SHG 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM 6-K

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REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the Month of March 2025

Commission File Number: 001-31798

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SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant's name into English)

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20, Sejong-daero 9-gil, Jung-gu, Seoul 04513, Korea
(Address of principal executive offices)

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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  Form 40-F 

Submission of Audit Report (Shinhan Financial Group)

On March 4, 2025, Shinhan Financial Group disclosed audit reports for the fiscal year 2024 based on the International Financial Reporting Standards as adopted by the Republic of Korea.

The financial statements with external auditor's report are not yet approved by stockholder's meeting approval process, thus contents are subjected to be changed in the due course of the approval process

Please refer to Exhibit 99.1 and 99.2 for Independent Auditor’s Reports on consolidated and separate financial statements.

Exhibit 99.1 : Independent Consolidated Auditor’s Report of Shinhan Financial Group as of December 31, 2024

Exhibit 99.2 : Independent Separate Auditor’s Report of Shinhan Financial Group as of December 31, 2024

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.
				(Registrant)
Date: March 04, 2025				By:		/s/ CHUN Sang-yung
				Name: CHUN Sang-yung
				Title: Chief Financial Officer

EX-99.1

Exhibit 99.1 : Independent Consolidated Auditor’s Report of Shinhan Financial Group

SHINHAN FINANCIAL GROUP CO., LTD.

AND SUBSIDIARIES

Consolidated Financial Statements

December 31, 2024 and 2023

(With Independent Auditor’s Report Thereon)

Contents

		Page
Independent Auditors’ Report		1
Consolidated Statements of Financial Position		6
Consolidated Statements of Comprehensive Income		8
Consolidated Statements of Changes in Equity		10
Consolidated Statements of Cash Flows		12
Notes to the Consolidated Financial Statements		15
Independent Auditors’ Report on Internal Control over Financial Reporting<br><br>for Consolidation Purposes		309
ICFR Operating Status Report for Consolidation Purposes by CEO and IAM		311

Independent Auditors’ Report

Based on a report originally issued in Korean

The Board of Directors and Stockholders

Shinhan Financial Group Co., Ltd.

Opinion

We have audited the consolidated financial statements of Shinhan Financial Group Co., Ltd. and its subsidiaries (“the Group”), which comprise the consolidated statements of financial position as of December 31, 2024 and 2023, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising material accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2024 and 2023, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

We have also audited, in accordance with Korean Standards on Auditing (KSAs), the Group’s Internal Control over Financial Reporting (“ICFR”) as of December 31, 2024 based on the criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea, and our report dated March 4, 2025 expressed an unmodified opinion on the effectiveness of the Group’s internal control over financial reporting.

Basis for Opinion

We conducted our audits in accordance with KSAs. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statement as of and for the year ended December 31, 2024. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

• Assessment of allowance for credit losses for loans

As discussed in Notes 3.(h), 5.(b), and 13 to the consolidated financial statements, the Group recognized an allowance for credit losses using the Expected Credit Loss (ECL) impairment model for loans at amortized cost amounting to KRW 4,565,931 million as of December 31, 2024. A lifetime ECL is recognized for those loans that have experienced a Significant Increase in Credit Risk (SICR) since initial recognition or

are credit impaired, otherwise a 12-month ECL is recognized. The Group measures ECL allowances on an individual basis for individually significant corporate loans which are credit impaired and for those which have experienced a SICR and demonstrate certain other high risk indicators (including debt restructuring, total capital erosion, etc.).

The individual assessment involves judgment by the Group in estimating the future cash flows expected from collateral. The allowance for credit losses for other loans are measured on a collective basis. For these loans, the Group measures ECL based on its estimates of the Probability of Default (PD), the Loss Given Default (LGD) and the Exposure at Default (EAD) as well as the impact of Forward-Looking Information (FLI). When measuring allowance for credit losses, PD estimated considering various factors such as collateral, product and borrower type, credit rating, loan size, recovering period, etc. and LGD per recovery type are applied. For corporate loans measured on a collective basis, one of the relevant inputs for determining PD is the internal credit risk rating of the borrower. When measuring the allowance for credit losses on corporate loans, PD is determined based on borrower's internal credit risk rating, which is assessed by considering both quantitative and qualitative factors. In particular, the evaluation of qualitative factors requires a high level of judgment by the Group.

We identified the following risks in accordance with the assessment of the allowance for credit losses for loans as a key audit matter, considering likelihood of error, management judgement, and risk of material misstatement;

• Risks of misstatement in the allowance for credit losses due to errors and fraud when assessing the quantitative and qualitative factors for determining internal credit risk ratings of corporate loans, measuring PD and LGD, and incorporating FLI for the collective ECL calculation.

The following are the primary audit procedures we performed to address this key audit matter.

• We evaluated the design and tested the operating effectiveness of certain internal controls related to: (i) the validation of the models used to determine the inputs to the collective ECL calculation and the impact of FLI; (ii) the assessment of qualitative factors in the process of determining the internal credit risk rating of the loans; (iii) the completeness and accuracy of quantitative data used in the credit risk ratings.
• We involved credit risk professionals with specialized skills, industry knowledge and relevant experience who assisted in: (i) evaluating the methodology and key judgments used in determining the PD and LGD parameters; (ii) evaluating how FLI was incorporated in the collective ECL model; and (iii) recalculating forward-looking PD and LGD on a sample basis.
• We evaluated on a sample basis whether, the internal credit risk ratings of corporate loans for collective ECL calculation were assessed in accordance with the Group policy.

(2) Internally measured fair value of level 3 derivatives, and level 3 derivative-linked securities

As discussed in Notes 5.(e) to the consolidated financial statements, the Group classifies financial instruments measured at fair value using valuation techniques where one or more significant inputs are not based on observable market data as level 3 in the fair value hierarchy.

Those financial instruments measured at fair value classified as level 3 include derivatives and derivative-linked securities both held and issued by Shinhan Securities Co., Ltd. (a subsidiary of the Group), of which fair value is measured by the internally developed valuation models. The fair value of such derivative assets and liabilities as of December 31, 2024 was KRW 718,788 million and KRW 535,162 million, respectively.

Also, the fair value of such derivative-linked securities held (presented as ‘financial assets at fair value through profit or loss – debt securities’) and issued (presented as ‘financial liabilities designated at fair value through profit or loss’) as of December 31, 2024 was KRW 86,279 million and KRW 7,146,909 million, respectively. In order to measure the fair value of these financial instruments, the Group uses

valuation models such as discounted cash flow models and option models. These models use various inputs and assumptions, depending on the nature of the financial instruments.

We identified the following risk in accordance with the measurement of fair value level 3 of the derivatives and derivative-linked securities as a key audit matter considering the level of judgement;

• Risks of misstatement in the fair value of the level 3 derivatives and the derivative-linked securities measured by internally developed valuation models due to inappropriate applying unobservable inputs (including volatility of underlying assets, correlations, regression coefficients, discount rates, etc.) and related assumptions.

The following are the primary audit procedures we performed to address this key audit matter.

• We evaluated the design and tested the operating effectiveness of certain internal controls related to the measurement of fair value of the derivatives and derivative-linked securities. This included controls related to the development and application of the significant unobservable inputs and assumptions used in the measurement of fair values.
• We involved valuation professionals with specialized skills and knowledge, who assisted in (i) evaluating unobservable inputs on a selection of the derivatives and derivative-linked securities; and (ii) developing unobservable inputs independently for a selection of the derivatives and derivative-linked securities and comparing the resulting fair value estimates to the Group’s fair value measurements.

Other matters

The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with K-IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with KSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these

consolidated financial statements.

As part of an audit in accordance with KSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in the internal controls that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors’ report is Jung-Soo Bok.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 4, 2025

This report is effective as of March 4, 2025, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Assets
Cash and due from banks at amortized cost		5, 9, 13, 20	W	40,525,712		34,629,251
Financial assets at fair value through profit or loss		5, 10, 20		72,146,845		71,216,564
Derivative assets		5, 11		10,279,257		4,711,421
Securities at fair value through other comprehensive income		5, 12, 20		93,805,369		90,311,979
Securities at amortized cost		5, 12, 20		33,315,999		35,686,487
Loans at amortized cost		5, 13, 20		449,295,238		411,739,562
Property and equipment		14, 19, 20		4,157,592		3,972,304
Intangible assets		15		6,120,133		6,217,946
Investments in associates		16		2,752,980		2,692,031
Current tax receivable				54,658		30,590
Deferred tax assets		45		205,506		153,719
Investment property		17		327,696		257,806
Net defined benefit assets		26		155,697		114,378
Insurance contract assets		28		5,639		10,654
Reinsurance contract assets		28		184,754		88,353
Other assets		5, 13, 18, 20		26,401,598		29,925,844
Assets held for sale				29,583		36,444
Total assets			W	739,764,256		691,795,333

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position (Continued)

As of December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Liabilities
Deposits		5, 21	W	422,781,045		381,512,664
Financial liabilities at fair value through profit or loss		5, 22		954,899		1,868,977
Financial liabilities designated at fair value through profit or loss		5, 23		8,220,475		7,796,727
Derivative liabilities		5, 11		10,058,532		5,038,416
Borrowings		5, 24		49,920,373		56,901,352
Debt securities issued		5, 25		93,765,854		81,561,725
Net defined benefit liabilities		26		38,974		67,620
Provisions		27		1,308,896		1,369,666
Current tax payable				203,131		92,253
Deferred tax liabilities		45		423,821		542,595
Insurance contract liabilities		28		51,124,629		48,333,208
Reinsurance contract liabilities		28		98,063		93,240
Investment contract liabilities		5, 30		1,165,022		1,572,685
Other liabilities		5, 31		40,879,509		48,722,340
Total liabilities				680,943,223		635,473,468
Equity		32
Capital stock				2,969,641		2,969,641
Hybrid bonds				4,600,121		4,001,731
Capital surplus				12,094,968		12,094,968
Capital adjustments				(807,114)		(658,664)
Accumulated other comprehensive loss				(1,824,440)		(1,074,453)
Retained earnings				39,020,580		36,387,314
Total equity attributable to equity holders of<br><br>Shinhan Financial Group Co., Ltd.				56,053,756		53,720,537
Non-controlling interests				2,767,277		2,601,328
Total equity				58,821,033		56,321,865
Total liabilities and equity			W	739,764,256		691,795,333

See accompanying notes to the consolidated financial statements.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Interest income			W	29,209,338		27,579,211
Interest expense				(17,807,036)		(16,761,289)
Net interest income		35		11,402,302		10,817,922
Fees and commission income				4,295,366		4,175,243
Fees and commission expense				(1,580,492)		(1,528,037)
Net fees and commission income		36		2,714,874		2,647,206
Insurance income				3,116,553		2,899,599
Reinsurance income				73,578		44,985
Insurance service expenses				(2,131,560)		(1,748,779)
Reinsurance service expenses				(75,405)		(82,190)
Net insurance income		28		983,166		1,113,615
Insurance finance income				202,363		143,064
Insurance finance expenses				(301,802)		(659,161)
Net insurance finance income (expenses)		29		(99,439)		(516,097)
Dividend income		37		239,097		181,486
Net gain on financial instruments at fair value through profit or loss		38		1,210,771		2,493,626
Net loss on financial instruments designated at fair value through profit or loss		39		(344,453)		(437,780)
Net gain on foreign currency transaction				510,985		256,766
Net gain (loss) on disposal of securities at fair value through other comprehensive income		12		60,260		(129,575)
Net gain (loss) on disposal of securities at amortized cost		12		(23,155)		251
Provision for allowance for credit loss		40		(2,013,274)		(2,244,503)
General and administrative expenses		41		(6,116,240)		(5,895,337)
Other operating expenses, net		43		(2,066,224)		(2,186,730)
Operating income				6,458,670		6,100,850
Equity method income (loss)		16		(23,822)		125,088
Other non-operating expense		44		(405,756)		(260,978)
Profit before income taxes				6,029,092		5,964,960
Income tax expense		45		1,470,922		1,486,960
Profit for the year			W	4,558,170		4,478,000

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Continued)

For the years ended December 31, 2024 and 2023

(In millions of won, except earnings per share data)		Note		2024		2023
Other comprehensive income for the year, net of income tax		32
Items that are or may be reclassified to profit or loss:
Valuation gain on securities at fair value through other comprehensive income			W	1,146,623		3,162,544
Equity in other comprehensive income of<br><br>associates				6,671		7,156
Foreign currency translation adjustments for foreign<br><br>operations				416,182		(6,245)
Net change in unrealized fair value of cash flow<br><br>hedges				38,514		61,280
Net finance income on insurance contract assets (liabilities)				(2,334,235)		(2,172,458)
Net finance income (expense) on reinsurance contract assets (liabilities)				(1,523)		(20,772)
				(727,768)		1,031,505
Items that will not be reclassified to profit or loss:
Remeasurements of the net defined benefit<br><br>liabilities (assets)				(62,143)		(200,857)
Valuation gain on securities at fair value<br><br>through other comprehensive income				43,258		8,174
Gain (loss) on disposal of securities at fair value<br><br>through other comprehensive income				7,329		(3,056)
Changes in own credit risk on financial liabilities<br><br>designated at fair value through profit of loss				(6,341)		8,623
				(17,897)		(187,116)
Total other comprehensive income (loss), net of income tax				(745,665)		844,389
Total comprehensive income for the year			W	3,812,505		5,322,389
Profit attributable to:
Equity holders of Shinhan Financial Group Co., Ltd.		32, 46	W	4,450,177		4,368,035
Non-controlling interests				107,993		109,965
			W	4,558,170		4,478,000
Total comprehensive income attributable to:
Equity holders of Shinhan Financial Group Co., Ltd.			W	3,702,863		5,208,629
Non-controlling interests				109,642		113,760
			W	3,812,505		5,322,389
Earnings per share:		32, 46
Basic and diluted earnings per share in won			W	8,441		8,048

See accompanying notes to the consolidated financial statements.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2023

(In millions of won)		Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.
		Capital<br><br>stock		Hybrid<br><br>bonds		Capital<br><br>surplus		Capital<br><br>adjustments		Accumulated<br><br>other compre-hensive income (loss)		Retained earnings		Sub-total		Non-controlling interests		Total
Balance at January 1, 2023	W	2,969,641		4,196,968		12,095,043		(582,859)		(1,910,750)		33,963,799		50,731,842		2,691,716		53,423,558
Profit for the year		-		-		-		-		-		4,368,035		4,368,035		109,965		4,478,000
Other comprehensive income (loss), net of income tax:
Loss on valuation and disposal of securities at fair value through other comprehensive income		-		-		-		-		3,163,334		-		3,163,334		4,328		3,167,662
Equity in other comprehensive income (loss) of associates		-		-		-		-		7,156		-		7,156		-		7,156
Foreign currency translation adjustments for foreign operations		-		-		-		-		(6,234)		-		(6,234)		(11)		(6,245)
Net change in unrealized fair value of cash flow hedges		-		-		-		-		61,280		-		61,280		-		61,280
Net finance loss on insurance contract assets (liabilities)		-		-		-		-		(2,172,458)		-		(2,172,458)		-		(2,172,458)
Net finance loss on reinsurance contract assets (liabilities)		-		-		-		-		(20,772)		-		(20,772)		-		(20,772)
Remeasurements of the net defined benefit liabilities (assets)		-		-		-		-		(200,335)		-		(200,335)		(522)		(200,857)
Changes in own credit risk on financial liabilities designated at fair value through profit or loss		-		-		-		-		8,623		-		8,623		-		8,623
Total other comprehensive income		-		-		-		-		840,594		-		840,594		3,795		844,389
Total comprehensive income (loss)		-		-		-		-		840,594		4,368,035		5,208,629		113,760		5,322,389
Other changes in equity
Dividends		-		-		-		-		-		(455,215)		(455,215)		-		(455,215)
Interim dividends		-		-		-		-		-		(817,122)		(817,122)		-		(817,122)
Dividends to hybrid bonds		-		-		-		-		-		(189,672)		(189,672)		-		(189,672)
Issuance of hybrid bonds (Note 32)		-		897,646		-		-		-		-		897,646		-		897,646
Repayment of hybrid bonds (Note 32)		-		(1,092,883)		-		(102,667)		-		-		(1,195,550)		-		(1,195,550)
Transfer to retained earnings of redemption loss of hybrid bonds		-		-		-		317		-		(317)		-		-		-
Acquisition of treasury stock (Note 32)		-		-		-		(485,947)		-		-		(485,947)		-		(485,947)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2023

(In millions of won)		Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.
		Capital<br><br>stock		Hybrid<br><br>bonds		Capital<br><br>surplus		Capital<br><br>adjustments		Accumulated<br><br>other compre-hensive income (loss)		Retained earnings		Sub-total		Non-controlling interests		Total
Retirement of treasury stock (Note 32)		-		-		-		485,947		-		(486,028)		(81)		-		(81)
Preferred stock converted to common stock		-		-		(75)		-		-		-		(75)		-		(75)
Change in other capital adjustments		-		-		-		26,703		-		(463)		26,240		-		26,240
Change in other non-controlling interests		-		-		-		(158)		-		-		(158)		(204,148)		(204,306)
		-		(195,237)		(75)		(75,805)		-		(1,948,817)		(2,219,934)		(204,148)		(2,424,082)
Reclassification of OCI to retained earnings		-		-		-		-		(4,297)		4,297		-		-		-
Balance at December 31, 2023	W	2,969,641		4,001,731		12,094,968		(658,664)		(1,074,453)		36,387,314		53,720,537		2,601,328		56,321,865

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity (Continued)

For the years ended December 31, 2024

(In millions of won)		Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.
		Capital<br><br>stock		Hybrid<br><br>bonds		Capital<br><br>surplus		Capital<br><br>adjustments		Accumulated<br><br>other compre-hensive income (loss)		Retained earnings		Sub-total		Non-controlling interests		Total
Balance at January 1, 2024	W	2,969,641		4,001,731		12,094,968		(658,664)		(1,074,453)		36,387,314		53,720,537		2,601,328		56,321,865
Profit for the year		-		-		-		-		-		4,450,177		4,450,177		107,993		4,558,170
Other comprehensive income (loss), net of income tax:
Loss on valuation and disposal of securities at fair value through other comprehensive income		-		-		-		-		1,196,353		-		1,196,353		857		1,197,210
Equity in other comprehensive income (loss) of associates		-		-		-		-		6,671		-		6,671		-		6,671
Foreign currency translation adjustments for foreign operations		-		-		-		-		415,006		-		415,006		1,176		416,182
Net change in unrealized fair value of cash flow hedges		-		-		-		-		38,514		-		38,514		-		38,514
Net finance loss on insurance contract assets (liabilities)		-		-		-		-		(2,334,235)		-		(2,334,235)		-		(2,334,235)
Net finance loss on reinsurance contract assets (liabilities)		-		-		-		-		(1,523)		-		(1,523)		-		(1,523)
Remeasurements of the net defined benefit liabilities (assets)		-		-		-		-		(61,759)		-		(61,759)		(384)		(62,143)
Changes in own credit risk on financial liabilities designated at fair value through profit or loss		-		-		-		-		(6,341)		-		(6,341)		-		(6,341)
Total other comprehensive income		-		-		-		-		(747,314)		-		(747,314)		1,649		(745,665)
Total comprehensive income (loss)		-		-		-		-		(747,314)		4,450,177		3,702,863		109,642		3,812,505
Other changes in equity
Dividends		-		-		-		-		-		(268,697)		(268,697)		-		(268,697)
Interim dividends		-		-		-		-		-		(820,287)		(820,287)		-		(820,287)
Dividends to hybrid bonds		-		-		-		-		-		(176,945)		(176,945)		-		(176,945)
Issuance of hybrid bonds (Note 32)		-		797,866		-		-		-		-		797,866		-		797,866
Repayment of hybrid bonds (Note 32)		-		(199,476)		-		(524)		-		-		(200,000)		-		(200,000)
Transfer to retained earnings of redemption loss of hybrid bonds		-		-		-		102,667		-		(102,667)		-		-		-
Acquisition of treasury stock (Note 32)		-		-		-		(700,000)		-		-		(700,000)		-		(700,000)
Disposal of treasury stock (Note 32)		-		-		-		297		-		-		297		-		297

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity (Continued)

For the years ended December 31, 2024

(In millions of won)		Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.
		Capital<br><br>stock		Hybrid<br><br>bonds		Capital<br><br>surplus		Capital<br><br>adjustments		Accumulated<br><br>other compre-hensive income (loss)		Retained earnings		Sub-total		Non-controlling interests		Total
Retirement of treasury stock (Note 32)		-		-		-		450,000		-		(450,102)		(102)		-		(102)
Change in other capital adjustments		-		-		-		(890)		-		(886)		(1,776)		-		(1,776)
Change in other non-controlling interests		-		-		-		-		-		-		-		56,307		56,307
		-		598,390		-		(148,450)		-		(1,819,584)		(1,369,644)		56,307		(1,313,337)
Reclassification of OCI to retained earnings		-		-		-		-		(2,673)		2,673		-		-		-
Balance at December 31, 2024	W	2,969,641		4,600,121		12,094,968		(807,114)		(1,824,440)		39,020,580		56,053,756		2,767,277		58,821,033

See accompanying notes to the consolidated financial statements.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Cash flows from operating activities
Profit for the year			W	4,558,170		4,478,000
Adjustments for:
Interest income		35		(29,209,338)		(27,579,211)
Interest expense		35		17,807,036		16,761,289
Dividend income		37		(239,097)		(181,486)
Income tax expense		45		1,470,922		1,486,960
Net fees and commission expense		36		330,896		307,492
Net insurance income		29		(983,166)		(1,113,615)
Net insurance finance expense		29		99,439		516,097
Net gain on financial instruments at fair value through profit or loss		38		(678,697)		(1,228,900)
Net gain on derivatives		11		(82,184)		(292,483)
Net gain (loss) on foreign currency translation				(107,294)		4,396
Net loss (gain) on financial instruments designated at fair value through profit or loss		39		35,604		(54,256)
Net gain (loss) on disposal of securities at fair value through other comprehensive income		12		(60,260)		129,575
Net loss (gain) on disposal of securities at amortized cost		12		23,155		(251)
Provision for allowance for credit loss		40		2,013,274		2,244,503
Employee benefit		26		157,711		145,874
Depreciation and other amortization		41		1,280,382		1,185,006
Other operating expense		43		687,447		859,065
Equity method loss (income), net		16		23,822		(125,088)
Other non-operating expense (income)		44		323,593		200,355
				(7,106,755)		(6,734,678)
Changes in assets and liabilities:
Due from banks at amortized cost				(408,314)		1,325,355
Securities at fair value through profit or loss				(159,581)		(7,374,788)
Deposits at fair value through profit or loss				(5,418)		-
Loans at fair value through profit or loss				(138,009)		620,955
Financial instruments designated at fair value through profit or loss				379,352		(726,476)
Derivative instruments				(83,294)		(336,770)
Loans at amortized cost				(34,952,582)		(5,652,482)
Insurance contract assets				5,015		(10,387)
Reinsurance contract assets				(96,401)		(4,262)
Other assets				2,036,969		(6,394,740)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Deposits			W	38,873,523		(1,380,003)
Net defined benefit liabilities				(246,347)		7,263
Provisions				(505,457)		(424,494)
Insurance contract liabilities				(916,060)		(1,247,849)
Reinsurance contract liabilities				936		(31,265)
Investment contract liabilities				(467,655)		(671,181)
Other liabilities				(8,626,434)		13,479,464
				(5,309,757)		(8,821,660)
Income taxes paid				(1,030,947)		(1,931,943)
Interest received				28,511,378		26,411,959
Interest paid				(15,218,677)		(13,058,769)
Dividends received				222,887		186,937
Net cash inflow from operating activities				4,626,299		529,846
Cash flows from investing activities
Decrease in financial instruments at fair value through profit or loss				5,846,223		3,845,778
Acquisition in financial instruments at fair value through profit or loss				(7,043,560)		(5,355,995)
Proceeds from disposal of securities at fair value through other comprehensive income				44,576,886		36,748,023
Acquisition of securities at fair value through other comprehensive income				(44,514,955)		(36,745,746)
Proceeds from disposal of securities at amortized cost				7,646,004		4,257,920
Acquisition of securities at amortized cost				(5,109,510)		(6,421,141)
Proceeds from disposal of property and equipment		14, 44		6,652		16,159
Acquisition of property and equipment		14		(263,836)		(261,444)
Proceeds from disposal of intangible assets		15, 44		8,102		25,029
Acquisition of intangible assets		15		(514,938)		(454,794)
Proceeds from disposal of investments in associates		16		326,439		377,496
Acquisition of investments in associates		16		(662,106)		(428,423)
Proceeds from disposal of investment property		17, 44		5,281		166,767
Acquisition of investment property		17		(3,202)		(5,367)
Proceeds from disposal of assets held for sale				-		3,663
Change in other assets				31,741		1,959
Proceeds from settlement of hedging derivative financial<br><br>instruments				50,300		29,123
Payment of settlement of hedging derivative financial instruments				(236,988)		(70,720)
Net cash inflow (outflow) from investing activities				148,533		(4,271,713)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Cash flows from financing activities
Issuance of hybrid bonds			W	797,866		897,646
Repayments of hybrid bonds				(200,000)		(1,195,550)
Net change in borrowings				(8,231,239)		8,153,087
Proceeds from debt securities issued				54,660,582		47,674,027
Repayments of debt securities issued				(45,082,555)		(43,808,445)
Increase in financial liabilities designated at fair value through profit or loss				-		209,969
Changes in other liabilities				(61,797)		164,567
Dividends paid				(1,267,146)		(1,461,371)
Proceeds from settlement of hedging derivative financial instruments				2,774,765		1,538,590
Payments of settlement of hedging derivative financial instruments				(2,655,404)		(1,459,027)
Acquisition of treasury stock				(700,000)		(485,947)
Disposal of treasury stock				297		-
Retirement of treasury stock				(102)		(81)
Increase (decrease) in non-controlling interests				54,717		(205,169)
Repayments of lease liabilities				(272,634)		(262,055)
Conversion costs for preferred stock to common stock				-		(75)
Net cash inflow (outflow) from financing activities				(182,650)		9,760,166
Effect of exchange rate changes on cash and cash equivalents held				238,477		(15,361)
Increase in cash and cash equivalents				4,830,659		6,002,938
Cash and cash equivalents at beginning of year		48		30,416,884		24,413,946
Cash and cash equivalents at end of year		48	W	35,247,543		30,416,884

See accompanying notes to the consolidated financial statements.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

1. Reporting entity

Shinhan Financial Group Co., Ltd., the controlling company, and its subsidiaries included in consolidation (collectively the “Group”) are summarized as follows:

(a) Controlling company

Shinhan Financial Group Co., Ltd. (the “Shinhan Financial Group” or the “Company”), the controlling company, is incorporated on September 1, 2001 for the main purposes of controlling, managing and funding Shinhan Bank, Shinhan Securities Co., Ltd., Shinhan Capital Co., Ltd. and Shinhan BNP Asset Management Co., Ltd. by way of share transfers. The total capital stock amounted to W1,461,721 million. Also, Shinhan Financial Group’s shares have been listed on the Korea Exchange since September 10, 2001 and Shinhan Financial Group’s American Depositary Shares have been registered with the Securities and Exchange Commission (SEC) and listed on the New York Stock Exchange since September 16, 2003.

(b) Ownership of Shinhan Financial Group and its major consolidated subsidiaries as of December 31, 2024 and 2023 are as follows:

						Date of financial information		Ownership (%)
Investor		Investee (*1)		Location					December 31, 2024		December 31, 2023
Shinhan Financial Group Co., Ltd.		Shinhan Bank		Korea		December 31		100.0		100.0
〃		Shinhan Card Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan Securities Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan Life Insurance Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan Capital Co., Ltd.		〃		〃		100.0		100.0
〃		Jeju Bank		〃		〃		75.3		75.3
〃		Shinhan Asset Management Co., Ltd.		〃		〃		100.0		100.0
〃		SHC Management Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan DS		〃		〃		100.0		100.0
〃		Shinhan Savings Bank		〃		〃		100.0		100.0
〃		Shinhan Asset Trust Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan Fund Partners Co., Ltd.		〃		〃		99.8		99.8
〃		Shinhan REITs Management Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan AI Co., Ltd. (*2)		〃		〃		-		100.0
〃		Shinhan Venture Investment Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan EZ General Insurance Co., Ltd.		〃		〃		85.1		85.1
Shinhan Bank		Shinhan Bank America		USA		〃		100.0		100.0
〃		Shinhan Bank Europe GmbH		Germany		〃		100.0		100.0
〃		Shinhan Bank Cambodia		Cambodia		〃		97.5		97.5
〃		Shinhan Bank Kazakhstan Limited		Kazakhstan		〃		100.0		100.0
〃		Shinhan Bank Canada		Canada		〃		100.0		100.0
〃		Shinhan Bank (China) Limited		China		〃		100.0		100.0
〃		Shinhan Bank Japan		Japan		〃		100.0		100.0
〃		Shinhan Bank Vietnam Ltd.		Vietnam		〃		100.0		100.0
〃		Banco Shinhan de Mexico		Mexico		〃		99.9		99.9
〃		PT Bank Shinhan Indonesia		Indonesia		〃		99.0		99.0
Shinhan Bank Japan		SBJDNX		Japan		〃		100.0		100.0

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

1. Reporting entity (continued)

(b) Ownership of Shinhan Financial Group and its major consolidated subsidiaries as of December 31, 2024 and 2023 are as follows (continued):

						Date of financial information		Ownership (%)
Investor		Investee (*1)		Location					December 31, 2024		December 31, 2023
Shinhan Card Co., Ltd.		Shinhan Credit Information Co., Ltd.		Korea		December 31		100.0		100.0
〃		LLP MFO Shinhan Finance		Kazakhstan		〃		75.0		100.0
〃		PT. Shinhan Indo Finance		Indonesia		〃		76.3		76.3
〃		Shinhan Microfinance Co., Ltd.		Myanmar		〃		100.0		100.0
〃		Shinhan Vietnam Finance Co., Ltd.		Vietnam		〃		100.0		100.0
Shinhan Securities Co., Ltd.		Shinhan Securities America Inc.		USA		〃		100.0		100.0
〃		Shinhan Securities Asia Ltd.		Hong Kong		〃		100.0		100.0
〃		SHINHAN SECURITIES VIETNAM CO., LTD.		Vietnam		〃		100.0		100.0
〃		PT. Shinhan Sekuritas Indonesia		Indonesia		〃		99.0		99.0
PT Shinhan Sekuritas Indonesia		PT. Shinhan Asset Management Indonesia (*3)		Indonesia		〃		-		75.0
Shinhan Life Insurance Co., Ltd.		Shinhan Financial Plus Co., Ltd		Korea		〃		100.0		100.0
〃		Shinhan LifeCare Co., Ltd.		〃		〃		100.0		100.0
〃		Shinhan Life Insurance Vietnam Co., Ltd.		Vietnam		〃		100.0		100.0
Shinhan Asset Management Co., Ltd.		SHINHAN ASSET MGT HK, LIMITED (*4)		Hong Kong		〃		-		100.0
Shinhan DS		SHINHAN DS VIETNAM CO., LTD.		Vietnam		〃		100.0		100.0

(*1) Subsidiaries such as trust, beneficiary certificate, special purpose company, partnerships and private equity fund which are not actually operating their own business are excluded.

(*2) The major assets were sold to Shinhan Bank in January 2024, and the liquidation process was completed after the distribution of remaining assets on July 15, 2024.

(*3) As of August 30, the entire stock was sold, and it was excluded from the consolidated subsidiaries.

(*4) Due to a decline in ownership interest for the year ended December 31, 2024, control was lost, and it was excluded from consolidation.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

1. Reporting entity (continued)

(c) Consolidated structured entities

Consolidated structured entities are as follows:

Category		Consolidated structured entities		Description
Trust		Shinhan Bank (including development trust) and 17 others		A trust is consolidated when the Group as a trustee is exposed to significant variable returns, if principle or interest amounts of the entrusted properties falls below guaranteed amount, the Group should compensate it, and the Group has the ability to affect those returns.
Asset-Backed Securitization		Tiger Eyes 3 Co., Ltd. and 181 others		An entity for asset backed securitization is consolidated when the Group has sole decision-making authority to dispose assets or change the conditions of the assets, and the Group is substantially exposed to, or has rights to significant variable returns by providing credit enhancement and purchases of subordinated securities.
Structured Financing		-		An entity established for structured financing relating to real estate, shipping, or mergers and acquisitions is consolidated, when the Group has the greatest credit to the entity, has sole decision-making authority of these Entities due to the entities default, and is substantially exposed to, or has rights to significant variable returns.
Investment Fund		One Shinhan Future's Fund and 171 others		An investment fund is consolidated, when the Group manages or invests assets of the investment funds on behalf of other investors as a collective investor or a business executive, or has the ability to dismiss the manager of the investment funds, and is substantially exposed to, or has rights to, the significant variable returns.

(*) The Group provides ABCP purchase agreements and others of W6,903,822million for the purpose of credit enhancement of structured companies.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

2. Basis of preparation

(a) Statement of compliance

The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (K-IFRS). The accompanying consolidated financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Group's financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.

The consolidated financial statements of the Group were authorized for issue by the Board of Directors on February 6, 2025. and the consolidated financial statements will be submitted for approval to the stockholders’ meeting to be held on March 26, 2025.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the consolidated statement of financial position:

• derivative financial instruments measured at fair value
• financial instruments at fair value through profit or loss measured at fair value
• financial instruments at fair value through other comprehensive income measured at fair value
• liabilities for cash-settled share-based payment arrangements measured at fair value
• financial assets and liabilities designated as hedged items in a fair value hedge accounting of which changes in fair value attributable to the hedged risk recognized in profit or loss
• liabilities for defined benefit plans recognized at the net of the total present value of defined benefit obligations less the fair value of plan assets
• Insurance and reinsurance contract assets and liabilities measured at fair value

(c) Functional and presentation currency

The respective financial statements of the Group entities are prepared in the functional currency of the economic environment in which each individual company of group entities operate. These consolidated financial statements are presented and reported in Korean won, which is the controlling company’s functional and presentation currency.

(d) Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. If the estimates and assumptions based on management's best judgment as of December 31, 2024 are different from the actual environment, these estimates and actual results may be different.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have a significant effect on the amounts recognized in the consolidated financial statements and information about assumptions and estimation uncertainties that might have a significant risk of resulting in a material adjustment within the next financial year are described in Note 4.

In preparing these consolidated financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainties are the same as those that applied to the consolidated financial statements as of and for the year ended December 31, 2023 except as explained below.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

2. Basis of preparation (continued)

(e) Standards and amendments adopted by the Group

The Group has newly applied the following accounting policies upon preparation of the annual consolidated financial statements from the beginning on January 1, 2024.

i) Amendment to K-IFRS No. 1001 'Presentation of Financial Statements' - Classification of Liabilities as Current or Non-current

The amendments clarify that the classification of liabilities as current or non-current should be based on the substantive rights existing at the end of the reporting period and that the classification is unaffected by management’s intentions or expectations about whether the company will exercise its right to defer settlement of a liability. The amendments also introduce a definition of settlement to make clear that settlement includes the transfer to the counterparty of the company's own equity instruments, however, it would be excluded if an option to settle the liability by the transfer of the company’s own equity instruments is recognized separately from the liability in compound financial instruments. There is no significant impact on the consolidated financial statements from these amendments.

ii) Amendments to K-IFRS No. 1007, ‘Cash Flow Statement’ and K-IFRS No. 1107 ‘Financial Instruments: Disclosures’ - Supplier Finance Arrangements

The amendments add to the disclosure objectives in K-IFRS 1007, ‘Cash Flow Statement,’ that information about supplier finance arrangements should be disclosed to enable users of financial statements to assess the impact of those arrangements on the Company’s liabilities and cash flows. The amendments also amend K-IFRS 1107, ‘Financial Instruments: Disclosures,’ to add supplier finance arrangements as an example of a requirement to disclose information about an entity’s exposure to concentrations of liquidity risk. There is no significant impact on the consolidated financial statements from these amendments.

iii) The following new and amended standards are not expected to have a significant impact on the consolidated financial statements.

• Lease liabilities arising from sale and leaseback transactions ( K-IFRS No. 1116 'Leases')

• Crypto assets disclosure (K-IFRS No. 1001 'Presentation of Financial Statements')

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies

Material accounting policies applied by the Group upon the preparation of consolidated financial statements under K-IFRS are described below, and consolidated financial statements for the year ended December 31, 2024 and comparative periods were prepared using the same accounting policy, except as described in Note 2.

(a) Operating segments

The Group has divided the segments based on internal reports reviewed periodically by the top sales decision maker to make decisions about the resources allocated to the segments and evaluate their performance. There are six reporting segments as described in Note 8. The reporting segments are operated separately according to the nature of the goods and services provided and the organizational structure of the Group.

The segment reported to the Chief Executive Officer (“CEO”) includes items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

It is the CEO’s responsibility to evaluate the resources to be distributed to the business and the performance of the business, and to make strategic decisions.

(b) Basis of consolidation

i) Subsidiaries

If an entity of the Group uses accounting policies other than those adopted in the consolidated financial statements for the same transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in preparing the consolidated financial statements.

ii) Structured entity

The Group establishes or invests in various structured entities. Considering the terms and conditions of the arrangement in which the structured entity was established, the entity is included in the consolidated entities if it is determined that the Group obtains gains and losses from the operations thereof, and the Group has the ability to direct the activities of the entity that can most significantly affect these gains and losses. The Group does not recognize any non-controlling interests as equity in relation to structured entities in the consolidated statements of financial position since the non-controlling interests in these entities are recognized as liabilities of the Group.

iii) Intra-group transactions eliminated on consolidation

Intra-group balances, transactions, and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealized intra-group losses are recognized as expense if intra-group losses indicate an impairment that requires recognition in the consolidated financial statements.

iv) Non-controlling interests

Non-controlling interests in a subsidiary are accounted for separately from the parent’s ownership interests in a subsidiary. Each component of net profit or loss and other comprehensive income is attributed to the owners of the parent and non-controlling interest holders, even when the non-controlling interests balance is reduced to below zero.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(c) Business combinations

i) Business combinations

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control.

Each identifiable asset or liability is measured at its acquisition-date fair value except for below:

• Leases are required to be classified based on the contractual terms and other factors

• Only those contingent liabilities assumed in a business combination that are a present obligation and can be measured reliably are recognized

• Deferred tax assets or liabilities are recognized and measured in accordance with K-IFRS No.1012, ‘Income Taxes’

• Employee benefit arrangements are recognized and measured in accordance with K-IFRS No.1019, ‘Employee Benefits’

• Compensation assets are recognized and measured on the same basis as the items subject to compensation

• Reacquired rights are measured in accordance with special provisions

• Liabilities or equity instruments related to share-based payment transactions are measured in accordance with the method in K-IFRS No.1102, ‘Share-based Payment’

• Non-current assets held for sale are measured at fair value less costs to sell in accordance with K-IFRS No.1105, ‘Non-current Assets Held for Sale and Discontinued Operations’

As of the acquisition date, non-controlling interests in the acquired are measured as the non-controlling interests' proportionate share of the acquirer’s identifiable net assets.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(d) Investments in associates and joint ventures

An associate is an entity in which the Group has significant influence, but not control, over the entity’s financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

The investment in an associate and a joint venture is initially recognized at cost, and the carrying amount is increased or decreased to recognize the Group’s share of the profit or loss and changes in the investments of the associate and the joint venture after the date of acquisition. Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated the Group's stake in preparing the consolidated financial statements. Unrealized losses are also being derecognized unless the transaction provides evidence of an impairment of the transferred assets.

If an associate or a joint venture uses accounting policies different from those of the Group for transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in applying the equity method.

When the carrying amount of that interest, including any long-term investments, is reduced to nil, the recognition of further losses is discontinued except to the extent that the Group has an obligation or has to make payments on behalf of the investee for further losses.

(e) Cash and cash equivalents

The Group classifies cash balances, call deposits and highly liquid investment assets with original maturities of three months or less from the acquisition date that are easily converted into a fixed amount of cash, and are subject to an insignificant risk of changes in their fair value as cash and cash equivalents.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(f) Non-derivative financial assets

Financial assets are recognized in the consolidated statement of financial position when the Group becomes a party to the contract. In addition, a standardized purchase or sale (a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the market concerned) is recognized on the trade date.

i) Financial assets designated at FVTPL

Financial assets can be irrevocably designated as measured at FVTPL despite of classification standards stated below, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring assets or liabilities or recognizing the gains or losses on them on different bases. However, once the financial assets are designated at FVTPL, it is irrevocable.

ii) Equity instruments

For the equity instruments that are not held for short-term trading, at initial recognition, the Group may make an irrevocable election to present subsequent changes in fair value in other comprehensive income. Equity instruments that are not classified as financial assets at Fair Value through Other Comprehensive Income (“FVOCI”) are classified as financial assets at FVTPL.

The Group subsequently measures all equity investments at fair value. Valuation gains or losses of the equity instruments that are classified as financial assets at FVOCI previously recognized as other comprehensive income is not reclassified as profit or loss on recognition. The Group recognizes dividends in profit or loss when the Group’s right to receive payments of the dividend is established.

Valuation gains or losses due to changes in fair value of the financial assets at FVTPL are recognized in the consolidated statement of comprehensive income gains or losses on financial assets at FVTPL. Impairment loss (reversal) on equity instruments at FVOCI is not recognized separately.

iii) Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model in which the asset is managed and the contractual cash flow characteristics of the asset. Debt instruments are classified as financial assets at amortized cost, at FVOCI, or at FVTPL. Debt instruments are reclassified only when the Group’s business model changes.

iii-1) Financial assets at amortized cost

Assets that are held within a business model whose objective is to hold assets to collect contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a financial asset measured at amortized cost that is not subject to a hedging relationship is recognized in profit or loss when the financial asset is derecognized or impaired. Interest income on the effective interest method is included in the ‘Interest income’ in the consolidated statement of comprehensive income.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(f) Non-derivative financial assets (continued)

iii-2) Financial assets at FVOCI

Assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Other than (reversal of) impairment losses, interest income, foreign exchange differences, gains or losses of the financial assets at FVOCI are recognized as other comprehensive income in equity. On removal, gains or losses accumulated in other comprehensive income are reclassified to profit or loss. The interest income on the effective interest method is included in the ‘Interest income’ in the consolidated statement of comprehensive income. Foreign exchange differences and impairment losses are included in the ‘Net foreign currency transaction gain’ and ‘Provision for credit losses allowance’ in the consolidated statement of comprehensive income, respectively.

iii-3) Financial assets at FVTPL

Debt securities other than financial assets at amortized costs or FVOCI are classified at FVTPL. Unless hedge accounting is applied, gains or losses from financial assets at FVTPL are recognized as profit or loss and are included in ‘Net gain (loss) on financial assets at fair value through profit or loss’ in the consolidated statement of comprehensive income.

iv) Embedded derivatives

Financial assets with embedded derivatives are classified regarding the entire hybrid contract, and the embedded derivatives are not separately recognized. The entire hybrid contract is considered when it is determined whether the contractual cash flows represent solely payments of principal and interest.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(g) Derivative financial instruments

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

i) Hedge accounting

The Group holds forward exchange contracts, interest rate swaps, currency swaps and other derivative contracts to manage interest rate risk and foreign exchange risk. The Group designated derivatives as hedging instruments to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction. In addition, this document describes the hedging instrument, hedged item, and the method of evaluating the effect of the hedging instrument offsetting changes in the fair value or cash flow of the hedged item due to the hedged risk at the initiation of the hedging relationship and in subsequent periods.

i-1) Fair value hedge

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair value for a derivative hedging instrument and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the separate statement of comprehensive income.

The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, or if the hedge no longer meets the criteria. Any adjustment arising from G/L on the hedged item attributable to the hedged risk is amortized to profit or loss from the date the hedge accounting is discontinued.

i-2) Cash flow hedge

When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

i-3) Net investment hedge

The portion of the change in fair value of a financial instrument designated as a hedging instrument that meets the requirements for hedge accounting for a net investment in a foreign operation is recognized in other comprehensive income and the ineffective portion of the hedge is recognized in profit or loss. The portion recognized as other comprehensive income that is effective as a hedge is recognized in the statement of comprehensive income as a result of reclassification adjustments in accordance with K-IFRS No. 1021, "Effect of Changes in Foreign Exchange Rates" at the time of disposing of its overseas operations or disposing of a portion of its overseas operations to profit or loss.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(g) Derivative financial instruments (continued)

ii) Other derivative financial instruments

All derivatives except those designated as hedging instruments and are effective in hedging are measured at fair value. Changes in the fair value of other derivative financial instrument not designated as a hedging instrument are recognized immediately in profit or loss.

iii) Gains and losses on initial recognition

Any difference between the fair value of over the counter derivatives at initial recognition and the amount that would be determined at that date using a valuation technique in a situation in which the valuation is dependent on unobservable parameters is not recognized in profit or loss but is deferred, and the deferred gains and losses on initial transaction are depreciated on a straight-line basis over the life of the instrument or the remainder is recognized in profit or loss immediately when the fair value becomes observable.

(h) Expected credit losses of financial assets

Except for financial assets measured at fair value through profit or loss, financial assets measured at amortized cost and financial assets measured at fair value through other comprehensive income are assessed for expected credit losses at the end of each reporting period and recognized as loss allowance. Financial assets migrate through the following three stages based on the change in credit risk since initial recognition and allowance for credit loss for the financial assets are measured at the 12-month expected credit losses (“ECL”) or the lifetime ECL, depending on the stage.

Category				Allowance for credit loss
STAGE 1		When credit risk has not increased<br><br>significantly since the initial<br><br>recognition		12-months ECL: the ECL associated with the probability of default events occurring within the next 12 months
STAGE 2		When credit risk has increased<br><br>significantly since the initial<br><br>recognition		Lifetime ECL: a lifetime ECL associated with the probability of default events occurring over the remaining lifetime
STAGE 3		When assets are impaired		Same as above

The Group, meanwhile, only recognizes the cumulative changes in lifetime expected credit losses since the initial recognition as an allowance for credit loss for purchased or originated credit-impaired financial assets.

The total period refers to the expected life span of the financial instrument up to the contract expiration date.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(h) Expected credit losses of financial assets (continued)

i) Reflection of forward-looking information

The Group reflects forward-looking information when measuring expected credit losses. Assuming that the measurement factor of expected credit losses has a certain correlation with economic fluctuations, the expected credit losses are calculated by reflecting forward-looking information through modeling between macroeconomic variables and measurement factors.

ii) Measurement of expected credit loss of financial assets at amortized cost

The expected credit loss of amortized financial assets is measured as the difference between the present value of the cash flows expected to be received and the cash flow to be received in accordance with loan agreements. For this purpose, the Group calculates expected cash flows for individually significant financial assets. For financial assets that are not individually significant, the Group collectively measures the expected credit losses thereof with similar credit risk characteristics.

Expected credit losses are deducted from financial assets at amortized cost using ACL, which are written off along with the assets if the assets are not recoverable. The allowance for credit loss is increased when the written-off loan receivables are subsequently collected, and the changes in the allowance for credit loss are recognized in profit or loss.

iii) Measurement of estimated credit loss of financial assets at FVOCI

The calculation of expected credit loss of financial assets at FVOCI is the same as for financial assets measured at amortized cost, but changes in allowance for credit loss are recognized in other comprehensive income. In the case of disposal and redemption of financial assets at FVOCI, the allowance for credit loss is reclassified from other comprehensive income to profit or loss and recognized in profit or loss.

(i) Property and equipment

Land is not depreciated. Other property and equipment are depreciated on a straight-line basis over the estimated useful lives for the acquisition cost after deduction of the residual value. The estimated useful lives for the current and comparative periods are as follows:

Descriptions		Useful lives
Buildings		40 ~ 50 years
Other properties		4 ~ 5 years

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(j) Intangible assets

Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses.

Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of intangible assets as shown below, from the date that they are available for use. The residual value of intangible assets is zero. However, if there are no foreseeable limits to the periods over which certain intangible assets are expected to be available for use, they are determined to have indefinite useful lives and are not amortized.

Descriptions		Useful lives
Software		5 years
Capitalized development cost		5 years
Other intangible assets		5 years or contract periods

(k) Investment properties

An investment property is initially recognized at cost including any directly attributable expenditure. Subsequent to initial recognition, the asset is measured at cost less accumulated depreciation and accumulated impairment losses, if any.

The depreciation method and the estimated useful lives for the current and comparative periods are as follows:

Descriptions		Useful lives		Depreciation method
Buildings		40 ~ 50 years		Straight-line

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(l) Leases

i) Accounting treatment as the lessee

The Group leases various tangible assets, such as real estate and vehicles, and each of the lease contract is negotiated individually and includes a variety of terms and conditions. There are no other restrictions imposed by the lease contracts, but the lease assets cannot be provided as collaterals for borrowings.

At the commencement date of the lease, the Group recognizes the right-of-use assets and the lease liabilities. Each lease payment is allocated to payment for the principal portion of the lease liability and financial costs. The Group recognizes in profit or loss the amount calculated to produce a constant periodic rate of interest on the lease liability balance for each period as financial costs. Right-of-use assets are depreciated using a straight-line method from the commencement date over the lease term.

If internal rate of return from in the lease is readily determined, the lease payments are discounted by the rate; if the rate is not readily determined, the lessee’s incremental borrowing rate is used.

The cost of the right-of-use assets comprise:

• The amount of the initial measurement of the lease liability

• Any lease payments made at or before the commencement date (less any lease incentives received)

• Any initial direct costs incurred by the lessee

• An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease

Lease payments related to short-term leases or low-value assets are recognized as current expenses over the lease term using the straight-line method. A short-term lease is a lease that has a lease term of 12 months or less, and the low-value assets lease is a lease of which the underlying asset value is not more than W6 million.

Additional considerations for the Group when accounting for lessees include:

Extension and termination options are included in a number of real estate lease contracts of the Group. In determining the lease term, management considers all relevant facts and circumstances that create an economic incentive not to exercise the options. The periods covered by, a) an option to extend the lease if the lessee is reasonably certain to exercise that option, or b) an option to terminate the lease if the lessee is reasonably certain not to exercise that option, is included when determining the lease term. The Group reassesses whether the Group is reasonably certain to exercise the extension option, or not to exercise a termination option, upon the occurrence of either a significant event or a significant change in circumstances that is within the control of the lessee, and affects whether the lessee is reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise an option previously included in its determination of the lease term.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(l) Leases (continued)

ii) Accounting treatment as the lessor

The Group leases out to lessee various tangible assets, including vehicles under operating and finance lease contracts, and each of the lease contract is negotiated individually and includes a variety of terms and conditions. The risk management method for all rights held by the Group in the underlying assets includes repurchase agreements, residual value guarantees, etc.

ii-1) Finance leases

The Group recognizes them as a receivable at an amount equal to the net investment in the lease, and the difference from the carrying amount of the leasing asset as of the commencement date is recognized as profit or loss from disposal of the lease asset. In addition, interest income is recognized by applying the effective interest method for the amount of the Group's net investment in finance leases. Lease-related direct costs are included in the initial recognition of financial lease receivables and are accounted for in a way that reduces the revenue for the lease term.

ii-2) Operating leases

The Group recognizes the lease payments as income on straight-line basis, and adds the lease initial direct costs incurred during negotiation and contract phase of the operating lease to the carrying amount of the underlying asset. In addition, the depreciation policy of operating lease assets is consistent with the Group’s depreciation policy of other similar assets.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(m) Impairment of non-financial assets

The carrying amounts of the Group’s non-financial assets, other than assets arising from employee benefits, deferred tax assets and non-current assets held for sale, are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amount to their carrying amount.

The Group estimates the recoverable amount of an individual asset, and if it is impossible to measure the individual recoverable amount of an asset, then the Group estimates the recoverable amount of cash-generating unit (“CGU”). The recoverable amount of an asset or a CGU is the greater of its value in use and its fair value less costs to sell. The value in use is estimated by applying a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or the CGU.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergies arising from the goodwill acquired. Any impairment identified at the CGU level will first reduce the carrying amount of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Impairment losses of goodwill cannot be reversed in the subsequent period. For other assets than goodwill, at the end of each reporting period, the Group reviews whether there is any indication that the impairment loss for those assets that was previously recognized no longer exists or has decreased, and reverses the impairment loss only if there is a change in the estimate used to determine the recoverable amount after the recognition of the impairment loss. The increased carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

(n) Non-derivative financial liabilities

The Group recognizes financial liabilities in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the financial liability in accordance with the substance of the contractual arrangement and the definitions of financial liabilities.

Transaction costs on the financial liabilities at FVTPL are recognized in profit or loss as incurred.

i) Financial liabilities designated at FVTPL

Financial liabilities can be irrevocably designated as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases, or a group of financial instruments is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. The amount of change in the fair value of the financial liabilities designated at FVTPL that is attributable to changes in the credit risk of that liabilities shall be presented in other comprehensive income.

ii) Financial liabilities at FVTPL

Since initial recognition, financial liabilities at FVTPL are measured at fair value, and changes in the fair value are recognized as profit or loss.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(n) Non-derivative financial liabilities (continued)

iii) Other financial liabilities

Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss are classified as other financial liabilities, and other financial liabilities include deposits, borrowings, debt securities and etc. At the date of initial recognition, other financial liabilities are measured at fair value minus transaction costs that are directly attributable to the acquisition. Subsequent to initial recognition, other financial liabilities are measured at amortized cost using the effective interest method.

The Group derecognizes a financial liability from the consolidated statement of financial position when it is extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

(o) Foreign currency

i) Foreign operations

The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy, are translated to presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to functional currency at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.

(p) Equity capital

i) Hybrid bonds

The Group classifies an issued financial instrument, or its component parts, as a financial liability or an equity instrument depending on the substance of the contractual arrangement of such financial instrument. Hybrid bonds where the Group has an unconditional right to avoid delivering cash or another financial asset to settle a contractual obligation are classified as an equity instrument and presented in equity. Hybrid bonds issued by subsidiaries of the Group are classified as non-controlling interests according to this classification criteria. In addition, distributions paid are treated as net income attributable to non-controlling interests in the consolidated statement of comprehensive income.

ii) Capital adjustment

The effect of changes in ownership interests in subsidiaries that do not lose control over the equity attributable to owners of the parent is included in capital adjustments.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(q) Employee benefits

i) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render the related service. When an employee has rendered service to the Group during an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

ii) Other long-term employee benefits

The Group’s net obligation in respect of other long-term employee benefits that are not expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

iii) Retirement benefits: defined benefit plans

For the year ended December 31, 2024, defined benefit liabilities related to the defined benefit plan are recognized by deducting the fair value of external reserve from the present value of the defined benefit plan debt.

Defined benefit liabilities are calculated annually by independent actuaries using the predicted unit credit method. If the net present value of the defined benefit obligation less the fair value of the plan assets is an asset then the present value of the economic benefits available to the entity in the form of a refund from the plan or a reduction in future contributions to the plan.

(r) Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. Provisions shall be used only for expenditures for which the provisions are originally recognized.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(s) Financial guarantee contract

A financial guarantee contract is a contract that requires the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts are recognized initially at their fair value, and the initial fair value is amortized over the life of the financial guarantee contract.

After initial recognition, financial guarantee contracts are measured at the higher of:

• Loss allowance in accordance with K-IFRS No.1109, ‘Financial Instruments’

• The amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of K-IFRS No.1115, ‘Revenue from Contracts with Customers’

(t) Insurance contracts

i) Definition and classification of insurance contracts

The Group classifies the insurance contract issued as an insurance contract when assuming significant insurance risk from the policyholder, regardless of its legal form. It is classified as an insurance contract if, based on present value, there is a potential loss exposure and if, under any commercially plausible scenario, significant additional payments (determined on a present value basis) would be required to the policyholder. The assessment of assuming significant insurance risk is performed for each contract at the time of issuance. For reinsurance contracts, they are classified as insurance contracts when transferring significant insurance risk to the reinsurer. Additionally, contracts with discretionary participation features are also classified as insurance contracts.
ii) Recognition and measurement of insurance liabilities (assets) and reinsurance assets (liabilities)

ii-1) Accounting unit

The Group identifies insurance contract portfolios by integrating insurance contracts that are exposed to similar risks and managed together based on coverage, currency, and interest rate types. The Group divides a portfolio of insurance contracts issued into the following groups of insurance contracts based on similarity of profitability. However, for insurance contracts applying the premium allocation approach, it assumes that there is onerous insurance contract (or net gain contract for reinsurance contracts held) at the initial recognition unless evidence suggests otherwise.

A group of insurance contracts issued consists of:

• A group of contracts that are onerous at initial recognition.

• A group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently

• A group of the remaining contracts

A group of reinsurance contracts held consists of:

• A group of contracts with net profits at initial recognition.

• A group of contracts that at initial recognition have possibility of having net profits subsequently

• A group of the remaining contracts

The Group does not include contracts with a difference in issuance dates exceeding one year in the same group of insurance contracts issued, and it does not reassess the composition of the group subsequently.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ii) Recognition and measurement of insurance liabilities (assets) and reinsurance assets (liabilities)(continued)

ii-2) Recognition of a group of insurance contracts issued

The Group shall recognize a group of insurance contracts it issues from the earliest of the following:

• The beginning of the coverage period of the group of contracts;

• The date when the first payment from a policyholder in the group becomes due (If there is no contractual payment due date, the time the first premium is received is considered that date); and

• For a group of onerous contracts, when the group becomes onerous.

The Group recognizes a group of reinsurance contracts held at the beginning of the coverage period of the group of insurance contracts held. However, in the case of non-proportional reinsurance, if the group of underlying contracts is a group of onerous contract and the group of reinsurance contracts held is concluded at or before the time when the group of underlying contracts is recognized, the Group recognizes a group of reinsurance contracts held at the earlier of the beginning of the coverage period of the group of reinsurance contracts held or the recognition time of the group of underlying insurance contracts which is the onerous contract for the current year. In addition, in the case of proportional reinsurance, the Group recognizes the group of reinsurance contracts held at the time of initial recognition of the group of underlying insurance contracts, if the initial recognition time of the group of underlying insurance contracts is later than the beginning of the coverage period of the group of reinsurance contracts held.

ii-3) Measurement of insurance liabilities (assets) and reinsurance assets (liabilities) under the general model

At the time of initial recognition, the Group measures a group of insurance contracts issued as the sum of fulfillment cash flows (estimates of future cash flows, adjustments to the time value of money related to financial risks to future cash flows, and risk adjustments to non-financial risks) and contractual service margin, and subsequently, as the sum of the liability or assets for remaining coverage (fulfillment cash flow and contractual service margin) and the liability or asset for incurred claims (fulfillment cash flow). The liability for remaining coverage includes the obligation to investigate and pay reasonable insurance benefits according to the current insurance contract for insurance events that have not yet occurred, the obligation to pay amounts related to insurance contract services that have not yet been provided, the obligation to pay amounts related to insurance contract services that have not yet been provided, and represents the obligation to pay investment elements and other amounts that have not been transferred to incurred liability. The liability for incurred claims comprises the obligation to investigate insurance events that have already occurred and pay reasonable insurance premiums and other incurred insurance costs, the obligation to pay amounts related to insurance contract services already provided, and obligation to pay investment elements and other amounts not related to insurance contract services and not included in the liability for remaining coverage.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ii) Recognition and measurement of insurance liabilities (assets) and reinsurance assets (liabilities)(continued)

ii-3) Measurement of insurance liabilities (assets) and reinsurance assets (liabilities) under the general model (continued)

• The estimate of future cash flows

The Group estimates future cash flows using a probability-weighted average based on all relevant, reliable, and neutral information available without undue cost or effort regarding the timing, scope, and uncertainty of future cash flows. Estimates for market variables are consistent with observable market prices and reflect the perspective of the entity, while estimates for non-market variables incorporate all reasonable and reliable internal and external evidence available without undue cost or effort, while ensuring consistency with observable market variables. The Group segregates the future cash flows of reinsurance contracts held from those of the underlying insurance contracts issued and measures them separately, using assumptions consistent with the underlying insurance contracts issued but including the effect of risk of non-performance by the issuer of the reinsurance contract.

• Future cash flows within the contract boundary

The Group includes all future cash flows within the boundary of a group of insurance contracts issued when measuring the group. Cash flows within the contract boundary refer to cash flows up to the reporting period in which there exists a substantive right or obligation to compel the policyholder to pay premiums (or compel the reinsurer to pay reinsurance premiums for a group of reinsurance contracts held) or to provide substantive services under the insurance contract (or receive substantive services from the reinsurer for a group of reinsurance contracts held).

Cash flows within the contract boundary include premiums from policyholders, claims and benefits payable to policyholders (including payments linked to underlying items), insurance claim handling expenses, undivided options and guarantees-related cash flows, insurance acquisition cash flows directly attributable to the contract or its portfolio, fixed/variable indirect expenses directly attributable to fulfilling the insurance contract, costs related to investment activities and the provision of investment return services/investment-related services, insurance policy loans, etc; and excludes investment income or future insurance-related cash flows, product development expenses, and training expenses not directly attributable to the insurance contract portfolio.

The substantive obligations to provide insurance contract services (or the substantive right to receive insurance contract services for a group of reinsurance contracts held) ends when there is the practical ability to reassess the risks of the particular policyholder or the risks of the portfolio of insurance contracts(the risk transferred to reinsurance company for a group of reinsurance contracts held), and, as a result, to fully reflect such risks in pricing or settlement; during the reassessment of portfolio pricing, the risks related to periods after the reassessment date is not considered. The Group reassesses the contract boundary at the end of each reporting period to reflect changes in circumstances affecting substantive rights and obligations.

• Discretionary cash flows

The Group identifies and distinguishes the effects of discretionary cash flow variations, which pertain to amounts or timing of cash flows subject to discretion, and the effects of changes in assumptions related to financial risks on the recognition, separately. Any impact of changes in discretion on recognition is adjusted in contractual service margin. The Group considers any adjustment rate applied to the disclosed benchmark rate as discretionary when applying the disclosed interest rate to payments to policyholders.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ii) Recognition and measurement of insurance liabilities (assets) and reinsurance assets (liabilities)(continued)

ii-3) Measurement of insurance liabilities (assets) and reinsurance assets (liabilities) under the general model (continued)

• Insurance acquisition cash flows

The Group allocates insurance acquisition cash flows directly attributable to the insurance contract portfolio to the group of insurance contracts issued in the portfolio and to the group of future insurance contracts that will be recognized upon renewal of the insurance contracts included in the group in a reasonable and systematic manner. Insurance acquisition cash flows recognized as assets after distribution are assessed for recoverability at the end of each reporting period if the fact and circumstances exist that the asset is impaired. If an impairment loss is identified, it is recognized in profit or loss for the current period and insurance acquisition cash flow assets and adjusted to the carrying amount of insurance acquisition cash flow assets. Insurance acquisition cash flow assets are derecognized when the related group of contracts is initially recognized and are included in the fulfilment cash flow measurement for that group of contracts.

• Discount rate

The Group measures the time value of money using a discount rate that reflects the cash flow and liquidity characteristics of insurance contracts while being consistent with current observable market prices and then adjusts future cash flow estimates. To do this, the Group calculates a risk-free interest rate term structure using the Smith-Wilson interpolation method, incorporating yields on government bonds with maturities observed in the market up to the longest term available, along with initial convergence periods and long-term forward interest rates. Liquidity premiums are then added to determine deterministic scenarios. The liquidity premium is derived by multiplying an adjustment ratio to the difference between the risk spread of the representative insurance industry portfolio and the credit risk spread. Additionally, the Group generates 1,000 stochastic scenarios based on this deterministic scenario, reflecting convergence speed parameters and volatility parameters. Deterministic and stochastic scenarios for foreign currencies are calculated separately from scenarios for Korean Won, taking into account the characteristics of each currency.

• Risk adjustment for non-financial risks

The Group explicitly reflects between estimated future cash flows and discount rates, reflecting the compensation of the uncertainty surrounding the amounts and timing of cash flows arising from non-financial risks through adjustments for non-financial risk. These adjustments are made in accordance with insurance regulations and are allocated at the individual contract level through reasonable and systematic methods. For reinsurance contracts held, adjustments for non-financial risk are calculated to reflect the risk transferred from the holder of the reinsurance contract to the reinsurer, consistent with the assumptions applied in the underlying insurance contracts issued.

• Contractual service margin

At the time of initial recognition of a group of insurance contracts issued, the Group measures the contractual service margin, which is unrealized profit that will be recognized as insurance contract services are provided in the future, as the amount that does not generate revenue or expenses from:

ⅰ) The amount of fulfillment cash flows expected at initial recognition date for the group of insurance contracts issued.

ⅱ) All cash flows already incurred from contracts within the group at the initial recognition date.

ⅲ) The insurance acquisition cash flows allocated to the group at the initial recognition date.

ⅳ) Other assets or liabilities recognized previously for cash flows associated with the group at the initial recognition date.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ii) Recognition and measurement of insurance liabilities (assets) and reinsurance assets (liabilities)(continued)

ii-3) Measurement of insurance liabilities (assets) and reinsurance assets (liabilities) under the general model (continued)

In the case of a reinsurance contracts held, the net cost or net gain on purchasing a group of the reinsurance contracts held is recognized as contractual service margin. However, if the net cost of purchasing reinsurance coverage is related to costs incurred prior to purchasing a group of reinsurance contracts held, it is recognized in profit or loss.

• Changes in fulfilment cash flows and contractual service margin.

The Group re-estimates the future cash flows as of the end of each reporting period at current estimates. Changes in fulfilment cash flows related to the future are adjusted in the contractual service margin, while the current and past service-related portions are recognized in profit or loss. The Group also adjusts the contractual service margin for experience adjustments related to future service-related premiums and related insurance acquisition cash flows, as well as for differences between expected and actual investment elements. However, changes in the time value of money and financial risk, changes in estimated fulfilment cash flows for the liabilities for incurred claims (assets), and other experience adjustments related to current and past services are not adjusted in the contractual service margin.

The Group adjusts the current contractual service margin at the end of the reporting period by adding the

following amounts to the base amount:

ⅰ) Impact of newly added contracts to the current group of insurance contracts issued.

ⅱ) Accrued interest on the carrying amount of the contractual service margin, measured at the discount rate determined at initial recognition.

ⅲ) Changes in future service-related fulfilment cash flows (excluding recognition and recovery elements of losses).

ⅳ) Effects of currency exchange differences on the contractual service margin.

ⅴ) Amounts recognized in the current period's profit or loss due to the transfer of insurance contract services during the period.

• Loss components and loss recovery components

The Group considers an insurance contract as one that incurs a loss if, at the initial recognition date, the total of the fulfilment cash flows allocated to the insurance contract, previously recognized insurance acquisition cash flows, and cash flows arising from the contract at that date result in a net outflow. Additionally, the Group categorizes a group of insurance contracts issued as a group of onerous contract if, at subsequent measurement dates, adverse fluctuations related to future services allocated to the group of insurance contracts issued exceed the carrying amount of the contractual service margin.

In a group of onerous contracts, there is no contractual service margin, and the measurement of the group consists entirely of the fulfilment cash flows. Any portion at the initial recognition date in the group of onerous contract that is expected to result in a net outflow or exceeds the carrying amount of the contractual service margin subsequently is considered a loss component of that group and recognized as a loss in the current period. After recognizing the loss component, the Group systematically allocates subsequent fluctuations in the remaining insurance liability fulfilment cash flows between the loss component and the liability for remaining coverage, excluding the loss component, based on established criteria. However, subsequent decreases in cash flows related to future services are allocated only to the loss component until it is fully exhausted and recognized in the current period. Any excess beyond the loss component's exhaustion is then recognized as contractual service margin again.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ii) Recognition and measurement of insurance liabilities (assets) and reinsurance assets (liabilities)(continued)

ii-3) Measurement of insurance liabilities (assets) and reinsurance assets (liabilities) under the general model (continued)

In the case of a group of reinsurance contracts held, when a loss component is recognized in the group of the underlying insurance contracts, the Group calculates the loss recovery component of the group of the reinsurance contracts held by multiplying the expected recovery ratio for claims under the group of the underlying insurance contracts by the loss component attributed to those claims. This loss recovery component is then used to adjust assets for the remaining coverage of the reinsurance group and to adjust the contractual service margin (or directly adjust the remaining insurance liability if the premium allocation approach is applied) for recognition of the current period's profit or loss. The loss recovery component is adjusted to reflect fluctuations in the loss component of the group of the underlying insurance contracts within the range that does not exceed the loss component's carrying amount for the group of the underlying insurance contracts.

ii-4) Measurement of insurance liabilities (assets) under the variable fee approach

The Group applies the variable fee approach to measure insurance liabilities (assets) for insurance contracts with direct participation features that meet the following criteria at inception. The Group provides investment-related services at the commencement of the insurance contract, and the insurance contract has direct participation features. The Group does not reassess the fulfillment of these criteria unless there is a contract modification. The variable fee approach is not applied to reinsurance contracts held.

i) the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items.

ii) the Group expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items.

iii) the Group expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items.

In the variable fee approach, it is clear that the obligation to pay an amount equal to the fair value of the underlying items, deducted by the variable fee, constitutes the liability to the policyholder. The variable fee is the company's share of the fair value of the underlying items minus fulfillment cash flows, which do not vary depending on the performance of the underlying items. Fluctuations in the obligation to pay an amount equal to the fair value of the underlying items are not adjusted in the contractual service margin. However, adjustments are made in the contractual service margin for the portion of the fair value of the underlying items attributable to the company and the changes in the fulfilment cash flows not subject to variations based on the performance of the underlying items.

The Group measures the present value of cash flows at the initial recognition date and at the end of the reporting period using the same general model. The contractual service margin is calculated by adjusting the base amount with the following amounts.

i) The effect of new contracts added to the current group of insurance contracts issued.

ii) Changes in the portion of the fair value of underlying items attributable to the entity (excluding recognition and reversal of loss components).

iii) Changes in the fulfilment cash flows related to future services (excluding recognition and reversal of loss components).

iv) The effect of exchange rate fluctuations on contractual service margins.

v) Amounts recognized in the current period's profit or loss due to the transfer of insurance contract services during the period.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ii) Recognition and measurement of insurance liabilities (assets) and reinsurance assets (liabilities)(continued)

ii-5) Insurance liabilities (assets) and reinsurance assets (liabilities) measured under the premium allocation approach.

At the inception of a group of insurance contracts issued, if there is a reasonable expectation that the measurement of liabilities for remaining coverage under premium allocation approach does not differ materially from the one under the general model, and if the coverage period for all contracts within the group of insurance contracts issued is one year or less, the insurance liabilities (assets) are measured using the premium allocation approach, which is a simplified method compared to the general model.

The Group measures the liabilities (assets) for remaining coverage at the initial recognition by deducting from the cash received as premiums (or reinsurance premiums paid for reinsurance contracts held), the amount of insurance acquisition cash flows not immediately recognized as expenses (including amounts removed from assets). Subsequently, it determines the carrying amount by adding or subtracting the following amounts from the initial amount:

ⅰ) Premiums received during the reporting period. (reinsurance premiums paid for reinsurance contracts held)

ⅱ) Insurance acquisition cash flows not recognized as expenses and amortization of those insurance acquisition cash flows

ⅲ) Adjustments related to significant financial components

ⅳ) Amount recognized in profit or loss for the reporting period due to providing insurance contract services.

v) Investment components paid (received for reinsurance contracts held) or transferred to the liability for incurred claims.

The Group does not adjust the carrying amount of the remaining insurance liabilities at the initial recognition date if the coverage period of each contract within the group of insurance contracts issued does not exceed one year, in order to reflect the time value of money and the financial risk effect. Additionally, acquisition cash flows are recognized as expenses when they occur. However, if circumstances indicate that the group of insurance contracts issued incurs losses, the Group performs impairment tests. If the fulfilment cash flows exceed the carrying amount of the liabilities for remaining coverage, the difference is recognized as a loss in the current period, is also recognized as increase of the liabilities for remaining coverage.

ii-6) Policyholders’ equity adjustments

It requires estimating the related cash flows from dividends and measuring liabilities using discount rates that reflect assumptions and risks for participating insurance contracts, as per K-IFRS 1117.

In response to concerns regarding the discrepancy between past accounting practices under K-IFRS 1104 and the accurate representation of obligations to participating policyholders, our company has adopted the methodology prescribed in Article 4-1(2) of the Insurance Supervisory Regulations to calculate liabilities associated with potential future obligations arising from unrealized gains on assets as of the reporting period end.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ⅲ) Recognition of insurance revenue and insurance service expenses

ⅲ-1) Recognition of insurance revenue in general model and variable fee approach model

Insurance revenue is measured as the amount expected to be received in exchange for providing insurance contract services for a group of insurance contracts issued. It consists of the sum of changes in the liabilities for remaining coverage as following and insurance acquisition cash flows:

ⅰ) Insurance service expenses incurred during the period, measured at the amount estimated at the inception date (excluding transaction-related taxes collected on behalf of third parties, allocated amounts to loss components, insurance acquisition costs, investment components repaid to policyholders even if an insured event does not occur, and the executed loan from insurance contracts).

ⅱ) Changes in the risk adjustment for non-financial risks (excluding allocated amounts to loss components and changes related to future services).

ⅲ) Contractual service margin recognized in the current period as profit or loss (contractual service margin allocated to current coverage units among all coverage units calculated considering the quantity of benefits payments and the expected duration for coverage within the group of insurance contracts issued, and the frequency and severity of occurrence of insured events.

ⅳ) Other amounts such as experience adjustments on premiums collected for current or past services.

The Group determines insurance revenue related to insurance acquisition cash flows by allocating the portion of the premiums that related to recovering those cash flows to each reporting period in a systematic way on the basis of the passage of time; also, recognizes the same amount as insurance service expenses.

ⅲ-2) Recognition of insurance revenue under the premium allocation approach

Under the premium allocation approach, insurance revenue is recognized by allocating the expected premium income (excluding investment components) for services provided over each period on the basis of the passage of time. However, if the expected pattern of release of risk during the coverage period differs significantly from the passage of time, the expected premium income is calculated on the basis of expected timing of incurred insurance service expenses.

ⅲ-3) Recognition of insurance service expenses

The insurance service expenses incurred as a result of issuing the group of insurance contracts issued consist of the following.

ⅰ) Increase in the liabilities for incurred claims and changes in the fulfilment cash flows related to premiums and expenses (excluding repayment of investment components).

ⅱ) Amortization of insurance acquisition cash flows (the same amount is recognized as insurance revenue and insurance service expenses).

ⅲ) Changes in loss components recognized for the first time in onerous groups of contracts and loss components related to future services.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ⅲ) Recognition of insurance revenue and insurance service expenses(continued)

ⅲ-4) Recognition of reinsurance revenue and reinsurance service expenses for the group of reinsurance contracts held.

The revenue and expenses arising from the group of reinsurance contracts held is recognized by adopting the method of recognizing insurance service expenses and insurance revenue of the group of underlying insurance contracts, with adjustments made to reflect the characteristics of reinsurance contracts held (revenue being the amount recovered from reinsurers and expenses being the allocated portion of premiums paid to reinsurers).

ⅳ) Contract modifications and terminations

The Group derecognises the original contract and recognizes the modified contract as a new contract when the insurance contract terms are changed and specific criteria are met. If the contract modification does not meet such criteria, the effect of the contract modification is accounted for as changes in estimated fulfilment cash flows. There were no instances during the current and prior periods where the original contract was removed and the modified contract was recognized as a new contract. When an insurance contract is extinguished (due to expiration, fulfilment, or cancellation of obligations stated in the insurance contract), the Group removes the insurance contract, adjusts the estimated fulfilment cash flows and contractual service margin related to the removed contract within the group of insurance contracts issued, and reflects the removed contract in the number of coverage units of the group of insurance contracts issued.

ⅴ) Accounting estimates used in the preparation of interim financial statements

The Group has adopted an accounting policy of not changing the accounting treatment of accounting estimates measured in interim financial statements when preparing subsequent interim financial statements and annual financial statements.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(t) Insurance contracts (continued)

ⅵ) Presentation

The Group separately presents the book value of insurance contract portfolio, which is an asset, the book value of the insurance contract portfolio, which is a liability, the reinsurance contract portfolio held, which is an asset, and the reinsurance contract portfolio held, which is a liability, respectively, in the consolidated statement of financial position. Furthermore, it distinguishes between insurance revenue and reinsurance service expenses, as well as insurance service expenses and reinsurance revenue, without offsetting them against each other in the statement of comprehensive income.

