Shinhan Financial Group Co., Ltd. · KRX:055550

Shinhan Financial — Q2 2021 Earnings Presentation

30 slides from Shinhan Financial's earnings presentation, Jul 27, 2021

  1. Slide 1: Business Results

    SHG one Shinhan Business Results

  2. Slide 2: Contents

    Contents I. 1H21 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

  3. Slide 3: 1H21 Result Highlights

    l. 1H21 Result Highlights

  4. Slide 4: Improved Profitability with Leveled-up Fundamentals

    Improved Profitability with Leveled-up Fundamentals Record-high Recurring Income Uncertainties Alleviated Improved Profitability Earnings Breakdown by Business Lines COVID-19 Financial Relief Program Group ROE & ROA (KRW tn)  Banking (KRW bn)  Newly deferred interest (%)  ROA  ROE  Consumer Fin

  5. Slide 5: Group Net Income

    Group Net Income Group Net Income Movements (KRW bn)  1Q  2Q  Plus factors  Minus factors +463 -228 Tax and 2,444 3,403 3,415 +35.4% 4 others 3,157 -167 +233 Non- 2,919 Operating 2,775 Income* SG&A* Provision 2,444 for credit losses* 1,806 1,252 +334 Non- Interest 873 Income* 1,806 Interest 1,19

  6. Slide 6: Net Interest Income

    Net Interest Income Group Net Interest Income and NIM (KRW bn) Interest Rate & NIM Movement 1 (%)  Bank  Non-bank  Group NIM 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 2.02% 2.06% 2.10% BOK Base rate 0.75 0.50 0.50 0.50 0.50 0.50 2.00% 1.84% 1.81% 1.80% 3-y T Bond yield (average) 1.23 0.92 0.85 0.95 1.04 1.19

  7. Slide 7: Non-interest income

    Non-interest income Non-interest Income (KRW bn) Details of Non-interest Income and Fees & Commission  Fees & Commission  Securities, F/X trading & Derivatives (KRW bn) 1H21 1H20 YoY % 2Q21 1Q21 QoQ %  Insurance  Others Non-Interest Income 2,014.3 1,781.0 13.1% 983.6 1,030.7 -4.6% +13.1% 3,378 F

  8. Slide 8: Expenses and Provisioning

    Expenses and Provisioning G&A Expense (KRW bn) Details of G&A Expense  Salary & Employee benefits  D&A  Other expenses  Cost Income ratio (KRW bn) 1H21 1H20 YoY% 2Q21 1Q21 QoQ% 51.3% 52.4% 42.5% G&A Expense 2,635.9 2,469.2 6.8% 1,356.9 1,279.0 6.1% 47.5% 46.1% 41.4% 45.2% Salary & Employee 1,740

  9. Slide 9: Capital and Profitability

    Capital and Profitability Capital Adequacy Group BIS Ratio  SFG  SHB (KRW bn) 2021.6 2020.12 YTD % 2021.3 QoQ % 18.5% 18.7% BIS ratio 15.9% 16.5% Risk weighted assets 259,373 252,321 2.8% 257,125 0.9% 15.7% Capital 42,826 39,709 7.9% 41,114 4.2% 13.9% 15.9% 16.2% CET1 34,630 32,462 6.7% 33,551 3.2

  10. Slide 10: Contribution by Subsidiaries and by Matrix

    Contribution by Subsidiaries and by Matrix Global Investment Banking Net Income Weight by Subsidiaries (%) (Operating Income, KRW bn) +36.0% 916 683 551 Group Non-Bank  Card, Savings Bank 479 405 303  Life, Orange Banks Non-Banks Others FY17 FY18 FY19 FY20 1H20 1H21  Investment Corp, 53% 47% 1% C

  11. Slide 11: Digital Transformation (DT)

    Digital Transformation (DT) MAU & Digital Revenue Creation Digital Coverage & Cost Efficiencies MAU of Major Digital Platforms1 (ten thousand users) Digital Coverage2 (%) 72.6 68.9  SHB(SOL)  SHC(PayFAN)  SHIC(Alpha + i mobile) 68.6 SHB 748  Deposits 55.2 55.5 62.2 685  Loans 559 46.6 514 39.8

  12. Slide 12: Sustainability Initiative (ESG)

    Sustainability Initiative (ESG) Zero Carbon Drive Innovative Finance (KRW bn) (KRW bn) Green Finance Loan2 Investment3 Loan Investment1  Progress (%)  Progress (%) 189.1% 72.1% 84.6% 110.3% 25,574 33.6% 78.8% Annual Target Annual Target 1,702 18,700 1,165 1,205 13,487 986 1,213 Annual Target 1,200

