Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 53

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 53
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2015, the financial regulators announced that they would encourage the banks in Korea to increase lending to technology companies in the small- to medium-sized enterprise segment and to enhance technology-related credit**

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**review capabilities. According to the Korea Federation of Banks, the aggregate balance of loans to technology companies in the small- to medium-sized enterprise segment reached W325.9 trillion, W304.5 trillion and W302.7 trillion, as of December 31, 2022, 2023 and 2024, respectively. Shinhan Bank’s total balance of outstanding loans to technology companies as of December 31, 2022, 2023 and 2024 was W44.8 trillion and W42.9 trillion and W42.7 trillion, respectively.

Furthermore, amidst concerns about increasing household debt, in 2020 the Financial Services Commission increased target proportions for fixed interest rate loans and installment principal repayment-based housing loans to 52.5% and 60.0%, respectively, which have remained the same through 2024. Fixed interest rate and installment principal repayment-based housing loans accounted for 60.6% and 61.4%, respectively, of the housing loans extended by Shinhan Bank as of December 31, 2024.

We, on a voluntary basis, may factor the existence of the Government’s policies and encouragements into consideration in making loans although the ultimate decision whether to make loans remains with us and is made based on our internal credit approval procedures and risk management systems independently of Government policies. In addition, in tandem with providing additional loans to small- and medium-sized enterprises and low-income individuals, Shinhan Bank takes active steps to mitigate the potential adverse impacts from making bad loans to enterprises or individuals with high risk profiles as a result of such arrangement, such as by strengthening its loan review and post-lending monitoring processes. However, we cannot assure you that such arrangement did not or will not, or similar or other government-led initiatives in the future will not, result in a suboptimal allocation of our loan portfolio from a risk-reward perspective compared to what we would have allocated based on purely commercial decisions in the absence of such initiatives. The Government may implement similar or other initiatives in the future to spur the overall economy or encourage the growth of targeted industries or relief to certain segments of the population. Specifically, the Government may introduce lending-related initiatives or enforce existing ones in a heightened fashion during times when small- and medium-sized enterprises or low-income households on average