Edgar Filing: SHINHAN FINANCIAL GROUP CO LTD

Form 6-K

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 2013

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 2013 1Q Business Report

On May 15, 2013, Shinhan Financial Group (“SFG”) filed its 2013 1Q Business Report (the “Business Report”) with the Financial Supervisory Service of the Republic of Korea (“Korea”) pursuant to the Financial Investment Services and Capital Market Act of Korea. 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 Korean International Financial Reporting Standards.

Table of Contents


1. Introduction of the Group			3
2. Business Results			6
3. Independent Auditor			16
4. Directors, Executive Officers and Employees			17
5. Major Shareholder and Market Price Information of Our Common Shares and ADRs			19
6. Related Party Transactions			20

1. Introduction of the Group

Company History in 2009 through 2013

•

Jan. 2009: Shinhan BNP Paribas Asset Management launched through the merger of Shinhan BNP Paribas ITMC and SH Asset Management

•

Jun. 2009 : SH&C separated from SFG after SFG consummated share transfers of SH&C

•

Sep. 2009 : SBJ became an indirect subsidiary of SFG

•

Oct. 2009 : Shinhan Bank Vietnam became an indirect subsidiary of SFG

•

Nov. 2009 : Liquidated Shinhan Finance Ltd. , an indirect subsidiary of SFG

•

Dec. 2009 : Shinhan Capital Petra PEF became an indirect subsidiary of SFG

•

Jan. 2010 : Shinhan Data System became a subsidiary of SFG

•

Jun. 2010 : CHB Valuemeet 2001 First SPC was disaffiliated from SFG

•

Jun. 2010 : CHB Valuemeet 2001 Second SPC and CHB Valuemeet 2002 First SPC were disaffiliated from SFG

•

Aug. 2010 : Shinhan Macquarie Financial Advisory was disaffiliated from SFG

•

Oct. 2010 : Shinhan Maritime Private Equity Fund I became an indirect subsidiary of SFG

•

Dec. 2010 : KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp. became an indirect subsidiary of SFG

•

Feb. 2011 : Shinhan BNP Paribas Asset Management (Hong Kong) Limited became an indirect subsidiary of SFG

•

Nov. 2011 : Shinhan Bank Vietnam was merged with Shinhan Vina Bank.

•

Dec. 2011 : Shinhan Savings Bank became a subsidiary of SFG

•

Nov. 2012 : Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary

•

Jan. 2013 : Yehanbyoul Savings Bank joined SFG as a direct subsidiary.

•

April. 2013 : Shinhan Savings Bank merged with Yehanbyoul Savings Bank. As a result of the integration, Shinhan Savings Bank has been liquidated and Yehanbyoul Savings Bank now exists under the name of “Shinhan Savings Bank” as an existing legal entity.

Principal Subsidiaries under Korean Law (as of March 31, 2013)

Direct Subsidiaries


Subsidiaries	Ownership by SFG
Shinhan Bank		100.0	%
Shinhan Card		100.0	%
Shinhan Investment Corp.		100.0	%
Shinhan Life Insurance		100.0	%
Shinhan BNP Paribas Asset Management		65.0	%
Shinhan Capital		100.0	%
Jeju Bank ¹⁾		68.9	%
Shinhan Savings Bank ²⁾		100.0	%
Yehanbyoul Savings Bank		100.0	%
Shinhan Data System		100.0	%
Shinhan AITAS ³⁾		99.8	%
Shinhan Credit Information		100.0	%
Shinhan Private Equity Investment Management		100.0	%
SHC Management ⁴⁾		100.0	%

1)	Jeju Bank is currently listed on the Korea Exchange.

2)	On January 30, 2013, Yehanbyoul Savings Bank joined SFG as a direct subsidiary.

On April 1, 2013, Shinhan Savings Bank merged with Yehanbyoul Savings Bank, both of which were direct subsidiaries of Shinhan Financial Group. As a result of the integration of the two savings banks, the previous Shinhan Savings Bank has been liquidated and is thus no longer a subsidiary of Shinhan Financial Group and instead, Yehanbyoul Savings Bank now exists under the name of “Shinhan Savings Bank” as an existing legal entity constituting a member of Shinhan Financial Group.

3)	On November 30, 2012, Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary. Prior to November 30, 2012, Shinhan AITAS was an indirect subsidiary of SFG under Shinhan Bank, a wholly-owned bank subsidiary of SFG.

4)	Currently in liquidation proceedings.

