SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of May 2004
SHINHAN FINANCIAL GROUP CO., LTD.
(Translation of registrant's name into English)
120, 2-Ga, Taepyung-Ro, Jung-Gu, Seoul 100-102, Korea
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----- -----
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): _______
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): _______
Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes No X
----- -----
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_______.
SUMMARY OF 2004 1ST QUARTER BUSINESS REPORT
On May 14, 2004, Shinhan Financial Group("SFG") filed the 2004 1st quarter
business report with the Financial Supervisory Commission of the Republic of
Korea ("Korea") pursuant to the Securities and Exchange Act of Korea (the
"Business Report"). This is the summary of the Business Report translated into
English. Non-material or previously disclosed information are omitted or
abridged.
The financial information in this report has been prepared in accordance with
accounting principles generally accepted in Korea.
TABLE OF CONTENTS
1. Introduction to the Group
2. Business
3. Independent Accountant
4. Performance of Affiliated Companies
5. Market Price Information of Our Equity Securities
6. Directors, Executive Officers and Employees
Exhibit 1. Independent Accountant's Review Report (Non Consolidated Financial
Statements)
2
1. INTRODUCTION TO THE GROUP
COMPANY HISTORY
- May 2000 Establishment of the Shinhan Financial Group announced.
- Oct. 2000 Secretariat for the incorporation of SFG established
- Jun. 2001 BOD of Shinhan Bank, Shinhan Securities, Shinhan Capital and
Shinhan ITM approved a transition to the holding company
structure/Signed a strategic alliance MOU with BNP Paribas
- Jul. 2001 Preliminary license granted
- Aug. 2001 Shareholders' Meeting of Shinhan Bank, Shinhan Securities,
Shinhan Capital and Shinhan ITM approved stock transfer
- Aug. 2001 Official license granted
- Sep. 2001 Registered SFG incorporation (Capital stock: KRW 1.4617
trillion)/e-Shinhan and Shinhan Macquarie Financial Advisory
co. became subsidiaries of the SFG
- Dec. 2001 Signed the strategic alliance agreement with BNP Paribas
- Apr. 2002 Announced the acquisition of the Good Morning Securities/
Established an Integration Committee to coordinate the merger
between Shinhan Securities and Good Morning Securities
- May 2002 Jeju Bank included as SFG subsidiary
- Jun. 2002 Credit card division of Shinhan Bank was spun off and
established as a wholly-owned subsidiary, Shinhan Card.
- Jul. 2002 Incorporated Shinhan Credit Information Co.,Ltd
- Aug. 2002 Good Morning-Shinhan Securities Launched and subsequently
included as SFG subsidiary
- Aug. 2002 Signed a strategic alliance agreement with BNP Paribas for
investment trust business
- Aug. 2002 Shinhan Credit Information included as SFG subsidiary
- Sep. 2002 Sold 50%-1 shares of Shinhan ITMC to BNP Paribas Asset
Management Group/Shinhan-BNP Paribas ITMC launched
- Oct. 2002 SH&C Life Insurance, a bancassurance joint venture
incorporated and included as the Group subsidiary
- Jun. 2003 Sold 49% equity share of Shinhan Credit Information to Lone
Star Fund
- Aug. 2003 Acquired 80.04% equity ownership of Chohung Bank(CHB) from the
Korea Deposit Insurance Corporation
3
- Sep. 2003 SFG's inclusion of CHB as its subsidiary officially granted
- Sep. 2003 Registered with the U.S. Securities Exchange Commission and
listed on the New York Stock Exchange
- Nov. 2003 Acquired a bank holding company license in the US market from
the Federal Reserve Board
- Dec. 2003 Additional Capital injection into CHB (KRW 200 billion)
- Mar. 2004 Shinhan Bank sold out 29,873,359 common shares (Common Shares)
or 10.15% of Shinhan Financial Group through the block trading
before market opens (The Common Shares used to be recognized
as treasury shares in our consolidated financial statements)
- Apr. 2004 Decided to acquire the minority common shares (135,548,285 or
18.85% of total common shares) of CHB by the end of June 2004
through the small-scale share
* Exchange ratio: 1 SFG common share = 0.1354 CHB common share
- Apr. 2004 Provided a tender offer for the 20% or 27,109,657 shares of
the Chohung minority shares before the share swap
* Tender offer price: KRW 3,500 per share
* Tender offer period: April 26, 2004 ~ May 17, 2004
- Apr. 2004 Decided to terminate the joint venture in the credit
information business and to buy back Lone Star's 49% ownership
in Shinhan Credit Information.
PRINCIPAL SUBSIDIARIES UNDER KOREAN LAW AS OF MARCH 31, 2004
DIRECT SUBSIDIARIES
----------------------------------------- ---------------------------
Subsidiaries Ownerships by SFG
----------------------------------------- ---------------------------
Shinhan Bank 100.0%
Chohung Bank 1) 81.2%
Goodmorning Shinhan Securities 1) 59.02% 2)
Shinhan Card 100.0%
Shinhan Capital 100.0%
Shinhan BNP Paribas ITMC 50.0%
Jeju Bank 1) 62.4%
SH&C life Insurance 50.0%
e-Shinhan 73.7%
Shinhan Macquarie 51.0%
Shinhan Credit Information 3) 51.0%
-----------------------------------------------------------------------
1. Chohung Bank, Goodmorning Shinhan Securities, and Jeju Bank are listed on
the Korea Stock Exchange.
