Form 6-K
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the Month of April 2013

 

 

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant’s name into English)

 

 

120, 2-Ga, Taepyung-Ro, Jung-Gu, Seoul 100-102, Korea

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.    Yes  ¨    No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            .

 

 

 


Table of Contents

Summary of FY2012 Business Report

On April 1, 2013, Shinhan Financial Group (“SFG”) filed its FY2012 Business Report (the “Business Report”) with the Financial Supervisory Service of the Republic of Korea (“Korea”) pursuant to the Financial Investment Services and Capital Market Act of Korea. This is the summary of the Business Report translated into English. Non-material or previously disclosed information are omitted or abridged.

The financial information in this report has been prepared in accordance with Korean International Financial Reporting Standards.

Table of Contents

 

1.

  Introduction of the Group      3   

2.

  Business Results      6   

3.

  Independent Auditor      16   

4.

  Directors, Executive Officers and Employees      17   

5.

  Major Shareholder and Market Price Information of Our Common Shares and ADRs      19   

6.

  Related Party Transactions      20   

 

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Table of Contents

1. Introduction of the Group

Company History in 2009 through 2013

 

   

Jan. 2009: Shinhan BNP Paribas Asset Management launched through the merger of Shinhan BNP Paribas ITMC and SH Asset Management

 

   

Jun. 2009 : SH&C separated from SFG after SFG consummated share transfers of SH&C

 

   

Sep. 2009 : SBJ became an indirect subsidiary of SFG

 

   

Oct. 2009 : Shinhan Bank Vietnam became an indirect subsidiary of SFG

 

   

Nov. 2009 : Liquidated Shinhan Finance Ltd. , an indirect subsidiary of SFG

 

   

Dec. 2009 : Shinhan Capital Petra PEF became an indirect subsidiary of SFG

 

   

Jan. 2010 : Shinhan Data System became a subsidiary of SFG

 

   

Jun. 2010 : CHB Valuemeet 2001 First SPC was disaffiliated from SFG

 

   

Jun. 2010 : CHB Valuemeet 2001 Second SPC and CHB Valuemeet 2002 First SPC were disaffiliated from SFG

 

   

Aug. 2010 : Shinhan Macquarie Financial Advisory was disaffiliated from SFG

 

   

Oct. 2010 : Shinhan Maritime Private Equity Fund I became an indirect subsidiary of SFG

 

   

Dec. 2010 : KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp. became an indirect subsidiary of SFG

 

   

Feb. 2011 : Shinhan BNP Paribas Asset Management (Hong Kong) Limited became an indirect subsidiary of SFG

 

   

Nov. 2011 : Shinhan Bank Vietnam was merged with Shinhan Vina Bank.

 

   

Dec. 2011 : Shinhan Savings Bank became a subsidiary of SFG

 

   

Nov. 2012 : Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary

 

   

Jan. 2013 : Yehanbyoul Savings Bank joined SFG as a direct subsidiary.

 

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Table of Contents

Principal Subsidiaries under Korean Law (as of December 31, 2012)

 

Direct Subsidiaries     

Subsidiaries

   Ownership by SFG

Shinhan Bank

   100.0%

Shinhan Card

   100.0%

Shinhan Investment Corp.

   100.0%

Shinhan Life Insurance

   100.0%

Shinhan BNP Paribas Asset Management

     65.0%

Shinhan Capital

   100.0%

Jeju Bank 1)

     68.9%

Shinhan Savings Bank

   100.0%

Shinhan Data System

   100.0%

Shinhan AITAS 2)

     99.8%

Shinhan Credit Information

   100.0%

Shinhan Private Equity Investment Management

   100.0%

SHC Management 3)

   100.0%

 

1) Jeju Bank is currently listed on the Korea Exchange.
2) On November 30, 2012, Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary. Prior to November 30, 2012, Shinhan AITAS was an indirect subsidiary of SFG under Shinhan Bank, a wholly-owned bank subsidiary of SFG.
3) Currently in liquidation proceedings.
* On January 30, 2013, Yehanbyoul Savings Bank joined SFG as a direct subsidiary.

 

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Table of Contents

Indirect subsidiaries held through direct subsidiaries (as of December 31, 2012)

 

Direct Subsidiaries

  

Indirect Subsidiaries

  

Ownership by
the Parent

 

Shinhan Bank

   Shinhan Asia Limited      100.0
   Shinhan Bank America      100.0
   Shinhan Bank Europe      100.0
   Shinhan Khmer Bank Limited      90.0
   Shinhan Bank Kazakhstan      100.0
   Shinhan Bank China Limited      100.0
   Shinhan Bank Canada      100.0
   Shinhan Bank Japan      100.0
   Shinhan Bank Vietnam      100.0

Shinhan Investment Corp.

