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

Shinhan Financial — Q1 2020 Earnings Presentation

29 slides from Shinhan Financial's earnings presentation, Apr 24, 2020

  1. Slide 1: Business Results 1Q 2020

    SHG One Shinhan Business Results + 1Q 2020 Se) 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. 1Q20 Results Highlights II. Supplements

  4. Slide 4: I. 1Q20 Results Highlights

    l. 1Q20 Results Highlights 4

  5. Slide 5: COVID-19 Ready to Help: Compassionate Finance for our Clients and Communities

    COVID-19 1 Ready to Help Compassionate Finance for our Clients and Communities  COVID-19 relief for both corporate (SMEs and SOHOs) and retail clients - KRW 4.9 trillion (32,510 cases)* support to SMEs provided so far. * including interest payment deferrals and debt rescheduling (Shinhan Bank, as o

  6. Slide 6: COVID-19 Ready for Challenges: Group-wide Risk Management System Launched

    COVID-19 2 Ready for Challenges Group-wide Risk Management System Launched  Impact from COVID-19 is only partially reflected in 1Q20 figures (Net Income for 1Q20 recorded KRW 932.4 billion (YoY +1.5%))  Impact from COVID-19 started to appear from March figures; therefore, earnings uncertainties wi

  7. Slide 7: 1Q20 Financial Overview

    1Q20 Financial Overview (KRW bln) 1Q20 1Q19 YoY % 4Q19 QoQ % Operating Income before Expenses 2,738.1 2,729.5 0.3 2,616.8 4.6 Interest Income 2,003.9 1,907.9 5.0 2,072.8 -3.3 Non-interest Income 734.2 821.7 -10.6 544.0 35.0 G&A Expenses 1,197.9 1,168.4 2.5 1,504.3 -20.4 Operating Income 1,540.2 1,56

  8. Slide 8: Group Net Income

    Group Net Income Group Net Income Movements (Unit: KRW bln)  Plus factors  Minus factors +96 -87 +1.5% 3,403 932 +7 918 Non- Non- -30 +60 932 3,157 Interest 2,919 918 interest operating 2,775 Income Income income SG&A -32 2,367 Provision Tax and for credit others losses FY15 FY16 FY17 FY18 FY19 1Q

  9. Slide 9: Net Interest Income

    Net Interest Income Group Net Interest Income and NIM (KRW bln) KEY HIGHLIGHTS  Shinhan Bank  Others  Group NIM 2.07% Net interest income & NIM 2.05% 2.06% 2.10% 1.86% 2.02% 2.00%  SHB’s 1Q20 interest income grew 5.0% YTD: +5.0% Interest income from overseas rose by 16.2%, 7,615 8,001 2,004 impr

  10. Slide 10: Non-interest income

    Non-interest income Non-interest Income (KRW bln) KEY HIGHLIGHTS  Fees & Commission  Securities, F/X trading & Derivatives  Insurance  Others Non-interest income -10.6% 3,131  Although fees and commissions increased, Group non- 822 734 interest income fell by -10.6% YoY due to a decrease in 2,5

  11. Slide 11: Expenses and Provisioning

    Expenses and Provisioning G&A Expense (KRW bln) KEY HIGHLIGHTS  Salary & Employee benefits  D&A  Other expenses  Cost Income ratio 52.7% 51.3% 52.4% Cost Management 47.5% 42.8% 43.7% 46.1%  Group recorded cost-income ratio of 43.7% through +2.5% cost control efforts. 5,135 4,811 4,742  Group’s

  12. Slide 12: Capital and Profitability

    Capital and Profitability Capital Adequacy  SFG  SHB KEY HIGHLIGHTS BIS ratio 16.0% 15.9% 15.5% Capital Adequacy 14.9% 14.1%  Under BASEL III, Group’s Common Equity Tier 1 ratio 13.9% is estimated at 11.4% Tier1 ratio 13.4% 13.3% - RWA increased by 1.9% YTD to mark 261.8Wtn 13.1% 13.3% 12.3% - CE

