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

Shinhan Financial — Q3 2023 Earnings Presentation

39 slides from Shinhan Financial's earnings presentation, Oct 27, 2023

  1. Slide 1: Shinhan Financial Group 3Q23 Business Results

    We believe finance should be Friend(4, NYSE + More Secure, Creative Q Shinhan Financial Group Se

  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 is accurate or complete, and such financial information may differ from the financial information to be contained in ou

  3. Slide 3: Contents

    Contents I. 3Q23 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

  4. Slide 4: I. 3Q23 Result Highlights

    l. 3Q23 Result Highlights

  5. 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 +69 -120 +730 -592 1,238 Interest Income* Non- -434 +200 Non- Operating Non- -106 +92 1,192 Interest Income* Interest 4,307 Interes

  6. Slide 6: 3Q23 Financial Overview

    3Q23 Financial Overview 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23  Although Group quarterly NIM went down 1bp QoQ, YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Group interest income grew by 2.6% QoQ reflecting 0.9% Operating Income before 10,977.2 10,047.5 929.6 9.3% 3,676.6 3,275.5 401.1 12.2% 3,727.5 -50.8 -1.4

  7. 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% 9.3% 5.2% 3.5% 4.6% 3.6% 8.7%1 9,435 0.6% 1.4% 8,500 -6.3% 7,000 7,308 6,579 6,654 12,692 12,868 5,742 6,116 10,977 11,132 11,533 10,048 4,789 9,980 3,810 4,195 8,782 9,184 8,019 8,068 8,486 F

  8. Slide 8: Interest Income

    Interest Income Details of Interest Income  Although Group NIM went down 1bp QoQ, Group interest 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23 income increased by 2.6% QoQ reflecting 0.9% growth in YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % interest-bearing assets and more business days during the Interest Revenue

  9. 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 BOK base rate  Total Loans YTD 10,597 10.6% 2021 2022 2023 9.0% 9,053 7.2% 7.4% 8,194 2,392 3.8% 8,001 3.

  10. Slide 10: Non-interest Income

    Non-interest Income Details of Non-interest Income  Despite increase in fee income and insurance-related 3Q23 3Q22 income, non-interest income decreased 11.6% QoQ due to (KRW bn) 3Q23 3Q22 2Q23 a drop in securities-related income YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ %  Fee income went up 9.7% QoQ,

  11. 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) 

  12. Slide 12: Expenses and Provisioning

    Expenses and Provisioning Details of G&A Expense  Group G&A costs increased 4.3% QoQ, but when excluding 3Q23 3Q22 SHB’s one-off ERP costs(74.3 Wbn) and the impact from the (KRW bn) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % reclassification of servicing expenses recognized in 3Q23, Group

  13. Slide 13: [Note 4] Expenses and Provisioning Trend

    [Note 4] Expenses and Provisioning Trend G&A Expense (KRW bn) Preemptive 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 (

  14. Slide 14: [Note 5] Asset Quality

    [Note 5] Asset Quality Group Asset Quality (%) SHB Delinquency Rate  Precautionary & Below  Substandard & Below 0.26% 0.27% 0.27% 0.27%  Precautionary & Below Coverage Ratio  NPL Coverage Ratio Loans 0.25% 0.24% 209% 0.21% in KRW 0.19% 195% 184% 170% 168% 151% 73% 0.33% 0.33% 0.32% 0.34% 72% SME

  15. Slide 15: [Note 6] Real Estate PF Updates

    [Note 6] 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) 2023.6 2023.9 QoQ Note 20% Total 8,861 9,129 268 Real Estate PF 7,001 7,275 274 Shinhan Bank w

  16. Slide 16: SFG Income by Subsidiaries

    SFG Income by Subsidiaries Net Income by Subsidiaries1 3Q23 3Q22  Despite a decrease in non-interest income reflecting higher (KRW bn) 3Q23 3Q22 2Q23 interest rate and f/x rate, SHB’s net income increased QoQ YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % thanks to interest income growth and decreased provi

  17. Slide 17: [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% 42.8% 41.7% 39.0% Other

  18. Slide 18: [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 8.3% 8.6% 12.1% 7.5% 8.4% 11.7% 11.2% 6.9% 7.0% 7.2% 10.0% 10.3% 9.8% 9.8% -2.4% -1.0%

  19. Slide 19: Capital Management and Profitability

    Capital Management and Profitability Group BIS Ratio Group BIS Ratio  CET1 ratio is expected to be 12.90%, down  BIS ratio  Tier 1 ratio  CET 1 ratio 0.09%p QoQ, driven by credit RWA growth (KRW bn) 2023.9(e) 2022.12 2023.6 YTD YTD % QoQ QoQ % reflecting loan growth and depreciation of 16.2% 16.