Indirect subsidiaries held through direct subsidiaries (as of March 31, 2013)


Direct Subsidiaries	Indirect Subsidiaries	Ownership by the Parent
Shinhan Bank	Shinhan Asia Limited		100.0	%
	Shinhan Bank America		100.0	%
	Shinhan Bank Europe		100.0	%
	Shinhan Khmer Bank Limited		90.0	%
	Shinhan Bank Kazakhstan		100.0	%
	Shinhan Bank China Limited		100.0	%
	Shinhan Bank Canada		100.0	%
	Shinhan Bank Japan		100.0	%
	Shinhan Bank Vietnam		100.0	%
Shinhan Investment Corp.	Shinhan Investment America Inc.		100.0	%
	Shinhan Investment Europe Ltd.		100.0	%
	Shinhan Investment Asia Ltd.		100.0	%
	Shinhan Maritime Private Equity Fund I		7.1	%
	KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp. ¹⁾		8.5	%
Shinhan BNP Paribas Asset Management	Shinhan BNP Paribas Asset Management (Hong Kong) Limited		100.0	%
Shinhan Private Equity Investment Management	Shinhan NPS Private Equity Fund 1st		5.0	% ²⁾
	Shinhan Private Equity Fund 2nd		2.2	% ³⁾
	Shinhan-Stonebridge Petro Private Equity Fund		0.6	%⁴⁾

1)	Shinhan Financial Group and its subsidiaries currently own 34.6% of KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp.

2)	Shinhan Financial Group and its subsidiaries currently own 36.7% of Shinhan NPS Private Equity Fund 1st.

3)	Shinhan Financial Group and its subsidiaries currently own 32.6% of Shinhan Private Equity Fund 2nd.

4)	Shinhan Financial Group and its subsidiaries currently own 1.8% of Shinhan-Stonebridge Petro Private Equity Fund.

Number of Shares (as of March 31, 2013)


Types of Shares	Number of Shares
Common Shares		474,199,587
Redeemable Preferred Shares		11,100,000

Total		485,299,587

2. Business Results


*Operation Results*		(KRW billion)


	FY2013 (Jan. 1 ~ Mar. 31)		FY2012 (Jan. 1 ~ Dec. 31)		FY2011 (Jan. 1 ~ Dec. 31)
Operating income		667.7		3,194.0		4,172.4
Equity in income(loss) of associates		2.1		27.5		57.8
Non-Operating Income(loss)		11.8		11.5		(37.6	)
Earnings before income tax		681.6		3,233.0		4,192.6
Income taxes		158.6		738.9		920.0
Consolidated net income		523.0		2,494.1		3,272.6
Net income in majority interest		481.3		2,322.7		3,100.0
Net income in minority interest		41.7		171.4		172.6

Some of the totals may not sum due to rounding.

Source and Use of Funds


Consolidated Basis (KRW billion, %)		FY2013								FY2012								FY2011
		Jan. 1 ~ Mar. 31								Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31
		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)
Source	Deposits		173,465.3		56.46		1,054.7		2.43		168,233.4		56.45		4,515.0		2.68		156,280.5		55.28		4,181.0		2.68
	Borrowings		12,819.8		4.17		58.8		1.83		14,027.8		4.71		271.9		1.94		14,037.4		4.97		259.2		1.85
	Debentures		38,688.9		12.59		390.3		4.04		39,765.1		13.34		1,740.2		4.38		40,017.2		14.16		1,942.9		4.86
	Other Liabilities		53,622.3		17.45		—		—		48,172.5		16.16		—		—		44,174.6		15.63		—		—

	Total Liabilities		278,596.3		90.67		—		—		270,198.8		90.66		—		—		254,509.7		90.03		—		—

	Total Stockholder’s Equity		28,659.0		9.33		—		—		27,843.7		9.34		—		—		28,184.6		9.97		—		—

	Total Liabilities & SE		307,255.3		100.00		—		—		298,042.5		100.00		—		—		282,694.3		100.00		—		—

