Shinhan Financial Group Co., Ltd. · KRX:055550
Shinhan Financial — FY2022 Earnings Presentation
39 slides from Shinhan Financial's earnings presentation, Feb 8, 2023
Slide 1: Business Results FY 2022
cur We believe finance should be Liste | Friendly, NYSE + More Secure, Creative Business Results FY 2022 1. Zoek’ @ Shinhan Financial Group Wy preaktrorgh “4
Slide 2: Contents
Contents I. FY22 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 3: I. FY22 Result Highlights
Il. FY¥22 Result Highlights
Slide 4: 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 +1,622 -1,107 +112 +830 -270 1,595 Interest -562 Income* SG&A* -309 Provision -143 Non- -593 Non- Non- for credit Tax and 4,642 Int
Slide 5: Note 1: Significant Items in 4Q22
[Note 1] Significant Items in 4Q22 1 [Non-interest Income] Valuation loss on Principal Protected Trust Accounts 3 [Non-interest Income] due to changes in accounting principle(△146.4Wbn) Valuation losses on alternative investment assets △104.1Wbn (△73.5Wbn YoY) • Recognition of valuation loss for pre
Slide 6: FY22 Financial Overview
FY22 Financial Overview SFG Net Income (KRW bn) Interest income went up by +17.9% YoY (KRW bn) FY22 FY21 4Q22 3Q22 Operating Income1 Net Income YoY YoY % QoQ QoQ % driven by NIM improvement (+15bp and Operating Income1 Growth (%) Net Income Growth (%) +22bp improvement for Group and Bank,
Slide 7: Interest Income
Interest Income Group Interest Income and NIM (KRW bn) Details of Interest Income Group interest income: Bank Non-bank Bank NIM (%) (KRW bn) FY22 FY21 YoY YoY% 4Q22 3Q22 QoQ QoQ% (YoY) grew +17.9%, thanks to +4.5% YoY 1.62% 1.63% increase in interest-bearing assets and 1.54% Interest Revenue
Slide 8: Note 2: Shinhan Bank NIM / Loans / Deposits
[Note 2] Shinhan Bank NIM / Loans / Deposits SHB NIM Trend (%) Core Deposit Trend (KRW tn) Loan Composition (%) Quarterly NIM BOK base rate Deposits in KRW Core Deposits Annualized NIM Deposit growth rate (YTD, %) Core Deposit growth rate (%) Corporate 2020 2021 2022 26.5% 53.6% Mortgage 2
Slide 9: Non-interest Income
Non-interest Income Details of Non-interest Income Non-interest Income (KRW bn, %) Non-interest income: Non-interest income (KRW bn) FY22 FY21 YoY YoY% 4Q22 3Q22 QoQ QoQ% (YoY) down -30.4%, owing to decrease in Non-interest income weight (Operating income/Non-interest income) both securities-r
Slide 10: Expenses and Provisioning
Expenses and Provisioning G&A Expense (KRW bn, %) Details of G&A Expense G&A costs: G&A Expenses CIR CIR (excluding ERP) FY22 FY21 YoY YoY% 4Q22 3Q22 QoQ QoQ% (YoY) up +4.7% (+7.0% when excluding (KRW bn) 47.5% ERP costs), driven by DT-related G&A Expense 6,013.5 5,743.1 270.4 4.7% 1,888.8 1
Slide 11: Note 3: Bracing for Future Uncertainties
[Note 3] Bracing for Future Uncertainties Frontloading Provisions for Resilience (KRW bn, %) Tightened Risk Monitoring and Management on Real Estate Financings Nominal CCR Recurring CCR ■ Recurring Provisioning ■ NPL Coverage Ratio Group Real Estate-related Exposure (Balance as of end of DEC, 20
Slide 12: Note 4: Asset Quality
[Note 4] Asset Quality Group Asset Quality (%) SHB Delinquency Ratio Precautionary & Below Substandard & Below Precautionary & Below Coverage Ratio NPL Coverage Ratio Loans 0.25% 0.26% 0.24% 0.23% 0.22% in KRW 0.19% 0.32% 0.33% SME 0.29% 0.30% 209% (Incl. SOHO) 0.26% 0.26% 195% 170% 168% 0.2