  20. Slide 20: [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 2021 2022 2023 30.0% 27.9% 26.0% 26.0% 1,400 865 23.6% 23.9% 300 300 386 269 287 150 149Wbn

  21. Slide 21: Digital, Digital to Value

    Digital, Digital to Value Digital Strategy Framework Fortifying Core DT Competencies and Fundamentals Enlarging Customer and Social Value Data Holistic Process Innovation Process Through Strengthened Data Capabilities 6 Key Customer-Centric Priorities Public • Data collaboration and SFG Process Inno

  22. Slide 22: ESG Initiatives

    ESG Initiatives CO2 Emissions (Scope1,2 / Scope3) Inclusive Finance (As of 3Q 2023, annual cumulative basis) Scope 1 + 2 Emissions Financed Emissions (Scope3) Inclusive Finance CSR Innovative Finance  Annual emissions  3Q emissions (thousand tCO2eq)  Financed emissions (million tCO2eq)  Carbon e

  23. Slide 23: II. Supplements

    lI. Supplements

  24. Slide 24: 3Q23 Financial Overview

    3Q23 Financial Overview 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Income before Expenses 10,977.2 10,047.5 929.6 9.3% 3,676.6 3,275.5 401.1 12.2% 3,727.5 -50.8 -1.4% Interest Income 8,031.3 7,831.7 199.7 2.5% 2,763.3 2,732.1 31.2 1.1% 2,694.2 69.1 2.6% Non-int

  25. Slide 25: Financial Highlights by Subsidiaries

    Financial Highlights by Subsidiaries (KRW bn) Ownership Total Assets1 Shareholder's Equity Profit for the Period2 ROA ROE Bank 633,169.3 33,567.7 2,612.2 Shinhan Bank 100.0% 625,976.3 33,031.9 2,599.1 0.69% 10.73% Jeju Bank 75.3% 7,193.0 535.8 13.1 0.26% 3.51% Non-bank 379,227.9 25,728.2 1,534.0 Con

  26. Slide 26: Shinhan Bank Income (1)

    Shinhan Bank Income (1) 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Income (a=b+c) 6,787.6 6,383.5 404.2 6.3% 2,248.7 2,162.0 86.7 4.0% 2,274.8 -26.1 -1.1% Interest Income (b) 6,256.3 6,029.9 226.5 3.8% 2,137.4 2,139.7 -2.3 -0.1% 2,116.4 21.1 1.0% Non-interest I

  27. Slide 27: Shinhan Bank Income (2)

    Shinhan Bank Income (2) 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Non-interest Income (a+b+c) 531.3 353.6 177.7 50.3% 111.3 22.3 89.0 399.9% 158.5 -47.2 -29.8% Fee & Commission (a) 690.0 726.2 -36.2 -5.0% 214.0 222.7 -8.7 -3.9% 239.5 -25.4 -10.6% Fund Fees 39.9 49.1 -9.

  28. Slide 28: Shinhan Card Income

    Shinhan Card Income 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Revenue (a) 4,120.1 4,087.1 33.0 0.8% 1,446.1 1,543.5 -97.3 -6.3% 1,309.0 137.2 10.5% Card business 2,343.8 2,216.6 127.2 5.7% 807.1 731.2 75.9 10.4% 795.3 11.8 1.5% Installment Finance 168.2 137.4

  29. Slide 29: Shinhan Life Insurance Income

    Shinhan Life Insurance Income 3Q23 3Q22 (KRW bn, %) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % APE1 745.9 524.1 221.8 42.3% 308.2 193.6 114.6 59.2% 212.4 95.9 45.1 Protection 725.0 474.1 250.9 52.9% 298.7 173.4 125.2 72.2% 208.5 90.2 43.3 Savings, Annuities 20.9 50.0 -29.2 -58.3% 9.6 20.2

  30. Slide 30: Shinhan Securities Income

    Shinhan Securities Income 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Revenue 1,137.8 946.8 191.0 20.2% 388.5 262.1 126.4 48.2% 409.3 -20.7 -5.1% Fee & Commission 565.3 567.2 -1.9 -0.3% 202.3 146.5 55.8 38.1% 200.6 1.8 0.9% Brokerage fees 278.2 240.4 37.8 15.7%