Use	Currency & Due from Banks		15,542.8		5.06		53.7		1.38		15,956.9		5.35		242.4		1.52		14,396.1		5.09		248.6		1.73
	Loans		200,252.6		65.17		2,582.5		5.16		195,495.2		65.59		11,273.2		5.77		186,828.2		66.09		11,265.3		6.03
	Loans in KRW		154,630.5		50.33		1,901.2		4.92		150,164.5		50.38		8,298.7		5.53		143,097.0		50.62		8,281.2		5.79
	Loans in Foreign Currency		10,139.1		3.30		96.1		3.79		10,347.1		3.47		439.1		4.24		9,510.8		3.36		379.1		3.99
	Credit Card Accounts		17,525.8		5.70		436.4		9.96		17,507.8		5.87		1,834.0		10.48		17,740.2		6.28		1,887.5		10.64
	Others		17,957.2		5.84		148.7		3.31		17,475.7		5.86		701.5		4.01		16,480.2		5.83		717.5		4.35
	AFS Financial Assets		30,542.6		9.94		260.3		3.41		30,198.0		10.13		1,152.3		3.82		25,588.5		9.05		1,025.9		4.01
	HTM Financial Assets		11,491.6		3.74		135.3		4.71		11,790.4		3.96		594.6		5.04		12,307.7		4.35		642.9		5.22
	Other Assets		49,425.7		16.09		—		—		44,602.1		14.97		—		—		43,573.8		15.41		—		—

	Total Assets		307,255.3		100.00		—		—		298,042.5		100.00		—		—		282,694.3		100.00		—		—

1)	The “Average Balance” is the arithmetic mean of the ending balance of each quarter.

Other Financial Information

The main serial financial figures and indices for Mar. 31, 2013 listed herein may be subject to change.

1) Capital Adequacy


*Consolidated BIS Ratio (Shinhan Financial Group)*		(KRW billion)


	Mar. 31, 2013			Dec. 31, 2012			Dec. 31, 2011
Aggregate Amount of Equity Capital (A)		24,893.2			25,075.7			22,315.4
Risk-Weighted Assets (B)		196,365.5			201,184.4			195,579.4
BIS Ratio (A/B) ¹⁾		12.68	%		12.46	%		11.41	%

1)	Based on Basel I.


*Capital Adequacy Ratios (Subsidiaries)*		(%)


Subsidiary	Capital Adequacy Ratio	Mar. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Shinhan Bank	BIS Capital Adequacy Ratio		15.55		15.83		15.26
Jeju Bank	BIS Capital Adequacy Ratio		15.55		15.89		13.27
Shinhan Card	Adjusted Equity Capital Ratio		27.83		27.43		25.81
Shinhan Investment Corp.	Net Capital Ratio		589.61		666.34		700.78
Shinhan Life Insurance	Risk Based Capital Ratio		275.63		287.70		324.02
Shinhan BNPP AM	Net Capital Ratio		612.69		583.21		599.73
Shinhan Capital	Adjusted Equity Capital Ratio		15.11		14.98		14.90
Shinhan Savings Bank	BIS Capital Adequacy Ratio		13.79		15.20		n/a
Yehanbyoul Savings Bank	BIS Capital Adequacy Ratio		12.07		n/a		n/a

•

The BIS Capital Adequacy Ratio is computed in accordance with the guidelines issued by the FSS for commercial banks. Under these guidelines, commercial banks are required to maintain a minimum capital adequacy ratio of 8%.

•

Basel II FIRB was applied in calculating Shinhan Bank’s BIS Capital Adequacy Ratio.

•

Basel II TSA was applied in calculating Jeju Bank’s BIS Capital Adequacy Ratio.

•

Basel I was applied in calculating Shinhan Savings Bank and Yehanbyoul Savings Bank’s BIS Capital Adequacy Ratio.

•

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 FSS. Under these guidelines, Shinhan Card and Shinhan Capital are required to maintain a minimum adjusted equity capital ratio of 8%.

•

Net Capital Ratio is computed in accordance with the guidelines issued by the FSS. Under these guidelines, Shinhan Investment Corporation and Shinhan BNP Paribas Asset Management are required to maintain a minimum net capital ratio of 100%.

•

Under the guidelines issued by the FSS, Shinhan Life Insurance is required to maintain a minimum RBC ratio of 100%.

