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

Shinhan Financial — Q1 2021 Earnings Presentation

30 slides from Shinhan Financial's earnings presentation, Apr 23, 2021

  1. Slide 1: Business Results 1Q 2021

    Qne Shinhan Business Results _ 1Q 2021 @ Shinhan Financial Group

  2. 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 contained herein is accurate or complete, and such financial information may differ from the financial information to b

  3. Slide 3: Contents

    Contents I. 1Q21 Result Highlights II. Supplements

  4. Slide 4: I. 1Q21 Result Highlights

    l. 1Q21 Result Highlights

  5. Slide 5: Continuing Upward Trajectory of Recurring Income

    Continuing Upward Trajectory of Recurring Income  Under consistent strategic direction set by “F.R.E.S.H 2020s”, recorded robust growth (Non-bank and Non-interest income increased +84% YoY, +40% YoY and +40% YoY, respectively) - Strong profit streaming from Non-bank (Non-bank Net Income: 620 Wbn) -

  6. Slide 6: 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

  7. Slide 7: 1Q21 Financial Overview

    1Q21 Financial Overview (KRW bn) 1Q21 1Q20 YoY % 4Q20 QoQ % Operating Income before Expenses 3,148.9 2,738.1 15.0% 2,776.2 13.4% Interest Income 2,118.1 2,003.9 5.7% 2,110.3 0.4% Non-interest Income 1,030.8 734.1 40.4% 665.9 54.8% G&A Expenses 1,279.0 1,197.9 6.8% 1,487.1 -14.0% Operating Income 1,8

  8. Slide 8: Group Net Income

    Group Net Income Group Net Income Movements (Unit: KRW bn)  Plus factors  Minus factors +297 -56 Non- -81 +95 -109 Operating 3,403 3,415 Income* SG&A* Provision for credit Tax and 1,192 3,157 +27.8% losses* others 2,919 2,775 +114 Non- 1,192 Interest Income* 932 Interest Income* 932 FY16 FY17 FY18

  9. Slide 9: 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 2.02% 2.06% 2.10% 2.00% 1.86% 1.81% BOK Base rate 0.75 0.50 0.50 0.50 0.50 1.80% 3-y T Bond yield (average) 1.23 0.92 0.85 0.95 1.04 +5.7% 8,155 NI

  10. Slide 10: 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  Insurance  Others (KRW bn) 1Q21 1Q20 YoY % 4Q20 QoQ % +40.4% Non-Interest Income 1,031 734 40.4% 666 54.8% 3,131 3,378 1,031 Fees & Com

  11. Slide 11: 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) 1Q21 1Q20 YoY % 4Q20 QoQ % 51.3% 52.4% G&A Expense 1,279 1,198 6.8% 1,487 -14.0% 43.7% 40.6% 47.5% 46.1% 45.2% Salary & Employee benefits 854 764 11.

  12. Slide 12: Capital and Profitability

    Capital and Profitability Capital Adequacy  SFG  SHB Group BIS Ratio 18.5% BIS ratio (KRW tn) 1Q21 1Q20 YoY % 4Q20 QoQ % 15.9% 18.0% 15.9% Risk weighted assets 258.3 252.0 2.4% 261.8 -1.4% 15.7% 13.9% Capital 41.1 39.7 3.4% 36.8 11.5% Tier1 ratio CET1 33.4 32.5 3.0% 29.7 12.7% 15.9% 15.6% 13.3% Ti

  13. Slide 13: CET1 Movement

    CET1 Movement (%) Decrease Increase +10bp 0.46 0.30 0.07 1.15 1.10 12.9 12.9 13.0 13.0 13.0 11.8 11.8 11.9 11.9 FY20 CET1 Basel Ⅲ FY20 Profit for RWA Others 2 1Q21 Basel Ⅲ 1Q21 1 1 (old) CET1 the year CET1 CET1 Change Change (old) NOTE 1 Reflecting early adoption of the revised BASEL III credit risk