2. Represents our ownership percentage of voting equity securities of
Goodmorning
4
Shinhan Securities. Currently, both common and preferred stock of
Goodmorning Shinhan Securities has voting rights. We own 60.5% of common
stock of Goodmorning Shinhan Securities.
3. On April 29, 2004 we decided to buy back Lone Star's 49 % ownership in
Shinhan Credit Information. With this transaction our equity ownership of
Shinhan Credit Information will be increased to 100%.
INDIRECT SUBSIDIARIES HELD THROUGH DIRECT SUBSIDIARIES
--------------------------------------------------------------------------------------
Ownerships by
Direct Subsidiaries Indirect Subsidiaries the Parent
------------------- ----------------------------------------- -------------
Shinhan Bank Shinhan Data System 1) 100.0%
Shinhan Finance 100.0%
Chohung Bank Chohung ITM 79.8%
Chohung Finance 100.0%
CHB America Bank 100.0%
Chohung Bank GmbH 100.0%
Chohung Vina Bank 50.0%
CHB Valuemeet 2001 year 1st Securitization 50.0%
CHB Valuemeet 2001 year 2nd Securitization 50.0%
CHB Valuemeet 2002 year 1st Securitization 50.0%
Goodmorning Goodmorning Shinhan Securities Europe 100.0%
Shinhan Securities Goodmorning Shinhan Securities USA 100.0%
--------------------------------------------------------------------------------------
1. Shinhan System changed its corporate name to Shinhan Data System on October
8, 2003.
CAPITALIZATION
The table below sets forth the changes to the number of issued and
outstanding shares of the Group since its incorporation on September 1, 2001.
------------------------------------------------------------------------------------------------------------------------------------
Subscription
Number of Par Value price per Total amount of
Date of issuance Purpose of issuance Types of shares shares issued (KRW) share capital stock (KRW)
------------------------------------------------------------------------------------------------------------------------------------
2001.Sept.01 Incorporation Common Shares 292,344,192 5,000 11,761 1,461,720,960,000
2002.Jun.06 Share Exchange(1) Common Shares 15,891 5,000 - 1,461,800,415,000
2002.Oct.01 Share Exchange(1) Common Shares 786 5,000 - 1,461,804,345,000
2002.Dec.31 Share Exchange(1) Common Shares 256 5,000 - 1,461,805,625,000
2003.Aug.19 Cash Subscription(2) Preferred Shares 6,000,000 5,000 150,000 1,491,805,625,000
2003.Aug.19 Share Exchange(3) Preferred Shares 46,583,961 5,000 18,086 1,724,725,430,000
2003.Aug.19 Share Exchange(4) Preferred Shares 44,720,603 5,000 18,086 1,948,328,445,000
2003.Sept.26 Cash Subscription(5) Common Shares 1,864,065 5,000 14,832 1,957,648,770,000
2003.Oct.01 Share Exchange(1) Common Shares 11,626 5,000 - 1,957,706,900,000
2003.Dec.31 Share Exchange(1) Common Shares 164,484 5,000 - 1,958,529,320,000
------------------------------------------------------------------------------------------------------------------------------------
1. Issued in exchange for Shinhan Bank's common shares which were issued
as a result of an exercise of warrants by the holders of bonds with
warrants.
5
2. Redeemable preferred shares issued to a third party to raise cash for
the Group's purchase of Chohung Bank shares which were held by Korean
Deposit Insurance Corporation.
3. Redeemable preferred shares issued as consideration for the Group's
purchase of Chohung Bank shares which were held by Korea Deposit
Insurance Corporation.
4. Redeemable convertible preferred shares issued as consideration for
the Group's purchase of Chohung Bank shares which were held by Korea
Deposit Insurance Corporation.
5. BNP Paribas Luxembourg subscribed for 1,864,065 shares of the Group's
common stock to maintain its 4% equity ownership on a fully diluted
basis taking into account the full conversion of the 44,720,603 shares
of redeemable convertible preferred shares issued by the Group to
Korea Deposit Insurance Corporation.
FUTURE CAPITAL INCREASE
Shinhan Financial Group, currently holding 81.15% ownership of Chohung Bank
decided to acquire the minority common shares (18.85% of total Chohung common
shares or 135,548,285) of Chohung Bank by the end of June 2004 through the
small-scale share swap pursuant to the resolution of the BOD meeting held on
April 12, 2004. With this transaction, the Common Stock of Shinhan Financial
Group is expected to increase by a maximum of 18,411,984 shares or KRW
92,059,920,000 (par value KRW 5,000 per share).
NUMBER OF SHARES BY TYPE
The table below sets forth the number of the issued and outstanding shares of
the Group as of March 31, 2004.