   Shinhan Investment America Inc.      100.0
   Shinhan Investment Europe Ltd.      100.0
   Shinhan Investment Asia Ltd.      100.0
   Shinhan Maritime Private Equity Fund I      7.1
   KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp. 1)      8.5

Shinhan BNP Paribas Asset Management

   Shinhan BNP Paribas Asset Management (Hong Kong) Limited      100.0

Shinhan Private Equity Investment Management

   Shinhan NPS Private Equity Fund 1st      5.0 2) 
   Shinhan Private Equity Fund 2nd      2.2 3) 
   Shinhan-Stonebridge Petro Private Equity Fund      0.6 4) 

 

1) Shinhan Capital currently owns 6.5% of KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp.
2) Shinhan Financial Group and its subsidiaries currently own 36.7% of Shinhan NPS Private Equity Fund 1st.
3) Shinhan Financial Group and its subsidiaries currently own 32.6% of Shinhan Private Equity Fund 2nd.
4) Shinhan Financial Group and its subsidiaries currently own 1.8% of Shinhan-Stonebridge Petro Private Equity Fund.

 

Number of Shares (as of December 31, 2012)       

Types of Shares

   Number of Shares  

Common Shares

     474,199,587   

Redeemable Preferred Shares

     11,100,000   
  

 

 

 

Total

     485,299,587   
  

 

 

 

 

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Table of Contents

2. Business Results

 

Operation Results                 (KRW billion)  
     FY2012
(Jan. 1~Dec.  31)
     FY2011
(Jan. 1~Dec. 31)
    FY2010
(Jan. 1~Dec.  31)
 

Operating income

     3,194.0         4,172.4        3,552.9   

Equity in income(loss) of associates

     27.5         57.8        15.3   

Non-Operating Income(loss)

     11.5         (37.6     (138.4

Earnings before income tax

     3,233.0         4,192.6        3,429.8   

Income taxes

     738.9         919.9        570.4   

Consolidated net income

     2,494.1         3,272.6        2,859.4   

Net income in majority interest

     2,322.7         3,100.0        2,684.6   

Net income in minority interest

     171.3         172.6        174.8   

 

LOGO Some of the totals may not sum due to rounding.

 

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Table of Contents

Source and Use of Funds

 

                   (KRW billion)  
      FY2012      FY2011      FY2010  
     Jan. 1 ~ Dec. 31      Jan. 1 ~ Dec. 31      Jan. 1 ~ Dec. 31  

Consolidated Basis
(KRW billion, %)

   Average
Balance
     Proportions
(%)
     Interest
Paid
     Interest
Rate
(%)
     Average
Balance
     Proportions
(%)
     Interest
Paid
     Interest
Rate
(%)
     Average
Balance
     Proportions
(%)
     Interest
Paid
     Interest
Rate
(%)
 

Source

   Deposits      168,233.4         56.45         4,515.0         2.68         156,280.5         55.28         4,181.0         2.68         149,653.3         56.11         3,935.6         2.63   
   Borrowings      14,027.8         4.71         271.9         1.94         14,037.4         4.97         259.2         1.85         12,403.4         4.65         250.4         2.02   
   Debentures      39,765.1         13.34         1,740.2         4.38         40,017.2         14.16         1,942.9         4.86         40,356.3         15.13         2,041.2         5.06   
   Other Liabilities      48,172.5         16.16         —           —           44,174.6         15.63         —           —           38,446.2         14.41         —           —     
   Total Liabilities      270,198.8         90.66         —           —           254,509.7         90.03         —           —           240,859.2         90.30         —           —     
   Total Stockholder’s Equity      27,843.7         9.34         —           —           28,184.6         9.97         —           —           25,872.4         9.70         —           —     
   Total Liabilities & SE      298,042.5         100.00         —           —           282,694.3         100.00         —           —           266,731.6         100.00         —           —     

Use

  

Currency & Due from

    Banks

     15,956.9         5.35         242.4         1.52         14,396.1         5.09         248.6         1.73         14,457.1         5.42         168.5         1.17   
   Loans      195,495.2         65.59         11,273.2         5.77         186,828.2         66.09         11,265.3         6.03         174,360.4         65.37         10,561.5         6.06   
       Loans in KRW      150,164.5         50.38         8,298.7         5.53         143,097.0         50.62         8,281.2         5.79         135,645.6         50.85         7,632.4         5.63   
  

    Loans in Foreign

        Currency

     10,347.1         3.47         439.1         4.24         9,510.8         3.36         379.1         3.99         8,940.8         3.35         377.3         4.22   
       Credit Card Accounts      17,507.8         5.87         1,834.0         10.48         17,740.2         6.28         1,887.5         10.64         16,278.4         6.10         1,794.8         11.03   
       Others      17,475.7         5.86         701.5         4.01         16,480.2         5.83         717.5         4.35         13,495.8         5.06         756.9         5.61   
   AFS Financial Assets      30,198.0         10.13         1,152.3         3.82         25,588.5         9.05         1,025.9         4.01         22,045.7         8.27         953.6         4.33   
   HTM Financial Assets      11,790.4         3.96         594.6         5.04         12,307.7         4.35         642.9         5.22         12,899.1         4.84         687.4         5.33   
   Other Assets      44,602.1         14.97         —           —           43,573.8         15.41         —           —           42,969.3         16.11         —           —     
   Total Assets      298,042.5         100.00         —           —           282,694.3         100.00         —           —           266,731.6         100.00         —           —     

 

1) The “Average Balance” is the arithmetic mean of the ending balance of each quarter.