The Group includes the time value of money and the effects of financial risks, as well as their fluctuations, in insurance finance income (expenses). The Group has chosen an accounting policy to differentiate between insurance finance income (expenses) for the period as either recognized in the current income or in other comprehensive income. For insurance groups where changes in assumptions related to financial risks significantly impact policyholder benefits, the effective interest rate method is applied. For other insurance groups, the effective interest rate determined at initial recognition is used to calculate insurance finance income (expenses) recognized in the current period. In cases where the variable fee approach is applied to insurance groups holding underlying items, the amount recognized as insurance finance income (expenses) in the current period is determined to eliminate accounting mismatches with the underlying items and recognized in the current income.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(u) Recognition of revenues and expenses

The Group’s revenues are recognized using five-step revenue recognition model as follows:
① ‘Identifying the contract’ → ② ‘Identifying performance obligations’ → ③ ‘Determining the transaction price’ → ④ ‘Allocating the transaction price to performance obligations’ → ⑤ ‘Recognizing the revenue by satisfying performance obligations’.

i) Interest income and expense

Interest income and expense are recognized in profit or loss using the effective interest method.

ii) Fees and commission income

The recognition of revenue for financial service fees depends on the purposes for which the fees are assessed and the basis of accounting for any associated financial instrument.

ii-1) Fees that are an integral part of the effective interest rate of a financial instrument

Such fees are generally treated as an adjustment to the effective interest rate. Such fees may include compensation for activities such as evaluating the borrower’s financial condition, evaluating and recording guarantees, collateral and other security arrangements, preparing and processing documents, closing the transaction and the origination fees received on issuing financial liabilities. However, when the financial instrument is measured at fair value with the change in fair value recognized in profit or loss, the fees are recognized as revenue when the instrument is initially recognized.

ii-2) Fees earned as services are provided

Fees and commission income, including investment management fees, sales commission, and account servicing fees, are recognized as the related services are provided.

ii-3) Fees that are earned on the execution of a significant act

The fees that are earned on the execution of a significant act including commission on the allotment of shares or other securities to a client, placement fee for arranging a loan between a borrower and an investor and sales commission, are recognized as revenue when the significant act has been completed.

iii) Dividend income

Dividend income is recognized when the shareholder’s right to receive payment is established. Dividend income is categorized on the classification of equity instruments.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(v) Revenue from Contracts with Customers

The fair value of the consideration received or receivable in exchange for the initial transaction is allocated to the reward points ("points") and the remainder of the fee income. The Group provides compensation in various forms such as payment discounts and free gifts. The consideration to be allocated to the points is estimated based on the fair value of the monetary benefits to be provided in consideration of the expected recovery rate of points awarded in accordance with the customer loyalty program and the expected time of recovery. The consideration allocated to the points is recognized as a consideration to be paid to the customer and deducted from Fees and commission income.

(w) Income tax

The Group applies a consolidated tax method based on a consolidated tax base and a domestic corporation (hereinafter referred to as the "Consolidated Entity Corporation ") that is fully controlled by the consolidated parent company and the consolidated tax base.

The Group evaluates the feasibility of temporary differences, taking into account the future taxable income of individual companies and consolidated groups, respectively. The change in deferred tax assets (liabilities) was recognized as expense (income), except for the amount associated with items directly added to the equity account.

For additional temporary differences in subsidiaries, associates, and joint venture investment interests, the Group may control the timing of the disappearance of temporary differences. All deferred tax liabilities are recognised except in cases where temporary differences are unlikely to dissipate in the foreseeable future. Deferred tax assets arising from deductible temporary differences are likely to be extinguished in the foreseeable future. In addition, it is recognised when taxable income is likely to be used for temporary differences.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period. The carrying amount of deferred tax assets is reduced when it is no longer likely that sufficient taxable income will be generated to use benefits from deferred tax assets.

Tax uncertainties arise from a claim of reassessment or refund of tax that the Group made, or tax investigation etc., due to complexity of transactions or the differences between the Group’s tax policy and authority’s interpretation. In accordance with K-IFRS 2123, the Group recognizes tax assets when anticipating tax refund on the tax paid due to tax authorities imposing, and tax liabilities when anticipating tax payment due to tax investigations, etc. In addition, the amount expected to be paid as a result of the tax investigation is recognized as the tax liability.

The Group is subject to the Global Minimum Corporate Tax Act and applies the temporary exception to deferred tax in K-IFRS No. 1012. As a result, the Group does not recognize deferred tax assets and liabilities related to the Global Minimum Corporate Tax Act and does not disclose information related to the related deferred tax assets. The Group separately discloses the details of the current corporate income tax expense (income) related to the Global Minimum Corporate Tax Act.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(x) Accounting for trust accounts

The Group accounts for trust accounts separately from its bank accounts under the Financial Investment Services and Capital Markets Act No. 114 and thus the trust accounts are not included in the accompanying consolidated financial statements. In this regard, the funds lent to the trust account are counted as trust account loans and loans borrowed from the trust account as other accounting accounts (non-payment of the trust account). In accordance with the Financial Investment Business Regulations, trust remuneration is acquired in connection with the operation, management, and disposal of trust property, and it is counted as the operating profit of trust business.

(y) The adoption of the Financial Supervisory Service’s guidelines for the application of K-IFRS 1117

The Financial Supervisory Service issued the actuarial assumption guidelines for the application of K-IFRS 1117. The Group has applied these guidelines, particularly regarding actuarial assumptions for zero/low-surrender-value insurance contracts, recognition criteria for contractual service margin, and actuarial assumptions for medical expense reimbursement insurance, and applied to the previous consolidated financial statements. In addition, the Group has applied these guidelines, particularly regarding actuarial assumptions for zero/low-surrender-value insurance contracts and whole life insurance with short premium payment term, and applied to the current consolidated financial statements.

(z) New standards and amendments not yet adopted by the Group

The following new accounting standards and amendments have been published that are not mandatory for annual periods beginning after January 1, 2024, and have not been early adopted by the Group. The Group did not early adopt the following new standards and amendments when preparing consolidated financial statements.

i) Amendment to K-IFRS No. 1021 'Effects of Changes in Foreign Exchange Rates' and No. 1101 ‘First-time adoption of K-IFRS’ – Lack of Exchangeability

These amendments define scenarios where exchanges with other currencies are considered possible for accounting purposes, clarify the assessment of exchangeability with other currencies, and specify requirements for estimating and disclosing the spot exchange rate in cases where no exchangeability exists. If exchange with other currencies is not possible, the spot exchange rate must be estimated on the measurement date using observable exchange rates without adjustment or employing alternative estimation techniques. These amendments are set for prospective application to fiscal years beginning on or after January 1, 2025, with early application permitted. The Group does not expect these amendments to have a significant impact on the consolidated financial statements.

ii) K-IFRS 1109 ‘Financial Instruments and K-IFRS 1107 Financial Instruments: Disclosures’ – Classification and measurement requirements of financial instruments

The amendments clarify the conditions related to the discharge of a financial liability before the settlement date when settling such financial liabilities using an electronic payment system. They further specify an interest feature, a contingent feature, financial assets with non-recourse features and contractually linked instruments which should be considered in assessing whether contractual cash flows of a financial asset are consistent with a basic lending arrangement. Furthermore, the amendments include additional disclosure requirements for investments in equity instruments designated at fair value through other comprehensive income and contractual terms that could change the timing or amount of contractual cash flows. The amendments are applied retrospectively for annual reporting periods beginning on or after 1 January 2026 with earlier application permitted. The Group does not expect these amendments to have a significant impact on the consolidated financial statements.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(z) New standards and amendments not yet adopted by the Group (continued)

ⅲ) K-IFRS Annual Improvements

K-IFRS annual improvements are applied for annual reporting periods beginning on or after 1 January 2026 with earlier application permitted. The Group believes that there will be no material impact on the consolidated financial statement.

• K-IFRS 1109 ‘Financial Instruments’ – derecognition of lease liabilities and transaction price

• K-IFRS 1110 ‘Consolidated Financial Statements’ – determination of ‘de facto agent’

• K-IFRS 1101 ‘First-time adoption of Korean International Financial Reporting Standards’ – hedge accounting adoption

• K-IFRS 1107 ‘Financial Instruments: Disclosures’ – Gain or loss on derecognition

• K-IFRS 1007 ‘Statement of Cash Flows’ – Cost method

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Significant estimates and judgments

The preparation of financial statements requires the Group to make estimates and assumptions concerning the future. Management also needs to exercise judgment in applying the Group’s accounting policies. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a significant risk of causing a material adjustment. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.

(a) Estimation of impairment of goodwill

The Group reviews the goodwill annually in accordance with the accounting policy in Note 3. The recoverable amount of the cash-generating unit (group) is determined based on the value-in-use calculation. These calculations are based on estimates.

(b) Income taxes

The Group is subject to tax laws from various countries. In the normal course of business, there are various types of transactions and different accounting methods that may add uncertainties to the decision of the final income taxes. The Group has recognized current and deferred taxes that reflect tax consequences based on the best estimates in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. However, actual income taxes in the future may not be identical to the recognized deferred tax assets and liabilities, and this difference can affect current and deferred tax at the period when the final tax effect is determined.

(c) Fair value of financial instruments

The fair values of financial instruments (e.g. over-the-counter derivatives) which are not actively traded in the market are determined by using valuation techniques. The Group determines valuation techniques and assumptions based on significant market conditions at the end of each reporting period. Diverse valuation techniques are used to determine the fair value of financial instruments, from generic valuation techniques to internally developed valuation models that incorporate various types of assumptions and variables.

(d) Allowance for credit loss, guarantees and unused loan commitments

The Group determines and recognizes allowances for losses on debt securities, loans and other receivables measured at amortized cost or FVOCI, and recognizes provisions for guarantees and unused loan commitments through impairment testing. The accuracy of allowances and provisions for credit losses are determined by the estimation of expected cash flows for individually assessed allowances, and methodology and assumptions used for collectively assessed allowances and provisions for groups of loans, guarantees and unused loan commitments.

(e) Insurance contract liabilities and reinsurance contract assets (liabilities)

The Group calculates the present value of the future cash flows of the remaining benefit liabilities and incurred claims liabilities for measurement purposes. This involves estimating the neutral present value of future cash flows, considering the time value of money, adjusting for financial risks associated with future cash flows, and making risk adjustments for non-financial risks. The measurement of the present value of these cash flows is determined by estimating relevant market variables, assessing uncertainties regarding the amounts and timing of future cash flows, considering actuarial and economic assumptions, and other risks.

The number of coverage units in the group of insurance contracts is determined by considering the amount of benefit provided by contracts within the group the duration of expected coverage, the frequency and recurrence of the coverage risk for all coverage units allocated to the current period.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management

(a) Overview

Shinhan Financial Group Co., Ltd. (collectively the “Group”) manages various risks that may be arisen by each business sector and the major risks to which the Group is exposed include credit risk, market risk, interest rate risk, and liquidity risk. These risks are recognized, measured, controlled and reported in accordance with risk management guidelines established at the controlling company level and at the subsidiary level.

i) Risk management principles

The risk management principles of the Group are as follows:

• All business activities take into account the balance of risks and profits within a predetermined risk appetite.

• The controlling company shall present the Group Risk Management Model Standards and supervise their compliance, and have responsibility and authority for group-level monitoring.

• Operate a risk-related decision-making system that enhances management's involvement.

• Organize and operate risk management organizations independent of the business sector.

• Operate a performance management system that clearly considers risks when making business decisions.

• Aim for preemptive and practical risk management functions.

• Share a cautious view to prepare for possible deterioration of the situation.

ii) Risk management organization

The basic policies and strategies for risk management of the Group are established by the Risk Management Committee (collectively the "Group Risk Management Committee") within the controlling company's Board of Directors. The Group's Chief Risk Management Officer (CRO) assists the Group Risk Management Committee and consults the risk policies and strategies of the group and each subsidiary through the Group Risk Council, which includes the Chief Risk Management Officer of each subsidiary. The subsidiary implements the risk policies and strategies of the Group through each company's risk management committee, risk-related committee, and risk management organization, and consistently establishes and implements the detailed risk policies and strategies of the subsidiary. The risk management team of the controlling company assists the Group's chief risk management officer for risk management and supervision.

Shinhan Financial Group has a hierarchical limit system to manage the risks of the Group to an appropriate level. The Group Risk Management Committee sets the risk limits that can be assumed by the Group and its subsidiaries, while the Risk Management Committee and the Committee of each subsidiary set and manage detailed risk limits by risk, department, desk and product types.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(a) Overview (continued)

ii) Risk management organization (continued)

ii-1) Group Risk Management Committee

The Group established the risk management system for the Group and each of its subsidiaries, and comprehensively manages group risk-related matters such as establishing risk policies, limits, and approvals. The Committee consists of directors of the controlling company.

The resolution of the Committee is as follows:

• Establish risk management basic policy in line with management strategy
• Determine the level of risk that can be assumed by the Group and each subsidiary
• Approve appropriate investment limit or loss allowance limit
• Enact and amend the Group Risk Management Regulations and the Group Risk Council Regulations
• Matters concerning risk management organization structure and division of duties
• Matters concerning the operation of the risk management system
• Matters concerning the establishment of various limits and approval of limits
• Make decisions on approval of the FSS's internal rating based approach for non-retail and retail credit rating systems
• Matters concerning risk disclosure policy
• Analysis of crisis situation, related capital management plan and financing plan
• Matters deemed necessary by the board of directors
• Materials required by external regulations such as the Financial Services Commission and other regulations and guidelines
• Matters deemed necessary by the Chairman

The resolution of the Group Risk Management Committee is reported to the Board of Directors.

ii-2) Group Risk Management Council

In order to maintain the Group's risk policy and strategy consistently, the Group decides what is necessary to discuss the risks of the Group and to carry out the policies set by the Group Risk Management Committee. The members are chaired by the Group's risk management officer and consist of the risk management officers of major subsidiaries.

iii) Group Risk Management System

iii-1) Management of the Risk Capital

Risk capital refers to the capital required to compensate for the potential loss (risk) if it is actually realized. Risk capital management refers to the management of the risk assets considering its risk appetite, which is a datum point on the level of risk burden compared to available capital, so as to maintain the risk capital at an appropriate level. The Group and subsidiaries establish and operate a risk planning process to reflect the risk plan in advance when establishing financial and business plans for risk capital management, and establish a risk limit management system to control risk to an appropriate level.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(a) Overview (continued)

iii) Group Risk Management System (continued)

iii-2) Risk Monitoring

In order to proactively manage risks by periodically identifying risk factors that can affect the Group's business environment, the Group has established a multi-dimensional risk monitoring system. Each subsidiary is required to report to the Group on key issues that affect risk management at the Group level. The Group prepares weekly, monthly and occasional monitoring reports to report to Group management including the CRO.

In addition, the Risk Dashboard is operated to derive abnormal symptoms through three-dimensional monitoring of major portfolios, increased risks, and external environmental changes of assets for each subsidiary. If necessary, the Group takes preemptive risk management to establish and implement countermeasures.

iii-3) Risk Reviewing

When conducting new product, new business and major policy changes, risk factors are reviewed by using a pre-defined checklist to prevent indiscriminate promotion of business that is not easy to judge risk and to support rational decision making. The subsidiary's risk management department conducts a preliminary review and post-monitoring process on products, services, and projects to be pursued in the business division. In case of matters that are linked or jointly promoted with other subsidiaries, the risk reviews are carried out after prior-consultation with the risk management department of the Group.

iii-4) Crisis Management

The Group maintains a group wide crisis management system to detect the signals of any risk crisis preemptively and, in the event of a crisis actually happening, to respond on a timely, efficient and flexible basis so as to ensure the Group’s survival as a going concern. Each subsidiary maintains crisis planning for four levels of contingencies, namely, ‘cautious’, ‘alert’, ‘imminent crisis’ and ‘crisis’ determination of which is made based on quantitative and qualitative monitoring and consequence analysis, and upon the happening of any such contingency, is required to respond according to a prescribed contingency plan. At the controlling company level, the Group maintains and installs crisis detection and response system which is applied consistently group-wide, and upon the happening of any contingency at two or more subsidiary level, the Group directly takes charge of the situation so that the Group manages it on a concerted group wide basis.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk

Credit risk is the risk of potential economic loss that may be caused if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and is the largest risk which the Group is facing. The Group’s credit risk management encompasses all areas of credit that may result in potential economic loss, including not just transactions that are recorded on balance sheets, but also off-balance-sheet transactions such as guarantees, loan commitments and derivative transactions.

Shinhan Bank's basic policy on credit risk management is determined by the Risk Policy Committee. The Risk Policy Committee consists of the chairman of the Chief Risk Officer (CRO), the Chief Credit Officer (CCO), the head of the business group, and the head of the risk management department, and decides the credit risk management plan and the direction of the loan policy for the entire bank. Apart from the Risk Policy Committee, the Credit Review Committee is established to separate credit monitoring, such as large loans and limit approval, and is composed of chairman, the CCO, CRO and the head of the Group in charge of the credit-related business group, the head of the credit planning department, and the senior examination team to enhance the credit quality of the loan and profitability of operation.

Shinhan Bank's credit risk management includes processes such as credit evaluation, credit monitoring, and credit supervision, and credit risk measurement of counterparties and limit management processes and credit risk measurements for portfolios. All loan customers of Shinhan Bank are evaluated and managed with credit ratings. Retail customers are evaluated by summing up the information of personal information Shinhan Bank's internal information and external credit information, and the corporate customers are evaluated by considering financial and non-financial items such as industrial risk, operating risk, and management risk. The evaluated credit rating is used for credit approval, limit management, pricing, credit loss provisioning, etc., and is the basis for credit risk management. The credit evaluation system is divided into an evaluation system for retail customers, a SOHO evaluation system, and an evaluation system for corporate customers. It is subdivided and refined by each model to reflect the Basel III requirements. The corporate credit decision is based on a collective decision-making system, making objective and prudent decisions. In the case of a general credit of loans, the credit is approved based on the consultation between branch's RM (Relationship Manager) and loan officers of each business division's headquarters. In the case of a large or important credit, the credit is approved by the review council. In particular, the Credit Review Committee, the highest decision-making body of the loan, reviews for important loans such as large loans. Credits for retail customers are monitored by an automated credit scoring systems (CSS) based on objective statistical methods and bank credit policies.

Shinhan Bank operates a regular monitoring system for the regular management of individual loans. The loan officers and RM evaluate the adequacy of the result of the loan review by automatically searching for anticipated insolvent companies among business loan partners, and if necessary, the credit rating of the corporate is requested of an adjustment. In accordance with these procedures, the corporate customers are classified as an early warning company, an observation company, and a normal company, and then are managed differently according to the management guidelines for each risk stage, thereby preventing the insolvency of the loan at an early stage. The financial analysis support system affiliated with a professional credit rating agency supports credit screening and management, and the credit planning department calculates and manages industrial grades, and analyzes and provides industry trends and company information. In order to control the credit risk for the credit portfolio to an appropriate level, credit VaR limits are set and managed for each business and business sector, and to prepare for the credit risk caused by biased exposure to specific sectors, the Group sets and manages exposure limits for each sector by the party, industry, country, etc.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

Shinhan Card's basic policy on credit risk is determined by the Risk Management Committee. The Risk Management Committee consists of the Risk Management Officer (CRO) as the chairperson, and is composed of the heads of each business group and supporting group and the heads of related departments. Apart from the RMC, a credit committee in charge of monitoring corporate credits and other important credits over a certain amount has been established to separate credit policy decisions from credit monitoring.

Shinhan Card’s credit rating system is divided into ASS (Application Scoring System) and BSS (Behavior Scoring System). Unless a customer fall under “rejections due to policy” (such circumstances include delinquency of other credit card companies) and his/her credit rating is above a certain rate, an application of AS is approved. There is a separate screening criterion for credit card customers, who has maintained its relationship with Shinhan Financial Group for a long-term and has a good credit history. In addition, the elements of credit ratings are used as the basis for setting limits when issuing cards. The BSS, which is recalculated monthly, predicts the delinquency probability of cardholders, and utilizes it to monitor members and monitor portfolio risk.

i) Techniques, assumptions and input variables used to measure impairment

i-1) Determining significant increases in credit risk since initial recognition

At the end of each reporting period, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses.

To make the assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, and is indicative of significant increases in credit risk since initial recognition. Information includes the default experience data held by the Group and analysis by an internal credit rating expert.

• Measuring the risk of default

The Group assigns an internal credit risk rating to each individual exposure based on observable data and historical experiences that have been found to have a reasonable correlation with the risk of default. The internal credit risk rating is determined by considering both qualitative and quantitative factors that indicate the risk of default, which may vary depending on the nature of the exposure and the type of borrower.

• Measuring term structure of probability of default

Internal credit risk rating is the main variable inputs to determine the duration structure for the risk of default. The Group accumulates information after analyzing the information regarding exposure to credit risk and default information by the type of product and borrower and results of internal credit risk assessment. For some portfolios, the Group uses information obtained from external credit rating agencies when performing these analyses.

The Group applies statistical techniques to estimate the probability of default for the remaining life of the exposure from the accumulated data and to estimate changes in the estimated probability of default over time.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

• Significant increases in credit risk

The Group uses the indicators defined as per portfolio to determine the significant increase in credit risk and such indicators generally consist of changes in the risk of default estimated from changes in the internal credit risk rating, qualitative factors, days of delinquency, and others. The method used to determine whether credit risk of financial instruments has significantly increased after the initial recognitions is summarized as follows:

Corporate exposures		Retail exposures		Card exposures
Significant change in credit ratings		Significant change in credit ratings		Significant change in credit ratings
Continued past due more than 30 days		Continued past due more than 30 days		Continued past due more than 7 days (personal card)
Loan classification of precautionary or below		Loan classification of precautionary or below		Loan classification of precautionary or below
Borrower with early warning signals		Borrower with early warning signals		Specific delinquent pool segment
Negative net assets		Specific pool segment
Adverse audit opinion or disclaimer of opinion		Collective loans for housing for which the constructors are insolvent
Interest coverage ratio below 1 for a consecutive period of three years or negative cash flows from operating activities for a consecutive period of two years		Loans with identified indicators for significant increases in other credit risk
Loans with identified indicators for significant increases in other credit risk

The Group assumes that the credit risk of the financial instrument has been increased significantly since initial recognition if a specific exposure is past due more than 30 days (except, for a specific portfolio if it is past due more than 7 days). The Group counts the number of days past due from the earliest date on which the Group fails to fully receive the contractual payments from the borrower, and does not take into account the grace period granted to the borrower.

The Group regularly reviews the criteria for determining if there have been significant increases in credit risk from the following perspective:

• A significant increase in credit risk shall be identified prior to the occurrence of default.

• The criteria established to judge the significant increase in credit risk shall have a more predictive power than the criteria for days of delinquency.

• As a result of applying the judgment criteria, there should be no excessively frequent movement between the 12-month expected credit loss accumulation target and the entire period expected credit loss accumulation target.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

i-2) Modified financial assets

If the contractual cash flows on a financial asset have been modified through renegotiation and the financial asset is not derecognized, the Group assesses whether there has been a significant increase in the credit risk of the financial instrument by comparing the risk of a default occurring at initial recognition based on the original, unmodified contractual terms and the risk of a default occurring at the reporting date based on the modified contractual terms.

The Group may adjust the contractual cash flows of loans to customers who are in financial difficulties in order to manage the risk of default and enhance the collectability (hereinafter referred to as ‘debt restructuring’). These adjustments generally involve extension of maturity, changes in interest payment schedule, and changes in other contractual terms.

Debt restructuring is a qualitative indicator of a significant increase in credit risk and the Group recognizes lifetime expected credit losses for the exposure expected to be the subject of such adjustments. If a borrower faithfully makes payments of contractual cash flows that are modified in accordance with the debt restructuring or if the borrower's internal credit rating has recovered to the level prior to the recognition of the lifetime expected credit losses, the Group recognizes the 12-month expected credit losses for that exposure again.

i-3) Risk of default

The Group considers a financial asset to be in default if it meets one or more of the following conditions:

• If a borrower is overdue 90 days or more from the contractual payment date,

• If the Group judges that it is not possible to recover principal and interest without enforcing the collateral on a financial asset

The Group uses the following indicators when determining whether a borrower is in default:

• Qualitative factors (e.g. breach of contractual terms),

• Quantitative factors (e.g. if the same borrower does not perform more than one payment obligations to the Group, the number of days past due per payment obligation. However, in the case of a specific portfolio, the Group uses the number of days past due for each financial instrument),

• Internal observation data and external data

The definition of default applied by the Group generally conforms to the definition of default defined for regulatory capital management purposes; however, depending on the situations, the information used to determine whether a default has occurred and the extent thereof may vary.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

i-4) Reflection of forward-looking information

The Group reflects future forward-looking information presented by a group of internal experts based on various information when measuring expected credit losses. The Group utilizes economic forecasts disclosed by domestic and foreign research institutes, governments, and public institutions to predict forward-looking information.

The Group reflects future macroeconomic conditions anticipated from a neutral standpoint that is free from bias in measuring expected credit losses. Expected credit losses in this respect reflect conditions that are most likely to occur and are based on the same assumptions that the Group used in its business plan and management strategy.

The Group analyzed the data experienced in the past, derived correlations between major macroeconomic variables and credit risks required for predicting credit risk and credit loss for each portfolio, and then reflected future forecast information through regression estimation. To reflect external and internal economic uncertainties, the Group has incorporated the forward-looking information by reviewing an additional worst-case scenario along with the three existing scenarios of upside, central and downside.

For the years ended December 31, 2024 and 2023, macroeconomic variables used by the Group are as follows for each scenario.

<December 31, 2024>

• Upside scenario

\Major variables (*1),(*2),(*3)		Correlation between credit risks		2024.4Q		2025
									1Q		2Q		3Q		4Q
GDP growth rate (YoY %)		(-)		2.1		1.5		2.4		3.2		2.8
Private consumption index (YoY %)		(-)		1.2		1.6		2.5		2.6		2.5
Facility investment growth rate (YoY %)		(-)		4.9		4.4		6.5		1.2		3.5
Consumer price index growth rate (%)		(+)		1.6		2.2		2.4		2.4		2.3
Balance on current account (100 million dollars)		(-)		220.0		210.0		190.0		180.0		200.0
Government bond 3y yields (%)		-		2.8		3.1		3.2		3.2		3.2

• Central scenario

Major variables (*1),(*2),(*3)		Correlation between credit risks		2024.4Q		2025
									1Q		2Q		3Q		4Q
GDP growth rate (YoY %)		(-)		2.1		1.2		2.0		2.4		2.2
Private consumption index (YoY %)		(-)		1.2		1.3		2.1		2.0		1.8
Facility investment growth rate (YoY %)		(-)		4.9		4.0		5.8		0.8		2.5
Consumer price index growth rate (%)		(+)		1.6		1.9		2.1		2.1		2.0
Balance on current account (100 million dollars)		(-)		200.0		190.0		170.0		160.0		180.0
Government bond 3y yields (%)		-		2.8		2.9		2.9		3.0		2.9

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

i-4) Reflection of forward-looking information (continued)

• Downside scenario

Major variables (*1),(*2),(*3)		Correlation<br><br>between credit risks		2024.4Q		2025
									1Q		2Q		3Q		4Q
GDP growth rate (YoY %)		(-)		2.1		0.8		1.4		1.7		1.0
Private consumption index (YoY %)		(-)		1.2		0.9		1.5		1.1		0.6
Facility investment growth rate (YoY %)		(-)		4.9		2.8		4.5		0.2		1.3
Consumer price index growth rate (%)		(+)		1.6		1.6		1.8		1.8		1.7
Balance on current account (100 million dollars)		(-)		170.0		160.0		140.0		120.0		130.0
Government bond 3y yields (%)		-		2.8		2.8		2.7		2.4		2.2

• Worst scenario

Major variables (*1), (*2),(*4)		Correlation<br><br>between credit risks		Economic Crisis for 1 year
GDP growth rate (YoY %)		(-)		(5.1)
Private consumption index (YoY %)		(-)		(11.9)
Facility investment growth rate (YoY %)		(-)		(38.6)
Consumer price index growth rate (%)		(+)		7.5
Balance on current account (100 million dollars)		(-)		401.1
Government bond 3y yields (%)		-		6.18

(*1) As a result of examining the correlation between each variable, the Group applied key variables to reflect the final future economic outlook. Shinhan Bank applied key variables such as GDP growth rate, current account balance, and 3-year government bond yield, while Shinhan Card applied key variables such as GDP growth rate. In addition to the table above, the Group has selected macroeconomic indicators such as KOSPI index.

(*2) Considering the default forecast period, the Group reflected the future economic outlook.

(*3) The macroeconomic outlook figures are estimated by the Group for the purpose of calculating expected credit losses based on information from domestic and foreign research institutes. Therefore, it could be different from other institutions' estimates.

(*4) Reflected considering the foreign exchange crisis.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

i-4) Reflection of forward-looking information (continued)

<December 31, 2023>

• Upside scenario

Major variables (*1), (*2), (*3)		Correlation between credit risks		2023.4Q		2024
									1Q		2Q		3Q		4Q
GDP growth rate (YoY %)		(-)		2.1		2.2		2.1		2.2		2.1
Private consumption index (YoY %)		(-)		1.8		1.7		2.3		2.5		2.4
Facility investment growth rate (YoY %)		(-)		(6.4)		(0.6)		(0.2)		4.0		5.0
Consumer price index growth rate (%)		(+)		3.2		2.6		2.4		2.1		1.8
Balance on current account (100 million dollars)		(-)		140.0		80.0		90.0		130.0		150.0
Government bond 3y yields (%)		-		3.7		3.6		3.6		3.3		3.1

② Central scenario

Major variables (*1), (*2), (*3)		Correlation between credit risks		2023.4Q		2024
									1Q		2Q		3Q		4Q
GDP growth rate (YoY %)		(-)		1.5		1.6		1.4		1.5		1.8
Private consumption index (YoY %)		(-)		0.9		0.7		1.2		1.4		2.0
Facility investment growth rate (YoY %)		(-)		(7.5)		(2.0)		(1.7)		2.4		3.9
Consumer price index growth rate (%)		(+)		3.4		2.8		2.8		2.5		2.1
Balance on current account (100 million dollars)		(-)		130.0		70.0		80.0		110.0		140.0
Government bond 3y yields (%)		-		3.7		3.6		3.6		3.5		3.3

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

i-4) Reflection of forward-looking information (continued)

• Downside scenario

Major variables (*1), (*2), (*3)		Correlation<br><br>between credit risks		2023.4Q		2024
									1Q		2Q		3Q		4Q
GDP growth rate (YoY %)		(-)		1.1		1.1		0.8		0.9		1.2
Private consumption index (YoY %)		(-)		0.4		0.0		0.3		0.6		1.0
Facility investment growth rate (YoY %)		(-)		(8.3)		(3.8)		(4.0)		0.2		1.4
Consumer price index growth rate (%)		(+)		3.6		3.2		3.2		3.0		2.7
Balance on current account (100 million dollars)		(-)		120.0		60.0		70.0		100.0		120.0
Government bond 3y yields (%)		-		3.7		3.7		3.6		3.6		3.6

• Worst scenario

Major variables (*1), (*2), (*4)		Correlation<br><br>between credit risks		Economic Crisis for 1 year
GDP growth rate (YoY %)		(-)		(5.1)
Private consumption index (YoY %)		(-)		(11.9)
Facility investment growth rate (YoY %)		(-)		(38.6)
Consumer price index growth rate (%)		(+)		7.5
Balance on current account (100 million dollars)		(-)		401.1
Government bond 3y yields (%)		-		6.7

(*1) As a result of examining the correlation between each variable, Shinhan Bank applied the GDP growth rate and private consumption index increase rate, etc. as the major variables to reflect the final forward-looking information, while, Shinhan Card applied the private consumption rate and CPI increase rate, etc. as the major variables. In addition to the table above, the Group has selected unemployment rate and KOSPI forecasts.

(*2) Considering the default forecast period, the Group reflected the future economic outlook.

(*3) The macroeconomic outlook figures are estimated by the Group for the purpose of calculating expected credit losses based on information from domestic and foreign research institutes. Therefore, it could be different from other institutions' estimates.

(*4) Shinhan Bank and Jeju Bank reviewed and reflected the Worst scenario (during the foreign exchange crisis) in addition to the three scenarios of Upside, Central and Downside.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

i-4) Reflection of forward-looking information (continued)

The predicted correlations between the macroeconomic variables and the risk of default, used by the Group, are derived based on long-term data over the past ten years.

Since 2020, the Group has been implementing various policy support measures in response to the economic downturn caused by COVID-19. The Group manages the credit risk through classifying borrowers in moratorium of interest payments and moratorium of repayment that is one of the financial relief programs into Stage2 to reflect the impact of potential insolvency. In addition, credit risk is managed through additional expected loss assessments for non-retail and retail SOHO loans of borrowers holding the relevant loans, extended maturity loans and estimated loss loans from financial support programs. The Group has considered multiple economic scenarios in applying forward-looking information to measure the expected credit losses. When assuming a 100% weighting of Upside, Central, Downside and Worst scenarios, while keeping all other assumptions unchanged, the sensitivity to the Group's provision for expected credit loss is not significant for both the current and prior periods.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

5. Financial risk management (continued)

(b) Credit risk (continued)

i-5) Measurement of expected credit losses

Key variables used in measuring expected credit losses are as follows:

• Probability of default (“PD”)

• Loss given default (“LGD”)

• Exposure at default (“EAD”)

These variables have been estimated from historical experience data by using the statistical techniques developed internally by the Group and have been adjusted to reflect forward-looking information.

Estimates of PD over a specified period are estimated by reflecting characteristics of counterparties and their exposure, based on a statistical model at a specific point of time. The Group uses its own information to develop a statistical credit assessment model used for the estimation, and additional information observed in the market is considered for some portfolios such as a group of large corporates. When a counterparty or exposure is concentrated in specific grades, the method of measuring PD for those grades would be adjusted, and the PD by grade is estimated by considering contract expiration of the exposure.

LGD refers to the expected loss if a borrower defaults. The Group calculates LGD based on the experience recovery rate measured from past default exposures. The model for measuring LGD is developed to reflect type of collateral, seniority of collateral, type of borrower, and cost of recovery. In particular, LGD for retail loan products uses loan to value (LTV) as a key variable. The recovery rate reflected in the LGD calculation is based on the present value of recovery amount, discounted at the effective interest rate.

EAD refers to the expected exposure at the time of default. The Group derives EAD reflecting a rate at which the current exposure is expected to be used additionally up to the point of default within the contractual limit. EAD of financial assets is equal to the total carrying amount of the asset, and EAD of loan commitments or financial guarantee contracts is calculated as the sum of the amount expected to be used in the future.

In measuring expected credit losses on financial assets, the Group uses the contractual maturity as the period subject to expected credit loss measurement. The contractual maturity is computed taking into account the extension right held by the borrower.

Risk factors of PD, LGD and EAD are collectively estimated according to the following criteria:

• Type of products

• Internal credit risk rating

• Type of collateral

• Loan to value (“LTV”)

• Industry that the borrower belongs to

• Location of the borrower or collateral

• Days of delinquency

The criteria classifying groups is periodically reviewed to maintain homogeneity of the group and adjusted if necessary. The Group uses external benchmark information to supplement internal information for a particular portfolio that did not have sufficient internal data accumulated from the past experience.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

i) Techniques, assumptions and input variables used to measure impairment (continued)

i-6) Write-off of financial assets

The Group writes off a portion of or entire loan or debt security that is not expected to receive its principal and interest. In general, the Group conducts write-off when it is deemed that the borrower has no sufficient resources or income to repay the principal and interest. Such determination on write-off is carried out in accordance with the internal rules of the Group and is carried out with the approval of an external institution, if necessary. Apart from write-off, the Group may continue to exercise its right of collection under its own recovery policy even after the write-off of financial assets.

ii) Maximum exposure to credit risk

Exposure to credit risk is the exposure related to due from banks, loans, investments in debt securities, derivative transactions, off-balance sheet accounts such as loan commitment. The exposures of due from banks and loans are classified into government, bank, corporation or retail based on the exposure classification criteria of BASEL III credit risk weights, and the net carrying amount, excluding provisions, is presented as the maximum amount that can be exposed by credit risk.

The Group’s maximum exposure to credit risk without taking into account of any collateral held or other credit enhancements as of December 31, 2024 and 2023 is as follows:

		December 31, 2024		December 31, 2023
Due from banks and loans at amortized cost (*1), (*3):
Banks	W	14,058,051		15,099,247
Retail		199,809,576		177,454,344
Government/Public sector/Central bank		27,228,308		21,981,065
Corporations		218,713,457		202,763,657
Card receivable		27,714,596		26,896,950
		487,523,988		444,195,263
Due from banks and loans at fair value through profit or loss (*3):
Banks		134,609		238,740
Corporations		1,780,787		1,550,565
		1,915,396		1,789,305
Securities at fair value through profit or loss		67,134,121		65,575,798
Securities at fair value through other comprehensive income		92,016,210		88,637,000
Securities at amortized cost (*1)		33,315,999		35,686,487
Derivative assets		10,279,257		4,711,421
Other financial assets (*1), (*2)		23,116,960		26,880,554
Guarantee contracts		22,509,195		18,374,287
Loan commitments and other credit liabilities		218,980,794		212,078,870
	W	956,791,920		897,928,985

(*1) The maximum exposure amounts for due from banks, loans, securities at amortized cost and other financial assets at amortized cost are recorded as net of allowances.

(*2) Other financial assets mainly comprise of accounts receivable, accrued income, deposits, domestic exchange settlement debit and suspense payments.

(*3) Classified as similar credit risk group based on calculation of the BIS ratio under new Basel Capital Accord (Basel III).

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

iii) The maximum amount of exposure to credit risk by type of collateral as of December 31, 2024 and 2023 is as follows:

		December 31, 2024
Classification		12 months<br><br>Expected credit loss		Life time expected credit loss				Total
				Not impaired		Impaired
Guarantee	W	55,422,696		11,872,362		450,079		67,745,137
Deposits and<br><br>Savings		2,508,238		401,970		4,971		2,915,179
Property and<br><br>equipment		1,576,438		367,086		4,154		1,947,678
Real estate		170,210,822		26,682,978		528,200		197,422,000
Securities		1,846,531		155,761		-		2,002,292
Others		7,687		-		-		7,687
Total	W	231,572,412		39,480,157		987,404		272,039,973
		December 31, 2023
---	---	---	---	---	---	---	---	---
Classification		12 months<br><br>Expected credit loss		Life time expected credit loss				Total
				Not impaired		Impaired
Guarantee	W	57,461,539		10,231,324		479,278		68,172,141
Deposits and<br><br>Savings		2,680,530		356,489		7,391		3,044,410
Property and<br><br>equipment		1,610,021		470,284		10,269		2,090,574
Real estate		141,472,617		20,751,067		389,560		162,613,244
Securities		2,106,426		286,855		251,272		2,644,553
Others		11,500		-		-		11,500
Total	W	205,342,633		32,096,019		1,137,770		238,576,422

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

iv) Impairment information by credit risk of financial assets

Details of impaired financial assets due to credit risk as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		12-month expected credit loss				Life time expected credit loss						Total		Allowances		Net		Mitigation of credit risk<br><br>due to collateral
		Grade 1		Grade 2		Grade 1		Grade 2		Impaired
Due from banks and loans at amortized cost:
Banks	W	11,740,875		2,027,427		254,625		60,114		-		14,083,041		(24,990)		14,058,051		27,874
Retail		177,166,099		6,397,386		11,714,193		4,387,929		1,198,594		200,864,201		(1,054,625)		199,809,576		151,610,129
Government/Public sector/<br><br>Central bank		25,118,226		2,030,126		83,783		49		-		27,232,184		(3,876)		27,228,308		2,500
Corporations		117,893,181		55,345,067		20,324,015		25,633,821		1,880,868		221,076,952		(2,363,495)		218,713,457		117,575,757
Card receivable		21,631,071		2,974,287		1,170,078		2,436,456		642,991		28,854,883		(1,140,287)		27,714,596		18,881
		353,549,452		68,774,293		33,546,694		32,518,369		3,722,453		492,111,261		(4,587,273)		487,523,988		269,235,141
Securities at fair value through other comprehensive income (*)		83,218,889		8,736,563		10,034		50,724		-		92,016,210		-		92,016,210		-
Securities at amortized cost		31,103,200		2,219,343		-		3,644		-		33,326,187		(10,188)		33,315,999		-
	W	467,871,541		79,730,199		33,556,728		32,572,737		3,722,453		617,453,658		(4,597,461)		612,856,197		269,235,141

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

iv) Impairment information by credit risk of financial assets (continued)

Details of impaired financial assets due to credit risk as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		12-month expected credit loss				Life time expected credit loss						Total		Allowances		Net		Mitigation of credit risk<br><br>due to collateral
		Grade 1		Grade 2		Grade 1		Grade 2		Impaired
Due from banks and loans at amortized cost:
Banks	W	12,465,770		2,260,226		392,061		80		-		15,118,137		(18,890)		15,099,247		39,768
Retail		158,067,855		6,429,281		8,934,566		3,839,919		1,054,827		178,326,448		(872,104)		177,454,344		122,490,514
Government/Public sector/<br><br>Central bank		20,226,305		1,680,151		82,000		2,952		-		21,991,408		(10,343)		21,981,065		2,500
Corporations		118,154,965		46,714,178		16,503,560		22,375,111		1,312,424		205,060,238		(2,296,581)		202,763,657		113,085,005
Card receivable		20,593,023		2,701,607		1,507,605		2,602,802		645,604		28,050,641		(1,153,691)		26,896,950		14,382
		329,507,918		59,785,443		27,419,792		28,820,864		3,012,855		448,546,872		(4,351,609)		444,195,263		235,632,169
Securities at fair value through other comprehensive income (*)		78,098,959		10,446,092		-		91,949		-		88,637,000		-		88,637,000		-
Securities at amortized cost		33,585,503		2,104,884		-		7,523		-		35,697,910		(11,423)		35,686,487		-
	W	441,192,380		72,336,419		27,419,792		28,920,336		3,012,855		572,881,782		(4,363,032)		568,518,750		235,632,169

(*) Credit loss allowance recognized as other comprehensive income of securities at fair value through other comprehensive income amounted to W 38,346 million and W 42,477 million as of December 31, 2024 and 2023.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

v) Credit risk exposures per credit grade of off-balance items

Credit risk exposures per credit grade of off-balance items as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Grade 1		Grade 2		Impaired		Total
Guarantee contracts:
12-month expected credit loss	W	19,212,434		2,786,804		-		21,999,238
Life time expected credit loss		361,440		127,153		-		488,593
Impaired		-		-		21,364		21,364
		19,573,874		2,913,957		21,364		22,509,195
Loan commitment and<br>other credit line
12-month expected credit loss		183,928,715		21,687,932		-		205,616,647
Life time expected credit loss		10,370,570		2,988,286		-		13,358,856
Impaired		-		-		5,291		5,291
		194,299,285		24,676,218		5,291		218,980,794
	W	213,873,159		27,590,175		26,655		241,489,989
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Grade 1		Grade 2		Impaired		Total
Guarantee contracts:
12-month expected credit loss	W	15,112,974		2,578,086		-		17,691,060
Life time expected credit loss		513,229		168,287		-		681,516
Impaired		-		-		1,711		1,711
		15,626,203		2,746,373		1,711		18,374,287
Loan commitment and<br>other credit line
12-month expected credit loss		181,662,271		19,763,504		-		201,425,775
Life time expected credit loss		7,510,601		3,138,342		-		10,648,943
Impaired		-		-		4,152		4,152
		189,172,872		22,901,846		4,152		212,078,870
	W	204,799,075		25,648,219		5,863		230,453,157

vi) Credit qualities are classified based on the internal credit rating as follows:

Type of Borrower		Grade 1		Grade 2
Individuals		Probability of default below 2.25% for each pool		Probability of default 2.25% or above for each pool
Government/Public agency/Central bank		OECD sovereign credit rating of 6 or above		OECD sovereign credit rating of below 6
Banks and Corporations<br><br>(Including credit card bond)		Internal credit rating of BBB+ or above		Internal credit rating of below BBB+
Card receivables (Individuals)		Behavior scoring system of 7 grade or above		Behavior scoring system of below 7 grade

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

vii) Credit risk exposures per credit quality of derivative assets

Credit risk exposures per credit quality of derivative assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Grade 1	W	9,578,458		4,264,499
Grade 2		700,799		446,922
	W	10,279,257		4,711,421

(*) Credit risk per credit quality of derivative assets is classified based on the internal credit ratings.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

viii) Concentration by geographic location

An analysis of concentration by geographic location for financial instrument, net of allowance, as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
Classification (*)		Korea		USA		UK		Japan		Germany		Vietnam		China		Other		Total
Due from banks and loans at amortized cost
Banks	W	6,303,730		1,284,361		624,468		334,073		354,583		1,295,863		1,633,954		2,227,019		14,058,051
Retail		185,102,271		506,525		7,064		5,165,687		3,399		4,391,692		2,002,467		2,630,471		199,809,576
Government/Public<br><br>sector/Central bank		21,716,534		1,018,284		-		1,914,100		197,042		334,366		360,451		1,687,531		27,228,308
Corporations		189,219,966		5,203,409		789,820		7,075,869		218,422		4,533,648		3,125,771		8,546,552		218,713,457
Card receivable		27,356,847		12,469		528		2,992		330		274,884		42,310		24,236		27,714,596
		429,699,348		8,025,048		1,421,880		14,492,721		773,776		10,830,453		7,164,953		15,115,809		487,523,988
Deposits and loans at FVTPL
Banks		99,159		35,450		-		-		-		-		-		-		134,609
Corporations		1,457,224		163,511		-		15,402		-		5,193		-		139,457		1,780,787
		1,556,383		198,961		-		15,402		-		5,193		-		139,457		1,915,396
Securities measured at FVTPL		61,955,771		3,321,700		377,462		135,194		2,564		-		7,144		1,334,286		67,134,121
Securities at FVOCI		81,294,290		5,367,178		441,203		564,635		35,026		50,368		708,567		3,554,943		92,016,210
Securities at amortized cost		31,113,242		207,817		-		499,988		-		761,386		116,944		616,622		33,315,999
		605,619,034		17,120,704		2,240,545		15,707,940		811,366		11,647,400		7,997,608		20,761,117		681,905,714
Off-balance accounts
Guarantees		20,517,889		579,426		250,938		44,186		9,663		199,535		511,891		395,667		22,509,195
Loan commitments and<br><br>other liabilities related to credit		206,833,657		1,873,831		290,909		352,256		87,212		2,187,736		2,158,798		5,196,395		218,980,794
	W	227,351,546		2,453,257		541,847		396,442		96,875		2,387,271		2,670,689		5,592,062		241,489,989

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(b) Credit risk (continued)

viii) Concentration by geographic location (continued)

An analysis of concentration by geographic location for financial instrument, net of allowance, as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Classification (*)		Korea		USA		UK		Japan		Germany		Vietnam		China		Other		Total
Due from banks and loans at amortized cost
Banks	W	5,077,652		3,063,531		307,509		371,901		946,100		1,577,823		1,610,517		2,144,214		15,099,247
Retail		164,718,020		414,632		7,927		4,682,914		2,189		3,629,576		1,883,206		2,115,880		177,454,344
Government/Public<br><br>sector/Central bank		17,922,312		455,682		2		1,360,853		222,960		304,743		341,837		1,372,676		21,981,065
Corporations		178,948,161		4,042,958		545,109		5,899,157		159,768		3,663,408		2,497,698		7,007,398		202,763,657
Card receivable		26,546,617		11,339		468		2,302		283		275,022		39,135		21,784		26,896,950
		393,212,762		7,988,142		861,015		12,317,127		1,331,300		9,450,572		6,372,393		12,661,952		444,195,263
Deposits and loans at FVTPL
Banks		207,997		30,743		-		-		-		-		-		-		238,740
Corporations		1,050,333		254,682		-		15,439		32,370		-		-		197,741		1,550,565
		1,258,330		285,425		-		15,439		32,370		-		-		197,741		1,789,305
Securities measured at FVTPL		61,136,722		2,439,313		379,357		100,113		29,247		11,066		25,267		1,454,713		65,575,798
Securities at FVOCI		79,391,621		4,699,809		280,127		445,201		38,468		51,473		707,921		3,022,380		88,637,000
Securities at amortized cost		33,542,302		203,265		-		565,286		-		654,073		110,463		611,098		35,686,487
		568,541,737		15,615,954		1,520,499		13,443,166		1,431,385		10,167,184		7,216,044		17,947,884		635,883,853
Off-balance accounts
Guarantees		16,993,719		155,883		7,607		55,086		15,639		197,031		595,236		354,086		18,374,287
Loan commitments and<br><br>other liabilities related to credit		200,907,271		1,465,839		226,423		461,892		93,295		1,972,723		2,315,614		4,635,813		212,078,870
	W	217,900,990		1,621,722		234,030		516,978		108,934		2,169,754		2,910,850		4,989,899		230,453,157

(*) The amounts by geographic location are presented as the net carrying amount after deducting allowances for loan losses.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

ix) Concentration by industry sector

An analysis of concentration by industry sector of financial instrument, net of allowance, as of and December 31, 2024 and 2023 is as follows:

		December 31, 2024
Classification (*)		Finance and insurance		Manu<br><br>-facturing		Retail and wholesale		Real estate and business		Construction service		Lodging and Restaurant		Other		Retail<br><br>customers		Total
Due from banks and loans at amortized cost:
Banks	W	13,495,577		-		-		-		-		-		562,474		-		14,058,051
Retail		-		-		-		-		-		-		-		199,809,576		199,809,576
Government/Public sector/Central bank		27,042,097		-		-		-		-		-		186,211		-		27,228,308
Corporations		22,485,184		62,200,259		23,447,863		47,109,684		5,409,739		6,735,852		51,324,876		-		218,713,457
Card receivable		81,613		323,992		288,452		65,256		51,107		20,277		1,189,255		25,694,644		27,714,596
		63,104,471		62,524,251		23,736,315		47,174,940		5,460,846		6,756,129		53,262,816		225,504,220		487,523,988
Due from banks and loans at FVTPL
Banks		35,450		-		-		-		99,159		-		-		-		134,609
Corporations		859,295		391,667		301,658		149,652		10,000		-		68,515		-		1,780,787
		894,745		391,667		301,658		149,652		109,159		-		68,515		-		1,915,396
Securities measured at FVTPL		34,194,979		3,634,273		1,286,997		2,149,229		304,020		136,364		25,428,259		-		67,134,121
Securities at FVOCI		35,854,914		2,636,678		712,936		1,790,042		1,056,603		12,160		49,952,877		-		92,016,210
Securities at amortized cost		9,761,249		19,984		-		539,416		260,379		-		22,734,971		-		33,315,999
		143,810,358		69,206,853		26,037,906		51,803,279		7,191,007		6,904,653		151,447,438		225,504,220		681,905,714
Off-balance accounts
Guarantees		3,733,957		11,712,348		3,548,909		92,172		179,255		115,827		3,113,748		12,979		22,509,195
Loan commitments and other liabilities related to credit		18,218,204		34,199,306		10,324,128		4,325,044		2,408,759		531,832		20,644,317		128,329,204		218,980,794
	W	21,952,161		45,911,654		13,873,037		4,417,216		2,588,014		647,659		23,758,065		128,342,183		241,489,989

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

ix) Concentration by industry sector (continued)

An analysis of concentration by industry sector of financial instrument, net of allowance, as of and December 31, 2024 and 2023 is as follows:

		December 31, 2023
Classification (*)		Finance and insurance		Manu<br><br>-facturing		Retail and wholesale		Real estate and business		Construction service		Lodging and Restaurant		Other		Retail<br><br>customers		Total
Due from banks and loans at amortized cost:
Banks	W	14,677,168		-		-		-		-		-		422,079		-		15,099,247
Retail		-		-		-		-		-		-		-		177,454,344		177,454,344
Government/Public sector/Central bank		21,767,450		-		-		-		-		-		213,615		-		21,981,065
Corporations		17,974,146		58,338,956		23,517,815		47,301,730		4,823,554		6,730,886		44,076,570		-		202,763,657
Card receivable		56,507		276,256		284,905		71,169		45,769		19,810		948,359		25,194,175		26,896,950
		54,475,271		58,615,212		23,802,720		47,372,899		4,869,323		6,750,696		45,660,623		202,648,519		444,195,263
Due from banks and loans at FVTPL
Banks		30,743		-		-		49,526		99,043		-		59,428		-		238,740
Corporations		1,037,896		235,232		105,890		70,716		-		1,000		99,831		-		1,550,565
		1,068,639		235,232		105,890		120,242		99,043		1,000		159,259		-		1,789,305
Securities measured at FVTPL		35,228,859		3,211,188		1,175,495		1,308,223		98,864		68,630		24,484,539		-		65,575,798
Securities at FVOCI		30,283,670		2,934,740		734,170		1,698,290		1,774,505		31,055		51,180,570		-		88,637,000
Securities at amortized cost		11,514,420		9,961		-		354,906		284,080		-		23,523,120		-		35,686,487
		132,570,859		65,006,333		25,818,275		50,854,560		7,125,815		6,851,381		145,008,111		202,648,519		635,883,853
Off-balance accounts
Guarantees		2,518,182		9,139,168		3,504,409		119,573		152,112		60,077		2,601,841		278,925		18,374,287
Loan commitments and other liabilities related to credit		17,773,113		32,356,393		10,328,099		4,715,541		2,471,645		428,695		17,788,097		126,217,287		212,078,870
	W	20,291,295		41,495,561		13,832,508		4,835,114		2,623,757		488,772		20,389,938		126,496,212		230,453,157

(*) The amounts by industry sector are presented as the net carrying amount after deducting allowances for loan losses.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk

i) Market risk management from trading positions

i-1) Concept of Market risk

Market risk is defined as the risk of loss of trading account position of financial institutions due to changes on market price, such as interest rates, exchange rates and stock prices, etc. and is divided into general market risks and individual risks. A general market risk refers to a loss from price variability caused by events affecting the market as a whole, such as interest rates, exchange rates and stock prices; and an individual risk refers to a loss from price variability related to individual events of securities issuer, such as bonds and stocks.

i-2) Market Risk Management Method

The basic principle of market risk management in the trading sector is to maintain the maximum possible loss due to market risk within a certain level. To this end, the Group sets and operates VaR limits, investment limits, position limits, sensitivity limits, and loss limits from the portfolio to individual desks. These limits are managed daily by the department in charge of risk management, independent from the operating department.

Trading positions refer to all transactions for holding purposes such as short-term resale, profit seeking through short-term price fluctuations, risk-free arbitrage, and risk hedging. Trading positions refer to securities, foreign exchange positions, and derivative financial instruments held for the purpose of obtaining short-term trading gains. As a method of measuring market risk, VaR (Value at Risk) is typical, and it is a statistical measurement of the potential maximum loss that can occur due to changes in market conditions. VaR calculates the standard method market risk using the Group Market Risk Measurement System, and Shinhan Bank calculates the standard method market risk using its own model market risk calculation system. Shinhan Financial Investment uses its own market risk calculation system to calculate historical simulation VaR and the Group market risk system to calculate standard method market risk.

Stress tests are conducted to supplement risk measurement by statistical methods and to manage losses that may arise from rapid changes in the economic environment.

Shinhan Bank measures the risk of trading account products by applying market risk standard methods. The trading account calculates market risk if it is for holding purposes such as short-term resale, profit seeking through short-term price fluctuations, risk-free arbitrage, and risk hedging. The standard approach calculates and aggregates sensitivity risk, default risk, and residual risk. Sensitivity risk measures coverage of general interest rates, credit spreads, stocks, commodity, and delta and vega of foreign exchange. Delta refers to the change in product value due to changes in the price of the underlying asset, and vega refers to the change in product value due to changes in the volatility of the underlying asset. Curvature is defined as a loss that exceeds the delta risk in the event of an upward or downward shock to the underlying asset. Sensitivity risk is designed to measure both linear and non-linear risks of factors affecting value fluctuations regardless of the characteristics of the product. Default risk measures the discrete default risk of the underlying asset that cannot be captured in sensitivity risk. Complete offsetting between purchase and sale exposures of the same borrower is possible. Residual risk is a concept that calculates additional risk because sensitivity risk and default risk are not accurately measured when there is a special profit/loss structure or the underlying asset is special.

Trading position data is automatically interfaced into management system, and the system conducts VaR measurement and manages the limit. In addition, Shinhan Bank sets loss limit, sensitivity limit, investment limit, stress limit, etc. for Trading Department and desks, and monitors daily.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

i) Market risk management from trading positions (continued)

i-2) Market Risk Management Method (continued)

Shinhan Securities measures daily market risk by applying historical simulation VaR method of 99.9% confidence level-based VaR. It also measures market risk standard methods to ensure consistent market risk management at the Group level. Historical simulation VaR method does not require assumption on a particular distribution since the method derives scenarios directly from historical market data, and measures non-linear products, such as options, in details. In addition to the VaR limit, Shinhan Securities sets and manages issuance and transaction limit, and stop-loss limit for each department.

An analysis of the Group’s requisite capital for market risk related to trading positions as of December 31, 2024 and 2023, based on the standard guidelines for risk management promulgated by the Financial Supervisory Service, including the minimum, maximum, and average risk amounts during the reporting period, is as follows:

		December 31, 2024		December 31, 2023
Sensitivity risk
GIRR (*1)	W	257,705		276,940
CSR-Non-Securitisations<br><br>(*2)		565,017		480,494
CSR-Securitisations<br><br>(Non-CTP)		91,048		70,685
CSR-Non-Securitisations (CTP)		508		376
Stock		210,850		330,212
Foreign		389,673		449,030
Commodity		2,829		1,600
	W	1,517,630		1,609,337
Default risk
Non-Securitisations	W	-		37,808
Securitisations<br><br>(Excluding CTP)		121,146		162,599
Securitisations (CTP)		596		71
	W	121,742		200,478
Residual risk		9,547		7,654
	W	1,648,919		1,817,469

(*1) GIRR (General Interest Rate Risk): General interest rate risk, a concept that measures the risk of loss due to changes in the risk-free interest rate. In general, if the maturity is long and the value changes fluctuates a lot due to interest rate changes, the risk value is calculated to be large.

(*2) CSR (Credit Spread Risk): Credit spread risk, a concept that measures the risk of value fluctuations as credit spreads fluctuate independently of the risk-free interest rate for products with inherent credit risk.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

i) Market risk management from trading positions (continued)

i-3) Shinhan Bank

The details of the minimum, maximum, and average risk amount during the reporting period for trading positions of Shinhan Bank and the market risk regulatory capital based on the Basel 3 new standard method as of and for the years ended December 31, 2024 and 2023 are as follows:

			December 31, 2024		December 31, 2023
	Sensitivity Risk
	GIRR (*1)	W	116,501		107,348
	CSR-Non-Securitisations<br><br>(*2)		129,603		153,034
	CSR-Securitisations<br><br>(Non-CTP)		27,930		26,187
	Stock		28,582		30,750
	Foreign		368,999		458,406
	Commodity		199		119
		W	671,814		775,844
Default Risk
Non-Securitisations		W	98,699		107,695
Securitisations<br><br>(Excluding CTP)			60,866		59,549
		W	159,565		167,244
Residual Risk			2,984		1,719
		W	834,363		944,807

(*1) GIRR: General Interest Rate Risk

(*2) CSR: Credit Spread Risk

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

i) Market risk management from trading positions (continued)

i-4) Shinhan Card

The analyses of Shinhan Card’s requisite capital in light of the market risk for trading positions as of December 31, 2024 and 2023, based on the standard guidelines for risk management promulgated by the Financial Supervisory Service, are as follows:

		December 31, 2024		December 31, 2023
Interest rate risk (*)	W	2,551		4,352

(*) Foreign subsidiaries are excluded from the calculation.

i-5) Shinhan Securities

The VaR details for trading positions of Shinhan Securities as of and for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Interest rate risk	W	15,662		32,186
Stock price risk		14,321		20,384
Foreign exchange risk		30,310		52,150
Option volatility risk		42,703		12,418
Portfolio diversification effect		(41,549)		(81,712)
	W	61,447		35,426

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

i) Market risk management from trading positions (continued)

i-6) Shinhan Life Insurance

The VaR details for trading positions of Shinhan Life Insurance as of and for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Interest rate risk	W	683		1,796
Stock price risk		11,523		7,522
Foreign exchange risk		55,467		52,394
Option volatility risk		559		1,233
	W	68,232		62,945

(*) The market risk exposure for performance dividend-type assets held is W 4,956,743 million and W 5,346,730 million as of December 31, 2024, and 2023 respectively, and the minimum guaranteed risk amount that could result in an impact on the Group calculated using the internal shock scenario method as of the end of the reporting period is W 280,577 million and W 228,451 million as of December 31, 2024 and 2023 respectively.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

ii) Interest rate risk management from non-trading positions

ii-1) Principle

Interest rate risk refers to the possibility of a decrease in net interest income or in net asset value that occurs when interest rates fluctuate unfavorably from the Group's financial position. The Group manages changes in net interest income or net asset value that occur due to changes in interest rates by early predicting the factors of interest rate risk fluctuation related to the Group's net interest income and net asset value through the interest rate risk management.

ii-2) Managements

Shinhan Financial Group's major financial subsidiaries manage interest rate risks independently by the risk management organization and the treasury department, and have internal regulations on interest rate risk management strategies, procedures, organization, measurement, and major assumptions.

One of the key indicators of managing interest rate risk is the Earnings at Risk (EaR) from an earning perspective and the Value at Risk (VaR) from an economic value perspective. Interest rate VaR represents the maximum anticipated loss in a net present value calculation, whereas interest rate EaR represents the maximum anticipated loss in a net interest income calculation for the immediately following one-year period, in each case, as a result of negative movements in interest rates.

Each subsidiary's interest rate risk measurement method varies depending on industry-specific regulations. However, interest rate VaR and interest rate EaR are measured using internal methodologies or IRRBB (Interest Rate Risk in the Banking Book). Interest rate risk limits are set based on interest rate VaR and monitored accordingly. In accordance with the amendments in Regulations for Supervision of Financial Holding Companies, the Group measures the interest rate risk using the standardized approach of IRRBB under Basel III, which measures the interest rate risk more precisely than the existing BIS standard framework by segmenting maturities of interest rates, reflecting customer behavior models and diversifying interest rate shocks. The interest rate VaR scenario based IRRBB measures ① parallel up shock ② parallel down shock ③ steepener shock ④ flattener shock ⑤ short rate up shock ⑥ short rate down shock. By the parallel up shock and parallel down shock, the interest rate EaR scenario measures the scenario value with the largest loss as interest rate risk. Under the existing BIS standard framework, ± 200bp parallel shock scenario is applied to all currency. However, as the shock width is set differently by currency and period, interest rate risk is measured significantly by the IRRBB (e.g. (KRW) Parallel ± 300bp, Short Term ± 400bp, Long Term ± 200bp, (USD) Parallel ± 200bp, Short Term ± 300bp, Long Term ± 150bp). In the IRRBB method, the existing interest rate VaR and the interest rate EaR are expressed as △ EVE (Economic Value of Equity) and △ NII (Net Interest Income), respectively.

Since impacts of each subsidiary on changes of interest rates are differentiated by portfolios, the Group is preparing to respond proactively while monitoring the financial market and regulatory environment, and making efforts to hedge or reduce interest rate risk. In addition, the subsidiaries conduct the crisis analysis on changes in market interest rates and report it to management and the Group.

In particular, through its ALM (Asset and Liability Management) system, Shinhan Bank measures and manages its interest rate risk based on various analytical measures such as interest rate gap, duration gap and NPV (Net Present Value) and NII (Net Interest Income) simulations, and monitors on a monthly basis its interest rate VaR limits, interest rate EaR (Earnings at Risk) limits and interest rate gap ratio limits.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

ii) Interest rate risk management from non-trading positions (continued):

The details of interest rate VaR and EaR for major subsidiaries for as of December 31, 2024 and 2023 are as follows:

ii-3) Shinhan Bank

		December 31, 2024		December 31, 2023
△EVE (*1)	W	1,508,514		1,185,973
△NII (*2)		406,207		394,996

ii-4) Shinhan Card

		December 31, 2024		December 31, 2023
△EVE (*1)	W	990,898		952,836
△NII (*2)		600,681		591,935

ii-5) Shinhan Securities

		December 31, 2024		December 31, 2023
△EVE (*1)	W	252,625		249,806
△NII (*2)		418,741		269,678

ii-6) Shinhan Life Insurance

		December 31, 2024		December 31, 2023
△EVE (*1)	W	3,848,473		4,434,253
△NII (*2)		44,525		35,901

(*1) △EVE is the change in economic value of equity capital that can arise from changes in interest rates that affect the present value of assets, liabilities and off-balance sheet items by using the Basel III standard based IRRBB method.

(*2) △NII is the change in net interest income that can occur over the next year due to changes in interest rates by using the Basel III standard based IRRBB method.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

iii) Foreign exchange risk

Exposure to foreign exchange risk can be defined as the difference (net position) between assets and liabilities presented in foreign currency, including derivative financial instruments linked to foreign exchange rate. Foreign exchange risk is a factor that causes market risk of the trading position and is managed by the Group under the market risk management system.

The management of Shinhan Bank’s foreign exchange position is centralized at the S&T Center. The desks and dealers of this department manage the overall position of spot foreign exchange or foreign exchange derivatives within the established market risk and foreign exchange position limits. Shinhan Bank sets a limit for net open positions by currency and the limits for currencies other than the U.S. dollars (USD), Japanese yen (JPY), Euros (EUR) and Chinese yuan (CNY) are set in order to minimize exposures from the other foreign exchange trading.

Foreign currency denominated assets and liabilities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
					CNY		Other		Total
Assets:
Cash and due from banks at amortized cost	W	12,337,661	2,952,548	263,878	731,304		5,387,372		21,672,763
Due from banks at FVTPL		35,450	-	-	-		-		35,450
Loans at FVTPL		275,434	-	28,229	-		19,899		323,562
Loan at amortized cost		25,948,190	13,073,162	1,832,150	4,873,899		15,186,486		60,913,887
Securities at FVTPL		6,687,351	133,864	852,382	4,124		726,565		8,404,286
Derivative assets		1,568,025	4,578	232,197	1,987		98,297		1,905,084
Securities at FVOCI		10,334,842	171,177	521,289	681,404		2,536,312		14,245,024
Securities at amortized cost		340,153	500,269	-	117,008		1,381,765		2,339,195
Other financial assets		5,471,934	1,264,209	197,766	355,004		830,886		8,119,799
	W	62,999,040	18,099,807	3,927,891	6,764,730		26,167,582		117,959,050
Liabilities:
Deposits	W	28,517,193	15,642,126	1,194,240	5,245,526		15,132,335		65,731,420
Financial liabilities at FVTPL		3,117	-	-	-		597,058		600,175
Derivative liabilities		1,513,732	5,297	50,101	1,964		55,052		1,626,146
Borrowings		9,498,518	1,446,603	280,140	544		1,485,415		12,711,220
Debt securities issued		15,926,430	168,566	764,365	-		1,865,788		18,725,149
Financial liabilities designated at FVTPL		804,324	313	-	-		-		804,637
Other financial liabilities		6,432,533	936,178	229,063	652,514		1,061,947		9,312,235
	W	62,695,847	18,199,083	2,517,909	5,900,548		20,197,595		109,510,982
Net domestic and foreign currency exposure	W	303,193	(99,276)	1,409,982	864,182		5,969,987		8,448,068
Off-balance derivative exposure		2,433,296	1,085,962	(397,997)	(379,652)		(1,555,122)		1,186,487
Net foreign currency exposure	W	2,736,489	986,686	1,011,985	484,530		4,414,865		9,634,555

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(c) Market risk (continued)

iii) Foreign exchange risk (continued)

Foreign currency denominated assets and liabilities as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
					CNY		Other		Total
Assets:
Cash and due from banks at amortized cost	W	10,473,766	2,318,380	140,319	654,444		3,975,017		17,561,926
Due from banks at FVTPL		30,743	-	-	-		-		30,743
Loans at FVTPL		385,844	-	114,389	-		-		500,233
Loan at amortized cost		23,694,171	11,663,301	1,556,746	4,018,660		12,182,861		53,115,739
Securities at FVTPL		5,765,741	8,255	761,046	5,230		545,306		7,085,578
Derivative assets		1,014,150	2,346	27,418	878		105,335		1,150,127
Securities at FVOCI		8,308,952	175,740	544,248	564,791		2,169,907		11,763,638
Securities at amortized cost		263,027	553,509	-	110,532		1,281,941		2,209,009
Other financial assets		5,971,194	637,612	831,019	441,906		979,795		8,861,526
	W	55,907,588	15,359,143	3,975,185	5,796,441		21,240,162		102,278,519
Liabilities:
Deposits	W	22,790,616	14,562,435	1,535,925	4,152,363		12,428,069		55,469,408
Financial liabilities at FVTPL		362,642	-	-	-		422,861		785,503
Derivative liabilities		841,175	2	35,679	591		94,701		972,148
Borrowings		9,670,444	1,392,637	208,335	115,798		1,284,046		12,671,260
Debt securities issued		10,916,488	337,684	713,295	-		1,258,257		13,225,724
Financial liabilities designated at FVTPL		909,250	3,188	-	-		-		912,438
Other financial liabilities		6,844,891	183,500	769,928	777,986		805,002		9,381,307
	W	52,335,506	16,479,446	3,263,162	5,046,738		16,292,936		93,417,788
Net domestic and foreign currency exposure	W	3,572,082	(1,120,303)	712,023	749,703		4,947,226		8,860,731
Off-balance derivative exposure		808,139	1,716,328	(340,327)	(328,756)		(1,898,176)		(42,792)
Net foreign currency exposure	W	4,380,221	596,025	371,696	420,947		3,049,050		8,817,939

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(d) Liquidity risk

Liquidity risk refers to the risk of unexpected losses (such as the disposal of assets abnormal pricing, high interest-rate financing, etc.) or insolvency due to inconsistency in funding periods between assets and liabilities or a sudden outflow of funds.

Each subsidiary seeks to minimize liquidity risk through early detection of risk factors related to the sourcing and managing of funding that may cause volatility in liquidity and by ensuring that it maintains an appropriate level of liquidity through systematic management. At the Group level, the Group manages liquidity risk by conducting monthly stress tests that compare liquidity requirements under normal situations against those under three types of stress situations, namely, the Group-specific internal crisis, crisis in the external market and a combination of internal and external crisis. Therefore, the Group is checking the liquidity side for abnormalities in preparation for the usual crisis.

In particular, after the bankruptcy of Silicon Valley Bank, the Group have been strengthening its ability to respond to liquidity crises by conducting crisis situation analysis using bank run scenarios for banks and savings bank subsidiaries and establishing and inspecting emergency procurement plans accordingly.

In addition, in order to pre-emptively and comprehensively manage liquidity risk, the Group measures and monitors liquidity risk management using various indices, including the ‘limit management index’, ‘early warning index’ and ‘monitoring index’.

Shinhan Bank applies the following basic principles for liquidity risk management:

• Raise funding in sufficient amounts, at the optimal time at reasonable costs;

• Maintain risk at appropriate levels and preemptively manage them through a prescribed risk limit system and an early warning signal detection system;

• Secure stable sources of revenue and minimize actual losses by implementing an effective asset-liability management system based on diversified sources of funding with varying maturities;

• Monitor and manage daily and intra-daily liquidity positions and risk exposures for timely payment and settlement of financial obligations due under both normal and crisis situations;

• Conduct periodic contingency analysis in anticipation of any potential liquidity crisis and establish and implement emergency plans in case of a crisis actually happening; and

• Consider liquidity-related costs, benefits of and risks in determining the pricing of the Group’s products and services, employee performance evaluations and approval of launching of new products and services.

Shinhan Card sets and operates a level that can withstand a 3-month credit crunch for end-of-month liquidity. The Group defines and manages the level of ‘cautious’, ‘alert’, ‘imminent crisis’, and ‘crisis’ and risk for the real liquidity gap ratio, liquidity buffer ratio, and ratio of ABS (asset backed securities) to borrowings which are major indicators related to liquidity risk. A contingency plan has been established to prepare for a crisis.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(d) Liquidity risk (continued)

The details of the composition of non-derivative financial instruments and derivative financial instruments by remaining period are as of December 31, 2024 and 2023 are as follows:

		December 31, 2024 (*1)
		Less than<br><br>1 month		1~3<br><br>months		3~6<br><br>months		6 months<br><br>~ 1 year		1~5<br><br>years		More than<br><br>5 years		Total
Non-derivative financial instruments:
Assets:
Cash and due from banks at amortized cost	W	36,069,005		678,029		293,900		290,070		295,757		3,107,597		40,734,358
Due from banks at fair value through profit or loss		-		-		-		-		-		35,450		35,450
Loans at fair value through profit or loss		275,263		531,544		136,762		95		660,244		276,599		1,880,507
Loans at amortized cost		37,868,875		54,775,441		69,211,593		99,131,674		145,027,757		123,300,327		529,315,667
Securities at fair value through profit or loss		41,515,377		1,066,771		473,077		894,621		8,851,339		20,043,058		72,844,243
Securities at fair value through other comprehensive income		45,714,502		997,618		825,089		2,680,515		10,809,850		32,861,952		93,889,526
Securities at amortized cost		878,077		3,117,274		3,152,468		3,236,438		20,604,654		5,540,522		36,529,433
Other financial assets		18,550,324		58,298		59,159		631,667		599,959		1,975,249		21,874,656
	W	180,871,423		61,224,975		74,152,048		106,865,080		186,849,560		187,140,754		797,103,840
Liabilities:
Deposits (*2)	W	217,170,450		49,309,656		56,540,309		77,227,315		30,221,968		1,261,816		431,731,514
Financial liabilities at fair value through profit or loss		954,899		-		-		-		-		-		954,899
Borrowings		12,862,532		4,757,090		6,901,957		9,990,468		11,464,431		4,896,426		50,872,904
Debt securities issued		4,859,511		8,927,081		9,122,810		17,273,392		56,429,636		4,046,575		100,659,005
Financial liabilities designated at fair value through profit or loss		439,367		861,277		991,871		1,963,789		2,473,275		1,513,662		8,243,241
Investment contract liabilities		106,106		105,788		248,954		375,300		328,874		-		1,165,022
Other financial liabilities		32,314,670		174,388		257,115		587,834		1,351,145		140,254		34,825,406
	W	268,707,535		64,135,280		74,063,016		107,418,098		102,269,329		11,858,733		628,451,991
Off balance (*3):
Guarantee contracts	W	22,509,195		-		-		-		-		-		22,509,195
Other liabilities related to loan commitments		218,980,794		-		-		-		-		-		218,980,794
	W	241,489,989		-		-		-		-		-		241,489,989
Derivatives	W	453,751		(12,670)		(68,634)		6,511		(1,847,862)		(165,170)		(1,634,074)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(d) Liquidity risk (continued)

The details of the composition of non-derivative financial instruments and derivative financial instruments by remaining period are as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023 (*1)
		Less than<br><br>1 month (*3)		1~3<br><br>months		3~6<br><br>months		6 months<br><br>~ 1 year		1~5<br><br>years		More than 5 years		Total
Non-derivative financial instruments:
Assets:
Cash and due from banks at amortized cost	W	31,107,629		734,193		83,972		159,377		189,601		2,560,084		34,834,856
Due from banks at fair value through profit or loss		-		-		-		-		-		30,743		30,743
Loans at fair value through profit or loss		308,740		421,193		85,467		9,739		923,364		76,062		1,824,565
Loans at amortized cost		37,692,048		50,813,677		65,503,264		96,981,341		130,306,477		101,012,508		482,309,315
Securities at fair value through profit or loss		38,919,131		1,642,951		682,000		559,767		7,258,255		20,304,519		69,366,623
Securities at fair value through other comprehensive income		42,256,944		445,463		539,255		2,336,017		14,033,768		30,785,721		90,397,168
Securities at amortized cost		899,355		3,258,092		1,964,229		4,323,906		21,357,255		7,573,653		39,376,490
Other financial assets		22,148,927		393,344		128,067		324,305		384,541		1,866,191		25,245,375
	W	173,332,774		57,708,913		68,986,254		104,694,452		174,453,261		164,209,481		743,385,135
Liabilities:
Deposits (*2)	W	204,353,639		49,995,140		43,382,707		65,673,174		24,930,159		2,931,998		391,266,817
Financial liabilities at fair value through profit or loss		410,381		358		586		1,202		6,816		1,449,634		1,868,977
Borrowings		19,310,777		5,678,981		6,166,750		9,811,684		14,182,221		5,170,111		60,320,524
Debt securities issued		4,496,200		7,218,255		7,931,732		18,000,681		45,961,768		3,734,554		87,343,190
Financial liabilities designated at fair value through profit or loss		309,713		1,252,877		1,774,016		1,821,666		1,324,185		1,356,579		7,839,036
Investment contract liabilities		245,353		110,050		67,039		423,484		726,759		-		1,572,685
Other financial liabilities		39,957,559		219,656		394,997		252,445		1,637,763		808,731		43,271,151
	W	269,083,622		64,475,317		59,717,827		95,984,336		88,769,671		15,451,607		593,482,380
Off balance (*3):
Guarantee contracts	W	18,374,287		-		-		-		-		-		18,374,287
Other liabilities related to loan commitments		212,078,870		-		-		-		-		-		212,078,870
	W	230,453,157		-		-		-		-		-		230,453,157
Derivatives	W	131,174		(101,655)		(335,841)		(104,002)		(1,657,294)		134,835		(1,932,783)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(d) Liquidity risk (continued)

The details of the composition of non-derivative financial instruments and derivative financial instruments by remaining period are as of December 31, 2024 and 2023 are as follows (continued):

(*1) These amounts include cash flows of principal and interest on financial assets and financial liabilities.

(*2) Demand deposits amounting to W 160,031,760 million and W151,177,041 million as of December 31, 2024 and 2023 are included in the ‘Less than 1 month’ category, respectively.

(*3) Though guarantees, loan agreements, and other credit offerings provided by the Group exist, if the counterparty requests a payment, the Group should fulfill the obligation immediately.

(e) Measurement of fair value

The fair values of financial instruments being traded in an active market are determined by the published market prices of each period end. The published market prices of financial instruments being held by the Group are based on the trading agencies’ notifications.

If the market for a financial instrument is not active, such as OTC (Over The Counter market) derivatives, fair value is determined either by using a valuation technique or independent third-party valuation service. The Group uses its judgment to select a variety of methods and make rational assumptions that are mainly based on market conditions existing at the end of each reporting period.

