Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 329

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 329
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21, 2022, the Financial Dispute Mediation Committee of the Financial Supervisory Service issued a non-binding recommendation to fully return the investment to the investors of the German Heritage DLS Product. On December 27, 2022, the board of directors of Shinhan Securities decided not to accept this non-binding recommendation and resolved to compensate investors at a rate of 100% for general investors and 80% to 95% for professional investors. As of December 31, 2024, Shinhan Securities has completed a voluntary settlement process totaling W 365.7 billion with most investors of the German Heritage DLS product according to the aforementioned criteria.

The prepayments made or to be made by Shinhan Bank and Shinhan Securities to investors of Lime Asset funds and Discovery Asset funds, respectively, as explained above, have been or will be, as the case may be, settled at the time of recovery of the underlying funds. If the amount recovered on the underlying fund is less than the amount prepaid to investors, Shinhan Bank and Shinhan Securities may not be able to recover from investors the amount of the prepaid amount that is in excess of the recovered amount and accordingly suffer losses. Depending on the performance of such underlying funds, we may record provisions for credit loss allowance to account for expected future losses.

During the fiscal year 2024, Shinhan Bank and Shinhan Securities recorded W27.3 billion and W7.9 billion, respectively, in provisions for credit loss allowance to account for expected future losses associated with financial products, including Lime Asset, Discovery Asset and German Heritage DLS Products. Depending on a variety of factors, including those outside the control of Shinhan Bank or Shinhan Securities, such as the performance of the underlying funds and progression of discussions with investors, Shinhan Bank or Shinhan Securities may record additional provisions for credit loss allowance to account for expected future losses from

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these or other financial products, and there is no guarantee that such amounts, if any, will not be significant. In response to increased incidents involving alleged improper sales of financial products such as those involving Lime Asset products, Discovery Asset products and German Heritage DLS Products, we have taken additional measures to improve our risk management systems and internal controls to prevent similar incidents. Shinhan Bank and Shinhan Securities have each updated their internal controls and performance evaluation systems and have made improvements to various stages of the sales cycle for financial products. For example, Shinhan Bank and Shinhan Securities have both upgraded their product