Slide 13: Capital Management and Profitability
Capital Management and Profitability BPS & EPS (KRW) Group BIS Ratio CET1 ratio is expected to be 12.7%, down BPS EPS (KRW bn) 2022.12 2021.12 YTD YTD % 2022.9 QoQ QoQ % -0.4%p YTD and up +0.1%p QoQ 84,068 82,304 Risk weighted assets 292,261 270,692 21,568.5 8.0% 302,342 -10,081.5 -3.3% (YTD
Slide 14: SFG Income by Subsidiaries
SFG Income by Subsidiaries NI Weight by Subsidiaries (%) Net Profit (before reflecting ownership) Despite weak non-interest income, SHB’s (KRW bn) net income increased thanks to interest Group Non-Bank FY22 FY21 4Q22 3Q22 income growth led by NIM improvement and YoY YoY % QoQ QoQ % moderate asset
Slide 15: Note 5: SFG Overseas Business
[Note 5] SFG Overseas Business NI Contribution by Overseas Business (KRW bn) Asset Contribution by Overseas Business (KRW bn) NI Contribution (%) Asset Contribution (%) Overseas Net Income 12.2% Overseas Assets 11.7% 8.2% 10.3% 7.2% 7.5% 9.8% 9.8% 6.9% 7.0% 6.3% 7.5% +43.0% +13.5% 564.6 55,1
Slide 16: Mid-term Capital Management Policy
Mid-term Capital Management Policy Current Shareholder Return Policy (Board Meeting, FEB 2022) Mid-term Financial Directive for 2025 (Board Meeting, AUG 2022) Shareholders Clients Employees Community Enhance Corporate Value Financial 1) Directive Quantitative Growth Qualitative Growth in Capital Lig
Slide 17: Shareholder Returns for FY2022 and FY2023
[Note] Shareholder Returns for FY2022 and FY2023 Total Shareholder Return (incl. preferred shares) (%, KRW bn) DPS(KRW) Amount of cancelled shares / Total shares(KRW) (KRW) Cash dividend Share cancellations(buyback) TSR FY2022 FY2023 30.0% 27.9% 865 26.0% 26.0% 295 (150Wbn) 23.9% 300 290 (
Slide 18: Digital, Digital to Value (1/2)
Digital, Digital to Value (1/2) Digital Strategy Framework Key Digital Index (as of end of FY2022) More Friendly More Secure More Creative CX Trust Expansion More Friendly More Secure More Creative SFG Gross MAU 1 Shinhan Sign Users Profit from New Businesses 4 Easier & Convenient Secure & Trusted I
Slide 19: Digital, Digital to Value (2/2)
Digital, Digital to Value (2/2) Strengthened DT performance and the foundation for sustainable growth SFG Gross MAU Financial MAU of SFG’s Major Digital business license acquisition Non-financial Financial Platforms Platform Service Growth CAGR 26% SOL pLay alpha SHB SHC SHB SHC SS SHL Exp
Slide 20: Sustainability Initiative (ESG)
Sustainability Initiative (ESG) Zero Carbon Drive Innovative Finance Managing Financed Emissions1 Green Finance (KRW tn) Innovative Finance (KRW tn) Power Generation Commercial Bld. Steel Paper Cement Transportation Others(incl. Chemicals) Carbon intensity Provide KRW 30tn in Green F
Slide 21: II. Supplements
lI. Supplements
Slide 22: FY22 Financial Overview
FY22 Financial Overview (KRW bn) FY22 FY21 4Q22 3Q22 YoY YoY % QoQ QoQ % Operating Income before Expenses 13,207.3 12,691.6 515.7 4.1% 2,892.1 3,341.9 -449.9 -13.5% Interest Income 10,675.7 9,053.5 1,622.2 17.9% 2,828.0 2,716.0 112.1 4.1% Non-interest Income 2,531.5 3,638.1 -1,106.5 -30.4% 64.0 625.