  13. Slide 13: Strategic Initiatives and its Overview

    Strategic Initiatives and its Overview Fundamental Resilience Eco-system Sustainability Human-talent 2020s Mid-term Financial FIRST Value Optimal Growth ROE 10%+ Growth from Non- Target #1 Customer’s bank, Non-interest, Customers Shareholders Focus on Shareholder investment return return Corporate M

  14. Slide 14: Supplements

    ll. Supplements

  15. Slide 15: 1H21 Financial Overview

    1H21 Financial Overview (KRW bn) 1H21 1H20 2Q21 1Q21 YoY YoY % QoQ QoQ % Operating Income before Expenses 6,370.8 5,803.8 567.0 9.8% 3,221.8 3,148.9 72.9 2.3% Interest Income 4,356.4 4,022.8 333.7 8.3% 2,238.2 2,118.1 120.1 5.7% Non-interest Income 2,014.3 1,781.0 233.3 13.1% 983.6 1,030.8 -47.1 -4.

  16. Slide 16: SFG Income by Subsidiaries

    SFG Income by Subsidiaries Net Profit (before reflecting ownership) (KRW bn) Ownership 1H21 1H20 YoY % 2Q21 1Q21 QoQ % Bank 1,384.9 1,152.7 20.1% 720.7 664.2 8.5% Shinhan Bank 1,370.9 1,140.7 20.2% 714.4 656.4 8.8% 100.0% Jeju Bank 14.1 12.0 17.2% 6.3 7.8 -19.9% 75.3% Non-bank 1,220.9 728.0 67.7% 60

  17. Slide 17: Financial Highlights by Subsidiaries

    Financial Highlights by Subsidiaries Shareholder's Profit for the (KRW bn) Ownership Total Assets1 ROA ROE Equity Period2 Bank 538,942.1 28,649.7 1,384.9 Shinhan Bank 100.0% 532,239.7 28,134.7 1,370.9 0.62% 9.92% Jeju Bank 75.3% 6,702.4 514.9 14.1 0.43% 5.53% Non-bank 319,730.5 19,090.4 1,220.9 Cons

  18. Slide 18: Shinhan Bank Income (1)

    Shinhan Bank Income (1) (KRW bn) 1H21 1H20 YoY % 2Q21 1Q21 QoQ % Operating Income (a=b+c) 3,546.0 3,415.8 3.8% 1,803.4 1,742.6 3.5% Interest Income (b) 3,166.2 2,950.5 7.3% 1,619.5 1,546.7 4.7% Non-interest Income (c) 379.8 465.3 -18.4% 183.9 195.9 -6.1% G&A Expenses (d) 1,559.4 1,511.5 3.2% 822.4 7

  19. Slide 19: Shinhan Bank Income (2)

    Shinhan Bank Income (2) (KRW bn) 1H21 1H20 YoY % 2Q21 1Q21 QoQ % Non-interest Income (a+b+c) 379.8 465.3 -18.4% 183.9 195.9 -6.1% Fee & Commission (a) 495.4 495.2 0.0% 255.2 240.2 6.2% Fund Fees 48.0 43.3 10.9% 23.2 24.7 -6.0% Bancassurance Fees 15.9 24.8 -35.6% 8.6 7.3 17.0% F/X Fees 74.7 65.5 13.9

  20. Slide 20: Shinhan Card Income

    Shinhan Card Income (KRW bn) 1H21 1H20 YoY % 2Q21 1Q21 QoQ % Operating Revenue (a) 2,134.6 2,046.0 4.3% 1,049.0 1,085.6 -3.4% Card business 1,417.8 1,456.8 -2.7% 734.8 682.9 7.6% Installment Finance 77.1 71.2 8.3% 39.9 37.2 7.2% Lease 185.6 127.8 45.1% 95.3 90.2 5.7% Others 454.2 390.2 16.4% 179.0 2

  21. Slide 21: Life Insurance Income

    Life Insurance Income Shinhan Life Orange Life (KRW bn) 1H21 1H20 YoY% 2Q21 1Q21 QoQ% (KRW bn) 1H21 1H20 YoY% 2Q21 1Q21 QoQ% Premium Income 1,941.9 2,064.5 -5.9% 960.5 981.4 -2.1% Premium Income 1,696.4 1,850.4 -8.3% 822.7 873.7 -5.8% Net Profit 92.2 91.6 0.7% 19.4 72.8 -73.4% Net Profit 216.8 137.5