  31. Slide 31: Shinhan Capital Income

    Shinhan Capital Income 3Q23 3Q22 (KRW bn) 3Q23 3Q22 2Q23 YTD YTD Y/Y Y/Y % Q/Q Q/Q % QoQ QoQ % Operating Income before Expenses 506.8 416.7 90.1 21.6% 153.3 138.3 14.9 10.8% 159.4 -6.2 -3.9% (a=b+c-d-e) Interest Income (b) 438.6 353.8 84.8 24.0% 150.5 127.7 22.8 17.8% 148.9 1.6 1.1% Non-interest Inc

  32. Slide 32: SFG Subsidiaries Asset

    SFG Subsidiaries Asset (KRW bn) 2023.9 2022.12 2023.6 2023.9 Weight % YTD YTD % QoQ QoQ % Bank 633,108.8 588,633.8 44,474.9 7.6% 618,752.6 14,356.2 2.3% 62.5% Shinhan Bank 625,915.8 581,202.6 44,713.2 7.7% 611,475.6 14,440.2 2.4% 61.8% Jeju Bank 7,193.0 7,431.3 -238.3 -3.2% 7,277.0 -84.1 -1.2% 0.7%

  33. Slide 33: Shinhan Bank Loans & Deposits

    Shinhan Bank Loans & Deposits (KRW bn) 2023.9 2022.12 2023.6 2023.9 Weight % YTD YTD % QoQ QoQ % Loans in KRW 286,279.1 281,380.6 4,898.5 1.8% 283,237.6 3,041.5 1.1% 100.0% Retail 127,292.6 130,626.9 -3,334.3 -2.5% 128,220.8 -928.3 -0.7% 44.5% Mortgage 59,018.2 60,156.4 -1,138.2 -1.9% 59,675.9 -657.

  34. Slide 34: Shinhan Bank Loans (Retail, Large Corporates)

    Shinhan Bank Loans (Retail, Large Corporates) Delinquency (KRW bn, %) 2023.9 Weight % 2022.12 2023.6 YTD YTD % QoQ QoQ % 2022.9 2022.12 2023.3 2023.6 2023.9 Mortgage Loans 59,018 46.4% 60,156 -1,138 -1.9% 59,676 -658 -1.1% 0.09% 0.11% 0.14% 0.15% 0.17% Personal Loans 68,274 53.6% 70,470 -2,196 -3.1%

  35. Slide 35: Shinhan Bank SME Loans

    Shinhan Bank SME Loans Delinquency (KRW bn, %) 2023.9 Weight % 2022.12 2023.6 YTD YTD % QoQ QoQ % 2022.9 2022.12 2023.3 2023.6 2023.9 SME Total 129,694 100.0% 126,324 3,370 2.7% 127,957 1,737 1.4% 0.25% 0.26% 0.33% 0.32% 0.34% SOHO 65,695 50.7% 64,483 1,212 1.9% 65,121 574 0.9% 0.16% 0.22% 0.33% 0.3

  36. Slide 36: Shinhan Card Assets and Funding

    Shinhan Card Assets and Funding (KRW bn, %) 2023.9 2022.12 2023.6 2023.9 Weight % YTD YTD % QoQ QoQ % Earning Assets 39,256.5 39,436.1 -179.6 -0.5% 38,885.3 371.2 1.0% 100.0% Credit Purchase 18,006.2 18,424.0 -417.8 -2.3% 17,802.3 203.8 1.1% 45.9% Cash Advances 1,600.6 1,794.1 -193.5 -10.8% 1,631.7

  37. Slide 37: 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 2023.9 391,144 385,077 4,046 850 427 743 2,021 0.52% 3,725 184% 2022.9 395,893 391,611 2,805 584 301 592 1,477 0.37% 3,199 217% Y/Y

  38. Slide 38: 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 486.6 154.8 242.4 89.4 550.6 80.7 196.8 70.8 202.2 Retail 188.0 50.3 57.9 79.9 332.9 38.2 132.3 86.3 76.1 Corporate 298.6 104.6 184.5 9.5 217.7 42.5

  39. Slide 39: Additional Notes

    Additional Notes Digital Transformation (pg.21) 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 — Q3 2023 Earnings Presentation on 6ix