Shinhan Financial Group Co., Ltd. · KRX:055550
Shinhan Financial — Q2 2023 Earnings Presentation
40 slides from Shinhan Financial's earnings presentation, Jul 27, 2023
Slide 1: Business Results 2Q 2023
cur We believe finance should be + Friendly, NYSE More secure, NYSE Creative Business Results 2Q 2023 @ Shinhan Financial Group
Slide 2: Disclaimer
Disclaimer The financial information contained herein has neither been reviewed nor audited by independent auditors. Therefore, no assurance is given that the financial information is accurate or complete, and such financial information may differ from the financial information to be contained in ou
Slide 3: Contents
Contents I. 2Q23 Result Highlights II. Supplements The financial information contained herein has neither been reviewed nor audited by independent auditors. Therefore, no assurance is given that the financial information contained herein is accurate or complete, and such financial information may di
Slide 4: 2Q23 Result Highlights
l. 2Q23 Result Highlights
Slide 5: Group Net Income
Group Net Income Movements (Consolidated basis, QoQ) (KRW bn) Movements (Consolidated basis, YoY) (KRW bn) Plus factors Plus factors Minus factors Minus factors +5 +34 -108 +360 Non- -230 Operating Non- Income* +120 Interest Income* SG&A* -408 Non- -87 +168 Non- Operating Interest Income* In
Slide 6: 2Q23 Financial Overview
2Q23 Financial Overview (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 When interest-bearing assets grew only by 0.1%, interest Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % income went up by 4.7% QoQ reflecting 6bp NIM Operating Income before 7,300.5 6,772.0 528.5 7.8% 3,727.5 3,398.2 329.2 9.7% 3,573.1 154.4 4.3% improvemen
Slide 7: [Note 1] Earnings Trend
[Note 1] Earnings Trend Operating Income (KRW bn) EPS (KRW) Operating Income Growth (%) 11.5% 10.0 % 8.7% 19.8% 5.2% 3.5% 4.6% 3.6% 9,774 0.6% 1.4% 9.5%1 8,500 -6.3% 7,000 7,308 6,579 6,654 12,692 12,868 5,742 6,116 11,132 11,533 4,789 9,980 7,301 3,810 4,195 8,782 9,184 6,772 8,019 8,068 8,486 FY
Slide 8: Interest Income
Interest Income Details of Interest Income Although interest-bearing assets only grew by 0.1%, Group (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 interest income increased by 4.7% QoQ reflecting non- Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % bank’s funding cost stabilization, and bank’s NIM Interest Revenue (a) 13,307.7
Slide 9: [Note 2] Loan Growth, Deposits, and Margin Trend
[Note 2] Loan Growth, Deposits, and Margin Trend Group Interest Income (KRW bn) KRW Loan Growth (%) SHB NIM Trend (%) Bank Non-bank Retail YTD Corporate YTD Annualized NIM Quarterly NIM Monthly NIM BOK base rate Total Loans YTD 10,597 10.6% 9.0% 2021 2022 2023 9,053 7.2% 7.4% 3.8% 3.50 3.5
Slide 10: Non-interest Income
Non-interest Income Details of Non-interest Income Despite decrease in securities-related income, non-interest income increased 3.4% QoQ thanks to recovery in (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 insurance-related income and fee income Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % On YoY basis, non-interest income
Slide 11: [Note 3] Non-interest Income Trend and Details
[Note 3] Non-interest Income Trend and Details Non-interest Income Trend (KRW bn) Non-interest Income Breakdown (KRW bn) Fees & Commission (%) Non-interest Income Fees & Commission Securities related & FX Trading/Derivatives Non-interest Income weight (Operating Income/Non-interest Income)
Slide 12: Expenses and Provisioning