---------------------------------------------------------------------------------------
Total amount of
Types of Shares Number of Shares par value
--------------------------------------- ---------------- -----------------
Common Shares 294,401,300 1,472,006,500,000
Redeemable Preferred Shares 52,583,961 262,919,805,000
Redeemable Convertible Preferred Shares 44,720,603 223,603,015,000
--------------------------------------- ---------------- -----------------
Total 391,705,864 1,958,529,320,000
---------------------------------------------------------------------------------------
STOCK OPTIONS
------------------------------------------------------------------------------------------------------------------------
Number of Number of Number of Exercise
Name of the Granted Exercised Exercisable Price
Grant date Guarantee Option option option (KRW) Positions held at
------------------------------------------------------------------------------------------------------------------------
22-May-02 Ra, Eung-Chan 100,000 - 100,000 18,910 Shinhan Financial Group
22-May-02 Lee, In-Ho 80,000 - 80,000 18,910 Shinhan Financial Group
22-May-02 Choi, Young Hwi 50,000 - 50,000 18,910 Shinhan Financial Group
------------------------------------------------------------------------------------------------------------------------
6
------------------------------------------------------------------------------------------------------------------------
Number of Number of Number of Exercise
Name of the Granted Exercised Exercisable Price
Grant date Guarantee Option option option (KRW) Positions held at
------------------------------------------------------------------------------------------------------------------------
22-May-02 Choi, Bhang-Gil 20,000 - 20,000 18,910 Shinhan Financial Group
22-May-02 Han, Min Ky 1,000 - 1,000 18,910 Shinhan Financial Group
22-May-02 Song, Youn Soo 2,500 - 2,500 18,910 Shinhan Financial Group
22-May-02 Shin, Sang Hoon 30,000 - 30,000 18,910 Shinhan Bank
22-May-02 Moon, Hong Soon 20,000 - 20,000 18,910 Shinhan Bank
22-May-02 Oh, Young-Kook 20,000 - 20,000 18,910 Shinhan Bank (retired)
22-May-02 Lee, Jae Woo 20,000 - 20,000 18,910 Shinhan Bank
22-May-02 Nam, Kee Do 20,000 - 20,000 18,910 Shinhan Bank (retired)
22-May-02 Huh, Joong Ok 20,000 - 20,000 18,910 Shinhan Bank
22-May-02 Kim, Sahng-Dae 20,000 - 20,000 18,910 Shinhan Bank
22-May-02 Jang, Myoung-Kee 20,000 - 20,000 18,910 Shinhan Bank
22-May-02 Youn, Gwang Lim 20,000 - 20,000 18,910 Shinhan Bank
22-May-02 Shin, Christoper 15,000 - 15,000 18,910 Shinhan Bank
22-May-02 Lee, Dae Woon 15,000 - 15,000 18,910 Shinhan Bank
22-May-02 Lee, Dong Girl 30,000 - 30,000 18,910 Shinhan Capital
22-May-02 Son, Woong Man 10,000 - 10,000 18,910 Shinhan Capital
22-May-02 Hwang, Jung Hun 10,000 - 10,000 18,910 Shinhan Capital (retired)
22-May-02 Jung, Yun Kang 10,000 - 10,000 18,910 Shinhan Capital
22-May-02 Shin, Beom Seong 2,500 - 2,500 18,910 Shinhan Credit Information
22-May-02 Song, Byung Kuk and 12,000 - 12,000 18,910 -
other 5 officers
22-May-02 Kim, Duk Jung and 456,200 - 456,200 18,910 -
other 323 officers
15-May-03 Ra, Eung-Chan 100,000 - 100,000 11,800 Shinhan Financial Group
15-May-03 Choi, Young Hwi 90,000 - 90,000 11,800 Shinhan Financial Group
15-May-03 Choi, Bhang-Gil 20,000 - 20,000 11,800 Shinhan Financial Group
15-May-03 Han, Min Ky 20,000 - 20,000 11,800 Shinhan Financial Group
15-May-03 Song, Youn Soo 20,000 - 20,000 11,800 Shinhan Financial Group
15-May-03 Shin, Sang Hoon 80,000 - 80,000 11,800 Shinhan Bank
15-May-03 Moon, Hong Soon 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Lee, Jae Woo 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Huh, Joong Ok 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Kim, Sahng-Dae 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Youn, Gwang Lim 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Cho, Woo Seop 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Kim, Hee Soo 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Han, Do Heui 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Shin, Christoper 15,000 - 15,000 11,800 Shinhan Bank
15-May-03 Lee, Dae Woon 15,000 - 15,000 11,800 Shinhan Bank
15-May-03 Hong Sung Kyun 30,000 - 30,000 11,800 Shinhan Card
15-May-03 Lee Tae Kyu 10,000 - 10,000 11,800 Shinhan Card
15-May-03 Kim Seong Won 10,000 - 10,000 11,800 Shinhan Card
15-May-03 Shim, Woo Yeob 10,000 - 10,000 11,800 Shinhan Card
15-May-03 Lee, Dong Girl 30,000 - 30,000 11,800 Shinhan Capital
15-May-03 Jung, Yun Kang 10,000 - 10,000 11,800 Shinhan Capital
15-May-03 Jang, Myoung-Kee 10,000 - 10,000 11,800 Shinhan Capital
15-May-03 Shim, Beom Seong 10,000 - 10,000 11,800 Shinhan Credit Information
15-May-03 Song, Byung Kuk and 14,600 - 14,600 11,800 -
other 7 officers
15-May-03 Seo, Jin Won and 501,700 - 501,700 11,800 -
other 340 officers
7
