Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 223

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 223
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 amount of the principal of and interest on financial liabilities divided by (2) the household’s annual income) should not exceed 40% unless otherwise specified by the applicable regulations. |

In December 2023, as a measure to help prevent excessive household debt, the Financial Services Commission introduced the “stress debt service ratio” system for floating rate loans, mixed rate loans (loans where a fixed interest rate shifts to a floating interest rate after a certain period of time), and periodic loans (loans where a fixed interest rate is adjusted periodically). The “stress debt service ratio” system imposes a certain level of interest rate spread (a stress rate) when calculating the debt service ratio, taking into consideration the possibility that a borrower of a floating rate loan may be subject to an increased burden when repaying principal and interest if the interest rate were to increase during the loan period. The “stress debt service ratio” system was initially applied beginning February 26, 2024 to mortgage loans in the banking sector. Since September 1, 2024, the application of the “stress debt service ratio” system was expanded to mortgage loans across all financial institutions as well as credit facilities in the banking sector. The application of the “stress debt service ratio” system is expected to further expand to mortgage loans, credit facilities and other loans across all financial institutions beginning July 2025. Restrictions on Investments in Property A bank may possess real estate property only to the extent necessary for conducting its business; provided that the aggregate value of such real estate property must not exceed 60% of the sum of its Tier I and Tier II capital (less any capital deductions). Any property acquired by a bank (1) through the exercise of its rights as a secured party or (2) the acquisition of which is prohibited by the Banking Act must be disposed of within three years, unless otherwise provided by the regulations thereunder. Restrictions on Shareholdings in Other Companies Under the Banking Act, a bank may not own more than 15% of shares outstanding with voting rights of another company, except where, among other reasons:

| • |     | the company issuing such shares is engaged in a business that falls under the category of financial businesses set forth by the Financial Services Commission (including companies which business purpose is to own equity interests in private equity funds); or |

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| • |     | the acquisition of shares by the bank is necessary for corporate restructuring of such company and is approved by the Financial Services Commission. |

In the above cases, a bank must satisfy either of