2) Liquidity


*Won Liquidity Ratio*		(KRW billion, %)


Company	Mar. 31, 2013						Dec. 31, 2012						Dec. 31, 2011
Company	Won Assets		Won Liabilities		Won Liquidity Ratio(%)		Won Assets		Won Liabilities		Won Liquidity Ratio(%)		Won Assets		Won Liabilities		Won Liquidity Ratio(%)
Shinhan Financial Group		904.1		710.1		127.3		189.1		93.4		202.6		4,225.5		3,911.2		108.0
Shinhan Bank		62,621.4		43,649.1		143.5		56,506.3		41,131.1		137.4		56,609.5		46,635.4		121.4
Shinhan Card		14,657.3		3,277.8		447.2		15,472.3		3,420.9		452.3		15,417.2		3,417.5		451.1
Shinhan Investment Corp.		11,482.1		7,959.1		144.3		9,358.8		6,725.4		139.2		6,161.4		5,036.5		122.3
Shinhan Life Insurance		1,822.2		392.0		464.8		969.1		377.2		256.9		843.5		341.5		247.0
Shinhan Capital		565.8		259.4		218.1		587.5		161.3		364.1		519.0		147.9		350.8
Jeju Bank		1,020.1		581.4		175.5		9,984.0		6,511.8		153.3		982.2		686.2		143.1
Shinhan Savings Bank		204.6		128.0		159.9		299.4		151.8		197.3		—		—		—
Yehanbyoul Savings Bank		657.0		336.5		195.2		—		—		—		—		—		—

1)	Shinhan Financial Group, Shinhan Bank, Jeju Bank: Due within 1 month

2)	Shinhan Life Insurance: (Won assets due within 3 months /3 months average of Claim payments)*100

3)	Shinhan Card, Shinhan Investment Corp., Shinhan Capital, Shinhan Savings Bank, Yehanbyoul Savings Bank: Due within 3 months

4)	Shinhan Financial Group figures are separate basis.


*Foreign Currency (FC) Liquidity Ratio*		(KRW billion, %)


Company	Mar. 31, 2013						Dec. 31, 2012						Dec. 31, 2011
Company	FC Assets		FC Liabilities		FC Liquidity Ratio(%)		FC Assets		FC Liabilities		FC Liquidity Ratio(%)		FC Assets		FC Liabilities		FC Liquidity Ratio(%)
Shinhan Financial Group		—		—		—		—		—		—		—		—		—
Shinhan Bank		26,935.0		21,354.7		126.1		25,501.1		20,005.1		127.5		25,887.9		22,254.2		116.3
Shinhan Investment Corp.		644.9		610.1		105.7		482.9		446.8		108.1		23.3		23.5		99.0
Shinhan Capital		70.7		16.2		437.3		108.1		71.4		151.4		51.5		21.9		235.7
Jeju Bank		1.1		0.5		214.6		11.4		6.1		186.8		15.4		9.4		164.3

1)	Foreign currency liquidity ratios are computed with assets and liabilities due within 3 months

2)	Shinhan Bank’s foreign currency liquidity ratio reflected securitization weight with the guidelines issued by the FSS

3)	Shinhan Financial Group figures are separate basis.

3) Asset Quality


*SFG Consolidated Basis*		(KRW billion, %)


	Mar. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Total Loans		203,629.6		203,155.4		201,245.9

Substandard & Below		2,894.6		2,718.9		2,587.1
Substandard & Below Ratio		1.42		1.34		1.29
Non-Performing Loans		2,284.9		2,173.3		1,903.5
NPL Ratio		1.12		1.07		0.95
Substandard & Below Coverage Ratio		169.26		169.06		162.19
Loan Loss Allowance ¹⁾		4,899.4		4,596.5		4,196.0
Substandard & Below Loans		2,894.6		2,718.9		2,587.1

1)	Including reserve for credit losses.


*Separate Basis*		(%)


	Mar. 31, 2013						Dec. 31, 2012						Dec. 31, 2011
	Substandard & Below Ratio		NPL Ratio		Substandard & Below Coverage Ratio ¹⁾		Substandard & Below Ratio		NPL Ratio		Substandard & Below Coverage Ratio ¹⁾		Substandard & Below Ratio		NPL Ratio		Substandard & Below Coverage Ratio ¹⁾
Shinhan Financial Group		—		—		—		—		—		—		—		—		—
Shinhan Bank		1.18		1.00		169.31		1.08		0.87		170.55		1.09		0.82		166.11
Shinhan Card		2.26		1.70		243.80		2.14		1.64		248.83		1.69		1.26		236.08
Shinhan Investment Corp.		14.15		14.15		75.55		11.17		11.18		77.61		16.97		16.92		71.46
Shinhan Life Insurance		0.26		0.25		381.74		0.50		0.26		361.33		0.45		0.23		280.64
Shinhan Capital		2.26		1.60		134.51		2.98		1.91		95.84		2.79		1.31		82.85
Jeju Bank		2.15		2.07		83.81		1.49		1.47		102.90		1.62		1.03		93.73
Shinhan Savings Bank		27.04		27.04		49.85		31.71		31.71		38.30		—		—		—
Yehanbyoul Savings Bank		13.56		13.56		87.69		—		—		—		—		—		—

1)	Including reserve for credit losses.

