Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 260

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 260
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holding company to be established in Korea. Since inception, we have developed and introduced a wide range of financial products and services in Korea and aimed to deliver comprehensive financial solutions to clients through a convenient one-portal network.

Most of our assets are located in, and we generate most of our income from, Korea. Accordingly, our business and profitability are largely dependent on the general economic and social conditions in Korea, including interest rates, inflation, exports, personal expenditures and consumption, unemployment, demand for business products and services, debt service burden of households and businesses, the general availability of credit, the asset value of real estate and securities and other factors affecting the financial well-being of our corporate and retail customers. The Korean economy is closely integrated with, and is significantly affected by, developments in the global economy and financial markets. In recent years, the global economy and financial markets experienced adverse conditions and volatility, which also had an adverse impact on the Korean economy and in turn on our business and profitability. See “Item 3.D. Risk Factors — Risks Relating to Our Overall Business — Difficult conditions and turbulence in the Korean and global economy and financial markets may adversely affect our business, asset quality, capital adequacy and earnings.”

We derive most of our income from interest earned on our corporate and retail loans, net of funding costs (which primarily consist of interest payable on customer deposits). Net interest income is largely a function of the average volume of loans and the net interest spread thereon.

In 2023, the average volume of retail loans decreased by 2.0% from 2022, primarily as a result of a decrease in household credit loans (particularly general fund lump-sum repayment loans) and collective loans. In 2023, the average volume of corporate loans increased by 4.5% from 2022, primarily as a result of an increase in corporate credit loans (particularly working capital loans and loans for equipment).

In 2024, the average volume of retail loans increased by 4.1% from 2023, primarily as a result of a decline in market interest rates and an increase in real estate prices, particularly in the Seoul metropolitan area, which resulted in an increase in mortgage loans. In 2024, the average volume of corporate loans increased by 9.3% from 2023, primarily as a result of an increase in demand for funds, including working capital.

From 2022 to 2023, both the average yield on interest-earning assets and the average rate on interest-bearing