Expenses and Provisioning Details of G&A Expense Despite one-offs in 1Q23(32Wbn in Shinhan Life’s ERP (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 costs) G&A costs increased 6.4% QoQ reflecting tax Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % deductions and higher advertising and servicing expenses G&A Expense 2,798.8 2,56
Slide 13: [Note 4] Expenses and Provisioning Trend
[Note 4] Expenses and Provisioning Trend G&A Expense (KRW bn) Frontloading Provisions for Resilience (KRW bn, %) Nominal CCR Recurring CCR ■ NPL Coverage Ratio G&A Expenses CIR CIR (excluding ERP) ■ Recurring Provisioning ■ Coverage Ratio for Precautionary & Below ■ Additional Provisioning
Slide 14: Group Asset Quality and Provisioning Outlook
Group Asset Quality and Provisioning Outlook Asset Quality and Delinquency Monitoring on Real Estate PF Loss Absorption Capacity Delinquency Trend (%) Real Estate PF Stress Test Group Credit Cost (%) [Non-Bank Delinquency] [Shinhan Card] (2M delinquency migration rate) Step1 Real Estate PF review fo
Slide 15: [Note 5] Real Estate PF Updates
[Note 5] Real Estate PF Updates Group Real Estate-related Exposure (KRW tn, %) Tightened Risk Management of Real Estate Financings Real Estate PF Group Real Estate-related Exposure Bridge Loan (KRW bn) 2023.3 2023.6 QoQ Note 22% Total 8,776 8,861 85 Real Estate PF 6,853 7,001 147 Shinhan Bank we
Slide 16: [Note 6] Asset Quality
[Note 6] Asset Quality Group Asset Quality (%) SHB Delinquency Rate Precautionary & Below Substandard & Below 0.26% 0.27% 0.27% Precautionary & Below Coverage Ratio NPL Coverage Ratio Loans 0.25% 0.24% 209% 0.21% in KRW 0.19% 195% 183% 170% 168% 151% 73% 0.33% 0.33% 0.32% 72% SME 0.29% 0.30%
Slide 17: SFG Income by Subsidiaries
SFG Income by Subsidiaries Net Income by Subsidiaries1 Although interest income increased QoQ, predominantly (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 driven by margin improvement, SHB’s net income decreased Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % due to large provisions set aside, increased G&A costs, and Bank (a)
Slide 18: [Note 7] SFG Income by Subsidiaries
[Note 7] SFG Income by Subsidiaries NI Contribution (%) Snapshot of NI Contribution (%) NI Contribution Trend (KRW bn) by Non-Bank Subsidiaries by Non-Bank Subsidiaries Bank Consumer Finance Insurance Capital Markets & Others Group Non-Bank Non-Bank Weight (%) 42.4% 39.0% 41.5% Others 41.7
Slide 19: [Note 8] SFG Overseas Business
[Note 8] SFG Overseas Business NI Contribution by Overseas Business (KRW bn) Asset Contribution by Overseas Business (KRW bn) NI Contribution (%) Asset Contribution (%) Overseas Net Income Overseas Assets 8.1% 8.3% 7.8% 12.1% 7.5% 11.7% 6.9% 7.0% 7.2% 11.8% 10.3% 9.8% 9.8% 10.3% +2.1% 564.6
Slide 20: Capital Management and Profitability
Capital Management and Profitability Group BIS Ratio Group BIS Ratio Through effective capital management and BIS ratio Tier 1 ratio CET 1 ratio the conversion of CPS (0.75Wtn), CET1 (KRW bn) 2023.6(e) 2022.6 2023.3 Y/Y Y/Y % QoQ QoQ % ratio is expected to be 12.95%, up 0.27%p 16.2% 16.1% Ri
Slide 21: [Note 9] Shareholder Return
[Note 9] Shareholder Return Total Shareholder Return (incl. preferred shares) (%, KRW bn) DPS(KRW) Amount of cancelled shares / Total shares(KRW) (KRW) Cash dividend Share cancellations(buyback) TSR 30.0% 27.9% 2021 2022 2023 26.0% 26.0% 1,400 300 865 23.9% 300 23.6% 269 287 150 193 (137Wb
Slide 22: Digital, Digital to Value
Digital, Digital to Value Elevating Financial Competitiveness while Enlarging Social Value through Digital (as of 1H 2023) More Friendly More MoreSecure Secure More MoreCreative Creative Pursuing qualitative & Strengthened customer protection, Process and business innovation Platform Social Financia
Slide 23: ESG Initiatives