The fair value of financial instruments is determined using valuation techniques; a method of using recent transactions between independent parties with reasonable judgment and willingness to trade, a method of referring to the current fair value of other financial instruments that are substantially identical, discounted cash flow model and option pricing models. For example, the fair value of an interest rate swap is calculated as the present value of the expected future cash flows, and the fair value of foreign exchange forwarding contract is calculated by applying the public forward exchange rate at the end of the reporting period.

The Group classifies and discloses fair value of financial instruments into the following three-level hierarchy:

• Level 1: Financial instruments measured at quoted prices from active markets are classified as fair value level 1.
• Level 2: Financial instruments measured using valuation techniques where all significant inputs are observable market data are classified as level 2.
• Level 3: Financial instruments measured using valuation techniques where one or more significant inputs are not based on observable market data are classified as level 3.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value

i-1) The fair value hierarchy of financial instruments presented at their fair values in the statements of financial position as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Level 1		Level 2		Level 3 (*3)		Total
Financial assets:
Due from banks measured at FVTPL	W	-		35,450		-		35,450
Loans at FVTPL (*1)		-		745,412		1,134,534		1,879,946
Securities at FVTPL:
Debt securities and other securities (*2)		11,870,768		39,052,189		16,082,867		67,005,824
Equity securities		1,618,125		64,277		1,414,926		3,097,328
Gold/silver deposits		128,297		-		-		128,297
		13,617,190		39,116,466		17,497,793		70,231,449
Derivative assets:
Trading		85,439		8,772,280		719,177		9,576,896
Hedging		-		702,361		-		702,361
		85,439		9,474,641		719,177		10,279,257
Securities measured at FVOCI:
Debt securities		35,984,894		56,031,316		-		92,016,210
Equity securities		866,968		-		922,191		1,789,159
		36,851,862		56,031,316		922,191		93,805,369
	W	50,554,491		105,403,285		20,273,695		176,231,471
Financial liabilities:
Financial liabilities measured at FVTPL:
Securities sold (*2)	W	357,841		-		-		357,841
Gold/silver deposits		597,058		-		-		597,058
		954,899		-		-		954,899
Financial liabilities designated at fair value through profit or loss:
Derivatives-combined securities		-		819,919		7,139,257		7,959,176
Debt securities issued		-		261,299		-		261,299
		-		1,081,218		7,139,257		8,220,475
Derivative liabilities:
Trading		22,721		8,476,885		536,855		9,036,461
Hedging		-		814,374		207,697		1,022,071
		22,721		9,291,259		744,552		10,058,532
	W	977,620		10,372,477		7,883,809		19,233,906

(*1) Of the Financial assets at FVTPL invested by the Group, P-note’s valuation of amount related to Lime Asset Management is W 40.8 billion. As of December 31, 2024, in this regard, international disputes are under way, the Group has estimated its fair value based on financial information within the recent audit report of underlying assets since it doesn’t have fair market value observable through active trading markets. Accounting estimates and assumptions used in preparing consolidated financial statements may lead to adjustment in response to changes in uncertainty, such as information and market conditions available in the future. In addition, the ultimate impact on the business, financial condition, performance, and liquidity of the Group is unpredictable.

(*2) Financial instruments (Beneficiary certificates: W 175 billion and derivatives-combined securities: W 175 billion) related to GEN2 Partners asset management were delayed in repurchase for the year ended December 31, 2020. The company estimated fair value using the net asset value based on the most recent data available for the repurchase suspension fund. Since then, it has an uncertainty in measuring fair value due to market conditions.

(*3) Shinhan Securities Co., Ltd.' level 3 over-the-counter derivatives is recognized W 86,279 million in financial assets measured at fair value through profit or loss, W 7,146,909 million in financial liabilities designated at fair value through profit or loss, W 718,788 million in derivative assets, and W 535,162 million in derivative liabilities. The fair value of over-the-counter derivatives classified as level 3 above is measured using Shinhan Securities Co., Ltd.’s internal valuation model.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-1) The fair value hierarchy of financial instruments presented at their fair values in the statements of financial position as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Level 1		Level 2		Level 3		Total
Financial assets:
Due from banks measured at FVTPL	W	-		30,743		-		30,743
Loans at FVTPL (*1)		-		515,564		1,242,998		1,758,562
Securities at FVTPL:
Debt securities and other securities (*2)		11,248,555		39,736,457		14,487,080		65,472,092
Equity securities		2,253,651		-		1,597,810		3,851,461
Gold/silver deposits		103,706		-		-		103,706
		13,605,912		39,736,457		16,084,890		69,427,259
Derivative assets:
Trading		117,929		3,709,058		632,213		4,459,200
Hedging		-		252,221		-		252,221
		117,929		3,961,279		632,213		4,711,421
Securities measured at FVOCI:
Debt securities		39,111,078		49,525,922		-		88,637,000
Equity securities		725,796		-		949,183		1,674,979
		39,836,874		49,525,922		949,183		90,311,979
	W	53,560,715		93,769,965		18,909,284		166,239,964
Financial liabilities:
Financial liabilities measured at FVTPL:
Securities sold	W	1,449,634		-		-		1,449,634
Gold/silver deposits		419,343		-		-		419,343
		1,868,977		-		-		1,868,977
Financial liabilities designated at fair value through profit or loss:
Derivatives-combined securities (*2)		-		816,643		6,725,252		7,541,895
Debt securities issued		-		254,832		-		254,832
		-		1,071,475		6,725,252		7,796,727
Derivative liabilities:
Trading		46,578		3,369,771		783,587		4,199,936
Hedging		-		614,285		224,195		838,480
		46,578		3,984,056		1,007,782		5,038,416
	W	1,915,555		5,055,531		7,733,034		14,704,120

(*1) Of the Financial assets at FVTPL invested by the Group, P-note’s valuation of amount related to Lime Asset Management is W 92 billion. As of December 31, 2023, in this regard, international disputes are under way, the Group has estimated its fair value based on financial information within the recent audit report of underlying assets since it doesn’t have fair market value observable through active trading markets. Accounting estimates and assumptions used in preparing consolidated financial statements may lead to adjustment in response to changes in uncertainty, such as information and market conditions available in the future. In addition, the ultimate impact on the business, financial condition, performance, and liquidity of the Group is unpredictable.

(*2) Financial instruments (Beneficiary certificates: W 143.5 billion and derivatives-combined securities: W 143.5 billion) related to GEN2 Partners asset management were delayed in repurchase for the year ended December 31, 2020. The Group estimated fair value using the net asset value based on the most recent data available for the repurchase suspension fund. Since then, it has an uncertainty in measuring fair value due to market conditions.

(*3) Shinhan Securities Co., Ltd.' level 3 over-the-counter derivatives is recognized W 66,866 million in financial assets measured at fair value through profit or loss, W 6,725,252 million in financial liabilities designated at fair value through profit or loss, W 629,223 million in derivative assets, and W 785,312 million in derivative liabilities. The fair value of over-the-counter derivatives classified as level 3 above is measured using Shinhan Securities Co., Ltd.’s internal valuation model.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-2) Classification of financial instruments as fair value level 3

The Group uses the evaluation value from evaluators who are qualified and external independent to determine the fair value for Group's assets at the end of each reporting period. Changes in carrying amounts of financial instruments classified as Level 3 for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Financial<br>asset<br>at fair value<br>through profit or loss		Securities<br>at fair value through other comprehensive profit or loss		Financial liabilities designated at fair value through profit or loss		Derivative assets and liabilities, net
											Held for trading	Held for hedging
Beginning balance	W	17,327,888		949,183		(6,725,252)		(151,374)	(224,195)
Recognized in total comprehensive income for the year:
Recognized in profit (loss) for the year (*1)		355,895		-		(74,680)		(243,855)	16,498
Recognized in other comprehensive income (loss) for the year		3,287		(77,241)		(8,614)		-	-
		359,182		(77,241)		(83,294)		(243,855)	16,498
Purchase		7,120,860		55,431		-		1,307,186	-
Issue		-		-		(7,993,276)		-	-
Settlement		(5,798,938)		(5,153)		7,662,565		(733,566)	-
Transfer to level3 (*2)		17,407		-		-		3,931	-
Transfer out of level3 (*2)		(394,072)		(29)		-		-	-
Ending balance	W	18,632,327		922,191		(7,139,257)		182,322	(207,697)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-2) Classification of financial instruments as fair value level 3 (continued)

The Group uses the evaluation value from evaluators who are qualified and external independent to determine the fair value for Group's assets at the end of each reporting period. Changes in carrying amounts of financial instruments classified as Level 3 for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Financial<br>asset<br>at fair value<br>through profit or loss		Securities<br>at fair value through other comprehensive profit or loss		Financial liabilities designated at fair value through profit or loss		Derivative assets and liabilities, net
											Held for trading	Held for hedging
Beginning balance	W	15,047,137		981,329		(7,930,909)		61,622	(343,759)
Recognized in total comprehensive income for the year:
Recognized in profit (loss) for the year (*1)		69,334		-		(244,146)		(15,540)	119,564
Recognized in other comprehensive income (loss) for the year		(532)		12,747		(1,907)		-	-
		68,802		12,747		(246,053)		(15,540)	119,564
Purchase		5,987,732		55,078		-		36,786	-
Issue		-		-		(6,343,080)		-	-
Settlement		(4,071,062)		(100,000)		7,794,790		(234,242)	-
Transfer to level3 (*2)		299,148		29		-		-	-
Transfer out of level3 (*2)		(3,869)		-		-		-	-
Ending balance	W	17,327,888		949,183		(6,725,252)		(151,374)	(224,195)

(*1) Recognized profit or loss of the changes in carrying amount of financial instruments classified as Level 3 for the years ended December 31, 2024 and 2023 are included in the accounts of the statements of comprehensive income, of which the amounts and the related accounts are as follows:

		December 31, 2024
		Amounts recognized in profit or loss		Recognized profit or loss from the financial instruments held as of December 31
Net loss on financial assets at fair value through profit or loss	W	112,040		443,935
Net gain on financial liabilities designated at fair value through profit or loss		(74,680)		102,961
Net other operating expense		16,498		16,497
	W	53,858		563,393

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-2) Changes in carrying amounts of financial instruments classified as Level 3 for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Amounts recognized in profit or loss		Recognized profit or loss from the financial instruments held as of December 31
Net gain on financial assets at fair value through profit or loss	W	53,794		47,708
Net gain (loss) on financial liabilities designated at fair value through profit or loss		(244,146)		96,223
Net other operating expense		119,564		119,564
	W	(70,788)		263,495

(*2) The equity securities experienced a level transfer due to changes in the availability of observable market data, such as trading suspensions. Similarly, the derivative instruments underwent a level transfer as the availability of observable market data changed due to modifications in valuation techniques.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-3) Valuation techniques and significant inputs not observable in markets

• Valuation techniques and inputs used in measuring the fair value of financial instruments classified as level 2 as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
Type of financial instrument		Valuation technique		Carrying<br><br>value		Significant inputs
Assets
Financial asset at fair value through profit or loss
Debt securities, due from banks, loans		DCF, NAV,<br><br>Option model (*)	W	39,833,051		Discount rate, interest rate, stock price and etc.
Equity securities		NAV		64,277		Price of underlying assets such as stocks, bonds, etc
				39,897,328
Derivative assets
Trading		Option model (*), Implied forward interest rate,<br><br>DCF		8,772,280		Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.
Hedging				702,361
				9,474,641
Securities at fair value through other comprehensive income
Debt securities		DCF,<br><br>Option model (*)		56,031,316		Interest rate, discount rate, etc.
			W	105,403,285
Liabilities
Financial liabilities designated at fair value through profit or loss
Debt securities issued		Option model (*), NAV		261,299		Discount rate, volatility
Compound financial instruments			W	819,919		Underlying asset price
				1,081,218
Derivative liabilities
Trading		Option model (*),<br><br>Forward interest rate,<br><br>DCF		8,476,885		Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.
Hedging				814,374
				9,291,259
			W	10,372,477

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-3) Valuation techniques and significant inputs not observable in markets (continued)

• Valuation techniques and inputs used in measuring the fair value of financial instruments classified as level 2 as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Type of financial instrument		Valuation technique		Carrying<br><br>value		Significant inputs
Assets
Financial asset at fair value through profit or loss
Debt securities		DCF, NAV,<br><br>Option model (*)	W	40,282,764		Discount rate, interest rate, stock price and etc.
				40,282,764
Derivative assets
Trading		Option model (*), Implied forward interest rate,<br><br>DCF		3,709,058		Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.
Hedging				252,221
				3,961,279
Securities at fair value through other comprehensive income
Debt securities		DCF,<br><br>Option model (*)		49,525,922		Interest rate, discount rate, etc.
			W	93,769,965
Liabilities
Financial liabilities designated at fair value through profit or loss
Debt securities issued		Option model (*), NAV		254,832		Discount rate, volatility
Compound financial instruments			W	816,643		Underlying asset price
				1,071,475
Derivative liabilities
Trading		Option model (*),<br><br>Forward interest rate,<br><br>DCF		3,369,771		Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.
Hedging				614,285
				3,984,056
			W	5,055,531

(*) Option models applied to measure fair value include the Black-Scholes model and Hull-White model, and methods such as Monte Carlo simulation are applied to some products depending on the product type.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-3) Valuation techniques and significant inputs not observable in markets (continued)

• Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
Type of financial instrument		Valuation technique			Carrying<br><br>Value (*2)		Significant unobservable inputs		Range
Financial assets
Financial asset at fair value through profit or loss
Debt securities, loans		DCF, NAV, Option model (*1), Income approach		W	17,217,401		The volatility of the underlying asset,<br><br>Discount rate,<br><br>Correlations<br><br>Growth rate,<br><br>and Liquidation Value		0.56~81.72%<br><br>2.74~11.07%<br><br>4.74~82.57%<br><br>0.00%<br><br>0.00%
Equity securities		DCF, NAV, Option model (*1),<br><br>Comparable company analysis, Transaction case price, Dividend discount model (DDM),<br><br>Cost method			1,414,926		The volatility of the underlying asset,<br><br>Discount rate,<br><br>Growth rate<br><br>And Interest rate volatility		25.58~53.67%<br><br>3.60~15.44%<br><br>0.00%<br><br>0.46~0.73%
					18,632,327
Derivative assets
Equity and foreign exchange related		Option model (*1)			125,445		The volatility of the underlying asset and<br><br>Correlations		10.35~41.28%<br><br>41.60~73.24%
Interest rates related					85,141		The volatility of the underlying asset and<br><br>Correlations		0.46~0.66%<br><br>-38.28~69.59%
Credit and commodity related					508,591		The volatility of the underlying asset, Correlations<br><br>and Hazard Rate		30.92~31.36%<br><br>99.88~99.96%<br><br>0.16~8.90%
					719,177
Securities at fair value through other comprehensive income
Equity securities		DCF, NAV, Option model (*1),<br><br>Comparable company analysis			922,191		The volatility of the underlying asset, Discount rate,<br><br>Growth rate and<br><br>Interest rate volatility		22.95%<br><br>4.75~14.03%<br><br>-1.00~1.00%<br><br>0.41~67.91%
				W	20,273,695

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-3) Valuation techniques and significant inputs not observable in markets (continued)

• Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2024
Type of financial instrument		Valuation technique			Carrying<br><br>Value (*2)		Significant unobservable inputs		Range
Financial liabilities
Financial liabilities designated at fair<br><br>value through profit or<br><br>loss
Equity related		Option model (*1)		W	7,139,257		The volatility of the underlying asset and<br><br>Correlations		0.46~57.68%<br><br>-46.56~83.10%
Derivative liabilities
Equity and foreign<br><br>exchange related		Option model (*1)			181,858		The volatility of the underlying asset and<br><br>Correlations		7.86~57.68%<br><br>-46.56~83.10%
Interest rates related					428,049		The volatility of the underlying asset,<br><br>Regression coefficient and<br><br>Correlations		0.46~1.09%<br><br>0.00~2.32%<br><br>-38.28~90.34%
Credit and commodity<br><br>related					134,645		The volatility of the underlying asset, Correlations<br><br>and Hazard Rate		6.98%<br><br>0.00%<br><br>0.29~6.05%
					744,552
				W	7,883,809

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-3) Valuation techniques and significant inputs not observable in markets (continued)

• Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of December 31, 2024 and 2023 are as follows (continued):

			December 31, 2023
Type of financial instrument			Valuation technique			Carrying<br><br>Value (*2)		Significant unobservable inputs		Range
Financial assets
Financial asset at fair value through profit or loss
Debt securities			DCF, NAV, Option model (*1), Income approach		W	15,730,078		The volatility of the underlying asset,<br><br>Discount rate,<br><br>Correlations<br><br>Growth rate,<br><br>and Liquidation Value		1.00~76.22%<br>2.44~16.17%<br><br>-11.62~65.74%<br><br>0.00%<br><br>0.00%
Equity securities			DCF, NAV, Option model (*1),<br><br>Comparable company analysis, Transaction case price,<br><br>Cost method			1,597,810		The volatility of the underlying asset,<br><br>Discount rate,<br><br>Growth rate<br><br>And Interest rate volatility		0.51~51.57%<br><br>2.61~31.73%<br><br>0.00%<br><br>0.51~74.30%
						17,327,888
Derivative assets
Equity and foreign exchange related			Option model (*1)			97,403		The volatility of the underlying asset and<br><br>Correlations		8.08~63.37%<br><br>-1.74~69.79%
Interest rates related						60,919		The volatility of the underlying asset and<br><br>Correlations		0.19~0.68%<br><br>75.14~77.30%
Credit and commodity related						473,891		The volatility of the underlying asset, Correlations<br><br>and Hazard Rate		34.52~41.77%<br><br>99.83~99.95%<br><br>0.08~3.60%
						632,213
Securities at fair value through other comprehensive income						949,183
Equity securities			DCF, NAV, Option model (*1),<br><br>Comparable company analysis					The volatility of the underlying asset, Discount rate,<br><br>Growth rate and<br><br>Interest rate volatility		20.60~27.84%<br><br>5.14~20.90%<br><br>-1.00~1.00%<br><br>0.55~60.71%
					W	18,909,284

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-3) Valuation techniques and significant inputs not observable in markets (continued)

• Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Type of financial instrument		Valuation technique			Carrying<br><br>value (*2)		Significant unobservable inputs		Range
Financial liabilities
Financial liabilities at fair<br><br>value through profit or<br><br>loss
Equity related		Option model (*1)		W	6,725,252		The volatility of the underlying asset and<br><br>Correlations		0.26~81.98%<br><br>-42.43~84.71%
Derivative liabilities
Equity and foreign<br><br>exchange related		Option model (*1)			468,611		The volatility of the underlying asset and<br><br>Correlations		7.58~81.98%<br><br>-42.43~84.71%
Interest rates related					445,572		The volatility of the underlying asset,<br><br>Regression coefficient and<br><br>Correlations		0.19~1.06%<br><br>0.00~2.71%<br><br>-38.52~90.34%
Credit and commodity<br><br>related					93,599		The volatility of the underlying asset, Correlations<br><br>and Hazard Rate		0.26~24.67%<br><br>-11.62~77.30%<br><br>0.08~2.55%
					1,007,782
				W	7,733,034

(*1) Option model that the Group uses in derivative valuation includes Black-Scholes model, Hull-White model, Monte Carlo simulation, etc.

(*2) There is no disclosure for valuation techniques and input variables related to items where the carrying amount is recognized as a reasonable approximation of fair value and the carrying amount is disclosed at fair value.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

i) Financial instruments measured at fair value (continued)

i-4) Sensitivity for changing in unobservable inputs

For level 3 fair value measurement, changing one or more of the unobservable inputs used to reasonably possible alternative assumptions would have the following effects on profit or loss, or other comprehensive income as of December 31, 2024 and 2023.

		December 31, 2024
		Favorable<br><br>changes		Unfavorable<br><br>changes
Financial assets:
Effects on profit or loss for the period (*1), (*2):
Financial asset at fair value through profit or loss	W	38,489		(33,351)
Derivative assets		14,813		(14,777)
Securities at fair value through other comprehensive income (*2)		74,482		(49,291)
	W	127,784		(97,419)
Financial liabilities:
Effects on profit or loss for the period (*1):
Financial liabilities designated at fair value through profit or loss	W	19,782		(20,339)
Derivative liabilities		25,420		(21,955)
	W	45,202		(42,294)

i-4) Sensitivity for changing in unobservable inputs

		December 31, 2023
		Favorable<br><br>changes		Unfavorable<br><br>changes
Financial assets:
Effects on profit or loss for the period (*1), (*2):
Financial asset at fair value through profit or loss	W	45,433		(42,214)
Derivative assets		19,994		(20,386)
Securities at fair value through other comprehensive income (*2)		44,286		(33,212)
	W	109,713		(95,812)
Financial liabilities:
Effects on profit or loss for the period (*1):
Financial liabilities designated at fair value through profit or loss	W	30,543		(29,790)
Derivative liabilities		27,561		(27,525)
	W	58,104		(57,315)

(*1) Fair value changes are calculated by increasing or decreasing the volatility of the underlying asset (-10~10%p) or correlations (-10~10%p), a significant unobservable input.

(*2) Fair value changes are calculated by increasing or decreasing the growth rate and discount rate, which are a significant unobservable input, from -1%p to 1%p.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

ii) Financial instruments measured at amortized cost

ii-1) The method of measuring the fair value of financial instruments measured at amortized cost is as follows:

Type		Measurement methods of fair value
Cash and<br><br>due from banks		The carrying amount and the fair value for cash are identical and most of deposits are floating interest rate deposits or next day deposits of a short-term instrument. For this reason, the carrying amount approximates fair value.
Loans		The fair value of the loans is measured by discounting the expected cash flow at the market interest rate and credit risk of the borrower.
Securities		An external professional evaluation agency is used to calculate the valuation amount using the market information. The agency calculates the fair value based on active market prices, and DCF model is used to calculate the fair value if there is no quoted price.
Deposits and borrowings		The carrying amount and the fair value for demand deposits, cash management account deposits, call money as short-term instrument are identical. The fair value of others is measured by discounting the contractual cash flow at the market interest rate that takes into account the residual risk.
Debt securities issued		Where available, the fair value of deposits and borrowings is based on the published price quotations in an active market. In case there is no data for an active market price, it is measured by discounting the contractual cash flow at the market interest rate that takes into account the residual risk.
Investment contract liabilities		The book value of retirement pension contract reserves as prescribed by the Insurance Business Act and Insurance Business Supervision Regulations was used as a proxy for fair value because of the difficulty of calculating reliable expected cash flows.
Other financial assets and<br><br>other financial liabilities		The carrying amount is measured at fair value for short-term and suspense accounts, such as spot exchange, inter-bank fund transfer, and domestic exchange of payments, and for the remaining financial instruments, the present value is calculated by discounting the contractual cash flows at a discount rate which considered residual risk at the market interest rate.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

ii) Financial instruments measured at amortized cost (continued)

ii-2) The carrying amount and the fair value of financial instruments measured at amortized cost as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
		Carrying amount		Fair value		Carrying amount		Fair value
Assets:
Deposits measured at amortized cost	W	38,228,750		38,159,135		32,455,701		32,338,446
Loans measured at amortized cost		449,295,238		452,724,752		411,739,562		414,024,035
Securities measured at amortized cost:
Government bonds		21,808,057		21,625,666		22,787,609		22,182,130
Financial institution bonds		3,787,661		3,828,599		5,864,626		5,906,724
Corporation bonds		7,720,281		7,694,086		7,034,252		6,879,983
		33,315,999		33,148,351		35,686,487		34,968,837
Other financial assets		23,116,960		23,469,322		26,880,554		27,175,002
	W	543,956,947		547,501,560		506,762,304		508,506,320
Liabilities:
Deposit liabilities:
Demand deposits	W	160,031,759		160,031,759		151,177,041		151,177,041
Time deposits		236,527,490		236,878,216		202,106,686		202,405,752
Certificate of deposit		10,409,701		10,481,318		12,059,730		12,114,566
Issued bill deposit		7,624,787		7,624,245		7,614,701		7,614,012
CMA deposits		4,451,561		4,451,561		4,950,392		4,950,392
Others		3,735,747		3,735,726		3,604,114		3,604,031
		422,781,045		423,202,825		381,512,664		381,865,794
Borrowing debts:
Call-money		1,197,823		1,197,823		2,195,849		2,195,849
Bills sold		8,872		8,831		11,252		11,208
Bonds sold under repurchase agreements		11,542,956		11,542,956		17,312,576		17,312,576
Borrowings		37,170,722		37,236,104		37,381,675		37,322,235
		49,920,373		49,985,714		56,901,352		56,841,868
Debt securities issued:
Borrowings in Korean won		75,106,885		75,610,971		68,382,242		68,189,097
Borrowings in foreign currency		18,658,969		18,759,433		13,179,483		13,143,721
		93,765,854		94,370,404		81,561,725		81,332,818
Investment contract liabilities		1,165,022		1,165,022		1,572,685		1,572,685
Other financial liabilities		39,472,400		39,429,575		47,328,051		47,295,828
	W	607,104,694		608,153,540		568,876,477		568,908,993

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

ii) Financial instruments measured at amortized cost (continued)

ii-3) The fair value hierarchy of financial assets and liabilities which are not measured at their fair values in the statements of financial position but with their fair value disclosed as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Level 1		Level 2		Level 3		Total
Deposits measured at amortized cost	W	537,760		37,621,375		-		38,159,135
Loans measured at amortized cost		-		965,455		451,759,297		452,724,752
Securities measured at amortized cost:
Government bonds		11,292,066		10,333,600		-		21,625,666
Financial institution bonds		331,421		3,497,178		-		3,828,599
Corporation bonds		-		7,694,086		-		7,694,086
		11,623,487		21,524,864		-		33,148,351
Other financial assets		-		13,474,763		9,994,559		23,469,322
	W	12,161,247		73,586,457		461,753,856		547,501,560
Liabilities:
Deposit liabilities:
Demand deposits	W	-		160,031,759		-		160,031,759
Time deposits		-		-		236,878,216		236,878,216
Certificate of deposit		-		-		10,481,318		10,481,318
Issued bill deposit		-		-		7,624,245		7,624,245
CMA deposits		-		4,451,561		-		4,451,561
Other		-		3,694,921		40,805		3,735,726
		-		168,178,241		255,024,584		423,202,825
Borrowing debts:
Call-money		-		1,197,823		-		1,197,823
Bills sold		-		-		8,831		8,831
Bonds sold under repurchase agreements		-		-		11,542,956		11,542,956
Borrowings		-		19,922		37,216,182		37,236,104
		-		1,217,745		48,767,969		49,985,714
Debt securities issued:
Borrowings in won		-		43,460,315		32,150,656		75,610,971
Borrowings in foreign currency		-		12,899,498		5,859,935		18,759,433
		-		56,359,813		38,010,591		94,370,404
Investment contract liabilities		-		-		1,165,022		1,165,022
Other financial liabilities		-		10,428,026		29,001,549		39,429,575
	W	-		236,183,825		371,969,715		608,153,540

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

ii) Financial instruments measured at amortized cost (continued)

ii-3) The fair value hierarchy of financial assets and liabilities which are not measured at their fair values in the statements of financial position but with their fair value disclosed as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Level 1		Level 2		Level 3		Total
Assets:
Deposits measured at amortized cost	W	554,703		31,783,743		-		32,338,446
Loans measured at amortized cost		-		1,633,949		412,390,086		414,024,035
Securities measured at amortized cost:
Government bonds		10,727,244		11,454,886		-		22,182,130
Financial institution bonds		2,005,877		3,900,847		-		5,906,724
Corporation bonds		-		6,879,983		-		6,879,983
		12,733,121		22,235,716		-		34,968,837
Other financial assets		-		16,393,625		10,781,377		27,175,002
	W	13,287,824		72,047,033		423,171,463		508,506,320
Liabilities:
Deposit liabilities:
Demand deposits	W	-		151,177,041		-		151,177,041
Time deposits		-		-		202,405,752		202,405,752
Certificate of deposit		-		-		12,114,566		12,114,566
Issued bill deposit		-		-		7,614,012		7,614,012
CMA deposits		-		4,950,392		-		4,950,392
Other		-		3,565,491		38,540		3,604,031
		-		159,692,924		222,172,870		381,865,794
Borrowing debts:
Call-money		-		2,195,849		-		2,195,849
Bills sold		-		-		11,208		11,208
Bonds sold under repurchase agreements		-		-		17,312,576		17,312,576
Borrowings		-		221,256		37,100,979		37,322,235
		-		2,417,105		54,424,763		56,841,868
Debt securities issued:
Borrowings in won		-		36,388,349		31,800,748		68,189,097
Borrowings in foreign currency		-		10,456,332		2,687,389		13,143,721
		-		46,844,681		34,488,137		81,332,818
Investment contract liabilities		-		-		1,572,685		1,572,685
Other financial liabilities		-		20,658,155		26,637,673		47,295,828
	W	-		229,612,865		339,296,128		568,908,993

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

ii) Financial instruments measured at amortized cost (continued)

ii-4) Valuation techniques and inputs used in the fair value measurements categorized within Level 2 and Level 3 for fair value disclosures, which are not recognized at fair value, as at December 31, 2024 and 2023, are as follows:

		December 31, 2024
		Fair value (*)		Valuation technique		Inputs
Financial instruments classified as level 2 :
Assets
Due from banks measured at amortized cost	W	37,621,375		DCF		Discount rate
Loans measured at amortized cost		965,455		DCF		Discount rate, Credit spread<br><br>and Prepayment rate
Securities measured at amortized cost		21,524,864		DCF		Discount rate
Other financial assets		13,474,763		DCF		Discount rate
Financial instruments classified as level 3 :
Assets
Loans measured at amortized cost		451,759,297		DCF		Discount rate, Credit spread and Prepayment rate
Other financial assets		9,994,559		DCF		Discount rate
	W	535,340,313
Financial instruments classified as level 2 :
Liabilities
Deposits	W	168,178,241		DCF		Discount rate
Borrowings		1,217,745		DCF		Discount rate
Debt securities issued		56,359,813		DCF		Discount rate
Other financial liabilities		10,428,026		DCF		Discount rate
Financial instruments classified as level 3 :
Liabilities
Deposits		255,024,584		DCF		Discount rate
Borrowings		48,767,969		DCF		Discount rate
Debt securities issued		38,010,591		DCF		Discount rate,<br><br>Regression coefficient<br><br>and Correlations
Investment contract liabilities		1,165,022		-		-
Other financial liabilities		29,001,549		DCF		Discount rate
	W	608,153,540

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(e) Measurement of fair value (continued)

ii) Financial instruments measured at amortized cost (continued)

ii-4) Valuation techniques and inputs used in the fair value measurements categorized within Level 2 and Level 3 for

fair value disclosures, which are not recognized at fair value, as at December 31, 2024 and 2023, are as follows

(continued):

		December 31, 2023
		Fair value (*)		Valuation technique		Inputs
Financial instruments classified as level 2 :
Assets
Due from banks measured at amortized cost	W	31,783,743		DCF		Discount rate
Loans measured at amortized cost		1,633,949		DCF		Discount rate, Credit spread<br><br>and Prepayment rate
Securities measured at amortized cost		22,235,716		DCF		Discount rate
Other financial assets		16,393,625		DCF		Discount rate
Financial instruments classified as level 3 :
Assets
Loans measured at amortized cost		412,390,086		DCF		Discount rate, Credit spread and Prepayment rate
Other financial assets		10,781,377		DCF		Discount rate
	W	495,218,496
Financial instruments classified as level 2 :
Liabilities
Deposits	W	159,692,924		DCF		Discount rate
Borrowings		2,417,105		DCF		Discount rate
Debt securities issued		46,844,681		DCF		Discount rate
Other financial liabilities		20,658,155		DCF		Discount rate
Financial instruments classified as level 3 :
Liabilities
Deposits		222,172,870		DCF		Discount rate
Borrowings		54,424,763		DCF		Discount rate
Debt securities issued		34,488,137		DCF		Discount rate,<br><br>Regression coefficient<br><br>and Correlations
Investment contract liabilities		1,572,685		-		-
Other financial liabilities		26,637,673		DCF		Discount rate
	W	568,908,993

(*) Valuation techniques and inputs are not disclosed when the carrying amount is a reasonable approximation of fair value.

iii) Changes in gains or losses on valuation at the transaction date for the years ended December 31, 2024 and 2023, are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	(81,747)		(143,959)
New transactions		(33,712)		(48,548)
Recognized in profit for the year		26,229		110,760
Ending balance	W	(89,230)		(81,747)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(f) Classification by categories of financial instruments

Financial assets and liabilities are measured at fair value or amortized cost. The financial instruments measured at fair value or amortized costs are measured in accordance with the Group’s valuation methodologies, which are described in Note 4. (e) Measurement of fair value.

The carrying amounts of each category of financial assets and financial liabilities as of December 31, 2024 and 2023 is as follows:

		December 31, 2024
		FVTPL		FVOCI		Amortized cost		Derivatives held for hedging		Total
Assets:
Cash and due from banks at amortized cost	W	-		-		40,525,712		-		40,525,712
Due from banks at fair value through profit or loss		35,450		-		-		-		35,450
Securities at fair value through profit or loss		70,231,449		-		-		-		70,231,449
Derivatives assets		9,576,896		-		-		702,361		10,279,257
Loans at fair value through profit or loss		1,879,946		-		-		-		1,879,946
Loans at amortized cost		-		-		449,295,238		-		449,295,238
Securities at fair value through other comprehensive income		-		93,805,369		-		-		93,805,369
Securities at amortized cost		-		-		33,315,999		-		33,315,999
Others		-		-		23,116,960		-		23,116,960
	W	81,723,741		93,805,369		546,253,909		702,361		722,485,380
		December 31, 2024
---	---	---	---	---	---	---	---	---	---	---
		FVTPL		FVTPL<br><br>liabilities designated		Financial liabilities measured at amortized cost		Derivatives held for hedging		Total
Liabilities:
Deposits	W	-		-		422,781,045		-		422,781,045
Financial liabilities at fair value through profit or loss		954,899		-		-		-		954,899
Financial liabilities designated at FVTPL		-		8,220,475		-		-		8,220,475
Derivatives liabilities		9,036,461		-		-		1,022,071		10,058,532
Borrowings		-		-		49,920,373		-		49,920,373
Debt securities issued		-		-		93,765,854		-		93,765,854
Investment contract liabilities		-		-		1,165,022		-		1,165,022
Others		-		-		39,472,400		-		39,472,400

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

	W	9,991,360		8,220,475		607,104,694		1,022,071		626,338,600

5. Financial risk management (continued)

(f) Classification by categories of financial instruments (continued)

The carrying amounts of each category of financial assets and financial liabilities as of December 31, 2024 and 2023 is as follows (continued):

		December 31, 2023
		FVTPL		FVOCI		Amortized cost		Derivatives held for hedging		Total
Assets:
Cash and due from banks at amortized cost	W	-		-		34,629,251		-		34,629,251
Due from banks at fair value through profit or loss		30,743		-		-		-		30,743
Securities at fair value through profit or loss		69,427,259		-		-		-		69,427,259
Derivatives assets		4,459,200		-		-		252,221		4,711,421
Loans at fair value through profit or loss		1,758,562		-		-		-		1,758,562
Loans at amortized cost		-		-		411,739,562		-		411,739,562
Securities at fair value through other comprehensive income		-		90,311,979		-		-		90,311,979
Securities at amortized cost		-		-		35,686,487		-		35,686,487
Others		-		-		26,880,554		-		26,880,554
	W	75,675,764		90,311,979		508,935,854		252,221		675,175,818
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
		FVTPL		FVTPL<br><br>liabilities designated		Financial liabilities measured at amortized cost		Derivatives held for hedging		Total
Liabilities:
Deposits	W	-		-		381,512,664		-		381,512,664
Financial liabilities at fair value through profit or loss		1,868,977		-		-		-		1,868,977
Financial liabilities designated at FVTPL		-		7,796,727		-		-		7,796,727
Derivatives liabilities		4,199,936		-		-		838,480		5,038,416
Borrowings		-		-		56,901,352		-		56,901,352
Debt securities issued		-		-		81,561,725		-		81,561,725
Investment contract liabilities		-		-		1,572,685		-		1,572,685
Others		-		-		47,328,051		-		47,328,051
	W	6,068,913		7,796,727		568,876,477		838,480		583,580,597

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(g) Transfer of financial instruments

i) Transfers that do not qualify for derecognition

i-1) Sale of repurchase bonds

Among the Group’s sale of repurchase bonds, followings are the details of financial instruments that do not qualify for derecognition because the Group sold under repurchase agreement at a fixed price as of December 31, 2024 and 2023:

		December 31, 2024		December 31, 2023
Transferred asset:
Securities at FVTPL	W	10,141,306		11,042,486
Securities at FVOCI		645,888		1,286,990
Securities at amortized cost		199,261		3,622,838
Loans at amortized cost		20,600		-
	W	11,007,055		15,952,314
Associated liabilities:
Bonds sold under repurchase agreements	W	11,542,956		17,312,576

i-2) Securities loaned

If the securities owned by the Group are loaned, the ownership of the securities is transferred, but is required to be returned at the end of the loan period. Therefore, the Group continues to recognize the entire securities loaned as it holds most of the risks and compensation of the securities.

Securities loaned as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023		Borrowers
Government bonds	W	13,611,571		15,340,768		Korea Securities Finance Corp.,<br><br>Korea Securities Depository, etc.
Financial institutions bonds		607,175		398,252		Korea Securities Finance Corp.,<br><br>Korea Securities Depository, etc.
Corporation bonds		465,211		221,435		BNP Paribas Securities Corp.
Equity securities		15,826		48,004		Korea Securities Depository
Beneficiary certificate		-		40,890		Korea Securities Depository
	W	14,699,783		16,049,349

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(g) Transfer of financial instruments

i) Transfers that do not qualify for derecognition (continued)

i-3) Securitization of financial assets

The Group uses the securitization of financial assets as a means of financing and to transfer risk. Generally, these securitization transactions result in the transfer of contractual cash flows to the debt securities holders issued from the financial asset portfolio. The Group recognizes debt securities issued without derecognition of assets under individual agreements, partially recognizes assets to the extent of the Group’s level of involvement in assets, or recognizes rights and obligations arising from the derecognition and transfer of assets as separate assets and liabilities. The Group derecognizes the entire asset only if it transfers contractual rights to the cash flows of financial assets or if it holds contractual rights but bears contractual obligations to pay cash flows to the other party without significant delays or reinvestment and transfers most of the risks and benefits of ownership (e.g., credit risk, interest rate risk, prepayment risk, etc.).

For the years ended December 31, 2024 and 2023, the carrying amount of financial assets related to securitization transactions that have neither been transferred nor derecognized are W 11,369,662 million and W 10,950,727 million, respectively; the carrying amounts of related liabilities are W 7,144,588 million and W 6,634,887 million, respectively.

ii) Financial instruments qualified for derecognition and continued involvement

There are no financial instruments which qualify for derecognition and in which the Group has continuing involvements as of December 31, 2024, and 2023.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(h) Offsetting financial assets and financial liabilities

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31, 2024 and 2023 are as follows:

			December 31, 2024
			Gross amounts of recognized financial assets/ liabilities		Gross amounts of recognized financial assets/ liabilities set off in the statement of financial position		Net amounts of financial assets/ liabilities presented in the statement of financial position		Related amounts not set off in the statement of financial position				Net amount
									Financial<br><br>instruments		Cash collateral received
Assets:
Derivatives (*1)		W	10,560,214		-		10,560,214		13,744,859		522,860		5,592,302
Other financial instruments (*1)			9,299,807		-		9,299,807
Securities repurchased under repurchase agreements and bonds purchased under repurchase agreements (*2)			17,514,396		-		17,514,396		15,238,643		-		2,275,753
Securities loaned (*2)			6,456,316		-		6,456,316		6,393,972		-		62,344
Domestic exchange settlement debit (*3)			39,697,639		34,787,860		4,909,779		-		-		4,909,779
Receivables from disposal of securities (*4)			4,879,073		2,199,610		2,679,463		1,925,615		-		753,848
		W	88,407,445		36,987,470		51,419,975		37,303,089		522,860		13,594,026
Liabilities:
Derivatives (*1),(*5)		W	18,245,590		-		18,245,590		14,692,837		1,000		11,767,096
Other financial instruments (*1)			8,215,343		-		8,215,343
Bonds sold under repurchase agreements (*2)			11,542,956		-		11,542,956		10,667,259		-		875,697
Securities borrowed (*2)			357,842		-		357,842		357,842		-		-
Domestic exchange settlement pending (*3)			36,593,966		34,787,860		1,806,106		1,735,983		-		70,123
Payable from purchase of securities (*4)			4,868,572		2,199,610		2,668,962		1,926,038		-		742,924
		W	79,824,269		36,987,470		42,836,799		29,379,959		1,000		13,455,840

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(h) Offsetting financial assets and financial liabilities (continued)

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31, 2024 and 2023 are as follows (continued):

(*1) The Group has certain derivative transactions subject to the ISDA (International Derivatives Swaps and Dealers Association) agreement. According to the ISDA agreement, when credit events (e.g. default) of counterparties occur, all derivative agreements are terminated and set off. At the time of termination, the parties to the transaction will offset the amount of payment or payment to each other, and one party will pay the other party a single amount will be paid to the other party.

(*2) Resale and repurchase agreement, securities borrowing and lending agreement are also similar to ISDA agreement with respect to enforceable netting agreements.

(*3) The Group has legally enforceable right to set off and settles financial assets and liabilities on a net basis under normal business terms. Therefore, domestic exchanges settlement receivables (payables) are recorded on a net basis in the consolidated statements of financial position.

(*4) It is an account that deals with bonds and liabilities based on the settlement of listed stocks traded in the market. The Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis. Therefore, the net amount is presented in the consolidated statement of financial position. The offset amount of related bonds and liabilities based on the settlement of over-the-counter derivatives in-house payment by Central Clearing System is included.

(*5) As of December 31, 2024, the total amount of financial liabilities includes W 7,966,828 million of ELS (equity-linked securities) products and of DLS (derivative linked securities) products. In the

course of this transaction, the Group has provided collateral for some transactions. The financial instruments provided as collateral of W 586,768 million are included in the related instruments not offset

in the statement of financial position.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(h) Offsetting financial assets and financial liabilities (continued)

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31, 2024 and 2023 are as follows: (continued)

			December 31, 2023
			Gross amounts of recognized financial assets/ liabilities		Gross amounts of recognized financial assets/ liabilities set off in the statement of financial position		Net amounts of financial assets/ liabilities presented in the statement of financial position		Related amounts not set off in the statement of financial position				Net amount
									Financial<br><br>instruments		Cash collateral received
Assets:
Derivatives (*1)		W	4,706,696		-		4,706,696		14,428,984		448,025		2,042,058
Other financial instruments (*1)			12,212,371		-		12,212,371
Securities repurchased under repurchase agreements and bonds purchased under repurchase agreements (*2)			19,200,694		-		19,200,694		18,814,022		-		386,672
Securities loaned (*2)			6,284,849		-		6,284,849		6,283,227		-		1,622
Domestic exchange settlement debit (*3)			47,791,602		42,766,815		5,024,787		-		-		5,024,787
Receivables from disposal of securities (*4)			7,421,808		3,734,544		3,687,264		3,006,017		-		681,247
		W	97,618,020		46,501,359		51,116,661		42,532,250		448,025		8,136,386
Liabilities:
Derivatives (*1), (*5)		W	12,637,884		-		12,637,884		14,701,829		-		8,958,880
Other financial instruments (*1)			11,022,825		-		11,022,825
Bonds sold under repurchase agreements (*2)			17,312,576		-		17,312,576		15,450,999		-		1,861,577
Securities borrowed (*2)			1,449,634		-		1,449,634		1,449,634		-		-
Domestic exchange settlement pending (*3)			52,004,974		42,766,815		9,238,159		9,151,927		-		86,232
Payable from purchase of securities (*4)			7,466,010		3,734,544		3,731,466		3,006,534		-		724,932
		W	101,893,903		46,501,359		55,392,544		43,760,923		-		11,631,621

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(h) Offsetting financial assets and financial liabilities (continued)

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31, 2024 and 2023 are as follows (continued):

(*1) The Group has certain derivative transactions subject to the ISDA (International Derivatives Swaps and Dealers Association) agreement. According to the ISDA agreement, when credit events (e.g. default) of counterparties occur, all derivative agreements are terminated and set off. At the time of termination, the parties to the transaction will offset the amount of payment or payment to each other, and one party will pay the other party a single amount will be paid to the other party.

(*2) Resale and repurchase agreement, securities borrowing and lending agreement are also similar to ISDA agreement with respect to enforceable netting agreements.

(*3) The Group has legally enforceable right to set off and settles financial assets and liabilities on a net basis under normal business terms. Therefore, domestic exchanges settlement receivables (payables) are recorded on a net basis in the consolidated statements of financial position.

(*4) It is an account that deals with bonds and liabilities based on the settlement of listed stocks traded in the market. The Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis. Therefore, the net amount is presented in the consolidated statement of financial position. The offset amount of related bonds and liabilities based on the settlement of over-the-counter derivatives in-house payment by Central Clearing System is included.

(*5) As of December 31, 2023, the total amount of financial liabilities includes W 7,541,895 million of ELS (equity-linked securities) products and of DLS (derivative linked securities) products. In the

course of this transaction, the Group has provided collateral for some transactions. The financial instruments provided as collateral of W 365,074 million are included in the related instruments not offset

in the statement of financial position.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Financial risk management (continued)

(i) Capital risk management

The criteria for capital adequacy to be complied with by the Group are 8.0%. In addition, the minimum regulatory BIS capital ratio, which should be maintained additionally to increase the ability to absorb losses, has been raised to up to 14% as the capital regulation based on the Basel III standard is enforced from 2016. This is based on the addition of capital conservation capital (2.5%p) and domestic system-critical banks (D-SIB) capital (1.0%p) and economic response capital (2.5%p) to the existing lowest common equity capital ratio. The economic response capital can be charged up to 2.5%p during credit expansion and required economic response capital in Korea was increased from 0% to 1%, effective May 1,2024. As of December 31, 2024, the minimum regulatory BIS capital ratio to be observed is 12.5%, which is the standard for applying capital conservation capital (2.5%p), D-SIB capital (1.0%p), and economic response capital (1.0%p).

Basel III capital ratio is the concept of 'International Agreement on the Measurement and Standards of Equity Capital' of the Basel Bank Supervisory Commission of BIS (International Settlement Bank). It is calculated as '(common stock capital (after deduction of deductions) + other basic capital + supplementary capital) ÷ ​​risk weighted assets'.

The capital of common stock can be the first to make up for the loss of the financial holding company. The capital of common stock consists of capital stock, capital reserve, retained earnings and other, which will not be redeemed until the liquidation and will be redeemed at the last during the liquidation. Other basic capital consists of capital securities that meet certain requirements as capital of permanent nature. Complementary capital is capital that can compensate for losses of financial holding companies during liquidation, and consists of capital securities, etc. that meet certain requirements. The deduction items are those held by the Group as assets or capital items, but do not contribute to the ability to absorb losses. Unless otherwise noted, it will be deducted from common stock capital.

The capital ratio of the Group based on Basel III is as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Capital :
Tier I common equity capital	W	44,570,426		41,388,070
Additional tier 1 capital		5,822,079		5,118,817
Tier I capital		50,392,505		46,506,887
Tier II capital		3,512,376		3,685,637
Total capital (A)	W	53,904,881		50,192,524
Total risk-weighted assets (B)	W	341,378,776		314,180,698
Capital adequacy ratio (A/B)		15.79%		15.98%
Tier I capital adequacy ratio		14.76%		14.80%
Common stock ratio		13.06%		13.17%

(*) As of December 31, 2024, the Group maintains an appropriate capital adequacy ratio in accordance with the BIS capital regulation system and the capital ratio as of that date is a provisional figure.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd.

i) Overview of the insurance risk

i-1) Insurance risk

Insurance risk is the likelihood that insured events occur and the uncertainty of the total amount and timing of claims for the insured events occurred. The main risk covered by insurance contracts is the risk that the actual claim or benefit payment will exceed the accumulated insurance liability. This risk can occur for the following reasons:

① Frequency risk: a possibility that the number of occurrences of the insured event is different from the expected number

② Severity risk: a possibility that the cost of an incident may be different from the expected cost level

By experience, when there is more similar insurance or they are more diversified, the less likely it is that abnormal effects from some contracts will occur. The Group takes this into account when underwriting contracts and strives to form a sufficiently large and diversified group of contracts.

Insurance risk includes a lack of risk diversification and relates to geographical location and the nature of the policyholder as well as to the diversification of risk forms or sizes.

If the insurance contract covers death, a catastrophe affects the frequency the most and can affect the frequency of death earlier than expected due to a wide range of causes such as eating habits, smoking, and exercise habits, etc. And if the coverage is survival, medical technology and social conditions can increase the survival rate. The frequency may also be affected by excessive concentration in residential areas of policy holders.

Insurance accidents in life insurance include not only the death of the policyholder(insured) but also their survival, disability, and hospitalization.

The Group basically classifies the Group's insurance products into individual insurance and group insurance according to the policyholder. Group insurance means a contract under which the insured belongs to a group of a certain size or larger and in which the policyholder is the representative of the Group or organization. The group insurance can be divided into savings and protections. Protection insurance means insurance in which the sum of benefits paid for survival at the base age does not exceed the premium already paid; savings insurance is defined as insurance, except for protection insurance, in which the sum of benefits paid for survival exceeds the premium already paid. Individual insurance can be classified into death insurance in which the insured's death is insured, survival insurance in which the life is insured for a certain period of time, and endowment insurance in which life insurance and survival insurance are mixed.

Life insurance products can also be divided into guaranteed fixed rates, floating rates, interest accreted rate linked , and variable types by the applying term structures of interest types.

In the guaranteed fixed interest type, since the expected rate does not change from the time the policyholder enters into the contract to the end of the insurance period, the Group assumes the interest rate risk if the asset management return rate or market interest rate is lower than the expected rate. Floating interest rate type divides the net insurance premium into the guaranteed portion and the reserve portion; the guaranteed portion is applied with the predetermined expected rate, and the reserve portion changes based on the reserve rate for policy reserve according to asset management return rate, which makes partial hedge to interest rate risk, but the Group assumes some interest rate risk from the changes of asset management return rate, etc. since the minimum reserve rate for policy reserve is predetermined.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

i) Overview of the insurance risk (continued)

i-1) Insurance risk and reinsurance (continued)

The Group uses acquisition strategies and reinsurance strategies to manage insurance risk of uncertainties of the total amount and timing of insurance claims paid due to insured events.

• Acceptance strategy

Acceptance strategy means diversifying the type of risk or the level of claims from that are accepted insurance policies. For example, the Group can balance mortality and survival risks. In addition, the selection of policyholders through regular health check-ups is one of the major acceptance strategies.

• Reinsurance strategy

The risk of reinsurance contracts held to the Group is based on the accepted insurance contracts, which can be the total amount of risk or risk per contract on a per capita basis or per contract basis. In principle, the reinsurance method provides the risk premium excess reinsurance, but other methods may be used within the scope of the relevant laws as required. The degree of reinsurance held by the Group shall be determined by considering the Group’s assets, contract conditions, risk level, and technology for selecting the contract.

Insurance risk can also be affected by the policyholder's right to terminate the contract or exercise annuity conversion rights to reduce or not pay the full premium. As a result, insurance risks may be affected by the policyholder's actions and decisions. The Group’s insurance risk can be estimated on the assumption that the policyholder is reasonable. For example, a person who is worse than a person in good health would have less intention of terminating insurance that covers death. These factors are also reflected in the assumptions about the Group’s insurance liabilities.

ii) Insurance risk management policy

ii -1) Measurement of Insurance Risk

Unlike other financial instruments, life insurance companies' insurance policies have the characteristics of long-term contracts, which can be exposed to insurance risk that may arise due to an increase in actual claim payments than the risk rate determined at the time of development of the product and interest rate risk that may arise due to differences in interest rates and maturities between insurance liabilities and asset management.

The purpose of the Group’s risk management is to generate long-term stable growth and profits by proactively preventing and systematically managing the various risks that may arise in the course of management activities, reflecting these uncertain financial environments and the characteristics of life insurance products with long-term attributes.

The Group divides insurance risks arising from life insurance contracts into six sub-risks: death risk, longevity risk, disability and illness risk, cancellation risk, operating expense risk, and catastrophe risk. The risk amount for each sub-risk is measured on assets and liabilities that may directly or indirectly cause loss to the Group in the event of changes in actuarial assumptions, and is calculated based on the net asset value through the shock scenario method or risk coefficient method for each sub-risk.

The shock scenario method, one of the insurance risk measurement methods, is a method of calculating the amount of change in net asset value when applying a scenario in which the basic assumptions used for market valuation of assets or liabilities change. On the other hand, the risk coefficient method is a method that calculates the amount by multiplying a specific exposure by a specified risk coefficient, and is suitable for risk amounts that have short maturity or do not have large changes in net asset value during market valuation. In addition, the Group calculates the life insurance risk amount considering the diversification effect by adding the risk amount calculated for each sub-risk, reflecting the correlation coefficient between the sub-risks.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

ii) Insurance risk management policy (continued)

ii -2) Insurance risk management organization and management method

The Group measures the statutory minimum level of capital based on the life insurance risk amount and manages it within the allowable range. For this purpose, the Group establishes basic principles of risk management and establishes and implements regulations and management systems to implement them. In addition, the Group supports decision-making related to various risks through the Risk Management Committee and risk management organization, and prepare risk management procedures to identify and manage risks in a timely manner.

In general, risk management procedures are to recognize exposed risks, measure their size, set acceptable limits, monitor them regularly to report to management, and efficiently control and manage risks in case they exceed their limits.

Management methods by risk type are as follows:

• Insurance risk management

The Group develops insurance products with proper profitability by setting the profitability guidelines from the time of product development, establishes and operates the acceptance policy to prevent reverse selection, running the claim-screening policy to make claim payments.

• Interest rate risk management

The Group establishes a guideline and consider the market interest rate and asset management return rate to determine the published interest rate and expected interest rate within the guidelines. The Group also establishes the asset management strategy considering the interest rate level and maturity of liabilities; establishes a long-term target portfolio by comprehensively considering the risk level and rate of return of operating assets after analyzing the properties of long-term insurance liabilities, and sets a viable portfolio as a guideline every year to allocate and manage assets.

• Liquidity risk management

The Group reviews and manages the amount of claims paid insurance and liquid assets periodically.

iii) Korean Insurance Capital Standard(K-ICS)

K-ICS is an equity capital system that precisely evaluates risk and financial soundness by evaluating the assets and liabilities of insurance companies to market so that they can be applied under the financial statements prepared in accordance with K-IFRS 1117 on insurance contracts. To maintain consistency in mark-to-market valuation and ensure consistency with international capital regulations, the supervisory authorities introduced K-ICS based on mark-to-market valuation, which improves the quality of insurance companies' capital by calculating available and required capital in line with economic substance. This is a system designed to encourage improvement and strengthen risk management.

With the introduction of K-ICS, the supervisory authorities have established standards for preparing a financial position statement based on soundness supervision standards to separately calculate assets and liabilities that meet the purpose of supervision and at the same time substantially reflect the risks of insurance companies. In the K-ICS, the available capital, or solvency amount, is measured based on the basic capital and supplementary capital classified by the loss absorption capacity of the net asset amount in the statement of financial position based on soundness supervision standards evaluated at market price, and there are some restrictions on loss compensation. Supplementary capital, defined as having, can be reflected in the solvency amount up to 50% of the required capital. In addition, the required capital under the K-ICS, that is, the solvency standard amount, refers to the amount of potential losses that may occur in the insurance company over the next year. Specifically, the K-ICS divides the risks exposed due to insurance contract underwriting and asset management into five risks: life and long-term non-life insurance risk,

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

iii) Korean Insurance Capital Standard(K-ICS) (continued)

general non-life insurance risk, market risk, credit risk, and operational risk. Under the 99.5% confidence level, the solvency standard amount is required to be measured by calculating the maximum loss that can occur over the next year using the shock scenario method.

Under the K-ICS, the solvency ratio is calculated by dividing the solvency amount by the solvency standard amount. If the insurance company's solvency ratio is less than 100%, it indicates that the solvency standard amount measured by the potential loss amount cannot be covered with capital, which means that the insurance company's capital soundness has become poor, and the supervisory authority must comply with the Insurance Business Supervision Regulations. Accordingly, insurance companies with a solvency ratio of less than 100% are required to take timely corrective actions such as management improvement recommendations, management improvement requests, or management improvement orders. As such, the new solvency system is a system in which the supervisory authorities seek to protect policyholders by supervising the capital adequacy and risk management capabilities of insurance companies.

iv) Financial risks related to insurance contracts

Investment contracts that include insurance contracts and discretionary participation feature may be exposed to financial risks although it is an insurance liability, and the form of exposure is as follows:

iv-1) Credit risk

Credit risk refers to the risk of loss resulting from the borrower's failure to repay a loan or meet contractual obligations. the Group’s reinsurance assets are exposed to credit risk as assets that may incur losses if the reinsurer defaults at the time of receipt of the claims and receivables.

iv-2) Interest rate risk

Interest rate risk means the risk that arises when the Group’s financial position fluctuates unfavorably due to the effect of interest rates on assets and liabilities. The Group manages matched assets and liabilities for each portfolio to minimize the impact of mismatches between assets and liabilities caused by interest rate fluctuations, thus reducing the risk.

iv-3) Liquidity risk

Liquidity risk refers to the risk that assets and liabilities are subject to inconsistency or failure to respond to unexpected cash outflows. Therefore, future cash outflows from investment contracts, including insurance liabilities which account for most of the Group’s liabilities and discretionary participation features, are factors used to determine the level of risk associated with the Group’s liquidity.

The purpose of the Group’s management of liquidity risk is to maintain sufficient liquidity to prepare for repayments arising from insurance contracts under normal circumstances or when market shocks occur. The Group’s main liquidity risk management methods are as follows:

• Regularly inspect and manage the amount of insurance payments and liquid assets

• Maintain and manage a portfolio comprised of assets that can be relatively easily liquidated in preparation for unexpected disruptions in financing.

• Monitoring liquidity ratios by running liquidity stress tests

• Establishment of asset liability management strategy considering insurance contract liability cash flow

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

iv) Financial risks related to insurance contracts(continued)

iv-4) Market risk

Market risk refers to the risk of loss arising when the Group’s financial position fluctuates unfavourably due to adverse price fluctuations such as stock prices and exchange rates. The Group carries out insurance contract transactions denominated in foreign currencies and is therefore exposed to exchange rate fluctuations. Exposure to exchange rate fluctuations is managed through foreign exchange forward contracts and interest rate swaps between different currencies.

v) Concentration of Insurance Risk

v-1) The concentration of insurance risks by region as of December 31, 2024 and December 31, 2023 are as follows:

		December 31, 2024
		Insurance Contract		Reinsurance Contract		Total
Domestic	W	41,195,537		345,177		41,540,714
International		(1,341)		-		(1,341)
	W	41,194,196		345,177		41,539,373
		December 31, 2023
---	---	---	---	---	---	---
		Insurance Contract		Reinsurance Contract		Total
Domestic	W	38,360,261		161,301		38,521,562
International		5,001		-		5,001
	W	38,365,262		161,301		38,526,563

v-2) Market risk arising from insurance contracts

The amount of currency insurance liabilities (based on the fulfilment cash flows) as of December 31, 2024 and December 31, 2023 are as follows:

	December 31, 2024				December 31, 2023
	Foreign currency amount		KRW converted amount		Foreign currency amount		KRW converted amount
Foreign currency insurance contract liabilities:
USD (thousand)	168,209		247,267		192,052		247,632
EUR (thousand)	119		182		124		177
VND (million)	(23,242)		(1,341)		94,010		5,001
			246,108				252,810

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

vi) Sensitivity to Insurance Risk

The impact of changes in key assumptions on insurance contract liabilities (assets) as of December 31, 2024 and 2023 are as follows

				December 31, 2024
		Sensitivity (*1)		Base amount and base amount after change								Profit and capital impact (before tax)
				Fulfilment cash flows (*2)				Contractual service margin				Profit(loss) (*3)				Other comprehensive income
				Before reflecting reinsurance effect		After reflecting reinsurance effect		Before reflecting reinsurance effect		After reflecting reinsurance effect		Before reflecting reinsurance effect		After reflecting reinsurance effect		Before reflecting reinsurance effect		After reflecting reinsurance effect
Base amount			W	39,380,251		39,819,864		7,224,114		6,869,326		-		-		-		-
Mortality rate		Increased by 3.27%		39,511,663		39,946,680		7,091,068		6,740,875		1,635		1,635		(9,952)		8,702
Disability and illness (fixed compensation)		Increased by 3.40%		40,083,199		40,478,965		6,567,655		6,256,714		(46,488)		(46,488)		16,176		34,285
Disability and illness (actual loss compensation)		Increased by 2.62%
Long-term property and other		Increased by 4.19%		39,380,251		39,819,864		7,224,114		6,869,326		-		-		-		-
Surrender rate(increase)		Increased by 9.16%		40,126,708		40,533,222		6,503,159		6,181,469		(25,501)		(25,501)		(104,650)		(86,772)
Surrender rate(decrease)		Decreased by 9.16%		38,556,883		39,031,830		8,041,498		7,651,376		5,984		5,984		115,085		133,903
Expense		Increased by 2.62%		39,592,255		40,031,868		7,024,540		6,669,753		(12,430)		(12,430)		9,624		9,624
Expense(inflation)		0.26%p

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

vi) Sensitivity to Insurance Risk (continued)

The impact of changes in major assumptions on insurance contract liabilities (assets) as of December 31, 2024 and December 31, 2023 are as follow (continued):

				December 31, 2023
		Sensitivity (*1)		Base amount and base amount after change								Profit and capital impact (before tax)
				Fulfilment cash flows (*2)				Contractual service margin				Profit(loss) (*3)				Other comprehensive income
				Before reflecting reinsurance effect		After reflecting reinsurance effect		Before reflecting reinsurance effect		After reflecting reinsurance effect		Before reflecting reinsurance effect		After reflecting reinsurance effect		Before reflecting reinsurance effect		After reflecting reinsurance effect
Base amount			W	36,532,133		36,758,686		7,168,725		7,037,730		-		-		-		-
Mortality rate		Increased by 3.27%		36,649,373		36,873,667		7,048,751		6,920,015		2,734		2,734		(669)		16,340
Disability and illness (fixed compensation)		Increased by 3.40%		37,207,600		37,392,758		6,518,899		6,429,299		(25,641)		(25,641)		79,046		91,155
Disability and illness (actual loss compensation)		Increased by 2.62%
Long-term property and other		Increased by 4.19%		36,532,133		36,758,686		7,168,725		7,037,730		-		-		-		-
Surrender rate(increase)		Increased by 9.16%		37,012,292		37,216,745		6,696,604		6,587,709		(8,038)		(8,038)		(248,007)		(231,815)
Surrender rate(decrease)		Decreased by 9.16%		36,002,582		36,252,706		7,700,114		7,545,548		(1,838)		(1,838)		265,129		283,049
Expense		Increased by 2.62%		36,724,665		36,951,218		6,982,049		6,851,054		(5,856)		(5,856)		29,725		29,725
Expense(inflation)		0.26%p

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

(*1) The risk adjustment is calculated at the 75% confidence level.

(*2) The risk adjustment included in the fulfilment cash flows was calculated without shock.

(*3) The profit (loss) for the year consists of (i) an increase in the present value estimate of future cash flows that exceeds the carrying amount of the contractual service margin, resulting in a loss due to changes in assumptions, and (ii) changes in the present value estimate of future cash flows allocated to the loss component, which also result from changes in assumptions.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

vii) Credit risk arising from insurance contracts

The amount of the reinsurance contracts held, which is an asset according to risk level, as of December 31, 2024 and December 31, 2023 are as follows:

		December 31, 2024				December 31, 2023
		Reinsurance residual coverage assets		Reinsurance incident assets		Reinsurance residual coverage assets		Reinsurance incident assets
AA+ ~ AA-	W	-		146		38,207		5,204

viii) Interest rate risk arising from insurance contracts

The impact of exposure to interest rate risk and interest rate changes on profit and loss and capital as of December 31, 2024 and December 31, 2023 are as follows:

viii-1) Interest rate risk exposure

		December 31, 2024		December 31, 2023
Exposure to financial products measured at fair value (*1)	W	48,843,348		46,700,713
Exposure to insurance contract (*2)		39,820,035		36,758,783
Net exposure (financial products - insurance contracts)	W	9,023,313		9,941,930

(*1) It is the total amount of financial assets measured at fair value through profit or loss, financial assets measured at fair value through other comprehensive income, and derivative assets (liabilities).

(*2) It is the total amount excluding the contractual service margin from the remaining coverage elements of insurance contract liabilities and reinsurance contract assets (liabilities).

viii-2) Interest rate risk sensitivity

		December 31, 2024				December 31, 2023
		Profit and loss effect		Capital effect		Profit and loss effect		Capital effect
100 bp Increase	W
Insurance contract (*1)		-		4,357,245		-		3,412,769
Reinsurance contract (*1)		-		50,365		-		15,543
Financial assets (*2)		(35,934)		(4,777,699)		(37,574)		(4,258,875)
100 bp Decrease	W
Insurance contract (*1)		-		(6,073,734)		-		(4,382,646)
Reinsurance contract (*1)		-		(59,948)		-		(17,723)
Financial assets (*2)		35,934		5,837,965		37,574		4,258,875

(*1) This is the impact on capital (before tax) due to changes in expected cash flows of insurance and reinsurance contracts, excluding variable annuities/savings.

(*2) Calculated for assets related to insurance contracts excluding variable annuities/savings. The profit and loss effect is the change in financial assets recognized at fair value through profit or loss, and the capital effect is the change in financial assets measured at fair value through other comprehensive income.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

ix) Liquidity risk arising from insurance contracts

The maturity amount of undiscounted remaining contractual cash flows as of December 31, 2024 and December 31, 2023 are as follow. This amount does not include matters relating to remaining coverage liabilities (insurance contracts and reinsurance contracts) measured under the premium allocation approach.

		December 31, 2024
		Less than or equal to<br><br>1 year		1 ~ 2<br><br>years		2 ~ 3<br><br>years		3 ~ 4<br><br>years		4 ~ 5<br><br>years		More than<br><br>5 years		Total
Insurance contract
General insurance:
Cash Inflow	W	4,959,356		4,502,944		4,087,588		3,652,621		3,114,091		40,523,130		60,839,730
Cash Outflow		(5,324,282)		(4,157,931)		(4,287,561)		(4,084,548)		(4,318,989)		(126,037,788)		(148,211,099)
		(364,926)		345,013		(199,973)		(431,927)		(1,204,898)		(85,514,658)		(87,371,369)
Variable insurance:
Cash Inflow		446,902		371,371		307,145		254,674		214,352		1,923,480		3,517,924
Cash Outflow		(880,558)		(752,425)		(682,066)		(612,330)		(536,499)		(7,753,564)		(11,217,442)
		(433,656)		(381,054)		(374,921)		(357,656)		(322,147)		(5,830,084)		(7,699,518)
		(798,582)		(36,041)		(574,894)		(789,583)		(1,527,045)		(91,344,742)		(95,070,887)
Reinsurance contract
Cash Inflow		225,165		216,544		209,995		207,721		207,575		8,223,398		9,290,398
Cash Outflow		(244,930)		(237,756)		(230,883)		(227,262)		(226,934)		(9,123,146)		(10,290,911)
		(19,765)		(21,212)		(20,888)		(19,541)		(19,359)		(899,748)		(1,000,513)
Total (including variable insurance)		(818,347)		(57,253)		(595,782)		(809,124)		(1,546,404)		(92,244,490)		(96,071,400)
Total (excluding variable insurance)	W	(384,691)		323,801		(220,861)		(451,468)		(1,224,257)		(86,414,406)		(88,371,882)

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

ix) Liquidity risk arising from insurance contracts (continued)

		December 31, 2023
		Less than or equal to<br><br>1 year		1 ~ 2<br><br>years		2 ~ 3<br><br>years		3 ~ 4<br><br>years		4 ~ 5<br><br>years		More than<br><br>5 years		Total
Insurance contract
General insurance:
Cash Inflow	W	5,120,022		4,408,374		3,892,580		3,500,316		3,073,794		51,775,416		71,770,502
Cash Outflow		(5,509,719)		(4,969,773)		(4,263,071)		(4,356,801)		(4,235,246)		(132,831,760)		(156,166,370)
		(389,697)		(561,399)		(370,491)		(856,485)		(1,161,452)		(81,056,344)		(84,395,868)
Variable insurance:
Cash Inflow		582,036		485,566		412,870		350,176		297,209		3,160,998		5,288,855
Cash Outflow		(943,282)		(836,548)		(764,049)		(711,324)		(641,963)		(10,096,136)		(13,993,302)
		(361,246)		(350,982)		(351,179)		(361,148)		(344,754)		(6,935,138)		(8,704,447)
		(750,943)		(912,381)		(721,670)		(1,217,633)		(1,506,206)		(87,991,482)		(93,100,315)
Reinsurance contract
Cash Inflow		203,944		204,852		204,904		204,760		205,383		7,421,755		8,445,598
Cash Outflow		(225,690)		(225,630)		(224,694)		(222,873)		(221,054)		(7,686,228)		(8,806,169)
		(21,746)		(20,778)		(19,790)		(18,113)		(15,671)		(264,473)		(360,571)
Total (including variable insurance)		(772,689)		(933,159)		(741,460)		(1,235,746)		(1,521,877)		(88,255,955)		(93,460,886)
Total (excluding variable insurance)	W	(411,443)		(582,177)		(390,281)		(874,598)		(1,177,123)		(81,320,817)		(84,756,439)

As of December 31, 2024 and 2023, the amount to be paid upon request by the contractor of insurance contracts issued by Shinhan Life Insurance Co., Ltd. is W 53,227,935 million and W 52,555,004 million.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(a) Overview of the insurance risk – Shinhan Life Insurance Co., Ltd. (continued)

(x) Claims development

The amount of claims development as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
Progress year		Year of incident
		2020		2021		2022		2023		2024		Total
Undiscounted estimate of ultimate loss	W	959,974		1,070,850		1,104,112		1,152,207		1,233,110		5,520,253
Paid claims:
Current year		746,984		833,427		857,650		896,474		957,713		4,292,248
1 year after		166,072		187,415		195,026		202,132		-		750,645
2 years after		23,751		27,433		27,763		-		-		78,947
3 years after		13,248		12,079		-		-		-		25,327
4 years after		4,849		-		-		-		-		4,849
Cumulative paid claims	W	954,904		1,060,354		1,080,439		1,098,606		957,713		5,152,016
The difference between the estimated ultimate loss and paid claims		5,070		10,497		23,673		53,601		275,396		368,237
Discount effect		-		-		-		-		-		(11,011)
Future loss adjustment expenses		-		-		-		-		-		7,316
Reported but unpaid claims		-		-		-		-		-		1,436,530
Risk adjustment for non-financial risks		-		-		-		-		-		14,041
Reinsurance effect		-		-		-		-		-		(94,435)
Total liabilities for incurred claims	W	-		-		-		-		-		1,720,678
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---
Progress year		Year of incident
		2019		2020		2021		2022		2023		Total
Undiscounted estimate of ultimate loss	W	962,548		950,728		1,062,120		1,098,646		1,153,875		5,227,917
Paid claims:
Current year		777,773		771,780		857,031		888,276		932,827		4,227,687
1 year after		151,943		144,712		167,000		172,431		-		636,086
2 years after		19,955		19,220		23,317		-		-		62,492
3 years after		8,972		11,202		-		-		-		20,174
4 years after		3,905		-		-		-		-		3,905
Cumulative paid claims	W	962,548		946,914		1,047,348		1,060,707		932,827		4,950,344
The difference between the estimated ultimate loss and paid claims		-		3,815		14,772		37,940		221,048		277,575
Discount effect		-		-		-		-		-		(9,311)
Future loss adjustment expenses		-		-		-		-		-		5,313
Reported but unpaid claims		-		-		-		-		-		1,535,849
Risk adjustment for non-financial risks		-		-		-		-		-		18,604
Reinsurance effect		-		-		-		-		-		(65,252)
Total liabilities for incurred claims	W	-		-		-		-		-		1,762,778

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(b) Overview of the insurance risk – Shinhan EZ General Insurance Co., Ltd.

i) Overview of insurance risks

Insurance risk is defined as the risk that arises in connection with the underwriting of insurance contracts and payment of claims, which are the unique tasks of an insurance company, and is managed by dividing it into long-term non-life insurance risk and general non-life insurance risk.

Long-term non-life insurance risk refers to the risk of loss due to risk factors that may arise in a long-term non-life insurance contract and is divided and measured into death risk, longevity risk, disability and illness risk, property/other risk, operating expense risk, project cost risk, and catastrophe risk. General non-life insurance risk refers to the risk of loss due to risk factors that may arise in general non-life insurance contracts, and is measured by dividing it into insurance price risk, reserve risk, and catastrophe risk.

i-1) Long-term non-life insurance risk

Mortality risk and longevity risk refer to the risk of unexpected losses related to the death of the policyholder, and are measured by the risk of a decrease in net asset value due to changes in the mortality level.

Disability and illness risk is the risk of unexpected losses related to the policyholder's disability or illness, and is measured as the risk of a decrease in net asset value due to changes in the risk level of disability and illness coverage.

Property and other risks are the risk of unexpected losses related to property, costs, compensation, and other collateral, and are measured as the risk of a decrease in net asset value due to changes in the risk level of property, costs, compensation, and other collateral.

Cancellation risk refers to the risk of unexpected losses due to the policyholder's exercise of options, such as contract termination or early withdrawal, and is measured by the risk of a decrease in net asset value due to changes in the policyholder's option exercise rate or group termination of policyholders.

Operating expense risk includes the risk arising from changes in spending due to inflation and the level of future costs related to insurance contract costs. Costs related to insurance contracts include all cost items except allowances.

Catastrophe risk refers to the risk of potential loss due to extreme or exceptional risks (e.g. epidemic disease, major accident, etc.) that are not considered in the risk of death.

i-2) General non-life insurance risk

Insurance price risk refers to the risk resulting from uncertainty related to the timing, frequency, and severity of future insured events.

Reserve risk refers to the risk that the reserve liability accumulated to pay insurance claims for insurance events that have occurred in the relevant contract will not cover the insurance claims to be paid in the future.

Catastrophe risk refers to the risk of potential loss due to extreme or exceptional risks (natural disasters, major accidents, major guarantees, etc.) that are not considered in insurance prices and reserve risks.

ii) Measurement and management of insurance risk

ii-1) Measurement of insurance risk

Shinhan EZ General Insurance Co., Ltd. measures general and long-term insurance risks through the solvency amount and the statutory solvency amount calculation criteria of Enforcement Rules of the Insurance Business Supervisory Regulations and operates related risk management policies.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Insurance Risk (continued)

(b) Overview of the insurance risk – Shinhan EZ General Insurance Co., Ltd. (continued)

ii) Measurement and management of insurance risk (continued)

ii-2) Insurance risk management organization and management method

Shinhan EZ General Insurance Co., Ltd. determines an insurance risk permissible limit every year, monitors compliance with the limit, and executes in accordance with predetermined countermeasures when the insurance risk exceeds the limit. In addition, underwriting guidelines, retention, and reinsurance strategies are established and operated so that risks can be retained at an appropriate level for each type of insurance.

ii-3) Claims development

When estimating occurrences of accidents, Shinhan EZ General Insurance Co., Ltd. considers that the probability of occurrence and scale of occurrence of future experience may be more unfavorable than the assumptions reflected in risk adjustment. In general, uncertainty related to insurance claims and costs due to an insured event is greatest when the accident is in its early stages, and as the year of the accident progresses, the uncertainty of the final claims and costs decreases.

ii-4) Sensitivity to insurance risk

Shinhan EZ General Insurance Co., Ltd. manages insurance risks through sensitivity analysis based on cancellation rates, loss ratios, and operating expense rates that are judged to have a significant impact on the amount, timing, and uncertainty of the insurer's future cash flows.

ii-5) Liquidity risk arising from insurance contracts

Liquidity risk arising from insurance contracts may result in the inability to respond to payment demands due to inconsistencies in the operation of funds and the procurement period and amount, or incur losses due to the procurement of high-interest funds or unfavorable sales of held assets to resolve fund shortages. It means there is a risk. Shinhan EZ General Insurance Co., Ltd. monitors liquidity ratios to manage liquidity risk.

ii-6) Credit risk arising from insurance contracts

Credit risk arising from an insurance contract refers to the possibility of economic loss that may occur if the reinsurer, the counterparty to the transaction, is unable to fulfil its obligations specified in the contract due to default or deterioration of credit rating. Shinhan EZ General Insurance Co., Ltd. transacts as a reinsurer with high-quality insurance companies that have been given a rating of BBB- or higher by S&P or an equivalent rating through strict internal review.

ii-7) Interest rate risk arising from insurance contracts

Interest rate risk exposed to Shinhan EZ General Insurance Co., Ltd. 's insurance contracts is the risk of unexpected losses arising from changes in net interest income or net asset value depending on changes in interest rates. The consolidated entity manages this to minimize unexpected losses arising from interest rate changes.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

7. Investment in subsidiaries

(a) The summarized financial information of the controlling company and the Group’s major subsidiaries as of December 31, 2024 and 2023 is as follows:

		December 31, 2024						December 31, 2023
Investees (*1), (*2)		Asset<br><br>balance		Liability<br><br>balance		Equity<br><br>balance		Asset<br><br>balance		Liability<br><br>balance		Equity<br><br>balance
Shinhan Financial Group (separate)	W	37,672,303		11,324,128		26,348,175		37,289,555		11,190,414		26,099,141
Shinhan Bank		556,691,161		519,926,426		36,764,735		508,497,276		474,966,063		33,531,213
Shinhan Card Co., Ltd.		44,137,094		35,860,198		8,276,896		43,420,162		35,365,175		8,054,987
Shinhan Securities Co., Ltd.		49,026,790		43,532,326		5,494,464		52,497,500		47,131,211		5,366,289
Shinhan Life Insurance Co., Ltd.		59,843,268		52,802,301		7,040,967		58,641,345		50,218,211		8,423,134
Shinhan Capital Co., Ltd.		12,512,659		10,259,145		2,253,514		13,018,880		10,791,281		2,227,599
Jeju Bank		7,444,771		6,854,663		590,108		7,162,714		6,626,863		535,851
Shinhan Asset Management Co., Ltd.		503,319		186,991		316,328		409,246		134,030		275,216
SHC Management Co., Ltd.		10,325		-		10,325		10,051		-		10,051
Shinhan DS		139,322		76,603		62,719		137,141		85,417		51,724
Shinhan Savings Bank		2,879,145		2,512,348		366,797		3,046,110		2,696,597		349,513
Shinhan Asset Trust Co., Ltd.		775,844		471,890		303,954		463,445		85,555		377,890
Shinhan Fund Partners Co., Ltd		122,507		22,580		99,927		110,849		20,136		90,713
Shinhan REITs Management Co., Ltd.		82,781		12,640		70,141		72,018		9,522		62,496
Shinhan AI Co., Ltd. (*3)		-		-		-		35,674		940		34,734
Shinhan Venture Investment Co., Ltd.		176,165		90,967		85,198		171,783		90,515		81,268
Shinhan EZ General Insurance Co., Ltd.		289,867		178,573		111,294		261,204		131,875		129,329

(*1) The consolidated financial statements of the consolidated subsidiaries are based on consolidated financial statements, if applicable.