------------------------------------------------------------------------------------------------------------------------
Number of Number of Number of Exercise
Name of the Granted Exercised Exercisable Price
Grant date Guarantee Option option option (KRW) Positions held at
------------------------------------------------------------------------------------------------------------------------
25-Mar-04 Ra, Eung Chan 100,000 100,000 21,595 Shinhan Financial Group
25-Mar-04 Choi, Young Hwi 90,000 90,000 21,595 Shinhan Financial Group
25-Mar-04 Choi, Bhang Gil 30,000 30,000 21,595 Shinhan Financial Group
25-Mar-04 Hong, Chil Sun 20,000 20,000 21,595 Shinhan Financial Group
25-Mar-04 Kim, Hee Soo 20,000 20,000 21,595 Shinhan Financial Group
25-Mar-04 Cho, Byung Jae 20,000 20,000 21,595 Shinhan Financial Group
25-Mar-04 Lee, Baek Soon 20,000 20,000 21,595 Shinhan Financial Group
25-Mar-04 Shin, Sang Hoon 80,000 80,000 21,595 Shinhan Bank
25-Mar-04 Cho, Jae Ho 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Lee, Jae Woo 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Youn, Gwang Lim 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Cho, Woo Sup 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Han, Min Ky 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Song, Youn Soo 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Han, Do Heui 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Suh, Jin Won 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Yang, Shin Keun 20,000 20,000 21,595 Shinhan Bank
25-Mar-04 Oh, Sang Young 15,000 15,000 21,595 Shinhan Bank
25-Mar-04 Hong, Sung Kyun 30,000 30,000 21,595 Shinhan Card
25-Mar-04 Lee, Tae Gyu 10,000 10,000 21,595 Shinhan Card
25-Mar-04 Kim, Seong Won 10,000 10,000 21,595 Shinhan Card
25-Mar-04 Shim, Woo Yeob 10,000 10,000 21,595 Shinhan Card
25-Mar-04 Kim, Moon Han 10,000 10,000 21,595 Shinhan Card
25-Mar-04 Lee, Dong Girl 30,000 30,000 21,595 Shinhan Capital
25-Mar-04 Kim, Sahng Dae 10,000 10,000 21,595 Shinhan Capital
25-Mar-04 Oh, Seung Keun 10,000 10,000 21,595 Shinhan Capital
25-Mar-04 Shim, Beom Seong 10,000 10,000 21,595 Shinhan Credit Information
25-Mar-04 Song, Byung Kuk and 13,900 13,900 21,595 -
other 7 officers
25-Mar-04 Kam, Hong Gon and 582,700 582,700 21,595 -
other 400 officers
TOTAL 417 persons 3,462,100 - 3,462,100 - -
------------------------------------------------------------------------------------------------------------------------
* The stock options granted in 2002 and 2003 are exercisable during the 4 year
period after the second anniversary from the grant date. The stock options
granted in 2004 are exercisable during 3 year period after the second
anniversary from the grant date.
2. BUSINESS
SOURCE AND USE OF FUNDS
SOURCE OF FUNDS
8
(in millions of Korean Won)
--------------------------------------------------------------------------------------------------------------
2004 2003 2002
(Jan.1~Mar.31) (Jan.1~Dec.31) (Jan.1~Dec.31)
----------------------- ------------------------ ------------------------
Average Ratio Average Ratio Average Ratio
Balance 1) (%) Balance 1) (%) Balance 1) (%)
--------------------------------------------------------------------------------------------------------------
Stockholders' Equity 6,238,169 72.59 4,768,492 73.82 3,877,215 89.45
--------------------------------------------------------------------------------------------------------------
Capital Stock 1,958,529 22.79 1,660,319 25.70 1,461,770 33.72
--------------------------------------------------------------------------------------------------------------
Capital Surplus 3,316,380 38.59 2,512,502 38.89 1,976,637 45.60
--------------------------------------------------------------------------------------------------------------
Retained Earnings 819,108 9.53 692,409 10.72 379,170 8.75
--------------------------------------------------------------------------------------------------------------
Capital Adjustment 144,152 1.68 (96,738) (1.50) 59,638 1.38
--------------------------------------------------------------------------------------------------------------
Borrowings 2,355,296 27.41 1,645,804 25.48 394,965 9.11
--------------------------------------------------------------------------------------------------------------
Debentures 2,005,118 23.33 1,434,951 22.21 359,240 8.29
--------------------------------------------------------------------------------------------------------------
Other liabilities 350,178 4.07 256,424 3.97 98,119 2.26
--------------------------------------------------------------------------------------------------------------
Total 8,593,465 100.00 6,459,867 100.00 4,334,574 100.00
--------------------------------------------------------------------------------------------------------------
1. The Average Balance was calculated by averaging the ending balance of each
quarter.