  22. Slide 22: Shinhan Investment Corp. Income

    Shinhan Investment Corp. Income (KRW bn) 1H21 1H20 YoY % 2Q21 1Q21 QoQ % Operating Revenue 845.8 493.8 71.3% 422.9 422.9 0.0% Fee & Commission 433.7 321.8 34.8% 206.1 227.7 -9.5% Brokerage fees 287.3 198.4 44.8% 125.7 161.6 -22.2% Financial Product fees 42.9 43.7 -1.9% 20.0 22.9 -12.4% Investment Ba

  23. Slide 23: SFG Subsidiaries Asset

    SFG Subsidiaries Asset (KRW bn) 2021.06 2020.12 YTD % 2021.03 QoQ % 2021.06 Weight % Bank 538,942.1 523,700.1 2.9% 534,608.3 0.8% 62.8% Shinhan Bank 532,239.7 517,111.1 2.9% 528,045.8 0.8% 62.0% Jeju Bank 6,702.4 6,589.0 1.7% 6,562.5 2.1% 0.8% Non-Bank 319,730.5 309,629.3 3.3% 312,822.8 2.2% 37.2% C

  24. Slide 24: Shinhan Bank Loans & Deposits

    Shinhan Bank Loans & Deposits (KRW bn) 2021.06 2020.12 YTD % 2021.03 QoQ % 2021.06 Weight % Loans in KRW 259,192 248,808 4.2% 255,079 1.7% 100.0% Retail 128,422 126,266 1.7% 128,689 -0.2% 49.5% Mortgage 54,482 53,355 2.1% 54,398 0.2% 21.0% Others1 73,939 72,911 1.4% 74,291 -0.5% 28.5% Corporate 130,

  25. Slide 25: Shinhan Bank Loans (Retail, Large Corporates)

    Shinhan Bank Loans (Retail, Large Corporates) Delinquency (KRW bn, %) 2021.06 Weight % 2020.12 YTD % 2021.03 QoQ % 2020.06 2020.09 2020.12 2021.03 2021.06 Mortgage Loans 54,482 42.4% 53,355 2.1% 54,398 0.2% 0.14% 0.12% 0.10% 0.09% 0.09% Personal Loans 73,939 57.6% 72,911 1.4% 74,291 -0.5% 0.56% 0.44

  26. Slide 26: Shinhan Bank SME Loans

    Shinhan Bank SME Loans Delinquency (KRW bn, %) 2021.06 Weight % 2020.12 YTD % 2021.03 QoQ% 2020.06 2020.09 2020.12 2021.03 2021.06 SME Total 111,861 100.0% 91,185 22.7% 107,522 4.0% 0.39% 0.32% 0.30% 0.34% 0.33% SOHO 58,236 52.1% 46,785 24.5% 56,139 3.7% 0.22% 0.18% 0.15% 0.17% 0.16% Audited SME 18,

  27. Slide 27: Shinhan Card Assets and Funding

    Shinhan Card Assets and Funding 2021.06 (KRW bn, %) 2021.06 2020.12 YTD % 2021.03 QoQ % Weight % Earning Assets 33,386.3 31,963.9 4.4% 32,408.9 3.0% 100.0% Credit Purchase 15,222.7 14,602.3 4.2% 14,775.5 3.0% 45.6% Cash Advances 1,598.0 1,571.0 1.7% 1,530.6 4.4% 4.8% Card Loan 7,513.7 7,371.7 1.9% 7

  28. Slide 28: Asset Quality

    Asset Quality NPL Total Substandard Loan Loss (KRW bn) NPL Ratio Coverage Loans Estimated & Below Allowance Normal Precautionary Substandard Doubtful Ratio Loss Group1 2021.06 357,634 353,712 2,048 935 366 574 1,875 0.52% 2,703 144% 2020.12 341,817 337,673 2,238 906 367 633 1,906 0.56% 2,839 149% YT

  29. Slide 29: Provisioning and Write-Offs

    Provisioning and Write-Offs Provision for Credit Losses and Credit Cost Ratio (KRW bn) 1H21 1Q21 2Q21 FY20 1Q20 2Q20 3Q20 4Q20 Shinhan Bank1 68.0 58.6 9.4 592.4 96.8 239.3 118.1 138.1 Retail 77.1 39.9 37.2 210.4 47.6 49.0 58.2 55.5 Corporate -9.1 18.7 -27.8 382.0 49.2 190.3 59.9 82.6 Shinhan Card1 2

  30. Slide 30: Disclaimer and Additional Notes

    Disclaimer and Additional Notes Please note the following: • Financial information has been prepared in accordance with the Korean IFRS (K-IFRS). • The financial figures have been derived following K-IFRS No.1109, ‘Financial instruments’ and K-IFRS No.1115, ‘Revenue from Contracts with Customers’ fo

Shinhan Financial Group — Q2 2021 Earnings Presentation on 6ix