(*2) Trusts, beneficiary certificates, securitization special limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded.

(*3) Shinhan AI Co., Ltd. was liquidated in the current period.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

7. Investment in subsidiaries (continued)

(b) The summarized income information of the controlling company and the Group’s major subsidiaries for the years ended December 31, 2024 and 2023 is as follows:

		December 31, 2024							December 31, 2023
Investees (*1), (*2)		Operating<br><br>Revenue		Net<br><br>Income (*3)		Comprehensive Income (*3)		Operating<br><br>Revenue			Net<br><br>Income (*3)		Comprehensive Income (*3)
Shinhan Financial Group (separate)	W	2,556,503		1,619,867		1,617,202		2,160,092			1,671,011		1,669,579
Shinhan Bank		47,357,783		3,695,913		4,414,685		37,459,678			3,067,991		3,707,829
Shinhan Card Co., Ltd.		6,173,106		575,261		553,274		5,378,610			621,908		583,014
Shinhan Securities Co., Ltd.		11,446,637		179,160		179,829		9,947,400			100,840		128,378
Shinhan Life Insurance Co., Ltd.		7,044,374		528,401		(1,056,025)		6,451,715			472,395		475,656
Shinhan Capital Co., Ltd.		1,201,874		116,948		115,203		1,204,941			304,024		298,609
Jeju Bank		382,121		10,416		12,709		371,210			5,101		20,189
Shinhan Asset Management Co., Ltd.		241,409		66,003		65,512		171,145			51,272		51,225
SHC Management Co., Ltd.		-		274		274		-			305		305
Shinhan DS		331,631		8,756		10,996		322,895			7,954		4,191
Shinhan Savings Bank		255,650		17,855		17,310		273,630			29,943		29,724
Shinhan Asset Trust Co., Ltd.		100,626		(320,601)		(320,675)		148,980			53,430		53,055
Shinhan Fund Partners Co., Ltd.		67,420		15,371		15,310		62,674			12,193		12,193
Shinhan REITs Management Co., Ltd.		26,131		7,688		7,644		21,512			9,485		9,446
Shinhan AI Co., Ltd. (*4)		-		(1,927)		(1,928)		8,727			(4,596)		(4,432)
Shinhan Venture Investment Co., Ltd.		45,542		3,776		3,931		28,209			4,441		4,266
Shinhan EZ General Insurance Co., Ltd.		93,894		(17,403)		(18,035)		43,747			(7,778)		(7,289)

(*1) The consolidated financial statements of the consolidated subsidiaries are based on consolidated financial statements, if applicable.

(*2) Trusts, beneficiary certificates, securitization special limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded.

(*3) This amount includes non-controlling interests.

(*4) Shinhan AI Co., Ltd was liquidated in the current period, and the amounts for the current and prior periods are those incurred before the liquidation.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

7. Investment in subsidiaries (continued)

(c) Change in the scope of consolidation

Change in consolidated subsidiaries for the year ended December 31, 2024 are as follows:

		Company		Description
Excluded		Shinhan AI Co., Ltd.		Liquidation
		PT Shinhan Asset Management Indonesia		Disposal
		SHINHAN ASSET MGT HK, LIMITED		Decrease in ownership stake

(*) Subsidiaries such as trust, beneficiary certificate, corporate restructuring fund and private equity fund which are not actually operating their own business are excluded.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Operating segments

(a) Segment information

The general descriptions by operating segments as of December 31, 2024 are as follows:

Segment		Description
Banking		Credit to customers, lending to and receiving deposits from customers, and its accompanying work
Credit card		Sales of credit cards, cash services, card loan services, installment financing, lease and its accompanying work
Securities		Securities trading, consignment trading, underwriting and its accompanying work
Insurance		Life insurance business, Non-Life insurance business and its accompanying work
Credit		Facility rental, new technology business financing, others and its accompanying work
Others		Business segments that do not belong to the above segments, such as real estate trust, investment advisory services, venture business investment and other remaining business

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Operating segments (continued)

(b) The following tables provide information of income and expense for each operating segment for the years ended December 31, 2024 and 2023:

		December 31, 2024
		Banking		Credit card		Securities		Insurance		Credit		Others		Consolidation adjustment		Total
Net interest income (expense)	W	8,988,515		1,931,171		573,375		(135,352)		143,672		92,600		(191,679)		11,402,302
Net fees and commission income (expense)		867,909		934,519		535,910		(4,380)		17,442		336,957		26,517		2,714,874
Provision for allowance for credit loss		(425,429)		(917,239)		(136,466)		(6,237)		(151,258)		(375,991)		(654)		(2,013,274)
General and administrative expenses		(3,983,172)		(855,125)		(786,141)		(201,994)		(65,273)		(437,691)		213,156		(6,116,240)
Other income (expense), net		(507,922)		(215,670)		95,227		1,055,611		177,677		548,614		(682,529)		471,008
Operating income (expense)		4,939,901		877,656		281,905		707,648		122,260		164,489		(635,189)		6,458,670
Equity method income (loss)		9,856		(4,053)		(558)		(894)		25,148		(5,453)		(47,868)		(23,822)
Income tax expense		1,040,924		224,731		54,238		193,041		27,044		52,899		(121,955)		1,470,922
Profit for the year	W	3,610,084		671,506		179,160		510,998		116,948		(124,845)		(405,681)		4,558,170
Controlling interest	W	3,609,620		668,392		179,157		510,998		116,948		(124,845)		(510,093)		4,450,177
Non-controlling interests		464		3,114		3		-		-		-		104,412		107,993

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Operating segments (continued)

(b) The following tables provide information of income and expense for each operating segment for the years ended December 31, 2024 and 2023 (continued):

		December 31, 2023
		Banking		Credit card		Securities		Insurance		Credit		Others		Consolidation adjustment		Total
Net interest income	W	8,548,138		1,895,298		443,676		(198,785)		248,804		125,238		(244,447)		10,817,922
Net fees and commission income (expense)		748,044		968,665		500,441		(3,210)		17,463		391,122		24,681		2,647,206
Provision for allowance for credit loss		(914,848)		(883,956)		(152,146)		(16,116)		(177,912)		(99,203)		(322)		(2,244,503)
General and administrative expenses		(3,876,485)		(778,564)		(720,835)		(218,820)		(80,106)		(403,395)		182,868		(5,895,337)
Other income (expense), net		(495,331)		(267,959)		181,927		1,087,789		335,205		327,511		(393,580)		775,562
Operating income (expense)		4,009,518		933,484		253,063		650,858		343,454		341,273		(430,800)		6,100,850
Equity method income (loss)		8,556		(2,831)		93		(302)		66,918		664		51,990		125,088
Income tax expense		936,472		218,332		36,239		167,417		89,849		81,695		(43,044)		1,486,960
Profit for the year	W	2,969,829		725,171		100,840		464,617		304,024		243,928		(330,409)		4,478,000
Controlling interest	W	2,969,519		723,845		100,915		464,617		304,024		243,928		(438,813)		4,368,035
Non-controlling interests		310		1,326		(75)		-		-		-		108,404		109,965

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Operating segments (continued)

(c) Interest gains and losses from segment external customers and cross-sector interest gains and losses for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Banking		Credit card		Securities		Insurance		Credit		Others		Consolidation adjustment (*)		Total
Net interest income from:
External customers (*)	W	8,987,390		1,997,334		596,982		(129,874)		170,737		1,207		(221,474)		11,402,302
Internal transactions		1,125		(66,163)		(23,607)		(5,478)		(27,065)		91,393		29,795		-
	W	8,988,515		1,931,171		573,375		(135,352)		143,672		92,600		(191,679)		11,402,302
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Banking		Credit card		Securities		Insurance		Credit		Others		Consolidation adjustment (*)		Total
Net interest income from:
External customers (*)	W	8,557,545		1,961,035		449,835		(208,812)		265,943		36,700		(244,324)		10,817,922
Internal transactions		(9,407)		(65,737)		(6,159)		10,027		(17,139)		88,538		(123)		-
	W	8,548,138		1,895,298		443,676		(198,785)		248,804		125,238		(244,447)		10,817,922

(*) Consolidated adjustment to net interest income from external customers is from the securities and others which were measured in fair values as a part of business combination accounting.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Operating segments (continued)

(d) The following tables provide information of net fees and commission income (expense) of each operating segment for the years ended December 31, 2024 and 2023.

		December 31, 2024
		Banking		Credit card		Securities		Insurance		Credit		Others		Consolidation adjustment		Total
Net fees and commission income from:
External customers	W	911,057		984,884		541,673		3,561		15,910		257,789		-		2,714,874
Internal transactions		(43,148)		(50,365)		(5,763)		(7,941)		1,532		79,168		26,517		-
	W	867,909		934,519		535,910		(4,380)		17,442		336,957		26,517		2,714,874
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Banking		Credit card		Securities		Insurance		Credit		Others		Consolidation adjustment		Total
Net fees and commission income from:
External customers	W	794,021		1,019,262		507,109		2,151		14,917		309,746		-		2,647,206
Internal transactions		(45,977)		(50,597)		(6,668)		(5,361)		2,546		81,376		24,681		-
	W	748,044		968,665		500,441		(3,210)		17,463		391,122		24,681		2,647,206

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Operating segments (continued)

(e) Financial information of geographical area

The following table provides information of income from external consumers by geographical area for the years ended December 31, 2024 and 2023.

		December 31, 2024		December 31, 2023
Domestic	W	5,180,020		5,088,487
Overseas (*)		1,278,650		1,012,363
	W	6,458,670		6,100,850

(*) Vietnam and Japan are the countries where the related income from external customers are material. As of December 31, 2024, and 2023, operating income recognized for Vietnam amounted to W 332,717 million and W 275,581 million, respectively. For Japan, it amounted to W 218,393 million and W 187,466 million, respectively.

The following table provides information of non-current assets by geographical area as of December 31, 2024 and 2023.

		December 31, 2024		December 31, 2023
Domestic	W	10,185,952		10,142,257
Overseas		419,469		305,799
	W	10,605,421		10,448,056

(*) Non-current assets comprise property and equipment, intangible assets and investment properties.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

9. Cash and due from banks at amortized cost

(a) Cash and due from banks at amortized cost as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Cash	W	2,296,962		2,173,550
		2,296,962		2,173,550
Deposits denominated in Korean won:
Reserve deposits		11,594,266		10,909,697
Time deposits		2,198,645		1,450,123
Certificate of deposit		-		14,446
Other		3,365,689		3,042,525
		17,158,600		15,416,791
Deposits denominated in foreign currency:
Deposits		14,934,942		12,117,199
Time deposits		3,956,971		3,000,279
Other		2,199,579		1,942,571
		21,091,492		17,060,049
Allowance for credit losses		(21,342)		(21,139)
	W	40,525,712		34,629,251

(b) Restricted due from banks in accordance with Related Regulation or Acts as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023		Related Regulations or Acts
Deposits denominated<br><br>in Korean won:
Reserve deposits	W	11,594,266		10,909,697		Article 55 of the Bank of Korea Act
Other		1,978,415		1,633,297		Article 74 of the Capital Markets and Financial Investment Business Act, etc.
		13,572,681		12,542,994
Deposits denominated<br><br>in foreign currency		11,046,189		7,148,169		Articles of the Bank of Korea Act,<br><br>New York State Banking Act, derivatives related, etc.
	W	24,618,870		19,691,163

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

10. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Debt instruments:
Governments	W	8,983,699		6,392,302
Financial institutions		11,127,785		12,590,217
Corporations		12,579,941		10,949,245
Stocks with put option		691,684		651,045
Equity investment with put option		5,483,075		5,019,107
Beneficiary certificates		14,414,681		14,489,698
Commercial papers		9,270,928		8,631,502
CMA		1,613,961		3,473,984
Others (*)		2,840,070		3,274,992
		67,005,824		65,472,092
Equity instruments:
Stocks		2,954,653		3,732,637
Equity investment		6,680		8,093
Others		135,995		110,731
		3,097,328		3,851,461
Gold/silver deposits		128,297		103,706
	W	70,231,449		69,427,259
Other:
Loans at FVTPL	W	1,879,946		1,758,562
Due from banks at fair value		35,450		30,743
	W	72,146,845		71,216,564

(*) As of December 31, 2024 and 2023, restricted reserve for claims of customers’ deposits (trusts) are W 1,731,224 million and W 1,841,473 million, respectively.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives

(a) The notional amounts of derivatives outstanding as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Foreign currency related:
Over the counter:
Currency forwards	W	167,805,176		142,779,721
Currency swaps		59,641,567		45,159,344
Currency options		2,182,530		1,265,326
		229,629,273		189,204,391
Exchange traded:
Currency futures		1,534,764		2,189,413
		231,164,037		191,393,804
Interest rates related:
Over the counter:
Interest rate forwards and swaps		57,169,341		41,950,711
Interest rate options		825,057		516,577
		57,994,398		42,467,288
Exchange traded:
Interest rate futures		4,875,687		3,943,763
Interest rate swaps (*)		142,194,805		94,186,140
		147,070,492		98,129,903
		205,064,890		140,597,191
Credit related:
Over the counter:
Credit swaps		5,041,093		4,178,441
Equity related:
Over the counter:
Equity swaps and forwards		5,975,657		4,100,836
Equity options		2,923,962		3,552,337
		8,899,619		7,653,173
Exchange traded:
Equity futures		1,600,342		2,764,186
Equity options		452,322		240,603
		2,052,664		3,004,789
		10,952,283		10,657,962
Commodity related:
Over the counter:
Commodity swaps and forwards		2,121,686		1,034,225
Commodity options		-		8,000
		2,121,686		1,042,225
Exchange traded:
Commodity futures and options		172,899		93,004
		2,294,585		1,135,229
Hedge:
Currency forwards		4,345,149		2,142,233
Currency swaps		7,993,851		4,448,030
Interest rate forwards and swaps		13,219,417		12,469,580
Equity options		18,750		-
		25,577,167		19,059,843
	W	480,094,055		367,022,470

(*) The notional amounts of derivatives outstanding that will be settled in the ‘Central Counter Party (CCP)’ system.

HINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(b) Fair values of derivative instruments as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
		Assets		Liabilities		Assets		Liabilities
Foreign currency related:
Over the counter:
Currency forwards	W	5,731,971		3,887,398		1,558,662		1,402,185
Currency swaps		2,299,084		3,823,249		1,431,614		1,206,156
Currency options		24,230		25,700		13,128		13,065
		8,055,285		7,736,347		3,003,404		2,621,406
Exchange traded:
Currency futures		1,527		828		30		1,102
		8,056,812		7,737,175		3,003,434		2,622,508
Interest rates related:
Over the counter:
Interest rate forwards and swaps		734,284		859,402		683,814		902,989
Interest rate options		1,157		28,907		4,011		17,038
		735,441		888,309		687,825		920,027
Exchange traded:
Interest rate futures		2,929		675		2,253		11,757
		738,370		888,984		690,078		931,784
Credit related:
Over the counter:
Credit swaps		507,677		9,764		473,582		10,366
Equity related:
Over the counter:
Equity swap and forwards		96,841		137,399		166,010		350,768
Equity options		95,173		112,088		7,137		165,834
		192,014		249,487		173,147		516,602
Exchange traded:
Equity futures		1,228		13,302		66,356		16,346
Equity options		66,177		4,274		47,167		16,735
		67,405		17,576		113,523		33,081
		259,419		267,063		286,670		549,683
Commodity related:
Over the counter:
Commodity swaps and forwards		914		129,833		3,314		84,957
Exchange traded:
Commodity futures and options		13,704		3,642		2,122		638
		14,618		133,475		5,436		85,595
Hedge:
Currency forwards		12,100		213,015		21,580		34,492
Currency swaps		539,015		181,413		111,024		99,093
Interest rate forwards and swaps		151,246		623,702		119,617		704,895
Equity options		-		3,941		-		-
		702,361		1,022,071		252,221		838,480
	W	10,279,257		10,058,532		4,711,421		5,038,416

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(c) Gain or loss on valuation of derivatives for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Foreign currency related:
Over the counter:
Currency forwards	W	1,734,704		36,890
Currency swaps		(1,739,525)		135,712
Currency options		4,392		1,355
		(429)		173,957
Exchange traded:
Currency futures		804		(955)
		375		173,002
Interest rates related:
Over the counter:
Interest rate forwards and swaps		115,234		181,987
Interest rate options		(2,413)		(2,886)
		112,821		179,101
Exchange traded:
Interest rate futures and others		2,253		(9,511)
		115,074		169,590
Credit related:
Over the counter:
Credit swaps		44,223		53,042
Equity related:
Over the counter:
Equity swap and forwards		(61,607)		(19,934)
Equity options		28,708		(159,324)
		(32,899)		(179,258)
Exchange traded:
Equity futures		(12,093)		50,009
Equity options		1,085		(13,929)
		(11,008)		36,080
		(43,907)		(143,178)
Commodity related:
Over the counter:
Commodity swaps and forwards		(43,643)		37,027
Commodity options		-		1,516
		(43,643)		38,543
Exchange traded:
Commodity futures		10,062		1,484
		(33,581)		40,027
Hedge		242,379		327,016
	W	324,563		619,499

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(d) Gains and losses related to hedge

i) Gains and losses on fair value hedged items and hedging instruments attributable to the hedged ineffectiveness for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Gains and losses on<br><br>fair value hedges<br><br>(hedged items)		Gains and losses on<br><br>fair value hedges<br><br>(hedging instruments)		Hedge ineffectiveness recognized in profit<br><br>or loss (*2)
Fair value hedges:
Interest rate risk (*1)	W	(45,264)		42,787		(2,477)
Foreign exchange risk (*1)		44,094		(46,382)		(2,288)
Other price risk (*1)		(1,548)		1,109		(439)
	W	(2,718)		(2,486)		(5,204)
		December 31, 2023
---	---	---	---	---	---	---
		Gains and losses on<br><br>fair value hedges<br><br>(hedged items)		Gains and losses on<br><br>fair value hedges<br><br>(hedging instruments)		Hedge ineffectiveness recognized in profit<br><br>or loss (*2)
Fair value hedges:
Interest rate risk (*1)	W	(271,425)		282,835		11,410
Foreign exchange risk (*1)		4,102		(5,264)		(1,162)
	W	(267,323)		277,571		10,248

(*1) The related account categories are presented as interest rate swap assets / liabilities and currency swap assets / liabilities.

(*2) The hedge ineffectiveness is the difference between gains and losses on hedged items and hedging instruments.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(d) Gains and losses related to hedge (continued)

ii) Due to the ineffectiveness of hedge of cash flow risk and hedge of net investment in foreign operations during the year, the amounts recognized in the profit or loss and other comprehensive income are as follows:

		December 31, 2024
		Gains (losses) on hedges recognized in other comprehensive income		Hedge ineffectiveness recognized in profit<br><br>or loss (*2)		From cash flow hedge<br>reserve to profit or loss<br>reclassified amount
Cash flow hedges:
Interest rate risk (*1)	W	89,293		(5,034)		(151)
Foreign exchange risk (*1)		2,548		(6,184)		210,424
Discontinuation of<br><br>cash flow hedges		(39,621)		-		47,957
Hedge of net investments:
Foreign exchange risk (*1)		(221,221)		(1,191)		-
	W	(169,001)		(12,409)		258,230
		December 31, 2023
---	---	---	---	---	---	---
		Gains (losses) on hedges recognized in other comprehensive income		Hedge ineffectiveness recognized in profit<br><br>or loss (*2)		From cash flow hedge<br>reserve to profit or loss<br>reclassified amount
Cash flow hedges:
Interest rate risk (*1)	W	99,268		(512)		(1,760)
Foreign exchange risk (*1)		(10,294)		(7,069)		(25,698)
Discontinuation of<br><br>cash flow hedges		(5,531)		-		14,659
Hedge of net investments:
Foreign exchange risk (*1)		(3,903)		3,673		-
	W	79,540		(3,908)		(12,799)

(*1) The related account categories are presented as interest rate swap assets / liabilities and currency swap assets / liabilities, currency forwards assets / liabilities and borrowings.

(*2) The hedge ineffectiveness is the difference between gains and losses on hedged items and hedging instruments.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(e) Effect of hedge accounting on the consolidated financial statements, statement of comprehensive income, statement of changes in equity

i) Hedging purpose and strategy

The Group transacts with derivative financial instruments to hedge its interest rate risk, currency risk and stock price fluctuation risk arising from the assets and liabilities of the Group. The Group applies the fair value hedge accounting for the changes in the market interest rates, foreign exchange rates and stock price of the Korean won structured notes, foreign currency generated financial debentures, Korean won structured deposits, foreign currency investment receivables and beneficiary securities in foreign currency; and cash flow hedge accounting for forward interest rate, interest rate swaps, forward currency and currency swaps to hedge cash flow risk due to interest rates and foreign exchange rates of the Korean won debt, foreign currency debt, foreign currency structured deposits, the Korean won bonds and foreign currency bonds, etc. In addition, in order to hedge the exchange rate risk of the net investment in overseas business, the Group applies the net investment hedge accounting for foreign operations using currency forward and non-derivative financial instruments.

ii) Nominal amounts and average hedge ratios for hedging instruments as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Less than<br><br>1 year		1~2<br><br>years		2~3<br><br>years		3~4<br><br>years		4~5<br><br>years		More than 5 years		Total
Interest risk:
Nominal values:	W	910,440		2,621,365		1,943,818		2,350,027		1,161,927		4,231,840		13,219,417
Average price condition (*1)		2.49%		1.75%		1.57%		1.54%		1.36%		0.38%		1.27%
Average hedge ratio:		100%		100%		100%		100%		100%		100%		100%
Exchange risk: (*2)
Nominal values:		4,319,632		2,421,806		3,072,483		2,870,442		1,059,147		447,703		14,191,213
Average hedge ratio:		100%		100%		100%		100%		100%		100%		100%
Other price risk: (*3)
Nominal values:		-		-		18,750		-		-		-		18,750
Average hedge ratio:		-		-		100%		-		-		-		100%

(*1) Interest rate swaps consist of 3M CD, USD SOFR, 3M Euribor, and 3M AUD Bond.

(*2) The average exchange rates of net investment hedge instruments are USD/KRW 1,280.52, JPY/KRW 9.25, EUR/KRW 1,402.37, GBP/KRW 1,561.57, AUD/KRW 892.94, CAD/KRW 991.06, CNY/KRW 189.50, SEK/KRW 127.54.

(*3) The equity option, which has an exercise price of W 324,027.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(e) Effect of hedge accounting on the consolidated financial statements, statement of comprehensive income, statement of changes in equity

ii) Nominal amounts and average hedge ratios for hedging instruments as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Less than<br><br>1 year		1~2<br><br>years		2~3<br><br>years		3~4<br><br>years		4~5<br><br>years		More than 5 years		Total
Interest risk:
Nominal values:	W	3,038,263		609,182		2,143,914		804,873		1,935,599		3,937,749		12,469,580
Average price condition (*1)		0.82%		3.02%		1.64%		1.65%		1.37%		0.74%		1.18%
Average hedge ratio:		100%		100%		100%		100%		100%		100%		100%
Exchange risk: (*2)
Nominal values:		1,871,327		1,335,798		2,139,371		974,113		1,687,341		49,109		8,057,059
Average hedge ratio:		100%		100%		100%		100%		100%		100%		100%

(*1) Interest rate swaps consist of 3M CD, USD SOFR, 3M Euribor, and 3M AUD Bond.

(*2) The average exchange rates of net investment hedge instruments are USD/KRW 1,235.14, JPY/KRW 9.46, EUR/KRW 1,358.46, GBP/KRW 1,547.81, AUD/KRW 865.53, CAD/KRW 921.27, CNY/KRW 177.98, SEK/KRW 126.18.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(e) Effect of hedge accounting on the consolidated financial statements, statement of comprehensive income, statement of changes in equity (continued)

iii) Effect of hedging derivatives on the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity.

			December 31, 2024
			Nominal amount		Carrying amount of assets (*)		Carrying amount of liability (*)		Changes in fair value in the period
Fair value hedges
Interest rate forward and swap		W	10,347,033		57,685		579,563		42,787
Currency forward			429,939		-		39,395		(46,382)
Equity options			18,750		-		3,941		1,109
Cash flow hedges
Interest rate swap			2,872,383		93,562		44,139		60,694
Currency swap			7,993,851		539,015		181,413		314,114
Currency forward			1,723,440		2,087		138,694		(104,727)
Hedge of net investments in foreign operations
Currency forward			2,191,770		10,013		34,926		(41,071)
Borrowings			1,852,212		-		1,848,316		(181,341)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(e) Effect of hedge accounting on the consolidated financial statements, statement of comprehensive income, statement of changes in equity (continued)

iii) Effect of derivatives on the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity (continued)

			December 31, 2023
			Nominal amount		Carrying amount of asset (*)		Carrying amount of liability (*)		Changes in fair value in the period
Fair value hedges
Interest rate forward and swap		W	10,112,789		65,787		614,219		246,594
Currency forward			308,117		2,949		791		(327)
Cash flow hedges
Interest rate swap			2,356,791		53,830		90,676		99,442
Currency swap			4,448,030		111,024		99,093		(21,649)
Currency forward			1,150,734		12,593		30,925		2,170
Hedge of net investments in foreign operations
Currency forward			683,382		6,038		2,776		4,537
Borrowings			1,466,795		-		1,462,329		(4,767)

(*) The related account categories are presented as interest rate swap assets / liabilities and currency forward assets / liabilities, equity option liabilities etc.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(e) Effect of hedge accounting on the consolidated financial statements, statement of comprehensive income, statement of changes in equity (continued)

iv) Effect of hedging items on the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity

		December 31, 2024
		Carrying amount of assets (*)		Carrying amount of liabilities (*)		Assets of Cumulative fair value hedge adjustment		Liabilities of Cumulative fair value hedge adjustment		Changes of fair value in the year		Cash flow hedge reserve		Foreign currency translation reserves
Fair value hedges
Interest rate risk
Borrowings and others	W	996,275		9,167,678		11,271		(540,967)		(45,264)		-		-
Foreign exchange risk
Securities in foreign currency		480,273		-		-		-		44,094		-		-
Other price risk
Loans		5,809		-		(1,548)		-		(1,548)		-		-
Cash flow hedges
Interest rate risk
Debentures in won and debentures in foreign currency debenturedebenture		357,441		749,708		-		-		(3,449)		25,943		-
Foreign exchange risk
Debentures in foreign currency and loans in foreign currency		2,971,800		5,045,127		-		-		773,828		(8,638)		-
Hedge of net investments in foreign operations
Foreign exchange risk
Net assets in foreign operation		-		-		-		-		221,221		-		184,291

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Derivatives (continued)

(e) Effect of hedge accounting on the consolidated financial statements, statement of comprehensive income, statement of changes in equity (continued)

iv) Effect of hedging items on the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity (continued)

		December 31, 2023
		Carrying amount of assets(*)		Carrying amount of liabilities (*)		Assets of Cumulative fair value hedge adjustment		Liabilities of Cumulative fair value hedge adjustment		Changes of fair value in the year		Cash flow hedge reserve		Foreign currency translation reserves
Fair value hedges
Interest rate risk
Borrowings and others	W	685,340		9,224,390		41,643		(579,315)		(240,965)		-		-
Foreign exchange risk
Securities in foreign currency		544,706		-		-		-		1,313		-		-
Cash flow hedges
Interest rate risk
Debentures in won and debentures in foreign currency debenturedebenture		641,750		1,029,542		-		-		(11,068)		26,648		-
Foreign exchange risk
Debentures in foreign currency and loans in foreign currency		2,490,098		2,342,230		-		-		69,784		(17,812)		-
Hedge of net investments in foreign operations
Foreign exchange risk
Net assets in foreign operation		-		-		-		-		3,903		-		(36,931)

(*) The related account categories are presented as interest rate swap assets / liabilities and currency forwards, etc.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

12. Securities at fair value through other comprehensive income and securities at amortized cost

(a) Details of securities at FVOCI and securities at amortized cost as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Securities at FVOCI:
Debt securities:
Government bonds	W	42,463,118		44,418,450
Financial institutions bonds		25,983,405		21,303,402
Corporate bonds and others		23,569,687		22,915,148
		92,016,210		88,637,000
Equity securities (*):
Stocks		1,594,019		1,527,182
Equity investments		4,367		2,153
Others		190,773		145,644
		1,789,159		1,674,979
		93,805,369		90,311,979
Securities at amortized cost:
Debt securities:
Government bonds		21,808,057		22,787,609
Financial institutions bonds		3,787,661		5,864,626
Corporate bonds and others		7,720,281		7,034,252
		33,315,999		35,686,487
	W	127,121,368		125,998,466

(*)The equity securities are designated as FVOCI since the Group exercised FVOCI option for these securities required to possess in accordance with certain regulations.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

12. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

(b) Changes in carrying amount of debt securities at fair value through other comprehensive income and securities at amortized cost for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Debt securities at fair value through other comprehensive income						Debt securities at amortized cost
		12-month expected<br><br>credit loss		Life time expected<br><br>credit loss		Total		12-month expected<br><br>credit loss		Life time expected<br><br>credit loss		Total
Beginning balance	W	88,545,051		91,949		88,637,000		35,690,387		7,523		35,697,910
Transfer (from) to 12-month expected credit loss		3,798		(3,798)		-		-		-		-
Transfer (from) to life time expected credit loss		-		-		-		-		-		-
Net increase and decrease (*)		3,406,603		(27,393)		3,379,210		(2,367,844)		(3,879)		(2,371,723)
Ending balance	W	91,955,452		60,758		92,016,210		33,322,543		3,644		33,326,187
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---
		Debt securities at fair value through other comprehensive income						Debt securities at amortized cost
		12-month expected<br><br>credit loss		Life time expected<br><br>credit loss		Total		12-month expected<br><br>credit loss		Life time expected<br><br>credit loss		Total
Beginning balance	W	83,729,377		67,198		83,796,575		33,371,599		10,515		33,382,114
Transfer (from) to 12-month expected credit loss		18,873		(18,873)		-		-		-		-
Transfer (from) to life time expected credit loss		(47,209)		47,209		-		-		-		-
Net increase and decrease (*)		4,844,010		(3,585)		4,840,425		2,318,788		(2,992)		2,315,796
Ending balance	W	88,545,051		91,949		88,637,000		35,690,387		7,523		35,697,910

(*) Included the effects from changes in purchase, disposal, repayment, valuation, changes in foreign exchange rate and amortization of fair value adjustments recognized through business combination accountings and the others.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

12. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

(c) Changes in allowance for credit loss of debt securities at fair value through other comprehensive income and securities at amortized cost for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Debt securities at fair value through other comprehensive income						Debt securities at amortized cost
		12 months expected credit loss		Life time expected credit loss		Total		12 months expected credit loss		Life time expected credit loss		Total
Beginning balance	W	41,568		909		42,477		11,283		140		11,423
Transfer (from)to 12-month expected credit loss		14		(14)		-		-		-		-
Transfer (from)to life time expected credit loss		-		-		-		-		-		-
Provision (Reversal)		(2,279)		(420)		(2,699)		(1,515)		(97)		(1,612)
Disposal and others (*)		(1,053)		(379)		(1,432)		369		8		377
Ending balance	W	38,250		96		38,346		10,137		51		10,188
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Debt securities at fair value through other comprehensive income						Debt securities at amortized cost
		12 months expected credit loss		Life time expected credit loss		Total		12 months expected credit loss		Life time expected credit loss		Total
Beginning balance	W	40,501		113		40,614		10,759		157		10,916
Transfer (from)to 12-month expected credit loss		14		(14)		-		-		-		-
Transfer (from)to life time expected credit loss		(111)		111		-		-		-		-
Provision (Reversal)		1,573		698		2,271		(113)		(23)		(136)
Disposal and others (*)		(409)		1		(408)		637		6		643
Ending balance	W	41,568		909		42,477		11,283		140		11,423

(*) Included the effects from changes in debt restructuring, investment conversion, foreign exchange rate and the others.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

12. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

(d) Gain or loss on disposal of securities at fair value through other comprehensive income and securities at amortized cost for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Gain on disposal of securities at FVOCI	W	197,708		50,793
Loss on disposal of securities at FVOCI		(137,448)		(180,368)
Gain on disposal of securities at amortized cost (*)		-		358
Loss on disposal of securities at amortized cost (*)		(23,155)		(107)
	W	37,105		(129,324)

(*) The issuers of those securities have exercised their early redemption options, and the disposal of securities measured at amortized cost aims to secure additional asset duration for asset-liability management in response to changes in interest rates.

(e) Income or loss on equity securities at fair value through other comprehensive income

i) The Group recognizes dividends, amounting to W 86,107 million and W 60,139 million, related to equity securities at fair value through other comprehensive income for the years ended December 31, 2024 and 2023, respectively.

ii) The details of disposal of equity securities designated at fair value through other comprehensive income for the years ended December 31, 2024 and 2023 are as follows:

		Fair value at the date of disposal				Cumulative net gain (loss) at the time of disposal
		December 31,<br><br>2024		December 31, 2023		December 31,<br><br>2024		December 31, 2023
Stocks	W	106,810		156,872		9,429		(4,152)
Contingent convertible bonds		3,023		-		5		-

(*) The reason for the disposal is the disposal of stocks acquired by investment conversion.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Loans at amortized cost, etc.

(a) Loans at amortized cost for configuration by customer as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Retail loans	W	166,140,123		155,103,825
Corporate loans (*)		251,011,516		224,916,377
Public and other loans		5,253,071		4,427,500
Loans between banks		1,946,442		3,049,239
Credit card receivables		28,894,371		28,090,168
		453,245,523		415,587,109
Discount		(29,923)		(23,063)
Deferred loan origination costs		645,569		505,986
		453,861,169		416,070,032
Less: Allowance for credit loss		(4,565,931)		(4,330,470)
	W	449,295,238		411,739,562

(*) Includes SOHO loans.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Loans at amortized cost, etc. (continued)

(b) Changes in carrying amount of loans at amortized cost, etc. as of December 31, 2024 and 2023 are as follows:

i) Loans at amortized cost

		December 31, 2024
		Retail						Corporate						Credit card						Others
		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		Total
Beginning balance	W	145,441,757		9,390,209		794,050		181,802,456		41,746,140		1,548,844		23,294,631		4,110,407		645,603		6,444,509		826,979		24,447		416,070,032
Transfer (from) to 12 months expected credit losses		3,147,209		(3,133,165)		(14,044)		8,633,328		(8,567,306)		(66,022)		59,878		(59,830)		(48)		30,878		(30,878)		-		-
Transfer (from) to lifetime expected credit losses		(7,176,298)		7,236,219		(59,921)		(14,466,401)		14,506,969		(40,568)		(50,080)		50,133		(53)		(189,201)		189,201		-		-
Transfer (from) to credit- impaired financial assets		(478,797)		(281,842)		760,639		(424,077)		(611,269)		1,035,346		(19,995)		(12,913)		32,908		(43)		(9,600)		9,643		-
Net increase and decrease (*1)		12,578,349		(843,971)		18,273		24,466,147		2,178,224		893,286		1,320,926		(481,264)		1,008,038		(303,276)		50,784		6,123		40,891,639
Charge off (*2)		-		-		(393,809)		-		-		(450,932)		-		-		(685,877)		-		-		(5,483)		(1,536,101)
Disposal		-		(2,706)		(200,812)		(33,148)		(190,000)		(761,001)		-		-		(357,581)		-		(410)		(18,743)		(1,564,401)
Ending balance	W	153,512,220		12,364,744		904,376		199,978,305		49,062,758		2,158,953		24,605,360		3,606,533		642,990		5,982,867		1,026,076		15,987		453,861,169

(*1) The amount is due to execution, collection, debt restructuring, investment conversion, exchange rate fluctuation, etc.

(*2) The amount of uncollected loans currently in recovery (principal and interest) is W 10,268,898 million, which is written off as of December 31, 2024.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Loans at amortized cost, etc. (continued)

(b) Changes in carrying amount of loans at amortized cost, etc. as of December 31, 2024 and 2023 are as follows(continued) :

i) Loans at amortized cost(continued)

		December 31, 2023
		Retail						Corporate						Credit card						Others
		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		Total
Beginning balance	W	146,741,436		8,491,997		600,340		183,229,940		32,054,591		970,719		23,586,633		4,333,611		493,480		10,367,271		665,676		14,091		411,549,785
Transfer (from) to 12 months expected credit losses		3,684,473		(3,671,574)		(12,899)		6,312,378		(6,310,771)		(1,607)		59,586		(59,510)		(76)		51,588		(51,588)		-		-
Transfer (from) to lifetime expected credit losses		(6,347,880)		6,382,499		(34,619)		(14,969,646)		14,984,213		(14,567)		(72,489)		72,551		(62)		(154,268)		154,268		-		-
Transfer (from) to credit- impaired financial assets		(462,894)		(266,533)		729,427		(511,906)		(476,684)		988,590		(19,349)		(10,202)		29,551		(476)		(6,139)		6,615		-
Net increase and decrease (*1)		1,826,622		(1,544,703)		148,463		7,797,722		1,502,116		449,944		(259,750)		(226,043)		928,319		(3,819,606)		65,262		8,018		6,876,364
Charge off (*2)		-		-		(489,511)		-		-		(352,324)		-		-		(805,454)		-		-		(2,127)		(1,649,416)
Disposal		-		(1,477)		(147,151)		(56,032)		(7,325)		(491,911)		-		-		(155)		-		(500)		(2,150)		(706,701)
Ending balance	W	145,441,757		9,390,209		794,050		181,802,456		41,746,140		1,548,844		23,294,631		4,110,407		645,603		6,444,509		826,979		24,447		416,070,032

(*1) The amount is due to execution, collection, debt restructuring, investment conversion, exchange rate fluctuation, etc.

(*2) The amount of uncollected loans currently in recovery (principal and interest) is W 9,964,573 million, which is written off as of December 31, 2023.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Loans at amortized cost, etc. (continued)

(b) Changes in carrying amount of loans at amortized cost, etc. as of December 31, 2024 and 2023 are as follows (continued):

ii) Due from banks at amortized cost and other financial assets

		December 31, 2024
			12 month expected<br><br>credit loss		Life time expected<br><br>credit loss		Impaired financial asset		Total
Beginning balance	W	59,409,121		245,916		167,788		59,822,825
Transfer (from) to 12 month expected credit losses		34,752		(34,626)		(126)		-
Transfer (from) to lifetime expected credit losses		(62,021)		62,091		(70)		-
Transfer (from) to credit- impaired financial assets		(8,949)		(21,143)		30,092		-
Net increase and decrease (*)		2,116,517		(10,556)		205,387		2,311,348
Charge off		-		-		(61,157)		(61,157)
Disposal		(475)		(6,430)		(124,756)		(131,661)
Ending balance	W	61,488,945		235,252		217,158		61,941,355
		December 31, 2023
---	---	---	---	---	---	---	---	---	---
			12 month expected<br><br>credit loss		Life time expected<br><br>credit loss		Impaired financial asset		Total
Beginning balance	W	49,701,131		165,723		87,512		49,954,366
Transfer (from) to 12 month expected credit losses		23,476		(23,305)		(171)		-
Transfer (from) to lifetime expected credit losses		(96,073)		96,096		(23)		-
Transfer (from) to credit- impaired financial assets		(9,110)		(40,985)		50,095		-
Net increase and decrease (*)		9,789,697		48,392		60,859		9,898,948
Charge off		-		-		(28,665)		(28,665)
Disposal		-		(5)		(1,819)		(1,824)
Ending balance	W	59,409,121		245,916		167,788		59,822,825

(*) The amount is due to execution, collection, debt restructuring, investment conversion, exchange rate fluctuation, etc.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Loans at amortized cost, etc. (continued)

(c) Changes in allowance for credit loss of loans at amortized cost and other financial assets as of December 31, 2024 and 2023 are as follows:

i) Loans at amortized cost

		December 31, 2024
		Retail						Corporate						Credit card						Others
		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		Total
Beginning balance	W	243,266		207,362		283,191		789,050		994,345		628,487		230,286		460,848		462,554		13,372		10,371		7,338		4,330,470
Transfer (from) to 12 months expected credit losses		40,874		(39,258)		(1,616)		140,511		(137,260)		(3,251)		25,333		(25,273)		(60)		85		(85)		-		-
Transfer (from) to lifetime expected credit losses		(24,178)		50,652		(26,474)		(79,310)		86,108		(6,798)		(19,981)		20,177		(196)		(1,310)		1,310		-		-
Transfer (from) to credit- impaired financial assets		(15,753)		(21,007)		36,760		(5,838)		(84,444)		90,282		(2,696)		(4,919)		7,615		-		(60)		60		-
Provision (reversal)		21,772		25,003		392,200		(123,593)		23,937		760,786		30,805		(32,602)		751,753		412		6,016		5,524		1,862,013
Charge off		-		-		(393,809)		-		-		(450,932)		-		-		(685,877)		-		-		(5,483)		(1,536,101)
Amortization of discount		-		-		(13,501)		-		-		(27,710)		-		-		6,180		-		-		-		(35,031)
Disposal		-		(261)		(53,538)		(2,946)		(19,347)		(90,141)		-		-		(257,543)		-		(1)		(1,061)		(424,838)
Collection		-		-		112,627		-		-		75,082		-		-		172,842		-		-		487		361,038
Others (*)		2,552		526		4,251		7,231		9,565		(16,997)		167		24		848		189		24		-		8,380
Ending balance	W	268,533		223,017		340,091		725,105		872,904		958,808		263,914		418,255		458,116		12,748		17,575		6,865		4,565,931

(*) Other changes are due to debt restructuring, investment conversion and changes in foreign exchange rate, etc.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Loans at amortized cost, etc. (continued)

(c) Changes in allowance for credit loss of loans at amortized cost and other financial assets as of December 31, 2024 and 2023 are as follows (continued):

i) Loans at amortized cost (continued)

		December 31, 2023
		Retail						Corporate						Credit card						Others
		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		12 months expected credit loss		Life time expected credit loss		Impaired financial asset		Total
Beginning balance	W	264,836		165,090		264,530		560,207		840,557		487,239		211,112		471,473		355,975		13,882		9,218		6,694		3,650,813
Transfer (from) to 12 months expected credit losses		25,984		(24,982)		(1,002)		92,347		(92,254)		(93)		23,474		(23,422)		(52)		213		(213)		-		-
Transfer (from) to lifetime expected credit losses		(28,336)		44,543		(16,207)		(69,404)		74,346		(4,942)		(18,412)		18,557		(145)		(305)		305		-		-
Transfer (from) to credit- impaired financial assets		(13,823)		(32,129)		45,952		(7,456)		(47,157)		54,613		(2,023)		(3,402)		5,425		(7)		(25)		32		-
Provision (reversal)		(4,029)		56,164		429,789		225,719		223,266		456,854		15,525		(3,720)		711,724		(348)		1,095		2,403		2,114,442
Charge off		-		-		(489,511)		-		-		(352,324)		-		-		(805,454)		-		-		(2,127)		(1,649,416)
Amortization of discount		-		-		(12,327)		-		-		(25,929)		-		-		7,344		-		-		-		(30,912)
Disposal		-		(177)		(40,297)		(36)		(240)		(56,118)		-		-		(155)		-		(9)		(115)		(97,147)
Collection		-		-		101,653		-		-		69,674		-		-		186,715		-		-		451		358,493
Others (*)		(1,366)		(1,147)		611		(12,327)		(4,173)		(487)		610		1,362		1,177		(63)		-		-		(15,803)
Ending balance	W	243,266		207,362		283,191		789,050		994,345		628,487		230,286		460,848		462,554		13,372		10,371		7,338		4,330,470

(*) Other changes are due to debt restructuring, investment conversion and changes in foreign exchange rate, etc.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Loans at amortized cost, etc. (continued)

(c) Changes in allowance for credit loss of loans at amortized cost and other financial assets as of December 31, 2024 and 2023 are as follows (continued):

ii) Due from banks at amortized cost and other financial assets

		December 31, 2024
			12 months expected<br><br>credit loss		Life time expected<br><br>credit loss		Impaired financial asset		Total
Beginning balance	W	332,951		15,650		137,968		486,569
Transfer (from) to 12 months expected credit losses		1,262		(1,229)		(33)		-
Transfer (from) to lifetime expected credit losses		(5,414)		5,441		(27)		-
Transfer (from) to credit- impaired financial assets		(178)		(5,715)		5,893		-
Provision		175		629		112,858		113,662
Charge off		-		-		(61,157)		(61,157)
Disposal		(1)		(38)		(15,028)		(15,067)
Collection		-		-		3,292		3,292
Others (*)		65,689		14		2,644		68,347
Ending balance	W	394,484		14,752		186,410		595,646

(*) Other changes are due to debt restructuring, investment conversion and changes in foreign exchange rate, etc

		December 31, 2023
			12 months expected<br><br>credit loss		Life time expected<br><br>credit loss		Impaired financial asset		Total
Beginning balance	W	296,346		10,440		74,621		381,407
Transfer (from) to 12 months expected credit losses		364		(299)		(65)		-
Transfer (from) to lifetime expected credit losses		(40,026)		40,041		(15)		-
Transfer (from) to credit- impaired financial assets		(228)		(37,000)		37,228		-
Provision		44,035		2,326		44,409		90,770
Charge off		-		-		(28,665)		(28,665)
Disposal		-		-		(178)		(178)
Collection		-		-		2,198		2,198
Others (*)		32,460		142		8,435		41,037
Ending balance	W	332,951		15,650		137,968		486,569

(*) Other changes are due to debt restructuring, investment conversion and changes in foreign exchange rate, etc.

(d) Changes in deferred loan origination costs for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	505,986		525,205
Loan origination		344,963		231,007
Amortization, etc.		(205,380)		(250,226)
Ending balance	W	645,569		505,986

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

14. Property and equipment

(a) Details of property and equipment as of December 31, 2024 and 2023 are as follows:

				December 31, 2024
		Acquisition cost				Accumulated<br><br>depreciation		Accumulated<br><br>Impairment		Carrying amount
Land	W	2,028,761				-		-		2,028,761
Buildings		1,314,682				(565,350)		(10,706)		738,626
Other assets		2,482,527				(1,967,572)		-		514,955
Right-of-use assets		1,717,665				(842,415)		-		875,250
	W	7,543,635				(3,375,337)		(10,706)		4,157,592
				December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
		Acquisition cost				Accumulated<br><br>depreciation		Accumulated<br><br>Impairment		Carrying amount
Land	W	2,043,119				-		-		2,043,119
Buildings		1,307,424				(508,171)		(9,002)		790,251
Other assets		2,410,101				(1,877,642)		-		532,459
Right-of-use assets		1,378,027				(771,552)		-		606,475
	W	7,138,671				(3,157,365)		(9,002)		3,972,304

(b) Changes in property and equipment for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Land		Buildings		Others		Right-of-use assets		Total
Beginning balance	W	2,043,119		790,251		532,459		606,475		3,972,304
Acquisition (*1)		40,480		23,661		199,988		624,103		888,232
Disposal (*1)		(500)		(854)		(10,774)		(45,452)		(57,580)
Depreciation (*2)		-		(57,341)		(209,156)		(329,946)		(596,443)
Asset impairment		-		(1,703)		-		53		(1,650)
Amounts transferred from(to) investment property		(61,432)		(16,320)		-		-		(77,752)
Amounts transferred from(to) intangible assets		-		-		2,302		-		2,302
Amounts transferred from(to) non-current assets held for sale (*3)		528		511		-		-		1,039
Amounts transferred from(to) operating lease assets		-		-		80		-		80
Effects of foreign currency adjustments		6,566		421		56		20,017		27,060
Ending balance	W	2,028,761		738,626		514,955		875,250		4,157,592

(*1) During 2024, W 26,185 million transferred from assets-under-construction is included.

(*2) Included in general administrative expense, other operating income(loss) and insurance service expense of the consolidated statements of comprehensive income.

(*3) Includes buildings, land, etc.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

14. Property and equipment (continued)

(b) Changes in property and equipment for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Land		Buildings		Others		Right-of-use assets		Total
Beginning balance	W	2,101,176		702,257		588,454		619,210		4,011,097
Acquisition (*1)		1,480		105,761		146,405		370,724		624,370
Disposal (*1)		(741)		(1,501)		(3,546)		(71,052)		(76,840)
Depreciation (*2)		-		(54,486)		(202,124)		(313,755)		(570,365)
Asset impairment		-		(1,409)		-		-		(1,409)
Amounts transferred from(to) investment property		(57,226)		40,548		-		-		(16,678)
Amounts transferred from(to) intangible assets		-		-		1,550		-		1,550
Amounts transferred from(to) non-current assets held for sale (*3)		(1,688)		(754)		-		-		(2,442)
Amounts transferred from(to) operating lease assets		-		-		221		-		221
Effects of foreign currency adjustments		118		(165)		1,499		1,348		2,800
Ending balance	W	2,043,119		790,251		532,459		606,475		3,972,304

(*1) During 2023, W 82,179 million transferred from assets-under-construction is included.

(*2) Included in general administrative expense, other operating income(loss) and insurance service expense of the consolidated statements of comprehensive income.

(*3) Includes buildings, land, etc.

(c) Insured assets and liability insurance as of December 31, 2024 are as follows:

		December 31, 2024
Type of insurance		Insured assets and objects		Amount covered		Insurance company
Comprehensive insurance for financial institutions		Cash (including ATM)		31,500		Samsung Fire & Marine<br><br>Insurance Co., Ltd., etc.
Comprehensive Property insurance		Property Total Risk, Machine Risk, General Liability Collateral		1,380,897		Samsung Fire & Marine<br><br>Insurance Co., Ltd., etc.
Fire insurance		Business property and real estate		12,869		Meritz Fire & Marine<br><br>Insurance Co., Ltd., etc.
Compensation liability insurance for officers		Officer liability of executives		50,000		Meritz Fire & Marine<br><br>Insurance Co., Ltd., etc.
Burglary insurance		Cash and securities		60,000		Samsung Fire & Marine<br><br>Insurance Co., Ltd., etc.
Others		Personal information liability insurance, etc.		56,639		Samsung Fire & Marine<br><br>Insurance Co., Ltd., etc.

(*) Aside from the insurance mentioned above, the Group has entered into car insurance, medical insurance, property insurance, and employee accident insurance.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

15. Intangible assets

(a) Details of intangible assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Goodwill	W	4,665,417		4,677,204
Software		235,229		259,233
Development cost		677,572		464,638
Others		541,915		816,871
	W	6,120,133		6,217,946

(b) Changes in intangible assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Goodwill		Software		Development<br><br>cost		Others		Total
Beginning balance	W	4,677,204		259,233		464,638		816,871		6,217,946
Acquisition		-		67,077		196,292		110,230		373,599
Disposal and write-off		-		(2,822)		(418)		(8,383)		(11,623)
Amounts transferred from(to) property and equipment		-		-		(2,302)		-		(2,302)
Amounts transferred within intangible assets		-		905		165,761		(166,666)		-
Impairment (*1)		(24,513)		-		(715)		(128)		(25,356)
Amortization (*2)		-		(96,335)		(179,302)		(174,341)		(449,978)
Effects of changes in foreign exchange rate		12,726		7,171		33,618		(35,668)		17,847
Ending balance	W	4,665,417		235,229		677,572		541,915		6,120,133

(*1) Goodwill impairment incurred from the cash-generating unit of security sector at SHINHAN SECURITIES VIETNAM CO.,LTD and other sector at Shinhan Asset Trust. As a result of the impairment test for goodwill of SHINHAN SECURITIES VIETNAM CO.,LTD. , the Group recognized an impairment loss amounting to W 1,298 million for the carrying amount exceeding the recoverable amount of the CGU. This is due to the decrease in recoverable amounts resulting from the reduced trading volume and trading value on the Vietnamese stock market, caused by the global high interest rate environment and domestic and external economic recessions. In addition, as a result of the impairment test for goodwill of Shinhan Asset Trust, the Group recognized an impairment loss amounting to W 23,215 million for the carrying amount exceeding the recoverable amount of the CGU. This is due to the decrease in recoverable amounts resulting from the deterioration of the business environment caused by the slowdown in the real estate and construction sectors. The amount of impairment loss recognized is included in the non-operating expenses, of the consolidated statement of comprehensive income.

(*2) Included in general administrative expense, other operating income (expense), and insurance service expense of the consolidated statements of comprehensive income.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

15. Intangible assets(continued)

(b) Changes in intangible assets for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Goodwill		Software		Development<br><br>cost		Others		Total
Beginning balance	W	4,683,902		263,341		454,284		406,309		5,807,836
Acquisition		-		90,051		133,709		605,225		828,985
Disposal and write-off		-		(3,901)		(3,560)		(6,793)		(14,254)
Amounts transferred from(to) property and equipment		-		-		(1,550)		-		(1,550)
Impairment (*1)		(5,402)		(4,006)		(1,001)		(273)		(10,682)
Amortization (*2)		-		(91,894)		(131,043)		(168,583)		(391,520)
Effects of changes in foreign exchange rate		(1,296)		5,642		13,799		(19,014)		(869)
Ending balance	W	4,677,204		259,233		464,638		816,871		6,217,946

(*1) Goodwill impairment incurred from the cash-generating unit of security sector at PT Shinhan Sekuritas Indonesia and life insurance sector at Shinhan Financial Plus Co., Ltd. As a result of the impairment test for goodwill of PT Shinhan Sekuritas Indonesia, the Group recognized an impairment loss amounting to W 1,842 million for the carrying amount exceeding the recoverable amount of the CGU. This is due to the decrease in recoverable amounts (W 2,934 million decrease comparing to the previous year) due to continuing high price index and domestic foreign economic turndown mainly from the prolongation of the Ukraine crisis, global high interest rates, etc. In addition, as a result of the impairment test for goodwill of Shinhan Financial Plus Co., Ltd., the Group recognized an impairment loss amounting to W 3,560 million for the carrying amount exceeding the recoverable amount of the CGU. This is due to the decrease in recoverable amounts (W 9,750 million decrease comparing to the previous year) due to the underperformance from the cash-generating unit and the reflection of the future outlook. The amount of impairment loss recognized is included in the non-operating expenses, of the consolidated statement of comprehensive income.

(*2) Included in general administrative expense, other operating income (expense), and insurance service expense of the consolidated statements of comprehensive income.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

15. Intangible asset (continued)

(c) Goodwill

i) Goodwill allocated in the Group’s CGUs as of December 31, 2024 and 2023 is as follows:

		December 31, 2024		December 31, 2023
Banking	W	771,156		768,468
Credit card		2,901,502		2,891,498
Securities		-		1,265
Life insurance		850,238		850,238
Others		142,521		165,735
	W	4,665,417		4,677,204

ii) Goodwill impairment test

The recoverable amounts of each CGU are evaluated based on their respective value in use.

ii-1) Explanation on evaluation method

The discounted cash flow method (DCF) is applied when evaluating the recoverable amounts based on value in use, considering the characteristics of each unit or group of CGU. However, the CGU of life insurance applied an actuarial enterprise valuation methodology based on stochastically expected cash flows in consideration of the characteristics of the insurance business.

ii-2) Projection period

When evaluating the value in use, 5.5 years of cash flow estimates are used in projection and the value thereafter is reflected as terminal value. However, 99 years of cash flow estimates for Shinhan Life Insurance Co., Ltd. is applied and the present value of the future cash flows thereafter is not applied as it is not significant.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

15. Intangible assets, net (continued)

ii-3) Discount rates and terminal growth rates

The required rates of return expected by shareholders are applied to the discount rates. It is calculated in consideration of which comprises a risk-free interest rate, a market risk premium and systemic risk (beta factor). In addition, terminal growth rate is estimated based on inflation rate. However, for the life insurance CGU, since its cost of risk is reflected at future cash flows, the current discount rates based on the interest rate term structure of risk-free government bonds that reflects only the time value of money was applied.

Discount rates before tax and terminal growth rates applied to each CGU are as follows:

		Discount rate before tax(%)		Terminal growth rate(%)
Banking		9.5 ~ 15.2		0.0 ~ 2.0
Credit card		11.3 ~ 16.1		1.0 ~ 2.0
Securities		17.2		2.0
Others		10.4 ~ 12.6		1.0

In case of the life insurance CGU, a term structure discount rate of 3.92% ~4.55% was applied for each future period corresponding to future cash flows for 99 years.

ii-4) Key assumptions

Key assumptions used in the discounted cash flow calculations of CGUs (other than life insurance components) are as follows:

	2024		2025		2026		2027		2028		2029
CPI growth (%)	2.4		2.1		1.5		1.8		1.6		1.6
Private consumption growth (%)	1.1		2.1		2.5		2.6		2.5		2.5
Real GDP growth (%)	2.6		2.7		2.2		2.5		2.7		2.7

Key assumptions used in the discounted cash flow calculations of life insurance (Shinhan Life Insurance) components are as follows:

		Key assumptions
Consumer price index growth rate (Bank of Korea) (%)		2.0
Risk-based confidence level (%)		99.5

ii-5) Total recoverable amount and total carrying amount of CGUs to which goodwill has been allocated, are as follows:

		Amount
Total recoverable amount	W	60,171,578
Total carrying amount (*)		53,827,788
	W	6,343,790

(*) It is the carrying amount after reflecting the impairment loss in the securities.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates

Investees		Country		Reporting<br><br>date		Ownership (%)
									December 31, 2024		December 31, 2023
BNP Paribas Cardif Life Insurance (*1), (*7)		Korea		September 30		14.99		14.99
Shinhan-Neoplux Energy Newbiz Fund		Korea		December 31		31.66		31.66
Shinhan-Albatross tech investment Fund (*1)		Korea		November 30		50.00		50.00
KCGI-SingA330-A Private Special Asset Investment Trust(*5)		Korea		-		-		23.89
VOGO Debt Strategy Qualified IV Private		Korea		December 31		20.00		20.00
Shinhan-Midas Donga Secondary Fund		Korea		December 31		50.00		50.00
ShinHan – Soo Young Entrepreneur Investment Fund No.1		Korea		December 31		24.00		24.00
Shinhan Praxis K-Growth Global Private Equity Fund (*7)		Korea		December 31		14.15		14.15
Kiwoom Milestone Professional Private Real Estate Trust No.19		Korea		-		50.00		50.00
Shinhan Global Healthcare Fund No.1 (*7)		Korea		-		3.13		4.41
KB NA Hickory Private Special Asset Fund		Korea		December 31		37.50		37.50
Koramco Europe Core Private Placement Real Estate Fund No.2-2		Korea		December 31		44.02		44.02
KDBC-Midas Dong-A Global contents Fund		Korea		December 31		23.26		23.26
Shinhan-Nvestor Liquidity Solution Fund		Korea		December 31		24.92		24.92
Shinhan AIM FoF Fund 1-A		Korea		December 31		25.00		25.00
IGIS Global Credit Fund 150-1		Korea		December 31		25.00		25.00
Korea Omega Project Fund III (*5)		Korea		-		-		23.53
Genesis North America Power Company No.1 PEF		Korea		December 31		43.84		43.84
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		Korea		December 31		23.33		23.33
KOREA FINANCE SECURITY CO., LTD (*1), (*7)		Korea		September 30		14.91		14.91
MIEL CO.,LTD.(*2)		Korea		-		28.77		28.77
AIP Transportation Specialized Privately Placed Fund Trust #1		Korea		December 31		35.73		35.73
Kiwoom-Shinhan Innovation Fund I		Korea		December 31		50.00		50.00
Midas Asset Global CRE Debt Private Fund No.6<br><br>(*5)		Korea		-		-		40.10
Samchully Midstream Private Placement Special Asset Fund 5-4		Korea		December 31		41.67		42.92
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3(*5)		Korea		-		-		20.00
MK Ventures-K Clavis Growth Capital Venture Fund 1		Korea		-		26.67		26.67
NH-Amundi Global Infrastructure Trust 14 (*5)		Korea		-		-		30.00
Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37 (*6)		Korea		December 31		60.00		60.00
Milestone Private Real Estate Fund 3		Korea		December 31		32.06		32.06
Nomura-Rifa Private Real Estate Investment Trust 31		Korea		December 31		31.31		31.31
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2		Korea		December 31		21.27		21.27
FuturePlay-Shinhan TechInnovation Fund 1		Korea		December 31		50.00		50.00
Stonebridge Corporate 1st Fund		Korea		December 31		44.12		44.12
Vogo Realty Partners Private Real Estate Fund V		Korea		December 31		21.64		21.64
Korea Credit Bureau (*1), (*7)		Korea		September 30		9.00		9.00
Goduck Gangil1 PFV Co., Ltd. (*1), (*7)		Korea		September 30		1.04		1.04
SBC PFV Co., Ltd. (*1), (*7), (*8)		Korea		September 30		25.00		25.00
NH-amundi global infra private fund 16		Korea		December 31		50.00		50.00
SH BNCT Professional Investment Type Private Special Asset Investment Trust (*9)		Korea		December 31		72.50		72.50
Deutsche Global Professional Investment Type Private Real Estate Investment Trust No. 24 (*5)		Korea		-		-		52.28
Sparklabs-Shinhan Opportunity Fund 1		Korea		December 31		49.50		49.50
IGIS Real-estate Private Investment Trust No.33		Korea		December 31		40.86		40.86
Goduck Gangil10 PFV Co., Ltd. (*1), (*7)		Korea		September 30		19.90		19.90
Fidelis Global Private Real Estate Trust No.2 (*6)		Korea		December 31		79.63		79.63

(a) Investments in associates as of December 31, 2024 and 2023 are as follows:

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(a) Investments in associates as of December 31, 2024 and 2023 are as follows (continued):

	Investees		Country		Reporting<br><br>date		Ownership (%)
										December 31, 2024		December 31, 2023
	AIP EURO PRIVATE REAL ESTATE TRUST No. 12		Korea		December 31		28.70		28.70
	Shinhan Healthcare Fund 2 (*7)		Korea		-		13.68		13.68
	Shinhan AIM Real Estate Fund No.2		Korea		December 31		30.00		30.00
	Shinhan AIM Real Estate Fund No.1		Korea		December 31		21.01		21.01
	SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust		Korea		December 31		22.02		22.02
	SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust		Korea		December 31		29.19		29.19
	SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2 (*6)		Korea		December 31		71.43		71.43
	Korea Omega-Shinhan Project Fund I		Korea		December 31		50.00		50.00
	Samsung SRA Real Estate Professional Private 45		Korea		December 31		25.00		25.00
	IBK Global New Renewable Energy Special Asset Professional Private2		Korea		December 31		28.98		28.98
	VS Cornerstone Fund		Korea		December 31		41.18		41.18
	NH-Amundi US Infrastructure Private Fund2		Korea		December 31		25.91		25.91
	Kakao-Shinhan 1st TNYT Fund		Korea		December 31		48.62		48.62
	Pacific Private Placement Real Estate Fund No.40		Korea		December 31		24.73		24.73
	Mastern Private Real Estate Loan Fund No.2		Korea		December 31		33.57		33.57
	LB Scotland Amazon Fulfillment Center Fund 29 (*6)		Korea		December 31		65.00		70.14
	JR AMC Hungary Budapest Office Fund 16		Korea		December 31		32.57		32.57
	EDNCENTRAL Co.,Ltd. (*7)		Korea		-		13.47		13.47
	Gyeonggi-Neoplux Superman Fund		Korea		December 31		21.76		21.76
	NewWave 6th Fund		Korea		December 31		30.00		30.00
Neoplux No.3 Private Equity Fund (*3)			Korea		December 31		10.00		10.00
PCC Amberstone Private Equity Fund I			Korea		December 31		21.67		21.67
KIAMCO POWERLOAN TRUST 4TH			Korea		December 31		47.37		47.37
Mastern Opportunity Seeking Real Estate Fund II			Korea		December 31		22.22		22.22
Neoplux Market-Frontier Secondary Fund (*3)			Korea		December 31		19.74		19.74
Synergy Green New Deal 1st New Technology Business Investment Fund			Korea		December 31		28.17		28.17
KIAMCO Vietnam Solar Special Asset Private Investment Trust			Korea		December 31		50.00		50.00
SHINHAN-NEO Core Industrial Technology Fund			Korea		December 31		49.75		49.75
SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2			Korea		December 31		30.00		30.00
Eum Private Equity Fund No.7			Korea		December 31		21.00		21.00
Kiwoom Hero No.4 Private Equity Fund			Korea		December 31		21.05		21.05
Vogo Canister Professional Trust Private Fund I (*5)			Korea		-		-		36.74
AJ-KOSNET Semicon One Venture Fund			Korea		December 31		22.22		22.22
Timefolio The Venture-V second			Korea		December 31		20.73		20.73
Shinhan Smilegate Global PEF I (*7)			Korea		December 31		14.21		14.21
Genesis Eco No.1 PEF			Korea		December 31		29.00		29.00
SHINHAN-NEO Market-Frontier 2nd Fund			Korea		December 31		42.70		42.70
NH-Synergy Core Industrial New Technology Fund (*5)			Korea		-		-		36.93
J& Moorim Jade Investment Fund			Korea		December 31		24.89		24.89
Ulmus SHC innovation investment fund			Korea		December 31		24.04		24.04
T Core Industrial Technology 1st Venture PEF			Korea		December 31		31.47		31.47
Fine Value POST IPO No.5 Private Equity Fund (*5)			Korea		-		-		40.00
TI First Property Private Investment Trust 1			Korea		December 31		40.00		40.00
IBKC Global Contents Investment Fund (*5)			Korea		-		-		24.39
Kiwoom-Shinhan Innovation Fund 2			Korea		December 31		42.86		42.86
ETRI Holdings-Shinhan 1st Unicorn Fund			Korea		December 31		50.00		50.00
SJ ESG Innovative Growth Fund			Korea		December 31		28.57		28.57
AVES 1st Corporate Recovery Private Equity Fund (*4)			Korea		December 31		76.19		76.19
Reverent-Shinhan Vista Fund (*3)			Korea		December 31		13.41		13.41

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(a) Investments in associates as of December 31, 2024 and 2023 are as follows (continued):

Investees		Country		Reporting<br><br>date		Ownership (%)
									December 31, 2024		December 31, 2023
JS Shinhan Private Equity Fund (*3)		Korea		December 31		3.85		3.85
Daishin Newgen New Technology Investment Fund 1st (*5)		Korea		-		-		50.60
META ESG Private Equity Fund I		Korea		December 31		27.40		27.40
Shinhan VC tomorrow venture fund 1		Korea		December 31		39.62		39.62
H-IOTA Fund		Korea		December 31		24.81		24.81
Stonebridge-Shinhan Unicorn Secondary Fund		Korea		December 31		26.01		26.01
Tres-Yujin Trust		Korea		December 31		50.00		50.00
Shinhan-Time mezzanine blind Fund		Korea		December 31		50.00		50.00
Capstone REITs No.26		Korea		December 31		50.00		50.00
JB Incheon-Bucheon REITS No.54		Korea		December 31		39.31		39.31
Hankook Smart Real Asset Investment Trust No.3		Korea		December 31		33.33		33.33
JB Hwaseong-Hadong REITs No.53		Korea		December 31		31.03		31.03
KB Oaktree Trust No.3		Korea		December 31		33.33		33.33
Daehan No.36 Office Asset Management Company (*5)		Korea		-		-		48.05
Rhinos Premier Mezzanine Private Investment Fund No.1 (*5)		Korea		-		-		27.93
SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2		Korea		December 31		29.73		29.73
Shinhan JigaeNamsan Road Private Special Asset Investment Trust		Korea		December 31		24.85		24.85
SKS-Yozma Fund No.1 (*5)		Korea		-		-		29.85
KB Distribution Private Real Estate 3-1		Korea		December 31		37.50		37.50
Pacific Private Investment Trust No.49-1 (*6)		Korea		December 31		79.28		79.28
KIWOOM Real estate private placement fund for normal investors No. 31 (*6)		Korea		December 31		60.00		60.00
RIFA Real estate private placement fund for normal investoes No. 51		Korea		December 31		40.00		40.00
Fivetree general private equity fund No.15 (*5)		Korea		-		-		49.98
Shinhan-Kunicorn first Fund		Korea		December 31		38.31		38.31
Shinhan-Quantum Startup Fund		Korea		December 31		49.18		49.18
Shinhan Simone Fund Ⅰ		Korea		December 31		38.46		38.46
Korea Investment develop seed Trust No.1		Korea		December 31		40.00		40.00
Tiger Green alpha Trust No.29 (*4)		Korea		December 31		95.24		95.24
STIC ALT Global II Private Equity Fund		Korea		December 31		21.74		21.74
NH-Brain EV Fund (*5)		Korea		-		-		25.00
DDI LVC Master Real Estate Investment Trust Co., Ltd. (*1), (*7)		Korea		September 30		15.00		15.00
Leverent-Frontier 4th Venture PEF		Korea		December 31		23.89		23.89
Find-Green New Deal 2nd Equity Fund		Korea		December 31		22.57		22.57
ShinhanFitrin 1st Technology Business Investment Association (*3)		Korea		December 31		16.17		16.17
Koramco Private Real Estate Fund 143		Korea		December 31		30.30		30.30
Korea Investment Top Mezzanine Private Real Esate Trust No.1		Korea		December 31		22.22		22.22
LB YoungNam Logistics Private Trust No.40		Korea		December 31		25.00		25.00
Shinhan-Cognitive Start-up Fund L.P.		Korea		December 31		32.77		32.77
Cornerstone J&M Fund I		Korea		December 31		26.67		26.67
Logisvalley Shinhan REIT Co.,Ltd. (*1)		Korea		September 30		20.27		20.27
DA Value-Honest New Technology Investment Fund 1 (*5)		Korea		-		-		23.66
Shinhan-Ji and Tec Smart Innovation Fund		Korea		December 31		50.00		50.00
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st		Korea		December 31		50.00		50.00
Korea Investment Green Newdeal Infra Trust No.1		Korea		December 31		27.97		27.97
BTS 2nd Private Equity Fund (*1)		Korea		November 30		26.00		26.00
NH-J&-IBKC Label Technology Fund		Korea		December 31		27.81		27.81
Hanyang Time Mezzanine Fund		Korea		December 31		28.57		28.57
Shinhan-Sneak Peek Bio&Healthcare Bounce Back Fund		Korea		December 31		50.00		50.00
Shinhan-isquare Venture PEF 1		Korea		December 31		40.00		40.00
Aurum Goldrush ESG Private Fund No. 1		Korea		December 31		28.33		28.33

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(a) Investments in associates as of December 31, 2024 and 2023 are as follows (continued):

Investees		Country		Reporting<br><br>date		Ownership (%)
									December 31, 2024		December 31, 2023
Capstone Develop Frontier Trust		Korea		December 31		21.43		21.43
Nextrade Co., Ltd. (*7)		Korea		December 31		8.00		8.00
SH 1.5years Maturity Investment Type Security Investment Trust No.2 (*5)		Korea		-		-		29.10
Eventus-IBKC LIB Fund(*5)		Korea		-		-		21.88
IBKC-Behigh Fund 1st		Korea		December 31		29.73		29.73
ON No.1 Private Equity Fund		Korea		December 31		28.57		28.57
Digital New Deal Kappa Private Equity Fund		Korea		December 31		24.75		24.75
IBKCJS New Technology Fund No.1		Korea		December 31		29.41		29.41
DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1		Korea		December 31		20.83		20.83
VOGO Debt Strategy General Private Real Estate Investment Trust No. 18		Korea		December 31		28.57		28.57
Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38 (*4)		Korea		December 31		75.00		75.00
TogetherKorea Private Investment Trust No. 6 (*6)		Korea		December 31		99.98		99.98
TogetherKorea Private Investment Trust No. 7 (*6)		Korea		December 31		99.98		99.98
Kiwoom Core Industrial Technology Investment Fund No.3		Korea		December 31		34.75		34.75
Penture K-Content Investment Fund (*7)		Korea		December 31		19.78		21.96
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund		Korea		December 31		30.00		30.00
Hana Alternative Investment Kosmes PCBO General PEF No. 1		Korea		December 31		37.04		37.04
Shinhan-timefolio Bio Development Investment Fund		Korea		December 31		48.39		48.39
Shinhan M&A-ESG Fund		Korea		December 31		23.33		23.33
SHINHAN Mid and SMALL-SIZED OFFICE VALUE-ADDED MO REIT Co., Ltd.		Korea		December 31		28.43		28.43
KDBC meta-enter New Technology investment fund		Korea		December 31		27.89		27.89
Shinhan Time Secondary Blind New Technology Investment Trust		Korea		December 31		47.50		47.50
Shinhan DS Secondary Investment Fund		Korea		December 31		49.83		39.93
Shinhan-openwater pre-IPO Investment Trust 1		Korea		December 31		50.00		50.00
Shinhan-CJ TechInnovation Fund 1st		Korea		December 31		40.00		40.00
Shinhan-Eco Venture Fund 2nd		Korea		December 31		40.00		40.00
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1		Korea		December 31		40.00		40.00
Hantoo Shinhan Lake K-beauty Technology Investment Trust		Korea		December 31		22.96		22.96
Shinhan HB Wellness 1st Investment Trust		Korea		December 31		48.54		48.54
Korea real Asset Fund No.3		Korea		December 31		28.57		28.57
PineStreet Global Corporate FoF XIII-2 (*6)		Korea		December 31		100.00		100.00
Igis Yongsan Office General PE Real Estate Inv. Trust No. 518		Korea		December 31		26.22		31.49
Samsung-dunamu Innovative IT Technology Investment Trust No. 1		Korea		December 31		22.99		22.99
Time Robotics New Technology Investment Trust		Korea		December 31		29.86		29.86
Ascent-welcome Tehcnology Investment Trust No.2		Korea		December 31		27.65		27.65
Newmain I funds		Korea		December 31		36.36		36.36
Igis General PE Real Estate Investment Trust 517-1 (*6)		Korea		December 31		96.78		96.30
SH Ulmus M.P.E. Innovative Venture Fund 7		Korea		December 31		28.57		28.57
Consus Osansegyo No.2		Korea		December 31		50.00		50.00
Mastern General Private Real Estate Investment Trust No.189(Type 1 Beneficiary Securities) (*5)		Korea		-		-		32.69
Shinhan AIM Private Fund of Fund 9-B		Korea		December 31		25.00		25.00
Shinhan General Private Real Estate Investment Trust No.3		Korea		December 31		20.75		20.75
NH Absolute Project L General Private Investment Trust (*5)		Korea		-		-		26.03
Paros Kosdaq Venture General Private Investment Trust No. 5		Korea		December 31		28.56		28.56
Happy Pet Life Care New Technology Investment Association No.2		Korea		December 31		30.00		30.00
Shinhan-Soo Secondary Investment Association (*6)		Korea		December 31		77.61		77.61
TECHFIN RATINGS Co., Ltd. (*1), (*11)		Korea		September 30		45.00		-
SONGPA BIZ CLUSTER PFV CO LTD (*1), (*7), (*10)		Korea		September 30		27.40		-
Planeta PTE LTD		Singapore		December 31		33.33		-
The E&Shinhan New Growth Up Fund		Korea		December 31		50.00		-
Shinhan-GB FutureFlow Fund L.P. (*6)		Korea		December 31		58.18		-
Credila Financial Services (*1), (*7), (*12)		India		September 30		10.93		-
DB IPO HighYield Fund 1		Korea		December 31		28.57		-
Exponential SQUARE Private Investment Trust No.1 (*6)		Korea		December 31		50.99		-
Fine North America Credit Private Mixed Asset Investment Trust 22 (*6)		Korea		December 31		58.82		-
IGIS Private Real Estate Investment No.454		Korea		December 31		24.04		-
IGIS Private Real Estate Investment No.462 (*6)		Korea		December 31		69.20		-
BNW Recharge Private Equity Fund		Korea		December 31		21.13		-

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(a) Investments in associates as of December 31, 2024 and 2023 are as follows (continued):

Investees		Country		Reporting<br><br>date		Ownership (%)
									December 31, 2024		December 31, 2023
United Partners Realasset Fund No.14		Korea		December 31		33.33		-
Shinhan Market-Frontier Fund Ⅲ		Korea		December 31		44.02		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.12 (*7)		Korea		December 31-		5.00		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.13 (*7)		Korea		December 31		5.00		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.14 (*7)		Korea		December 31		5.00		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.15 (*7)		Korea		December 31		5.00		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.16 (*7)		Korea		December 31		5.00		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.17 (*7)		Korea		December 31		5.00		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.18 (*7)		Korea		December 31		5.00		-
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.19 (*7)		Korea		December 31		5.00		-
SH US Buyback&High Dividend Security Feeder Investment Trust(H)[Equity]		Korea		December 31		22.37		-

(*1) The most recent financial statements available are used for the equity method since the financial statements as of December 31, 2024 are not available. Significant trades and events occurred within the period are properly reflected.