ESG Initiatives CO2 Emissions (Scope1,2 / Scope3) Inclusive Finance (As of 1H 2023) Scope 1 + 2 Emissions Financed Emissions (Scope3) Inclusive Finance CSR Innovative Finance Annual emissions 2Q emissions (thousand tCO2eq) Financed emissions (million tCO2eq) Carbon emissions (t/Wbn) Empoweri
Slide 24: Supplements
lI. Supplements
Slide 25: 2Q23 Financial Overview
2Q23 Financial Overview (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Income before Expenses 7,300.5 6,772.0 528.5 7.8% 3,727.5 3,398.2 329.2 9.7% 3,573.1 154.4 4.3% Interest Income 5,268.0 5,099.5 168.5 3.3% 2,694.2 2,608.4 85.8 3.3% 2,573.8 120.3 4.7% Non-interest Incom
Slide 26: Financial Highlights by Subsidiaries
Financial Highlights by Subsidiaries (KRW bn) Ownership Total Assets1 Shareholder's Equity Profit for the Period2 ROA ROE Bank 618,752.6 32,643.8 1,689.2 Shinhan Bank 100.0% 611,475.6 32,112.2 1,680.5 0.68% 10.58% Jeju Bank 75.3% 7,277.0 531.6 8.7 0.24% 3.31% Non-bank 377,580.8 25,257.2 1,139.3 Cons
Slide 27: Shinhan Bank Income (1)
Shinhan Bank Income (1) (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Income (a=b+c) 4,538.9 4,221.5 317.5 7.5% 2,274.8 2,170.1 104.8 4.8% 2,264.1 10.7 0.5% Interest Income (b) 4,118.9 3,890.2 228.8 5.9% 2,116.4 2,037.8 78.5 3.9% 2,002.6 113.8 5.7% Non-interest Income (c)
Slide 28: Shinhan Bank Income (2)
Shinhan Bank Income (2) (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Non-interest Income (a+b+c) 420.0 331.3 88.7 26.8% 158.5 132.2 26.2 19.8% 261.6 -103.1 -39.4% Fee & Commission (a) 476.0 503.5 -27.5 -5.5% 239.5 237.8 1.7 0.7% 236.5 3.0 1.3% Fund Fees 26.4 34.2 -7.8 -22.8% 13.4
Slide 29: Shinhan Card Income
Shinhan Card Income (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Revenue (a) 2,674.0 2,543.6 130.3 5.1% 1,309.0 1,392.1 -83.1 -6.0% 1,365.0 -56.0 -4.1% Card business 1,536.6 1,485.3 51.3 3.5% 795.3 755.4 39.9 5.3% 741.3 54.0 7.3% Installment Finance 109.0 85.8 23.2 27.1%
Slide 30: Shinhan Life Insurance Income
Shinhan Life Insurance Income (KRW bn, %) 1H23 1H22 2Q23 2Q22 1Q23 Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % APE1 437.7 330.5 +107.2 +32.4% 212.4 162.2 +50.2 +30.9% 225.3 -13.0 -5.8% Protection 426.3 300.6 +125.7 +41.8% 208.5 149.7 +58.8 +39.2% 217.9 -9.4 -4.3% Savings, Annuities 11.3 29.9 -18.5 -62.1% 3.9 12.5
Slide 31: Shinhan Securities Income
Shinhan Securities Income (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Revenue 749.3 684.7 64.6 9.4% 409.3 335.6 73.6 21.9% 340.0 69.2 20.4% Fee & Commission 363.0 420.7 -57.7 -13.7% 200.6 192.5 8.1 4.2% 162.5 38.1 23.4% Brokerage fees 175.6 171.9 3.7 2.2% 94.2 80.0 14.2
Slide 32: Shinhan Capital Income
Shinhan Capital Income (KRW bn) 1H23 1H22 2Q23 2Q22 1Q23 Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Income before Expenses 353.5 278.3 75.2 27.0% 159.4 133.9 25.5 19.1% 194.1 -34.7 -17.9% (a=b+c-d-e) Interest Income (b) 288.1 226.1 62.0 27.4% 148.9 120.9 28.0 23.2% 139.2 9.8 7.0% Non-interest Income (c
Slide 33: SFG Subsidiaries Asset
SFG Subsidiaries Asset (KRW bn) 2023.6 2022.12 2023.3 2023.6 Weight % YTD YTD % QoQ QoQ % Bank 618,752.6 588,633.8 30,118.8 5.1% 591,944.0 26,808.6 4.5% 62.1% Shinhan Bank 611,475.6 581,202.6 30,273.0 5.2% 584,728.6 26,746.9 4.6% 61.4% Jeju Bank 7,277.0 7,431.3 -154.2 -2.1% 7,215.4 61.7 0.9% 0.7% No
Slide 34: Shinhan Bank Loans & Deposits
Shinhan Bank Loans & Deposits (KRW bn) 2023.6 2022.12 2023.3 2023.6 Weight % YTD YTD % QoQ QoQ % Loans in KRW 283,237.6 281,380.6 1,857.0 0.7% 281,519.2 1,718.4 0.6% 100.0% Retail 128,220.8 130,626.9 -2,406.0 -1.8% 129,311.1 -1,090.3 -0.8% 45.3% Mortgage 59,675.9 60,156.4 -480.5 -0.8% 60,068.4 -392.
