Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 491

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 491
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<div align='center'>F- 9 6</div>

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(In millions of won)

December 31, 2023 and 2024

| 5. | Financial risk management (continued) |

ii) Financial instruments measured at amortized cost

| ii-1) | The method of measuring the fair value of financial instruments measured at amortized cost is as follows: |

| Type                                                   |     | Measurement methods of fair value                                                                                                                                                                                                                                                                                                                                             |
| Cash and due from banks                                |     | The carrying amount and the fair value for cash are identical and most of deposits are floating interest rate deposits or next day deposits of a short-term instrument. For this reason, the carrying amount approximates fair value.                                                                                                                                         |
| Loans                                                  |     | The fair value of the loans is measured by discounting the expected cash flow at the market interest rate and credit risk of the borrower.                                                                                                                                                                                                                                    |
| Securities                                             |     | An external professional evaluation agency is used to calculate the valuation amount using the market information. The agency calculates the fair value based on active market prices, and DCF model is used to calculate the fair value if there is no quoted price.                                                                                                         |
| Deposits and borrowings                                |     | The carrying amount and the fair value for demand deposits, cash management account deposits, call money as short-term instrument are identical. The fair value of others is measured by discounting the contractual cash flow at the market interest rate that takes into account the residual risk.                                                                         |
| Debt securities issued                                 |     | Where available, the fair value of deposits and borrowings is based on the published price quotations in an active market. In case there is no data for an active market price, it is measured by discounting the contractual cash flow at the market interest rate that takes into account the residual risk.                                                                |
| Investment contract liabilities                        |     | The book value of retirement pension contract reserves as prescribed by the Insurance Business Act and Insurance Business Supervision Regulations was used as a proxy for fair value because of the difficulty of calculating reliable expected cash flows.                                                                                                                   |
| Other financial assets and other financial liabilities |     | The carrying amount is measured at fair value for short-term and suspense accounts, such as spot exchange, inter-bank fund transfer, and domestic exchange of payments, and for the remaining financial instruments, the present value is