  13. Slide 13: Contribution by Subsidiaries and by Matrix

    Contribution by Subsidiaries and by Matrix Global Investment Banking (Operating Income, KRW bln) Net Income Weight by Subsidiaries (%)  Shinhan Card  Capital, Savings Bank  Life, Orange Life +2.1%  Investment Corp.  Others 682.5 Non-Banks Non-Banks 479.1 174.9 34% 8 1 35% 5 2 302.8 171.2 6 10 5

  14. Slide 14: International Business

    International Business Net Income contribution from International Business (KRW Bln) Asset Contribution from International Business (KRW Bln)  Net income contribution (%)  Asset contribution (%)  Global net income (Group)  International assets (Group) 9.5% 8.5% 7.2% 11.7% 6.9% 7.0% 10.2% +13.6%

  15. Slide 15: Responsible Financing (ESG)

    Responsible Financing (ESG) Green Finance (Unit: KRW bln) Inclusive Finance (Unit: KRW bln) Loan Investment Loan Investment 2,918 46,163 3,835 1,443 292 5,520 144 157 976 17,025 802 2,751 2,626 40,644 3,691 909 1,286 13,363 1,650 23,618 449 485 741 741 10,255 10,255 896 941 36 36 45 45 2017 2018 201

  16. Slide 16: II. Supplements

    ll. Supplements 16

  17. Slide 17: SFG Income by Subsidiaries

    SFG Income by Subsidiaries Net Profit (before reflecting ownership) (KRW bln) Ownership 1Q20 4Q19 1Q19 YoY% QoQ % Bank 632.2 625.1 1.1 359.9 75.7 Shinhan Bank 626.5 618.1 1.4 352.9 77.5 100.0% Jeju Bank 5.6 7.0 -18.7 7.0 -19.0 75.3% Non-bank 337.3 387.9 -13.0 230.9 46.1 Consumer Shinhan Card 126.5 1

  18. Slide 18: Shinhan Bank Income (1)

    Shinhan Bank Income (1) (KRW bln) 1Q20 1Q19 YoY % 4Q19 QoQ % Operating Income (a=b+c) 1,674.9 1,644.3 1.9 1,624.6 3.1 Interest Income (b) 1,478.2 1,423.7 3.8 1,478.3 -0.0 Non-interest Income (c) 196.7 220.7 -10.9 146.2 34.5 G&A Expenses (d) 743.6 704.9 5.5 928.7 -19.9 Pre-Provision Operating Income

  19. Slide 19: Shinhan Bank Income (2)

    Shinhan Bank Income (2) (KRW bln) 1Q20 1Q19 YoY % 4Q19 QoQ % Non-interest Income (a+b+c) 196.7 220.7 -10.9 146.2 34.5 Fee & Commission (a) 259.8 251.4 3.4 270.1 -3.8 Fund Fees 22.3 22.8 -2.3 25.6 -12.9 Bancassurance Fees 13.4 13.5 -0.6 13.8 -2.7 F/X Fees 33.8 31.8 6.4 39.5 -14.6 Trust Fees 52.4 57.1

  20. Slide 20: Shinhan Card Income

    Shinhan Card Income (KRW bln) 1Q20 1Q19 YoY % 4Q19 QoQ % Operating Revenue (a) 1,091.6 962.7 13.4 905.3 20.6 Card business 708.0 722.1 -2.0 746.1 -5.1 Installment Finance 35.2 30.4 15.7 35.6 -1.2 Lease 62.2 42.3 47.2 52.1 19.4 Others 286.2 167.9 70.5 71.5 300.2 Interest Expense (b) 130.3 121.7 7.1 1

  21. Slide 21: Life Insurance Income

    Life Insurance Income Shinhan Life Insurance Orange Life Insurance QoQ % QoQ % (KRW bln) 1Q20 1Q19 YoY % 4Q19 (KRW bln) 1Q20 1Q19 YoY % 4Q19 (YTD %) (YTD %) Premium Income 1,042.0 1,104.0 -5.6 1,052.0 -0.9 Premium Income 906.7 1,088.7 -16.7 951.7 -4.7 Net Profit 39.7 53.9 -26.3 14.1 181.5 Net Profit

  22. Slide 22: Shinhan Investment Corp. Income

    Shinhan Investment Corp. Income QoQ % (KRW bln) 1Q20 1Q19 YoY % 4Q19 (YTD %) Operating Revenue 226.6 224.6 0.9 185.5 22.1 Fee & Commission 152.4 110.6 37.8 135.5 12.5 Brokerage fees 84.0 51.7 62.6 49.2 70.7 Financial Product fees 22.7 28.9 -21.6 25.4 -21.1 Investment Banking 31.4 18.4 70.3 41.6 -24.

