Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 278

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 278
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 to an increase in the average balances of corporate loans, which was partially offset by a decrease in the average balances of retail loans, as further described below. More specifically, the increase in interest income was due to the following:

| • |     | a 27.7% increase in interest on retail loans to W7,747 billion in 2023 from W6,065 billion in 2022, primarily due to an increase in the average lending rate for retail loans to 5.03% in 2023 from 3.85% in 2022 which was partially offset by a 2.0% decrease in the average balance of retail loans to |

203

| W154,140 billion in 2023 from W157,359 billion in 2022. The average lending rate for retail loans increased primarily as a result of the general increase in market interest rates largely driven by increases in the base interest rate set by the Bank of Korea in 2023 as discussed above. The base interest rate set by the Bank of Korea affects the market interest rate for certificates of deposit, which in turn largely determines our lending rates for a substantial majority of our retail loans. The average balance of retail loans decreased primarily as a result of a decrease in the average volume of household loans and collective loans. |

| • |     | a 44.7% increase in interest on corporate loans to W11,293 billion in 2023 from W7,802 billion in 2022, primarily due to an increase in the average lending rate for corporate loans to 5.10% in 2023 from 3.68% in 2022, as well as a 4.5% increase to the average balance of corporate loans to W221,341 billion in 2023 from W211,892 billion in 2022. The average lending rate for corporate loans increased primarily as a result of the general increase in market interest rates largely driven by the increase in the base interest rate set by the Bank of Korea in 2023 as discussed above. The average balance of corporate loans increased largely due to corporate customers’ preference for loans over bonds as source of financing resulting from an increase in issuance costs of bonds. |

Interest expense.Interest expense increased by 76.5% from W9,495 billion in 2022 to W16,761 billion in 2023, primarily due to a 110.9% increase in interest expense on deposits from W4,643 billion in 2022 to