Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 191

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 191
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-weighted assets using the Basel III standard method, based on operational risk loss data for incidents with net losses exceeding 25 million won that have occurred during the past ten years. An independent verification department conducts an annual review of the appropriateness of such loss data.

Every six months, based on our assessment of risk profile considering the scale and complexity of our subsidiaries, we designate significant operational risks identified as “Top Operational Risks”. In order to improve our risk management and mitigate these operational risks, we develop and implement measures including policies for the assessment of key risk indicators and risk control measures.

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Additionally, we have implemented strategies to mitigate certain operational risks by subscribing to various insurance policies, such as comprehensive financial institution insurance and electronic financial transaction liability insurance. We monitor the effectiveness of our operational risk mitigation efforts through regular reports to our management and board of directors. Furthermore, in the event of significant operational risk loss incidents, we identify improvement measures through Top Operational Risk assessments to enhance and strengthen our operational risk management system.

We set internal capital limits for operational risks taking into account our risk appetite and monitor to ensure that internal capital is being managed within appropriate limits. We also conduct periodic stress tests to ensure we maintain sufficient capital to withstand potential volatility in and changes to economic forecasts.

Upgrades to Risk Management Systems

Our recent material upgrades in relation to risk management systems are as follows.

Shinhan Financial Group

In May 2015, we developed and implemented a credit review system to unify our corporate credit review and risk measurements, allowing us and our subsidiaries to utilize a uniform and consistent credit review system with respect to each borrower. In addition, in preparation of full implementation of Basel III requirements relating to liquidity coverage ratios for bank holding companies and to enhance our liquidity risk management capabilities, we have implemented a Basel III liquidity coverage ratio risk management system by which we calculate our liquidity coverage ratio each month.

Shinhan Bank

In order to strengthen risk management of its overseas subsidiaries and effectively comply with local and domestic regulations, Shinhan Bank is in the process of laying out a global risk management system network, which records the risk data of its overseas subsidiaries. Shinhan Bank seeks to leverage the development of this system for further overseas expansion and stable growth of existing overseas subsidiaries. To date, Shinhan Bank has completed the development of this system for several of its overseas subsidiaries, including Japan, China, and Vietnam. Shinhan Bank plans to continue expanding this system to its other overseas subsidiaries.

Shinhan Bank has also developed a system to