Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 279

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 279
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 W9,791 billion in 2023, as well as a 101.9% increase in interest expense on borrowings from W939 billion in 2022 to W1,896 billion in 2023. The increase in interest expense on deposits was due to an increase in the average interest rate of total interest-bearing deposits from 1.26% in 2022 to 2.59% in 2023, as well as a 2.3% increase in the average balance of deposits from W369,139 billion in 2022 to W377,612 billion in 2023. The increase in the average rate of interest paid on deposits was mainly due to an increase in the average rate of interest paid on time deposits from 2.04% in 2022 to 3.83% in 2023 as well as an increase in the average rate of interest paid on savings deposits from 0.39% in 2022 to 0.85% in 2023. The average rate of interest paid on time deposits and savings deposits increased largely as a result of an increase in the weighted average base interest rate from 2.03% in 2022 to 3.49% in 2023 resulting from increases in the base interest rate set by the Bank of Korea as explained above. The increase in the average balance of deposits was primarily due to an 18.0% increase in the average balance of time deposits, which was largely a result of an increase in amounts deposited by customers in light of higher deposit interest rates. The increase in interest expense on borrowings was primarily due to an increase in the average interest rate of borrowings from 1.91% in 2022 to 3.56% in 2023, and an 8.3% increase in the average balance of borrowings from W49,236 billion in 2022 to W53,317 billion in 2023. The average interest rate of borrowings increased principally as a result of higher average market interest rates for 2023 compared to 2022 as described above. The average balance of borrowings increased as we incurred additional borrowings to invest in bonds in anticipation of expected decrease in market interest rates. Net interest margin.Net interest margin represents the ratio of net interest income to the average balance of interest-earning assets. Our overall net interest margin remained consistent at 1.78% in both 2022 and 2023. Interest income and interest expense increased substantially in