 

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Table of Contents

Other Financial Information

1) Capital Adequacy

 

Consolidated BIS Ratio (Shinhan Financial Group)                (KRW billion)  
     Dec. 31, 2012     Dec. 31, 2011     Dec. 31, 2010  

Aggregate Amount of Equity Capital (A)

     25,075.7        22,315.4        23,369.7   

Risk-Weighted Assets (B)

     201,184.4        195,579.4        188,785.7   

BIS Ratio (A/B) 1)

     12.46     11.41     12.38

 

1) Based on Basel I.
2) BIS ratio for Dec. 31, 2010 based on Korean GAAP is 12.77%

 

Capital Adequacy Ratios (Subsidiaries)                       (%)  

Subsidiary

  

Capital Adequacy Ratio

   Dec. 31, 2012      Dec. 31, 2011      Dec. 31, 2010  

Shinhan Bank 1)

   BIS Capital Adequacy Ratio      15.83         15.26         15.47   

Jeju Bank 1)

   BIS Capital Adequacy Ratio      15.89         13.27         13.40   

Shinhan Card 2)

   Adjusted Equity Capital Ratio      27.43         25.81         24.99   

Shinhan Investment Corp. 2)

   Net Capital Ratio      666.34         700.78         658.31   

Shinhan Life Insurance 2)

   Risk Based Capital Ratio      287.70         324.02         397.93   

Shinhan BNPP AM 2)

   Net Capital Ratio      583.21         599.73         708.31   

Shinhan Capital 2)

   Adjusted Equity Capital Ratio      14.98         14.90         14.23   

Shinhan Savings Bank

   BIS Capital Adequacy Ratio      15.20         n/a         n/a   

 

- The BIS Capital Adequacy Ratio is computed in accordance with the guidelines issued by the FSS for commercial banks. Under these guidelines, commercial banks are required to maintain a minimum capital adequacy ratio of 8%.
- Basel II FIRB was applied in calculating Shinhan Bank’s BIS Capital Adequacy Ratios.
- Basel II TSA was applied in calculating Jeju Bank’s BIS Capital Adequacy Ratios.
- Basel I was applied in calculating Shinhan Savings Bank’s BIS Capital Adequacy Ratios.
- The Adjusted Equity Capital Ratio represents the ratio of total adjusted shareholder’s equity to total adjusted assets and is computed in accordance with the guidelines issued by FSS. Under these guidelines, Shinhan Card and Shinhan Capital are required to maintain a minimum adjusted equity capital ratio of 8%.
- Net Capital Ratio is computed in accordance with the guidelines issued by the FSS. Under these guidelines, Shinhan Investment Corporation and Shinhan BNP Paribas Asset Management are required to maintain a minimum net capital ratio of 100%.
- Under the guidelines issued by the FSS, Shinhan Life Insurance is required to maintain a minimum RBC ratio of 100%.
1) Capital adequacy ratios for Dec. 31, 2010 based on K-GAAP is as follows:
   Shinhan Bank: 15.93%, Jeju Bank: 14.18%
2) Capital adequacy ratios of Shinhan Card, Shinhan Investment Corp., Shinhan Life Insurance, Shinhan BNPP AM, and Shinhan Capital for Dec. 31, 2010 are based on K-GAAP.

 

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Table of Contents

2) Liquidity Ratios

 

Won Liquidity Ratio                                                            (KRW billion, %)  

Company

   Dec. 31, 2012      Dec. 31, 2011      Dec. 31. 2010  
   Won
Assets
     Won
Liabilities
     Won
Liquidity
Ratio(%)
     Won
Assets
     Won
Liabilities
     Won
Liquidity
Ratio(%)
     Won
Assets
     Won
Liabilities
     Won
Liquidity
Ratio(%)
 

Shinhan Financial Group

     189.1         93.4         202.6         4,225.5         3,911.2         108.0         972.6         246.0         395.3   

Shinhan Bank

     56,506.3         41,131.1         137.4         56,609.5         46,635.4         121.4         54,646.2         45,786.9         119.3   

Shinhan Card

     15,472.3         3,420.9         452.3         15,417.2         3,417.5         451.1         13,160.9         3,450.1         381.5   

Shinhan Investment Corp.