(*2) In the course of the rehabilitation process, the shares were acquired through investment conversion. Although voting rights cannot be exercised during the rehabilitation process, normal voting rights are exercised because the rehabilitation process was completed before December 31, 2024. Therefore, it has been reclassified into the investments in associates.

(*3) As a managing partner, the Group has a significant influence over the investees.

(*4) As a limited partner, the Group does not have an ability to participate in policy-making processes to obtain economic benefit from the investees that would allow the Group to control the entity.

(*5) Excluded from the investments in associates due to full or partial disposal of shares, or loss of significant influence.

(*6) Although the ownership percentages are more than 50%, the Group applies the equity method accounting as the Group does not have an ability to participate in the financial and operating policy-making process.

(*7) Although the ownership percentages are less than 20%, the Group applies the equity method accounting since it participates in policy-making processes and therefore can exercise significant influence on investees.

(*8) The rate of Group’s voting rights is 4.65%.

(*9) Although the Group has a significant influence with ownership percentage more than 50%, the contribution was classified as investments in associates as the Group is not exposed to variable returns due to the payment guarantee for the entire investment amount.

(*10) The rate of Group’s voting rights is 19.86%.

(*11) Douzon3 TECHFIN Co., Ltd. has changed its name to TECHFIN RATINGS Co., Ltd..

(*12) HDFC Credila Financial Services has changed its name to Credila Financial Services.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

• Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
BNP Paribas Cardif Life Insurance	W	39,272		-		(3,423)		587		-		36,436
Shinhan-Neoplux Energy Newbiz Fund		22,358		(9,196)		1,450		-		-		14,612
Shinhan-Albatross tech investment Fund		15,499		(8,312)		1,485		-		-		8,672
KCGI-SingA330-A Private Special Asset Investment Trust		4,609		(4,876)		267		-		-		-
VOGO Debt Strategy Qualified IV Private		6,532		(3,465)		646		-		-		3,713
Shinhan-Midas Donga Secondary Fund		4,301		(750)		(399)		-		-		3,152
ShinHan – Soo Young Entrepreneur Investment Fund No.1		4,862		(5,760)		4,279		-		-		3,381
Shinhan Praxis K-Growth Global Private Equity Fund		3,692		-		(2)		-		-		3,690
Kiwoom Milestone Professional Private Real Estate Trust 19 (*)		-		-		-		-		-		-
Shinhan Global Healthcare Fund 1 (*)		-		-		-		-		-		-
KB NA Hickory Private Special Asset Fund		24,096		(7,321)		718		-		-		17,493
Koramco Europe Core Private Placement Real Estate Fund No.2-2		18,799		1,058		370		-		(13,412)		6,815
KDBC-Midas Dong-A Global contents Fund		4,288		-		(1,648)		-		-		2,640
Shinhan-Nvestor Liquidity Solution Fund		6,088		(1,270)		308		-		-		5,126
Shinhan AIM FoF Fund 1-A		9,635		(1,169)		1,338		-		-		9,804
IGIS Global Credit Fund 150-1		4,286		(549)		1,252		-		-		4,989
Korea Omega Project Fund III		3,696		(2,274)		(1,422)		-		-		-
Genesis North America Power Company No.1 PEF		6,358		(3,143)		3,587		-		-		6,802
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		40,764		(37,990)		6,628		-		-		9,402
KOREA FINANCE SECURITY CO., LTD		3,245		-		297		-		-		3,542
MIEL CO.,LTD. (*)		-		-		-		-		-		-
AIP Transportation Specialized Privately Placed Fund Trust #1		46,372		3,460		8,975		-		-		58,807
Kiwoom-Shinhan Innovation Fund I		7,854		-		125		-		-		7,979
Midas Asset Global CRE Debt Private Fund No.6		54,881		(57,919)		3,038		-		-		-
Samchully Midstream Private Placement Special Asset Fund 5-4		33,163		2,416		3,905		-		-		39,484
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3		7,254		(7,664)		410		-		-		-
MK Ventures-K Clavis Growth Capital Venture Fund 1 (*)		-		(183)		3		-		183		3
NH-Amundi Global Infrastructure Trust 14		18,728		(20,589)		1,861		-		-		-
Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37		35,265		(1,591)		1,739		-		-		35,413
Milestone Private Real Estate Fund 3		17,615		1,619		(114)		-		-		19,120
Nomura-Rifa Private Real Estate Investment Trust 31		6,889		-		(546)		-		-		6,343
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2		3,138		(889)		269		-		-		2,518

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2024
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
FuturePlay-Shinhan TechInnovation Fund 1	W	7,847		(1,238)		(824)		-		-		5,785
Stonebridge Corporate 1st Fund		4,142		-		(165)		-		-		3,977
Vogo Realty Partners Private Real Estate Fund V		10,792		1,379		(1,509)		-		-		10,662
Korea Credit Bureau		6,738		(45)		881		-		-		7,574
Goduck Gangil1 PFV Co., Ltd.		180		(148)		64		-		-		96
SBC PFV Co., Ltd.		30,774		8,750		(1,908)		-		-		37,616
NH-amundi global infra private fund 16		50,652		4,293		(21,977)		-		-		32,968
SH BNCT Professional Investment Type Private Special Asset Investment Trust		244,772		(31,676)		12,612		-		-		225,708
Deutsche Global Professional Investment Type Private Real Estate Investment Trust No. 24		18,110		(19,646)		1,536		-		-		-
Sparklabs-Shinhan Opportunity Fund 1		3,914		-		(1,189)		-		-		2,725
IGIS Real-estate Private Investment Trust No.33		15,271		(809)		1,170		-		-		15,632
Goduck Gangil10 PFV Co., Ltd.		5,081		(212)		1,296		-		-		6,165
Fidelis Global Private Real Estate Trust No.2		551		-		-		-		-		551
AIP EURO PRIVATE REAL ESTATE TRUST No. 12		48,619		2,955		2,919		-		(29,849)		24,644
Shinhan Healthcare Fund 2 (*)		-		-		-		-		-		-
Shinhan AIM Real Estate Fund No.2		26,678		1,760		(26,884)		-		-		1,554
Shinhan AIM Real Estate Fund No.1		51,873		2,613		(51,602)		-		-		2,884
SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust		34,781		(856)		5,566		-		-		39,491
SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust		20,053		-		1,894		-		-		21,947
SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2		17,516		(3,377)		1,631		-		-		15,770
Korea Omega-Shinhan Project Fund I		11,630		(1,957)		9,800		-		-		19,473
Samsung SRA Real Estate Professional Private 45		31,432		(3,954)		2,798		-		-		30,276
IBK Global New Renewable Energy Special Asset Professional Private2		32,296		(1,266)		2,068		-		-		33,098
VS Cornerstone Fund		3,280		-		(55)		-		-		3,225
NH-Amundi US Infrastructure Private Fund2		29,725		(30,845)		1,664		-		-		544
Kakao-Shinhan 1st TNYT Fund		19,866		-		3,812		-		-		23,678
Pacific Private Placement Real Estate Fund No.40		11,624		(748)		747		-		-		11,623
Mastern Private Real Estate Loan Fund No.2		3,040		(1,908)		198		-		-		1,330
LB Scotland Amazon Fulfillment Center Fund 29		30,928		3,780		(15,860)		-		-		18,848
JR AMC Hungary Budapest Office Fund 16		12,687		221		279		-		-		13,187
EDNCENTRAL Co.,Ltd. (*)		-		-		-		-		-		-
Gyeonggi-Neoplux Superman Fund		5,056		-		(918)		-		-		4,138
NewWave 6th Fund		13,716		(1,425)		(1,583)		-		-		10,708
Neoplux No.3 Private Equity Fund		18,981		(404)		(6,425)		-		-		12,152
PCC Amberstone Private Equity Fund I		17,258		(5,513)		2,795		-		-		14,540
KIAMCO POWERLOAN TRUST 4TH		45,099		(2,331)		5,935		-		-		48,703

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2024
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Mastern Opportunity Seeking Real Estate Fund II	W	13,135		(4,868)		(2,995)		-		-		5,272
Neoplux Market-Frontier Secondary Fund		10,427		(4,006)		1,754		-		-		8,175
Synergy Green New Deal 1st New Technology Business Investment Fund		10,315		(72)		614		-		-		10,857
KIAMCO Vietnam Solar Special Asset Private Investment Trust		6,836		(580)		847		-		-		7,103
SHINHAN-NEO Core Industrial Technology Fund		13,616		(9,247)		3,742		-		-		8,111
SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2		23,356		(2,538)		892		-		-		21,710
Eum Private Equity Fund No.7		9,166		(400)		390		-		-		9,156
Kiwoom Hero No.4 Private Equity Fund		3,442		(96)		851		-		-		4,197
Vogo Canister Professional Trust Private Fund I		45,871		(47,321)		1,450		-		-		-
AJ-KOSNET Semicon One Venture Fund		2,854		-		358		-		-		3,212
Timefolio The Venture-V second		5,801		(4,444)		8		-		-		1,365
Shinhan Smilegate Global PEF I		3,801		(4,326)		4,407		-		-		3,882
Genesis Eco No.1 PEF		11,219		-		(142)		-		-		11,077
SHINHAN-NEO Market-Frontier 2nd Fund		32,670		(5,466)		295		-		-		27,499
NH-Synergy Core Industrial New Technology Fund		6,439		(6,175)		(264)		-		-		-
J& Moorim Jade Investment Fund		4,920		-		433		-		-		5,353
Ulmus SHC innovation investment fund		5,543		(1,150)		(88)		-		-		4,305
T Core Industrial Technology 1st Venture PEF		4,254		(378)		(881)		-		-		2,995
Fine Value POST IPO No.5 Private Equity Fund		3,766		(3,565)		(201)		-		-		-
TI First Property Private Investment Trust 1		3,102		(203)		203		-		-		3,102
IBKC Global Contents Investment Fund		4,701		(4,764)		63		-		-		-
Kiwoom-Shinhan Innovation Fund 2		9,165		1,148		(86)		-		-		10,227
ETRI Holdings-Shinhan 1st Unicorn Fund		3,295		1,500		(99)		-		-		4,696
SJ ESG Innovative Growth Fund		4,198		-		(1,083)		-		-		3,115
AVES 1st Corporate Recovery Private Equity Fund		4,768		-		(245)		-		-		4,523
Reverent-Shinhan Vista Fund		2,600		54		755		-		-		3,409
JS Shinhan Private Equity Fund		4,933		-		1,448		-		-		6,381
Daishin Newgen New Technology Investment Fund 1st		6,082		(5,742)		(340)		-		-		-
META ESG Private Equity Fund I		5,771		-		(88)		-		-		5,683
Shinhan VC tomorrow venture fund 1		45,210		25,608		(185)		-		-		70,633
H-IOTA Fund		9,524		(2,639)		2,492		-		-		9,377
Stonebridge-Shinhan Unicorn Secondary Fund		7,427		6,160		-		-		-		13,587
Tres-Yujin Trust		10,359		-		2,672		-		-		13,031
Shinhan-Time mezzanine blind Fund		14,121		-		2,305		-		-		16,426
Capstone REITs No.26		5,750		-		(381)		-		-		5,369
JB Incheon-Bucheon REITS No.54		4,978		-		(11)		-		-		4,967
Hankook Smart Real Asset Investment Trust No.3		7,668		-		(1,662)		-		-		6,006
JB Hwaseong-Hadong REITs No.53		4,983		-		(9)		-		-		4,974
KB Oaktree Trust No.3		8,668		304		916		-		-		9,888

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2024
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Daehan No.36 Office Asset Management Company	W	22,482		(25,394)		2,912		-		-		-
Rhinos Premier Mezzanine Private Investment Fund No.1		3,056		(3,048)		(8)		-		-		-
SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2		62,769		(12,710)		2,738		-		-		52,797
Shinhan JigaeNamsan Road Private Special Asset Investment Trust		41,434		(1,142)		(647)		-		-		39,645
SKS-Yozma Fund No.1		3,455		(2,931)		(524)		-		-		-
KB Distribution Private Real Estate 3-1		25,976		-		(1,897)		-		-		24,079
Pacific Private Investment Trust No.49-1		27,377		-		623		-		-		28,000
KIWOOM Real estate private placement fund for normal investors No. 31		8,558		(435)		(91)		-		-		8,032
RIFA Real estate private placement fund for normal investoes No. 51		5,731		(294)		(66)		-		-		5,371
Fivetree general private equity fund No.15		12,572		(12,572)		-		-		-		-
Shinhan-Kunicorn first Fund		9,626		-		(202)		-		-		9,424
Shinhan-Quantum Startup Fund		3,986		1,800		(121)		-		-		5,665
Shinhan Simone Fund Ⅰ		4,837		(991)		(424)		-		-		3,422
Korea Investment develop seed Trust No.1		9,532		(939)		1,552		-		-		10,145
Tiger Green alpha Trust No.29		28,573		(664)		2,083		-		-		29,992
STIC ALT Global II Private Equity Fund		9,504		(217)		554		-		-		9,841
NH-Brain EV Fund		11,125		(12,999)		1,874		-		-		-
DDI LVC Master Real Estate Investment Trust Co., Ltd.		6,583		-		(783)		-		-		5,800
Leverent-Frontier 4th Venture PEF		3,294		-		(1,220)		-		-		2,074
Find-Green New Deal 2nd Equity Fund		4,465		-		(141)		-		-		4,324
ShinhanFitrin 1st Technology Business Investment Association		4,519		-		(287)		-		-		4,232
Koramco Private Real Estate Fund 143		6,667		-		2		-		-		6,669
Korea Investment Top Mezzanine Private Real Esate Trust No.1		10,016		(994)		854		-		-		9,876
LB YoungNam Logistics Private Trust No.40		9,782		(600)		443		-		-		9,625
Shinhan-Cognitive Start-up Fund L.P.		5,329		-		(1,120)		-		-		4,209
Cornerstone J&M Fund I		3,488		-		(74)		-		-		3,414
Logisvalley Shinhan REIT Co.,Ltd.		3,598		-		(209)		-		-		3,389
DA Value-Honest New Technology Investment Fund 1		4,099		(2,754)		(1,345)		-		-		-
Shinhan-Ji and Tec Smart Innovation Fund		9,977		2,535		492		-		-		13,004
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st		6,968		-		(210)		-		-		6,758
Korea Investment Green Newdeal Infra Trust No.1		10,257		5,962		(123)		-		-		16,096
BTS 2nd Private Equity Fund		6,342		3,796		21		-		-		10,159
NH-J&-IBKC Label Technology Fund		9,747		-		(101)		-		-		9,646
Hanyang Time Mezzanine Fund		3,012		(300)		(201)		-		-		2,511
Shinhan-Sneak Peek Bio&Healthcare Bounce Back Fund		2,261		1,250		405		-		-		3,916
Shinhan-isquare Venture PEF 1		4,286		100		(149)		-		-		4,237

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2024
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Aurum Goldrush ESG Private Fund No. 1	W	2,917		-		90		-		-		3,007
Capstone Develop Frontier Trust		7,547		(549)		1,051		-		-		8,049
Nextrade Co., Ltd.		9,700		-		-		-		-		9,700
SH 1.5years Maturity Investment Type Security Investment Trust No.2		4,835		(4,835)		-		-		-		-
Eventus-IBKC LIB Fund		6,632		(7,064)		432		-		-		-
IBKC-Behigh Fund 1st		3,219		-		(59)		-		-		3,160
ON No.1 Private Equity Fund		5,321		-		391		-		-		5,712
Digital New Deal Kappa Private Equity Fund		4,845		-		(98)		-		-		4,747
IBKCJS New Technology Fund No.1		6,130		(2,418)		(1,094)		-		-		2,618
DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1		9,803		-		(157)		-		-		9,646
VOGO Debt Strategy General Private Real Estate Investment Trust No. 18		12,013		(2,170)		1,481		-		-		11,324
Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38		3,171		(61)		168		-		-		3,278
TogetherKorea Private Investment Trust No. 6		5,270		-		153		-		-		5,423
TogetherKorea Private Investment Trust No. 7		5,270		-		153		-		-		5,423
Kiwoom Core Industrial Technology Investment Fund No.3		4,180		-		39		-		-		4,219
Penture K-Content Investment Fund		5,622		6,000		(303)		-		-		11,319
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund		7,969		6,413		(914)		-		-		13,468
Hana Alternative Investment Kosmes PCBO General PEF No. 1		5,107		(526)		544		-		-		5,125
Shinhan-timefolio Bio Development Investment Fund		5,927		6,000		(220)		-		-		11,707
Shinhan M&A-ESG Fund		4,169		2,576		(291)		-		-		6,454
Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd. -		10,574		6,609		1,621		-		-		18,804
KDBC meta-enter New Technology investment fund		6,940		-		(143)		-		-		6,797
Shinhan Time Secondary Blind New Technology Investment Trust		4,754		-		(117)		-		-		4,637
Shinhan DS Secondary Investment Fund		7,477		(1,408)		(3,630)		-		-		2,439
Shinhan-openwater pre-IPO Investment Trust 1		4,973		-		693		-		-		5,666
Shinhan-CJ TechInnovation Fund 1st		2,364		2,400		(169)		-		-		4,595
Shinhan-Eco Venture Fund 2nd		3,610		450		(103)		-		-		3,957
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1		3,154		3,200		143		-		-		6,497
Hantoo Shinhan Lake K-beauty Technology Investment Trust		9,969		-		295		-		-		10,264
Shinhan HB Wellness 1st Investment Trust		4,992		-		334		-		-		5,326
Korea real Asset Fund No.3		9,315		7,865		(628)		-		-		16,552
PineStreet Global Corporate FoF XIII-2 (NC XI)		721		3,087		(65)		-		-		3,743

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2024
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Igis Yongsan Office General PE Real Estate Inv. Trust No. 518	W	23,131		(5,596)		(391)		-		-		17,144
Samsung-dunamu Innovative IT Technology Investment Trust No. 1		4,536		-		(786)		-		-		3,750
Time Robotics New Technology Investment Trust		3,966		(200)		12		-		-		3,778
Ascent-welcome Tehcnology Investment Trust No.2		8,771		-		(311)		-		-		8,460
Newmain I funds		1,991		-		7,373		-		-		9,364
Igis General PE Real Estate Investment Trust 517-1		51,736		5,000		(1,834)		-		-		54,902
SH Ulmus M.P.E. Innovative Venture Fund 7		3,000		-		32		-		-		3,032
Consus Osansegyo No.2		8,104		-		(95)		-		-		8,009
Mastern General Private Real Estate Investment Trust No.189(Type 1 Beneficiary Securities)		7,822		(7,502)		(320)		-		-		-
Shinhan AIM Private Fund of Fund 9-B		24,018		9,751		2,972		-		-		36,741
Shinhan General Private Real Estate Investment Trust No.3		7,838		18,970		(102)		-		-		26,706
NH Absolute Project L General Private Investment Trust		4,893		(5,264)		371		-		-		-
Paros Kosdaq Venture General Private Investment Trust No. 5		5,994		-		596		-		-		6,590
Happy Pet Life Care New Technology Investment Association No.2		3,456		-		(457)		-		-		2,999
Shinhan-Soo Secondary Investment Association		5,249		12,250		(762)		-		-		16,737
TECHFIN RATINGS Co., Ltd.		-		27,000		(1,390)		-		-		25,610
SONGPA BIZ CLUSTER PFV CO LTD		-		13,700		(336)		-		-		13,364
Planeta PTE LTD		-		11,341		-		-		-		11,341
The E&Shinhan New Growth Up Fund		-		3,600		(82)		-		-		3,518
Shinhan-GB FutureFlow Fund L.P.		-		5,855		(352)		(353)		-		5,150
Credila Financial Services		-		250,270		4,017		8,829		-		263,116
Shinhan Market-Frontier Fund Ⅲ		-		13,205		(414)		-		-		12,791
DB IPO HighYield Fund 1		-		4,000		278		-		-		4,278
Exponential SQUARE Private Investment Trust No.1		-		6,146		(938)		-		-		5,208
Fine North America Credit Private Mixed Asset Investment Trust 22		-		4,549		64		-		-		4,613
IGIS Private Real Estate Investment No.454		-		3,393		(25)		-		-		3,368
IGIS Private Real Estate Investment No.462		-		4,607		(174)		-		-		4,433
BNW Recharge Private Equity Fund		-		6,767		371		-		-		7,138

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2024
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
United Partners Realasset Fund No.14	W	-		10,000		(2)		-		-		9,998
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.12		-		17,929		48		-		-		17,977
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.13		-		11,996		39		-		-		12,035
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.14		-		13,953		(242)		-		-		13,711
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.15		-		13,955		(217)		-		-		13,738
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.16		-		13,837		(547)		-		-		13,290
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.17		-		5,270		108		-		-		5,378
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.18		-		10,530		395		-		-		10,925
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.19		-		5,270		(218)		-		-		5,052
SH US Buyback&High Dividend Security Feeder Investment Trust(H)[Equity]		-		4,124		73		-		-		4,197
Others		210,518		(9,778)		(17,080)		-		-		183,660
	W	2,692,031		118,786		(23,822)		9,063		(43,078)		2,752,980

(*) An impairment loss has been recognized due to accumulated unrealized losses since its initial acquisition.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
BNP Paribas Cardif Life Insurance	W	30,169		-		920		8,183		-		39,272
Partners 4th Growth Investment Fund		13,542		(13,542)		-		-		-		-
KTB Newlake Global Healthcare PEF		4,309		(3,954)		(355)		-		-		-
Shinhan-Neoplux Energy Newbiz Fund		20,837		-		1,521		-		-		22,358
Shinhan-Albatross tech investment Fund		12,253		(1,500)		4,618		128		-		15,499
KCGI-SingA330-A Private Special Asset Investment Trust		4,232		-		377		-		-		4,609
VOGO Debt Strategy Qualified IV Private		6,085		50		397		-		-		6,532
Shinhan -Midas Dong-A Secondary Fund		4,431		-		(130)		-		-		4,301
ShinHan – Soo Young Entrepreneur Investment Fund No.1		4,414		(864)		1,312		-		-		4,862
Shinhan Praxis K-Growth Global Private Equity Fund		3,691		-		1		-		-		3,692
Kiwoom Milestone Professional Private Real Estate Trust 19 (*1)		3,961		-		(136)		-		(3,825)		-
Shinhan Global Healthcare Fund 1 (*1)		-		-		-		-		-		-
KB NA Hickory Private Special Asset Fund		34,339		(11,436)		1,193		-		-		24,096
Koramco Europe Core Private Placement Real Estate Fund No.2-2		19,236		(919)		482		-		-		18,799
Hermes Private Investment Equity Fund		5,562		(5,562)		-		-		-		-
KDBC-Midas Dong-A Global contents Fund		4,277		-		11		-		-		4,288
Shinhan-Nvestor Liquidity Solution Fund		6,438		(265)		(85)		-		-		6,088
Shinhan AIM FoF Fund 1-A		10,110		(1,653)		1,178		-		-		9,635
IGIS Global Credit Fund 150-1		4,692		(803)		397		-		-		4,286
Partner One Value up I Private Equity Fund		5,144		(5,144)		-		-		-		-
Genesis No.1 Private Equity Fund		59,924		(59,916)		(8)		-		-		-
Korea Omega Project Fund III		3,674		-		22		-		-		3,696
Genesis North America Power Company No.1 PEF		8,118		(4,384)		2,624		-		-		6,358
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		43,244		(10,595)		8,115		-		-		40,764
KOREA FINANCE SECURITY CO., LTD		2,411		-		(169)		1,003		-		3,245
MIEL CO., LTD. (*1)		-		-		-		-		-		-
AIP Transportation Specialized Privately Placed Fund Trust #1		44,821		782		769		-		-		46,372

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Kiwoom-Shinhan Innovation Fund I	W	9,441		(1,425)		(162)		-		-		7,854
Midas Asset Global CRE Debt Private Fund No.6		57,029		(8,663)		6,515		-		-		54,881
Samchully Midstream Private Placement Special Asset Fund 5-4		30,624		795		1,744		-		-		33,163
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3		24,492		(18,264)		1,026		-		-		7,254
NH-Amundi Global Infrastructure Trust 14		20,975		(3,086)		839		-		-		18,728
Jarvis Memorial Private Investment Trust 1		9,786		(10,642)		856		-		-		-
Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37		33,357		(683)		2,591		-		-		35,265
Milestone Private Real Estate Fund 3		19,071		563		(2,019)		-		-		17,615
Nomura-Rifa Private Real Estate Investment Trust 31		7,364		-		(475)		-		-		6,889
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2		2,969		(2,675)		2,844		-		-		3,138
T&F 2019 bearing Private Equity Fund Specializing in Start-up and Venture Business		3,231		(3,231)		-		-		-		-
FuturePlay-Shinhan TechInnovation Fund 1		6,916		-		931		-		-		7,847
Stonebridge Corporate 1st Fund		3,622		-		520		-		-		4,142
Vogo Realty Partners Private Real Estate Fund V		10,915		(378)		255		-		-		10,792
Korea Credit Bureau		5,039		(90)		1,789		-		-		6,738
Goduck Gangil1 PFV Co., Ltd.		60		-		120		-		-		180
SBC PFV Co., Ltd.		28,468		3,750		(1,444)		-		-		30,774
NH-amundi global infra private fund 16		56,211		(1,299)		(4,260)		-		-		50,652
IMM Global Private Equity Fund		147,384		(147,384)		-		-		-		-
SH BNCT Professional Investment Type Private Special Asset Investment Trust		263,052		(32,093)		13,813		-		-		244,772
Deutsche Global Professional Investment Type Private Real Estate Investment Trust No. 24		22,683		(5,882)		1,309		-		-		18,110
Sparklabs-Shinhan Opportunity Fund 1		4,631		(1,137)		420		-		-		3,914
BNW Tech-Innovation Private Equity Fund		5,833		(5,833)		-		-		-		-
IGIS Real-estate Private Investment Trust No.33		14,552		(360)		1,079		-		-		15,271
WWG Global Real Estate Investment Trust no.4		10,331		(10,795)		464		-		-		-
Goduck Gangil10 PFV Co., Ltd.		3,236		-		1,845		-		-		5,081

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Fidelis Global Private Real Estate Trust No.2	W	21,945		-		(9,925)		-		(11,469)		551
AIP EURO PRIVATE REAL ESTATE TRUST No. 12		48,427		(5,864)		6,056		-		-		48,619
Shinhan Global Healthcare Fund 2 (*1)		-		-		-		-		-		-
Shinhan AIM Real Estate Fund No.2		25,243		-		1,435		-		-		26,678
Shinhan AIM Real Estate Fund No.1		44,642		6,586		645		-		-		51,873
SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust		32,627		(916)		3,070		-		-		34,781
SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust		19,296		3		754		-		-		20,053
SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2		24,598		(7,618)		536		-		-		17,516
Korea Omega-Shinhan Project Fund I		10,022		-		1,608		-		-		11,630
Samsung SRA Real Estate Professional Private 45[FoFs]		21,650		8,487		1,295		-		-		31,432
IBK Global New Renewable Energy Special Asset Professional Private2		33,412		(2,303)		1,187		-		-		32,296
VS Cornerstone Fund		3,335		-		(55)		-		-		3,280
Aone Mezzanine Opportunity Professional Private		5,009		(5,072)		63		-		-		-
NH-Amundi US Infrastructure Private Fund2		31,941		(4,395)		2,179		-		-		29,725
SH Japan Photovoltaic Private Special Asset Investment Trust No.2		6,332		(4,360)		341		-		-		2,313
Kakao-Shinhan 1st TNYT Fund		21,330		-		(1,464)		-		-		19,866
Pacific Private Placement Real Estate Fund No.40		11,622		(748)		750		-		-		11,624
Mastern Private Real Estate Loan Fund No.2		6,387		(3,679)		332		-		-		3,040
LB Scotland Amazon Fulfillment Center Fund 29		29,637		(1,753)		3,044		-		-		30,928
JR AMC Hungary Budapest Office Fund 16		12,457		(773)		1,003		-		-		12,687
EDNCENTRAL Co.,Ltd. (*1)		-		-		-		-		-		-
Future-Creation Neoplux Venture Capital Fund		4,251		(889)		(682)		-		-		2,680
Gyeonggi-Neoplux Superman Fund		5,467		-		(411)		-		-		5,056
NewWave 6th Fund		13,540		-		176		-		-		13,716

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Neoplux No.3 Private Equity Fund	W	20,454		(4)		(1,469)		-		-		18,981
PCC Amberstone Private Equity Fund I		18,785		(2,425)		898		-		-		17,258
KIAMCO POWERLOAN TRUST 4TH		43,524		(2,306)		3,881		-		-		45,099
Mastern Opportunity Seeking Real Estate Fund II		14,710		(4,029)		2,454		-		-		13,135
AION ELFIS PROFESSIONAL PRIVATE 1		3,566		(3,376)		(190)		-		-		-
T&F 2020 SS Private Equity Fund Specializing in Start-up and Venture Business		5,709		(7,843)		2,134		-		-		-
Neoplux Market-Frontier Secondary Fund		13,960		(3,673)		140		-		-		10,427
Harvest Private Equity Fund II		3,139		(26)		(135)		-		-		2,978
Synergy Green New Deal 1st New Technology Business Investment Fund		10,632		(145)		(172)		-		-		10,315
KIAMCO Vietnam Solar Special Asset Private Investment Trust		6,727		(220)		329		-		-		6,836
SHINHAN-NEO Core Industrial Technology Fund		9,409		-		4,207		-		-		13,616
SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2		25,024		(2,542)		874		-		-		23,356
SIMONE Mezzanine Fund No.3		3,017		(1,965)		150		-		-		1,202
Eum Private Equity Fund No.7		9,170		-		(4)		-		-		9,166
Kiwoom Hero No.4 Private Equity Fund		3,517		-		(75)		-		-		3,442
Vogo Canister Professional Trust Private Fund I		46,329		(3,075)		2,617		-		-		45,871
SW-S Fund		7,248		(11,177)		3,929		-		-		-
CL Buyout 1st PEF		12,842		(20,216)		7,374		-		-		-
Timefolio The Venture-V second		4,096		-		1,705		-		-		5,801

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Newlake Growth Capital Partners2 PEF	W	12,496		(12,496)		-		-		-		-
Shinhan Smilegate Global PEF I		3,771		-		30		-		-		3,801
Genesis Eco No.1 PEF		11,418		-		(199)		-		-		11,219
SHINHAN-NEO Market-Frontier 2nd Fund		34,420		4,270		(6,020)		-		-		32,670
NH-Synergy Core Industrial New Technology Fund		6,377		-		62		-		-		6,439
J& Moorim Jade Investment Fund		5,434		(787)		273		-		-		4,920
Helios-KDBC Digital Contents 1st		3,356		(1,457)		357		-		-		2,256
Ulmus SHC innovation investment fund		4,886		-		657		-		-		5,543
Mirae Asset Partners X Private Equity Fund		7,792		(7,792)		-		-		-		-
T Core Industrial Technology 1st Venture PEF		4,529		-		(275)		-		-		4,254
Curious Finale Corporate Recovery Private Equity Fund		3,591		(3,636)		45		-		-		-
Fine Value POST IPO No.5 Private Equity Fund		2,270		-		1,496		-		-		3,766
TI First Property Private Investment Trust 1		3,127		(203)		178		-		-		3,102
MPLUS Professional Private Real Estate Fund 25		4,231		-		(1,873)		-		-		2,358
IBKC Global Contents Investment Fund		4,552		-		149		-		-		4,701
Premier Luminous Private Equity Fund		8,966		(12,439)		3,473		-		-		-
Hanyang-Meritz 1 Fund		3,466		(689)		204		-		-		2,981
Kiwoom-Shinhan Innovation Fund 2		11,271		(4,434)		2,328		-		-		9,165
ETRI Holdings-Shinhan 1st Unicorn Fund		1,895		1,500		(100)		-		-		3,295
Maple Mobility Fund		16,859		(16,859)		-		-		-		-
SJ ESG Innovative Growth Fund		4,197		-		1		-		-		4,198
AVES 1st Corporate Recovery Private Equity Fund		5,057		-		(289)		-		-		4,768
JS Shinhan Private Equity Fund		4,953		-		(20)		-		-		4,933
NH Kyobo AI Solution Investment Fund		3,288		(4,138)		850		-		-		-
Daishin Newgen New Technology Investment Fund 1st		5,704		-		378		-		-		6,082
META ESG Private Equity Fund I		5,857		-		(86)		-		-		5,771
SWFV FUND-1		9,128		(9,433)		305		-		-		-
PHAROS DK FUND		3,835		(1,413)		40		-		-		2,462

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Shinhan VC tomorrow venture fund 1	W	26,926		18,258		26		-		-		45,210
Highland 2021-8 Fund		4,826		(5,366)		540		-		-		-
H-IOTA Fund		9,623		(239)		140		-		-		9,524
Stonebridge-Shinhan Unicorn Secondary Fund		6,082		2,924		(1,579)		-		-		7,427
Tres-Yujin Trust		10,004		-		355		-		-		10,359
Shinhan-Time mezzanine blind Fund		13,312		-		809		-		-		14,121
Capstone REITs No.26		3,852		(300)		2,198		-		-		5,750
JB Incheon-Bucheon REITS No.54		4,989		-		(11)		-		-		4,978
Hankook Smart Real Asset Investment Trust No.3		6,993		-		675		-		-		7,668
JB Hwaseong-Hadong REITs No.53		4,991		-		(8)		-		-		4,983
KB Oaktree Trust No.3		8,605		(771)		834		-		-		8,668
Daehan No.36 Office Asset Management Company		22,058		-		424		-		-		22,482
Rhinos Premier Mezzanine Private Investment Fund No.1		2,873		-		183		-		-		3,056
SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2		57,334		3,369		2,066		-		-		62,769
Shinhan JigaeNamsan Road Private Special Asset Investment Trust		40,571		36		827		-		-		41,434
SKS-Yozma Fund No.1		6,599		(4,140)		996		-		-		3,455
IBKC-METIS Global Contents Investment Fund		4,550		(3,921)		(629)		-		-		-
Keistone Unicorn Private Equity Fund		6,249		(6,249)		-		-		-		-
KB Distribution Private Real Estate 3-1		26,651		-		(675)		-		-		25,976
Pacific Private Investment Trust No.49-1		28,641		-		(1,264)		-		-		27,377
KIWOOM Real estate private placement fund for normal investors No. 31		8,558		(518)		518		-		-		8,558
RIFA Real estate private placement fund for normal investoes No. 51		5,726		(340)		345		-		-		5,731
Fivetree general private equity fund No.15		12,281		(489)		780		-		-		12,572
Shinhan-Kunicorn first Fund		9,831		-		(205)		-		-		9,626
Harvest Fund No.3		15,854		(15,854)		-		-		-		-
Shinhan-Quantum Startup Fund		1,119		3,000		(133)		-		-		3,986
Shinhan Simone Fund Ⅰ		4,796		-		41		-		-		4,837
Korea Investment develop seed Trust No.1		10,242		(901)		191		-		-		9,532
Tiger Green alpha Trust No.29		26,806		(588)		2,355		-		-		28,573
STIC ALT Global II Private Equity Fund		9,859		(218)		(137)		-		-		9,504
NH-Brain EV Fund		11,592		-		(467)		-		-		11,125
DDI LVC Master Real Estate Investment Trust Co., Ltd.		6,405		450		(272)		-		-		6,583
Leverent-Frontier 4th Venture PEF		2,964		-		330		-		-		3,294
Find-Green New Deal 2nd Equity Fund		4,508		-		(43)		-		-		4,465
ShinhanFitrin 1st Technology Business Investment Association		4,437		-		82		-		-		4,519
PARATUS No.3 Private Equity Fund		4,936		(4,936)		-		-		-		-

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Golden Route 2nd Startup Venture Specialized Private Equity Fund	W	3,003		(3,003)		-		-		-		-
Koramco Private Real Estate Fund 143		3,030		3,636		1		-		-		6,667
Korea Investment Top Mezzanine Private Real Esate Trust No.1		9,885		(1,169)		1,300		-		-		10,016
LB YoungNam Logistics Private Trust No.40		9,748		(600)		634		-		-		9,782
Shinhan-Cognitive Start-up Fund L.P.		9,953		(5,052)		428		-		-		5,329
IGEN2022 No.1 private Equity Fund		9,045		(9,045)		-		-		-		-
Cornerstone J&M Fund I		3,561		-		(73)		-		-		3,488
Logisvalley Shinhan REIT Co.,Ltd.		3,804		-		(206)		-		-		3,598
DA Value-Honest New Technology Investment Fund 1		2,663		(1,145)		2,581		-		-		4,099
KDB Investment Global Healthcare Private Equity Fund I		34,468		(34,468)		-		-		-		-
Shinhan-Ji and Tec Smart Innovation Fund		2,587		7,800		(410)		-		-		9,977
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st		1,776		5,400		(208)		-		-		6,968
Korea Investment Green Newdeal Infra Trust No.1		5,714		4,537		6		-		-		10,257
BTS 2nd Private Equity Fund		3,772		2,860		(290)		-		-		6,342
Shinhan Global Active REIT Co.Ltd.		19,222		(69)		(156)		-		-		18,997
NH-J&-IBKC Label Technology Fund		9,866		-		(119)		-		-		9,747
Hanyang Time Mezzanine Fund		3,000		-		12		-		-		3,012
IMM Global Venture Opportunity, LP		3,115		(3,115)		-		-		-		-
Shinhan-isquare Venture PEF 1		497		4,000		(211)		-		-		4,286
Capstone Develop Frontier Trust		6,857		(565)		1,255		-		-		7,547
Nextrade Co., Ltd.		9,700		-		-		-		-		9,700
SH Sustainable Management ESG Short term Bond Security Feeder Investment Trust No.1 (*2)		3,011		(3,011)		-		-		-		-
SH 1.5years Maturity Investment Type Security Investment Trust No.2		4,601		-		234		-		-		4,835
Eventus-IBKC LIB Fund		6,035		-		597		-		-		6,632
NH-Daishin-Kyobo healthcare 1 Fund		3,948		(3,948)		-		-		-		-
IBKC-Behigh Fund 1st		3,268		-		(49)		-		-		3,219
Nautic Green Innovation ESG Co-investment No.1 Private Equity Fund		3,956		(3,956)		-		-		-		-
ON No.1 Private Equity Fund		5,362		-		(41)		-		-		5,321
Digital New Deal Kappa Private Equity Fund		4,946		-		(101)		-		-		4,845
IBKCJS New Technology Fund No.1		-		5,000		1,130		-		-		6,130
DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1		-		10,000		(197)		-		-		9,803
VOGO Debt Strategy General Private Real Estate Investment Trust No. 18		-		11,014		999		-		-		12,013
Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38		-		3,000		171		-		-		3,171
TogetherKorea Private Investment Trust No. 6		-		5,122		148		-		-		5,270
TogetherKorea Private Investment Trust No. 7		-		5,122		148		-		-		5,270
Kiwoom Core Industrial Technology Investment Fund No.3		-		4,000		180		-		-		4,180

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(b) Changes in investments in associates for the years ended December 31, 2024 and 2023 are as follows

(continued):

		December 31, 2023
Investees		Beginning<br><br>balance		Investment<br><br>and<br><br>dividend		Equity<br><br>method<br><br>income<br><br>(loss)		Change in<br><br>other comprehensive income		Impairment<br><br>loss		Ending<br><br>balance
Penture K-Content Investment Fund	W	-		6,000		(378)		-		-		5,622
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund		-		7,838		131		-		-		7,969
Hana Alternative Investment Kosmes PCBO General PEF No. 1		-		4,740		367		-		-		5,107
Shinhan-timefolio Bio Development Investment Fund		-		6,000		(73)		-		-		5,927
Shinhan M&A-ESG Fund		-		4,354		(185)		-		-		4,169
Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd. -		-		9,565		1,009		-		-		10,574
KDBC meta-enter New Technology investment fund		-		7,000		(60)		-		-		6,940
Shinhan Time Secondary Blind New Technology Investment Trust		-		4,750		4		-		-		4,754
Shinhan DS Secondary Investment Fund		-		1,815		5,662		-		-		7,477
Shinhan-openwater pre-IPO Investment Trust 1		-		5,000		(27)		-		-		4,973
Shinhan-Eco Venture Fund 2nd		-		3,650		(40)		-		-		3,610
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1		-		3,200		(46)		-		-		3,154
Hantoo Shinhan Lake K-beauty Technology Investment Trust		-		10,000		(31)		-		-		9,969
Shinhan HB Wellness 1st Investment Trust		-		5,000		(8)		-		-		4,992
Korea real Asset Fund No.3		-		9,370		(55)		-		-		9,315
Igis Yongsan Office General PE Real Estate Inv. Trust No. 518		-		23,900		(769)		-		-		23,131
Samsung-dunamu Innovative IT Technology Investment Trust No. 1		-		4,000		536		-		-		4,536
Time Robotics New Technology Investment Trust		-		4,000		(34)		-		-		3,966
Ascent-welcome Tehcnology Investment Trust No.2		-		9,000		(229)		-		-		8,771
Igis General PE Real Estate Investment Trust 517-1		-		52,000		(264)		-		-		51,736
Consus Osansegyo No.2		-		8,000		104		-		-		8,104
Mastern General Private Real Estate Investment Trust No.189 (Type 1 Beneficiary Securities)		-		8,500		(678)		-		-		7,822
Shinhan AIM Private Fund of Fund 9-B		-		23,036		982		-		-		24,018
Shinhan General Private Real Estate Investment Trust No.3		-		7,721		117		-		-		7,838
NH Absolute Project L General Private Investment Trust		-		4,488		405		-		-		4,893
Paros Kosdaq Venture General Private Investment Trust No. 5		-		6,000		(6)		-		-		5,994
Happy Pet Life Care New Technology Investment Association No.2		-		3,000		456		-		-		3,456
Shinhan-Soo Secondary Investment Association		-		5,250		(1)		-		-		5,249
Others		225,498		(39,576)		4,942		424		(289)		190,999
	W	2,904,474		(331,686)		125,088		9,738		(15,583)		2,692,031

(*1) An impairment loss has been recognized due to accumulated unrealized losses since its initial acquisition.

(*2) For the year ended December 31, 2023 it is incorporated into the consolidation target as the Group held control due to increased equity ratio.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as

follows:

		December 31, 2024
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
BNP Paribas Cardif Life Insurance	W	2,714,143		2,471,042		57,764		(22,798)		3,917		(18,881)
Shinhan-Neoplux Energy Newbiz Fund		52,550		6,398		26,255		1,591		-		1,591
Shinhan-Albatross tech investment Fund		17,575		229		17,168		(1,666)		-		(1,666)
VOGO Debt Strategy Qualified IV Private		18,573		8		5,810		3,229		-		3,229
Shinhan-Midas Donga Secondary Fund		6,304		-		868		(797)		-		(797)
ShinHan – Soo Young Entrepreneur Investment Fund No.1		14,244		157		30,591		17,828		-		17,828
Shinhan Praxis K-Growth Global Private Equity Fund		26,087		6		18		(14)		-		(14)
Kiwoom Milestone Professional Private Real Estate Trust 19		-		39,013		6,701		3,188		-		3,188
Shinhan Global Healthcare Fund 1		39		4,925		-		(1)		-		(1)
KB NA Hickory Private Special Asset Fund		51,721		5,072		15,337		(1,158)		-		(1,158)
Koramco Europe Core Private Placement Real Estate Fund No.2-2		17,260		1,779		(1,381)		(10,599)		-		(10,599)
KDBC-Midas Dong-A Global contents Fund		11,416		62		4		(7,080)		-		(7,080)
Shinhan-Nvestor Liquidity Solution Fund		20,841		270		2,354		1,236		-		1,236
Shinhan AIM FoF Fund 1-A		39,244		30		12,872		5,353		-		5,353
IGIS Global Credit Fund 150-1		19,966		12		5,917		5,008		-		5,008
Genesis North America Power Company No.1 PEF		15,514		-		7,299		7,018		-		7,018
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		40,375		81		28,764		28,406		-		28,406
KOREA FINANCE SECURITY CO., LTD		36,984		13,230		46,929		1,991		-		1,991
MIEL CO.,LTD.		423		565		-		-		-		-
AIP Transportation Specialized Privately Placed Fund Trust #1		165,492		885		(88,843)		(152,566)		-		(152,566)
Kiwoom-Shinhan Innovation Fund I		16,166		209		469		253		-		253
Samchully Midstream Private Placement Special Asset Fund 5-4		94,792		30		22,021		9,371		-		9,371
MK Ventures-K Clavis Growth Capital Venture Fund 1 (*1)		10		-		151		146		-		146
Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37		59,045		23		11,969		2,925		-		2,925
Milestone Private Real Estate Fund 3		59,637		-		1,297		(10,711)		-		(10,711)
Nomura-Rifa Private Real Estate Investment Trust 31		92,219		71,961		43,830		32,959		-		32,959
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2		11,845		6		1,183		1,265		-		1,265

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2024
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
FuturePlay-Shinhan TechInnovation Fund 1	W	11,855		285		2,219		(1,648)		-		(1,648)
Stonebridge Corporate 1st Fund		9,016		1		-		(373)		-		(373)
Vogo Realty Partners Private Real Estate Fund V		49,374		96		5,403		(6,973)		-		(6,973)
Korea Credit Bureau		153,079		68,920		172,186		9,791		-		9,791
Goduck Gangil1 PFV Co., Ltd.		9,794		542		85,798		6,326		-		6,326
SBC PFV Co., Ltd.		1,315,956		1,125,532		4		(7,622)		-		(7,622)
NH-amundi global infra private fund 16		72,552		6,617		84,498		38,998		-		38,998
SH BNCT Professional Investment Type Private Special Asset Investment Trust		311,321		-		3,086		17,396		-		17,396
Sparklabs-Shinhan Opportunity Fund 1		5,505		-		25		(2,405)		-		(2,405)
IGIS Real-estate Private Investment Trust No.33		93,113		54,852		5,709		2,863		-		2,863
Goduck Gangil10 PFV Co., Ltd.		31,122		144		59,353		6,350		-		6,350
Fidelis Global Private Real Estate Trust No.2		748		57		(1)		(2)		-		(2)
AIP EURO PRIVATE REAL ESTATE TRUST No. 12		145,170		59,302		(7,077)		(10,179)		-		(10,179)
Shinhan Healthcare Fund 2		31		183		1		-		-		-
Shinhan AIM Real Estate Fund No.2		6,641		1,461		123,427		(89,613)		-		(89,613)
Shinhan AIM Real Estate Fund No.1		14,604		877		164,469		(245,607)		-		(245,607)
SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust		179,396		52		22,204		25,277		-		25,277
SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust		75,611		426		11,878		6,489		-		6,489
SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2		22,106		29		2,581		2,283		-		2,283
Korea Omega-Shinhan Project Fund I		38,945		-		19,657		19,599		-		19,599
Samsung SRA Real Estate Professional Private 45		139,222		18,119		(11,232)		(11,358)		-		(11,358)
IBK Global New Renewable Energy Special Asset Professional Private2		114,189		-		(4,160)		(32,244)		-		(32,244)
VS Cornerstone Fund		8,085		254		-		(134)		-		(134)
NH-Amundi US Infrastructure Private Fund2		2,100		1		107		6,423		-		6,423
Kakao-Shinhan 1st TNYT Fund		48,793		96		12,387		7,840		-		7,840
Pacific Private Placement Real Estate Fund No.40		145,794		98,798		4,270		3,022		-		3,022
Mastern Private Real Estate Loan Fund No.2		3,977		14		627		590		-		590
LB Scotland Amazon Fulfillment Center Fund 29		29,223		227		3,917		(16,566)		-		(16,566)
JR AMC Hungary Budapest Office Fund 16		42,031		1,543		858		858		-		858
EDNCENTRAL Co.,Ltd.		122,357		200,291		(35,285)		(70,591)		-		(70,591)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2024
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Gyeonggi-Neoplux Superman Fund	W	20,711		1,697		716		(4,218)		-		(4,218)
NewWave 6th Fund		36,572		878		9,185		(5,276)		-		(5,276)
Neoplux No.3 Private Equity Fund		129,055		7,532		1,307		(64,247)		-		(64,247)
PCC Amberstone Private Equity Fund I		67,099		-		17,359		12,898		-		12,898
KIAMCO POWERLOAN TRUST 4TH		102,831		13		8,143		12,529		-		12,529
Mastern Opportunity Seeking Real Estate Fund II		25,087		1,362		12,764		(13,478)		-		(13,478)
Neoplux Market-Frontier Secondary Fund		41,423		2		13,712		8,889		-		8,889
Synergy Green New Deal 1st New Technology Business Investment Fund		38,542		-		2,578		2,180		-		2,180
KIAMCO Vietnam Solar Special Asset Private Investment Trust		14,267		62		4,527		1,697		-		1,697
SHINHAN-NEO Core Industrial Technology Fund		16,704		400		21,363		7,522		-		7,522
SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2		72,396		31		3,173		2,973		-		2,973
Eum Private Equity Fund No.7		43,608		4		2,427		1,857		-		1,857
Kiwoom Hero No.4 Private Equity Fund		19,934		-		3,624		4,042		-		4,042
AJ-KOSNET Semicon One Venture Fund		14,576		122		1,827		1,613		-		1,613
Timefolio The Venture-V second		6,589		3		2,744		31		-		31
Shinhan Smilegate Global PEF I		27,798		475		(18,714)		(19,824)		-		(19,824)
Genesis Eco No.1 PEF		38,654		469		-		(490)		-		(490)
SHINHAN-NEO Market-Frontier 2nd Fund		65,802		1,402		11,931		691		-		691
J& Moorim Jade Investment Fund		21,508		-		1,862		1,740		-		1,740
Ulmus SHC innovation investment fund		17,910		-		207		(366)		-		(366)
T Core Industrial Technology 1st Venture PEF		9,541		23		206		(2,800)		-		(2,800)
TI First Property Private Investment Trust 1		7,776		21		4,139		507		-		507
Kiwoom-Shinhan Innovation Fund 2		23,991		129		429		(200)		-		(200)
ETRI Holdings-Shinhan 1st Unicorn Fund		9,391		-		7		(197)		-		(197)
SJ ESG Innovative Growth Fund		10,941		39		1		(3,791)		-		(3,791)
AVES 1st Corporate Recovery Private Equity Fund		6,131		194		-		(321)		-		(321)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2024
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Reverent-Shinhan Vista Fund	W	25,415		-		6,002		5,629		-		5,629
JS Shinhan Private Equity Fund		165,748		1		(39,164)		(40,720)		-		(40,720)
META ESG Private Equity Fund I		20,742		-		23		(321)		-		(321)
Shinhan VC tomorrow venture fund 1		180,741		2,474		19,038		(467)		-		(467)
H-IOTA Fund		38,306		517		10,346		10,044		-		10,044
Stonebridge-Shinhan Unicorn Secondary Fund		52,230		-		71		(6)		-		(6)
Tres-Yujin Trust		26,264		202		5,347		5,344		-		5,344
Shinhan-Time mezzanine blind Fund		32,851		-		4,901		4,613		-		4,613
Capstone REITs No.26		51,536		40,798		914		(761)		-		(761)
JB Incheon-Bucheon REITS No.54		12,639		5		-		(29)		-		(29)
Hankook Smart Real Asset Investment Trust No.3		18,083		66		-		(4,986)		-		(4,986)
JB Hwaseong-Hadong REITs No.53		16,034		5		-		(29)		-		(29)
KB Oaktree Trust No.3		29,674		9		7,074		2,749		-		2,749
SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2		177,733		143		12,600		9,210		-		9,210
Shinhan JigaeNamsan Road Private Special Asset Investment Trust		159,621		83		6,948		(2,604)		-		(2,604)
KB Distribution Private Real Estate 3-1		64,261		50		5,118		5,118		-		5,118
Pacific Private Investment Trust No.49-1		40,988		5,671		(1,819)		(2,852)		-		(2,852)
KIWOOM Real estate private placement fund for normal investors No. 31		13,403		17		1,669		1,604		-		1,604
RIFA Real estate private placement fund for normal investoes No. 51		13,461		33		153		140		-		140
Shinhan-Kunicorn first Fund		24,603		7		7		(527)		-		(527)
Shinhan-Quantum Startup Fund		11,519		-		61		(246)		-		(246)
Shinhan Simone Fund Ⅰ		8,901		3		206		(1,098)		-		(1,098)
Korea Investment develop seed Trust No.1		25,407		45		3,987		3,881		-		3,881
Tiger Green alpha Trust No.29		31,545		53		2,345		2,187		-		2,187
STIC ALT Global II Private Equity Fund		45,398		129		3,073		2,548		-		2,548
DDI LVC Master Real Estate Investment Trust Co., Ltd.		38,594		8		(60)		(5,340)		-		(5,340)
Leverent-Frontier 4th Venture PEF		8,758		75		-		(5,109)		-		(5,109)
Find-Green New Deal 2nd Equity Fund		19,201		47		28		(625)		-		(625)
ShinhanFitrin 1st Technology Business Investment Association		26,243		68		2,869		2,445		-		2,445
Koramco Private Real Estate Fund 143		22,055		44		15		7		-		7
Korea Investment Top Mezzanine Private Real Esate Trust No.1		44,605		165		3,876		3,845		-		3,845
LB YoungNam Logistics Private Trust No.40		38,510		10		1,794		1,771		-		1,771
Shinhan-Cognitive Start-up Fund L.P.		12,844		-		4,046		2,657		-		2,657
Cornerstone J&M Fund I		12,849		47		1		(278)		-		(278)
Logisvalley Shinhan REIT Co.,Ltd.		78,877		55,563		3,872		(1,031)		-		(1,031)
Shinhan-Ji and Tec Smart Innovation Fund		26,008		-		1,395		984		-		984

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2024
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st	W	13,899		383		8		(420)		-		(420)
Korea Investment Green Newdeal Infra Trust No.1		57,567		25		-		(441)		-		(441)
BTS 2nd Private Equity Fund		39,434		359		527		81		-		81
NH-J&-IBKC Label Technology Fund		35,111		425		6		(363)		-		(363)
Hanyang Time Mezzanine Fund		8,790		-		270		(703)		-		(703)
Shinhan-Sneak Peek Bio&Healthcare Bounce Back Fund		7,831		-		815		810		-		810
Shinhan-isquare Venture PEF 1		10,655		63		-		(372)		-		(372)
Aurum Goldrush ESG Private Fund No. 1		10,629		16		332		316		-		316
Capstone Develop Frontier Trust		37,644		81		4,987		4,906		-		4,906
Nextrade Co., Ltd.		123,829		2,579		(12,517)		(34,855)		-		(34,855)
IBKC-Behigh Fund 1st		10,629		-		26		(198)		-		(198)
ON No.1 Private Equity Fund		19,991		-		1,628		1,369		-		1,369
Digital New Deal Kappa Private Equity Fund		19,178		-		-		(396)		-		(396)
IBKCJS New Technology Fund No.1		8,901		-		2,523		(3,720)		-		(3,720)
DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1		46,301		-		9		(753)		-		(753)
VOGO Debt Strategy General Private Real Estate Investment Trust No. 18		39,658		24		9,617		5,184		-		5,184
Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38		4,390		19		244		224		-		224
TogetherKorea Private Investment Trust No. 6		5,425		1		150		147		-		147
TogetherKorea Private Investment Trust No. 7		5,425		1		150		147		-		147
Kiwoom Core Industrial Technology Investment Fund No.3		12,139		-		239		112		-		112
Penture K-Content Investment Fund		57,553		337		505		(1,532)		-		(1,532)
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund		45,013		119		43		(3,047)		-		(3,047)
Hana Alternative Investment Kosmes PCBO General PEF No. 1		13,852		15		1,524		1,469		-		1,469
Shinhan-timefolio Bio Development Investment Fund		24,659		464		32		(458)		-		(458)
Shinhan M&A-ESG Fund		27,661		1		137		(1,245)		-		(1,245)
Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd. -		103,444		37,314		21,731		5,701		-		5,701
KDBC meta-enter New Technology investment fund		24,375		2		1		(513)		-		(513)
Shinhan Time Secondary Blind New Technology Investment Trust		9,762		-		133		(246)		-		(246)
Shinhan DS Secondary Investment Fund		5,047		152		(653)		(9,219)		-		(9,219)
Shinhan-openwater pre-IPO Investment Trust 1		11,337		5		1,873		1,386		-		1,386
Shinhan-CJ TechInnovation Fund 1st		11,488		-		66		(422)		-		(422)
Shinhan-Eco Venture Fund 2nd		9,935		42		-		(257)		-		(257)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2024
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1	W	16,243		-		835		358		-		358
Hantoo Shinhan Lake K-beauty Technology Investment Trust		44,701		-		1,878		1,284		-		1,284
Shinhan HB Wellness 1st Investment Trust		10,971		-		808		688		-		688
Korea real Asset Fund No.3		58,401		468		-		(2,198)		-		(2,198)
PineStreet Global Corporate FoF XIII-2 (NC XI)		3,748		5		173		(47)		-		(47)
Igis Yongsan Office General PE Real Estate Inv. Trust No. 518		271,916		206,529		16,409		(614)		-		(614)
Samsung-dunamu Innovative IT Technology Investment Trust No. 1		16,313		-		11		(3,419)		-		(3,419)
Time Robotics New Technology Investment Trust		12,651		-		240		40		-		40
Ascent-welcome Tehcnology Investment Trust No.2		30,597		-		16		(1,125)		-		(1,125)
Newmain I funds		25,757		3		25,313		20,278		-		20,278
Igis General PE Real Estate Investment Trust 517-1		57,074		346		11		(1,983)		-		(1,983)
SH Ulmus M.P.E. Innovative Venture Fund 7		10,612		-		250		112		-		112
Consus Osansegyo No.2		16,024		6		284		282		-		282
Shinhan AIM Private Fund of Fund 9-B		147,033		70		25,619		11,888		-		11,888
Shinhan General Private Real Estate Investment Trust No.3		130,731		2,057		5,557		(491)		-		(491)
Paros Kosdaq Venture General Private Investment Trust No. 5		23,074		-		916		2,087		-		2,087
Happy Pet Life Care New Technology Investment Association No.2		9,997		-		-		(1,523)		-		(1,523)
Shinhan-Soo Secondary Investment Association		21,567		-		77		(982)		-		(982)
TECHFIN RATINGS Co., Ltd.		32,223		4,000		170		(3,089)		-		(3,089)
SONGPA BIZ CLUSTER PFV CO LTD		909,499		860,724		-		(1,225)		-		(1,225)
Planeta PTE LTD		36,088		2,061		1,677		3,354		-		3,354
The E&Shinhan New Growth Up Fund		7,035		-		16		(163)		-		(163)
Shinhan-GB FutureFlow Fund L.P.		8,951		99		(98)		(801)		-		(801)
Credila Financial Services		6,597,497		5,362,148		188,931		36,768		-		36,768
Shinhan Market-Frontier Fund Ⅲ		29,058		-		89		(940)		-		(940)
DB IPO HighYield Fund 1		14,974		-		970		846		-		846
Exponential SQUARE Private Investment Trust No.1		10,233		18		3,365		220		-		220
Fine North America Credit Private Mixed Asset Investment Trust 22		8,610		769		1,062		401		-		401
IGIS Private Real Estate Investment No.454		14,022		12		95		81		-		81
IGIS Private Real Estate Investment No.462		6,445		39		223		176		-		176
BNW Recharge Private Equity Fund		33,918		133		2,050		1,755		-		1,755

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2024
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
United Partners Realasset Fund No.14	W	30,026		32		206		(6)		-		(6)
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.12		1,758,651		1,399,238		78,021		30,627		-		30,627
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.13		1,186,406		945,673		50,564		19,152		-		19,152
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.14		1,086,016		811,622		37,721		19,563		-		19,563
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.15		1,085,298		810,379		36,610		18,667		-		18,667
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.16		1,084,569		818,607		42,410		24,595		-		24,595
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.17		525,649		418,113		2,206		(155)		-		(155)
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.18		1,045,465		826,940		(1,922)		(4,905)		-		(4,905)
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.19		523,914		422,896		5,962		5,122		-		5,122
SH US Buyback&High Dividend Security Feeder Investment Trust(H)[Equity]		18,870		109		7,131		3,895		-		3,895

(*) Excluded the financial information of associates that are not subject to equity method due to disposal or of which the financial information is not available as of end of the year.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
BNP Paribas Cardif Life Insurance	W	2,937,652		2,675,629		49,330		(17,674)		54,555		36,881
Shinhan-Neoplux Energy Newbiz Fund		72,503		1,883		10,434		4,802		-		4,802
Shinhan-Albatross tech investment Fund		31,296		295		10,919		9,109		383		9,492
KCGI-SingA330-A Private Special Asset Investment Trust		19,299		1		1,579		1,578		-		1,578
VOGO Debt Strategy Qualified IV Private		32,674		15		4,003		1,987		-		1,987
Shinhan -Midas Dong-A Secondary Fund		8,603		-		-		(259)		-		(259)
ShinHan – Soo Young Entrepreneur Investment Fund No.1		20,511		252		5,702		5,467		-		5,467
Shinhan Praxis K-Growth Global Private Equity Fund		26,097		1		5		2		-		2
Kiwoom Milestone Professional Private Real Estate Trust 19		-		38,867		756		(311)		-		(311)
Shinhan Global Healthcare Fund 1		39		3,507		-		(1)		-		(1)
KB NA Hickory Private Special Asset Fund		64,327		70		4,636		(9,995)		-		(9,995)
Koramco Europe Core Private Placement Real Estate Fund No.2-2		44,606		1,899		1,255		(2,601)		-		(2,601)
KDBC-Midas Dong-A Global contents Fund		18,500		62		71		45		-		45
Shinhan-Nvestor Liquidity Solution Fund		24,720		289		173		(342)		-		(342)
Shinhan AIM FoF Fund 1-A		38,571		29		12,279		4,713		-		4,713
IGIS Global Credit Fund 150-1		17,155		12		2,224		1,586		-		1,586
Korea Omega Project Fund III		15,709		-		148		95		-		95
Genesis North America Power Company No.1 PEF		15,989		1,487		2,904		2,523		-		2,523
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		174,702		-		42,498		34,779		-		34,779
KOREA FINANCE SECURITY CO., LTD		36,392		14,629		48,995		(1,136)		-		(1,136)
MIEL CO.,LTD.		422		565		36		-		-		-
AIP Transportation Specialized Privately Placed Fund Trust #1		130,174		373		4,237		(38,058)		-		(38,058)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Kiwoom-Shinhan Innovation Fund I	W	16,081		373		1,531		(325)		-		(325)
Midas Asset Global CRE Debt Private Fund No.6		138,202		1,352		18,827		15,828		-		15,828
Samchully Midstream Private Placement Special Asset Fund 5-4		77,296		28		15,914		4,186		-		4,186
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3		36,283		10		5,351		5,130		-		5,130
NH-Amundi Global Infrastructure Trust 14		62,431		2		10,567		2,796		-		2,796
Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37		58,814		38		12,899		4,319		-		4,319
Milestone Private Real Estate Fund 3		54,945		-		5,117		(7,989)		-		(7,989)
Nomura-Rifa Private Real Estate Investment Trust 31		93,950		71,946		1,882		(192)		-		(192)
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2		14,760		6		17,929		13,371		-		13,371
FuturePlay-Shinhan TechInnovation Fund 1		15,922		227		2,392		1,861		-		1,861
Stonebridge Corporate 1st Fund		9,390		-		1,262		1,179		-		1,179
Vogo Realty Partners Private Real Estate Fund V		49,968		86		4,879		1,179		-		1,179
Korea Credit Bureau		129,155		54,287		160,189		19,880		-		19,880
Goduck Gangil1 PFV Co., Ltd.		209,615		192,311		340,451		11,493		-		11,493
SBC PFV Co., Ltd.		472,860		309,802		-		(5,733)		-		(5,733)
NH-amundi global infra private fund 16		102,499		1,195		291		(10,397)		-		(10,397)
SH BNCT Professional Investment Type Private Special Asset Investment Trust		337,617		-		32,744		19,052		-		19,052
Deutsche Global Professional Investment Type Private Real Estate Investment Trust No. 24		35,359		716		29,833		2,504		-		2,504
Sparklabs-Shinhan Opportunity Fund 1		7,916		9		1,834		848		-		848
IGIS Real-estate Private Investment Trust No.33		91,806		54,428		15,927		2,642		-		2,642
Goduck Gangil10 PFV Co., Ltd.		129,399		103,864		158,905		9,272		-		9,272
Fidelis Global Private Real Estate Trust No.2		745		52		-		(9)		-		(9)
AIP EURO PRIVATE REAL ESTATE TRUST No. 12		170,567		1,159		1,097		37		-		37
Shinhan Global Healthcare Fund 2		31		183		1		(2)		-		(2)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Shinhan AIM Real Estate Fund No.2	W	90,066		1,140		19,579		4,783		-		4,783
Shinhan AIM Real Estate Fund No.1		247,193		296		89,979		3,070		-		3,070
SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust		158,010		55		18,673		13,942		-		13,942
SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust		69,059		361		2,753		2,583		-		2,583
SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2		24,554		31		2,926		750		-		750
Korea Omega-Shinhan Project Fund I		23,261		-		3,356		3,216		-		3,216
Samsung SRA Real Estate Professional Private 45		128,943		3,215		13		(44)		-		(44)
IBK Global New Renewable Energy Special Asset Professional Private2		111,460		36		16,458		(9,724)		-		(9,724)
VS Cornerstone Fund		8,094		127		-		(133)		-		(133)
NH-Amundi US Infrastructure Private Fund2		114,783		45		60,166		8,411		-		8,411
SH Japan Photovoltaic Private Special Asset Investment Trust No.2		7,797		85		9,439		1,137		-		1,137
Kakao-Shinhan 1st TNYT Fund		40,992		134		77		(3,012)		-		(3,012)
Pacific Private Placement Real Estate Fund No.40		145,871		98,869		4,152		3,031		-		3,031
Mastern Private Real Estate Loan Fund No.2		9,081		24		1,049		989		-		989
LB Scotland Amazon Fulfillment Center Fund 29		44,187		93		7,071		4,339		-		4,339
JR AMC Hungary Budapest Office Fund 16		40,697		1,742		8,394		3,081		-		3,081
EDNCENTRAL Co.,Ltd.		120,947		163,105		657		(18,592)		-		(18,592)
Future-Creation Neoplux Venture Capital Fund		20,097		3,601		6,093		(4,198)		-		(4,198)
Gyeonggi-Neoplux Superman Fund		24,409		1,174		2,874		(1,889)		-		(1,889)
NewWave 6th Fund		46,704		984		5,322		585		-		585
Neoplux No.3 Private Equity Fund		195,669		5,877		24,125		(14,695)		-		(14,695)
PCC Amberstone Private Equity Fund I		82,150		2,509		13,537		4,144		-		4,144
KIAMCO POWERLOAN TRUST 4TH		95,224		15		8,657		8,193		-		8,193
Mastern Opportunity Seeking Real Estate Fund II		59,113		-		11,061		11,043		-		11,043

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Neoplux Market-Frontier Secondary Fund	W	53,425		597		17,711		708		-		708
Harvest Private Equity Fund II		13,718		217		119		(613)		-		(613)
Synergy Green New Deal 1st New Technology Business Investment Fund		36,618		-		764		(610)		-		(610)
KIAMCO Vietnam Solar Special Asset Private Investment Trust		13,693		21		2,644		658		-		658
SHINHAN-NEO Core Industrial Technology Fund		27,494		123		8,970		8,456		-		8,456
SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2		77,888		34		3,376		2,913		-		2,913
SIMONE Mezzanine Fund No.3		4,179		3		2,625		521		-		521
Eum Private Equity Fund No.7		43,658		6		632		(19)		-		(19)
Kiwoom Hero No.4 Private Equity Fund		16,580		228		356		(356)		-		(356)
Vogo Canister Professional Trust Private Fund I		249,535		124,697		19,630		7,122		-		7,122
Timefolio The Venture-V second		28,125		135		8,764		8,226		-		8,226
Shinhan Smilegate Global PEF I		30,053		3,305		14		(477)		-		(477)
Genesis Eco No.1 PEF		38,676		-		1		(686)		-		(686)
SHINHAN-NEO Market-Frontier 2nd Fund		78,108		1,596		4,660		(14,099)		-		(14,099)
NH-Synergy Core Industrial New Technology Fund		17,437		-		1,813		168		-		168
J& Moorim Jade Investment Fund		19,829		57		1,054		1,097		-		1,097
Helios-KDBC Digital Contents 1st		9,785		85		19		1,535		-		1,535
Ulmus SHC innovation investment fund		23,060		-		2,967		2,734		-		2,734

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
T Core Industrial Technology 1st Venture PEF	W	13,541		22		216		(874)		-		(874)
Fine Value POST IPO No.5 Private Equity Fund		9,441		26		3,921		3,740		-		3,740
TI First Property Private Investment Trust 1		7,773		17		1,353		445		-		445
MPLUS Professional Private Real Estate Fund 25		11,946		6,286		-		(4,495)		-		(4,495)
IBKC Global Contents Investment Fund		19,634		359		1,127		611		-		611
Hanyang-Meritz 1 Fund		13,202		-		1,093		903		-		903
Kiwoom-Shinhan Innovation Fund 2		21,555		170		5,952		5,431		-		5,431
ETRI Holdings-Shinhan 1st Unicorn Fund		6,590		-		6		(199)		-		(199)
SJ ESG Innovative Growth Fund		14,693		-		127		4		-		4
AVES 1st Corporate Recovery Private Equity Fund		6,331		72		-		(380)		-		(380)
JS Shinhan Private Equity Fund		123,099		-		8		(1,470)		-		(1,470)
Daishin Newgen New Technology Investment Fund 1st		12,044		25		907		747		-		747
META ESG Private Equity Fund I		21,063		-		31		(314)		-		(314)
PHAROS DK FUND		10,179		21		838		165		-		165
Shinhan VC tomorrow venture fund 1		114,834		730		3,462		147		-		147
H-IOTA Fund		38,721		338		966		564		-		564
Stonebridge-Shinhan Unicorn Secondary Fund		28,551		-		3		(6,069)		-		(6,069)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2022 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
Tres-Yujin Trust	W	20,820		102		712		710		-		710
Shinhan-Time mezzanine blind Fund		28,243		-		2,237		1,617		-		1,617
Capstone REITs No.26		46,661		35,161		9,371		4,395		-		4,395
JB Incheon-Bucheon REITS No.54		12,667		5		-		(27)		-		(27)
Hankook Smart Real Asset Investment Trust No.3		23,032		26		2,052		2,026		-		2,026
JB Hwaseong-Hadong REITs No.53		16,065		5		1		(27)		-		(27)
KB Oaktree Trust No.3		26,012		8		6,097		2,502		-		2,502
Daehan No.36 Office Asset Management Company		153,846		107,055		6,232		882		-		882
Rhinos Premier Mezzanine Private Investment Fund No.1		10,965		20		98		83		-		83
SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2		211,192		59		11,320		6,949		-		6,949
Shinhan JigaeNamsan Road Private Special Asset Investment Trust		166,822		84		8,934		3,328		-		3,328
SKS-Yozma Fund No.1		12,315		740		4,529		3,337		-		3,337
KB Distribution Private Real Estate 3-1		69,558		289		67		42		-		42
Pacific Private Investment Trust No.49-1		40,024		5,491		-		(437)		-		(437)
KIWOOM Real estate private placement fund for normal investors No. 31		14,278		14		-		(16)		-		(16)
RIFA Real estate private placement fund for normal investoes No. 51		14,358		29		1		(16)		-		(16)
Fivetree general private equity fund No.15		25,184		29		817		788		-		788
Shinhan-Kunicorn first Fund		25,126		-		9		(534)		-		(534)
Shinhan-Quantum Startup Fund		8,105		-		40		(270)		-		(270)
Shinhan Simone Fund Ⅰ		12,582		4		311		107		-		107
Korea Investment develop seed Trust No.1		24,168		338		582		478		-		478
Tiger Green alpha Trust No.29		30,054		51		2,634		2,473		-		2,473
STIC ALT Global II Private Equity Fund		43,848		130		5		(630)		-		(630)
NH-Brain EV Fund		44,499		-		4		(1,868)		-		(1,868)
DDI LVC Master Real Estate Investment Trust Co., Ltd.		43,817		8		-		(1,809)		-		(1,809)
Leverent-Frontier 4th Venture PEF		13,792		-		1,530		1,380		-		1,380
Find-Green New Deal 2nd Equity Fund		19,779		-		2		(190)		-		(190)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
ShinhanFitrin 1st Technology Business Investment Association	W	28,025		73		3,160		2,758		-		2,758
Koramco Private Real Estate Fund 143		22,026		23		11		2		-		2
Korea Investment Top Mezzanine Private Real Esate Trust No.1		45,815		740		5,900		5,849		-		5,849
LB YoungNam Logistics Private Trust No.40		39,139		10		2,561		2,538		-		2,538
Shinhan-Cognitive Start-up Fund L.P.		16,518		254		2,557		2,197		-		2,197
Cornerstone J&M Fund I		13,129		47		3		(274)		-		(274)
Logisvalley Shinhan REIT Co.,Ltd.		78,925		56,307		4,840		(1,017)		-		(1,017)
DA Value-Honest New Technology Investment Fund 1		17,329		-		10,911		10,910		-		10,910
Shinhan-Ji and Tec Smart Innovation Fund		19,954		-		21		(820)		-		(820)
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st		14,318		382		6		(416)		-		(416)
Korea Investment Green Newdeal Infra Trust No.1		36,689		21		52		21		-		21
BTS 2nd Private Equity Fund		25,136		742		101		(1,116)		-		(1,116)
Shinhan Global Active REIT Co.Ltd.		191,211		97,944		-		(766)		-		(766)
NH-J&-IBKC Label Technology Fund		35,347		294		13		(428)		-		(428)
Hanyang Time Mezzanine Fund		10,543		-		127		43		-		43
Shinhan-isquare Venture PEF 1		10,741		25		3		(528)		-		(528)
Capstone Develop Frontier Trust		35,305		83		5,942		5,859		-		5,859
Nextrade Co., Ltd.		140,424		19,174		6,626		(8,432)		-		(8,432)
SH 1.5years Maturity Investment Type Security Investment Trust No.2		17,814		1,200		908		798		-		798
Eventus-IBKC LIB Fund		30,326		8		3,215		2,729		-		2,729
IBKC-Behigh Fund 1st		10,829		-		31		(165)		-		(165)
ON No.1 Private Equity Fund		18,625		-		125		(144)		-		(144)
Digital New Deal Kappa Private Equity Fund		19,576		-		1		(408)		-		(408)
IBKCJS New Technology Fund No.1		20,842		-		4,123		3,842		-		3,842
DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1		47,055		-		3		(945)		-		(945)
VOGO Debt Strategy General Private Real Estate Investment Trust No. 18		42,082		35		5,917		3,496		-		3,496
Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38		4,248		19		247		228		-		228
TogetherKorea Private Investment Trust No. 6		5,273		1		223		218		-		218
TogetherKorea Private Investment Trust No. 7		5,273		1		223		218		-		218
Kiwoom Core Industrial Technology Investment Fund No.3		12,058		29		592		518		-		518
Penture K-Content Investment Fund		25,938		338		196		(1,721)		-		(1,721)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(c) The statement of financial information as of and for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
Investees		Asset		Liability		Operating<br><br>revenue		Net profit<br><br>(loss)		Other comprehen-<br><br>sive income<br><br>(loss)		Total comprehen-<br><br>sive income<br><br>(loss)
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund	W	26,684		121		785		438		-		438
Hana Alternative Investment Kosmes PCBO General PEF No. 1		13,806		15		1,007		992		-		992
Shinhan-timefolio Bio Development Investment Fund		12,420		170		23		(150)		-		(150)
Shinhan M&A-ESG Fund		18,154		285		31		(791)		-		(791)
Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd. -		37,231		41		3,710		3,548		-		3,548
KDBC meta-enter New Technology investment fund		24,889		2		-		(215)		-		(215)
Shinhan Time Secondary Blind New Technology Investment Trust		10,009		-		50		9		-		9
Shinhan DS Secondary Investment Fund		18,709		15		14,179		14,156		-		14,156
Shinhan-openwater pre-IPO Investment Trust 1		9,947		-		2		(55)		-		(55)
Shinhan-Eco Venture Fund 2nd		9,067		42		1		(100)		-		(100)
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1		7,885		-		65		(115)		-		(115)
Hantoo Shinhan Lake K-beauty Technology Investment Trust		43,417		-		1		(133)		-		(133)
Shinhan HB Wellness 1st Investment Trust		10,285		-		17		(17)		-		(17)
Korea real Asset Fund No.3		32,625		20		170		(193)		-		(193)
Igis Yongsan Office General PE Real Estate Inv. Trust No. 518		278,662		205,204		3,943		(650)		-		(650)
Samsung-dunamu Innovative IT Technology Investment Trust No. 1		20,175		444		2,875		2,331		-		2,331
Time Robotics New Technology Investment Trust		13,284		-		-		(114)		-		(114)
Ascent-welcome Tehcnology Investment Trust No.2		31,722		-		2		(828)		-		(828)
Igis General PE Real Estate Investment Trust 517-1		54,015		289		-		(274)		-		(274)
Consus Osansegyo No.2		16,209		-		24		22		-		22
Mastern General Private Real Estate Investment Trust No.189(Type 1 Beneficiary Securities)		123,657		99,729		1,285		(2,073)		-		(2,073)
Shinhan AIM Private Fund of Fund 9-B		96,124		51		9,992		3,928		-		3,928
Shinhan General Private Real Estate Investment Trust No.3		38,175		410		591		564		-		564
NH Absolute Project L General Private Investment Trust		18,863		65		7		1,556		-		1,556
Paros Kosdaq Venture General Private Investment Trust No. 5		8,998		3		5		(9)		-		(9)
Happy Pet Life Care New Technology Investment Association No.2		11,868		347		1,868		1,520		-		1,520
Shinhan-Soo Secondary Investment Association		6,764		-		-		(1)		-		(1)