  14. Slide 14: Contribution by Subsidiaries and by Matrix

    Contribution by Subsidiaries and by Matrix Net Income Weight by Subsidiaries (%) Global Investment Banking (Operating Income, KRW bn) +19.6%  Shinhan Card  Capital, Savings Bank  Life, Orange Life 916  Investment Corp.  Others 683 208 479 174 Non-Banks Non-Banks 303 FY17 FY18 FY19 FY20 1Q20 1Q2

  15. Slide 15: Digital Transformation (DT)

    Digital Transformation (DT) Digital Coverage Revenue Creation and Cost Efficiencies (Unit: %) Operating Income before Expenses via Digital Channels Deposit 1Q21 73.1  Group Contribution(%) (Unit: KRW billion) 2020 72.6 14.2 Shinhan 2019 68.6 12.7 Bank 2018 55.2 11.1 9.5 \ 9.2 411 Loan 1Q21 60.1 353

  16. Slide 16: Sustainability Initiative (ESG)

    Sustainability Initiative (ESG) Zero Carbon Drive Innovative Finance (Unit: KRW bn) (Unit: KRW bn) Green Finance Loan6 Investment7 Loan1 Investment2  Progress (%) 28.9% 32.4%  Progress (%) 110.3 189.1 % % 9.7% Annual Target 34.0% 18,700 25,574 Annual Target 1,165 Annual Target 1,205 1,200 1,213 1,

  17. Slide 17: II. Supplements

    ll. Supplements

  18. Slide 18: SFG Income by Subsidiaries

    SFG Income by Subsidiaries Net Profit (before reflecting ownership) (KRW bn) Ownership 1Q21 1Q20 YoY % 4Q20 QoQ % Bank 664.2 632.2 5.1% 314.5 111.2% Shinhan Bank 656.4 626.5 4.8% 312.7 109.9% 100.0% Jeju Bank 7.8 5.6 38.2% 1.7 354.3% 75.3% Non-bank 620.0 337.3 83.8% 233.8 165.2% Consumer Shinhan Car

  19. Slide 19: Shinhan Bank Income (1)

    Shinhan Bank Income (1) (KRW bn) 1Q21 1Q20 YoY % 4Q20 QoQ % Operating Income (a=b+c) 1,742.6 1,674.9 4.0% 1,685.9 3.4% Interest Income (b) 1,546.7 1,478.2 4.6% 1,498.6 3.2% Non-interest Income (c) 195.9 196.7 -0.4% 187.3 4.6% G&A Expenses (d) 737.1 743.6 -0.9% 943.8 -21.9% Pre-Provision Operating In

  20. Slide 20: Shinhan Bank Income (2)

    Shinhan Bank Income (2) (KRW bn) 1Q21 1Q20 YoY % 4Q20 QoQ % Non-interest Income (a+b+c) 195.9 196.7 -0.4% 187.3 4.6% Fee & Commission (a) 240.2 259.8 -7.5% 254.9 -5.8% Fund Fees 24.7 22.3 10.9% 22.3 10.9% Bancassurance Fees 7.3 13.4 -45.3% 10.0 -26.9% F/X Fees 33.1 33.8 -2.0% 43.2 -23.3% Trust Fees

  21. Slide 21: Shinhan Card Income

    Shinhan Card Income (KRW bn) 1Q21 1Q20 YoY % 4Q20 QoQ % Operating Revenue (a) 1,085.6 1,091.6 -0.6% 1,138.8 -4.7% Card business 682.9 708.0 -3.5% 684.2 -0.2% Installment Finance 37.2 35.2 5.7% 39.2 -5.2% Lease 75.5 62.2 21.3% 73.0 3.4% Others 290.0 286.2 1.3% 342.4 -15.3% Interest Expense (b) 122.8

  22. Slide 22: Life Insurance Income

    Life Insurance Income Shinhan Life Orange Life QoQ % QoQ % (KRW bn) 1Q21 1Q20 YoY % 4Q20 (KRW bn) 1Q21 1Q20 YoY % 4Q20 (YTD %) (YTD %) Premium Income 981.4 1,042.0 -5.8% 999.3 -1.8% Premium Income 873.7 906.7 -3.6% 913.1 -4.3% Net Profit 72.8 39.7 83.6% 6.6 1,009.8% Net Profit 107.7 59.5 81.0% 66.0