4) Write-Offs & Provision for Credit Losses

<SFG Consolidated Basis>

(KRW billion)


	Mar. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		3,088.7		2,893.0		2,729.1
Allowance for acceptances and guarantees		77.0		77.8		85.8
Allowance for unused loan commitments		408.9		415.4		444.8
Other allowance		245.9		253.6		339.0

Total allowance		3,820.5		3,639.8		3,598.7

Write-offs		211.5		1,417.2		1,382.1

<Shinhan Bank>

(KRW billion)


	Mar. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		1,812.6		1,649.0		1,580.9
Allowance for acceptances and guarantees		133.7		112.8		109.5
Allowance for unused loan commitments		74.3		78.1		85.2
Other allowance		166.2		168.8		256.2

Total allowance		2,186.8		2,008.7		2,031.8

Write-offs		52.8		695.6		811.8

<Shinhan Card>

(KRW billion)


	Mar. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		779.5		777.4		706.2
Allowance for acceptances and guarantees		—		—		—
Allowance for unused loan commitments		326.0		328.5		345.3
Other allowance		60.8		46.7		50.6

Total allowance		1,166.3		1,152.6		1,102.1

Write-offs		146.5		511.6		451.5

5) Debt to Equity Ratios


*Shinhan Financial Group (Separate Basis)*			(KRW billion)


	Mar. 31, 2013			Dec. 31, 2012			Dec. 31, 2011 ¹⁾
Debt		7,816.5			7,546.0			11,413.4
Equity		20,067.5			19,666.9			19,430.8
Debt to Equity Ratio		38.95	%		38.37	%		58.74	%

1)	Upon the resolution of Board of Directors to redeem Series 10 redeemable preferred shares and Series 11 convertible redeemable preferred shares held on December 15, 2011, KRW 3.75 trillion capital decrease and liability increase reflected on Debt to Equity Ratio.

Twenty Largest Exposures by Borrower

(KRW billion)


As of Mar. 31, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Ministry of Strategy & Finance		—		—		7,516		—		—		7,516
Bank of Korea		3,190		—		3,638		—		—		6,828
Industrial Bank of Korea		582		22		2,968		—		—		3,572
Hyundai Heavy Industries Co., Ltd.		8		188		318		2,814		—		3,328
Korea Development Bank		12		50		2,947		—		—		3,009
Korea Finance Corporation		—		—		2,676		—		—		2,676
Korea Deposit Insurance Corporation		—		—		2,534		—		—		2,534
Korea Land & Housing Corporation		—		—		1,730		—		—		1,730
Samsung Heavy Industries Co., Ltd.		—		48		42		1,549		—		1,638
Woori Bank		97		28		1,279		3		—		1,407
Korea Securities Finance Corporation		31		—		1,329		—		—		1,360
POSCO		1		76		826		36		—		940
Nonghyup Bank		94		—		805		11		—		910
Songdo Cosmopolitan City Development Inc.		848		—		47		—		—		895
KEPCO		—		—		878		8		—		886
Hana Bank		32		69		783		—		—		884
Samsung C&T Corporation		—		74		496		269		—		839
Korea Housing-Finance Corporation		—		—		807		—		—		807
Korea EximBank		—		—		798		—		—		798
LG Electronics		505		11		23		219		—		758

Total		5,401		566		32,442		4,907		—		43,316

Some of the totals may not sum due to rounding


*Exposure to ten Main Debtor Groups*		(KRW billion)


As of Mar. 31, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Hyundai Heavy Industries		111		337		349		3,742		0		4,539
Samsung		320		702		1,134		2,229		0		4,386
Hyundai Motors		1,418		1,314		619		360		0		3,711
SK		507		791		953		839		0		3,091
LG		1,615		277		230		286		0		2,409
POSCO		135		365		956		286		0		1,742
Lotte		447		79		476		195		1		1,199
LS		173		337		114		347		0		971
Hyosung		252		442		16		202		0		912
GS		304		148		101		316		0		868

Total		5,283		4,793		4,948		8,803		2		23,828

Some of the totals may not sum due to rounding

Loan and due from banks Concentration by Industry

(KRW billion)