USE OF FUNDS
(in millions of Korean Won)
--------------------------------------------------------------------------------------------------------------
2004 2003 2002
(Jan.1~Mar.31) (Jan.1~Dec.31) (Jan.1~Dec.31)
--------------------- --------------------- ------------------------
Average Ratio Average Ratio Average Ratio
Balance 1) (%) Balance 1) (%) Balance 1) (%)
--------------------------------------------------------------------------------------------------------------
Investments on equity stock 6,427,896 74.80 5,882,011 77.81 3,874,018 89.38
--------------------------------------------------------------------------------------------------------------
Shinhan Bank 3,467,213 40.35 3,139,126 41.53 3,134,106 72.30
--------------------------------------------------------------------------------------------------------------
Chohung Bank 2) 2,054,938 23.91 1,831,964 24.24 - -
--------------------------------------------------------------------------------------------------------------
Goodmorning Shinhan
Securities 3) 550,122 6.40 537,265 7.11 447,117 10.32
--------------------------------------------------------------------------------------------------------------
Shinhan Card 160,791 1.87 191,094 2.53 149,800 3.46
--------------------------------------------------------------------------------------------------------------
Shinhan Capital 105,825 1.23 95,384 1.26 71,171 1.64
--------------------------------------------------------------------------------------------------------------
Shinhan BNP Paribas 22,768 0.26 22,109 0.29 39,010 0.90
--------------------------------------------------------------------------------------------------------------
E-Shinhan 2,738 0.03 3,331 0.04 4,281 0.10
--------------------------------------------------------------------------------------------------------------
Shinhan Macquarie 2,015 0.02 578 0.01 583 0.01
--------------------------------------------------------------------------------------------------------------
Jeju Bank 46,704 0.54 44,783 0.59 23,855 0.55
--------------------------------------------------------------------------------------------------------------
Shinhan Credit Information 1,786 0.02 2,392 0.03 1,169 0.03
--------------------------------------------------------------------------------------------------------------
SH&C Life Insurance 12,996 0.15 13,985 0.19 2,926 0.07
--------------------------------------------------------------------------------------------------------------
Investment on Bonds 0 0.00 905 0.01 1,279 0.03
--------------------------------------------------------------------------------------------------------------
Loans 2,007,828 23.36 1,618,091 21.41 390,275 9.00
--------------------------------------------------------------------------------------------------------------
Fixed Assets 1,588 0.02 1,434 0.02 1,272 0.03
--------------------------------------------------------------------------------------------------------------
Intangible Assets 401 0.00 471 0.01 163 0.00
--------------------------------------------------------------------------------------------------------------
Cash Deposit in bank 111,217 1.29 25,326 0.34 57,241 1.32
--------------------------------------------------------------------------------------------------------------
Other Assets 44,535 0.52 30,808 0.41 10,325 0.24
--------------------------------------------------------------------------------------------------------------
Total 8,593,465 100.00 7,559,046 100.00 4,334,574 100.00
--------------------------------------------------------------------------------------------------------------
1. The Average Balance was calculated by averaging the ending balance of each
quarter.
2. The Average Balance of Goodmorning Shinhan Securities for 2002 is the sum
of the pre-merger balances of Shinhan Securities and Goodmorning
Securities.
9
OTHER FINANCIAL INFORMATION
REQUISITE CAPITAL RATIO
(in millions of Korean Won)
-----------------------------------------------------------------------------------------------
1st quarter
of 2004 2003 2) 2002
-----------------------------------------------------------------------------------------------
Aggregate Amount of Equity Capital (A) 9,960,206 8,847,673 4,842,795
Requisite Capital (B) 7,763,470 7,472,030 3,698,754
Requisite Capital Ratio (A/B) 1) 128.30% 118.41% 130.93%
-----------------------------------------------------------------------------------------------
1. Under the guidelines issued by the Financial Supervisory Commission
applicable to financial holding companies, we, at the holding company
level, are required to maintain a minimum requisite capital ratio of 100%.
2. The numbers for the 1st quarter of 2004 are provisional and are subject to
change.
WON LIQUIDITY RATIO
(in millions of Korean Won)
-----------------------------------------------------------------------------------------------------
1st quarter
of 2004 2003 2002
-----------------------------------------------------------------------------------------------------
Won Assets due within 3 months (A) 332,483 16,687 14,945
Won Liabilities due within 3 months (B) 319,951 15,504 6,480
Won Liquidity Ratio (A/B) 1) 103.92% 107.46% 230.63%
-----------------------------------------------------------------------------------------------------
1. Under the guidelines issued by the Financial Supervisory Commission, we, at
the holding company level, are required to maintain a Won liquidity ratio
of not less than 100%.
LIABILITIES TO EQUITY RATIO
(in millions of Korean Won)
------------------------------------------------------------------------------------------------------
1st quarter
of 2004 2003 2002
------------------------------------------------------------------------------------------------------
Liabilities (A) 2,533,606 2,176,875 774,759
Adjusted Equity (B) 1) 6,358,895 6,117,555 4,010,220
Liabilities to Equity Ratio (A/B) 39.84% 35.58% 19.32%
------------------------------------------------------------------------------------------------------
1. Adjusted Equity was calculated by subtracting the amount of intangible
assets from total net assets.