  23. Slide 23: Shinhan Investment Corp. Income

    Shinhan Investment Corp. Income QoQ % (KRW bn) 1Q21 1Q20 YoY % 4Q20 (YTD %) Operating Revenue 422.9 226.6 86.7% 364.1 16.2% Fee & Commission 227.7 152.4 49.4% 203.7 11.8% Brokerage fees 161.6 84.0 92.4% 118.2 36.8% Financial Product fees 22.9 22.7 0.8% 20.4 12.0% Investment Banking 36.7 31.4 17.0% 6

  24. Slide 24: SFG Subsidiaries Asset

    SFG Subsidiaries Asset 2021.03 (KRW bn) 2021.03 2020.12 YTD % Weight % Bank 534,643.7 523,700.1 2.1% 63.1% Shinhan Bank 528,081.2 517,111.1 2.1% 62.3% Jeju Bank 6,562.5 6,589.0 -0.4% 0.8% Non-Bank 312,823.6 309,638.6 1.0% 36.9% Consumer Shinhan Card 35,522.2 34,885.2 1.8% 4.2% Finance Shinhan Saving

  25. Slide 25: Shinhan Bank Loans & Deposits

    Shinhan Bank Loans & Deposits 2021.03 (KRW bn) 2021.03 2020.12 YTD % 2020.03 YoY % Weight % Loans in KRW 255,079 248,813 2.5% 231,468 10.2% 100.0% Retail 128,689 126,266 1.9% 117,925 9.1% 50.5% Mortgage 54,398 53,355 2.0% 53,202 2.2% 21.3% Others1 74,291 72,911 1.9% 64,723 14.8% 29.1% Corporate 126,

  26. Slide 26: Shinhan Bank Loans (Retail, Large Corporates)

    Shinhan Bank Loans (Retail, Large Corporates) Delinquency (KRW bn, %) 2021.03 Weight % 2020.12 YTD % 2020.03 2020.06 2020.09 2020.12 2021.03 Mortgage Loans 54,398 42.3% 53,355 2.0% 0.14% 0.14% 0.12% 0.10% 0.09% Personal Loans 74,291 57.7% 72,907 1.9% 0.52% 0.56% 0.44% 0.41% 0.41% High credit unsecur

  27. Slide 27: Shinhan Bank SME Loans

    Shinhan Bank SME Loans Delinquency (KRW bn, %) 2021.03 Weight % 2020.12 YTD % 2020.03 2020.06 2020.09 2020.12 2021.03 SME Total 107,522 100.0% 103,995 3.4% 0.41% 0.39% 0.32% 0.30% 0.34% SOHO 56,139 52.2% 54,387 3.2% 0.22% 0.22% 0.18% 0.15% 0.17% Audited SME 17,412 16.2% 17,097 1.8% 0.22% 0.37% 0.19%

  28. Slide 28: Shinhan Card Assets and Funding

    Shinhan Card Assets and Funding 2021.03 (KRW bn, %) 2021.03 2020.12 YTD % 2020.03 YoY % Weight % Earning Assets 32,409 31,964 1.4% 29,488 9.9% 100.0% Credit Purchase 14,775 14,602 1.2% 13,848 6.7% 45.6% Cash Advances 1,531 1,571 -2.6% 1,772 -13.6% 4.7% Card Loan 7,402 7,372 0.4% 7,013 5.5% 22.8% (Re

  29. Slide 29: 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 2021.03 349,696 345,604 2,134 962 365 631 1,959 0.56% 2,780 142% 2020.12 341,817 337,673 2,238 906 367 633 1,906 0.56% 2,839 149% YT

  30. Slide 30: Provisioning and Write-Offs

    Provisioning and Write-Offs Provision for Credit Losses and Credit Cost Ratio (KRW bn) 1Q21 FY20 1Q20 2Q20 3Q20 4Q20 Shinhan Bank1 58.6 592.4 96.8 239.3 118.1 138.1 Retail 39.9 210.4 47.6 49.0 58.2 55.5 Corporate 18.7 382.0 49.2 190.3 59.9 82.6 Shinhan Card1 102.1 483.4 161.8 103.7 90.7 127.3 Total

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