     9,358.8         6,725.4         139.2         6,161.4         5,036.5         122.3         6,615.7         5,293.5         125.0   

Shinhan Life Insurance

     969.1         377.2         256.9         843.5         341.5         247.0         517.3         254.7         203.1   

Shinhan Capital

     587.5         161.3         364.1         519.0         147.9         350.8         758.8         295.0         257.2   

Jeju Bank

     9,984.0         6,511.8         153.3         982.2         686.2         143.1         899.3         618.8         145.3   

Shinhan Savings Bank

     299.4         151.8         197.3         —           —           —           —           —           —     

 

1) Shinhan Financial Group, Shinhan Bank, Jeju Bank: Due within 1 month
2) Shinhan Life Insurance: (Won assets due within 3 months /3 months average of Claim payments )*100
3) Shinhan Card, Shinhan Investment Corp., Shinhan Capital, Shinhan Savings Bank: Due within 3 months

 

Foreign Currency (FC) Liquidity Ratio                    (KRW billion, %)  

Company

   Dec. 31, 2012      Dec. 31, 2011      Dec. 31, 2010  
   FC
Assets
     FC
Liabilities
     FC
Liquidity
Ratio
     FC
Assets
     FC
Liabilities
     FC
Liquidity
Ratio
     FC
Assets
     FC
Liabilities
     FC
Liquidity
Ratio
 

Shinhan Financial Group

     —           —           —           —           —           —           —           —           —     

Shinhan Bank

     25,501.1         20,005.1         127.5         25,887.9         22,254.2         116.3         24,238.7         23,092.8         105.0   

Shinhan Investment Corp.

     482.9         446.8         108.1         23.3         23.5         99.0         11.5         10.3         111.5   

Shinhan Capital

     108.1         71.4         151.4         51.5         21.9         235.7         333.5         285.0         117.0   

Jeju Bank

     11.4         6.1         186.8         15.4         9.4         164.3         13.0         10.5         123.8   

 

1) Foreign currency liquidity ratios are computed with assets and liabilities due within 3 months
2) Shinhan Bank’s foreign currency liquidity ratio reflected securitization weight with the guidelines issued by the FSS

 

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3) Asset Quality

 

SFG Consolidated Basis                  (KRW billion, %)  
     Dec. 31, 2012      Dec. 31, 2011      Dec. 31, 2010  

Total Loans

     203,155.4         201,245.9         184,676.3   

Substandard & Below

     2,718.9         2,587.1         2,736.8   

Substandard & Below Ratio

     1.34         1.29         1.48   

Non-Performing Loans

     2,173.3         1,903.5         1,977.7   

NPL Ratio

     1.07         0.95         1.07   

Substandard & Below Coverage Ratio

     169.06         162.19         132.80   

Loan Loss Allowance 1)

     4,596.5         4,196.0         3,634.5   

Substandard & Below Loans

     2,718.9         2,587.1         2,736.8   

 

1) Including reserve for credit losses.

 

Separate Basis                                                            (%)  
     Dec. 31, 2012      Dec. 31, 2011      Dec. 31, 2010  
     Substandard
& Below
Ratio
     NPL
Ratio
     Substandard
& Below
Coverage
Ratio 1)
     Substandard
& Below
Ratio
     NPL
Ratio
     Substandard
& Below
Coverage
Ratio 1)
     Substandard
& Below
Ratio
     NPL
Ratio
     Substandard
& Below
Coverage
Ratio 1)
 

Shinhan Financial Group

     —           —           —           —           —           —           —           —           —     

Shinhan Bank

     1.08         0.87         170.55         1.09         0.82         166.11         1.31         0.91         133.10   

Shinhan Card

     2.14         1.64         248.83         1.69         1.26         236.08         1.90         1.44         182.65   

Shinhan Investment Corp.

     11.17         11.18         77.61         16.97         16.92         71.46         12.29         12.29         82.41   

Shinhan Life Insurance

     0.50         0.26         361.33         0.45         0.23         280.64         0.62         1.48         226.89   

Shinhan Capital

     2.98         1.91         95.84         2.79         1.31         82.85         2.38         1.86         80.44   

Jeju Bank

     1.49         1.47         102.90         1.62         1.03         93.73         1.57         1.28         113.74   

Shinhan Savings Bank

     31.71         31.71         38.30         —           —           —           —           —           —     

 

1) Including reserve for credit losses.