CAPITAL ADEQUACY RATIO AND OTHER RATIOS OF CERTAIN SUBSIDIARIES
10
1) Total Capital Adequacy Ratio (%)
-----------------------------------------------------------------------------------------------
1st quarter of 2004 2003 2002
Shinhan Bank 11.17 10.49 10.91
Chohung Bank 9.10 8.87 8.66
Jeju Bank 10.56 10.96 11.71
-----------------------------------------------------------------------------------------------
* The Total Capital Adequacy Ratios are computed in accordance with the
guidelines issued by the Financial Supervisory Commission for commercial
banks. Under these guidelines, commercial banks are required to maintain a
minimum capital adequacy ratio of 8%.
2) Net Capital Ratio
------------------------------------------------------------------------------------------------
Mar.31 2004 Mar.31 2003 Mar.31 2002
Goodmorning Shinhan Securities 480.7% 412.6% 589.5%
------------------------------------------------------------------------------------------------
* Net Capital Ratio is computed in accordance with the guidelines issued by
the Financial Supervisory Commission for securities investment trust
businesses. Under these guidelines, Goodmorning Shinhan Securities is
required to maintain a minimum net capital ratio of 100%.
3) Adjusted Equity Capital Ratio
--------------------------------------------------------------------------------------------
1st quarter of 2004 2003 2002
Shinhan Card 14.40% 13.78% 10.86%
--------------------------------------------------------------------------------------------
* The Adjusted Equity Capital Ratio represents the ratio of total adjusted
shareholder's equity to total adjusted assets and is computed in accordance
with the guidelines issued by the Financial Supervisory Commission for
credit card companies. Under these guidelines, Shinhan Card is required to
maintain a minimum adjusted equity capital ratio of 8%.
4) Non Performing Loans
(in 100 millions of Korean Won)
-----------------------------------------------------------------------------------------------------------
March 31.2004 Dec.31.2003 Dec.31.2002
------------------------------------------------------------------------------
NPL to NPL to NPL to
Balance of total Loans Balance of total Loans Balance of total Loans
NPL (%) NPL (%) NPL (%)
------------------------------------------------------------------------------
Shinhan Bank 1) 4,649 0.93 3,985 0.82 2,983 0.69
Chohung Bank 1) 18,705 4.2 18,796 4.1 19,811 4.0
Jeju Bank 1) 359 2.77 298 2.27 238 1.86
G.MS Securities 2) 382 13.48 410 19 1,244 45
Shinhan Card 3) 652 5.92 747 6.34 714 2.82
-----------------------------------------------------------------------------------------------------------
1. Non-performing loans of banks are defined as those loans are past due more
than 90 days or those are placed on non-accrual status according to the
guidelines of the Financial Supervisory Service.
11
2. Under the guidelines of the Financial Supervisory Service, every securities
company shall classify its loans into five categories: "normal",
"precautionary", "substandard", "doubtful", and "estimated loss". Under the
Group's internal measures, non-performing loans of Goodmorning Shinhan
Securities includes loans classified as "substandard", "doubtful", and
"estimated loss."
3. Under the guidelines of the Financial Supervisory Service, every credit
card company shall classify its loans into five categories: "normal",
"precautionary", "substandard", "doubtful", and "estimated loss". Under the
Group's internal measures, non-performing loans of Shinhan Card includes
loans classified as "substandard", "doubtful", and "estimated loss."
5) Loan Loss Allowances & Write-offs for the period
(in 100 millions of Korean Won)
---------------------------------------------------------------------------------------------------
Jan.1, 2004~ Jan.1, 2003~ Jan.1, 2002~
Mar.31, 2004 Dec.31, 2003 Dec.31, 2002
---------------------------------------------------------------------------------------------------
Shinhan Bank Loan Loss Domestic 8,479 8,664 4,925
Allowance ------------------------------------------------------------
Overseas 729 745 733
------------------------------------------------------------
Total 9,208 9,409 5,658
----------------------------------------------------------------------------
Write-offs 167 715 1,375
------------------------------------------------------------------------------------------------
Chohung Bank Loan Loss Domestic 16,246 16,820 16,988
Allowance ------------------------------------------------------------
Overseas 623 693 563
------------------------------------------------------------
Total 16,869 17,513 17,551
----------------------------------------------------------------------------
Write-offs 2,981 17,812 11,007
---------------------------------------------------------------------------------------------------
Jeju Bank Loan Loss Domestic 458 345 273
Allowance ------------------------------------------------------------
Overseas - - -
------------------------------------------------------------
Total 458 345 273
----------------------------------------------------------------------------
Write-offs 35 179 240
---------------------------------------------------------------------------------------------------
GM Shinhan Loan Loss Domestic 309 370 929
Securities 1) Allowance ------------------------------------------------------------
Overseas - - -
------------------------------------------------------------
Total 309 370 929
----------------------------------------------------------------------------
Write-offs - 75 244
---------------------------------------------------------------------------------------------------
Shinhan Card 2) Loan Loss Domestic 827 946 961
Allowance ------------------------------------------------------------
Overseas - - -
------------------------------------------------------------
Total 827 946 961
----------------------------------------------------------------------------
Write-offs 646 2,770 544
---------------------------------------------------------------------------------------------------
1. The fiscal year of Goodmorning Shinhan Securities ends on March 31 of each
year. Accordingly, the relevant periods for Goodmorning Shinhan Securities
are adjusted as follows: (i) from April 1, 2003 to March 31, 2004, (ii)
from April 1, 2002 to March 31 2003, and (iii) from April 1, 2001 to March
31, 2002.