(*) Excluded the financial information of associates that are not subject to equity method due to disposal or of which the financial information is not available as of end of the year.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows:

	December 31, 2024
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
BNP Paribas Cardif Life Insurance	W	243,101		14.99		36,441		(5)		-		36,436
Shinhan-Neoplux Energy Newbiz Fund		46,152		31.66		14,612		-		-		14,612
Shinhan-Albatross tech investment Fund		17,346		50.00		8,672		-		-		8,672
VOGO Debt Strategy Qualified IV Private		18,565		20.00		3,713		-		-		3,713
Shinhan-Midas Donga Secondary Fund		6,304		50.00		3,152		-		-		3,152
ShinHan – Soo Young Entrepreneur Investment Fund No.1		14,087		24.00		3,381		-		-		3,381
Shinhan Praxis K-Growth Global Private Equity Fund		26,081		14.15		3,690		-		-		3,690
Kiwoom Milestone Professional Private Real Estate Trust 19 (*2)		(39,013)		50.00		(19,506)		-		19,506		-
Shinhan Global Healthcare Fund 1 (*2)		(4,886)		3.13		(153)		-		153		-
KB NA Hickory Private Special Asset Fund		46,649		37.50		17,493		-		-		17,493
Koramco Europe Core Private Placement Real Estate Fund No.2-2		15,481		44.02		6,815		-		-		6,815
KDBC-Midas Dong-A Global contents Fund		11,354		23.26		2,640		-		-		2,640
Shinhan-Nvestor Liquidity Solution Fund		20,571		24.92		5,126		-		-		5,126
Shinhan AIM For Fund 1-A		39,214		25.00		9,804		-		-		9,804
IGIS Global Credit Fund 150-1		19,954		25.00		4,989		-		-		4,989
Genesis North America Power Company No.1 PEF		15,514		43.84		6,802		-		-		6,802
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		40,294		23.33		9,402		-		-		9,402
KOREA FINANCE SECURITY CO., LTD		23,754		14.91		3,542		-		-		3,542
MIEL CO.,LTD. (*2)		(142)		28.77		(41)		-		41		-
AIP Transportation Specialized Privately Placed Fund Trust #1		164,607		35.73		58,807		-		-		58,807
Kiwoom-Shinhan Innovation Fund I		15,957		50.00		7,979		-		-		7,979
Samchully Midstream Private Placement Special Asset Fund 5-4		94,762		41.67		39,484		-		-		39,484
MK Ventures-K Clavis Growth Capital Venture Fund 1		10		26.67		3		-		-		3
Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37		59,022		60.00		35,413		-		-		35,413
Milestone Private Real Estate Fund 3		59,637		32.06		19,120		-		-		19,120
Nomura-Rifa Private Real Estate Investment Trust 31		20,258		31.31		6,343		-		-		6,343
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2		11,839		21.27		2,518		-		-		2,518

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2024
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
FuturePlay-Shinhan TechInnovation Fund 1	W	11,570		50.00		5,785		-		-		5,785
Stonebridge Corporate 1st Fund		9,015		44.12		3,977		-		-		3,977
Vogo Realty Partners Private Real Estate Fund V		49,278		21.64		10,662		-		-		10,662
Korea Credit Bureau		84,159		9.00		7,574		-		-		7,574
Goduck Gangil1 PFV Co., Ltd.		9,252		1.04		96		-		-		96
SBC PFV Co., Ltd. (*3)		190,424		25.00		47,606		-		(9,990)		37,616
NH-amundi global infra private fund 16		65,935		50.00		32,968		-		-		32,968
SH BNCT Professional Investment Type Private Special Asset Investment Trust		311,321		72.50		225,708		-		-		225,708
Sparklabs-Shinhan Opportunity Fund 1		5,505		49.50		2,725		-		-		2,725
IGIS Real-estate Private Investment Trust No.33		38,261		40.86		15,632		-		-		15,632
Goduck Gangil10 PFV Co., Ltd.		30,978		19.90		6,165		-		-		6,165
Fidelis Global Private Real Estate Trust No.2		691		79.63		551		-		-		551
AIP EURO PRIVATE REAL ESTATE TRUST No. 12		85,868		28.70		24,644		-		-		24,644
Shinhan Healthcare Fund 2 (*2)		(152)		13.68		(21)		-		21		-
Shinhan AIM Real Estate Fund No.2		5,180		30.00		1,554		-		-		1,554
Shinhan AIM Real Estate Fund No.1		13,727		21.01		2,884		-		-		2,884
SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust		179,344		22.02		39,491		-		-		39,491
SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust		75,185		29.19		21,947		-		-		21,947
SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2		22,077		71.43		15,770		-		-		15,770
Korea Omega-Shinhan Project Fund I		38,945		50.00		19,473		-		-		19,473
Samsung SRA Real Estate Professional Private 45		121,103		25.00		30,276		-		-		30,276
IBK Global New Renewable Energy Special Asset Professional Private2		114,189		28.98		33,098		-		-		33,098
VS Cornerstone Fund		7,831		41.18		3,225		-		-		3,225
NH-Amundi US Infrastructure Private Fund2		2,099		25.91		544		-		-		544
Kakao-Shinhan 1st TNYT Fund		48,697		48.62		23,678		-		-		23,678
Pacific Private Placement Real Estate Fund No.40		46,996		24.73		11,623		-		-		11,623
Mastern Private Real Estate Loan Fund No.2		3,963		33.57		1,330		-		-		1,330
LB Scotland Amazon Fulfillment Center Fund 29		28,996		65.00		18,848		-		-		18,848
JR AMC Hungary Budapest Office Fund 16		40,488		32.57		13,187		-		-		13,187
EDNCENTRAL Co.,Ltd. (*2)		(77,934)		13.47		(10,495)		-		10,495		-

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2024
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Gyeonggi-Neoplux Superman Fund	W	19,014		21.76		4,138		-		-		4,138
NewWave 6th Fund		35,694		30.00		10,708		-		-		10,708
Neoplux No.3 Private Equity Fund		121,523		10.00		12,152		-		-		12,152
PCC Amberstone Private Equity Fund I		67,099		21.67		14,540		-		-		14,540
KIAMCO POWERLOAN TRUST 4TH		102,818		47.37		48,703		-		-		48,703
Mastern Opportunity Seeking Real Estate Fund II		23,725		22.22		5,272		-		-		5,272
Neoplux Market-Frontier Secondary Fund		41,421		19.74		8,175		-		-		8,175
Synergy Green New Deal 1st New Technology Business Investment Fund		38,542		28.17		10,857		-		-		10,857
KIAMCO Vietnam Solar Special Asset Private Investment Trust		14,205		50.00		7,103		-		-		7,103
SHINHAN-NEO Core Industrial Technology Fund		16,304		49.75		8,111		-		-		8,111
SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2		72,365		30.00		21,710		-		-		21,710
Eum Private Equity Fund No.7		43,604		21.00		9,156		-		-		9,156
Kiwoom Hero No.4 Private Equity Fund		19,934		21.05		4,197		-		-		4,197
AJ-KOSNET Semicon One Venture Fund		14,454		22.22		3,212		-		-		3,212
Timefolio The Venture-V second		6,586		20.73		1,365		-		-		1,365
Shinhan Smilegate Global PEF I		27,323		14.21		3,882		-		-		3,882
Genesis Eco No.1 PEF		38,185		29.01		11,077		-		-		11,077
SHINHAN-NEO Market-Frontier 2nd Fund		64,400		42.70		27,499		-		-		27,499
J& Moorim Jade Investment Fund		21,508		24.89		5,353		-		-		5,353
Ulmus SHC innovation investment fund		17,910		24.04		4,305		-		-		4,305
T Core Industrial Technology 1st Venture PEF		9,518		31.47		2,995		-		-		2,995
TI First Property Private Investment Trust 1		7,755		40.00		3,102		-		-		3,102
Kiwoom-Shinhan Innovation Fund 2		23,862		42.86		10,227		-		-		10,227
ETRI Holdings-Shinhan 1st Unicorn Fund		9,391		50.00		4,696		-		-		4,696
SJ ESG Innovative Growth Fund		10,902		28.57		3,115		-		-		3,115
AVES 1st Corporate Recovery Private Equity Fund		5,937		76.19		4,523		-		-		4,523

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2024
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Reverent-Shinhan Vista Fund	W	25,415		13.41		3,409		-		-		3,409
JS Shinhan Private Equity Fund		165,747		3.85		6,381		-		-		6,381
META ESG Private Equity Fund I		20,742		27.40		5,683		-		-		5,683
Shinhan VC tomorrow venture fund 1		178,267		39.62		70,633		-		-		70,633
H-IOTA Fund		37,789		24.81		9,377		-		-		9,377
Stonebridge-Shinhan Unicorn Secondary Fund		52,230		26.01		13,587		-		-		13,587
Tres-Yujin Trust		26,062		50.00		13,031		-		-		13,031
Shinhan-Time mezzanine blind Fund		32,851		50.00		16,426		-		-		16,426
Capstone REITs No.26		10,738		50.00		5,369		-		-		5,369
JB Incheon-Bucheon REITS No.54		12,634		39.31		4,967		-		-		4,967
Hankook Smart Real Asset Investment Trust No.3		18,017		33.33		6,006		-		-		6,006
JB Hwaseong-Hadong REITs No.53		16,029		31.03		4,974		-		-		4,974
KB Oaktree Trust No.3		29,665		33.33		9,888		-		-		9,888
SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2		177,590		29.73		52,797		-		-		52,797
Shinhan JigaeNamsan Road Private Special Asset Investment Trust		159,538		24.85		39,645		-		-		39,645
KB Distribution Private Real Estate 3-1		64,211		37.50		24,079		-		-		24,079
Pacific Private Investment Trust No.49-1		35,317		79.28		28,000		-		-		28,000
KIWOOM Real estate private placement fund for normal investors No. 31		13,386		60.00		8,032		-		-		8,032
RIFA Real estate private placement fund for normal investoes No. 51		13,428		40.00		5,371		-		-		5,371
Shinhan-Kunicorn first Fund		24,596		38.31		9,424		-		-		9,424
Shinhan-Quantum Startup Fund		11,519		49.18		5,665		-		-		5,665
Shinhan Simone Fund Ⅰ		8,898		38.46		3,422		-		-		3,422
Korea Investment develop seed Trust No.1		25,362		40.00		10,145		-		-		10,145
Tiger Green alpha Trust No.29		31,492		95.24		29,992		-		-		29,992
STIC ALT Global II Private Equity Fund		45,269		21.74		9,841		-		-		9,841
DDI LVC Master Real Estate Investment Trust Co., Ltd. (*1)		38,586		15.00		5,788		-		12		5,800
Leverent-Frontier 4th Venture PEF		8,683		23.89		2,074		-		-		2,074
Find-Green New Deal 2nd Equity Fund		19,154		22.57		4,324		-		-		4,324
ShinhanFitrin 1st Technology Business Investment Association		26,175		16.17		4,232		-		-		4,232
Koramco Private Real Estate Fund 143		22,011		30.30		6,669		-		-		6,669
Korea Investment Top Mezzanine Private Real Esate Trust No.1		44,440		22.22		9,876		-		-		9,876
LB YoungNam Logistics Private Trust No.40		38,500		25.00		9,625		-		-		9,625
Shinhan-Cognitive Start-up Fund L.P.		12,844		32.77		4,209		-		-		4,209
Cornerstone J&M Fund I		12,802		26.67		3,414		-		-		3,414
Logisvalley Shinhan REIT Co.,Ltd. (*1)		23,314		20.27		4,726		-		(1,337)		3,389
Shinhan-Ji and Tec Smart Innovation Fund		26,008		50.00		13,004		-		-		13,004

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amounts of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2024
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st	W	13,516		50.00		6,758		-		-		6,758
Korea Investment Green Newdeal Infra Trust No.1		57,542		27.97		16,096		-		-		16,096
BTS 2nd Private Equity Fund		39,075		26.00		10,159		-		-		10,159
NH-J&-IBKC Label Technology Fund		34,686		27.81		9,646		-		-		9,646
Hanyang Time Mezzanine Fund		8,790		28.57		2,511		-		-		2,511
Shinhan-Sneak Peek Bio&Healthcare Bounce Back Fund		7,831		50.00		3,916		-		-		3,916
Shinhan-isquare Venture PEF 1		10,592		40.00		4,237		-		-		4,237
Aurum Goldrush ESG Private Fund No. 1		10,613		28.33		3,007		-		-		3,007
Capstone Develop Frontier Trust		37,563		21.43		8,049		-		-		8,049
Nextrade Co., Ltd.		121,250		8.00		9,700		-		-		9,700
IBKC-Behigh Fund 1st		10,629		29.73		3,160		-		-		3,160
ON No.1 Private Equity Fund		19,991		28.57		5,712		-		-		5,712
Digital New Deal Kappa Private Equity Fund		19,178		24.75		4,747		-		-		4,747
IBKCJS New Technology Fund No.1		8,901		29.41		2,618		-		-		2,618
DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1		46,301		20.83		9,646		-		-		9,646
VOGO Debt Strategy General Private Real Estate Investment Trust No. 18		39,634		28.57		11,324		-		-		11,324
Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38		4,371		75.00		3,278		-		-		3,278
TogetherKorea Private Investment Trust No. 6		5,424		99.98		5,423		-		-		5,423
TogetherKorea Private Investment Trust No. 7		5,424		99.98		5,423		-		-		5,423
Kiwoom Core Industrial Technology Investment Fund No.3		12,139		34.75		4,219		-		-		4,219
Penture K-Content Investment Fund		57,216		19.78		11,319		-		-		11,319
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund		44,894		30.00		13,468		-		-		13,468
Hana Alternative Investment Kosmes PCBO General PEF No. 1		13,837		37.04		5,125		-		-		5,125
Shinhan-timefolio Bio Development Investment Fund		24,195		48.39		11,707		-		-		11,707
Shinhan M&A-ESG Fund		27,660		23.33		6,454		-		-		6,454
Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd. -		66,130		28.43		18,804		-		-		18,804
KDBC meta-enter New Technology investment fund		24,373		27.89		6,797		-		-		6,797
Shinhan Time Secondary Blind New Technology Investment Trust		9,762		47.50		4,637		-		-		4,637
Shinhan DS Secondary Investment Fund		4,895		49.83		2,439		-		-		2,439
Shinhan-openwater pre-IPO Investment Trust 1		11,332		50.00		5,666		-		-		5,666
Shinhan-CJ TechInnovation Fund 1st		11,488		40.00		4,595		-		-		4,595
Shinhan-Eco Venture Fund 2nd		9,893		40.00		3,957		-		-		3,957

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amounts of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2024
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1	W	16,243		40.00		6,497		-		-		6,497
Hantoo Shinhan Lake K-beauty Technology Investment Trust		44,701		22.96		10,264		-		-		10,264
Shinhan HB Wellness 1st Investment Trust		10,971		48.54		5,326		-		-		5,326
Korea real Asset Fund No.3		57,933		28.57		16,552		-		-		16,552
PineStreet Global Corporate FoF XIII-2 (NC XI)		3,743		100.00		3,743		-		-		3,743
Igis Yongsan Office General PE Real Estate Inv. Trust No. 518		65,387		26.22		17,144		-		-		17,144
Samsung-dunamu Innovative IT Technology Investment Trust No. 1		16,313		22.99		3,750		-		-		3,750
Time Robotics New Technology Investment Trust		12,651		29.86		3,778		-		-		3,778
Ascent-welcome Tehcnology Investment Trust No.2		30,597		27.65		8,460		-		-		8,460
Newmain I funds		25,754		36.36		9,364		-		-		9,364
Igis General PE Real Estate Investment Trust 517-1		56,728		96.78		54,902		-		-		54,902
SH Ulmus M.P.E. Innovative Venture Fund 7		10,612		28.57		3,032		-		-		3,032
Consus Osansegyo No.2		16,018		50.00		8,009		-		-		8,009
Shinhan AIM Private Fund of Fund 9-B		146,963		25.00		36,741		-		-		36,741
Shinhan General Private Real Estate Investment Trust No.3		128,674		20.75		26,706		-		-		26,706
Paros Kosdaq Venture General Private Investment Trust No. 5		23,074		28.56		6,590		-		-		6,590
Happy Pet Life Care New Technology Investment Association No.2		9,997		30.00		2,999		-		-		2,999
Shinhan-Soo Secondary Investment Association		21,567		77.61		16,737		-		-		16,737
TECHFIN RATINGS Co., Ltd. (*4)		28,223		45.00		12,700		-		12,910		25,610
SONGPA BIZ CLUSTER PFV CO LTD		48,775		27.40		13,364		-		-		13,364
Planeta PTE LTD		34,027		33.33		11,341		-		-		11,341
The E&Shinhan New Growth Up Fund		7,035		50.00		3,518		-		-		3,518
Shinhan-GB FutureFlow Fund L.P.		8,852		58.18		5,150		-		-		5,150
Credila Financial Services (*4)		1,235,349		10.93		135,024		-		128,092		263,116
Shinhan Market-Frontier Fund Ⅲ		29,058		44.02		12,791		-		-		12,791
DB IPO HighYield Fund 1		14,974		28.57		4,278		-		-		4,278
Exponential SQUARE Private Investment Trust No.1		10,215		50.99		5,208		-		-		5,208
Fine North America Credit Private Mixed Asset Investment Trust 22		7,841		58.82		4,613		-		-		4,613
IGIS Private Real Estate Investment No.454		14,010		24.04		3,368		-		-		3,368
IGIS Private Real Estate Investment No.462		6,406		69.20		4,433		-		-		4,433
BNW Recharge Private Equity Fund		33,785		21.13		7,138		-		-		7,138

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amounts of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2024
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
United Partners Realasset Fund No.14	W	29,994		33.33		9,998		-		-		9,998
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.12		359,413		5.00		17,977		-		-		17,977
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.13		240,733		5.00		12,035		-		-		12,035
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.14		274,394		5.00		13,711		-		-		13,711
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.15		274,919		5.00		13,738		-		-		13,738
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.16		265,962		5.00		13,290		-		-		13,290
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.17		107,536		5.00		5,378		-		-		5,378
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.18		218,525		5.00		10,925		-		-		10,925
Shinhan Securities HIFI Bond SafeR 2Y Private Fund No.19		101,018		5.00		5,052		-		-		5,052
SH US Buyback&High Dividend Security Feeder Investment Trust(H)[Equity]		18,761		22.37		4,197		-		-		4,197

(*1) Others represents the adjustments of fair value when acquired.

(*2) Others are the amount of fair value adjustments that occurred at the time of acquisition and accumulated losses that were not recognized due to the suspension of equity method recognition as the investment account balance became “0” due to the accumulation of losses for the current period.

(*3) Others are the unrecognized equity method for preferred stocks without voting rights issued by the investee.

(*4) Others correspond to the goodwill recognized at the time of acquisition.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2023
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
BNP Paribas Cardif Life Insurance	W	262,022		14.99		39,277		(5)		-		39,272
Shinhan-Neoplux Energy Newbiz Fund		70,619		31.66		22,358		-		-		22,358
Shinhan-Albatross tech investment Fund		31,000		50.00		15,499		-		-		15,499
KCGI-SingA330-A Private Special Asset Investment Trust		19,297		23.89		4,609		-		-		4,609
VOGO Debt Strategy Qualified IV Private		32,658		20.00		6,532		-		-		6,532
Shinhan -Midas Dong-A Secondary Fund		8,602		50.00		4,301		-		-		4,301
ShinHan – Soo Young Entrepreneur Investment Fund No.1		20,258		24.00		4,862		-		-		4,862
Shinhan Praxis K-Growth Global Private Equity Fund		26,095		14.15		3,692		-		-		3,692
Kiwoom Milestone Professional Private Real Estate Trust 19 (*2)		(38,868)		50.00		(19,434)		-		19,434		-
Shinhan Global Healthcare Fund 1 (*2)		(3,469)		4.41		(153)		-		153		-
KB NA Hickory Private Special Asset Fund		64,256		37.50		24,096		-		-		24,096
Koramco Europe Core Private Placement Real Estate Fund No.2-2		42,706		44.02		18,799		-		-		18,799
KDBC-Midas Dong-A Global contents Fund		18,437		23.26		4,288		-		-		4,288
Shinhan-Nvestor Liquidity Solution Fund		24,430		24.92		6,088		-		-		6,088
Shinhan AIM FoF Fund 1-A		38,541		25.00		9,635		-		-		9,635
IGIS Global Credit Fund 150-1		17,142		25.00		4,286		-		-		4,286
Korea Omega Project Fund III		15,708		23.53		3,696		-		-		3,696
Genesis North America Power Company No.1 PEF		14,501		43.84		6,358		-		-		6,358
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		174,701		23.33		40,764		-		-		40,764
KOREA FINANCE SECURITY CO., LTD		21,762		14.91		3,245		-		-		3,245
MIEL CO.,LTD. (*2)		(144)		28.77		(41)		-		41		-
AIP Transportation Specialized Privately Placed Fund Trust #1		129,800		35.73		46,372		-		-		46,372
Kiwoom-Shinhan Innovation Fund I		15,707		50.00		7,854		-		-		7,854
Midas Asset Global CRE Debt Private Fund No.6		136,849		40.10		54,881		-		-		54,881
Samchully Midstream Private Placement Special Asset Fund 5-4		77,267		42.92		33,163		-		-		33,163
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3		36,272		20.00		7,254		-		-		7,254
NH-Amundi Global Infrastructure Trust 14		62,428		30.00		18,728		-		-		18,728
Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37		58,775		60.00		35,265		-		-		35,265

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2023
Investees		Net assets<br><br>(a)		Ownership (%) (b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Milestone Private Real Estate Fund 3	W	54,944		32.06		17,615		-		-		17,615
Nomura-Rifa Private Real Estate Investment Trust 31		22,003		31.31		6,889		-		-		6,889
SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2		14,753		21.27		3,138		-		-		3,138
FuturePlay-Shinhan TechInnovation Fund 1		15,694		50.00		7,847		-		-		7,847
Stonebridge Corporate 1st Fund		9,389		44.12		4,142		-		-		4,142
Vogo Realty Partners Private Real Estate Fund V		49,881		21.64		10,792		-		-		10,792
Korea Credit Bureau		74,867		9.00		6,738		-		-		6,738
Goduck Gangil1 PFV Co., Ltd.		17,303		1.04		180		-		-		180
SBC PFV Co., Ltd. (*3)		163,057		25.00		40,764		-		(9,990)		30,774
NH-amundi global infra private fund 16		101,303		50.00		50,652		-		-		50,652
SH BNCT Professional Investment Type Private Special Asset Investment Trust		337,616		72.50		244,772		-		-		244,772
Deutsche Global Professional Investment Type Private Real Estate Investment Trust No. 24		34,642		52.28		18,110		-		-		18,110
Sparklabs-Shinhan Opportunity Fund 1		7,906		49.50		3,914		-		-		3,914
IGIS Real-estate Private Investment Trust No.33		37,377		40.86		15,271		-		-		15,271
Goduck Gangil10 PFV Co., Ltd.		25,534		19.90		5,081		-		-		5,081
Fidelis Global Private Real Estate Trust No.2		692		79.63		551		-		-		551
AIP EURO PRIVATE REAL ESTATE TRUST No. 12		169,407		28.70		48,619		-		-		48,619
Shinhan Healthcare Fund 2 (*2)		(153)		13.68		(21)		-		21		-
Shinhan AIM Real Estate Fund No.2		88,925		30.00		26,678		-		-		26,678
Shinhan AIM Real Estate Fund No.1		246,896		21.01		51,873		-		-		51,873
SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust		157,954		22.02		34,781		-		-		34,781
SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust		68,697		29.19		20,053		-		-		20,053
SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2		24,522		71.43		17,516		-		-		17,516
Korea Omega-Shinhan Project Fund I		23,260		50.00		11,630		-		-		11,630
Samsung SRA Real Estate Professional Private 45		125,727		25.00		31,432		-		-		31,432
IBK Global New Renewable Energy Special Asset Professional Private2		111,423		28.98		32,296		-		-		32,296
VS Cornerstone Fund		7,966		41.18		3,280		-		-		3,280
NH-Amundi US Infrastructure Private Fund2		114,737		25.91		29,725		-		-		29,725
SH Japan Photovoltaic Private Special Asset Investment Trust No.2		7,711		30.00		2,313		-		-		2,313
Kakao-Shinhan 1st TNYT Fund		40,857		48.62		19,866		-		-		19,866

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2023
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Pacific Private Placement Real Estate Fund No.40	W	47,001		24.73		11,624		-		-		11,624
Mastern Private Real Estate Loan Fund No.2		9,056		33.57		3,040		-		-		3,040
LB Scotland Amazon Fulfillment Center Fund 29		44,093		70.14		30,928		-		-		30,928
JR AMC Hungary Budapest Office Fund 16		38,954		32.57		12,687		-		-		12,687
EDNCENTRAL Co.,Ltd. (*2)		(42,159)		13.47		(5,677)		-		5,677		-
Future-Creation Neoplux Venture Capital Fund		16,495		16.25		2,680		-		-		2,680
Gyeonggi-Neoplux Superman Fund		23,234		21.76		5,056		-		-		5,056
NewWave 6th Fund		45,719		30.00		13,716		-		-		13,716
Neoplux No.3 Private Equity Fund		189,791		10.00		18,979		-		-		18,979
PCC Amberstone Private Equity Fund I		79,640		21.67		17,258		-		-		17,258
KIAMCO POWERLOAN TRUST 4TH		95,208		47.37		45,099		-		-		45,099
Mastern Opportunity Seeking Real Estate Fund II		59,112		22.22		13,135		-		-		13,135
Neoplux Market-Frontier Secondary Fund		52,827		19.74		10,427		-		-		10,427
Harvest Private Equity Fund II		13,500		22.06		2,978		-		-		2,978
Synergy Green New Deal 1st New Technology Business Investment Fund		36,617		28.17		10,315		-		-		10,315
KIAMCO Vietnam Solar Special Asset Private Investment Trust		13,671		50.00		6,836		-		-		6,836
SHINHAN-NEO Core Industrial Technology Fund		27,370		49.75		13,616		-		-		13,616
SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2		77,853		30.00		23,356		-		-		23,356
SIMONE Mezzanine Fund No.3		4,175		28.78		1,202		-		-		1,202
Eum Private Equity Fund No.7		43,651		21.00		9,166		-		-		9,166
Kiwoom Hero No.4 Private Equity Fund		16,351		21.05		3,442		-		-		3,442
Vogo Canister Professional Trust Private Fund I		124,837		36.74		45,871		-		-		45,871
Timefolio The Venture-V second		27,989		20.73		5,801		-		-		5,801
Shinhan Smilegate Global PEF I		26,747		14.21		3,801		-		-		3,801
Genesis Eco No.1 PEF		38,675		29.01		11,219		-		-		11,219
SHINHAN-NEO Market-Frontier 2nd Fund		76,511		42.70		32,670		-		-		32,670
NH-Synergy Core Industrial New Technology Fund		17,436		36.93		6,439		-		-		6,439
J& Moorim Jade Investment Fund		19,771		24.89		4,920		-		-		4,920
Helios-KDBC Digital Contents 1st		9,699		23.26		2,256		-		-		2,256
Ulmus SHC innovation investment fund		23,059		24.04		5,543		-		-		5,543

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amount of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2023
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
T Core Industrial Technology 1st Venture PEF	W	13,518		31.47		4,254		-		-		4,254
Fine Value POST IPO No.5 Private Equity Fund		9,414		40.00		3,766		-		-		3,766
TI First Property Private Investment Trust 1		7,755		40.00		3,102		-		-		3,102
MPLUS Professional Private Real Estate Fund 25		5,659		41.67		2,358		-		-		2,358
IBKC Global Contents Investment Fund		19,274		24.39		4,701		-		-		4,701
Hanyang-Meritz 1 Fund		13,201		22.58		2,981		-		-		2,981
Kiwoom-Shinhan Innovation Fund 2		21,384		42.86		9,165		-		-		9,165
ETRI Holdings-Shinhan 1st Unicorn Fund		6,589		50.00		3,295		-		-		3,295
SJ ESG Innovative Growth Fund		14,692		28.57		4,198		-		-		4,198
AVES 1st Corporate Recovery Private Equity Fund		6,258		76.19		4,768		-		-		4,768
JS Shinhan Private Equity Fund		123,098		3.85		4,737		-		-		4,737
Daishin Newgen New Technology Investment Fund 1st		12,018		50.60		6,081		-		-		6,081
META ESG Private Equity Fund I		21,062		27.40		5,770		-		-		5,770
PHAROS DK FUND		10,157		24.24		2,462		-		-		2,462
Shinhan VC tomorrow venture fund 1		114,103		39.62		45,210		-		-		45,210
H-IOTA Fund		38,382		24.81		9,524		-		-		9,524
Stonebridge-Shinhan Unicorn Secondary Fund		28,550		26.01		7,427		-		-		7,427
Tres-Yujin Trust		20,717		50.00		10,359		-		-		10,359
Shinhan-Time mezzanine blind Fund		28,242		50.00		14,121		-		-		14,121
Capstone REITs No.26		11,499		50.00		5,750		-		-		5,750
JB Incheon-Bucheon REITS No.54		12,661		39.31		4,978		-		-		4,978
Hankook Smart Real Asset Investment Trust No.3		23,005		33.33		7,668		-		-		7,668
JB Hwaseong-Hadong REITs No.53		16,059		31.03		4,983		-		-		4,983
KB Oaktree Trust No.3		26,003		33.33		8,668		-		-		8,668
Daehan No.36 Office Asset Management Company		46,790		48.05		22,482		-		-		22,482
Rhinos Premier Mezzanine Private Investment Fund No.1		10,944		27.93		3,056		-		-		3,056
SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2		211,132		29.73		62,769		-		-		62,769
Shinhan JigaeNamsan Road Private Special Asset Investment Trust		166,737		24.85		41,434		-		-		41,434
SKS-Yozma Fund No.1		11,574		29.85		3,455		-		-		3,455
KB Distribution Private Real Estate 3-1		69,268		37.50		25,976		-		-		25,976

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amounts of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2023
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Pacific Private Investment Trust No.49-1	W	34,532		79.28		27,377		-		-		27,377
KIWOOM Real estate private placement fund for normal investors No. 31		14,263		60.00		8,558		-		-		8,558
RIFA Real estate private placement fund for normal investoes No. 51		14,328		40.00		5,731		-		-		5,731
Fivetree general private equity fund No.15		25,154		49.98		12,572		-		-		12,572
Shinhan-Kunicorn first Fund		25,125		38.31		9,626		-		-		9,626
Shinhan-Quantum Startup Fund		8,104		49.18		3,986		-		-		3,986
Shinhan Simone Fund Ⅰ		12,577		38.46		4,837		-		-		4,837
Korea Investment develop seed Trust No.1		23,829		40.00		9,532		-		-		9,532
Tiger Green alpha Trust No.29		30,002		95.24		28,573		-		-		28,573
STIC ALT Global II Private Equity Fund		43,717		21.74		9,504		-		-		9,504
NH-Brain EV Fund		44,498		25.00		11,125		-		-		11,125
DDI LVC Master Real Estate Investment Trust Co., Ltd. (*1)		43,808		15.00		6,571		-		12		6,583
Leverent-Frontier 4th Venture PEF		13,791		23.89		3,294		-		-		3,294
Find-Green New Deal 2nd Equity Fund		19,778		22.57		4,465		-		-		4,465
ShinhanFitrin 1st Technology Business Investment Association		27,951		16.17		4,519		-		-		4,519
Koramco Private Real Estate Fund 143		22,002		30.30		6,667		-		-		6,667
Korea Investment Top Mezzanine Private Real Esate Trust No.1		45,074		22.22		10,016		-		-		10,016
LB YoungNam Logistics Private Trust No.40		39,128		25.00		9,782		-		-		9,782
Shinhan-Cognitive Start-up Fund L.P.		16,263		32.77		5,329		-		-		5,329
Cornerstone J&M Fund I		13,081		26.67		3,488		-		-		3,488
Logisvalley Shinhan REIT Co.,Ltd. (*1)		22,617		20.27		4,584		-		(986)		3,598
DA Value-Honest New Technology Investment Fund 1		17,328		23.66		4,099		-		-		4,099
Shinhan-Ji and Tec Smart Innovation Fund		19,953		50.00		9,977		-		-		9,977
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st		13,935		50.00		6,968		-		-		6,968
Korea Investment Green Newdeal Infra Trust No.1		36,667		27.97		10,257		-		-		10,257
BTS 2nd Private Equity Fund		24,393		26.00		6,342		-		-		6,342
Shinhan Global Active REIT Co.Ltd.		93,266		20.37		18,997		-		-		18,997
NH-J&-IBKC Label Technology Fund		35,052		27.81		9,748		-		-		9,748
Hanyang Time Mezzanine Fund		10,542		28.57		3,012		-		-		3,012
Shinhan-isquare Venture PEF 1		10,715		40.00		4,286		-		-		4,286
Capstone Develop Frontier Trust		35,221		21.43		7,547		-		-		7,547
Nextrade Co., Ltd.		121,249		8.00		9,700		-		-		9,700
SH 1.5years Maturity Investment Type Security Investment Trust No.2		16,613		29.10		4,834		-		-		4,834
Eventus-IBKC LIB Fund		30,317		21.88		6,632		-		-		6,632
IBKC-Behigh Fund 1st		10,828		29.73		3,219		-		-		3,219
ON No.1 Private Equity Fund		18,624		28.57		5,321		-		-		5,321
Digital New Deal Kappa Private Equity Fund		19,575		24.75		4,845		-		-		4,845
IBKCJS New Technology Fund No.1		20,841		29.41		6,130		-		-		6,130

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amounts of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2023
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1	W	47,054		20.83		9,803		-		-		9,803
VOGO Debt Strategy General Private Real Estate Investment Trust No. 18		42,046		28.57		12,013		-		-		12,013
Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38		4,228		75.00		3,171		-		-		3,171
TogetherKorea Private Investment Trust No. 6		5,271		99.98		5,270		-		-		5,270
TogetherKorea Private Investment Trust No. 7		5,271		99.98		5,270		-		-		5,270
Kiwoom Core Industrial Technology Investment Fund No.3		12,028		34.75		4,180		-		-		4,180
Penture K-Content Investment Fund		25,599		21.96		5,622		-		-		5,622
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund		26,562		30.00		7,969		-		-		7,969
Hana Alternative Investment Kosmes PCBO General PEF No. 1		13,790		37.04		5,107		-		-		5,107
Shinhan-timefolio Bio Development Investment Fund		12,249		48.39		5,927		-		-		5,927
Shinhan M&A-ESG Fund		17,868		23.33		4,169		-		-		4,169
Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd. -		37,189		28.43		10,575		-		-		10,575
KDBC meta-enter New Technology investment fund		24,886		27.89		6,940		-		-		6,940
Shinhan Time Secondary Blind New Technology Investment Trust		10,008		47.50		4,754		-		-		4,754
Shinhan DS Secondary Investment Fund		18,693		40.00		7,477		-		-		7,477
Shinhan-openwater pre-IPO Investment Trust 1		9,946		50.00		4,973		-		-		4,973
Shinhan-Eco Venture Fund 2nd		9,024		40.00		3,610		-		-		3,610
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1		7,884		40.00		3,154		-		-		3,154
Hantoo Shinhan Lake K-beauty Technology Investment Trust		43,416		22.96		9,969		-		-		9,969
Shinhan HB Wellness 1st Investment Trust		10,284		48.54		4,992		-		-		4,992

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(d) Reconciliation of the financial information to the carrying amounts of its interests in the associates as of December 31, 2024 and 2023 are as follows (continued):

	December 31, 2023
Investees		Net assets<br><br>(a)		Ownership (%)(b)		Interests in the net assets<br><br>(a)*(b)		Intra-group transactions		Others		Carrying<br><br>amount
Korea real Asset Fund No.3	W	32,604		28.57		9,315		-		-		9,315
Igis Yongsan Office General PE Real Estate Inv. Trust No. 518		73,457		31.49		23,131		-		-		23,131
Samsung-dunamu Innovative IT Technology Investment Trust No. 1		19,730		22.99		4,536		-		-		4,536
Time Robotics New Technology Investment Trust		13,283		29.86		3,966		-		-		3,966
Ascent-welcome Tehcnology Investment Trust No.2		31,721		27.65		8,771		-		-		8,771
Igis General PE Real Estate Investment Trust 517-1		53,725		96.30		51,735		-		-		51,735
Consus Osansegyo No.2		16,208		50.00		8,104		-		-		8,104
Mastern General Private Real Estate Investment Trust No.189 (Type 1 Beneficiary Securities)		23,927		32.69		7,822		-		-		7,822
Shinhan AIM Private Fund of Fund 9-B		96,072		25.00		24,018		-		-		24,018
Shinhan General Private Real Estate Investment Trust No.3		37,764		20.75		7,838		-		-		7,838
NH Absolute Project L General Private Investment Trust		18,797		26.03		4,893		-		-		4,893
Paros Kosdaq Venture General Private Investment Trust No. 5		8,994		66.65		5,994		-		-		5,994
Happy Pet Life Care New Technology Investment Association No.2		11,521		30.00		3,456		-		-		3,456
Shinhan-Soo Secondary Investment Association		6,764		77.61		5,249		-		-		5,249

(*1) Others represents the adjustments of fair value when acquired.

(*2) Others are the amount of fair value adjustments that occurred at the time of acquisition and accumulated losses that were not recognized due to the suspension of equity method recognition as the investment account balance became “0” due to the accumulation of losses for the current period.

(*3) Others are the unrecognized equity method for preferred stocks without voting rights issued by the investee.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Investments in associates (continued)

(e) The unrecognized equity method losses as of and for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
Investees		Unrecognized equity method losses		Cumulative unrecognized equity method losses
MIEL CO.,LTD.	W	-		(41)
Shinhan Global Healthcare Fund 1		-		(153)
Shinhan Global Healthcare Fund 2		-		(21)
EDNCENTRAL Co.,Ltd.		(4,818)		(10,495)
Kiwoom Milestone Professional Private Real Estate Trust 19		(73)		(19,506)
	W	(4,891)		(30,216)
		December 31, 2023
---	---	---	---	---
Investees		Unrecognized equity method losses		Cumulative unrecognized equity method losses
MIEL CO.,LTD.	W	-		(41)
Shinhan Global Healthcare Fund 1		61		(153)
Shinhan Global Healthcare Fund 2		75		(21)
EDNCENTRAL Co.,Ltd.		(4,679)		(5,677)
Kiwoom Milestone Professional Private Real Estate Trust 19		(19,433)		(19,433)
	W	(23,976)		(25,325)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

17. Investment properties

(a) Investment properties as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Acquisition cost	W	495,844		410,475
Accumulated depreciation		(168,148)		(152,669)
Carrying amount	W	327,696		257,806

(b) Changes in investment properties for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	257,806		363,108
Acquisition		3,582		5,479
Disposal		(1,854)		(106,344)
Depreciation		(15,063)		(15,058)
Amounts transferred from (to) property and equipment		77,752		16,678
Amounts transferred from(to) assets held for sale (*)		5,551		(6,057)
Effects of foreign currency adjustments		(78)		-
Ending balance	W	327,696		257,806

(*) Comprise buildings and land, etc.

(c) Income and expenses on investment property for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Rental income	W	28,708		24,472
Direct operating expenses for investment properties that generated rental income		11,385		12,905

(d) The fair value of investment property as of December 31, 2024 and 2023 is as follows:

		December 31, 2024		December 31, 2023
Land and buildings (*)	W	1,121,833		1,044,491

(*) Fair value of investment properties is estimated based in the recent market transaction conditions with an independent third party and certain significant unobservable inputs. Accordingly, fair value of investment properties is classified as level 3.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

18. Other assets

Other assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Accounts receivable	W	13,611,340		17,048,595
Domestic exchange settlement debit		4,909,780		5,024,787
Guarantee deposits		982,836		1,002,119
Discounted present value		(57,626)		(52,660)
Accrued income		3,810,267		3,908,205
Prepaid expense		381,091		304,161
Provisional payments		411,923		405,201
Sundry assets		136,079		98,104
Advance payments		484,828		408,857
Leased assets		2,125,379		2,078,742
Others		180,005		165,163
Allowances for credit loss of other assets		(574,304)		(465,430)
	W	26,401,598		29,925,844

19. Leases

(a) Gross investment and present value of minimum lease payment of finance lease as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Gross investment		Unrealized interest income		Present value of minimum lease payment
Not later than 1 year	W	655,270		116,496		538,774
1 ~ 2 years		580,993		75,359		505,634
2 ~ 3 years		520,285		36,203		484,082
3 ~ 4 years		305,670		13,301		292,369
4 ~ 5 years		217,104		10,347		206,757
Later than 5 years		3,858		11		3,847
	W	2,283,180		251,717		2,031,463

(*) Interest income on finance lease receivables recognized for the year ended December 31, 2024 is W 119,049 million.

		December 31, 2023
		Gross investment		Unrealized interest income		Present value of minimum lease payment
Not later than 1 year	W	898,235		95,269		802,966
1 ~ 2 years		458,736		28,398		430,338
2 ~ 3 years		359,893		19,220		340,673
3 ~ 4 years		324,331		6,155		318,176
4 ~ 5 years		155,615		6,399		149,216
Later than 5 years		1,411		3		1,408
	W	2,198,221		155,444		2,042,777

(*) Interest income on finance lease receivables recognized for the year ended December 31, 2023 is W 108,514 million.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

19. Leases (continued)

(b) Minimum lease payment receivable schedule for operating lease contracts of the Group as lessor as of December 31, 2024 and 2023 are as follows:

		Minimum lease payment
		December 31, 2024		December 31, 2023
Not later than 1 year	W	585,583		576,017
1 ~ 2 years		455,068		460,075
2 ~ 3 years		313,369		320,463
3 ~ 4 years		169,173		177,914
4 ~ 5 years		52,983		55,548
Later than 5 years		328		453
	W	1,576,504		1,590,470

(c) Changes in operating lease assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	2,077,080		1,930,503
Acquisition		740,721		762,996
Disposal		(228,384)		(171,192)
Depreciation		(465,716)		(445,006)
Amounts transferred from (to) property and equipment		(80)		(221)
Ending balance	W	2,123,621		2,077,080

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

19. Leases (continued)

(d) The details of the right-of-use assets by the lessee’s underlying asset type as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Acquisition cost		Accumulated depreciation		Carrying amount
Real estate	W	1,621,125		(784,200)		836,925
Vehicle		57,737		(31,744)		25,993
Others		38,803		(26,471)		12,332
	W	1,717,665		(842,415)		875,250
		December 31, 2023
---	---	---	---	---	---	---
		Acquisition cost		Accumulated depreciation		Carrying amount
Real estate	W	1,282,462		(715,521)		566,941
Vehicle		57,534		(29,117)		28,417
Others		38,031		(26,914)		11,117
	W	1,378,027		(771,552)		606,475

(e) The details of the changes in the right-of-use assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Real estate		Vehicle		Others		Total
Beginning balance	W	566,941		28,417		11,117		606,475
Acquisition		601,686		15,454		6,963		624,103
Disposal		(40,522)		(4,222)		(708)		(45,452)
Depreciation (*)		(311,077)		(13,843)		(5,026)		(329,946)
Effects of impairment loss		53		-		-		53
Effects of foreign currency adjustments		19,844		187		(14)		20,017
Ending balance	W	836,925		25,993		12,332		875,250
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Real estate		Vehicle		Others		Total
Beginning balance	W	586,075		22,327		10,808		619,210
Acquisition		340,809		23,039		6,876		370,724
Disposal		(66,392)		(3,388)		(1,272)		(71,052)
Depreciation (*)		(294,895)		(13,565)		(5,295)		(313,755)
Effects of foreign currency adjustments		1,344		4		-		1,348
Ending balance	W	566,941		28,417		11,117		606,475

(*) Included in general administrative expense, other operating income(expense) and insurance service expense of the consolidated statements of comprehensive income.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

19. Leases (continued)

(f) The details of the maturity of the lease liability as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		1 month<br><br>or less		1 month ~<br><br>3 months<br><br>or less		3 months ~<br><br>6 months<br><br>or less		6 months ~<br><br>1 year<br><br>or less		1 year ~<br><br>5 years<br><br>or less		More than 5 years		Total
Real estate	W	31,623		45,513		63,760		128,823		479,432		95,807		844,958
Vehicle		6,849		1,687		2,355		5,578		15,939		220		32,628
Others		721		713		1,325		2,202		8,142		-		13,103
	W	39,193		47,913		67,440		136,603		503,513		96,027		890,689
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		1 month<br><br>or less		1 month ~<br><br>3 months<br><br>or less		3 months ~<br><br>6 months<br><br>or less		6 months ~<br><br>1 year<br><br>or less		1 year ~<br><br>5 years<br><br>or less		More than 5 years		Total
Real estate	W	35,167		36,612		51,621		83,202		305,694		54,961		567,257
Vehicle		6,908		1,705		2,380		5,559		18,333		434		35,319
Others		639		658		1,223		2,438		6,380		-		11,338
	W	42,714		38,975		55,224		91,199		330,407		55,395		613,914

(*) The above amounts are based on undiscounted cash flows, and have been classified at the earliest maturity that the Group has the obligation to pay.

(g) The lease payments for low-value assets and short-term leases for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Low-value assets	W	6,287		7,016
Short-term lease (*)		975		1,841
Total	W	7,262		8,857

(*) The payments for leases with terms less than 1 month are included.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

20. Pledged assets

(a) Assets pledged as collateral as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023		Reasons for collateral
Loans at fair value through profit or loss	W	-		49,902		Pledge for borrowing transaction
Loans at amortized cost		119,699		124,420		Pledge for borrowing transaction
Securities:
Securities at FVTPL		14,837,334		18,525,421		Customer RP, etc.
Securities at FVOCI		10,223,916		12,164,955		Borrowings, Settlement security for Bank of Korea, Borrowing securities, etc.
Securities at amortized cost		1,464,788		17,659,715		Borrowings, Settlement security for Bank of Korea, Customer RP, etc.
		26,526,038		48,350,091
Deposits at amortized cost		1,845,022		1,500,246		Borrowings, etc.
Property and Equipment<br><br>(real estate)		5,515		5,039		Establishing the right to collateral security, etc.
	W	28,496,274		50,029,698

(*) The carrying amounts of assets pledged that the pledgees have the right to sell or re-pledge regardless of the Group’s default as of December 31, 2024 and 2023 are W 13,579,738 million and W 16,345,580 million, respectively.

(b) The fair value of collateral held that the Group has the right to sell or re-pledge regardless of the pledger’s default as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
		The fair value of assets received as collateral		The fair value of<br><br>collateral sold or<br><br>re-provided as collateral		The fair value of assets received as collateral		The fair value of<br><br>collateral sold or<br><br>re-provided as collateral
Securities	W	14,854,920		-		14,372,408		-

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

21. Deposits

Deposits as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Demand deposits:
Korean won	W	134,283,019		128,035,326
Foreign currencies		25,748,740		23,141,715
		160,031,759		151,177,041
Time deposits:
Korean won		202,699,097		175,191,964
Foreign currencies		33,828,393		26,914,722
		236,527,490		202,106,686
Certificates of deposits		10,409,701		12,059,730
Discount note deposits		7,624,787		7,614,701
CMA		4,451,561		4,950,392
Others		3,735,747		3,604,114
	W	422,781,045		381,512,664

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

22. Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Securities sold:
Stocks	W	640		628,225
Bonds		354,084		477,626
Others		3,117		343,783
		357,841		1,449,634
Gold/silver deposits		597,058		419,343
	W	954,899		1,868,977

23. Financial liabilities designated at fair value through profit or loss

(a) Financial liabilities designated at fair value through profit or loss as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023		Reason for designation
Equity-linked securities sold	W	5,449,026		5,610,256		Compound financial instrument
Securities sold with embedded derivatives		2,510,150		1,931,639
Debt securities issued		261,299		254,832		Fair value measurement<br><br>and management
	W	8,220,475		7,796,727

(*) The Group designated the financial liabilities at the initial recognition (or subsequently) in accordance with paragraph 6.7.1 of K-IFRS No. 1109 as financial liabilities at fair value through profit or loss.

Maximum credit risk exposure of the financial liabilities designated at fair value through profit or loss amounts to W 8,220,475 million as of December 31, 2024. Decrease in values of the liability due to credit risk changes is W 8,616 million for the year ended December 31, 2024 and the accumulated changes in values are W (-)7,566 million as of December 31, 2024.

(b) The difference between the carrying amount of financial liabilities designated at fair value through profit or loss and the amount required to be paid at contractual maturity as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Expiration payment	W	8,001,931		7,519,962
Carrying amount		8,220,475		7,796,727
Difference from carrying amount	W	(218,544)		(276,765)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

24. Borrowings

Borrowings as of December 31, 2024 and 2023 are as follows:

	December 31, 2024				December 31, 2023
	Interest<br><br>rate (%)		Amount		Interest<br><br>rate (%)		Amount
Borrowings denominated in Korean won:
Borrowings from Bank of Korea	1.50~1.50	W	3,106,011		2.00~2.00	W	2,562,162
Others	0.00~5.72		23,869,254		0.00~7.83		25,077,825
			26,975,265				27,639,987
Borrowings denominated in foreign currencies:
Overdraft due from banks	0.00~0.00		30,837		0.00~0.00		34,072
Borrowings from banks	0.00~16.25		7,591,181		0.00~14.85		7,331,197
Others	0.00~16.75		2,713,165		0.00~17.50		2,674,834
			10,335,183				10,040,103
Call money	0.29~4.97		1,197,823		0.02~5.88		2,195,849
Bill of sale	0.00~3.23		8,872		0.00~3.65		11,252
Bonds sold under repurchase agreements	0.00~5.45		11,542,956		0.00~6.74		17,312,576
Deferred origination costs			(139,726)				(298,415)
		W	49,920,373			W	56,901,352

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

25. Debt securities issued

Debt securities issued as of December 31, 2024 and 2023 are as follows:

	December 31, 2024				December 31, 2023
	Interest<br>rate (%)		Amount		Interest<br>rate (%)		Amount
Debt securities issued in Korean won:
Debt securities issued	1.00~9.50	W	72,561,043		0.00~7.70	W	65,801,744
Subordinated debt securities issued	2.20~5.20		2,820,105		2.20~5.20		2,860,105
Gain on fair value hedges	-		(188,774)		-		(225,750)
Discount on debt securities issued	-		(85,489)		-		(53,857)
			75,106,885				68,382,242
Debt securities issued in foreign<br><br>currencies:
Debt securities issued	0.98~6.60		13,979,805		0.25~7.36		9,697,265
Subordinated debt securities issued	3.34~5.75		4,995,972		3.34~5.00		3,768,942
Gain on fair value hedges	-		(250,628)		-		(240,483)
Discount on debt securities issued	-		(66,180)		-		(46,241)
			18,658,969				13,179,483
		W	93,765,854			W	81,561,725

26. Defined benefit plans

(a) Defined benefit plan assets and obligations

The Group has operated a defined benefit plan and calculates defined benefit obligations based on the employee's pension compensation benefits and service period.

Defined benefit obligations and plan assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Present value of defined benefit obligations	W	2,345,148		2,219,490
Fair value of plan assets		(2,461,871)		(2,266,248)
Recognized liability (asset) for defined benefit obligations (*)	W	(116,723)		(46,758)

(*) The asset for defined benefit obligation of W 116,723 million as of December 31, 2024 is the net defined benefit assets of W 155,697 million less the net defined liabilities of W 38,974 million. In addition, the asset for defined benefit obligation of W 46,758 million as of December 31, 2023 is the net defined benefit assets of W 114,378 million less the net defined liabilities of W 67,620 million.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

26. Defined benefit plans (continued)

(b) Changes in the present value of defined benefit obligation and plan assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Defined benefit<br><br>obligation		Plan assets		Net defined benefit liabilities (assets)
Beginning balance	W	2,219,490		(2,266,248)		(46,758)
Included in profit or loss (*):
Current service cost		164,062		-		164,062
Past service cost		(18,613)		-		(18,613)
Net interest expense (income)		107,274		(122,178)		(14,904)
Settlement loss (gain)		(1,990)		18		(1,972)
		250,733		(122,160)		128,573
Included in other comprehensive income:
Remeasurement loss
- Actuarial losses(gains) arising from
Demographic assumptions		(2,338)		-		(2,338)
Financial assumptions		141,583		2,407		143,990
Experience adjustment		(121,322)		-		(121,322)
- Return on plan assets excluding interest income		605		29,966		30,571
		18,528		32,373		50,901
Other:
Benefits paid by the plan		(143,331)		60,606		(82,725)
Contributions paid into the plan		-		(166,447)		(166,447)
Changes in the scope of consolidation		-		5		5
Effect of changes in foreign exchange rates		(272)		-		(272)
		(143,603)		(105,836)		(249,439)
Ending balance	W	2,345,148		(2,461,871)		(116,723)

(*) Profit and loss related to defined benefit plans are all included in the general administrative expense.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

26. Defined benefit plans (continued)

(b) Changes in the present value of defined benefit obligation and plan assets for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Defined benefit<br><br>obligation		Plan assets		Net defined benefit liabilities (assets)
Beginning balance	W	1,934,643		(2,376,817)		(442,174)
Included in profit or loss (*):
Current service cost		143,259		-		143,259
Past service cost		92		-		92
Net interest expense (income)		104,546		(138,254)		(33,708)
Settlement loss (gain)		7,633		5		7,638
		255,530		(138,249)		117,281
Included in other comprehensive income:
Remeasurement loss
- Actuarial losses arising from:
Demographic assumptions		106,072		-		106,072
Financial assumptions		123,204		1,723		124,927
Experience adjustment		5,925		-		5,925
- Return on plan assets excluding interest income		195		34,233		34,428
		235,396		35,956		271,352
Other:
Benefits paid by the plan		(207,515)		295,185		87,670
Contributions paid into the plan		(13)		(82,323)		(82,336)
Changes in the scope of consolidation		93		-		93
Effect of changes in foreign exchange rates		1,356		-		1,356
		(206,079)		212,862		6,783
Ending balance	W	2,219,490		(2,266,248)		(46,758)

(*) Profit and loss related to defined benefit plans are all included in the general administrative expense.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

26. Defined benefit plans (continued)

(c) The composition of plan assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Plan assets comprise:
Debt securities	W	38,634		5,002
Due from banks		2,046,507		2,044,101
Others		376,730		217,145
	W	2,461,871		2,266,248

(d) Actuarial assumptions as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023		Description
Discount rate		3.45%~4.66%		4.00%~5.20%		AA0 corporate bond yields
Future salary increase rate		1.94%~5.94%<br><br>+ Upgrade rate		0.00%~7.00%<br><br>+ Upgrade rate		Average for 5 years
Weighted average maturity		5.00 years~<br><br>11.00 years		1.00 years~<br><br>11.50 years

(e) Sensitivity analysis

As of December 31, 2024 and 2023, reasonably possible changes in one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

		December 31, 2024
		Defined benefit obligation
		Increase		Decrease
Discount rate (1%p movement)	W	(180,402)		204,053
Future salary increase rate (1%p movement)		211,736		(190,347)
		December 31, 2023
---	---	---	---	---
		Defined benefit obligation
		Increase		Decrease
Discount rate (1%p movement)	W	(190,760)		205,916
Future salary increase rate (1%p movement)		209,531		(196,909)

(f) The Group's estimated contribution is W 176,412 million as of December 31, 2025.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

27. Provisions

(a) Provisions as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Asset retirement obligations	W	99,306		99,927
Expected loss related to litigation		114,750		31,371
Unused credit commitments		411,275		355,591
Guarantee contracts issued		104,451		63,161
Financial guarantee contracts issued		87,088		39,998
Non-financial guarantee contracts issued		17,363		23,163
Others (*1), (*2), (*3)		579,114		819,616
	W	1,308,896		1,369,666

(*1) As of December 31, 2024 and 2023, the Group recognizes a provision of W 317,857 million and W 360,137 million, respectively, an estimated amount which is highly probable to be paid for customer losses expected due to delays in redemption of Lime CI funds, etc.

(*2) As of December 31, 2024 and 2023, the Group recognizes a provision of W 25,856 million and W 293,824 million, respectively for vulnerable groups such as self-employed people, small business owners and institutions supporting vulnerable groups, etc. in accordance with the “Banking financial support plan for people’s livelihood.”

(*3) As of December 31, 2024, the Group recognizes a provision of W 19,086 million for the estimated customer compensation amount related to equity-linked products based on the Hong Kong H-Index (Hang Seng China Enterprises Index).

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

27. Provisions (continued)

(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Unused credit commitments						Financial guarantee contracts issued						Total
		12 months expected<br>credit loss		Life time expected<br>credit loss		Impaired<br><br>financial asset		12 months expected credit loss		Life time expected<br>credit loss		Impaired financial asset
Beginning balance	W	206,687		129,182		19,722		32,002		7,590		406		395,589
Transfer (from) to 12 months expected credit loss		68,071		(67,931)		(140)		4,968		(4,968)		-		-
Transfer (from) to life time expected credit loss		(11,698)		11,723		(25)		(366)		366		-		-
Transfer (from) to impaired financial asset		(806)		(1,561)		2,367		-		-		-		-
Provided (reversed)		(40,306)		16,043		71,093		(3,783)		(1,139)		2		41,910
Change in foreign exchange rate		5,340		1,347		-		2,316		791		1		9,795
OtOthers (*)		2,127		40		-		45,643		3,656		(397)		51,069
Ending balance	W	229,415		88,843		93,017		80,780		6,296		12		498,363

(*) Others include effects of the provision from the new financial guarantee contracts measured at fair value, and the expired contracts, the change of discount rate and others.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

27. Provisions (continued)

(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Unused credit commitments						Financial guarantee contracts issued						Total
		12 months expected<br>credit loss		Life time expected<br>credit loss		Impaired<br><br>financial asset		12 months expected credit loss		Life time expected<br>credit loss		Impaired financial asset
Beginning balance	W	175,562		139,998		2,030		48,113		7,687		28		373,418
Transfer (from) to 12 months expected credit loss		65,058		(64,897)		(161)		3,921		(3,921)		-		-
Transfer (from) to life time expected credit loss		(13,466)		13,502		(36)		(7,659)		7,659		-		-
Transfer (from) to impaired financial asset		(609)		(1,953)		2,562		(530)		-		530		-
Provided (reversed)		(20,883)		42,506		15,327		150		70		(14)		37,156
Change in foreign exchange rate		1,025		26		-		294		92		1		1,438
OtOthers (*)		-		-		-		(12,287)		(3,997)		(139)		(16,423)
Ending balance	W	206,687		129,182		19,722		32,002		7,590		406		395,589

(*) Others include effects of the provision from the new financial guarantee contracts measured at fair value, and the expired contracts, the change of discount rate and others.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

27. Provisions (continued)

(c) Changes in provisions for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Asset<br><br>retirement		Litigation		Guarantee		Others		Total
Beginning balance	W	99,927		31,371		23,163		819,616		974,077
Provision(reversal)		957		83,862		(8,471)		293,407		369,755
Provision used		(7,282)		(483)		-		(533,232)		(540,997)
Change in foreign<br><br>exchange rate		-		-		2,412		(483)		1,929
Others (*)		5,704		-		259		(194)		5,769
Ending balance	W	99,306		114,750		17,363		579,114		810,533
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
		Asset<br><br>retirement		Litigation		Guarantee		Others		Total
Beginning balance	W	91,571		29,238		27,583		744,504		892,896
Provision(reversal)		4,771		2,266		(4,856)		516,735		518,916
Provision used		(5,157)		(193)		-		(446,545)		(451,895)
Change in foreign<br><br>exchange rate		-		-		412		1,127		1,539
Others (*)		8,742		60		24		3,795		12,621
Ending balance	W	99,927		31,371		23,163		819,616		974,077

(*) Others include increase in provisions based on the present value, the effect of changes in discount rate over the period and others.

(d) Asset retirement obligation liabilities represent the estimated cost to restore the existing leased properties which is discounted to the present value using the appropriate discount rate at the end of the reporting period. Disbursements of such costs are expected to incur at the end of lease contract. Such costs are reasonably estimated using the average lease year and the average restoration expenses. The average lease year is calculated based on the past ten-year historical data of the expired leases. The average restoration expense is calculated based on the actual costs incurred for the past three years using the three-year average inflation rate.

(e) Allowance for guarantees and acceptances as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Outstanding guarantees and acceptances	W	15,315,381		12,503,445
Contingent guarantees and acceptances		5,068,782		4,337,751
ABS and ABCP purchase commitments		2,123,665		1,533,047
Endorsed bill		1,367		44
	W	22,509,195		18,374,287
Allowance for loss on guarantees and acceptances	W	104,451		63,161
Ratio	%	0.46		0.34

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities

(a) The details of insurance contract liabilities as of December 31, 2024 and 2023 are as follows:

			December 31, 2024
			Life insurance												Non-life insurance
			Death		Health		Pension<br><br>Savings		Variable		Etc.		Complex		Long-term		General		Car		Total
Insurance contract assets	W		-		-		-		-		-		-		(1,051)		(4,588)		-		(5,639)
Insurance contract liabilities (*)			20,021,186		5,556,614		20,227,829		5,157,827		-		-		-		160,346		1,189		51,124,991
Net insurance contract liability (asset) total			20,021,186		5,556,614		20,227,829		5,157,827		-		-		(1,051)		155,758		1,189		51,119,352
Reinsurance contract assets			-		-		-		-		-		107,668		21		77,065		-		184,754
Reinsurance contract liabilities			(26,214)		(71,844)		-		-		-		-		-		(5)		-		(98,063)
Total net reinsurance contract assets (liabilities)	W		(26,214)		(71,844)		-		-		-		107,668		21		77,060		-		86,691
			December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
			Life insurance												Non-life insurance
			Death		Health		Pension<br><br>Savings		Variable		Etc.		Complex		Long-term		General		Car		Total
Insurance contract assets	W		-		-		-		-		-		-		(444)		(10,210)		-		(10,654)
Insurance contract liabilities (*)			16,895,075		5,347,357		20,536,870		5,445,493		5,001		-		-		102,921		1,515		48,334,232
Net insurance contract liability (asset) total			16,895,075		5,347,357		20,536,870		5,445,493		5,001		-		(444)		92,711		1,515		48,323,578
Reinsurance contract assets			-		-		-		-		-		62,815		-		25,538		-		88,353
Reinsurance contract liabilities			(27,046)		(66,075)		-		-		-		-		(41)		(78)		-		(93,240)
Total net reinsurance contract assets (liabilities)	W		(27,046)		(66,075)		-		-		-		62,815		(41)		25,460		-		(4,887)

(*) As of December 31, 2024 and 2023, contractor's share adjustment amount is excluded W (-)362 million and W (-)1,024 million, respectively.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(b) The assumptions and calculation basis for the current estimates of future cash flows applied to the holding contract as of December 31, 2024 and 2023 are as follows:

		Assumption value (%)					Basis for calculation
		December 31, 2024		December 31, 2023
Life insurance:
Surrender ratio		0.00 ~ 69.75		0.00 ~ 73.78			- The ratio of surrendered contract amounts to the retained contract amounts, calculated based on statistics, by premium payment type, product group, interest rate category, payment term (zero/low-surrender-value insurance products), and duration<br><br>- For zero/low-surrender-value insurance products, the surrender ratio for the period when there is insufficient experience statistics is calculated, using the log-linear regression model, so that it converges to 0.1% at the time of completion of premium payments.
Loss ratio		8.00 ~ 316.00		17.00 ~ 756.00			- Other than general mortality: the ratio of accident claims to insurance premiums to on-level risk insurance premiums by risk coverage and elapsed period based on the last five years' experience statistics
							- General mortality: the ratio of actual mortality rate to expected mortality rate by risk coverage and elapsed period based on the last five years' experience statistics
Expense ratio		-		-			- Calculate unit costs such as performance, agent commissions, number of new/retained contracts, initial/continuing premiums, reserve funds, etc. based on a business plan (budget) incorporating future expense policies based on recent experience statistics.
Discount rate		2.31 ~ 4.55		3.75 ~ 4.80			- Disclosure standard interest rate term structure provided by the Financial Supervisory Service
The confidence level for the risk adjustments regarding non-financial		75.00		75.00			- The risk adjustment is calculated as the portion of 75th percentile exceeding the probability-weighted average of the present value of future cash flows, assuming that the probability distribution of the present value of future cash flows follows a normal distribution at each reporting date.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(b) The assumptions and calculation basis for the current estimates of future cash flows applied to the holding contract as of December 31, 2024 and 2023 are as follows (continued):

		Assumption value (%)					Basis for calculation
		December 31, 2024		December 31, 2023
Non-life insurance:
Surrender ratio		General: 0.00 ~ 52.76		General: 0.54 ~ 38.56			General: Calculated as the ratio of the number of and effective contracts compared to the number of contracts with experience from July 2017 to June 2024<br><br>※ The assumptions are derived based on contracts where surrender and lapse have actually occurred.
		Long-term: 1.60 ~ 25.47		Long-term: 1.60 ~ 25.25			Long-term: Calculated as the ratio of the number of canceled and effective contracts compared to the number of contracts with experience from October 2017 to June 2024<br><br>※The surrender ratio for zero and low surrender value products is separately calculated in accordance with the practical standards of the Financial Supervisory Service.
							For products with insufficient experience data, the assumptions applied during product development are used (e.g., pet insurance and indemnity medical insurance).
Loss ratio		General: 12.98 ~ 81.54		General: 24.47 ~ 112.27			General: Calculated as the ratio of incurred losses to experienced risk insurance premiums from July 2017 to June 2024
		Long-term: 36.81 ~ 422.10		Long-term: 40.99 ~ 187.70			Long-term: Calculated as the ratio of incurred losses to experienced risk insurance premiums from October 2017 to June 2024
							※ For products with insufficient experience data, the Insurance Development Institute's industry statistics are applied.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(b) The assumptions and calculation basis for the current estimates of future cash flows applied to the holding contract as of December 31, 2024 and 2023 are as follows (continued):

		Assumption value (%)					Basis for calculation
		December 31, 2024		December 31, 2023
Expense ratio		Contract conclusion cost:<br><br>Variable cost (%)<br><br>General VC: 12.45 ~ 16.14<br><br>Long-term VC: 198.79<br><br>Fixed cost (won)<br><br>General FC: 53,192<br><br>Long-term FC: 15,131<br><br>Contract maintenance cost:<br><br>Variable cost (%)<br><br>General VC: 24.10 ~ 24.74<br><br>Long-term VC: 13.30<br><br>Fixed cost (won)<br><br>General FC: 2,895<br><br>Long-term FC: 1,576<br><br>Damage investigation cost:<br><br>Variable cost (%)<br><br>General VC: 6.91 ~ 6.95<br><br>Long-term VC: 3.78		Contract conclusion cost:<br><br>Variable cost (%)<br><br>11.73 ~ 2170.24<br><br>Fixed cost (won)<br><br>44,653 ~ 68,795<br><br>Contract maintenance cost:<br><br>Variable cost (%) 31.73 ~ 36.37<br><br>Fixed cost (won) 2,220 ~ 2,538<br><br>Damage investigation cost:<br><br>Variable cost (%) 11.65 ~ 14.30			Using the Group’s experience statistics for the year immediately preceding the calculation (October 2024 - September 2025), the operating expense unit price was subdivided by workload and type of work on a portfolio basis, and calculated by applying the variable cost/fixed ratio according to the operating expense allocation standard.
							Contract conclusion cost
							- Variable cost: Distribution of contract variable cost compared to imported insurance premium.
							- Fixed cost: Fixed cost distribution for contract conclusion compared to the number of new contracts.
							Contract maintenance cost
							- Variable cost: Variable cost allocation for contract maintenance compared to earned insurance premiums.
							- Fixed cost: Fixed cost allocation for contract maintenance compared to the number of contracts held.
							Damage investigation cost: Amount of damage investigation cost allocated to the amount of damage incurred
Discount rate		2.31 ~ 4.55		4.55 ~ 4.80			Term structure of interest rates provided by the Financial Supervisory Service.
		;
The confidence level for non-financial risks		75.00		75.00			- The risk adjustment is calculated as the portion of 75th percentile exceeding the probability-weighted average of the present value of future cash flows, assuming that the probability distribution of the present value of future cash flows follows a normal distribution at each reporting date.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(c) The details of changes in the remaining coverage elements and incurred claim elements of net insurance contract liabilities that did not apply the premium allocation approach for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss component		Loss component
Beginning balance		Insurance contract assets	W	(493)		-		49		(444)
		Insurance contract liabilities		45,517,567		884,042		1,827,957		48,229,566
		Net insurance contract liabilities		45,517,074		884,042		1,828,006		48,229,122
Insurance income		Retroactive modification method		(1,354,769)		-		-		(1,354,769)
		Fair value method		(968,200)		-		-		(968,200)
		Etc.		(730,549)		1,501		18		(729,030)
				(3,053,518)		1,501		18		(3,051,999)
Insurance service expenses		Accrued insurance premiums and other incurred insurance service expenses		-		-		1,646,968		1,646,968
		Changes in incident fulfillment cash flow		-		-		28,182		28,182
		Costs related to onerous contracts		-		67,934		-		67,934
		Amortization of insurance acquisition cash flows		360,411		-		-		360,411
		Etc.		(28,208)		(20,122)		-		(48,330)
				332,203		47,812		1,675,150		2,055,165
Investment factors and insurance premium refund				(4,769,963)		-		4,769,963		-
Insurance finance income and expenses		Current profit or loss		1,697,955		17,375		63,930		1,779,260
		Other comprehensive income		3,125,467		42,685		3,306		3,171,458
			W	4,823,422		60,060		67,236		4,950,718

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(c) The details of changes in the remaining coverage elements and incurred claim elements of net insurance contract liabilities that did not apply the premium allocation approach for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2024
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss component		Loss component
Cash flow for the period		Insurance premium received	W	6,897,049		-		-		6,897,049
		Insurance acquisition cash flow payment		(1,586,104)		-		-		(1,586,104)
		Payment of insurance benefits and other insurance service expenses		(6,708)		-		(1,583,846)		(1,590,554)
		Receipt (payment) of investment elements and refund of insurance premiums		-		-		(4,941,397)		(4,941,397)
				5,304,237		-		(6,525,243)		(1,221,006)
Other increase/decrease				(3)		(6)		-		(9)
Ending balance		Insurance contract assets		(1,266)		-		215		(1,051)
		Insurance contract liabilities		48,154,718		993,409		1,814,915		50,963,042
		Net insurance contract liabilities	W	48,153,452		993,409		1,815,130		50,961,991

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(c) The details of changes in the remaining coverage elements and incurred claim elements of net insurance contract liabilities that did not apply the premium allocation approach for the years ended December 31, 2024 and 2023 are as follows (continued):

				December 31, 2023
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss component		Loss component
Beginning balance		Insurance contract assets	W	-		-		-		-
		Insurance contract liabilities		43,128,619		880,115		1,810,028		45,818,762
		Net insurance contract liabilities		43,128,619		880,115		1,810,028		45,818,762
Insurance income		Retroactive modification method		(1,484,047)		-		-		(1,484,047)
		Fair value method		(958,369)		-		-		(958,369)
		Etc.		(417,542)		-		-		(417,542)
				(2,859,958)		-		-		(2,859,958)
Insurance service expenses		Accrued insurance premiums and other incurred insurance service expenses		-		-		1,513,580		1,513,580
		Changes in incident fulfillment cash flow		-		-		11,468		11,468
		Losses on (reversal of) onerous contracts		-		(35,360)		-		(35,360)
		Amortization of insurance acquisition cash flows		262,280		-		-		262,280
		Etc.		(21,048)		(16,548)		-		(37,596)
				241,232		(51,908)		1,525,048		1,714,372
Investment factors and insurance premium refund				(5,281,435)		-		5,281,435		-
Insurance finance income and expenses		Current profit or loss		2,134,312		21,300		62,861		2,218,473
		Other comprehensive income		2,924,797		35,025		1,172		2,960,994
			W	5,059,109		56,325		64,033		5,179,467

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(c) The details of changes in the remaining coverage elements and incurred claim elements of net insurance contract liabilities that did not apply the premium allocation approach for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss component		Loss component
Cash flow for the period		Insurance premium received	W	6,209,129		-		-		6,209,129
		Insurance acquisition cash flow payment		(979,176)		-		-		(979,176)
		Payment of insurance benefits and other insurance service expenses		(715)		-		(1,497,502)		(1,498,217)
		Receipt (payment) of investment elements and refund of insurance premiums		-		-		(5,355,137)		(5,355,137)
				5,229,238		-		(6,852,639)		(1,623,401)
Other increase/decrease				269		(490)		101		(120)
Ending balance		Insurance contract assets		(493)		-		49		(444)
		Insurance contract liabilities		45,517,567		884,042		1,827,957		48,229,566
		Net insurance contract liabilities	W	45,517,074		884,042		1,828,006		48,229,122

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(d) The changes in the remaining coverage elements and incurred claim elements of net insurance contract liabilities applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Remaining coverage elements				Incurred claim elements		Risk adjustment for non-financial risks		Total
				Excluding loss component		Loss component		Present value estimate of future cash flows
Beginning balance		Insurance contract assets	W	(10,670)		3		450		7		(10,210)
		Insurance contract liabilities		88,524		4,815		10,340		987		104,666
		Net insurance contract liabilities		77,854		4,818		10,790		994		94,456
Insurance income				(64,554)		-		-		-		(64,554)
Insurance service expenses		Accrued insurance premiums and other incurred insurance service expenses		45		-		61,148		528		61,721
		Changes in incident fulfillment cash flow		-		-		3,209		421		3,630
		Costs related to loss-bearing contracts		54		(2,239)		-		-		(2,185)
		Amortization of insurance acquisition Cash flows		13,238		-		-		-		13,238
		Etc.		-		-		(9)		-		(9)
				13,337		(2,239)		64,348		949		76,395
Investment factors and insurance premium refund				(2)		-		2		-		-
Insurance finance income and expenses		Current profit or loss		4,363		-		162		17		4,542
		Other comprehensive income		-		-		22		6		28
				4,363		-		184		23		4,570
Cash flow for the period		Insurance premium received		109,597		-		-		-		109,597
		Insurance acquisition cash flow payment		(19,841)		-		-		-		(19,841)
		Payment of insurance benefits and other insurance service expenses		-		-		(45,564)		-		(45,564)
		Receipt (payment) of investment elements and refund of insurance premiums		-		-		(2)		-		(2)
				89,756		-		(45,566)		-		44,190
Other increase/decrease				8,410		-		(6,108)		2		2,304
Ending balance		Insurance contract assets		(6,506)		-		1,894		24		(4,588)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

		Insurance contract liabilities		135,670		2,579		21,756		1,944		161,949
		Net insurance contract liabilities	W	129,164		2,579		23,650		1,968		157,361

28. Insurance contract liabilities (continued)

(d) The changes in the remaining coverage elements and incurred claim elements of net insurance contract liabilities applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2023
				Remaining coverage elements				Incurred claim elements		Risk adjustment for non-financial risks		Total
				Excluding loss component		Loss component		Present value estimate of future cash flows
Beginning balance		Insurance contract assets	W	-		-		-		-		-
		Insurance contract liabilities		78,665		3,139		5,372		451		87,627
		Net insurance contract liabilities		78,665		3,139		5,372		451		87,627
Insurance income				(39,641)		-		-		-		(39,641)
Insurance service expenses		Accrued insurance premiums and other incurred insurance service expenses		33		-		29,966		1,093		31,092
		Changes in incident fulfillment cash flow		-		-		(2,669)		(684)		(3,353)
		Costs related to loss-bearing contracts		23		2,449		-		-		2,472
		Amortization of insurance acquisition Cash flows		4,126		-		-		-		4,126
		Etc.		-		-		70		-		70
				4,182		2,449		27,367		409		34,407
Investment factors and insurance premium refund				(9)		-		9		-		-
Insurance finance income and expenses		Current profit or loss		2,412		-		67		10		2,489
		Other comprehensive income		-		-		23		2		25
				2,412		-		90		12		2,514
Cash flow for the period		Insurance premium received		46,680		-		-		-		46,680
		Insurance acquisition cash flow payment		(12,751)		-		-		-		(12,751)
		Payment of insurance benefits and other insurance service expenses		-		-		(22,643)		-		(22,643)
		Receipt (payment) of investment elements and refund of insurance premiums		-		-		288		-		288
				33,929		-		(22,355)		-		11,574