Slide 35: Shinhan Bank Loans (Retail, Large Corporates)
Shinhan Bank Loans (Retail, Large Corporates) Delinquency (KRW bn, %) 2023.6 Weight % 2022.12 2023.3 YTD YTD % QoQ QoQ % 2022.6 2022.9 2022.12 2023.3 2023.6 Mortgage Loans 59,676 46.5% 60,156 -481 -0.8% 60,068 -393 -0.7% 0.09% 0.09% 0.11% 0.14% 0.15% Personal Loans 68,545 53.5% 70,470 -1,926 -2.7% 6
Slide 36: Shinhan Bank SME Loans
Shinhan Bank SME Loans Delinquency (KRW bn, %) 2023.6 Weight % 2022.12 2023.3 YTD YTD % QoQ QoQ % 2022.6 2022.9 2022.12 2023.3 2023.6 SME Total 127,957 100.0% 126,324 1,633 1.3% 126,763 1,194 0.9% 0.23% 0.25% 0.26% 0.33% 0.32% SOHO 65,121 50.9% 64,483 638 1.0% 64,646 475 0.7% 0.14% 0.16% 0.22% 0.33%
Slide 37: Shinhan Card Assets and Funding
Shinhan Card Assets and Funding (KRW bn, %) 2023.6 2022.12 2023.3 2023.6 Weight % YTD YTD % QoQ QoQ % Earning Assets 38,848.6 39,436.1 -587.6 -1.5% 38,487.0 361.5 0.9% 100.0% Credit Purchase 17,765.6 18,424.0 -658.4 -3.6% 17,705.1 60.4 0.3% 45.7% Cash Advances 1,631.7 1,794.1 -162.4 -9.1% 1,597.4 34
Slide 38: Asset Quality
Asset Quality Total Substandard & Loan Loss NPL (KRW bn) NPL Ratio Loans Normal Precautionary Substandard Doubtful Estimated Loss Below Allowance Coverage Ratio Group1 2023.6 387,640 381,739 3,872 838 496 695 2,029 0.52% 3,705 183% 2022.6 379,923 375,879 2,634 507 307 597 1,410 0.37% 2,942 209% Y/Y
Slide 39: Provisioning and Write-Offs
Provisioning and Write-Offs Provision for Credit Losses and Credit Cost Ratio (KRW bn) FY23 1Q23 2Q23 3Q23 4Q23 FY22 1Q22 2Q22 3Q22 4Q22 Shinhan Bank1 397.2 154.8 242.4 550.6 80.7 196.8 70.8 202.2 Retail 108.1 50.3 57.9 332.9 38.2 132.3 86.3 76.1 Corporate 289.1 104.6 184.5 217.7 42.5 64.5 -15.5 126
Slide 40: Additional Notes
Additional Notes Digital Transformation (pg.22) NOTE 1 ‘SFG Gross MAU’ is the sum of the MAU of Shinhan’s financial platforms and the MAU of Shinhan’s non-financial platforms. The MAU figures are based on managed data. * The MAU figures for financial platform represent the sum of MAUs of the followi
Shinhan Financial Group — Q2 2023 Earnings Presentation on 6ix