Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 28

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 28
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 particularly in the banking sector. Such difficulties were caused, among others, by rising levels of inflation and rapid increase in base interest rates by the governments globally. Many financial institutions have experienced volatile stock prices and significant losses in their equity value, and many have faced heightened risk of bank runs. Any negative perceptions resulting from such developments concerning the soundness of savings banks, Internet-only banks or the banking system generally in Korea could affect customers’ decision on where to maintain their deposits, which may result in financial distress and closure for certain banks in Korea. Also in cases where such distress could pose a systemic risk, the Government may require us or Shinhan Bank, as one of the largest bank holding companies and commercial banks, respectively, in Korea, to actively participate in the Government’s initiative to mitigate such difficulties, which could strain our resources, divert our management’s attention and have an adverse impact on our results of operations and financial condition.

Events involving limited liquidity, defaults, non-performance or other adverse developments that affect the financial services industry generally or financial institutions, transactional counterparties or other companies in the financial services industry, may in the future lead to market-wide liquidity problems or increase our risk in various dealings with its counterparties, among others. If, as a result of such developments, any parties with**

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**whom we conduct business are unable to access their deposits with a distressed financial institution or any of their other funds loaned to such distressed financial institution, including through financial instruments or lending arrangements, such parties’ credit quality, ability to pay their obligations to us, or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. In addition, our ability to access funding sources and other arrangements in amounts adequate to finance or capitalize our current and future business operations or to fulfill our financial obligations could also be affected by such disruptions or instability in the financial services industry or financial markets. Furthermore, we could be impacted by current or future negative perceptions, expectations or rumors about the prospects for the financial services industry, which could worsen over time and result in downward pressure on, and continued or accelerated volatility of, bank securities. Any of these developments resulting from the general instability of the financial services industry could materially adversely impact our results of operations and financial condition.

Risks Relating to Our Banking Business

We have significant exposure to small- and medium-sizedenterprises, and financial difficulties experienced by such enterprises may result in a deterioration of our asset quality.

Our banking activities are conducted primarily through our wholly-owned subsidiary