Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 293

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 293
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 debt securities increased primarily due to the higher average interest rate resulting from the refinancing of corporate bonds that were issued prior to 2022 at lower interest rates with new corporate bonds issued at higher interest rates. Interest expense on borrowings increased as a result of an increase in the average balance of borrowings denominated in Korean Won as part of measures to diversify funding sources. Net fees and commission income remained stable with no significant fluctuations in 2024 compared to 2023. Commission received as agency increased due to an increase in management fee income, which was mostly offset by a decrease in investment banking fees, resulting from a decrease in financial intermediary services, particularly in the corporate and investment banking sector. Net other expense of W39 billion was recognized in 2024, compared to net other income of W77 billion in 2023, primarily due to a decrease in net gain on financial instruments at fair value through profit or loss, which was partially offset by an increase in other operating income. The decrease in net gain on financial instruments at fair value through profit or loss was primarily due to net loss recognized in relation to the valuation and disposal of investments, including venture capital investments, domestic and foreign alternative investments, and initial public offerings. The increase in other operating income was mainly driven by the valuation gains on currency swaps to mitigate exchange rate risks associated with borrowings denominated in foreign currencies, resulting from the depreciation of the Korean Won against foreign currencies in 2024. Comparison of 2023 to 2022 Operating income for the specialized credit business decreased by 1.7% from W349 billion in 2022 to W343 billion in 2023. Net interest income decreased by 4.2% from W260 billion in 2022 to W249 billion in 2023, as the increase in interest expenses outpaced the increase in interest income. Interest expenses increased from W227 billion in 2022 to W342 billion in 2023, primarily due to an increase in the average balance of borrowings denominated in 217

Korean Won as well as an increase in interest rates. The increase in the average balance of borrowings in Korean Won was mainly due to Shinhan Capital’s increased borrowings in Korean Won. Interest income increased from W487 billion in 2022 to W591 billion in 2023, primarily due to an increase in interest income on loans denominated in Korean Won resulting from an increase in interest rates on loans denominated in Korean Won, which was partially offset by a decrease in the average