2. Shinhan Card was incorporated on July 1, 2002.
3. INDEPENDENT ACCOUNTANT
12
COMPENSATION TO THE INDEPENDENT AUDITOR FOR AUDIT AND REVIEW SERVICES
The following is a description of the fees for audit and review services
performed by our independent auditor for the last three years in connection with
our financial statements prepared in accordance with generally accepted
accounting principles in Korea.
---------------------------------------------------------------------------------------------------
Year Auditor Payment (KRW) Working hours
---------------------------------------------------------------------------------------------------
2004 1) KPMG Samjong Accounting Corp. 300,000,000 -
2003 KPMG Samjong Accounting Corp. 210,000,000 1,560 hours
2002 KPMG Samjong Accounting Corp. 150,000,000 1,484 hours
2001 KPMG Samjong Accounting Corp. 70,000,000 9 days
---------------------------------------------------------------------------------------------------
1) The payment for 2004 is the total engagement amount, and therefore, it has
not been fully paid yet.
COMPENSATION FOR SERVICES OTHER THAN AUDIT AND REVIEW
The following is a description of the fees and commissions paid to our
independent auditor for the services set forth below for the last three years.
-----------------------------------------------------------------------------------------------------------
Year Month Service description Payment (KRW)
-----------------------------------------------------------------------------------------------------------
2004 1) Jan. Consulting services for disclosure control and 1,375,000,000
procedure & Internal control system
2003 Sept. Due diligence on the Chohung Bank 904,000,000
July Valuation of common shares of Chohung Bank 100,000,000
2001 Sept. Advisory service for accounting and taxation 40,000,000
-----------------------------------------------------------------------------------------------------------
1) The payment for 2004 is the total engagement amount, and therefore, it has
not been fully paid yet.
4. PERFORMANCE OF AFFILIATED COMPANIES
13
CONDENSED FINANCIAL STATEMENTS OF SUBSIDIARIES
1) Balance sheets
Condensed balance sheets of subsidiaries as of March 31, 2004 are as
follows:
(In millions of Korean Won)
----------------------------------------------------------
Total stockholders'
Subsidiaries Total assets Total liabilities equity
------------ ------------ ----------------- -------------------
Shinhan Bank W 74,206,294 70,787,755 3,418,539
Chohung Bank 62,240,144 59,915,568 2,324,576
Goodmorning Shinhan Securities 2,251,449 1,595,278 656,171
Shinhan Card 1,645,129 1,492,683 152,446
Shinhan Capital 1,222,488 1,119,741 102,747
Shinhan BNP Paribas ITMC 49,013 2,914 46,099
Jeju Bank 1,702,026 1,602,587 99,439
SH&C Life Insurance 140,105 114,161 25,944
e-Shinhan 3,989 256 3,733
Shinhan Macquarie 17,703 13,414 4,289
Shinhan Credit Information 12,657 9,511 3,146
------------ ----------- ---------
W143,490,997 136,653,868 6,837,129
============ =========== =========
2) Statements of Earnings
Condensed statements of earnings of subsidiaries for the years ended March
31, 2004 are as follows:
(In millions of Korean Won)
----------------------------------------------------------------------------
Operating Operating Operating Ordinary Net earnings
Subsidiaries revenue expense income (loss) income (loss) (loss)
------------ ---------- --------- ------------- ------------- ------------
Shinhan Bank W1,440,872 1,196,837 244,035 365,565 253,408
Chohung Bank 1,479,113 1,438,160 40,953 36,740 36,120
Goodmorning Shinhan
Securities (*) 193,385 178,928 14,457 22,116 24,098
Shinhan Card 108,895 114,080 (5,185) (5,190) (5,190)
Shinhan Capital 56,245 43,435 12,810 12,141 8,309
Shinhan BNP
Paribas ITMC (*) 3,230 1,715 1,515 1,520 1,066
Jeju Bank 32,539 36,528 (3,989) (4,319) (4,319)
SH&C life Insurance (*) 7,880 8,532 (652) (652) (652)
e-Shinhan 638 624 14 34 34
Shinhan Macquarie (*) 7,687 6,187 1,500 1,517 661
Shinhan Credit Information 9,248 10,149 (901) (715) (715)
---------- --------- ------- ------- -------
W3,339,732 3,035,175 304,557 428,757 312,820
========== ========= ======= ======= =======
5. MARKET PRICE INFORMATION OF OUR EQUITY SECURITIES
14
COMMON SHARE TRADED IN KOREA STOCK EXCHANGE
(in Korean Won or number of shares)
----------------------------------------------------------------------------------------------------------
Nov. 2003 Dec. 2003 Jan. 2004 Feb. 2004 Mar. 2004 Apr. 2004
----------------------------------------------------------------------------------------------------------
Price per High 19,700 19,050 20,100 23,050 22,700 23,250
share Low 16,200 17,300 18,000 18,950 20,050 20,450
Trading Volume 26,806,597 21,912,227 19,275,208 27,301,403 67,106,149 21,938,659
----------------------------------------------------------------------------------------------------------
AMERICAN DEPOSITARY SHARES
Shinhan Financial Group listed its American Depositary Shares on the New
York Stock Exchange on September 16, 2003.