 

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4) Write-Offs & Provision for Credit Losses

 

<SFG Consolidated Basis>                  (KRW billion)  
     Dec. 31, 2012      Dec. 31, 2011      Dec. 31, 2010  

Allowance for loan losses

     2,893.0         2,729.1         2,993.3   

Allowance for acceptances and guarantees

     77.8         85.8         171.0   

Allowance for unused loan commitments

     415.4         444.8         462.5   

Other allowance

     253.6         339.0         225.9   

Total allowance

     3,639.8         3,598.7         3,852.7   

Write-offs

     1,417.2         1,382.1         1,284.7   

 

<Shinhan Bank>                  (KRW billion)  
     Dec. 31, 2012      Dec. 31, 2011      Dec. 31, 2010  

Allowance for loan losses

     1,649.0         1,580.9         1,803.8   

Allowance for acceptances and guarantees

     112.8         109.5         208.7   

Allowance for unused loan commitments

     78.1         85.2         85.8   

Other allowance

     168.8         256.2         155.4   

Total allowance

     2,008.7         2,031.8         2,253.8   

Write-offs

     695.6         811.8         773.1   

 

<Shinhan Card>                  (KRW billion)  
     Dec. 31, 2012      Dec. 31, 2011      Dec. 31, 2010  

Allowance for loan losses

     777.4         706.2         703.8   

Allowance for acceptances and guarantees

     —           —           —     

Allowance for unused loan commitments

     328.5         345.3         367.5   

Other allowance

     46.7         50.6         42.5   

Total allowance

     1,152.6         1,102.1         1,113.8   

Write-offs

     511.6         451.5         436.8   

 

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5) Debt to Equity Ratios

 

Shinhan Financial Group (Separate Basis)                (KRW billion)  
     Dec. 31, 2012     Dec. 31, 2011  1)     Dec. 31, 2010  

Debt

     7,546.0        11,413.4        6,907.6   

Equity

     19,666.9        19,430.8        20,753.0   

Debt to Equity Ratio

     38.37     58.74     33.29

 

1) Upon the resolution of Board of Directors to redeem Series 10 redeemable preferred shares and Series 11 convertible redeemable preferred shares held on December 15, 2011, KRW 3.75 trillion capital decrease and liability increase reflected on Debt to Equity Ratio.

 

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Twenty Largest Exposures by Borrower                                       (KRW billion)  

As of Dec. 31, 2012

Consolidated basis

   Loans in
Won
     Loans in
Foreign
Currency
     Securities      Guarantees
and
Acceptances
     Others      Total
Exposures
 

Ministry of Strategy & Finance

     —           —           8,139         —           —           8,139   

Bank of Korea

     2,560         —           4,628         —           —           7,188   

Industrial Bank of Korea

     503         44         2,885         —           —           3,432   

Hyundai Heavy Industries Co., Ltd.

     28         109         538         2,739         —           3,414   

Korea Development Bank

     12         92         3,132         —           —           3,237   

Korea Finance Corporation

     —           —           3,028         —           —           3,028   

Korea Deposit Insurance Corporation

     —           —           2,978         —           —           2,978   

Korea Land & Housing Corporation

     —           —           1,842         —           —           1,842   

Samsung Heavy Industries Co., Ltd.

     —           82         61         1,484         —           1,626   

Korea Securities Finance Corporation

     31         —           1,329         —           —           1,360   

Woori Bank

     319         39         956         3         —           1,318   

Nonghyup Bank

     90         —           910         —           —           1,000   

POSCO

     36         189         712         28         —           965   

Songdo Cosmopolitan City Development Inc.

     888         —           —           —           —           888   

Samsung C&T Corporation

     41         56         461         304         —           861   

KEPCO

     1         —           828         8         —           837   

Korea EximBank

     —           —           836         —           —           836   

Hana Bank

     32         42         760         —           —           834   

Kookmin Bank

     144         5         678         —           —           827   

Hyundai Samho Heavy Industries Co., Ltd.

     —           19         50         704         —           773   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     4,685         677         34,753         5,269         —           45,384   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

LOGO Some of the totals may not sum due to rounding

 

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Table of Contents
Exposure to ten Main Debtor Groups                                       (KRW billion)  

As of Dec. 31, 2012

Consolidated basis

   Loans in Won      Loans in Foreign
Currency
     Securities      Guarantees and
Acceptances
     Others      Total
Exposures
 

Hyundai Heavy Industries

     134         207         600         3,731         —           4,672   

Samsung

     338         902         1,196         2,117         —           4,553   

Hyundai Motors

     1,370         1,458         757         334         —           3,919   

SK

     689         774         1,151         1,005         —           3,618   

LG

     1,510         326         275         77         —           2,188   

POSCO

     217         338         830         342         —           1,726   

Lotte

     361         120         684         333         1         1,498   

GS

     268         274         227         270         —           1,040   

LS

     189         308         197         309         —           1,004   

Hyosung

     251         463         17         147         —           878   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     5,327         5,170         5,933         8,665         1         25,097   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

LOGO Some of the totals may not sum due to rounding

 

Loan and due from banks Concentration by Industry           (KRW billion)  

As of Dec. 31, 2012

Consolidated basis

   Total Exposures  
   Amount      Weight (%)  