Slide 23: Financial Highlights by Subsidiaries
Financial Highlights by Subsidiaries (KRW bn) Ownership Total Assets1 Shareholder's Equity Profit for the Period2 ROA ROE Bank 588,633.8 31,689.1 3,067.8 Shinhan Bank 100.0% 581,202.6 31,167.3 3,045.0 0.62% 10.13% Jeju Bank 75.3% 7,431.3 521.9 22.8 0.32% 4.46% Non-bank 373,704.3 19,573.6 1,976.6 Con
Slide 24: Shinhan Bank Income (1)
Shinhan Bank Income (1) (KRW bn) FY22 FY21 YoY YoY % 4Q22 3Q22 QoQ QoQ % Operating Income (a=b+c) 8,477.5 7,289.4 1,188.2 16.3% 2,094.1 2,162.0 -67.9 -3.1% Interest Income (b) 8,205.2 6,611.8 1,593.4 24.1% 2,175.3 2,139.7 35.6 1.7% Non-interest Income (c) 272.3 677.6 -405.3 -59.8% -81.2 22.3 -103.5
Slide 25: Shinhan Bank Income (2)
Shinhan Bank Income (2) (KRW bn) FY22 FY21 YoY YoY % 4Q22 3Q22 QoQ QoQ % Non-interest Income (a+b+c) 272.3 677.6 -405.3 -59.8% -81.2 22.3 -103.5 n.a. Fee & Commission (a) 955.3 977.7 -22.4 -2.3% 229.1 222.7 6.4 2.9% Fund Fees 62.5 92.7 -30.2 -32.6% 13.3 14.9 -1.6 -10.7% Bancassurance Fees 39.9 30.5
Slide 26: Shinhan Card Income
Shinhan Card Income (KRW bn) FY22 FY21 YoY YoY % 4Q22 3Q22 QoQ QoQ % Operating Revenue (a) 4,846.0 4,375.4 470.6 10.8% 758.9 1,543.5 -784.6 -50.8% Card business 2,932.7 2,862.3 70.4 2.5% 716.1 731.2 -15.1 -2.1% Installment Finance 195.3 158.7 36.5 23.0% 57.9 51.6 6.3 12.3% Lease 517.9 399.3 118.6 29
Slide 27: Shinhan Life Insurance Income
Shinhan Life Insurance Income (KRW bn, %) FY22 FY21 YoY YoY % 4Q22 3Q22 QoQ QoQ % APE1 733.4 756.7 -23.2 -3.1% 209.3 193.6 15.7 8.1% Protection 629.1 577.8 51.3 8.9% 155.0 173.4 -18.4 -10.6% Savings, Annuities 104.4 178.9 -74.5 -41.6% 54.3 20.2 34.1 169.2% Net Profit 463.6 391.6 72.0 18.4% 94.0 92.0
Slide 28: Shinhan Securities Income
Shinhan Securities Income (KRW bn) FY22 FY21 YoY YoY % 4Q22 3Q22 QoQ QoQ % Operating Revenue 997.6 1,575.0 -577.4 -36.7% 51.7 261.2 -209.5 -80.2% Fee & Commission 698.9 848.5 -149.5 -17.6% 131.7 146.5 -14.8 -10.1% Brokerage fees 305.0 510.4 -205.4 -40.2% 64.6 68.5 -3.9 -5.7% Financial Product fees 8
Slide 29: Shinhan Capital Income
Shinhan Capital Income (KRW bn) FY22 FY21 YoY YoY % 4Q22 3Q22 QoQ QoQ % Operating Income before Expenses (a=b+c-d-e) 506.9 483.4 23.5 4.9% 90.2 138.3 -48.1 -34.8% Interest Income (b) 486.6 383.2 103.4 27.0% 132.8 127.7 5.1 4.0% Non-interest Income (c) 435.9 400.7 35.3 8.8% 27.8 119.3 -91.4 -76.7% Se
Slide 30: SFG Subsidiaries Asset
SFG Subsidiaries Asset (KRW bn) 2022.12 2021.12 YTD YTD % 2022.9 QoQ QoQ % 2022.12 Weight % Bank 588,633.8 559,566.1 29,067.7 5.2% 598,681.4 -10,047.6 -1.7% 61.2% Shinhan Bank 581,202.6 552,554.8 28,647.8 5.2% 591,460.8 -10,258.2 -1.7% 60.4% Jeju Bank 7,431.3 7,011.3 419.9 6.0% 7,220.7 210.6 2.9% 0.
