Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 264

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 264
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2024, credit card companies continued to operate amid political uncertainties, prolonged high levels of inflation, high interest rates, and weakened household purchasing power. These factors contributed to sluggish domestic demand and a slowdown in economic growth. Amidst these challenges, Korean credit card businesses aimed to enhance their profitability by targeting key overseas payment segments and transportation markets, as well as rolling out new private label credit cards in partnership with various brands and implementing specialized marketing efforts aimed at senior and youth demographics.

In 2025, the Korean credit card industry is expected to encounter further challenges despite certain measures that may be implemented such as a reduction in benchmark interest rates. Uncertainties surrounding U.S. President Donald Trump’s second administration, fluctuating foreign exchange rates, and a continued slowdown in the Chinese economy may lead to slower growth or a decline in levels of domestic consumption. Furthermore, competition may intensify as new entrants from other industries seek to establish a presence in the payments market. In response, credit card companies will need to develop strategies to optimize their business portfolios, enhance capital efficiency, streamline resources across personnel and channels, and pursue higher returns from emerging areas such as global operations and fee-based services.

Securities

The Korean securities industry is currently undergoing a transformation, expanding its business model from a traditional capital intermediary to a capital provider. Unlike in the past, when revenue was primarily generated through commissions in the brokerage sector, there is now a concerted effort to minimize the impact of trading volumes on the stock market by diversifying revenue streams within the investment banking sector. In the case of corporate finance at securities firms, there is an increasing emphasis on structured finance operations, including acquisition financing and overseas real estate investments, in addition to the traditional corporate finance sector. With financial authorities implementing policies to revitalize corporate finance and the presence of abundant liquidity, the profitability of securities firms in corporate finance is expected to become even more pronounced.

In 2024, despite market volatility, the Korean securities industry showed resilience in profitability, supported by the capital securities firms have accumulated over time, including during the COVID-19 pandemic. The general increase in operating funds allowed the securities industry to increase operating profit and secure recurring profits. Additionally, recognizing less one-time provisions and evaluation losses related to domestic real estate project financing and overseas alternative assets compared to previous years contributed to the profitability of the industry in 2024.

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In 2025, a challenging business environment is expected to persist due to market uncertainties and intensified competition. Factors such as increased trading volume in overseas stock markets,