Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 33

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 33
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 aside provisions for credit loss and charge-offs. As of December 31, 2024, real estate project financing provided to real estate development projects classified at caution or warning levels represented 5.37% of our total real estate project financing loans. Shinhan Bank has also actively managed and reduced its real estate project financing-related exposure, particularly during sustained downturns in the Korean real estate market, and as of December 31, 2024, the total outstanding amount of Shinhan Bank’s real estate project financing-related exposure was W9.6 trillion.

Lenders in project financing, including us and Shinhan Bank, generally receive from general contractors a performance guarantee for the completion of projects by the developers as well as a payment guarantee for the loans raised by a special purpose financing vehicle established by the developers in order to procure the construction orders, as the developers tend to be small and highly leveraged. Although we will continue our Group-wide efforts to, and Shinhan Bank will also continue its efforts to, effective manage real estate project financing exposure, if defaults were to significantly increase under our existing loans to real estate development projects or the quality of such loans were to deteriorate, and particularly if general contractors fail to pay the guaranteed amount necessary to cover the amount of such financings, it may have an adverse effect on our and Shinhan Bank’s business, financial condition and results of operations.

A limited portion of our credit exposure is concentrated in a relatively small number of large corporate borrowers, and future financial difficulties experienced by them may have an adverse impact on us.

Of Shinhan Bank’s 10 largest corporate exposures as of December 31, 2024, two were companies for which Shinhan Bank was a main creditor bank. All of the 10 companies are members of the main debtor groups as identified by the Governor of the Financial Supervisory Service, which are largely comprised of the largest Korean commercial conglomerates known as “chaebols.” As of such date, the total amount of Shinhan Bank’s**

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**exposures to the 10 companies was W41,959 billion, or 15.6%, of its total exposures. As of that date, Shinhan Bank’s single largest outstanding exposure to a main debtor group amounted to W6,566 billion, or 2.4%, of its total exposures. If the credit quality of Shinhan Bank’s exposure to large corporations, including those in the main debtor groups, declines, Shinhan Bank may be required to record additional loan loss