Finance and Insurance

     52,782         19.84

Manufacturing

     35,179         13.22

Retail and wholesale

     12,534         4.71

Real Estate, leasing and service

     19,475         7.32

Construction

     5,008         1.88

Hotel and leisure

     4,215         1.58

Others

     38,328         14.40

Consumers

     98,558         37.04
  

 

 

    

 

 

 

Total

     266,079         100
  

 

 

    

 

 

 

 

* Including deposits, loans, and securities

 

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Table of Contents

 

Top Twenty Non-Performing Loans              
                 (KRW billion)  

Borrower

  

Industry

   Gross Principal
Outstanding
     Allowance for
Loan Losses
 

A

   Development and Subdividing of Residential Buildings      116         26   

B

   Building of Steel Ships      43         19   

C

   Office and Commercial Building Construction      40         30   

D

   Development and Subdividing of Residential Buildings      37         2   

E

   Manufacture of Television      35         32   

F

   Manufacture of Other Paper and Paperboard      34         15   

G

   Renting of Non-Residential Buildings      31         2   

H

   Development and Subdividing of Residential Buildings      30         22   

I

   Other Civil Engineering Construction      29         26   

J

   Development and Subdividing of Residential Buildings      27         0   

K

   Manufacture of Synthetic Resin and Other Plastic Materials      25         2   

L

   Development and Subdividing of Residential Buildings      23         2   

M

   Manufacture of Sections for Ships      22         0   

N

   Building of Steel Ships      21         2   

O

   Manufacture of Other Basic Iron and Steel n. e. c.      20         14   

P

   Construction of Highways, Streets and Roads      19         11   

Q

   Other Cast of Non-ferrous Metals      18         3   

R

   Non-Financial Holding Companies      18         18   

S

   Renting of Non-Residential Buildings      18         0   

T

   Real Estate Consultancy and Brokerage      17         2   
     

 

 

    

 

 

 
  

Total

     623         227   
     

 

 

    

 

 

 

 

1) Consolidated basis as of Dec. 31, 2012.
2) Non-Performing Loans are defined as loans past due longer than 90 days.
3) Some of the totals may not sum due to rounding.

 

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Table of Contents

3. Independent Auditor

 

Audit Opinion for the last 3 years                     
     FY 2012      FY 2011      FY 2010  

Audit Opinion

     Unqualified         Unqualified         Unqualified   

Compensation to the Independent Auditor for Audit and Review Services

The following is a description of the fees for audit and review services performed by our independent auditor for the last three years in connection with our financial statements preparation.

 

Year

  

Auditor

   Payment
(KRW mil.)
    

Details

   Working
hours
 

2012

  

KPMG Samjong Accounting

Corp.

     498       Review/Audit of Financial Statements     
 
6,380
hours
  
  

2011

  

KPMG Samjong Accounting

Corp.

     487       Review/Audit of Financial Statements     
 
9,016
hours
  
  

2010

  

KPMG Samjong Accounting

Corp.

     366       Review/Audit of Financial Statements     
 
4,650
hours
  
  

 

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Table of Contents

4. Directors, Executive Officers and Employees

Directors and Executive Officers

1) Executive Directors

 

Name

  

Month and

Year

of Birth

  

Position

  

Service Term

Dong Woo Han

   Nov. 1948   

-   Chairman of Shinhan Financial Group

-   Board Steering Committee Member

-   Corporate Governance & CEO Recommendation Committee Member

   3 years starting from March 23, 2011

2) Non-Executive Directors

Currently, 11 non-executive directors are in office, 10 of which outside directors who are nominated by our Outside Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting.

9 outside directors were appointed as board of directors at the 12th Annual General Meeting of Shareholders on March 28, 2013, of which 8 directors renewed their terms and 1 director newly appointed.

Our non-executive directors are as follows:

 

Name

  

Month and Year

of Birth

  

Outside

Director

  

Sub-Committees

  

Service Term

Jin Won Suh

   April 1951    X    —      4 years starting from March 23, 2011

Taeeun Kwon

   January 1941    O   

Audit Committee member

Corporate Governance & CEO Recommendation Committee member

   3 years starting from March 23, 2011

Kee Young Kim

   October 1937    O   

Board Steering Committee member

Risk Management Committee member

Corporate Governance & CEO Recommendation Committee member

   3 years starting from March 23, 2011

Seok Won Kim

   April 1947    O   

Board Steering Committee member

Audit Committee member

   3 years starting from March 23, 2011

Hoon Namkoong

   June 1947    O   

Chairman of Board of Directors

Risk Management Committee member

Compensation Committee member

Corporate Governance & CEO Recommendation Committee member

   3 years starting from March 23, 2011

Boo In Ko

   December 1941    O   

Board Steering Committee member

Corporate Governance & CEO Recommendation Committee member

   2 years starting from March 28, 2013

Sang-Kyeong Lee

   September 1945    O    Audit Committee member Compensation Committee Chair    2 years starting from March 29, 2012