As of Mar. 31, 2013 Consolidated basis	Total Exposures
As of Mar. 31, 2013 Consolidated basis	Amount		Weight (%)
Finance and Insurance		56,491		20.7	%
Manufacturing		35,244		12.9	%
Retail and wholesale		12,663		4.6	%
Real Estate, leasing and service		20,245		7.4	%
Construction		4,770		1.8	%
Hotel and leisure		4,484		1.6	%
Others		40,536		14.9	%
Consumers		98,040		36.0	%

Total		272,473		100	%

*	Including deposits, loans, and securities

Top Twenty Non-Performing Loans

(KRW billion)


Borrower	Industry	Gross Principal Outstanding		Allowance for Loan Losses
A	Development and Subdividing of Residential Buildings		116		26
B	Apartment Building Construction		54		54
C	Office and Commercial Building Construction		43		36
D	Building of Steel Ships		43		19
E	Manufacture of Machinery for Other Textiles, Apparel and Leather Processing		42		41
F	Development and Subdividing of Residential Buildings		37		3
G	Renting of Non-Residential Buildings		32		2
H	Development and Subdividing of Residential Buildings		30		21
I	Manufacture of Other Paper and Paperboard		30		10
J	Other Civil Engineering Construction		29		24
K	Development and Subdividing of Residential Buildings		27		8
L	Manufacture of Synthetic Resin and Other Plastic Materials		25		3
M	Renting of Non-Residential Buildings		24		2
N	Renting of Non-Residential Buildings		23		10
O	Manufacture of Tires and Tubes		23		23
P	Development and Subdividing of Residential Buildings		23		18
Q	Building of Steel Ships		22		2
R	Manufacture of Sections for Ships		22		—
S	Apartment Building Construction		22		9
T	Development and Subdividing of Residential Buildings		21		15

Total			688		325

1)	Consolidated basis as of Mar. 31, 2013.

2)	Non-Performing Loans are defined as loans past due longer than 90 days.

3)	Some of the totals may not sum due to rounding.

3. Independent Auditor

Audit Opinion for the last 3 years


	1Q 2013	FY 2012	FY 2011
Audit Opinion	-	Unqualified	Unqualified

*	For the first quarter of 2013, the independent accountant conducted a review for our financial statements instead of auditing them.

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 preparation.


Year	Auditor	Payment ¹⁾ (KRW mil.)			Details	Working hours
2013	KPMG Samjong Accounting Corp.		508 (annualized basis	)	Review/Audit of Financial Statements	1,230 hours ²⁾
2013	KPMG Samjong Accounting Corp.		140		K-IFRS Report Package Audit for Shinhan Savings Bank	510 hours²⁾
2012	KPMG Samjong Accounting Corp.		498		Review/Audit of Financial Statements	6,380 hours
	KPMG Samjong Accounting Corp.		35		K-IFRS Report Package Audit for Shinhan Savings Bank	372 hours
	KPMG Samjong Accounting Corp.		70		Non-statutory audit of subsidiaries under the consolidated corporate tax system for CY2012	690 hours
2011	KPMG Samjong Accounting Corp.		487		Review/Audit of Financial Statements	9,016 hours

1)	Excluding value-added taxes.

2)	As of March 31, 2013.

* In addition to above mentioned description of fees for audit and review services, KPMG Samjong Accounting Corp. also provided services related to US listing and ICOFR audit in accordance with the standards of the PCAOB which we paid KRW1,304 million (Excluding value-added taxes) for FY2012

4. Directors, Executive Officers and Employees

Directors and Executive Officers

1) Executive Directors

Name

Month and
Year

of Birth

Position

Service Term

Dong Woo Han

Nov. 1948

• Chairman of Shinhan Financial Group

• Board Steering Committee Member

• Corporate Governance & CEO Recommendation Committee Member

3 years starting from March 23, 2011

2) Non-Executive Directors

Currently, 11 non-executive directors are in office, 10 of which outside directors who are nominated by our Outside Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting.

9 outside directors were appointed as board of directors at the 12^th Annual General Meeting of Shareholders on March 28, 2013, of which 8 directors renewed their terms and 1 director newly appointed.