Slide 31: Shinhan Bank Loans & Deposits
Shinhan Bank Loans & Deposits (KRW bn) 2022.12 2021.12 YTD YTD % 2022.9 QoQ QoQ % 2022.12 Weight % Loans in KRW 281,380.6 271,148.4 10,232.2 3.8% 278,490.8 2,889.8 1.0% 100.0% Retail 130,626.9 135,599.4 -4,972.5 -3.7% 131,349.7 -722.8 -0.6% 46.4% Mortgage 60,156.4 58,893.4 1,263.0 2.1% 60,464.9 -308
Slide 32: Shinhan Bank Loans (Retail, Large Corporates)
Shinhan Bank Loans (Retail, Large Corporates) Delinquency (KRW bn, %) 2022.12 Weight % 2021.12 YTD YTD % 2022.9 QoQ QoQ % 2021.12 2022.3 2022.6 2022.9 2022.12 Mortgage Loans 60,156 46.1% 58,893 1,263 2.1% 60,465 -309 -0.5% 0.08% 0.08% 0.09% 0.09% 0.11% Personal Loans 70,470 53.9% 76,706 -6,236 -8.1%
Slide 33: Shinhan Bank SME Loans
Shinhan Bank SME Loans Delinquency (KRW bn, %) 2022.12 Weight % 2021.12 YTD YTD % 2022.9 QoQ QoQ % 2021.12 2022.3 2022.6 2022.9 2022.12 SME Total 126,324 100.0% 117,319 9,005 7.7% 125,547 777 0.6% 0.26% 0.28% 0.23% 0.25% 0.26% SOHO 64,483 51.0% 61,298 3,184 5.2% 64,574 - 92 -0.1% 0.14% 0.15% 0.14% 0
Slide 34: Shinhan Card Assets and Funding
Shinhan Card Assets and Funding 2022.12 (KRW bn, %) 2022.12 2021.12 YTD YTD % 2022.9 QoQ QoQ % Weight % Earning Assets 39,436.1 35,371.7 4,064.4 11.5% 39,456.8 -20.7 -0.1% 100.0% Credit Purchase 18,424.0 16,439.0 1,985.0 12.1% 18,230.9 193.1 1.1% 46.7% Cash Advances 1,794.1 1,672.7 121.4 7.3% 1,669.
Slide 35: Asset Quality
Asset Quality Total Substandard & Loan Loss NPL (KRW bn) NPL Ratio Loans Below Allowance Coverage Ratio Normal Precautionary Substandard Doubtful Estimated Loss Group1 2022.12 392,401 387,775 3,028 678 348 572 1,598 0.41% 3,342 209% 2021.12 374,557 370,627 2,463 564 291 614 1,468 0.39% 2,867 195% Yo
Slide 36: Provisioning and Write-Offs
Provisioning and Write-Offs Provision for Credit Losses and Credit Cost Ratio (KRW bn) FY22 1Q22 2Q22 3Q22 4Q22 FY21 1Q21 2Q21 3Q21 4Q21 Shinhan Bank1 743.2 80.7 196.8 94.1 371.6 236.1 58.6 9.4 43.4 124.7 Retail 513.6 38.2 132.3 86.3 256.8 165.4 39.9 37.2 44.8 43.5 Corporate 229.6 42.5 64.5 7.8 114.
Slide 37: Disclaimer and Additional Notes (1)
Disclaimer and Additional Notes (1) Please note the following: • Financial information has been prepared in accordance with the Korean IFRS (K-IFRS). • The financial figures for periods starting January 1, 2018 have been stated in accordance with K-IFRS No.1109, ‘Financial instruments’ and K-IFRS No
Slide 38: Disclaimer and Additional Notes (2)
Disclaimer and Additional Notes (2) Digital Transformation (pg.18 ~ pg.19) NOTE 1 The MAU figures are the average MAU of the given period, and are based on managed data Group Gross MAU is the sum of the MAU of Shinhan’s financial platform and the MAU of Shinhan’s non-financial platform The MAU figur
Slide 39: Disclaimer and Additional Notes (3)
Disclaimer and Additional Notes (3) Sustainability Initiative (ESG) (pg. 20) NOTE 1 The methodology from the PCAF Global GHG Accounting & Reporting Standard for the Financial Industry was applied to measure the financed emissions of Shinhan Financial Group’s asset portfolio. The formula for the gene
Shinhan Financial Group — FY2022 Earnings Presentation on 6ix