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

Other increase/decrease				(1,684)		(770)		307		122		(2,025)
Ending balance		Insurance contract assets		(10,670)		3		450		7		(10,210)
		Insurance contract liabilities		88,524		4,815		10,340		987		104,666
		Net insurance contract liabilities	W	77,854		4,818		10,790		994		94,456

28. Insurance contract liabilities (continued)

(e) Changes by measurement element in net insurance contract liabilities without applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin								Total
										Retrospective method		Fair value method		Etc.			Sub-total
Beginning balance		Insurance contract assets	W	(743)		124		-		-		175		175		(444)
		Insurance contract liabilities		37,213,497		1,151,534		5,772,838		2,782,796		1,308,901		9,864,535		48,229,566
		Net insurance contract liabilities		37,212,754		1,151,658		5,772,838		2,782,796		1,309,076		9,864,710		48,229,122
Changes related to future services		Change in contractual service margin adjustment estimate		685,902		90,882		(663,935)		257,316		(370,165)		(776,784)		-
		Change in unadjusted estimate of contractual service margin		39,452		382		-		-		460		460		40,294
		Initial recognition effect of new contracts for the current period		(1,395,897)		157,279		-		-		1,266,258		1,266,258		27,640
				(670,543)		248,543		(663,935)		257,316		896,553		489,934		67,934
Changes related to current service		Contractual service margin amortization		-		-		(433,780)		(246,990)		(242,944)		(923,714)		(923,714)
		Risk-adjusted change		-		(119,568)		-		-		-		-		(119,568)
		Experience adjustment		(49,668)		-		-		-		-		-		(49,668)
				(49,668)		(119,568)		(433,780)		(246,990)		(242,944)		(923,714)		(1,092,950)
Changes related to past services		Adjustment of incurred claim elements		44,341		(16,159)		-		-		-		-		28,182

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(e) Changes by measurement element in net insurance contract liabilities without applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2024
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin								Total
										Retrospective method		Fair value method		Etc.			Sub-total
Insurance finance income and expenses		Current profit or loss	W	1,399,565		41,292		173,539		83,110		81,754		338,403		1,779,260
		Other comprehensive income		3,130,302		41,156		-		-		-		-		3,171,458
				4,529,867		82,448		173,539		83,110		81,754		338,403		4,950,718
Cash flow for the period		Insurance premium received		6,897,049		-		-		-		-		-		6,897,049
		Insurance acquisition cash flow payment		(1,586,104)		-		-		-		-		-		(1,586,104)
		Payment of insurance benefits and other insurance service expenses		(1,590,554)		-		-		-		-		-		(1,590,554)
		Receipt (payment) of investment elements and refund of insurance premiums		(4,941,397)		-		-		-		-		-		(4,941,397)
				(1,221,006)		-		-		-		-		-		(1,221,006)
Other increase/decrease				(9)		-		-		-		-		-		(9)
Ending balance		Insurance contract assets		(1,325)		203		-		-		71		71		(1,051)
		Insurance contract liabilities		39,847,061		1,346,719		4,848,662		2,876,232		2,044,368		9,769,262		50,963,042
		Net insurance contract liabilities	W	39,845,736		1,346,922		4,848,662		2,876,232		2,044,439		9,769,333		50,961,991

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(e) Changes by measurement element in net insurance contract liabilities without applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin								Total
										Retrospective method		Fair value method		Etc.			Sub-total
Beginning balance		Insurance contract assets	W	-		-		-		-		-		-		-
		Insurance contract liabilities		34,851,591		1,151,768		6,765,720		2,351,146		698,537		9,815,403		45,818,762
		Net insurance contract liabilities		34,851,591		1,151,768		6,765,720		2,351,146		698,537		9,815,403		45,818,762
Changes related to future services		Change in contractual service margin adjustment estimate		350,007		(84,549)		(659,780)		570,862		(176,540)		(265,458)		-
		Change in unadjusted estimate of contractual service margin		(46,697)		(4,196)		-		-		(158)		(158)		(51,051)
		Initial recognition effect of new contracts for the current period		(991,607)		105,353		-		-		901,945		901,945		15,691
				(688,297)		16,608		(659,780)		570,862		725,247		636,329		(35,360)
Changes related to current service		Contractual service margin amortization		-		-		(536,399)		(215,795)		(162,449)		(914,643)		(914,643)
		Risk-adjusted change		-		(101,902)		-		-		-		-		(101,902)
		Experience adjustment		(105,141)		(8)		-		-		-		-		(105,149)
				(105,141)		(101,910)		(536,399)		(215,795)		(162,449)		(914,643)		(1,121,694)
Changes related to past services		Adjustment of incurred claim elements		21,880		(10,412)		-		-		-		-		11,468
---

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(e) Changes by measurement element in net insurance contract liabilities without applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin								Total
										Retrospective method		Fair value method		Etc.			Sub-total
Insurance finance income and expenses		Current profit or loss	W	1,848,652		42,200		203,297		76,583		47,741		327,621		2,218,473
		Other comprehensive income		2,907,587		53,407		-		-		-		-		2,960,994
				4,756,239		95,607		203,297		76,583		47,741		327,621		5,179,467
Cash flow for the period		Insurance premium received		6,209,129		-		-		-		-		-		6,209,129
		Insurance acquisition cash flow payment		(979,176)		-		-		-		-		-		(979,176)
		Payment of insurance benefits and other insurance service expenses		(1,498,217)		-		-		-		-		-		(1,498,217)
		Receipt (payment) of investment elements and refund of insurance premiums		(5,355,137)		-		-		-		-		-		(5,355,137)
				(1,623,401)		-		-		-		-		-		(1,623,401)
Other increase/decrease				(117)		(3)		-		-		-		-		(120)
Ending balance		Insurance contract assets		(743)		124		-		-		175		175		(444)
		Insurance contract liabilities		37,213,497		1,151,534		5,772,838		2,782,796		1,308,901		9,864,535		48,229,566
		Net insurance contract liabilities	W	37,212,754		1,151,658		5,772,838		2,782,796		1,309,076		9,864,710		48,229,122

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(f) Details of insurance contracts that did not apply the premium allocation approach recognized for the first time for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Present value estimate of future cash outflows				Present value estimate of future cash inflows		Risk adjustment for non-financial risks		Contractual service margin		Total
				Other than insurance acquisition cash flow amount		Insurance acquisition cash flow amount
Contract recognized for the first time in the period		Except for onerous contracts issued	W	5,654,572		1,725,595		(8,794,395)		147,970		1,266,258		-
		Onerous contracts issued		748,281		119,002		(848,952)		9,309		-		27,640
			W	6,402,853		1,844,597		(9,643,347)		157,279		1,266,258		27,640
				December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
				Present value estimate of future cash outflows				Present value estimate of future cash inflows		Risk adjustment for non-financial risks		Contractual service margin		Total
				Other than insurance acquisition cash flow amount		Insurance acquisition cash flow amount
Contract recognized for the first time in the period		Except for onerous contracts issued	W	2,790,412		975,895		(4,766,973)		98,721		901,945		-
		Onerous contracts issued		154,524		63,685		(209,150)		6,632		-		15,691
			W	2,944,936		1,039,580		(4,976,123)		105,353		901,945		15,691

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(g) The amount expected to be recognized in profit or loss in the future as contractual service margin for insurance contracts that do not apply the premium allocation approach as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Less than<br><br>1 year		1~2<br><br>years		2~5<br><br>years		5~10<br><br>years		More than 10 years		Total
Contractual Service Margin	W	613,018		527,795		1,331,128		1,664,754		5,632,638		9,769,333
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Less than<br><br>1 year		1~2<br><br>years		2~5<br><br>years		5~10<br><br>years		More than 10 years		Total
Contractual Service Margin	W	867,208		759,132		1,851,145		2,185,854		4,201,371		9,864,710

(h) The composition details and fair value amounts of basic items of insurance contracts with direct participation characteristics as of December 31, 2024 and 2023 are as follows:

(*)		December 31, 2024		December 31, 2023
Cash and amortized cost measurement deposits	W	294,963		322,933
Financial assets measured at fair value through profit or loss		3,561,126		3,934,491
Amortized cost loan receivables		32,489		66,790
derivatives		(150)		674
Etc.		69,608		81,468
	W	3,958,036		4,406,356

(*) As of December 31, 2024 and 2023, the book value of financial assets (liabilities) of variable insurance is W 5,498,129 million and W 5,940,453 million.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(i) The details of changes in the remaining coverage elements and incurred claim elements of reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss recovery component		Loss recovery component
Beginning balance		Reinsurance contract assets	W	19,436		5,055		38,323		62,814
		Reinsurance contract liabilities		(143,204)		23,112		26,930		(93,162)
		Net reinsurance contract assets<br><br>(liabilities)		(123,768)		28,167		65,253		(30,348)
Reinsurance revenue		Accrued reinsurance amount		-		-		89,856		89,856
		Changes in incident fulfillment cash flow		-		-		(29,334)		(29,334)
		Etc.		10		(7,391)		-		(7,381)
				10		(7,391)		60,522		53,141
Reinsurance service expense		Fair value method		(28,839)		-		-		(28,839)
		Etc.		(28,514)		-		-		(28,514)
				(57,353)		-		-		(57,353)
Recovery of investment elements and reinsurance premiums				(143,510)		-		143,510		-
Reinsurance finance income and expense		Current profit or loss		(1,350)		37		1,375		62
		Other comprehensive income		(2,685)		244		350		(2,091)
			W	(4,035)		281		1,725		(2,029)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(i) The details of changes in the remaining coverage elements and incurred claim elements of reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2024
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss recovery component		Loss recovery component
Cash flow for the period		Reinsurance premium paid	W	221,033		-		-		221,033
		Recovery of reinsurance proceeds and other reinsurance profits		-		-		(33,580)		(33,580)
		Receipt of investment elements and recovery of reinsurance premiums		2,348		-		(142,968)		(140,620)
				223,381		-		(176,548)		46,833
Other increase/decrease				(549)		(64)		-		(613)
Ending balance		Reinsurance contract assets		47,331		3,806		56,552		107,689
		Reinsurance contract liabilities		(153,155)		17,187		37,910		(98,058)
		Net reinsurance contract assets<br><br>(liabilities)	W	(105,824)		20,993		94,462		9,631

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(i) The details of changes in the remaining coverage elements and incurred claim elements of reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss recovery component		Loss recovery component
Beginning balance		Reinsurance contract assets	W	8,453		5,236		45,328		59,017
		Reinsurance contract liabilities		(106,247)		22,662		20,815		(62,770)
		Net reinsurance contract assets<br><br>(liabilities)		(97,794)		27,898		66,143		(3,753)
Reinsurance revenue		Accrued reinsurance amount		-		-		72,651		72,651
		Changes in incident fulfillment cash flow		-		-		(32,100)		(32,100)
		Etc.		(1)		(115)		-		(116)
				(1)		(115)		40,551		40,435
Reinsurance service expense		Fair value method		(52,637)		-		-		(52,637)
		Etc.		(19,767)		318		-		(19,449)
				(72,404)		318		-		(72,086)
Recovery of investment elements and reinsurance premiums				(152,684)		-		152,684		-
Reinsurance finance income and expense		Current profit or loss		(2,156)		29		1,263		(864)
		Other comprehensive income		(28,793)		384		116		(28,293)
			W	(30,949)		413		1,379		(29,157)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(i) The details of changes in the remaining coverage elements and incurred claim elements of reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Remaining coverage elements				Incurred claim elements		Total
				Excluding loss recovery component		Loss recovery component
Cash flow for the period		Reinsurance premium paid	W	229,319		-		-		229,319
		Recovery of reinsurance proceeds and other reinsurance profits		-		-		(43,405)		(43,405)
		Receipt of investment elements and recovery of reinsurance premiums		-		-		(152,052)		(152,052)
				229,319		-		(195,457)		33,862
Other increase/decrease				745		(347)		(47)		351
Ending balance		Reinsurance contract assets		19,436		5,055		38,323		62,814
		Reinsurance contract liabilities		(143,204)		23,112		26,930		(93,162)
		Net reinsurance contract assets<br><br>(liabilities)	W	(123,768)		28,167		65,253		(30,348)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(j) Details of changes in the remaining coverage elements and incurred claim elements of reinsurance contract assets (liabilities) applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Remaining coverage elements				Incurred claim elements				Total
				Excluding loss recovery component		Loss recovery component		Present value estimate of future cash flows		Risk adjustment for non-financial risks
Beginning balance		Reinsurance contract assets	W	19,971		1,220		4,244		104		25,539
		Reinsurance contract liabilities		(59)		-		(19)		-		(78)
		Net reinsurance contract assets (liabilities)		19,912		1,220		4,225		104		25,461
Reinsurance revenue		Accrued reinsurance amount		-		-		15,934		564		16,498
		Changes in incident fulfillment cash flow		-		(255)		3,476		838		4,059
		Etc.		(120)		-		-		-		(120)
				(120)		(255)		19,410		1,402		20,437
Reinsurance service expense				(18,052)		-		-		-		(18,052)
Recovery of investment elements and reinsurance premiums				-		-		-		-		-
Reinsurance finance income and expense		Current profit or loss		2,071		-		97		7		2,175
		Other comprehensive income		-		-		14		4		18
				2,071		-		111		11		2,193
Cash flow for the period		Reinsurance premium paid		2,128		-		-		-		2,128
		Recovery of reinsurance proceeds and other reinsurance profits		-		-		33,051		-		33,051
		Receipt of investment elements and recovery of reinsurance premiums		-		-		-		-		-
				2,128		-		33,051		-		35,179
Other increase/decrease				45,500		-		(33,658)		-		11,842
Ending balance		Reinsurance contract assets		51,439		965		23,144		1,517		77,065
		Reinsurance contract liabilities		-		-		(5)		-		(5)
		Net reinsurance contract assets (liabilities)	W	51,439		965		23,139		1,517		77,060

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(j) Details of changes in the remaining coverage elements and incurred claim elements of reinsurance contract assets (liabilities) applying the premium allocation approach for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Remaining coverage elements				Incurred claim elements				Total
				Excluding loss recovery component		Loss recovery component		Present value estimate of future cash flows		Risk adjustment for non-financial risks
Beginning balance		Reinsurance contract assets	W	26,901		75		2,659		120		29,755
		Reinsurance contract liabilities		-		-		(33)		-		(33)
		Net reinsurance contract assets (liabilities)		26,901		75		2,626		120		29,722
Reinsurance revenue		Accrued reinsurance amount		-		-		2,813		79		2,892
		Changes in incident fulfillment cash flow		-		1,194		318		(71)		1,441
		Etc.		217		-		-		-		217
				217		1,194		3,131		8		4,550
Reinsurance service expense				(10,104)		-		-		-		(10,104)
Recovery of investment elements and reinsurance premiums				-		-		-		-		-
Reinsurance finance income and expense		Current profit or loss		915		-		27		3		945
		Other comprehensive income		-		-		9		1		10
				915		-		36		4		955
Cash flow for the period		Reinsurance premium paid		3,716		-		-		-		3,716
		Recovery of reinsurance proceeds and other reinsurance profits		-		-		(1,079)		-		(1,079)
		Receipt of investment elements and recovery of reinsurance premiums		-		-		-		-		-
				3,716		-		(1,079)		-		2,637
Other increase/decrease				(1,733)		(49)		(489)		(28)		(2,299)
Ending balance		Reinsurance contract assets		19,971		1,220		4,244		104		25,539
		Reinsurance contract liabilities		(59)		-		(19)		-		(78)
		Net reinsurance contract assets (liabilities)	W	19,912		1,220		4,225		104		25,461

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(k) Changes by measurement element in reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin						Total
								Fair value method		Etc.		Sub-total
Beginning balance		Reinsurance contract assets	W	(26,683)		18,538		15,224		55,735		70,959		62,814
		Reinsurance contract liabilities		(182,136)		28,620		24,066		36,288		60,354		(93,162)
		Net reinsurance contract<br><br>assets (liabilities)		(208,819)		47,158		39,290		92,023		131,313		(30,348)
Changes related to future services		Change in contractual<br><br>service margin adjustment estimate		(186,989)		4,806		121,614		52,954		174,568		(7,615)
		Initial recognition effect of new contracts for the current period		(46,121)		4,672		-		42,929		42,929		1,480
				(233,110)		9,478		121,614		95,883		217,497		(6,135)
Changes related to current service		Contractual service margin amortization		-		-		11,035		(10,844)		191		191
		Risk-adjusted change		-		(2,982)		-		-		-		(2,982)
		Experience adjustment		34,048		-		-		-		-		34,048
				34,048		(2,982)		11,035		(10,844)		191		31,257
Changes related to past services		Adjustment of accident<br><br>factors	W	(27,816)		(1,518)		-		-		-		(29,334)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(k) Changes by measurement element in reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2024
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin						Total
								Fair value method		Etc.		Sub-total
Reinsurance finance income and expenses		Current profit or loss	W	(7,595)		1,758		1,699		4,200		5,899		62
		Other comprehensive<br><br>income		(7,320)		5,229		-		-		-		(2,091)
				(14,915)		6,987		1,699		4,200		5,899		(2,029)
Cash flow for the period		Reinsurance premium paid		221,033		-		-		-		-		221,033
		Recovery of reinsurance<br><br>proceeds and other<br><br>reinsurance profits		(33,580)		-		-		-		-		(33,580)
		Receipt of investment<br><br>elements and refund of<br><br>insurance premiums		(140,620)		-		-		-		-		(140,620)
				46,833		-		-		-		-		46,833
Other increase/decrease				(672)		-		-		59		59		(613)
Ending balance		Reinsurance contract assets		(81,178)		19,688		78,043		91,136		169,179		107,689
		Reinsurance contract<br><br>liabilities		(323,273)		39,435		95,595		90,185		185,780		(98,058)
		Net reinsurance contract<br><br>assets(liabilities)	W	(404,451)		59,123		173,638		181,321		354,959		9,631

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(k) Changes by measurement element in reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin						Total
								Fair value method		Etc.		Sub-total
Beginning balance		Reinsurance contract assets	W	(52,365)		16,522		47,211		47,649		94,860		59,017
		Reinsurance contract liabilities		(168,825)		22,870		68,110		15,075		83,185		(62,770)
		Net reinsurance contract<br><br>assets (liabilities)		(221,190)		39,392		115,321		62,724		178,045		(3,753)
Changes related to future services		Change in contractual<br><br>service margin adjustment estimate		42,958		4,630		(71,099)		24,721		(46,378)		1,210
		Initial recognition effect of new contracts for the current period		(10,008)		1,254		-		8,924		8,924		170
				32,950		5,884		(71,099)		33,645		(37,454)		1,380
Changes related to current service		Contractual service margin amortization		-		-		(8,120)		(7,269)		(15,389)		(15,389)
		Risk-adjusted change		-		(2,485)		-		-		-		(2,485)
		Experience adjustment		16,943		-		-		-		-		16,943
				16,943		(2,485)		(8,120)		(7,269)		(15,389)		(931)
Changes related to past services		Adjustment of accident<br><br>factors	W	(31,062)		(1,038)		-		-		-		(32,100)
---

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(k) Changes by measurement element in reinsurance contract assets (liabilities) for which the premium allocation approach was not applied for the years ended December 31, 2024 and 2023 are as follow (continued):

				December 31, 2023
				Present value estimate of future cash flows		Risk adjustment for non-financial risks		Contractual service margin						Total
								Fair value method		Etc.		Sub-total
Reinsurance finance income and expenses		Current profit or loss	W	(8,686)		1,711		3,188		2,923		6,111		(864)
		Other comprehensive<br><br>income		(31,987)		3,694		-		-		-		(28,293)
				(40,673)		5,405		3,188		2,923		6,111		(29,157)
Cash flow for the period		Reinsurance premium paid		229,319		-		-		-		-		229,319
		Recovery of reinsurance<br><br>proceeds and other<br><br>reinsurance profits		(43,405)		-		-		-		-		(43,405)
		Receipt of investment<br><br>elements and refund of<br><br>insurance premiums		(152,052)		-		-		-		-		(152,052)
				33,862		-		-		-		-		33,862
Other increase/decrease				351		-		-		-		-		351
Ending balance		Reinsurance contract assets		(26,683)		18,538		15,224		55,735		70,959		62,814
		Reinsurance contract<br><br>liabilities		(182,136)		28,620		24,066		36,288		60,354		(93,162)
		Net reinsurance contract<br><br>assets(liabilities)	W	(208,819)		47,158		39,290		92,023		131,313		(30,348)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(l) Details of reinsurance contracts that did not apply the premium allocation approach recognized for the first time for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Present value estimate of future cash outflows				Present value estimate of future cash inflows		Risk adjustment for non-financial risks		Contractual service margin		Total
				Other than insurance acquisition cash flow amount		Insurance acquisition cash flow amount
Contract recognized for the first time in the period		Except for net profit contract set	W	(160,095)		-		109,889		3,098		47,598		490
		Net profit contract set		(64,074)		-		68,159		1,574		(4,669)		990
			W	(224,169)		-		178,048		4,672		42,929		1,480
				December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
				Present value estimate of future cash outflows				Present value estimate of future cash inflows		Risk adjustment for non-financial risks		Contractual service margin		Total
				Other than insurance acquisition cash flow amount		Insurance acquisition cash flow amount
Contract recognized for the first time in the period		Except for net profit contract set	W	(71,470)		-		61,101		1,104		9,307		42
		Net profit contract set		(6,322)		-		6,683		150		(383)		128
			W	(77,792)		-		67,784		1,254		8,924		170

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(m) The amount of contractual service margin for reinsurance contracts that do not apply the premium allocation approach as of December 31, 2024 and 2023 is expected to be recognized in profit or loss in the future as follows:

		December 31, 2024
		Less than<br><br>1 year		1~2<br><br>years		2~5<br><br>year		5~10<br><br>year		More than 10 years		Total
Reinsurance contract assets	W	(12,551)		(11,363)		(29,455)		(38,460)		(77,350)		(169,179)
Reinsurance contract liabilities		(13,874)		(12,036)		(30,495)		(35,569)		(93,806)		(185,780)
	W	(26,425)		(23,399)		(59,950)		(74,029)		(171,156)		(354,959)
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Less than<br><br>1 year		1~2<br><br>years		2~5<br><br>year		5~10<br><br>year		More than 10 years		Total
Reinsurance contract assets	W	(5,256)		(4,777)		(12,166)		(15,305)		(33,455)		(70,959)
Reinsurance contract liabilities		(5,692)		(4,947)		(11,507)		(12,251)		(25,957)		(60,354)
	W	(10,948)		(9,724)		(23,673)		(27,556)		(59,412)		(131,313)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(n) Details of insurance profits and losses for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Retroactive modification method		Fair value method		Etc.		Total
Unapplied premium allocation approach		Expected insurance premiums and other expected insurance service expenses	W	769,737		685,765		199,933		1,655,435
		Risk-adjusted change amount		48,040		35,437		46,946		130,423
		Contractual service margin amortization		433,780		246,990		242,944		923,714
		Recovery of insurance acquisition cash flows		116,454		379		243,578		360,411
		Etc. (*)		(13,242)		(371)		(4,371)		(17,984)
				1,354,769		968,200		729,030		3,051,999
Premium allocation approach				64,109		-		445		64,554
Insurance revenue subtotal				1,418,878		968,200		729,475		3,116,553
Unapplied premium allocation approach		Accrued insurance premiums and other incurred insurance service expenses		775,573		652,193		219,202		1,646,968
		Changes in incident fulfillment cash flow		(2,310)		26,060		4,432		28,182
		Costs related to loss-bearing contracts		42,867		4,682		20,385		67,934
		Amortization of insurance acquisition cash flows		116,636		379		243,396		360,411
		Etc. (*)		(10,455)		883		(38,758)		(48,330)
				922,311		684,197		448,657		2,055,165
Premium allocation approach				75,029		-		1,366		76,395
Insurance service expense subtotal			W	997,340		684,197		450,023		2,131,560

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(n) Details of insurance profits and losses for the years ended December 31, 2024 and 2023 are as follows (continued):

				December 31, 2024
				Retroactive modification method		Fair value method		Etc.		Total
Unapplied premium allocation approach		Accrued reinsurance amount	W	67		68,816		20,973		89,856
		Changes in incident fulfillment cash flow		58		(27,421)		(1,971)		(29,334)
		Etc. (*)		53		(11,372)		3,938		(7,381)
				178		30,023		22,940		53,141
Premium allocation approach				20,437		-		-		20,437
Reinsurance revenue subtotal				20,615		30,023		22,940		73,578
Unapplied premium allocation approach		Expected reinsurance amount		-		39,319		13,689		53,008
		Risk-adjusted change amount		-		2,861		1,066		3,927
		Contractual service margin amortization		-		(11,035)		10,844		(191)
		Etc. (*)		-		(2,306)		2,915		609
				-		28,839		28,514		57,353
Premium allocation approach				18,052		-		-		18,052
Reinsurance service expense subtotal				18,052		28,839		28,514		75,405
			W	424,101		285,187		273,878		983,166

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(n) Details of insurance profits and losses for the years ended December 31, 2024 and 2023 are as follows (continued):

				December 31, 2023
				Retroactive modification method		Fair value method		Etc.		Total
Unapplied premium allocation approach		Expected insurance premiums and other expected insurance service expenses	W	776,917		706,136		90,916		1,573,969
		Risk-adjusted change amount		55,712		36,036		24,797		116,545
		Contractual service margin amortization		536,399		215,795		162,449		914,643
		Recovery of insurance acquisition cash flows		133,781		337		128,162		262,280
		Etc. (*)		(18,762)		65		11,218		(7,479)
				1,484,047		958,369		417,542		2,859,958
Premium allocation approach				29,504		-		10,137		39,641
Insurance revenue subtotal				1,513,551		958,369		427,679		2,899,599
Unapplied premium allocation approach		Accrued insurance premiums and other incurred insurance service expenses		794,824		644,118		74,638		1,513,580
		Changes in incident fulfillment cash flow		(5,104)		14,944		1,628		11,468
		Costs related to loss-bearing contracts		(74,960)		8,286		31,314		(35,360)
		Amortization of insurance acquisition cash flows		133,868		337		128,075		262,280
		Etc. (*)		(10,235)		1,451		(28,812)		(37,596)
				838,393		669,136		206,843		1,714,372
Premium allocation approach				37,657		-		(3,250)		34,407
Insurance service expense subtotal			W	876,050		669,136		203,593		1,748,779

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

28. Insurance contract liabilities (continued)

(n) Details of insurance profits and losses for the years ended December 31, 2024 and 2023 are as follows (continued):

				December 31, 2023
				Retroactive modification method		Fair value method		Etc.		Total
Unapplied premium allocation approach		Accrued reinsurance amount	W	27		67,051		5,573		72,651
		Changes in incident fulfillment cash flow		2		(29,952)		(2,150)		(32,100)
		Etc. (*)		(1)		(2,021)		1,906		(116)
				28		35,078		5,329		40,435
Premium allocation approach				4,550		-		-		4,550
Reinsurance revenue subtotal				4,578		35,078		5,329		44,985
Unapplied premium allocation approach		Expected reinsurance amount		-		41,537		7,324		48,861
		Risk-adjusted change amount		-		3,227		626		3,853
		Contractual service margin amortization		-		8,120		7,269		15,389
		Etc. (*)		-		(247)		4,230		3,983
				-		52,637		19,449		72,086
Premium allocation approach				5,375		-		4,729		10,104
Reinsurance service expense subtotal				5,375		52,637		24,178		82,190
			W	636,704		271,674		205,237		1,113,615

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

29. Insurance finance income and expense

Details of insurance finance income and expense for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Life insurance						Non-life insurance						Total
				General		Variable		Retirement		Long-term		General		Car
Insurance finance<br><br>income	Insurance contract	Exchange rate fluctuation effect	W	13,896		-		-		-		-		-		13,896
		Etc.		21,762		166,710		-		-		2		-		188,474
				35,658		166,710		-		-		2		-		202,370
	Reinsurance contract	Etc.		40		-		-		-		(47)		-		(7)
				35,698		166,710		-		-		(45)		-		202,363
Insurance finance expense	Insurance contract	Exchange rate fluctuation effect		48,410		-		-		-		-		-		48,410
		Etc.		1,176		252,216		-		-		-		-		253,392
				49,586		252,216		-		-		-		-		301,802
Total insurance finance income and expense recognized in current profit or loss				(13,888)		(85,506)		-		-		(45)		-		(99,439)
Insurance finance income and expense recognized as other comprehensive income (*)				(3,124,198)		(47,215)		-		(47)		(26)		-		(3,171,486)
Reinsurance finance income and expense recognized in other comprehensive income (*)				(2,098)		-		-		7		18		-		(2,073)
Total insurance finance income and expense recognized in profit or loss and other comprehensive income			W	(3,140,184)		(132,721)		-		(40)		(53)		-		(3,272,998)

(*) Finance income and expense recognized as other comprehensive income are before deducting corporate tax effects.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

29. Insurance finance income and expense (continued)

Details of insurance finance income and expense for the years ended December 31, 2024 and 2023 are as follows (continued):

				December 31, 2023
				Life insurance						Non-life insurance						Total
				General		Variable		Retirement		Long-term		General		Car
Insurance finance<br><br>income	Insurance contract	Exchange rate fluctuation effect	W	13,656		-		-		-		-		-		13,656
		Etc.		38,384		91,062		-		-		-		-		129,446
				52,040		91,062		-		-		-		-		143,102
	Reinsurance contract	Etc.		-		-		-		-		(38)		-		(38)
				52,040		91,062		-		-		(38)		-		143,064
Insurance finance expense	Insurance contract	Exchange rate fluctuation effect		19,345		-		-		-		-		-		19,345
		Etc.		935		638,881		-		-		-		-		639,816
				20,280		638,881		-		-		-		-		659,161
Total insurance finance income and expense recognized in current profit or loss				31,760		(547,819)		-		-		(38)		-		(516,097)
Insurance finance income and expense recognized as other comprehensive income (*)				(2,970,845)		9,841		-		(15)		-		-		(2,961,019)
Reinsurance finance income and expense recognized in other comprehensive income (*)				(28,276)		-		-		(7)		-		-		(28,283)
Total insurance finance income and expense recognized in profit or loss and other comprehensive income			W	(2,967,361)		(537,978)		-		(22)		(38)		-		(3,505,399)

(*) Finance income and expense recognized as other comprehensive income are before deducting corporate tax effects.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

30. Investment contract liabilities

Details of investment contract liabilities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Financial liabilities measured at amortized cost (*)	W	1,165,022		1,572,685

(*) This is retirement pension policyholder reserve.

31. Other liabilities

Other liabilities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Lease liabilities (*)	W	890,689		613,914
Accounts payable		15,140,873		18,917,257
Accrued expenses		7,023,165		5,877,135
Dividend payable		7,997		8,809
Advance received		198,317		168,940
Unearned income		453,706		492,886
Withholding value-added tax and other taxes		1,020,113		876,814
Securities deposit received		2,252,424		2,552,266
Foreign exchange settlement pending		551,196		302,322
Domestic exchange settlement pending		1,806,106		9,238,159
Payable from trust account		8,174,066		6,537,565
Due to agencies		1,178,661		801,976
Deposits for subscription		61,578		30,729
Sundry liabilities		2,198,383		2,394,202
Others		54,133		45,221
Present value discount		(131,898)		(135,855)
	W	40,879,509		48,722,340

(*) As of December 31, 2024, the Group accounts for the lease liabilities as other liabilities. For the year ended December 31, 2024, the amount of variable lease payments that are not included in the measurement of lease liabilities is W 1,987 million, cash outflows from leases are W 299,061 million, and interest expense on lease liabilities is W 22,787 million. For the year ended December 31, 2023, the amount of variable lease payments that are not included in the measurement of lease liabilities is W 23,272 million, cash outflows from leases are W 293,240 million, and interest expense on lease liabilities is W 18,855 million.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

32. Equity

(a) Equity as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Capital stock (*1):
Common stock	W	2,695,586		2,695,586
Preferred stock		274,055		274,055
		2,969,641		2,969,641
Hybrid bond		4,600,121		4,001,731
Capital surplus:
Share premium		11,352,744		11,352,744
Others		742,224		742,224
		12,094,968		12,094,968
Capital adjustments		(807,114)		(658,664)
Accumulated other comprehensive income, net of tax:
Loss on financial assets at fair value through other comprehensive income		(2,314,518)		(3,503,542)
Equity in other comprehensive loss of associates		5,701		(970)
Foreign currency translation adjustments for foreign operations		296,489		(118,517)
Net loss from cash flow hedges		3,406		(35,108)
Remeasurement of net defined benefit liabilities (assets)		(354,087)		(292,328)
Changes in own credit risk on financial liabilities designated under fair value option		(5,569)		(3,884)
Net finance income on insurance contract assets (liabilities)		532,388		2,866,623
Net finance income on reinsurance contract assets (liabilities)		11,750		13,273
		(1,824,440)		(1,074,453)
Retained earnings (*2), (*3), (*4)		39,020,580		36,387,314
Non-controlling interest (*5)		2,767,277		2,601,328
	W	58,821,033		56,321,865

(*1) Due to profit retirement, the capital is different from the total face value of issued stocks.

(*2) As of December 31, 2024 and 2023, profits reserved by the Group in accordance with Article 53 of the Financial Holding Companies Act amounted to W 2,865,461 million and W 2,698,360 million, respectively.

(*3) As of December 31, 2024 and 2023, the regulatory reserve for loan losses the Group appropriated in retained earnings are W 20,656 million and W 21,078 million, respectively.

(*4) As of December 31, 2024, profit dividends within retained earnings of subsidiaries of the Group restricted in accordance with laws, etc. are amounted to W 23,606,325 million.

(*5) As of December 31, 2024 and 2023, the total amounts of hybrid bonds that Shinhan Bank, Jeju Bank, Shinhan Capital Co,.Ltd. and Shinhan Life Insurance Co., Ltd. issued are W 2,587,478 million and W 2,437,561 million, respectively, and are recognized as non-controlling interests. And, for the years ended December 31, 2024 and 2023, the amounts of dividends paid for the hybrid bonds of Shinhan Bank, Jeju Bank, Shinhan Capital Co,.Ltd. and Shinhan Life Insurance Co., Ltd. W 104,400 million and W 106,715 million, respectively, are allocated to profit attributed to non-controlling interest.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

32. Equity (continued)

(b) Capital stock

i) Capital stock of the Group as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
Number of authorized shares		1,000,000,000				1,000,000,000
Types of stock		Common stocks		Preferred stocks		Common stocks		Preferred stocks
Par value per share in won	W	5,000		-		5,000		-
Number of issued common stocks		503,445,325		-		512,759,471		-
Capital stock (*)	W	2,695,586		274,055		2,695,586		274,055

(*) Due to profit retirement, the capital is different from the total face value of issued stocks.

(ii) The details of changes in the number of common shares outstanding as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance		512,753,119		508,778,517
Increase		6,353		17,482,000
Decrease		(13,899,708)		(13,507,398)
Ending balance		498,859,764		512,753,119

(iii) The details of convertible preferred stock as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance		-		17,482,000
Decrease (*)		-		(17,482,000)
Ending balance		-		-

(*) Convertible preferred shares of 17,482,000 that were issued on May 1, 2019 have been converted into common shares at a 1:1 ratio on May 1, 2023.

(c) Hybrid bonds

Hybrid bonds classified as other equity instruments as of December 31, 2024 and 2023 are as follows:

	Issue date		Maturity date		Interest rate (%)		December 31, 2024		December 31, 2023
KRW	June 25, 2015		June 25, 2045		4.38	W	199,455		199,455
	September 15, 2017		Perpetual bond		4.25		89,783		89,783
	April 13, 2018		Perpetual bond		4.56		14,955		14,955
	June 28, 2019		Perpetual bond		3.27		-		199,476
	September 17, 2020		Perpetual bond		3.12		448,699		448,699
	March 16, 2021		Perpetual bond		2.94		429,009		429,009
	March 16, 2021		Perpetual bond		3.30		169,581		169,581
	January 25, 2022		Perpetual bond		3.90		560,438		560,438
	January 25, 2022		Perpetual bond		4.00		37,853		37,853
	August 26, 2022		Perpetual bond		4.93		343,026		343,026
	August 26, 2022		Perpetual bond		5.15		55,803		55,803
	January 30, 2023		Perpetual bond		5.14		398,831		398,831
	July 13, 2023		Perpetual bond		5.40		498,815		498,815
	January 31, 2024		Perpetual bond		4.49		398,833		-
	September 12, 2024		Perpetual bond		4.00		399,033		-
USD	May 12, 2021		Perpetual bond		2.88		556,007		556,007
						W	4,600,121		4,001,731

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

32. Equity (continued)

(c) Hybrid bonds (continued)

(*) For the year ended December 31, 2024, the deduction for capital related to hybrid bonds issued is W 2,134 million.

The hybrid bonds above can be repaid early after 5 or 10 years from the date of issuance, and the controlling company has an unconditional right to extend the maturity under the same condition or change them to perpetual bonds.

(d) Capital adjustments

(i) Changes in capital adjustments for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	(658,664)		(582,859)
Acquisition of treasury stocks		(700,000)		(485,947)
Disposal and retirement of treasury stocks		450,297		485,947
Repayments of hybrid bonds		102,143		(102,350)
Other transactions with owners		(890)		26,545
Ending balance	W	(807,114)		(658,664)

(ii) Details of treasury stock acquisition for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
		The number of share		Carrying amount		The number of share		Carrying amount
Beginning balance		6,352	W	227		6,352	W	227
Acquisition		13,899,708		700,000		13,507,398		485,947
Disposal		(6,353)		(227)		-		-
Retirement (*)		(9,314,146)		(450,000)		(13,507,398)		(485,947)
Ending balance		4,585,561	W	250,000		6,352	W	227

(*) For the year ended December 31, 2024, the Group acquired treasury stocks for retirement, and the retirement of 3,366,257 shares, 5,947,889 shares was completed on March 22, 2024, November 1, 2024, respectively. For the year ended December 31, 2023, treasury stocks were acquired for retirement, and the retirement of 3,676,470 shares, 4,243,281 shares, 2,842,929 shares and 2,744,718 shares was completed on March 28, 2023, June 16, 2023, August 31, 2023 and December 27, 2023, respectively.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

32. Equity (continued)

(e) Accumulated other comprehensive income

Changes in accumulated other comprehensive income for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Items that are or may be reclassified to profit or loss												Items that will never be reclassified to profit or loss								Total
		Gain (loss) on securities at fair value through other comprehensive income		Equity in other comprehensive income (expense) of<br><br>associates		Foreign currency translation<br><br>adjustments<br><br>for foreign<br><br>operations		Net gain (loss)<br><br>from cash<br><br>flow<br><br>hedges		Net finance<br><br>Income (expense) on insurance contract<br><br>assets<br><br>(liabilities)		Net finance<br><br>Income (expense) on reinsurance contract assets<br><br>(liabilities)		Remeasure<br><br>-ments of<br><br>the defined benefit<br><br>plans		Equity in other comprehensive income (expense) of<br><br>associates		Gain (loss) on securities at<br><br>fair value<br><br>through other<br><br>comprehensive income		Gain (loss) on<br><br>financial<br><br>Liabilities<br><br>measured at<br><br>FVTPL<br>attributable to<br>changes in<br>credit risk
Beginning balance	W	(3,628,434)		(979)		(118,517)		(35,108)		2,866,623		13,273		(292,328)		9		124,892		(3,884)		(1,074,453)
Change due to fair value		1,465,249		16,732		-		-		(3,171,476)		(2,077)		-		-		55,179		(8,616)		(1,645,009)
Reclassification:
Change due to impairment or disposal		119,594		-		(593)		-		-		-		-		-		-		-		119,001
Effect of hedge accounting		-		-		-		(582,424)		-		-		-		-		-		-		(582,424)
Hedging		(30,371)		-		(221,221)		634,645		-		-		-		-		-		-		383,053
Effects from changes in foreign exchange rate		-		(7,668)		624,565		-		-		-		-		-		13,017		-		629,914
Remeasurements of the net defined benefit plans		-		-		-		-		-		-		(83,937)		-		-		-		(83,937)
Deferred income taxes		(407,849)		(2,393)		13,431		(13,707)		837,241		554		21,794		-		(17,609)		2,275		433,737
Transfer to other account		-		-		-		-		-		-		-		-		(7,329)		4,656		(2,673)
Non-controlling interests		(857)		-		(1,176)		-		-		-		384		-		-		-		(1,649)
Ending balance	W	(2,482,668)		5,692		296,489		3,406		532,388		11,750		(354,087)		9		168,150		(5,569)		(1,824,440)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

32. Equity (continued)

(e) Accumulated other comprehensive income (continued)

Changes in accumulated other comprehensive income for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Items that are or may be reclassified to profit or loss												Items that will never be reclassified to profit or loss								Total
		Gain (loss) on securities at fair value through other comprehensive income		Equity in other comprehensive income (expense) of<br><br>associates		Foreign currency translation<br><br>adjustments<br><br>for foreign<br><br>operations		Net gain (loss)<br><br>from cash<br><br>flow<br><br>hedges		Net finance<br><br>Income (expense) on insurance contract<br><br>assets<br><br>(liabilities)		Net finance<br><br>Income (expense) on reinsurance contract assets<br><br>(liabilities)		Remeasure<br><br>-ments of<br><br>the defined benefit<br><br>plans		Equity in other comprehensive income (expense) of<br><br>associates		Gain (loss) on securities at<br><br>fair value<br><br>through other<br><br>comprehensive income		Gain (loss) on<br><br>financial<br><br>Liabilities<br><br>measured at<br><br>FVTPL<br>attributable to<br>changes in<br>credit risk
Beginning balance	W	(6,786,650)		(8,135)		(112,283)		(96,388)		5,039,081		34,045		(91,993)		9		116,719		(5,155)		(1,910,750)
Change due to fair value		3,862,277		9,738		-		-		(2,961,019)		(28,283)		-		-		1,459		4,011		888,183
Reclassification:
Change due to impairment or disposal		465,343		-		-		-		-		-		-		-		4,199		5,077		474,619
Effect of hedge accounting		-		-		-		(69,484)		-		-		-		-		-		-		(69,484)
Hedging		(28,044)		-		(3,903)		152,927		-		-		-		-		-		-		120,980
Effects from changes in foreign exchange rate		-		-		2,316		-		-		-		-		-		2,862		-		5,178
Remeasurements of the net defined benefit plans		-		-		-		-		-		-		(272,792)		-		-		-		(272,792)
Deferred income taxes		(1,137,032)		(2,582)		(4,658)		(22,163)		788,561		7,511		71,935		-		(3,402)		(465)		(302,295)
Transfer to other account		-		-		-		-		-		-		-		-		3,055		(7,352)		(4,297)
Non-controlling interests		(4,328)		-		11		-		-		-		522		-		-		-		(3,795)
Ending balance	W	(3,628,434)		(979)		(118,517)		(35,108)		2,866,623		13,273		(292,328)		9		124,892		(3,884)		(1,074,453)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

32. Equity (continued)

(f) Appropriation of retained earnings

The appropriation of retained earnings for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Date of appropriation:		March 26, 2025		March 26, 2024
Unappropriated retained earnings:
Balance at beginning of year	W	4,672,650		5,033,475
Retirement of treasury stock		(450,402)		(486,999)
Dividend to hybrid bonds		(176,945)		(189,672)
Interim dividends		(820,287)		(817,122)
Net income		1,619,867		1,671,011
		4,844,883		5,210,693
Transfer from voluntary reserves
Loan loss reserve reversal amount		194		422
		4,845,077		5,211,115
Appropriation of retained earnings:
Legal reserve		104,180		167,101
Dividends on common stocks paid		267,755		268,697
Loss on repayments of hybrid bonds		524		102,667
		372,459		538,465
Unappropriated retained earnings<br><br>to be carried over to subsequent year	W	4,472,618		4,672,650

(*) These statements of appropriation of retained earnings are based on the separate financial statements of Shinhan Financial Group.

(g) Regulatory reserve for loan losses

In accordance with Regulations for the Supervision of Financial Institutions, the Group reserves the difference between allowance for credit losses by K-IFRS and that as required by the Regulations at the account of regulatory reserve for loan losses in retained earnings.

i) Changes in regulatory reserve for loan losses including non-controlling interests as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	3,456,487		3,609,851
Expected reversal of regulatory reserve for loan losses		512,852		(153,364)
Ending balance	W	3,969,339		3,456,487

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

32. Equity (continued)

(g) Regulatory reserve for loan losses (continued)

ii) Profit attributable to equity holders of Shinhan Financial Group and earnings per share after factoring in regulatory reserve for loan losses for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Profit attributable to equity holders of Shinhan Financial Group	W	4,450,177		4,368,035
Provision for regulatory reserve for loan losses		(512,278)		151,357
Profit attributable to equity holders of Shinhan Financial Group adjusted for regulatory reserve	W	3,937,899		4,519,392
Basic and diluted earnings per share adjusted for regulatory reserve in won (*)		7,779		8,361

(*) Dividends for hybrid bonds are deducted.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

33. Dividends

(a) The interim dividends paid for the years ended December 31, 2024 and 2023 are as follows:

December 31, 2024
Dividend base date				Amount
March 31, 2024 (1st Quarter)	Common stock (W540 per share)		W	275,069
June 30, 2024 (2nd Quarter)	Common stock (W540 per share)		W	273,358
September 30, 2024 (3rd Quarter)	Common stock (W540 per share)	W		271,860
			W	820,287
December 31, 2023
Dividend base date				Amount
March 31, 2023 (1st Quarter)	Common stock (W525 per share)		W	265,179
	Convertible preferred stock (W525 per share)			9,178
			W	274,357
June 30, 2023 (2nd Quarter)	Common stock (W525 per share)		W	272,129
September 30, 2023 (3rd Quarter)	Common stock (W525 per share)	W		270,636
			W	817,122

(b) Details of dividends recognized as distributions to stockholders for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Common Stock:
Total number of shares issued and outstanding	W	503,445,325		512,759,471
Par value per share in won		5,000		5,000
Dividend per share in won (*3)		540		525
Dividends (*1), (*2)	W	267,755		268,697
Dividend rate per share (*3)	%	10.8		10.5
Record date (*4)		2025-02-21		2024-02-23

(*1) The current dividend (plan) is expected to be approved on March 26, 2025, and has not been recognized as a distribution to owners during the period.

(*2) The dividend applies to common shares excluding treasury shares, with 7,603,260 treasury shares acquired between the end of the reporting period and the dividend record date being excluded.

(*3) The amount excludes quarterly dividends. When including quarterly dividends, the dividend per share is W 2,160 and W 2,100, for the years ended December 31, 2024 and 2023, respectively and dividend rate per share are 43.2% and 42.0%, for the years ended December 31, 2024 and 2023, respectively.

(*4) The Articles of Incorporation were amended through a resolution of the Board of Directors at the regular general meeting of shareholders on March 23, 2023, to allow the determination of the dividend record date by the Board’s decision. The dividend record date for the annual dividend of 2024 is February 21, 2025.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

33. Dividends (continued)

(c) The details of dividends paid by the Group related to the preferred stock issued for the years ended December 31, 2023 are as follows:

		December 31, 2023
		Number of shares		Dividend per share<br><br>(in won)		Total dividend paid		Issue price per share<br><br>(in won)		Dividend rate per issue price (%)
Convertible preferred stock (*)		17,482,000		525		9,178		42,900		1.22

(*) Convertible preferred shares of 17,482,000 that were issued on May 1, 2019 have been converted into common shares at a 1:1 ratio on May 1, 2023, and dividends were paid before conversion.

(d) Dividends for hybrid bond is calculated as follows for the years ended December 31, 2024 and 2023:

		December 31, 2024		December 31, 2023
Amount of hybrid bond	W	4,614,550		4,014,550
Interest rate (%)	%	2.88 ~ 5.40		2.88 ~ 5.40
Dividends	W	176,945		189,672

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

34. Operating revenue

Operating revenue for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Interest income	W	29,209,338		27,579,211
Fees and commission income		4,295,366		4,175,243
Insurance income		3,116,553		2,899,599
Reinsurance income		73,578		44,985
Insurance finance income		202,363		143,064
Dividend income		239,097		181,486
Net gain on financial instruments measured at fair value through profit or loss		4,264,126		4,254,811
Gain on trading derivatives measured at fair value through profit or loss		22,397,247		17,208,758
Net gain on financial instruments designated at fair value through profit or loss		252,924		438,709
Net gain on foreign currency transaction		8,084,564		3,201,023
Net gain on disposal of securities at fair value through other comprehensive income		197,708		50,793
Net gain on disposal of securities at amortized cost		-		358
Reversal of credit loss allowance		4,311		136
Gain related to hedging derivates		753,798		422,074
Other operating income		973,306		732,379
	W	74,064,279		61,332,629

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

35. Net interest income

Net interest income for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Interest income:
Cash and due from banks at amortized cost	W	780,046		590,831
Deposits at FVTPL		133		-
Securities at FVTPL		1,693,064		1,396,409
Securities at FVOCI		2,744,083		2,357,108
Securities at amortized cost		1,101,721		1,062,110
Loans at amortized cost		22,410,903		21,676,818
Loans at FVTPL		100,122		120,815
Insurance finance interest income		219,409		240,534
Others		159,857		134,586
		29,209,338		27,579,211
Interest expense:
Deposits		10,220,774		9,790,811
Financial liabilities designated at FVTPL		13,292		9,804
Borrowings		1,862,406		1,895,913
Debt securities issued		3,408,678		2,735,421
Insurance finance interest expense		1,901,536		1,945,318
Others		400,350		384,022
		17,807,036		16,761,289
Net interest income	W	11,402,302		10,817,922

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

36. Net fees and commission income

Net fees and commission income for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Fees and commission income:
Credit placement fees	W	73,339		75,930
Commission received as electronic charge receipt		147,625		146,037
Brokerage fees		392,836		369,175
Commission received as agency		153,684		134,432
Investment banking fees		228,976		165,366
Commission received in foreign exchange activities		361,341		295,722
Trust management fees		249,586		299,600
Credit card fees		1,311,422		1,378,200
Operating lease fees (*)		651,691		600,283
Others		724,866		710,498
		4,295,366		4,175,243
Fees and commission expense:
Credit-related fee		49,924		45,739
Credit card fees		966,303		930,044
Others		564,265		552,254
		1,580,492		1,528,037
Net fees and commission income	W	2,714,874		2,647,206

(*) Among operating lease fees recognized for the years ended December 31, 2024 and 2023, there is no variable lease fee income which does not vary by index or rate.

37. Dividend income

Dividend income for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Securities at FVTPL	W	152,990		121,347
Securities at FVOCI		86,107		60,139
	W	239,097		181,486

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

38. Net gain (loss) on financial instruments measured at fair value through profit or loss

Net gain (loss) on financial instruments measured at fair value through profit or loss for the ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Net gain (loss) on due from banks measured at FVTPL
Gain (loss) on valuation	W	(711)		3,964
Net gain on loans measured at FVTPL
Loss on valuation		(2,755)		(6,562)
Gain on sale		90,227		36,774
		87,472		30,212
Net gain on securities measured at FVTPL
Debt securities
Gain on valuation		663,877		755,501
Gain (loss) on sale		(39,354)		197,148
Other gains		803,645		624,282
		1,428,168		1,576,931
Equity securities
Gain on valuation		161,316		540,188
Gain on sale		485,566		428,947
		646,882		969,135
Other
Gain on valuation		36,688		11,635
		2,111,738		2,557,701
Net loss on financial liabilities measured at FVTPL
Debt securities
Loss on valuation		(3,593)		(60,144)
Loss on disposal		(249,398)		(88,398)
		(252,991)		(148,542)
Other
Loss on valuation		(173,058)		(60,565)
Gain on disposal		2,930		1,606
		(170,128)		(58,959)
		(423,119)		(207,501)
Derivatives:
Gain on valuation		82,184		292,483
Loss on transaction		(646,793)		(183,233)
		(564,609)		109,250
	W	1,210,771		2,493,626

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

39. Net gain (loss) on financial instruments designated at fair value through profit or loss

Net gain (loss) on financial instruments designated at fair value through profit or loss for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Financial liabilities designated at fair value through profit or loss:
Debt securities issued:
Gain(loss) on valuation	W	(6,466)		2,495
Compound financial instruments:
Gain(loss) on valuation		(29,162)		51,750
Loss on sale and redemption		(308,825)		(492,025)
		(337,987)		(440,275)
	W	(344,453)		(437,780)

40. Provision for credit loss allowance

Provision for credit loss allowance on financial assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Allowance provided:
Loans at amortized cost	W	(1,862,013)		(2,114,442)
Other financial assets at amortized cost		(113,662)		(90,770)
Securities at fair value through other comprehensive income		-		(2,271)
Unused credit line and financial guarantee		(41,910)		(37,156)
		(2,017,585)		(2,244,639)
Allowance reversed:
Securities at fair value through other comprehensive income	W	2,699		-
Securities at amortized cost		1,612		136
		4,311		136
	W	(2,013,274)		(2,244,503)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

41. General and administrative expenses

General and administrative expenses for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Employee benefits:
Salaries	W	3,316,503		3,247,162
Severance benefits:
Defined contribution		37,745		35,679
Defined benefit		114,943		109,444
Termination benefits		235,330		197,184
		3,704,521		3,589,469
Entertainment		46,903		46,050
Depreciation		535,571		514,100
Amortization		279,095		225,900
Taxes and utility bills		272,018		245,723
Advertising		315,281		285,495
Research		23,917		21,494
Others		938,934		967,106
	W	6,116,240		5,895,337

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

42. Share-based payments

(a) Performance shares granted as of December 31, 2024 are as follows:

		Expired		Not expired
Type		Cash-settled share-based payment
Performance conditions		Relative stock price linked (20.0%), management index (80.0%)
Exercising period		4 years from the commencement date of the year<br><br>to which the grant date belongs
Estimated number of shares vested at December 31, 2024		964,742 shares		2,211,101 shares
Fair value per share in Korean won (*)		W 33,122, W 37,387,<br><br>W 37,081, W 38,156<br><br>and W 50,444 for the expiration of exercising period from 2020 to 2024		W 47,650

(*) Based on performance-based stock compensation, the reference stock price (the arithmetic average of the weighted average share price of transaction volume for the past two months, the past one month, and the past one week from the day before the base date) of four years after the commencement of the grant year is paid in cash, and the fair value of the reference stock price to be paid in the future is assessed as the closing price of the settlement.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

42. Share-based payments (continued)

(b) Share-based compensation costs for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Employees of
		The controlling company		The subsidiaries		Total
Performance shares	W	4,950		41,686		46,636
		December 31, 2023
---	---	---	---	---	---	---
		Employees of
		The controlling company		The subsidiaries		Total
Performance shares	W	5,123		36,751		41,874

(c) Accrued expenses recognized related to share-based payment transactions as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Employees of
		The controlling company		The subsidiaries			Total
Performance shares	W	16,396		135,356			151,752
		December 31, 2023
---	---	---	---	---	---	---	---
		Employees of
		The controlling company		The subsidiaries			Total
Performance shares	W	16,079		111,056			127,135

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

43. Other operating expenses, net

Other operating income and other operating expense for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Other operating income
Gain on disposal of assets:
Loans at amortized cost	W	206,643		178,158
Others:
Gain on hedged items		753,798		422,074
Reversal of allowance for guarantees and acceptances		8,471		4,856
Gain on other trust accounts		-		2
Reversal of other allowance		8,022		1,790
Others		750,170		547,573
		1,520,461		976,295
	W	1,727,104		1,154,453
Other operating expense
Loss on disposal of assets:
Loans at amortized cost	W	97,821		19,723
Others:
Loss on hedged items		626,116		448,664
Fund contribution		526,196		470,227
Provision for other debt allowances		98,344		15,516
Depreciation of operating lease assets		465,716		445,006
Others (*)		1,979,135		1,942,047
		3,695,507		3,321,460
	W	3,793,328		3,341,183
Other operating expenses, net	W	(2,066,224)		(2,186,730)

(*) Includes W 293,824 million for vulnerable groups such as self-employed people, small business owners and institutions supporting vulnerable groups, etc. in accordance with the “Banking financial support plan for people’s livelihood” for the year ended December 31, 2023.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

44. Net other non-operating income

Other non-operating income and other non-operating expense for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Other non-operating income
Gain on disposal of assets:
Property and equipment	W	3,287		4,944
Investment property		3,427		56,640
Assets held for sale		-		1,753
Lease assets		1		9
Right-of-use assets		9,712		3,388
		16,427		66,734
Investments in associates:
Gain on disposal		9,908		12,435
Reversal of impairment loss		183		-
		10,091		12,435
Others:
Rental income on investment property		28,708		24,472
Reversal of impairment losses on intangible asset		112		50
Others		86,458		66,546
		115,278		91,068
		141,796		170,237
Other non-operating expense
Loss on disposal of assets:
Property and equipment		5,785		6,009
Lease assets		7		-
Right-of-use assets		804		1,063
Others		50		29
		6,646		7,101
Investments in associates:
Loss on disposal		5,193		19,266
Impairment loss		43,262		15,583
		48,455		34,849
Others:
Donations		144,212		100,201
Depreciation of investment properties		15,063		15,058
Impairment loss on property and equipment		1,650		1,409
Impairment loss on intangible assets		25,468		10,732
Write-off of intangible assets		1,662		446
Expenses on collection of special bonds		10,236		9,130
Others		294,160		252,289
		492,451		389,265
		547,552		431,215
Net other non-operating gain (loss)	W	(405,756)		(260,978)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

45. Income tax expense

(a) Income tax expense for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Current income tax expense	W	1,210,083		1,301,802
Temporary differences		(163,840)		493,026
Income tax recognized in other comprehensive income		424,679		(307,868)
Income tax expenses	W	1,470,922		1,486,960

(b) Income tax expense calculated by multiplying net income before tax with the tax rate for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Profit before income taxes	W	6,029,092		5,964,960
Income taxes at statutory tax rates		1,581,318		1,564,388
Adjustments:
Non-taxable income		(44,370)		(10,350)
Non-deductible expense		19,755		16,514
Tax credit		(1,484)		(1,185)
Others		(84,297)		(82,407)
Income tax expense	W	1,470,922		1,486,960
Effective tax rate	%	24.40		24.93

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

45. Income tax expense (continued)

(c) Deferred tax expenses by origination and reversal of deferred assets and liabilities and temporary differences for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Beginning<br><br>Balance		Profit or loss		Other comprehensive income (loss)		Ending<br><br>Balance
Unearned income		W		(432,276)		2,101		-		(430,175)
Account receivable				(21,354)		(15,052)		-		(36,406)
Financial assets measured at fair value				454,253		(408,640)		(425,218)		(379,605)
Investment in associates and etc.				188,268		8,543		(2,396)		194,415
Valuation and depreciation of property and equipment				(104,078)		147		-		(103,931)
Derivative asset				152,388		(79,962)		(21,242)		51,184
Deposits				33,553		(6,274)		-		27,279
Accrued expenses				221,458		64,571		-		286,029
Defined benefit obligation				544,667		(17,567)		19,995		547,095
Plan assets				(617,983)		32,565		1,710		(583,708)
Other provisions				510,604		(15,187)		-		495,417
Allowance for acceptances and<br><br>guarantees				22,017		13,467		-		35,484
Allowance related to asset revaluation				(47,709)		-		-		(47,709)
Allowance for expensing depreciation				(140)		61		-		(79)
Accrued contributions				37,669		19,935		-		57,604
Financial assets (liabilities) designated at fair value through profit of loss				(232,597)		119,658		-		(112,939)
Allowances				224,066		50,152		-		274,218
Constructive dividend				17,718		857		-		18,575
Liability under insurance contracts				11,445		(1,089)		-		10,356
Others				(1,551,513)		(2,239)		851,830		(701,922)
				(589,544)		(233,953)		424,679		(398,818)
Expired unused tax losses:
Extinguishment of deposit and insurance liabilities				200,668		(20,165)		-		180,503
		W		(388,876)		(254,118)		424,679		(218,315)

(*1) Deferred tax assets from overseas subsidiaries are increased by W 6,721 million due to foreign exchange rate movements.

(*2) The Group does not recognize deferred tax assets and liabilities related to global minimum tax laws by applying the temporary exception provision for deferred tax in K-IFRS No. 1012.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

45. Income tax expense (continued)

(c) Deferred tax expenses by origination and reversal of deferred assets and liabilities and temporary differences for the years ended December 31, 2024 and 2023 are as follows (continued):

				December 31, 2023
				Beginning<br><br>Balance		Profit or loss		Other comprehensive income (loss)		Ending<br><br>Balance
Unearned income		W		(350,772)		(81,504)		-		(432,276)
Account receivable				(23,695)		2,341		-		(21,354)
Financial assets measured at fair value				1,006,441		587,125		(1,139,313)		454,253
Investment in associates and etc.				183,410		7,439		(2,581)		188,268
Valuation and depreciation of property and equipment				(100,618)		(3,460)		-		(104,078)
Derivative asset				262,353		(81,234)		(28,731)		152,388
Deposits				37,047		(3,494)		-		33,553
Accrued expenses				209,728		11,730		-		221,458
Defined benefit obligation				475,777		(1,566)		70,456		544,667
Plan assets				(635,981)		16,645		1,353		(617,983)
Other provisions				398,873		111,731		-		510,604
Allowance for acceptances and<br><br>guarantees				24,423		(2,406)		-		22,017
Allowance related to asset revaluation				(47,891)		182		-		(47,709)
Allowance for expensing depreciation				(202)		62		-		(140)
Accrued contributions				37,039		630		-		37,669
Financial assets (liabilities) designated at fair value through profit of loss				(279,089)		46,492		-		(232,597)
Allowances				166,078		57,988		-		224,066
Constructive dividend				17,187		531		-		17,718
Liability under insurance contracts				93,537		(82,092)		-		11,445
Others				(1,588,403)		(754,058)		790,948		(1,551,513)
				(114,758)		(166,918)		(307,868)		(589,544)
Expired unused tax losses:
Extinguishment of deposit and insurance liabilities				219,558		(18,890)		-		200,668
		W		104,800		(185,808)		(307,868)		(388,876)

(*1) Deferred tax assets from overseas subsidiaries are decreased by W 650 million due to foreign exchange rate movements.

(*2) The Group does not recognize deferred tax assets and liabilities related to global minimum tax laws by applying the temporary exception provision for deferred tax in K-IFRS No. 1012.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

45. Income tax expense (continued)

(d) Deferred tax assets and liabilities that are directly charged or credited to equity for the years ended December 31, 2024 and 2023 are as follows:

		January 1, 2024		Changes		December 31, 2024
		OCI		Tax effect		OCI		Tax effect		OCI		Tax effect
Gain (loss) on valuation of financial assets measured at FVOCI	W	(4,727,044)		1,223,503		1,614,241		(425,218)		(3,112,803)		798,285
Gain (loss) on financial liabilities measured at FVTPL attributable to changes in credit risk		(5,278)		1,393		(2,288)		604		(7,566)		1,997
Foreign currency translation adjustments for foreign operations		(105,343)		(13,174)		401,576		13,431		296,233		257
Gain (loss) on cash flow hedges		(48,623)		13,515		59,756		(21,242)		11,133		(7,727)
Equity in other comprehensive income (loss) of associates		(1,321)		352		9,067		(2,396)		7,746		(2,044)
Remeasurements of the defined benefit liability		(398,538)		106,209		(83,464)		21,705		(482,002)		127,914
Net finance income (expense) on insurance contract		3,912,910		(1,033,014)		(3,173,553)		837,795		739,357		(195,219)
	W	(1,373,237)		298,784		(1,174,665)		424,679		(2,547,902)		723,463
		January 1, 2023		Changes		December 31, 2023
		OCI		Tax effect		OCI		Tax effect		OCI		Tax effect
Gain (loss) on valuation of financial assets measured at FVOCI	W	(9,032,747)		2,362,816		4,305,703		(1,139,313)		(4,727,044)		1,223,503
Gain (loss) on financial liabilities measured at FVTPL attributable to changes in credit risk		(7,014)		1,859		1,736		(466)		(5,278)		1,393
Foreign currency translation adjustments for foreign operations		(103,767)		(8,516)		(1,576)		(4,658)		(105,343)		(13,174)
Gain (loss) on cash flow hedges		(138,634)		42,246		90,011		(28,731)		(48,623)		13,515
Equity in other comprehensive income (loss) of associates		(11,059)		2,933		9,738		(2,581)		(1,321)		352
Remeasurements of the defined benefit liability		(126,394)		34,400		(272,144)		71,809		(398,538)		106,209
Net finance income (expense) on insurance contract		6,902,211		(1,829,086)		(2,989,301)		796,072		3,912,910		(1,033,014)
	W	(2,517,404)		606,652		1,144,167		(307,868)		(1,373,237)		298,784

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

45. Income tax expense (continued)

(e) The amount of deductible temporary differences that are not recognized as deferred tax assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Temporary differences related to<br><br>Shinhan EZ General Insurance Co., Ltd. (*1)	W	109,731		112,293
Shinhan AI Co., Ltd. (*2)		-		13
		109,731		112,306

(*1) Shinhan EZ General Insurance Co., Ltd., a subsidiary of the Group, suffered a net loss for the current period, etc. As of the end of 2024, deferred corporate tax assets were not recognized as it was determined that the temporary difference to be deducted in excess of the temporary difference to be added and the tax loss were not feasible.

(*2) Shinhan AI Co., Ltd, a subsidiary of the Group, did not recognize deferred corporate tax assets for temporary differences in consideration of liquidation in 2024.

(*3) The expiration date of unused carried tax losses not recognized as deferred tax assets as of the end of the reporting period is as follows:

		Less than<br><br>1 year		1~2<br><br>years		2~3<br><br>years		More than 3 years		Total
Tax loss carried-forward	W	9,006		7,444		9,253		77,186		102,889

(f) The amount of temporary difference regarding investment in subsidiaries that are not recognized as deferred tax liabilities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Investment in subsidiaries, etc.	W	(10,203,270)		(9,331,214)

(g) The Group set off a deferred tax asset against a deferred tax liability of the same taxable entity if, and only if, they relate to income taxes levied by the same taxation authority and the entity has a legally enforceable right to set off current tax assets against current tax liabilities. Deferred tax assets and liabilities presented on a gross basis prior to any offsetting as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Deferred tax assets	W	1,375,325		1,300,568
Deferred tax liabilities		1,593,640		1,689,444

(h) Under the Global Minimum Corporate Tax Act, effective from 2024, the Group is required to pay additional taxes on the difference between the effective tax rate and the minimum tax rate of 15% for each unit of jurisdiction in which each constituent company belongs. However, since most jurisdictions either qualify for the transitional relief provisions or already have an effective tax rate of 15% or higher, it is anticipated that no significant additional taxes will arise. As a result, the Group has not recognized any amount related to the Global Minimum Corporate Tax Act in its current period income tax expense. Additionally, the Group also applies the temporary exception to deferred tax, which does not recognize deferred tax assets and liabilities related to the Global Minimum Corporate Tax Act and does not disclose information related to deferred tax.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

46. Earnings per share

(a) Basic and diluted earnings per share for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Profit attributable to equity holders of Shinhan Financial Group	W	4,450,177		4,368,035
Less:
Dividends to hybrid bond		(176,945)		(189,672)
Net profit available for common stock	W	4,273,232		4,178,363
Weighted average number of common shares outstanding (*)		506,231,595		519,207,776
Basic and diluted earnings per share in won	W	8,441		8,048

(*) The number of common shares outstanding is 503,445,325 shares, and the above weighted-average number of shares has been calculated by reflecting changes in treasury stock, including shares acquired and subsequently retired, for the years ended December 31, 2024 and 2023.

(b) The calculation details of the weighted average number of ordinary shares for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Number of shares		Accumulated number of shares
Number of common shares issued		503,445,325		186,347,761,912
Shares of convertible preferred stock		-		-
Shares of treasury stock		(4,585,561)		(1,066,997,991)
Average number of ordinary shares		498,859,764		185,280,763,921
Days				366 days
Weighted average number of ordinary shares				506,231,595
		December 31, 2023
---	---	---	---	---
		Number of shares		Accumulated number of shares
Number of common shares issued		512,759,471		187,756,015,279
Shares of convertible preferred stock		-		2,097,840,000
Shares of treasury stock		(6,352)		(343,017,080)
Average number of ordinary shares		512,753,119		189,510,838,199
Days				365 days
Weighted average number of ordinary shares				519,207,776

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

47. Commitments and contingencies

(a) Guarantees, acceptances and credit commitments as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Guarantees and purchase agreements:
Outstanding guarantees	W	15,315,381		12,503,445
Contingent guarantees		5,068,782		4,337,751
ABS and ABCP purchase agreements		2,123,665		1,533,047
		22,507,828		18,374,243
Commitments to extend credit:
Loan commitments in won		93,064,772		88,913,555
Loan commitments in foreign currency		28,613,692		26,970,371
Unused credit commitments		90,700,766		90,832,893
Other agreements		6,601,564		5,362,051
		218,980,794		212,078,870
Endorsed bills:
Secured endorsed bills		1,367		44
Unsecured endorsed bills		11,937,894		10,519,665
		11,939,261		10,519,709
	W	253,427,883		240,972,822

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

47. Commitments and contingencies (continued)

(b) Pending litigations

The Group’s pending lawsuits as a defendant as of December 31, 2024 are as follows:

Case		Number of claim		Claim<br><br>amount		Description		Status
Return of unjust earning		1	W	33,096		The plaintiff claims that the group of lenders, including Shinhan Bank, unfairly sold two oil drilling vessels, which were core assets of the borrower, causing losses to other bankrupt creditors.		The first trial is ongoing as of December 31, 2024
Loss claim		2		73,830		A case in which OO Bank and OO Securities filed a lawsuit for damages against employees of Shinhan Investment Corp., alleging their involvement in the illegal activities of Lime Asset Management.		The first trial is ongoing as of December 31, 2024. (an appeal is planned following the first trial announced on February 14, 2025)
Loss claim		2		36,937		A case in which OO Bank and OO Securities filed a lawsuit for damages against employees of Shinhan Investment Corp., alleging their involvement in the illegal activities of Lime Asset Management.		The first trial is ongoing as of December 31, 2024
Loss claim regarding responsibility for construction completion in a management-type land trust (Eojin-dong, Sejong-si,)		1		65,770		A case in which 13 plaintiffs, including OO Securities and others, claim the loan principal and interest, convertible bond principal and interest, and delayed damages due to the failure to fulfill the responsibilities for completing the construction by Shinhan Asset Trust.		The first trial is ongoing as of December 31, 2024
Loss claim regarding responsibility for construction completion in a management-type land trust (Wonchang-dong, Incheon-si)		1		57,500		A case in which 4 plaintiffs, including OO Capital and others, claim the loan principal and interest, and delayed damages due to the failure to fulfill the responsibilities for completing the construction by Shinhan Asset Trust.		The first trial is ongoing as of December 31, 2024
Loss claim regarding responsibility for construction completion in a management-type land trust (Sanho-dong, Changwon-si)		1		52,360		A case in which 8 plaintiffs, including OO Securities and others, claim the loan principal and interest, due to the failure to fulfill the responsibilities for completing the construction by Shinhan Asset Trust.		The first trial is ongoing as of December 31, 2024
Loss claim regarding responsibility for construction completion in a management-type land trust (Naegang-ri, Anseong-si)		1		47,400		A case in which 23 plaintiffs, including mutual finance companies, claim the loan principal and interest, due to the failure to fulfill the responsibilities for completing the construction by Shinhan Asset Trust.		The first trial is ongoing as of December 31, 2024
Loss claims regarding responsibility for construction completion in a management-type land trust (others)		6		45,605		Claims for losses due to the failure to fulfill construction completion responsibilities in a management-type land trust.		The first trial is ongoing as of December 31, 2024
Others		1,091		778,132		Includes various cases, such as compensation for loss claim.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

		1,106	W	1,190,630

47. Commitments and contingencies (continued)

(b) Pending litigations(continued)

The Group’s pending lawsuits as a defendant as of December 31, 2024 are as follows (continued):

As of the December 31, 2024, the Group has recorded W 114,750 million and W 5,450 million, respectively, as provisions and incurred claims element of insurance contract liabilities for litigations, etc., which are for the lawsuits ruled against in the first trial. The outcome of the remaining litigations other than those accounted for provisions, etc. are not expected to have a material impact on the consolidated financial statements, but additional losses may result from future litigation.

(c) As a Prime Brokerage Service operator, the Group entered into a total return swap agreement (“TRS”, derivatives that exchange profits and losses from underlying assets such as stocks, bonds and funds) with a fund operated by Lime Asset Management ("Lime Fund"). Through TRS with the Group, the Lime Fund invested approximately $200 million in IIG Global Trade Finance Fund, IIG Trade Finance Fund, and IIG Trade Finance Fund-FX Hedge ("IIG Fund") from May 2017 to September 2017. The Group invested the IIG Fund in LAM Enhanced Finance III L.P ("LAM III Fund") in kind and acquired the LAM III Fund's beneficiary certificates in accordance with the management instructions of Lime Asset Management in 2019. The recoverable value of the LAM III Fund beneficiary certificates is affected by the recoverable value of the IIG Fund invested in kind. Meanwhile, IIG Fund received cancellation of registration and asset freeze from the US Securities and Exchange Commission in November 2019.

The Financial Supervisory Service (FSS) announced in its interim inspection of Lime Fund in February 2020 that the Group is charged of being involved in poor concealment and fraud of Lime Fund while operating TRSs with Lime Fund, and a related prosecution investigation has been under way since then. Institutional sanctions (banned from the sale of new private equity funds and etc. for six months) against the Group was finalized by the Financial Services Commission on November 12, 2021.

In addition, the prosecution arrested and indicted the former director of Prime Brokerage Services for fraud charges and violation of the Capital Market and Financial Investment Services Act. Finally, the former director of Prime Brokerage Services was found guilty.

The prosecution indicted the Group and the former director of Prime Brokerage Services on January 22, 2021 for violating ‘Financial Investment Services and Capital Markets Act’, and the Group was sentenced to a fine of W 50 million for neglection its duty of supervision. Meanwhile, the Group is still involved in civil litigation with Woori Bank, Mirae Asset Securities, Hana Bank, and Shin Young Securities regarding the criminal ruling mentioned above. On February 14, 2025, the consolidated entity partially lost in the first trial with Woori Bank and Mirae Asset Securities. Considering the first trial verdict, the Group has recognized a litigation provision of approximately W 101.4 billion as of the end of the current period.

Considering the board resolutions and the results of the Financial Supervisory Service's dispute settlement committee, the Group has been completed or will be carried out the compensation and liquidity supply for some of the Lime Fund sales in the future.

(d) The Group has sold Gen2 related trust instruments from May 2014 to November 2019. As of December 31, 2023, approximately W420 billion, the entire outstanding balance, is suspended from redemption and delayed in repayment. In accordance with a resolution of the Board of Directors on September 28, 2021, the Group has decided to pay 40% of the investment principal to the customers who have agreed to the suspension of redemption and settle the amount upon investment recovery. On August 29, 2023, the Board of Directors decided to proceed with privatization using the post-settlement method. In addition, on December 8, 2023, the Board of Directors decided to privatize NH-UK Peterborough Power Plant Trust and others through a post-settlement method.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

47. Commitments and contingencies (continued)

(e) The Group is responsible for the completion of construction if the contractor fails to fulfill its obligations. In the event that the Group fails to meet its responsibilities, it is currently engaged in a responsible-for-completion land trust project to compensate for damages incurred by the financial institutions. The status of land trust project with completion guarantee progress as of the period ended December 31, 2024, is as follows:

				Loan commitments with financial institution (*1)
Description		Number of constructions		Temporary loan		Limit loan		Outstanding balance with financial institution
Construction site in progress without failure to meet completion		21	W	851,901		744,389		1,309,186
Construction site in progress with<br><br>contractor's failure to meet completion		7		233,500		196,899		390,839
Construction site in progress with contractor's failure to meet completion by the Group (*2)		9		157,270		196,299		352,458
		37	W	1,242,671		1,137,587		2,052,483

(*1) The outstanding loan commitment balance including lump-sum payments, limit deductions, and repayments.

(*2) Land trust projects with completion guarantees that are subject to ongoing litigation have been included.

(f) As of the end of the current period, the Group may provide trust account loans for a portion of the total project cost in relation to 52 borrowed-land trust contracts, including the Magok D13 Knowledge Industry Center in Gangseo-gu, Seoul. The maximum additional loan amount (unused limit) is W 383,071 million. The decision on whether the Group will provide trust account loans for the relevant projects is not an unconditional obligation but is determined after comprehensively considering various factors, including proprietary accounts and the cash flow plans of each trust project.