Our non-executive directors are as follows:


Name	Month and Year of Birth	Outside Director	Sub-Committees	Service Term

Jin Won Suh	April 1951	X	-	4 years starting from March 23, 2011

Taeeun Kwon	January 1941	O	Audit Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 23, 2011

Kee Young Kim	October 1937	O	Board Steering Committee member Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 23, 2011

Seok Won Kim	April 1947	O	Board Steering Committee member Audit Committee member	3 years starting from March 23, 2011

Hoon Namkoong	June 1947	O	Chairman of Board of Directors Risk Management Committee member Compensation Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 23, 2011

Boo In Ko	December 1941	O	Board Steering Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 28, 2013

Sang-Kyeong Lee	September 1945	O	Audit Committee member Compensation Committee Chair	2 years starting from March 29, 2012

Ke Sop Yun	May 1945	O	Audit Committee Chair Compensation Committee member	5 years starting from March 17, 2009

Jung Il Lee	August 1952	O	Compensation Committee member	3 years starting from March 23, 2011

Haruki Hirakawa	November 1964	O	Board Steering Committee member	3 years starting from March 23, 2011

Philippe Aguignier	September 1957	O	Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	4 years starting from March 24, 2010

3) Executive Officers

In addition to the executive directors, we currently have the following executive officers:


Name	Month and Year of Birth	Position	In charge of

Buhmsoo Choi	Aug. 1956	Deputy President	• Strategic Planning Team • Global Business Strategy Team • Shinhan FSB Research Institute

Sung Ho Wi	June 1958	Deputy President	• Wealth Management Planning Office

Dong Hwan Lee	Sep. 1959	Deputy President	• Corporate & Investment Banking Planning Office

Jae-Gwang Soh	Aug. 1961	Deputy President	• Synergy Management Team • Information & Technology Planning Team • Smart Finance Team • Audit Team

Jung Kee Min	Mar. 1959	Deputy President & Chief Financial Officer	• Finance Management Team • Investor Relations Team • HR Team

Sin Gee Lee	July 1956	Deputy President	• Public Relations Team • CSR & Culture Management Team • General Affairs Team

Bo Hyuk Yim	Mar. 1961	Managing Director	• Risk Management Team

Woo Gyun Park	Mar. 1959	Managing Director	• Compliance Team

Byung chul Lim	Jan. 1964	Managing Director	• Shinhan FSB Research Institute


*Stock Options*		(As of April 30, 2013)


	No. of Granted Options (A)		No. of Exercised Options (B)		No. of Cancelled Options (C)		No. of Exercisable Options (D = A – B – C)		Exercise Price (KRW)
Granted in 2005		2,620,331		2,266,642		251,300		102,389		28,006
Granted in 2006		3,206,173		2,617,517		480,300		108,356		38,829
Granted in 2007		1,231,169		0		205,313		1,025,856		54,560
Granted in 2008		805,174		0		185,396		619,778		49,053

Total		7,862,847		4,884,159		1,122,309		1,856,379		—


Note	1)	The weighted-average exercise price of outstanding exercisable options as of April 30, 2013 is KRW 50,339
	2)	The closing price of our common stock was KRW 38,100 on April 30, 2013.


*Employees*		(As of Mar. 31, 2013)

Gender

Number of
Employees

Average length of Service

Total Salaries and wages
paid in 2013
(KRW million)

Average Payment
per person
(KRW million)

Male

127

2 yrs 5 mths

5,136

Female

3 yrs 7 mths

604

Total

155

2 yrs 7 mths

5,739


Note)				Average length of service including service within group subsidiaries as of Mar. 31, 2013 is Male 12 yrs 9 mths and Female 7yrs 3 mths, whereas total average is 11yrs 9mths.

5. Major Shareholder and Market Price Information of our Common Shares and ADRs

Major Shareholders¹⁾ of Shinhan Financial Group as of Mar. 31, 2013


Name	No. of Common Shares owned		Ownership%
National Pension Service		34,506,886		7.28	%
BNP Paribas		30,106,276		6.35	%

1)	Shareholders who own beneficial ownership of 5% or more(common share basis).

2)	In addition to the common share holdings, National Pension Service holds a total of 2,000,000 shares of Shinhan Financial Group’s series 12 non-voting redeemable preferred stock as of Mar. 31, 2013.

Share ownership of Employee Stock Ownership Association

Beginning Balance

(Jan. 1, 2013)

Increase

Decrease

Ending Balance
(Mar. 31, 2013)

Ownership%¹⁾
(Mar. 31, 2013)

18,787,067

671,249

718,627

18,739,689

3.95

1)	Common share basis.