Ke Sop Yun

   May 1945    O   

Audit Committee Chair

Compensation Committee member

   5 years starting from March 17, 2009

Jung Il Lee

   August 1952    O    Compensation Committee member    3 years starting from March 23, 2011

Haruki Hirakawa

   November 1964    O    Board Steering Committee member    3 years starting from March 23, 2011

Philippe Aguignier

   September 1957    O   

Risk Management Committee member

Corporate Governance & CEO Recommendation Committee member

   4 years starting from March 24, 2010

 

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Table of Contents

3) Executive Officers

In addition to the executive directors, we currently have the following executive officers:

 

Name

  

Month and Year

of Birth

  

Position

  

In charge of

Buhmsoo Choi

   Aug. 1956    Deputy President   

-   Strategic Planning Team

-   Global Business Strategy Team

-   Shinhan FSB Research Institute

Sung Ho Wi

   June 1958    Deputy President   

-   Wealth Management Planning Office

Dong Hwan Lee

   Sep. 1959    Deputy President   

-   Corporate & Investment Banking Planning Office

Jae-Gwang Soh

   Aug. 1961    Deputy President   

-   Synergy Management Team

-   Information & Technology Planning Team

-   Smart Finance Team

-   Audit Team

Jung Kee Min

   Mar. 1959   

Deputy President &

Chief Financial Officer

  

-   Finance Management Team

-   Investor Relations Team

-   HR Team

Sin Gee Lee

   July 1956    Deputy President   

-   Public Relations Team

-   CSR & Culture Management Team

-   General Affairs Team

Bo Hyuk Yim

   Mar. 1961    Managing Director   

-   Risk Management Team

Woo Gyun Park

   Mar. 1959    Managing Director   

-   Compliance Team

Byung chul Lim

   Jan. 1964    Managing Director   

-   Shinhan FSB Research Institute

 

Stock Options                                (As of Feb. 28, 2013)  
     No. of
Granted Options
(A)
     No. of  Exercised
Options

(B)
     No. of  Cancelled
Options

(C)
     No. of  Exercisable
Options

(D = A – B – C)
     Exercise Price
(KRW)
 

Granted in 2005

     2,620,331         2,266,642         251,300         102,389         28,006   

Granted in 2006

     3,206,173         996,722         480,300         1,729,151         38,829   

Granted in 2007

     1,231,169         0         205,313         1,025,856         54,560   

Granted in 2008

     805,174         0         185,396         619,778         49,053   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     7,862,847         3,263,364         1,122,309         3,477,174         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Note 1) The weighted-average exercise price of outstanding exercisable options as of Feb. 28, 2013 is KRW 44,974.
   2) The closing price of our common stock was KRW 42,650 on Feb. 28, 2013.

 

Employees                       (As of Dec. 31, 2012)  

Gender

   Number of
Employees
    

Average length of Service

   Total Salaries and  wages
paid in 2012
(KRW million)
     Average Payment
per person
(KRW million)
 

Male

     127       2 yrs 5 mths      15,198         120   

Female

     28       3 yrs 4 mths      1,870         67   
  

 

 

    

 

  

 

 

    

 

 

 

Total

     155       2 yrs 7 mths      17,068         110   
  

 

 

    

 

  

 

 

    

 

 

 

 

Note 1) Average length of service including service within group subsidiaries as of Dec. 31, 2012 is Male 13 yrs 3 mths

and Female 7yrs 4 mths, whereas total average is 12yrs 2mths.

          2) Total salaries and average payment per person excludes retired employees. Including retired employees, total salaries

paid stands at KRW19,412 million and average payment per person KRW99million.

 

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Table of Contents

5. Major Shareholder and Market Price Information of our Common Shares and ADRs

 

Major Shareholders1) of Shinhan Financial Group as of Dec. 31, 2012   

Name

   No. of Common Shares owned      Ownership%  

National Pension Service

     34,506,886         7.28

BNP Paribas

     30,106,276         6.35

 

1) Shareholders who own beneficial ownership of 5% or more(common share basis).
2) In addition to the common share holdings, National Pension Service holds a total of 2,000,000 shares of Shinhan Financial Group’s series 12 non-voting redeemable preferred stock as of Dec. 31, 2012.

Share ownership of Employee Stock Ownership Association

 

Beginning Balance

(Jan. 1, 2012)

 

Increase

 

Decrease

 

Ending Balance

(Dec. 31, 2012)

 

Ownership%1)

(Dec. 31, 2012)

16,974,245

  3,618,670   1,805,848   18,787,067   3.96%

 

1) Common share basis.

