Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 143

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 143
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 risks based on the borrower’s credit rating, we seek to reduce credit risk related to future non-performingloans. Our early warning system is designed to bring any sudden increase in a borrower’s credit risk to the attention of our loan officers, who then closely monitor such loans. If a loan becomes non-performingnotwithstanding such preventive mechanism, an officer at the branch level responsible for monitoring non-performingloans will commence due diligence on the borrower’s assets, send a notice demanding payment or a notice that we will take or prepare for legal action. At the same time, we also initiate our non-performingloan management process, which includes:

| • |     | identifying loans subject to a proposed sale by assessing the estimated losses from such sale based on the estimated recovery value of collateral, if any, for such non-performing loans; |

| • |     | identifying loans subject to charge-off based on the estimated recovery value of collateral, if any, for such non-performing loans and the estimated rate of recovery of unsecured loans; and |

| • |     | to a limited extent, identifying commercial loans subject to normalization efforts based on the cash-flow situation of the borrower. |

Once the details of a non-performingloan are identified, we pursue early solutions for recovery. Actual recovery efforts for non-performingloans are handled by the relevant department, depending on the nature of such loans and the borrower, among others. The officers or agents of the responsible departments and units use a variety of methods to resolve non-performingloans, including:

| • |     | making phone calls and paying visits to the borrower to request payment; |

| • |     | continuing to assess and evaluate assets of our borrowers; and |

| • |     | if necessary, initiating legal action such as foreclosures, attachment and litigation. |

In order to promote speedy recovery on loans subject to foreclosures and litigation, the branch responsible for handling these loans may transfer them to the relevant unit at headquarters. Our policy is to commence legal action within one month after default on promissory notes and four months after delinquency of payment on other types of loans. For loans to insolvent or bankrupt borrowers or when we conclude that it is not possible to recover through normal procedures, we take prompt legal actions regardless of the grace period. In addition to making efforts to collect on these non-performingloans, we take other measures to reduce the level of our non-performingloans, including:

| • |     | selling non-per