*Common Share Traded on the Korea Exchange*		(KRW, number of shares)


		Oct. 2012		Nov. 2012		Dec. 2012		Jan. 2013		Feb. 2013		Mar. 2013		Apr. 2013
Price per share	High		38,700		38,000		38,950		42,150		42,650		42,650		40,600
	Low		36,750		33,550		34,100		38,900		39,200		37,650		37,250
	Avg.		37,652		35,355		37,017		40,302		40,884		40,423		39,036
Trading Volume			16,965,939		20,246,247		21,836,849		22,521,117		19,289,381		24,282,510		19,273,274
Highest Daily Trading Volume			1,531,700		1,711,287		2,242,260		1,982,508		2,245,654		2,312,600		1,551,531
Lowest Daily Trading Volume			396,731		461,578		587,830		499,305		568,054		518,345		467,707


*American Depositary Receipts traded on the New York Stock Exchange*		(USD, number of shares)


		Oct. 2012		Nov. 2012		Dec. 2012		Jan. 2013		Feb. 2013		Mar. 2013		Apr. 2013
Price per share	High		34.97		34.84		36.64		39.01		38.86		39.32		36.26
	Low		33.07		31.25		31.42		37.02		35.89		33.60		32.73
	Avg.		33.95		32.59		34.44		37.84		37.40		36.63		34.42
Trading Volume			974,446		1,073,368		1,251,615		1,595,732		1,294,323		1,770,037		2,039,053
Highest Daily Trading Volume			87,800		145,651		211,507		263,937		143,978		207,959		391,395
Lowest Daily Trading Volume			11,364		26,591		22,122		23,475		37,682		32,386		37,164

1)	Shinhan Financial Group changed the ratio on its American Depositary Receipts (ADRs) from one (1) ADR representing two (2) common shares to one (1) ADR representing one (1) common share effective October 15, 2012.

2)	Figures for October 2012 reflect the changed ratio(1:1).

6. Related Party Transactions


*Loans to Subsidiaries*		(KRW billion)


Subsidiary	Loan Type		Origination Date		Maturity Date		Lending Rate			Beginning Balance (Jan. 1, 2013)		Decrease		Increase		Ending Balance (Mar. 31, 2013)
Shinhan Investment Corp.		Loans in KRW		2012-01-30		2017-01-30		4.11	%		100.0		—		—		100.0
Shinhan Investment Corp.		Loans in KRW		2012-06-28		2017-06-28		3.84	%		100.0		—		—		100.0
Shinhan Card		Loans in KRW		2010-10-29		2015-10-29		4.37	%		100.0		—		—		100.0
		Loans in KRW		2011-01-28		2016-01-28		4.91	%		100.0		—		—		100.0
		Loans in KRW		2011-02-24		2016-02-24		4.82	%		250.0		—		—		250.0
		Loans in KRW		2011-05-17		2016-05-17		4.47	%		100.0		—		—		100.0
		Loans in KRW		2012-03-14		2017-03-14		4.12	%		150.0		—		—		150.0
Shinhan Capital		Loans in KRW		2008-01-23		2013-01-23		6.60	%		50.0		50.0		—		0
		Loans in KRW		2010-09-28		2013-09-28		4.12	%		100.0		—		—		100.0
		Loans in KRW		2011-01-28		2014-01-28		4.53	%		50.0		—		—		50.0
		Loans in KRW		2011-04-29		2016-04-29		4.65	%		100.0		—		—		100.0
		Loans in KRW		2011-05-17		2016-05-17		4.47	%		50.0		—		—		50.0
		Loans in KRW		2012-03-14		2017-03-14		4.12	%		50.0		—		—		50.0
		Loans in KRW		2012-12-14		2017-12-14		3.33	%		50.0		—		—		50.0
		Loans in KRW		2013-01-18		2018-01-18		3.18	%		0		—		50.0		50.0
Shinhan PE Investment Management		Loans in KRW		2012-08-10		2013-08-09		4.09	%		5.0		—		—		5.0
Shinhan PE Investment Management		Loans in KRW		2012-11-27		2013-11-27		3.07	%		5.0		—		—		5.0

Total											1,360.0		50.0		50.0		1,360.0

Exhibit 99.1

Independent Auditors’ Review Report (Separate Financial Statements) of Shinhan Financial Group as of March 31, 2013

Exhibit 99.2

Independent Auditors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of March 31, 2013

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.

/s/ Jung Kee Min

Name: Jung Kee Min

Title: Chief Financial Officer

Date: May 15, 2013