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 registrants 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- .
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.
2
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. |
3
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. |
4
Indirect subsidiaries held through direct subsidiaries (as of December 31, 2012)
Direct Subsidiaries |
Indirect Subsidiaries |
Ownership by |
||||
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 | |||
|
|
5
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 |
Some of the totals may not sum due to rounding. |
6
Source and Use of Funds
(KRW billion) | ||||||||||||||||||||||||||||||||||||||||||||||||||
FY2012 | FY2011 | FY2010 | ||||||||||||||||||||||||||||||||||||||||||||||||
Jan. 1 ~ Dec. 31 | Jan. 1 ~ Dec. 31 | Jan. 1 ~ Dec. 31 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Basis |
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 Stockholders 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. |
7
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 Banks BIS Capital Adequacy Ratios. |
- | Basel II TSA was applied in calculating Jeju Banks BIS Capital Adequacy Ratios. |
- | Basel I was applied in calculating Shinhan Savings Banks BIS Capital Adequacy Ratios. |
- | The Adjusted Equity Capital Ratio represents the ratio of total adjusted shareholders 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. |
8
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 Banks foreign currency liquidity ratio reflected securitization weight with the guidelines issued by the FSS |
9
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. |
10
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 |
11
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. |
12
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 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Some of the totals may not sum due to rounding |
13
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 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
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 |
14
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. |
15
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 |
|
16
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 |
17
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.
18
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 Groups 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). |
19
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 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
20
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