 

Common Share Traded on the Korea Exchange             (KRW, number of shares)  
          Jul. 2012      Aug. 2012      Sep. 2012      Oct. 2012      Nov. 2012      Dec. 2012      Jan. 2013      Feb. 2013  

Price per share

   High      40,900         37,600         39,350         38,700         38,000         38,950         42,150         42,650   
   Low      33,350         34,250         34,500         36,750         33,550         34,100         38,900         39,200   
   Avg.      36,970         36,367         37,020         37,652         35,355         37,017         40,302         40,884   

Trading Volume

     29,538,364         29,398,615         30,282,383         16,965,939         20,246,247         21,836,849         22,521,117         19,289,381   

Highest Daily Trading Volume

     2,623,823         2,479,453         3,497,457         1,531,700         1,711,287         2,242,260         1,982,508         2,245,654   

Lowest Daily Trading Volume

     587,270         594,170         551,598         396,731         461,578         587,830         499,305         568,054   
American Depositary Receipts traded on the New York Stock Exchange      (USD, number of shares)  
          Jul. 2012      Aug. 2012      Sep. 2012      Oct. 2012      Nov. 2012      Dec. 2012      Jan. 2013      Feb. 2013  

Price per share

   High      72.84         66.30         69.90         34.97         34.84         36.64         39.01         38.86   
   Low      58.54         61.83         60.77         33.07         31.25         31.42         37.02         35.89   
   Avg.      64.74         64.41         66.17         33.95         32.59         34.44         37.84         37.40   

Trading Volume

     593,047         848,141         565,578         974,446         1,073,368         1,251,615         1,595,732         1,294,323   

Highest Daily Trading Volume

     57,657         205,904         69,439         87,800         145,651         211,507         263,937         143,978   

Lowest Daily Trading Volume

     9,613         7,520         9,852         11,364         26,591         22,122         23,475         37,682   

 

1) Shinhan Financial Group changed the ratio on its American Depositary Receipts (ADRs) from one (1) ADR representing two (2) common shares to one (1) ADR representing one (1) common share effective October 15, 2012.
2) Figures from July 2012 to September 2012 reflect the previous ratio (2:1), whereas figures for October 2012 reflect the changed ratio(1:1).

 

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6. Related Party Transactions

 

Loans to Subsidiaries                                     (KRW billion)  

Subsidiary

 

Loan Type

  Origination
Date
  Maturity
Date
  Lending
Rate
  Beginning
Balance

(Jan. 1,
2012)
    Decrease     Increase     Ending
Balance

(Dec.  31,
2012)
 

Shinhan Investment Corp.

  Loans in KRW   2006-07-31   2012-01-31   5.64%     100.0        100.0        —          —     
 

Loans in KRW

  2012-01-30   2017-01-30   4.11%     —          —          100.0        100.0   
 

Loans in KRW

  2012-06-28   2017-06-28   3.84%     —          —          100.0        100.0   

Shinhan Card

  Loans in KRW   2010-10-29   2015-10-29   4.37%     100.0        —          —          100.0   
 

Loans in KRW

  2011-01-28   2016-01-28   4.91%     100.0        —          —          100.0   
 

Loans in KRW

  2011-02-24   2016-02-24   4.82%     250.0        —          —          250.0   
 

Loans in KRW

  2011-05-17   2016-05-17   4.47%     100.0        —          —          100.0   
 

Loans in KRW

  2012-03-14   2017-03-14   4.12%     —          —          150.0        150.0   

Shinhan Capital

  Loans in KRW   2007-03-23   2012-03-23   5.48%     50.0        50.0        —          —     
 

Loans in KRW

  2007-06-08   2012-06-08   5.95%     50.0        50.0        —          —     
 

Loans in KRW

  2008-01-23   2013-01-23   6.60%     50.0        —          —          50.0   
 

Loans in KRW

  2010-09-28   2013-09-28   4.12%     100.0        —          —          100.0   
 

Loans in KRW

  2011-01-28   2014-01-28   4.53%     50.0        —          —          50.0   
 

Loans in KRW

  2011-04-29   2016-04-29   4.65%     100.0        —          —          100.0   
 

Loans in KRW

  2011-05-17   2016-05-17   4.47%     50.0        —          —          50.0   
 

Loans in KRW

  2012-03-14   2017-03-14   4.12%     —          —          50.0        50.0   
 

Loans in KRW

  2012-12-14   2017-12-14   3.33%     —          —          50.0        50.0   

Shinhan PE Investment Management

  Loans in KRW   2011-08-12   2012-08-10   4.09%     5.0        5.0        —          —     
 

Loans in KRW

  2012-08-10   2013-08-09   4.09%     —          —          5.0        5.0   
 

Loans in KRW

  2012-11-27   2013-11-27   3.07%     —          —          5.0        5.0   
 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

 

 

Total

            1,105.0        205.0        460.0        1,360.0   
 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SHINHAN FINANCIAL GROUP CO., LTD.

/s/ Jung Kee Min

Name: Jung Kee Min
Title: Chief Financial Officer

Date: April 1, 2013

 

21