  23. Slide 23: SFG Subsidiaries Asset

    SFG Subsidiaries Asset 2020.03 (KRW bln) 2020.03 2019.12 YTD % 2019.03 YoY % Weight (%) Bank 507,591.8 483,644.9 5.0 445,893.7 13.8 64.0% Shinhan Bank 501,207.3 477,289.6 5.0 439,944.6 13.9 63.2% Jeju Bank 6,384.6 6,355.3 0.5 5,949.0 7.3 0.8% Non-Bank 286,003.9 278,401.9 2.7 213,749.0 33.8 36.0% Con

  24. Slide 24: Shinhan Bank Loans & Deposit

    Shinhan Bank Loans & Deposit 2020.03 (KRW bln) 2020.03 2019.12 YTD % 2019.03 YoY % Weight (%) Loans in KRW 231,468.1 225,001.9 2.9 215,006.7 7.7 100.0% Retail 117,925.0 115,874.8 1.8 108,593.4 8.6 50.9% Mortgage 53,202.1 54,604.9 -2.6 55,027.8 -3.3 23.0% Others1 64,723.0 61,269.9 5.6 53,565.6 20.8 2

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

    Shinhan Bank Loans (Retail, Large Corporates) Delinquency (KRW bln) 2020.03 Weight (%) 2019.12 YTD % 2019.03 2019.06 2019.09 2019.12 2020.03 Mortgage Loans 53,202 45.1% 54,605 -2.6 0.13% 0.13% 0.15% 0.13% 0.14% Personal Loans 64,723 54.9% 61,270 5.6 0.56% 0.54% 0.58% 0.43% 0.52% High credit unsecure

  26. Slide 26: Shinhan Bank SME Loans

    Shinhan Bank SME Loans Delinquency (KRW bln, %) 2020.03 Weight (%) 2019.12 YTD % 2019.03 2019.06 2019.09 2019.12 2020.03 SME Total 93,258 100.0% 91,162 2.3 0.34% 0.38% 0.42% 0.33% 0.41% SOHO 47,907 51.4% 46,785 2.4 0.23% 0.23% 0.26% 0.20% 0.22% Audited SME 15,627 16.8% 16,451 0.5 0.26% 0.24% 0.32% 0

  27. Slide 27: Shinhan Card Assets and Funding

    Shinhan Card Assets and Funding 2020.03 (KRW bln, %) 2020.03 2019.12 YTD % 2019.03 YoY % Weight % Earning Assets 29,488.3 30,180.3 -2.3 27,703.8 6.4 100.0% Credit Purchase 13,847.8 15,184.4 -8.8 13,786.2 0.4 47.0% Cash Advances 1,771.6 1,864.1 -5.0 1,914.4 -7.5 6.0% Card Loan 7,013.4 6,760.9 3.7 6,5

  28. Slide 28: Asset Quality

    Asset Quality NPL Total Substandard Loan Loss (KRW bln) NPL Ratio Coverage Loans Estimated & Below Allowance Normal Precautionary Substandard Doubtful Ratio Loss Group1 2020.03 321,808 318,057 2,001 672 434 645 1,751 0.54% 2,572 147% 2019.12 312,243 308,565 2,040 621 404 613 1,638 0.52% 2,488 152% Y

  29. Slide 29: Provisioning and Write-Offs

    Provisioning and Write-Offs Provision for Credit Losses and Credit Cost Ratio (KRW bln) 1Q20 FY19 1Q19 2Q19 3Q19 4Q19 Shinhan Bank1 96.8 284.3 75.9 135.0 64.4 9.0 Retail 47.6 217.2 52.8 57.9 53.3 53.3 Corporate 49.2 67.0 23.1 77.1 11.2 -44.3 Shinhan Card 161.8 562.2 157.4 129.0 141.1 134.6 Provision

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