American Depositary Shares trade on the New York Stock Exchange
(in US Dollars or number of shares)
----------------------------------------------------------------------------------------------------------
Nov. 2003 Dec. 2003 Jan. 2004 Feb. 2004 Mar. 2004 Apr. 2004
----------------------------------------------------------------------------------------------------------
Price per High 32.75 32.05 35.10 39.63 38.50 40.80
share Low 28.15 29.35 30.80 32.80 34.05 35.15
Trading Volume 30,300 90,000 67,500 178,900 160,700 90,700
----------------------------------------------------------------------------------------------------------
6. DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
DIRECTORS AND EXECUTIVE OFFICERS
1) Executive Directors
Our executive directors are as follows
----------------------------------------------------------------------
Name Age Position
----------------------------------------------------------------------
Eung Chan Ra 65 Chairman of BOD
Chairman of the BOD Steering Committee
Young Hwi Choi 57 President & CEO
----------------------------------------------------------------------
2) Non-Executive Directors
Currently, 13 non executive directors are in office, all of whom were
nominated by our BOD and appointed or reappointed pursuant to the approval
of general shareholders' meeting on March 25, 2004.
Our non-executive directors are as follows.
15
--------------------------------------------------------------------------------
Name Age Position
--------------------------------------------------------------------------------
In Ho Lee 60 Non-Executive Directors
Young Seok Choi 74 Non-Executive Directors,
Audit Committee member,
Compensation Committee member
Yong Woong Yang 55 Non-Executive Directors
Pyung Joo Kim 65 Outside Director
BOD Steering Committee member
Chairman of Risk Management Committee
Il Sup Kim 57 Outside Director
Chairman of Audit Committee
Compensation Committee member
Sang Yoon Lee 61 Outside Director
Audit Committee member
Compensation Committee member
Yoon Soo Yoon 58 Outside Director
BOD Steering Committee member
Risk Management Committee member
Chairman of Compensation Committee
Sang Chul Lee 56 Outside Director
Compensation Committee member
Byung Hun Park 75 Outside Director
BOD Steering Committee member
Moon Pil Oh 73 Outside Director
Audit Committee member
Young Soo Lee 69 Outside Director
Dong Hyun Kwon 67 Outside Director
Audit Committee member
Philippe Reynieix 54 Outside Director
Risk Management Committee member
--------------------------------------------------------------------------------
For the personal profiles of the directors, please refer to our Form 6-K
filed on March 8, 2004, in which we included the resume of director
candidates.
3) Executive Officers
In addition to the executive directors who are also our executive officers,
we currently have the following executive officers
---------------------------------------------------------------------------------------------------------
Name Age Position
---------------------------------------------------------------------------------------------------------
Bhang Gil Choi 52 Senior Executive Vice President of Integration Coordination Team I and
II (taking charge of Chohung Bank related issues)
Chil Sun Hong 57 Senior Executive Vice President of Subsidiary Management Team II,
Public Relations Team, and Audit & Compliance Team
Hee Soo Kim 53 Senior Executive Vice President of Subsidiary Management Team I and
Integration Coordination Team I
Byung Jae Cho 53 Chief Financial Officer and Senior Executive Vice President of Planning
& Financial Management Team and Investor Relations Team
Lee, Baek Soon 51 Senior Executive Vice President of General Service Team, Information &
Technology Planning Team and Integration Coordination Team II
---------------------------------------------------------------------------------------------------------
16
EMPLOYEES
(As of March 31, 2004)
------------------------------------------------------------------------------------------------------------
Total Salaries and wages paid Average Payment per
Number of Average Tenure for 1st quarter 2004 person (in mil. of
Employees (in mil. of Korean Won) Korean Won)
------------------------------------------------------------------------------------------------------------
Male 60 1 year & 4 months 1,028.5 17.1
Female 13 1 year & 5 months 94.5 6.8
Total 73 1 year & 5 months 1,123.1 -
------------------------------------------------------------------------------------------------------------
EXHIBIT 1.
The Independent Accountant's Review Report (under Korean GAAP) to the
Non-consolidated Financial Statements of Shinhan Financial Group as of and for
the year ended December 31, 2003
Page
----
- Independent Accountant's Review Report F-2
- Shinhan Financial Group Non-Consolidated Balance Sheets F-5
- Shinhan Financial Group Non-Consolidated Statements of Earnings F-6
- Shinhan Financial Group Non-Consolidated Statements of Cash Flows F-7
- Notes to Non-Consolidated Financial Statements F-9
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SHINHAN FINANCIAL GROUP CO., LTD.
By /s/Byung Jae Cho
------------------------------------
Name: Byung Jae Cho
Title: Chief Financial Officer
Date: May 19, 2004
18