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

48. Statement of cash flows

(a) Cash and cash equivalents in the consolidated statements of cash flows as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Cash and due from banks at amortized cost	W	40,547,054		34,650,390
Adjustments:
Due from financial institutions with a maturity over three months from date of acquisition		(1,655,932)		(1,322,274)
Restricted due from banks		(3,643,579)		(2,911,232)
		(5,299,511)		(4,233,506)
	W	35,247,543		30,416,884

(b) Significant non-cash activities for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Transfers from construction-in-progress to property and equipment	W	26,185		82,179
Transfers between property and equipment and investment property		77,752		16,678
Transfers between assets held for sale and property and equipment		1,039		2,442
Transfers between investment property and assets held for sale		5,551		6,057
Accounts payable for purchase of intangible assets, etc.		(132,270)		374,685
Transaction for right-of-use assets		578,651		299,672

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

48. Statement of cash flows (continued)

(c) Changes in assets and liabilities arising from financing activities for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Net Derivative liabilities		Borrowings		Debt securities issued		Lease liabilities		Financial liabilities designated at FVTPL		Total
Beginning balance	W	358,017		56,901,352		81,561,725		613,914		254,832		139,689,840
Changes from cash flows		119,361		(8,231,239)		9,578,027		(272,634)		-		1,193,515
Changes from<br>non-cash flows
Amortization of discount on borrowings and debentures		-		(131,663)		(4,401)		22,787		-		(113,277)
Changes in foreign currency		-		770,798		2,178,255		28,602		-		2,977,655
Other		(617,651)		611,125		452,248		498,020		6,467		950,209
Ending balance	W	(140,273)		49,920,373		93,765,854		890,689		261,299		144,697,942

`

		December 31, 2023
		Net Derivative liabilities		Borrowings		Debt securities issued		Lease liabilities		Financial liabilities designated at FVTPL		Total
Beginning balance	W	531,934		49,279,175		77,288,783		623,339		47,327		127,770,558
Changes from cash flows		79,563		8,153,087		3,865,582		(262,055)		209,969		12,046,146
Changes from<br>non-cash flows
Amortization of discount on borrowings and debentures		-		(61,561)		33,295		18,855		-		(9,411)
Changes in foreign currency		-		90,914		197,895		(4,331)		32		284,510
Other		(253,480)		(560,263)		176,170		238,106		(2,496)		(401,963)
Ending balance	W	358,017		56,901,352		81,561,725		613,914		254,832		139,689,840

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

49. Related parties

Intra-group balances, and income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. In accordance with K-IFRS No. 1024, the Group defines the retirement benefit plans of the associates, key management and their families, the consolidation group and related parties as the scope of related parties. The amount of profit and loss, bond and debt balance between the Group and the related parties are disclosed. For details of the subsidiaries and associates, refer to 'Note 16'.

(a) Balances with the related parties as of December 31, 2024 and 2023 are as follows:

Related party		Account		December 31, 2024		December 31, 2023
Investments in associates:
BNP Paribas Cardif Life Insurance		Credit card loans	W	154		105
〃		ACL		(1)		(1)
〃		Accrued income		23		32
〃		Deposits		5,559		2,984
〃		Allowance for Undrawn Commitment		1		2
Incorporated association Finance Saving Information Center		Credit card loans		2		-
〃		Deposits		3		7
Nomura-Rifa Private Real Estate Investment Trust No.19		Loans		11,700		12,000
〃		ACL		(247)		(471)
〃		Accrued income		-		51
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		Accrued income		71		310
KOREA FINANCE SECURITY CO., LTD		Deposits		131		132
〃		Credit card loans		6		-
Korea Credit Bureau		Deposits		24		640
〃		Credit card loans		616		-
〃		ACL		(1)		-
Goduck Gangil1 PFV Co., Ltd		Deposits		4		11
SBC PFV Co., Ltd		Loans		984,600		-
〃		ACL		(1,345)		-
〃		Accrued income		89		-
〃		Deposits		105		13,113
Goduck Gangil10 PFV Co., Ltd		Loans		-		1,100
〃		ACL		-		(5)
〃		Deposits		11,899		7,568
EDNCENTRAL Co.,Ltd.		Loans		25,400		-
〃		ACL		(74)		-
〃		Accrued income		64		-
〃		Deposits		1,170		-
〃		Provisions		156		-
Shinhan Global Healthcare Fund 2		Deposits		1		1
Future-Creation Neoplux Venture Capital Fund		Account receivables		3,600		3,600
Neoplux Market-Frontier Secondary Fund		Account receivables		-		592
Gyeonggi-Neoplux Superman Fund		Account receivables		1,696		1,174
Shinhan-Neoplux Energy Newbiz Fund		Account receivables		721		1,883
SHINHAN-NEO Core Industrial Technology Fund		Account receivables		399		123
Neoplux No.3 Private Equity Fund		Account receivables		7,532		5,866
Korea Digital Asset Custody (*1)		Deposits		-		34
Shinhan Smilegate Global PEF I		Unearned revenue		-		7
WaveTechnology co.Ltd		Deposits		115		17

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

49. Related parties (continued)

(a) Balances with the related parties as of December 31, 2024 and 2023 are as follows (continued):

Related party		Account		December 31, 2024		December 31, 2023
Investments in associates (continued):
SHINHAN-NEO Market-Frontier 2nd Fund		Account receivables	W	1,402		1,596
iPIXEL Co.,Ltd.		Credit card loans		14		-
〃		ACL		(1)		-
〃		Deposits		717		11
〃		Allowance for Undrawn Commitment		1		-
CJL No.1 Private Equity Fund		Deposits		-		265
NewWave 6th Fund		Account receivables		877		984
DDI LVC Master Real Estate Investment Trust Co., Ltd.		Deposits		852		923
Logisvalley Shinhan REIT Co.,Ltd.		Loans		33,000		33,000
〃		ACL		(30)		(36)
〃		Accrued income		75		81
〃		Deposits		1,340		1,134
Shinhan-Albatross tech investment Fund		Deposits		4,339		2,229
Shinhan Global Active REIT Co.Ltd (*1), (*2)		Deposits		-		206
Shinhan VC tomorrow venture fund 1		Account receivables		2,474		730
SH Global Net Zero Solution Security Investment Trust (*1)		Accrued income		-		2
SEOKWANG T&I		Deposits		-		1
Shinhan Time 1st Investment fund		Deposits		64		151
Shinhan-Cognitive Start-up Fund L.P.		Unearned revenue		-		52
NH-J&-IBKC Label Technology Fund		Deposits		59		301
Shinhan-JW Mezzanin New Technology Fund 1st (*1)		Unearned revenue		-		7
Shinhan M&A-ESG Investment fund		Account receivables		-		285
SH K REITs Infra Real Estate Investment Trust		Accrued income		5		-
Shinhan-CJ TechInnovation Fund 1st		Deposits		3,100		-
SH US Buyback&High Dividend Security Feeder Investment Trust(H)[Equity]		Accrued income		12		-
SH Prestige High Dividend Security Feeder No.1[Equity]		Accrued income		14		-
Shinhan General Private Real Estate Investment Trust No.3		Accrued income		44		13
Capston General Private Real Estate Investment Trust No.26(Professional)		Loans		20,000		-
〃		ACL		(21)		-
〃		Accrued income		90		-
〃		Deposits		-		1
SHINHAN Mid and SMALL-SIZED OFFICE VALUE-ADDED MO REIT Co., Ltd.		Accrued income		145		21
Shinhan-GB FutureFlow L.P.		Account receivables		41		-
LB Scotland Amazon Fulfillment Center Fund 29		Derivative assets		503		-
Shinhan AIM FoF Fund 1-A		Derivative assets		3,511		-
PineStreet Global Corporate FoF XIII-2		Derivative assets		104		-
CASCADETECH INC		Deposits		35		-
SONGPA BIZ CLUSTER PFV CO LTD		Loans		22,424		-
〃		ACL		(119)		-
〃		Accrued income		26		-
STIC ALT Global II Private Equity Fund		Deposits		2,207		-
TECHFIN RATINGS Co., Ltd.(*3)		Credit card loans		13		-
〃		ACL		(2)		-

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

49. Related parties (continued)

(a) Balances with the related parties as of December 31, 2024 and 2023 are as follows (continued):

Related party		Account		December 31, 2024		December 31, 2023
〃		Deposits		21,611		-
〃		Allowance for Undrawn Commitment		7		-
Nomura-Rifa Private Real Estate Investment Trust 31		Loans		14,000		-
〃		ACL		(27)		-
Pacific Private Placement Real Estate Fund No.40		Loans		14,000		-
〃		ACL		(160)		-
〃		Accrued income		124		-
Shinhan-DS Mezzanine Fund 1		Unearned revenue		93		-
Shinhan-Csquared Mezzanine Fund 1		Unearned revenue		19		-
KR Seocho Co., Ltd		Loans		11,871		-
〃		ACL		(213)		-
〃		Accrued income		573		-
KB Distribution Private Real Estate 3-1		Loans		2,000		-
〃		ACL		(4)		-
〃		Accrued income		17		-
Key management personnel<br><br>and their immediate relatives:		Loans		3,402		5,003
		Assets		1,165,189		68,038
		Liabilities	W	53,612		29,797

(*1) Excluded from the associates due to disposal and liquidation for the year ended December 31, 2024.

(*2) It includes details of receivables and payables with the subsidiaries of associates for the year ended December 31, 2023.

(*3) Douzon3 TECHFIN Co., Ltd. has changed its name to TECHFIN RATINGS Co., Ltd..

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

49. Related parties (continued)

(b) Transactions with the related parties for the years ended December 31, 2024 and 2023 are as follows:

Related party		Account		December 31, 2024		December 31, 2023
Investments in associates
BNP Paribas Cardif Life Insurance		Fees and commission income	W	1,312		4,125
〃		Provision of credit loss		-		(2)
〃		Interest expense		(12)		(57)
Shinhan-Albatross tech investment Fund		Fees and commission income		1,047		115
〃		Interest expense		(12)		(4)
Shinhan-Nvestor Liquidity Solution Fund		Fees and commission income		192		173
Shinhan-PS Investment Fund No.1		Fees and commission income		20		25
Nomura-Rifa Private Real Estate Investment Trust No.19		Interest income		588		568
〃		Reversal of credit loss		223		-
SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3		Fees and commission income		886		1,262
KOREA FINANCE SECURITY CO., LTD		Fees and commission income		4		4
〃		Other administrative expense		(145)		-
ShinHan – Soo Young Entrepreneur Investment Fund No.1		Fees and commission income		3,122		589
Kiwoom-Shinhan Innovation Fund I		Fees and commission income		148		140
FuturePlay-Shinhan TechInnovation Fund 1		Fees and commission income		158		56
Korea Credit Bureau		Fees and commission income		1,753		14
〃		Fees and commission expense		(4,830)		-
〃		Other administrative expense		(91)		-
Goduck Gangil1 PFV Co., Ltd		Interest income		-		143
〃		Reversal of credit loss		-		20
SBC PFV Co., Ltd		Fees and commission income		7,839		-
〃		Interest income		36,957		-
〃		Interest expense		(13)		(13)
〃		Provision for credit loss		(679)		-

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

49. Related parties (continued)

(b) Transactions with the related parties for the years ended December 31, 2024 and 2023 are as follows (continued):

Related party		Account		December 31, 2024		December 31, 2023
Investments in associates (continued)
Goduck Gangil10 PFV Co., Ltd		Interest income	W	30		69
〃		Interest expense		(295)		(647)
〃		Reversal of credit loss		17		4
Korea Omega Project Fund I		Fees and commission income		146		166
Sparklabs-Shinhan Opportunity Fund 1		Fees and commission income		18		39
EDNCENTRAL Co.,Ltd.		Interest income		615		-
〃		Interest expense		(2)		-
〃		Provision for credit loss		(74)		-
Kakao-Shinhan 1st TNYT Fund		Fees and commission income		338		386
Future-Creation Neoplux Venture Capital Fund		Interest income		76		86
Neoplux Market-Frontier Secondary Fund		Fees and commission income		-		592
Gyeonggi-Neoplux Superman Fund		Fees and commission income		522		551
Shinhan-Neoplux Energy Newbiz Fund		Fees and commission income		706		906
NewWave 6th Fund		Fees and commission income		877		984
SHINHAN-NEO Core Industrial Technology Fund		Fees and commission income		401		496
KTC-NP Growth Champ 2011-2 Private Equity Fund (*1)		Interest income		-		36
Neoplux No.3 Private Equity Fund		Fees and commission income		-		2,676
Shinhan Smilegate Global PEF I		Fees and commission income		238		-
SHINHAN-NEO Market-Frontier 2nd Fund		Fees and commission income		1,402		1,596
SWK-Shinhan New Technology Investment Fund 1st		Fees and commission income		61		61
Ulmus SHC innovation investment fund		Fees and commission income		69		91
iPIXEL Co.,Ltd.		Interest expense		(1)		-
CJL No.1 Private Equity Fund		Interest expense		(2)		(10)
Reverent-Shinhan Vista Fund		Fees and commission income		80		80
Kiwoom-Shinhan Innovation Fund 2		Fees and commission income		120		268
ETRI Holdings-Shinhan 1st Unicorn Fund		Fees and commission income		93		100
Shinhan-Time mezzanine blind Fund		Fees and commission income		300		226
Shinhan VC tomorrow venture fund 1		Fees and commission income		2,474		3,280
JS Shinhan Private Equity Fund		Fees and commission income		600		600
Stonebridge-Shinhan Unicorn Secondary Fund		Fees and commission income		722		444
Shinhan-Kunicorn first Fund		Fees and commission income		261		232
Shinhan-Quantum Startup Fund		Fees and commission income		153		153
Shinhan Simone Fund Ⅰ		Fees and commission income		78		78
ShinhanFitrin 1st Technology Business Investment Association		Fees and commission income		82		85
DDI LVC Master Real Estate Investment Trust Co., Ltd.		Interest expense		(1)		(1)
Logisvalley Shinhan REIT Co.,Ltd.		Interest income		1,703		1,841
〃		Fees and commission income		143		163
〃		Interest expense		(2)		(2)
〃		Provision for credit loss		-		(8)
Shinhan-Dev healthcare Fund I		Fees and commission income		82		77
Shinhan-Cognitive Start-up Fund L.P.		Fees and commission income		222		188

49. Related parties (continued)

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

(b) Transactions with the related parties for the years ended December 31, 2024 and 2023 are as follows (continued):

Related party		Account		December 31, 2024		December 31, 2023
Global Commerce Fund		Fees and commission income	W	38		30
Shinhan-HGI Social Enterprise Fund		Fees and commission income		47		63
Shinhan-WWG Energy Fund New Technology Venture Investment Fund		Fees and commission income		45		45
IGIS-Shinhan New Technology Fund 1		Fees and commission income		36		36
Shinhan-G.N.Tech Smart Innovation Fund		Fees and commission income		195		260
SH Global Net Zero Solution Security Investment Trust(*2)		Fees and commission income		17		75
SH 1.5years Maturity Investment Type Security Investment Trust No.2(*2)		Fees and commission income		4		16
Shinhan Global Active REIT Co.Ltd (*2), (*3)		Interest income		3,982		17
〃		Fees and commission income		2,498		-
〃		Derivative-related income		8,220		-
〃		Interest expense		(4)		(2)
〃		Reversal of credit loss		533		-
DS SHINHAN Content Investment Fund 1		Fees and commission income		18		18
Shinhan Time 1st Investment fund		Fees and commission income		26		26
SHINHAN SGC ESG Fund No.1		Fees and commission income		115		115
Shinhan-Sneak Peek Bio&Healthcare Bounce Back Fund		Fees and commission income		125		125
Shinhan-isquare Venture PEF 1		Fees and commission income		100		100
Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st		Fees and commission income		207		42
DS-Shinhan-JBWoori New Media New Tehcnology Investment Fund No.1		Fees and commission income		216		216
NH-J&-IBKC Label Technology Fund		Interest expense		(6)		(12)
Bonanza-Shinhan GIB Innovative Semiconductor Investment Fund		Fees and commission income		55		55
2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund		Fees and commission income		214		113
Shinhan M&A-ESG Investment fund		Fees and commission income		1,083		726
Shinhan-JW Mezzanin New Technology Fund 1st (*2)		Fees and commission income		7		46
MAN Global Strategy Bond(H)		Fees and commission income		5		2
SH US Buyback&High Dividend Security Feeder Investment Trust(H)[Equity]		Fees and commission income		18		-
SH Prestige High Dividend Security Feeder No.1[Equity]		Fees and commission income		24		-
Shinhan Time Secondary Blind New Technology Investment Trust		Fees and commission income		200		71
Shinhan-openwater pre-IPO Investment Trust 1		Fees and commission income		100		36
Shinhan-CJ Technology Innovation Fund No. 1		Fees and commission income		200		88
〃		Interest expense		(25)		-
Shinhan-Eco Venture Fund 2nd		Fees and commission income		100		49
Heungkuk-Shinhan the1st Visionary Technology Investment Trust no. 1		Fees and commission income		200		87
Hantoo Shinhan Lake K-beauty Technology Investment Trust		Fees and commission income		237		94
Shinhan HB Wellness 1st Investment Trust		Fees and commission income		77		35
Shinhan JN Wave Technology Investment Trust		Fees and commission income		18		2
Shinhan General Private Real Estate Investment Trust No.3		Fees and commission income		135		13
Shinhan-Timefolio Bio Accelerator Fund		Fees and commission income		310		163
Shinhan DS Secondary Investment Fund		Fees and commission income		303		139
Fortress-shinhan New Tech Fund No.1		Fees and commission income		101		27
Shinhan-Ulmus Sobujang hyeokshin Enterprise Investment Association No.7		Fees and commission income		94		18

49. Related parties (continued)

(b) Transactions with the related parties for the years ended December 31, 2024 and 2023 are as follows (continued):

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

Related party		Account			December 31, 2024		December 31, 2023
SHINHAN Mid and SMALL-SIZED OFFICE VALUE-ADDED MO REIT Co., Ltd.		Fees and commission income			208		25
Shinhan-GB FutureFlow Fund L.P.		Fees and commission income			279		-
LB Scotland Amazon Fulfillment Center Fund 29		Derivative-related income			503		-
〃		Other expense			(2)		-
Shinhan AIM FoF Fund 1-A		Derivative-related income			3,331		-
〃		Derivative-related expense			(232)		-
〃		Other income			22		-
〃		Interest expense			(12)		-
PineStreet Global Corporate FoF XIII-2		Derivative-related income			96		-
Shinhan-Regent Fund Ⅰ		Fees and commission income			23		-
Shinhan-soo secondary Fund		Fees and commission income			247		-
The E&Shinhan New Growth Up Fund		Fees and commission income			216		-
CASCADETECH INC		Reversal of credit loss			6		-
TECHFIN RATINGS Co., Ltd.(*4)		Fees and commission income			2		-
〃		Interest expense			(726)		-
SONGPA BIZ CLUSTER PFV CO LTD		Interest income			356		-
〃		Fees and commission income			9,178		-
〃		Interest expense			(1)		-
STIC ALT Global II Private Equity Fund		Interest expense			(3)		-
Nomura-Rifa Private Real Estate Investment Trust No.31.		Interest income			746		-
〃		Provision for credit loss			(27)		-
Pacific Private Placement Real Estate Fund No.40		Interest income			825		-
Shinhan-DS Mezzanine Fund 1		Fees and commission income			172		-
Shinhan-Csquared Mezzanine Fund 1		Fees and commission income			20		-
Shinhan Time BM sobujang Fund		Fees and commission income			110		-
KR Seocho Co., Ltd		Interest income			1,287		-
Shinhan Market-Frontier Fund Ⅲ		Fees and commission income			1,022		-
SH K REITs Infra Real Estate Investment Trust[FoFs])		Fees and commission income			50		25
KB Distribution Private Real Estate 3-1		Interest income			103		-
〃		Provision for credit loss			(4)		-
Capstone REITs No.26		Interest income			589		-
〃		Provision for credit loss			(21)		-
Wave Technology		Fees and commission expense			(300)		-
Key management personnel and their immediate relatives
		Interest income			133		242
				W	98,783		26,270

(*1) Excluded from associates due to the loss of significant influence through disposal, liquidation, or other means for the year ended December 31, 2023.

(*2) Excluded from the associates due to disposal and liquidation for the year ended December 31, 2024.

(*3) The transaction details between the associate and its subsidiary are included for the years ended December 31, 2024 and 2023.

(*4) Douzon3 TECHFIN Co., Ltd. has changed its name to TECHFIN RATINGS Co., Ltd..

49. Related parties (continued)

(c) Key management personnel compensation

Key management personnel compensation for the years ended December 31, 2024 and 2023 are as follows:

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

		December 31,<br><br>2024		December 31,<br><br>2023
Short-term employee benefits	W	21,963		25,007
Severance benefits		824		809
Share-based payment transactions (*)		12,478		11,862
	W	35,265		37,678

(*) The expenses of share-based payment transactions are the renumeration expenses during the vesting period.

(d) The guarantees and purchase agreement provided between the related parties as of December 31, 2024 and 2023 are as follows:

				Amount of guarantees
Guarantor		Guaranteed Parties		December 31, 2024		December 31, 2023		Account
Shinhan Bank		BNP Paribas Cardif Life Insurance	W	-		10,000		Unused loan limit
〃		SBC PFV Co., Ltd		65,400		-		Unused loan limit
〃		Key Management Personnel		2,801		3,241		Unused loan limit
Shinhan Card		BNP Paribas Cardif Life Insurance		846		895		Unused credit line
The Group		Structured entities		204,035		326,830		Purchase agreement
〃		〃		31,440		-		Derivates agreement
			W	304,522		340,966

(e) Details of collaterals provided by the related parties as of December 31, 2024 and 2023 are as follows:

						Amount of assets pledged
Provided to		Provided by		Pledged assets		December 31,<br><br>2024		December 31,<br><br>2023
Shinhan Bank		BNP Paribas Cardif Life<br><br>Insurance		Government<br><br>bonds	W	-		2,400
		Logisvalley Shinhan REIT Co.,Ltd..		Collateral trust		39,600		39,600
		Nomura-Rifa Private Real Estate Investment Trust No.31.		Collateral trust		16,800		-
		SBC PFV Co., Ltd		Collateral trust		960,000		-
		Key Management Personnel		Properties		6,799		4,417
		〃		Deposits and etc.		1,466		1,127
		〃		Guarantee		2,132		1,308
						10,397		6,852
					W	1,026,797		48,852

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

49. Related parties (continued)

(f) Details of significant loan transactions with related parties as of December 31, 2024 and 2023 are as follows:

				December 31, 2024
Classification		Company		Beginning			Execution		Collection		Others (*1)		Ending
Investments in associates		Nomura-Rifa Private Real Estate Investment Trust No.19	W	11,529			-		(300)		471		11,700
		Shinhan Global Active REIT Co.Ltd. (*2)		-			165,400		(125,700)		(39,700)		-
		SBC PFV Co., Ltd.		-			1,169,700		(185,100)		-		984,600
		Goduck Gangil10 PFV Co., Ltd.		1,100			-		(1,100)		-		-
		Logisvalley Shinhan REIT Co.,Ltd.		33,000			34,175		(34,175)		-		33,000
		CASCADETECH INC		-			66		(66)		-		-
		Nomura-Rifa Private Real Estate Investment Trust No.31.		-			28,000		(14,000)		-		14,000
		Pacific Private Placement Real Estate Fund No.40		-			14,000		-		-		14,000
		KR Seocho Co., Ltd		-			11,871		(7,000)		7,000		11,871
		SONGPA BIZ CLUSTER PFV CO LTD		-			22,424		-		-		22,424
		KB Distribution Private Real Estate 3-1		-			2,000		-		-		2,000
		Capstone REITs No.26		-			20,000		-		-		20,000
		EDNCENTRAL Co.,Ltd		-			25,400		-		-		25,400
Key Management Personnel				5,005			1,493		(3,095)		-		3,403
Total			W	50,634			1,494,529		(370,536)		(32,229)		1,142,398

(*1) The effect on changes in allowance for credit loss is included.

(*2) It was excluded from associates due to the loss of significant influence during the year ended December 31, 2024, and the year-end balance has been reclassified under 'Others'

				December 31, 2023
Classification		Company		Beginning		Execution		Collection		Others (*)		Ending
Investments in associates		Nomura-Rifa Private Real Estate Investment Trust No.19	W	11,880		-		-		(351)		11,529
		Goduck Gangil1 PFV Co., Ltd.		6,825		-		(6,825)		-		-
		Goduck Gangil10 PFV Co., Ltd.		3,100		-		(2,000)		-		1,100
		Logisvalley Shinhan REIT Co.,Ltd.		43,000		33,000		(43,000)		-		33,000
Key Management Personnel				6,563		3,154		(4,712)		-		5,005
Total			W	71,368		36,154		(56,537)		(351)		50,634

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

(*) The effect on changes in allowance for credit loss is included.

50. Interests in unconsolidated structured entities

• The nature and extent of interests in unconsolidated structured entities

The Group involved in assets-backed securitization, structured financing, beneficiary certificates (primarily investment funds) and other structured entities and characteristics of these structured entities are as follows:

		Description
Assets-backed securitization		Securitization vehicles are established to buy assets from originators and issue asset-backed securities in order to facilitate the originators’ funding activities and enhance their financial soundness. The Group is involved in the securitization vehicles by purchasing (or committing to purchase) the asset-backed securities issued and/or providing other forms of credit enhancement.<br><br>The Group does not consolidate a securitization vehicle if (i) the Group is unable to make or approve decisions as to the modification of the terms and conditions of the securities issued by such vehicle or disposal of such vehicles’ assets, (ii) (even if the Group is so able) if the Group does not have the exclusive or primary power to do so, or (iii) if the Group does not have exposure, or right, to a significant amount of variable returns from such entity due to the purchase (or commitment to purchase) of asset-backed securities so issued or subordinated obligations or by providing other forms of credit support.
Structured financing		Structured entities for project financing are established to raise funds and invest in a specific project such as M&A (mergers and acquisitions), BTL (build-transfer-lease), shipping finance, etc. The Group is involved in the structured entities by originating loans, investing in equity, or providing credit enhancement.
Investment fund		Investment fund means an investment trust, a PEF (private equity fund) or a partnership which invests in a group of assets such as stocks or bonds by issuing a type of beneficiary certificates to raise funds from the general public, and distributes its income and capital gains to their investors. The Group manages assets by investing in shares of investment fund or playing a role of an operator or a GP (general partner) of investment fund, on behalf of other investors.

The size of unconsolidated structured entities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Total assets:
Asset-backed securitization	W	193,570,970		214,750,119
Structured financing		506,473,200		427,272,034
Investment fund		508,704,815		364,272,967
	W	1,208,748,985		1,006,295,120

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

50. Interests in unconsolidated structured entities (continued)

(b) Nature of risks

i) The carrying amounts of the assets and liabilities relating to its interests in unconsolidated structured entities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Assets-backed<br><br>securitization		Structured<br><br>financing		Investment<br><br>fund		Total
Assets under consolidated financial statements:
Loans measured at fair value through profit or loss	W	11,669		600,796		-		612,465
Loan at amortized cost		2,326,196		18,660,200		93,296		21,079,692
Securities at fair value through profit or loss		4,233,165		255,936		14,902,327		19,391,428
Derivate assets		16,012		-		-		16,012
Securities at fair value through other comprehensive income		4,124,742		176,273		-		4,301,015
Securities at amortized cost		4,879,484		-		93		4,879,577
Other assets		13,700		73,981		28,076		115,757
	W	15,604,968		19,767,186		15,023,792		50,395,946
Liabilities under consolidated financial statements:
Derivate liabilities	W	3,130		220		-		3,350
Other liabilities		510		4,295		3		4,808
	W	3,640		4,515		3		8,158
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Assets-backed<br><br>securitization		Structured<br><br>financing		Investment<br><br>fund		Total
Assets under consolidated financial statements:
Loans measured at fair value through profit or loss	W	9,598		309,635		123,282		442,515
Loan at amortized cost		1,061,060		16,604,162		227,185		17,892,407
Securities at fair value through profit or loss		4,366,192		129,795		13,304,176		17,800,163
Derivate assets		674		-		-		674
Securities at fair value through other comprehensive income		4,041,459		183,517		3,315		4,228,291
Securities at amortized cost		4,806,904		-		65		4,806,969
Other assets		4,636		79,822		11,935		96,393
	W	14,290,523		17,306,931		13,669,958		45,267,412
Liabilities under consolidated financial statements:
Derivate liabilities	W	9,939		315		-		10,254
Other liabilities		301		1,628		-		1,929
	W	10,240		1,943		-		12,183

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(In millions of won)

50. Interests in unconsolidated structured entities (continued)

(b) Nature of risks (continued)

ii) The maximum risk exposure of the Group relating to its interests in unconsolidated structured entities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Assets-backed<br><br>securitization		Structured<br><br>financing		Investment<br><br>fund		Total
Assets held	W	15,604,968		19,767,186		15,023,792		50,395,946
ABS and ABCP<br><br>purchase agreements		1,125,400		224,184		2,246,239		3,595,823
Loan commitments		327,367		916,236		41,656		1,285,259
Guarantees		111,150		8,900		-		120,050
Others		-		383,071		-		383,071
	W	17,168,885		21,299,577		17,311,687		55,780,149
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Assets-backed<br><br>securitization		Structured<br><br>financing		Investment<br><br>fund		Total
Assets held	W	14,290,523		17,306,931		13,669,958		45,267,412
ABS and ABCP<br><br>purchase agreements		1,029,819		10,462		2,134,239		3,174,520
Loan commitments		353,790		913,252		-		1,267,042
Others		-		429,549		-		429,549
	W	15,674,132		18,660,194		15,804,197		50,138,523

51. subsequent events

To enhance the shareholders’ value, the Company made a decision on the acquisition and retirement of treasury stock amounted to W 500 billion based on the resolution of the board of directors on February 6, 2025.

Independent Auditors’ Report on Internal Control over Financial Reporting for Consolidation Purposes

Based on a report originally issued in Korean

The Board of Directors and Stockholders

Shinhan Financial Group Co., Ltd.

Opinion on Internal Control over Financial Reporting for Consolidation Purposes

We have audited the internal control over financial reporting (“ICFR”) for consolidation purposes of Shinhan Financial Group Co., Ltd. and its subsidiaries (“the Group”) as of December 31, 2024 based on the criteria established in the Conceptual Framework for Designing and Operating ICFR (“ICFR Design and Operation Framework”) issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea (the “ICFR Committee”).

In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting for consolidation purposes as of December 31, 2024, based on ICFR Design and Operation Framework.

We have also audited, in accordance with Korean Standards on Auditing (KSAs), the consolidated financial statements of the Group, which comprise the consolidated statement of financial position as of December 31, 2024, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of material accounting policies and other explanatory information, and our report dated March 4, 2025 expressed an unmodified opinion on those consolidated financial statements.

Basis for Opinion on Internal Control over Financial Reporting for Consolidation Purposes

We conducted our audit in accordance with KSAs. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Internal Control over Financial Reporting for Consolidation Purposes section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the internal control over financial reporting for consolidation purposes in the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Internal Control over Financial Reporting for Consolidation Purposes

The Group’s management is responsible for designing, operating and maintaining effective internal control over financial reporting for consolidation purposes and for its assessment of the effectiveness of internal control over financial reporting for consolidation purposes, included in the accompanying ‘ICFR Operating Status Report for Consolidation Purposes by CEO and IAM.’

Those charged with governance are responsible for overseeing the Group’s internal control over financial reporting for consolidation purposes.

Auditors’ Responsibilities for the Audit of the Internal Control over Financial Reporting for Consolidation Purposes

Our responsibility is to express an opinion on the Group’s internal control over financial reporting for consolidation purposes based on our audit. We conducted our audit in accordance with KSAs. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting for consolidation purposes was maintained in all material respects.

Our audit of internal control over financial reporting for consolidation purposes included obtaining an understanding of internal control over financial reporting for consolidation purposes, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Definition and Limitations of Internal Control over Financial Reporting for Consolidation Purposes

A company’s internal control over financial reporting for consolidation purposes is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with Korean International Financial Reporting Standards (“K-IFRS”). A company’s internal control over financial reporting for consolidation purposes includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Group; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with K-IFRS, and that receipts and expenditures of the Group are being made only in accordance with authorizations of management and directors of the Group; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Group’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting for consolidation purposes may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The engagement partner on the audit resulting in this independent auditors’ report is Jung-Soo Bok.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 4, 2025

This report is effective as of March 4, 2025, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the internal control over financial reporting for consolidation purposes. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

EX-99.2

Exhibit 99.2 : Independent Separate Auditor’s Report of Shinhan Financial Group

SHINHAN FINANCIAL GROUP CO., LTD.

Separate Financial Statements

December 31, 2024 and 2023

(With Independent Auditor’s Report Thereon)

Contents

		Page
Independent Auditors’ Report		1
Separate Statements of Financial Position		4
Separate Statements of Comprehensive Income		5
Separate Statements of Changes in Equity		6
Separate Statements of Cash Flows		8
Notes to the Separate Financial Statements		10
Independent Auditors’ Report on Internal Control over Financial Reporting		75
ICFR Operating Status Report by CEO and IAM		77

Independent Auditors’ Report

Based on a report originally issued in Korean

The Board of Directors and Stockholders

Shinhan Financial Group Co., Ltd.

Opinion

We have audited the separate financial statements of Shinhan Financial Group Co., Ltd. (“the Company”), which comprise the separate statements of financial position as of December 31, 2024 and 2023, the separate statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising a summary of material accounting policies and other explanatory information.

In our opinion, the accompanying separate financial statements present fairly, in all material respects, the separate financial position of the Company as of December 31, 2024 and 2023, and its separate financial performance and its cash flows for the years then ended in accordance with Korean International Financial Reporting Standards (“KIFRS”).

We have also audited, in accordance with Korean Standards on Auditing (KSAs), the Company’s Internal Control over Financial Reporting (“ICFR”) as of December 31, 2024 based on the criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea, and our report dated March 4, 2025 expressed an unmodified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

We conducted our audits in accordance with KSAs. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Separate Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the separate financial statements in the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Key Audit Matters

We have determined that there are no key audit matters to communicate in our report.

Other Matters

The procedures and practices utilized in the Republic of Korea to audit such separate financial statements may differ from those generally accepted and applied in other countries.

Responsibilities of Management and Those Charged with Governance for the Separate Financial Statements

Management is responsible for the preparation and fair presentation of the separate financial statements in accordance with K-IFRS, and for such internal control as management determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the separate financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether the separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with KSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate financial statements.

As part of an audit in accordance with KSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
• Evaluate the appropriateness of accounting policies used in the preparation of the separate financial statements and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the separate financial statements, including the disclosures, and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in the internal controls that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors’ report is Jung-Soo Bok.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 4, 2025

This report is effective as of March 4, 2025, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

SHINHAN FINANCIAL GROUP CO., LTD.

Separate Statements of Financial Position

For the years ended December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Assets
Cash and due from banks at amortized cost		4, 6, 8, 33	W	151,143		22
Financial assets at fair value through profit or loss		4, 7, 33		2,552,750		1,985,760
Loans at amortized cost		4, 8, 33		3,837,298		4,051,004
Property and equipment		9, 11, 33		6,509		7,586
Intangible assets		10		6,488		7,745
Investments in subsidiaries		12		30,623,651		30,723,087
Net defined benefit assets		16		5,622		7,077
Other assets		4, 8, 13, 33		488,842		507,274
Total assets			W	37,672,303		37,289,555
Liabilities
Borrowings		4, 14		19,914		223,722
Debt securities issued		4, 15, 33		10,731,336		10,389,276
Deferred tax liabilities		29		20,518		9,589
Other liabilities		4, 17, 33		552,360		567,827
Total liabilities				11,324,128		11,190,414
Equity		18
Capital stock				2,969,641		2,969,641
Hybrid bonds				4,600,121		4,001,731
Capital surplus				11,350,744		11,350,744
Capital adjustments				(296,024)		(148,464)
Accumulated other comprehensive loss				(9,307)		(6,642)
Retained earnings				7,733,000		7,932,131
Total equity				26,348,175		26,099,141
Total liabilities and equity			W	37,672,303		37,289,555

See accompanying notes to the separate financial statements.

SHINHAN FINANCIAL GROUP CO., LTD.

Separate Statements of Comprehensive Income

For the years ended December 31, 2024 and 2023

(In millions of won, except earnings per share data)		Note		2024		2023
Interest income		28, 33
Financial assets at amortized cost			W	98,770		93,504
Interest expense		33		(334,798)		(286,642)
Net interest expense		20		(236,028)		(193,138)
Fees and commission income		28, 33		71,053		69,517
Fees and commission expense		33		(617)		(439)
Net fees and commission income		21		70,436		69,078
Dividend income		22, 28, 33		2,025,956		1,785,967
Net gain (loss) on financial assets at fair value through profit or loss		24, 28		89,244		151,698
Net foreign currency transaction gain		28		(2,128)		27,525
Reversal of credit loss allowance		8, 23, 28, 33		215		1,363
General and administrative expenses		25, 33		(146,832)		(135,853)
Operating income				1,800,863		1,706,640
Non-operating income (expense)		27		(169,111)		(7,223)
Profit before income taxes				1,631,752		1,699,417
Income tax expense		29		11,885		28,406
Profit for the year				1,619,867		1,671,011
				(2,665)		(1,432)
Other comprehensive income (loss) for the year, net of income tax		16, 18
Items that will not be reclassified subsequently to profit or loss:<br><br>Re-measurements of the defined benefit asset				(2,665)		(1,432)
Total comprehensive income for the year			W	1,617,202		1,669,579
Basic and diluted earnings per<br><br>share in Korean won		30	W	2,850		2,853

See accompanying notes to the separate financial statements.

SHINHAN FINANCIAL GROUP CO., LTD.

Separate Statements of Changes in Equity

For the years ended December 31, 2024 and 2023

		Capital<br><br>stock		Hybrid bonds		Capital<br><br>surplus		Capital adjust-ments		Accumulated other<br><br>comprehe-nsive loss		Retained earnings		Total<br><br>equity
Balance at January 1, 2023	W	2,969,641		4,196,968		11,350,819		(46,114)		(5,210)		8,210,445		26,676,549
Total comprehensive income for the period:
Profit for the period		-		-		-		-		-		1,671,011		1,671,011
Other comprehensive income		-		-		-		-		(1,432)		-		(1,432)
1) Re-measurements of the defined benefit liability		-		-		-		-		(1,432)		-		(1,432)
		-		-		-		-		(1,432)		1,671,011		1,669,579
Transactions with owners:
Dividends		-		-		-		-		-		(455,215)		(455,215)
Interim dividends		-		-		-		-		-		(817,122)		(817,122)
Dividend to hybrid bonds		-		-		-		-		-		(189,672)		(189,672)
Repayments to hybrid bonds		-		(1,092,883)		-		(102,667)		-		-		(1,195,550)
Replacement of retained earnings from hybrid bond repayment losses		-		-		-		317		-		(317)		-
Issuance of hybrid bonds		-		897,646		-		-		-		-		897,646
Acquisition of treasury stock		-		-		-		(486,919)		-		-		(486,919)
Retirement of treasury stock		-		-		-		486,919		-		(486,999)		(80)
Conversion of convertible preferred stock into common stock		-		-		(75)		-		-		-		(75)
		-		(195,237)		(75)		(102,350)		-		(1,949,325)		(2,246,987)
Balance at December 31, 2023	W	2,969,641		4,001,731		11,350,744		(148,464)		(6,642)		7,932,131		26,099,141

SHINHAN FINANCIAL GROUP CO., LTD.

Separate Statements of Cash Flows

For the years ended December 31, 2024 and 2023

		Capital<br><br>stock		Hybrid bonds		Capital<br><br>surplus		Capital adjust-ments		Accumulated other<br><br>comprehe-nsive loss		Retained earnings		Total<br><br>equity
Balance at January 1, 2024	W	2,969,641		4,001,731		11,350,744		(148,464)		(6,642)		7,932,131		26,099,141
Total comprehensive income for the period:
Profit for the period		-		-		-		-		-		1,619,867		1,619,867
Other comprehensive income		-		-		-		-		(2,665)		-		(2,665)
1) Re-measurements of the defined benefit liability		-		-		-		-		(2,665)		-		(2,665)
		-		-		-		-		(2,665)		1,619,867		1,617,202
Transactions with owners:
Dividends		-		-		-		-		-		(268,697)		(268,697)
Interim dividends		-		-		-		-		-		(820,287)		(820,287)
Dividend to hybrid bonds		-		-		-		-		-		(176,945)		(176,945)
Repayments to hybrid bonds		-		(199,476)		-		(524)		-		-		(200,000)
Replacement of retained earnings from hybrid bond repayment losses		-		-		-		102,667		-		(102,667)		-
Issuance of hybrid bonds		-		797,866		-		-		-		-		797,866
Acquisition of treasury stock		-		-		-		(700,300)		-		-		(700,300)
Disposal of treasury stock		-		-		-		297		-		-		297
Retirement of treasury stock		-		-		-		450,300		-		(450,402)		(102)
		-		598,390		-		(147,560)		-		(1,818,998)		(1,368,168)
Balance at December 31, 2024	W	2,969,641		4,600,121		11,350,744		(296,024)		(9,307)		7,733,000		26,348,175

See accompanying notes to the separate financial statements.

SHINHAN FINANCIAL GROUP CO., LTD.

Separate Statements of Changes in Equity

For the years ended December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Cash flows from operating activities
Profit for the period			W	1,619,867		1,671,011
Adjustments for:
Interest income		20		(98,770)		(93,504)
Interest expense		20		334,798		286,642
Dividend income		22		(2,025,956)		(1,785,967)
Corporate tax expense		29		11,885		28,406
Net profit or loss on financial instruments at fair value through profit or loss		24		(39,427)		(99,802)
Reversal of credit loss allowance				(215)		(1,363)
Employee costs				6,364		7,012
Depreciation and amortization		25		5,137		4,066
Net foreign currency translation gain				4,201		(6,090)
Non-operating expense (income)				167,731		7,269
				(1,634,252)		(1,653,331)
Changes in assets and liabilities:
Due from banks				-		-
Financial instruments at fair value through profit or loss				(330,111)		196,722
Other assets				235		(522)
Net defined benefit assets				(4,625)		(5,508)
Other liabilities				(4,021)		(3,074)
				(338,522)		187,618
Income tax paid				792		(640)
Interest received				97,366		88,680
Interest paid				(326,008)		(261,617)
Dividend received				2,025,368		1,783,758
Net cash provided by operating activities				1,444,611		1,815,479
Cash flows from investing activities
Acquisition of financial instruments at fair value through<br><br>profit or loss				(150,000)		(300,000)
Lending of loans at amortized cost				(179,304)		(411,277)
Collection of loans at amortized cost				615,000		400,000
Acquisition of property and equipment				(2,162)		(2,770)
Disposal of property and equipment				(10)		-
Acquisition of intangible assets				(1,840)		(1,489)
Disposal of intangible assets				2,387		-
Increase in other assets				(620)		(525)
Decrease in other assets				71		1,202
Acquisition of investment in subsidiary				(100,000)		11
Disposal of investments in subsidiaries				32,804		-
Net cash used in investing activities			W	216,326		(314,848)

SHINHAN FINANCIAL GROUP CO., LTD.

Separate Statements of Cash Flows (Continued)

For the years ended December 31, 2024 and 2023

(In millions of won)		Note		2024		2023
Cash flows from financing activities
Issuance of hybrid bonds				797,867		897,646
Repayments of hybrid bonds				(200,000)		(1,195,550)
Issuance of debt securities				1,836,934		2,253,173
Repayments of debt securities				(1,770,000)		(1,709,626)
Increase in borrowings				29,316		371,713
Decrease in borrowings				(235,000)		(170,000)
Convertible preferred stock conversion cost				-		(75)
Dividends paid				(1,267,146)		(1,461,371)
Acquisition of treasury stock				(700,300)		(486,919)
Payment for disposal of treasury stock				297		-
Costs for retirement of treasury stock				(102)		(81)
Repayments of lease liabilities				(1,619)		(1,708)
Net cash outflow from financing activities				(1,509,753)		(1,502,798)
Net increase(decrease) in cash and cash equivalents				151,184		(2,167)
Cash and cash equivalents at the beginning of year		32		19		2,186
Cash and cash equivalents at the end of year		32	W	151,203		19

See accompanying notes to the separate financial statements.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

1. Reporting entity

Shinhan Financial Group Co., Ltd. (hereinafter referred to as "the Company") was established on September 1, 2001 for the main business purposes such as control and management of companies operating in the financial industry, and financial support for subsidiaries. In addition, the stocks were listed on the Korea Exchange on September 10, 2001, and the Company was registered with the Securities and Exchange Commission (SEC) on September 16, 2003, and on the same date, ADS (American Depositary Shares) was listed on the New York Stock Exchange (NYSE).

2. Basis of preparation

(a) Statement of compliance

The accompanying separate financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”), as prescribed in the Act on External Audits of Corporations in the Republic of Korea.

The Company maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (K-IFRS). The accompanying separate financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Company's financial position, financial performance or cash flows, is not presented in the accompanying separate financial statements.

These financial statements are separate financial statements prepared in accordance with K-IFRS No. 1027 ‘Separate Financial Statements’ in which presented on the basis of direct equity investments, not on that the controlling company, equity interests in associates and joint ventures does not base the investment on the investee’s reported performance and net assets.

(b) Basis of measurement

The separate financial statements have been prepared on the historical cost basis except for the following material items in the separate statement of financial position.

• Financial instruments at fair value through profit or loss are measured at fair value
• Liabilities for cash-settled share-based payment arrangements are measured at fair value
• Liabilities for defined benefit plans are recognized at the net of the total present value of defined benefit obligations less the fair value of plan assets

(c) Functional and presentation currency

These separate financial statements are presented in Korean won which is the Company’s functional currency and the currency of the primary economic environment in which the Company operates.

(d) Use of estimates and judgments

The preparation of the separate financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

2. Basis of preparation (continued)

(e) Changes in accounting policy

Except for the following new standard, which has been applied from January 1, 2024, the accounting policies applied by the Company in these separate financial statements are the same as those applied by the Company in its separate financial statements as of and for the year ended December 31, 2023.

i) Amendment to K-IFRS No. 1001 'Presentation of Financial Statements' - Classification of Liabilities as Current or Non-current

The amendments clarify that the classification of liabilities as current or non-current should be based on the substantive rights existing at the end of the reporting period and that the classification is unaffected by management’s intentions or expectations about whether the company will exercise its right to defer settlement of a liability. The amendments also introduce a definition of settlement to make clear that settlement includes the transfer to the counterparty of the company's own equity instruments, however, it would be excluded if an option to settle the liability by the transfer of the company’s own equity instruments is recognized separately from the liability in compound financial instruments. There is no significant impact on the separate financial statements from these amendments.

ii) Amendments to K-IFRS No. 1007, ‘Cash Flow Statement’ and K-IFRS No. 1107 ‘Financial Instruments: Disclosures’ - Supplier Finance Arrangements

The amendments add to the disclosure objectives in K-IFRS 1007, ‘Cash Flow Statement,’ that information about supplier finance arrangements should be disclosed to enable users of financial statements to assess the impact of those arrangements on the Company’s liabilities and cash flows. The amendments also amend K-IFRS 1107,,‘Financial Instruments: Disclosures,’ to add supplier finance arrangements as an example of a requirement to disclose information about an entity’s exposure to concentrations of liquidity risk. There is no significant impact on the separate financial statements from these amendments.

iii) The following new and amended standards are not expected to have a significant impact on the separate financial statements.

• Lease Liability in a Sale and Leaseback (the K-IFRS 1116 'lease')

• Disclosure of Virtual Assets (the K-IFRS 1001 'Financial statement presentation')

(f) Approval of separate financial statements

These separate financial statements were approved by the Board of Directors on February 6, 2025, which will be submitted for approval to shareholders’ meeting on March 26, 2025.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies

The material accounting policies applied by the Company in preparation of its separate financial statements are included below. The Company applies the same accounting policies applied as when preparing the annual separate financial statements for the year ended December 31, 2023, except for the following amendments that have been applied for the first time since January 1, 2024 and as described in Note 2.

(a) Investments in subsidiaries

The accompanying separate financial statements have been prepared on a stand-alone basis in accordance with K-IFRS No.1027 Separate Financial Statements. The Company’s investments in subsidiaries are recorded at cost less impairment, if any, in accordance with K-IFRS No.1027. The Company applied K-IFRS No.1101 First-time Adoption of K-IFRS, and considered the amount reported previously in separate financial statements prepared in accordance with previous K-GAAP as deemed cost at the date of transition. Dividends received from its subsidiaries are recognized in profit or loss when the Company is entitled to receive the dividend.

(b) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and are used by the Company in management of its short-term commitments.

(c) Non-derivative financial assets

Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. In addition, a regular way purchase or sale (a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the market concerned) is recognized at the trade date.

i) Financial assets designated at FVTPL

Financial assets can be irrevocably designated as measured at FVTPL despite of classification standards stated below, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring assets or liabilities or recognizing the gains or losses on them on different bases. However, once designated, it cannot be modified.

ii) Equity instruments

For the equity instruments that are not held for trading, at initial recognition, the Company may make an irrevocable election to present subsequent changes in fair value in other comprehensive income. Equity instruments that are not classified as financial assets at Fair Value through Other Comprehensive Income (“FVOCI”) are classified as financial assets at FVTPL. The Company subsequently measures all equity investments at fair value. Valuation gains or losses of the equity instruments that are classified as financial assets at FVOCI previously recognized as other comprehensive income is not reclassified as profit or loss on derecognition. The Company recognizes dividends in profit or loss when the Company’s right to receive payments of the dividend is established.

Valuation gains or losses due to changes in fair value of the financial assets at FVTPL are recognized as gains or losses on financial assets at FVTPL. Impairment loss (reversal) on equity instruments at FVOCI is not recognized separately.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(c) Non-derivative financial assets (continued)

iii) Debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model in which the asset is managed and the contractual cash flow characteristics of the asset. Debt instruments are classified as financial assets at amortized cost, at FVOCI, or at FVTPL. Debt instruments are reclassified only when the Company’s business model changes.

① Financial assets at amortized cost

Assets that are held within a business model whose objective is to hold assets to collect contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Impairment losses, and gains or losses on derecognition of the financial assets at amortized cost are recognized in profit or loss. Interest income on the effective interest method is included in the ‘Interest income’ in the separate statement of comprehensive income.

② Financial asset at FVOCI

Assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Other than impairment losses, interest income amortized using effective interest method and foreign exchange differences, gains or losses of the financial assets at FVOCI are recognized as other comprehensive income in equity. On removal, gains or losses accumulated in other comprehensive income are reclassified to profit or loss. The interest income on the effective interest method is included in the ‘Interest income’ in the separate statement of comprehensive income. Foreign exchange differences and impairment losses are included in the ‘Net foreign currency transaction gain’ and ‘Provision for credit losses allowance’ in the separate statement of comprehensive income, respectively.

③ Financial asset at FVTPL

Debt securities other than financial assets at amortized costs or FVOCI are classified at FVTPL. Unless hedge accounting is applied, gains or losses from financial assets at FVTPL are recognized as profit or loss and are included in ‘Net gain on financial assets at fair value through profit or loss’ in the separate statement of comprehensive income.

iv) Embedded derivatives

Financial assets with embedded derivatives are classified regarding the entire hybrid contract, and the embedded derivatives are not separately recognized. The entire hybrid contract is considered when it is determined whether the contractual cash flows represent solely payments of principal and interest.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(d) Expected credit losses of financial assets

The Company recognize provision for credit loss allowance for debt instruments measured at amortized cost and fair value through other comprehensive income, using the expected credit loss impairment model. Financial assets migrate through the following three stages based on the change in credit risk since initial recognition and loss allowances for the financial assets are measured at the 12-month expected credit losses (“ECL”) or the lifetime ECL, depending on the stage.

Category				Provision for credit loss allowance
STAGE 1		When credit risk has not increased<br><br>significantly since the initial<br><br>recognition		12-month ECL: the ECL associated with the probability of default events occurring within the next 12 months
STAGE 2		When credit risk has increased<br><br>significantly since the initial<br><br>recognition		Lifetime ECL: a lifetime ECL associated with the probability of default events occurring over the remaining lifetime
STAGE 3		When assets are impaired		Same as above

The Company, meanwhile, only recognizes the cumulative changes in lifetime expected credit losses since the initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.

The total period refers to the expected life span of the financial instrument up to the contract expiration date.

i) Reflection of forward-looking information

The Company determines future credit risk and reflects estimated future credit risk to the forward-looking information.

Assuming that the expected credit loss measure has a certain correlation with economic fluctuations, the Company calculates the expected credit loss by modeling between macroeconomic variables and measurement factors and reflecting forward-looking information to the measurement factors.

ii) Measurement of amortization cost regarding the expected credit loss of financial assets

The expected credit loss of an amortized financial asset is measured as the difference between the present value of the cash flows expected to be received and the cash flow expected to be received. For this purpose, the Company calculates expected cash flows for individually significant financial assets.

For non-individually significant financial assets, the financial assets collectively include expected credit losses as part of a set of financial assets with similar credit risk characteristics.

Expected credit losses are deducted using the allowance for doubtful accounts and are amortized as if the financial assets are not recoverable. The allowance of bad debts is increased when the loan receivables are subsequently recovered and the changes in the credit loss allowance are recognized in profit or loss.

iii) Measurement of expected credit loss of financial assets at FVOCI

The calculation of expected credit losses is the same as for financial assets measured at amortized cost, but changes in allowance for loan losses are recognized in other comprehensive income. In the case of disposal and redemption of financial assets at fair value through other comprehensive income, the credit loss allowance is reclassified from other comprehensive income to profit or loss and recognized in profit or loss.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(e) Property and equipment

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of 5 years, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

(f) Intangible assets

Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses, if any.

Amortization of intangible assets is calculated on a straight-line basis over the estimated useful lives of 5 years from the date that they are available for use. The residual value of intangible assets is zero. However, if there are no foreseeable limits to the periods over which certain intangible assets are expected to be available for use, they are determined to have indefinite useful lives and are not amortized.

(g) Impairment of non-financial assets

The carrying amounts of the Company’s non-financial assets, other than assets arising from employee benefits and deferred tax assets, are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amount to their carrying amount.

The Company estimates the recoverable amount of an individual asset, if it is impossible to measure the individual recoverable amount of an asset, then the Company estimates the recoverable amount of cash-generating unit (“CGU”). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. The value in use is estimated by applying a pre-tax discount rate that reflect current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(h) Non-derivative financial liabilities

The Company recognizes financial liabilities in the separate statement of financial position when the Company becomes a party to the contractual provisions of the financial liability in accordance with the substance of the contractual arrangement and the definitions of financial liabilities. Transaction costs on the financial liabilities at FVTPL are recognized in profit or loss as incurred.

i) Financial liabilities designated at FVTPL

Financial liabilities can be irrevocably designated as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases, or a group of financial instruments is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. The amount of change in the fair value of the financial liabilities designated at FVTPL that is attributable to changes in the credit risk of that liabilities shall be presented in other comprehensive income.

ii) Financial liabilities at FVTPL

Since initial recognition, financial liabilities at FVTPL are measured at fair value, and changes in the fair value are recognized as profit or loss.

iii) Other financial liabilities

Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss are classified as other financial liabilities. At the date of initial recognition, other financial liabilities are measured at fair value minus transaction costs that are directly attributable to the acquisition. Subsequent to initial recognition, other financial liabilities are measured at amortized cost using the effective interest method.

The Company derecognizes a financial liability from the separate statement of financial position when it is extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

(i) Paid-in capital

i) Hybrid bond

The Company classifies issued financial instrument, or its component parts, as a financial liability or an equity instrument depending on the substance of the contractual arrangement of such financial instrument. Hybrid bond where the Company has an unconditional right to avoid delivering cash or another financial asset to settle a contractual obligation are classified as an equity instrument and presented in equity.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(j) Employee benefits

i) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render the related service. When an employee has rendered service to the Company during an accounting period, the Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

ii) Other long-term employee benefits

The Company’s net obligation in respect of long-term employee benefits other than pension plans is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of the Company’s obligations. The calculation is performed using the projected unit credit method. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.

iii) Retirement benefits: defined benefit plans

For the year ended December 31, 2024, defined benefit liabilities related to the defined benefit plan are recognized by deducting the fair value of external reserve from the present value of the defined benefit plan debt.

Defined benefit liabilities are calculated annually by independent actuaries using the predicted unit credit method. If the net present value of the defined benefit obligation less the fair value of the plan assets is an asset then the present value of the economic benefits available to the entity in the form of a refund from the plan or a reduction in future contributions to the plan.

(k) Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

Provision shall be used only for expenditures for which the provision is originally recognized.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(l) Recognition of revenues and expenses

The Company recognizes revenue by applying the following five-step revenue recognition model:

① Identify the contract → ② Identify performance obligations → ③ Determine the transaction price → ④ Allocate the transaction price to the performance obligations → ⑤ Recognize revenue once performance obligations are satisfied

i) Interest income and expenses

Interest income and expense are recognized in profit or loss using the effective interest method.

ii) Fees and commissions

The recognition of revenue for financial service fees depends on the purposes for which the fees are assessed and the basis of accounting for any associated financial instrument.

① Fees that are an integral part of the effective interest rate of a financial instrument

Such fees are generally treated as an adjustment to the effective interest rate. Such fees may include compensation for activities such as evaluating the borrower’s financial condition, evaluating and recording guarantees, collateral and other security arrangements, preparing and processing documents, closing the transaction and the origination fees received on issuing financial liabilities. However, when the financial instrument is measured at fair value with the change in fair value recognized in profit or loss, the fees are recognized as revenue when the instrument is initially recognized.

② Fees earned after provision of services

Fees and commission income, including investment management fees, sales commission, and account servicing fees, are recognized as the related services are provided.

③ Fees that are earned on the execution of a significant act

The fees that are earned on the execution of a significant act including commission on the allotment of shares or other securities to a client, placement fee for arranging a loan between a borrower and an investor and sales commission, are recognized as revenue when the significant act has been completed.

iii) Dividend income

Dividend income is recognized when the shareholder’s right to receive payment is established. Usually this is the ex-dividend date for equity securities.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(m) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

The Company applies the consolidated corporate tax system, in which the Company, i.e. a consolidate parent corporation, and its wholly owned subsidiaries (hereinafter referred to as the "consolidated subsidiary corporation”) file a corporate tax return and pay corporate tax as a single unit that calculates the amount of tax based on a single base. The Company evaluates the probability of realizing temporary differences by considering the future taxable profit of each entity and the consolidated group and recognizes changes in deferred tax assets (liabilities), except those recognized directly in equity, in profit or loss as income tax expense. In addition, given the Company, as the consolidated parent corporation, files a corporate tax return and pays corporate tax, it recognizes total consolidated income taxes payables and income tax allocated to each subsidiary as liabilities and receivables from subsidiaries, respectively, within its stand-alone financial statements.

The carrying value of deferred tax assets is reviewed at the end of each reporting period. The carrying value of deferred tax assets is reduced when it is no longer likely that sufficient taxable income will be generated to use benefits from deferred tax assets.

Because of the tax polices taken by the Company, tax uncertainties arise from the complexity of transactions and differences in tax law analysis. Also, it arises from a tax refund suit, tax investigation, or a refund suit against the tax authorities' tax amount. The Company paid the tax amount by the tax authorities in accordance with K-IFRS No. 2123. However, it will be recognized as the corporate tax assets if there is a high possibility of a refund in the future. In addition, the amount expected to be paid as a result of the tax investigation is recognized as the tax liability.

The company is subject to the Global Minimum Corporate Tax Act and has applied the temporary exception for deferred taxes under K-IFRS 1012. Accordingly, the company does not recognize deferred tax assets and liabilities related to the Global Minimum Corporate Tax Act and does not disclose information related to deferred tax. However, the company separately discloses details of the current income tax expense (income) related to the Global Minimum Corporate Tax Act.

(n) New standards and amendments not yet adopted by the Company

The following new accounting standards and amendments have been published that are not mandatory for annual periods beginning on or after January 1, 2024, and have not been early adopted by the Company.

i) Amendment to K-IFRS No. 1021 'Effects of Changes in Foreign Exchange Rates' and No. 1101 ‘First-time adoption of K-IFRS’ – Lack of Exchangeability

These amendments define scenarios where exchanges with other currencies are considered possible for accounting purposes, clarify the assessment of exchangeability with other currencies, and specify requirements for estimating and disclosing the spot exchange rate in cases where no exchangeability exists. If exchange with other currencies is not possible, the spot exchange rate must be estimated on the measurement date using observable exchange rates without adjustment or employing alternative estimation techniques. These amendments are set for prospective application to fiscal years beginning on or after January 1, 2025, with early application permitted. The company is currently assessing the impacts of these amendments on the separate financial statements.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

3. Material accounting policies (continued)

(n) New standards and amendments not yet adopted by the Company (continued)

ii) K-IFRS 1109 ‘Financial Instruments and K-IFRS 1107 Financial Instruments: Disclosures’ – Classification and measurement requirements of financial instruments

The amendments clarify the conditions related to the discharge of a financial liability before the settlement date when settling such financial liabilities using an electronic payment system. They further specify an interest feature, a contingent feature, financial assets with non-recourse features and contractually linked instruments which should be considered in assessing whether contractual cash flows of a financial asset are consistent with a basic lending arrangement. Furthermore, the amendments include additional disclosure requirements for investments in equity instruments designated at fair value through other comprehensive income and contractual terms that could change the timing or amount of contractual cash flows. The amendments are applied retrospectively for annual reporting periods beginning on or after 1 January 2026 with earlier application permitted. The company believes that there will be no material impact on the financial statement.

ⅲ) K-IFRS Annual Improvements

K-IFRS annual improvements are applied for annual reporting periods beginning on or after 1 January 2026 with earlier application permitted. The company believes that there will be no material impact on the financial statement.

• K-IFRS 1109 Financial Instruments – Derecognition of lease liabilities and transaction price

• K-IFRS 1110 Consolidated Financial Statements – Determination of ‘de facto agent’

• K-IFRS 1101 First-time adoption of Korean International Financial Reporting Standards – Hedging accounting by a first-time adopter

• K-IFRS 1107 Financial Instruments: Disclosures – Gain or loss on derecognition

• K-IFRS 1007 Statement of Cash Flows: Cost method

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

4. Financial risk management

(a) Overview

As a financial services provider, Shinhan Financial Group Co., Ltd. and its subsidiaries (hereinafter referred to as the “Group”) manage various risks that may occur in each business area, and the main risks are credit risk, market risk, interest rate risk and liquidity risk. These risks are recognized, measured, controlled and reported in accordance with the basic risk management policies established by the controlling company and each subsidiary.

i) Risk management principles

The Group's risk management principles are as follows.

• All sales activities should be carried out in consideration of the balance between risk and profit within the preset risk propensity.

• The parent company presents group risk management best practices, supervises compliance, and has responsibility and authority for monitoring at the group level.

• Operate a risk-related decision-making system that enhances management involvement.

• Organize and operate a risk management organization independent of the sales department.

• Operate a performance management system that clearly considers risks when making business decisions.

• Aim for proactive and practical risk management functions.

• Share a careful view of the possibility of worsening the situation even in normal times.

ii) Risk management organization

The Group's basic policies and strategies for risk management are established by the Risk Management Committee (hereinafter referred to as the “Group Risk Management Committee”) within the Board of Directors of the controlling company. The Group's Chief Risk Management Officer (CRO) assists the Group Risk Management Committee and discusses risk policies and strategies of the group and each subsidiary through the Group Risk Council, which consists of each subsidiary's Chief Risk Management Officer. Subsidiaries implement the group's risk policies and strategies through risk management committees, risk-related working committees, and risk management organizations for each company, and consistently establish and implement detailed risk policies and strategies for subsidiaries. The risk management team of the controlling company performs the risk management and supervision by assisting the group's chief risk manager.

Shinhan Financial Group has a hierarchical limit system to manage the group's risks at an appropriate level. The Group Risk Management Committee sets the risk limits that can be borne by the group and each subsidiary, and the risk management committees and management level risk groups of each subsidiary establish and manage detailed risk limits by risk type, department, desk, and product.

ii-1) Group Risk Management Committee

Establish a risk management system for the parent company and each subsidiary, and comprehensively manage group risk, including the establishment and approval of the group's risk policies and limits. The committee consists of directors of the parent company.

The Committee's resolutions are as follows.

• Establish a basic risk management policy consistent with the management strategy.

• Determination of the level of risk that can be borne by the group and each subsidiary

• Approve the appropriate investment limit or loss allowance limit

• Establishment and revision of group risk management regulations and group risk council regulations

• Matters concerning risk management organizational structure and division of duties.

• Matters concerning the operation of the risk management system.

• Matters concerning the establishment of various limits and approval of excess limits

• Decisions related to the approval of the group's internal rating law for non-retail and retail credit rating systems by the Financial Supervisory Service

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

4. Financial risk management (continued)

(a) Overview (continued)

ii-1) Group Risk Management Committee(continued)

• Matters concerning risk disclosure policy

• Results of crisis situation analysis and related capital management plans and financing plans

• Matters deemed necessary by the board of directors

• Matters required by external regulations such as the Financial Services Commission, and matters prescribed by other regulations, guidelines, etc.

• Matters deemed necessary by the Chairperson

The resolutions of the Group Risk Management Committee shall be reported to the Board of Directors.

ii-2) Group Risk Management Council

In order to maintain the Group's risk policies and strategies consistently, discuss all risk-related matters of the Group and make resolutions on matters necessary to implement the policies prescribed by the Group Risk Management Committee. The members shall be chaired by the risk management officer of the group and shall be comprised of the risk management officer of the major subsidiaries.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

4. Financial risk management (continued)

iii) Risk management framework

iii-1) Risk Capital Management

Risk capital refers to capital required to compensate for losses in case of a potential risk being realized, and risk capital management refers to the process of asset management based on considerations of its risk appetite, which is a datum point on the level of risk burden compared to available capital. As part of the Group’s risk capital management, the Group has adopted and maintains various risk planning processes and reflects such risk planning in the Group’s business and financial planning. The Group also has adopted and maintains a risk limit management system control risk to an appropriate level.

iii-2) Risk monitoring

The Group proactively manages risks by periodically identifying risk factors that may affect the group’s business environment, through a multidimensional risk monitoring system. Each subsidiary is required to report to the Company any factors that could have a material impact on the group-level risk management, and the Company prepares weekly, monthly and occasional monitoring reports to report to Group management including the CRO.

In addition, the Group performs preemptive risk management through a “Risk Dashboard” under which the Group closely monitors any increase in asset size, risk levels and sensitivity to external factors with respect to the major asset portfolios of each subsidiary, and to the extent such monitoring yields any warning signals, the Group promptly analyze the causes and, if necessary, formulates and implements actions in response to these warning signals.

iii-3) Risk review

When promoting new products and new businesses and changing major policies, risk factors are reviewed by a pre-defined checklist to block reckless promotion of businesses that are not easy to judge risks and support rational decision-making.

The risk management departments of all subsidiaries are required to review all new businesses, products and services prior to their launch and closely monitor the development of any related risks following their launch, and in the case of any action that involves more than one subsidiary, the relevant risk management departments are required to consult with the risk management team at the controlling company level prior to making any independent risk reviews.

iii-4) Crisis management

The Group maintains a group wide risk management system to detect the signals of any risk crisis and, in the event of a crisis actually happening, to respond on a timely, efficient and flexible basis so as to ensure the Group’s survival as a going concern. Each subsidiary maintains crisis planning for four levels of contingencies, namely, “cautious’, “alert”, “imminent crisis” and “crisis”, determination of which is made based on quantitative and qualitative monitoring and consequence analysis, and upon the happening of any such contingency, is required to respond according to a prescribed contingency plan. At the controlling company level, the Company maintains and installs crisis detection and response system which is applied consistently group-wide, and upon the happening of any contingency at two or more subsidiary level, the Company directly takes charge of the situation so that the Company manages it on a concerted group wide basis.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

4. Financial risk management (continued)

(b) Credit risk

i) Credit risk management

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers and investment securities. The Company’s credit risk management encompasses all areas of credit that may result in potential economic loss, including not just transactions that are recorded on balance sheets, but also off-balance-sheet transactions such as guarantees, loan commitments and derivative transactions.

< Techniques, assumptions and input variables used to measure impairment>

i-1) Determining significant increases in credit risk since initial recognition

At the end of each reporting period, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. This information includes the default experience data we have and the analysis results of internal credit rating experts.

i-1-1) Measuring the risk of default

The Company assigns an internal credit risk rating to each individual exposure based on observable data and historical experiences that have been found to have a reasonable correlation with the risk of default. The internal credit risk rating is determined by considering both qualitative and quantitative factors that indicate the risk of default, which may vary depending on the nature of the exposure and the type of borrower.

i-1-2) Measuring term structure of probability of default

Internal credit rate is a key input variable for determining term structure of probability of default. The Company accumulates information after analyzing the information regarding exposure to credit risk and default information by the type of product and borrower and results of internal credit risk assessment. For some portfolios, the Company uses information obtained from external credit rating agencies when performing these analyses. The Company applies statistical techniques to estimate the probability of default for the remaining life of the exposure from the accumulated data and to estimate changes in the estimated probability of default over time.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

4. Financial risk management (continued)

(b) Credit risk (continued)

i-1-3) Significant increases in credit risk

The Company uses the indicators defined as per portfolio to determine the significant increase in credit risk and such indicators generally consist of changes in the risk of default estimated from changes in the internal credit risk rating, qualitative factors, days of delinquency, and others.

i-2) Risk of default

The Company considers a financial asset to be in default if it meets one or more of the following conditions:

• if a borrower is overdue 90 days or more from the contractual payment date,

• if the Company judges that it is not possible to recover principal and interest without enforcing the collateral on a financial asset

The Company uses the following indicators when determining whether a borrower is in default:

• qualitative factors (e.g. breach of contractual terms),

• quantitative factors (e.g. if the same borrower does not perform more than one payment obligations to the Company, the number of days past due per payment obligation. However, in the case of a specific portfolio, the Company uses the number of days past due for each financial instrument)

• internal observation data and external data

The definition of default applied by the Company generally conforms to the definition of default defined for regulatory capital management purposes; however, depending on the situations, the information used to determine whether a default has incurred, and the extent thereof may vary.

i-3) Reflection of forward-looking information

The Company reflects forward-looking information presented by internal experts based on a variety of information when measuring expected credit losses. For the purpose of estimating this forward-looking information, the Company utilizes the economic outlook published by domestic and overseas research institutes or government and public agencies.

The Company identified the key macroeconomic variables needed to forecast credit risk and credit losses for each portfolio as follows by analyzing data obtained from past experience and drew correlations across credit risk for each variable. After that, the Company has reflected the forward-looking information through regression estimation.

Key macroeconomic variables		Correlation with credit risk
GDP growth rate		(-)
Private consumption growth rate		(-)
Facility investment growth rate		(-)
Consumer price index growth rate		(+)
Balance on current account		(-)

The predicted correlations between the macroeconomic variables and the risk of default, used by the Company, are derived based on data from the over the past ten years.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

4. Financial risk management (continued)

(b) Credit risk (continued)

i-4) Measurement of expected credit losses

Key variables used in measuring expected credit losses are as follows:

• Probability of default (“PD”)

• Loss given default (“LGD”)

• Exposure at default (“EAD”)

These variables have been estimated from historical experience data and the statistical techniques developed internally and have been adjusted to reflect forward-looking information.

Estimates of PD over a specified period are estimated by reflecting characteristics of counterparties and their exposure, based on a statistical model at a specific point of time. The Company uses its own information to develop a statistical credit assessment model used for the estimation, and additional information observed in the market is considered for some portfolios such as a group of large corporates. When a counterparty or exposure is concentrated in specific grades, the method of measuring PD for those grades would be adjusted, and the PD by grade is estimated by considering contract expiration of the exposure.

LGD refers to the expected loss if a borrower default. The Company calculates LGD based on the experience recovery rate measured from past default exposures. The model for measuring LGD is developed to reflect type of collateral, seniority of collateral, type of borrower, and cost of recovery. In particular, LGD for retail loan products uses loan to value (LTV) as a key variable. The recovery rate reflected in the LGD calculation is based on the present value of recovery amount, discounted at the effective interest rate.

EAD refers to the expected exposure at the time of default. The Company derives EAD reflecting a rate at which the current exposure is expected to be used additionally up to the point of default within the contractual limit. EAD of financial assets is equal to the total carrying amount of the asset, and EAD of loan commitments or financial guarantee contracts is calculated as the sum of the amount expected to be used in the future.

In measuring expected credit losses on financial assets, the Company uses the contractual maturity as the period subject to expected credit loss measurement. The contractual maturity is computed by considering the extension right held by the borrower.

Risk factors of PD, LGD and EAD are collectively estimated according to the following criteria:

• Type of products

• Internal credit risk rating

• Type of collateral

• Loan to value (“LTV”)

• Industry that the borrower belongs to

• Location of the borrower or collateral

• Days of delinquency

The criteria classifying groups is periodically reviewed to maintain homogeneity of the group and adjusted if necessary. The Company uses external benchmark information to supplement internal information for a particular portfolio that did not have sufficient internal data accumulated from the past experience.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(b) Credit risk (continued)

i-5) Write-off of financial assets

The Company writes off a portion of or entire loan or debt security for which the Company does not expect to receive its principal and interest. In general, the Company writes off the balance when it is deemed that the borrower has no sufficient resources or income to repay the principal and interest. Such determination on write-off is carried out in accordance with the internal rules of the Company and is carried out with the approval of Financial Supervisory Service, if necessary. The Company may continue to exercise its right of collection under its own recovery policy even after the write-off of financial assets.

ii) The Company’s maximum exposure to credit risk without taking into account of any collateral held or other credit enhancements as of December 31, 2024 and 2023 are as follows:

			December 31, 2024		December 31, 2023
Due from banks and loans at amortized cost (*1):	Banks	W	151,143		22
	Corporations		3,837,298		4,051,004
			3,988,441		4,051,026
Financial assets at fair value through profit or loss			1,069,628		735,155
Other financial assets at amortized cost (*1), (*2)			488,756		507,171
		W	5,546,825		5,293,352

(*1) The maximum exposure amounts for due from banks, loans and other financial assets are measured as net of allowances.

(*2) It is comprised of accounts receivable, accrued income, and guarantee deposits.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(b) Credit risk (continued)

iii) Impairment information of financial assets by credit risk

Detailed information of financial assets at amortized costs on impairment as of December 31, 2024 and 2023 is as follows:

		December 31, 2024
		12-month<br><br>ECL		Lifetime<br><br>ECL		Gross<br><br>amount		Allowance		Total, net
Due from banks and loans at amortized cost (*):
Banks	W	151,206		-		151,206		(63)		151,143
Corporations		3,838,903		-		3,838,903		(1,605)		3,837,298
		3,990,109		-		3,990,109		(1,668)		3,988,441
Other financial assets at amortized cost		488,954		-		488,954		(198)		488,756
	W	4,479,063		-		4,479,063		(1,866)		4,477,197
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
		12-month<br><br>ECL		Lifetime<br><br>ECL		Gross<br><br>amount		Allowance		Total, net
Due from banks and loans at amortized cost (*):
Banks	W	22		-		22		-		22
Corporations		4,052,900		-		4,052,900		(1,896)		4,051,004
		4,052,922		-		4,052,922		(1,896)		4,051,026
Other financial assets at amortized cost		507,356		-		507,356		(185)		507,171
	W	4,560,278		-		4,560,278		(2,081)		4,558,197

(*) Credit quality of due from banks and loans is divided into Prime and Normal. Credit quality of due from banks and loans as of December 31, 2024 and 2023 is classified as Prime. The distinction between prime grade and normal grade is as follows:

Type of Borrower		Corporations and banks
Grade: 1. Prime		Internal credit rating of BBB+ or above
Grade: 2. Normal		Internal credit rating of below BBB+

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(c) Market risk

Market risk refers to the risk of loss that may occur due to changes in market price such as interest rates, equity prices, and foreign exchange rates, etc.

i) Interest rate risk

Interest rate risk refers to the risk of loss that changes in market interest rates can result in changes in net interest

income (NII) or net asset value (NPV).

Interest rate gap analysis is a method of measuring the sensitivity of net interest income from interest rate fluctuations

by preparing interest rate gap tables that allocate interest income asset, liability, and non-external transaction item

positions to maturity based on the agreed cash flow and interest rate revision date.

The results of interest rate gap analysis as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Less than<br><br>1 month		1 month ~ 3 months		3 months ~ 6 months		6 months ~<br><br>1 year		1 year ~<br><br>5 years		More than<br><br>5 years		Total
Interest-earning assets:
Due from banks		9		-		151,194		-		-		-		151,203
Loans at amortized<br><br>cost	W	10,000		780,300		350,000		1,340,590		1,358,100		-		3,838,990
		10,009		780,300		501,194		1,340,590		1,358,100		-		3,990,193
Interest-bearing liabilities:
Borrowings		10,000		10,000		-		-		-		-		20,000
Debt securities issued		-		1,285,000		760,000		970,000		7,530,000		200,000		10,745,000
		10,000		1,295,000		760,000		970,000		7,530,000		200,000		10,765,000
Sensitivity gap	W	9		(514,700)		(258,806)		370,590		(6,171,900)		(200,000)		(6,774,807)
Cumulative gap		9		(514,691)		(773,497)		(402,907)		(6,574,807)		(6,774,807)
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Less than<br><br>1 month		1 month ~ 3 months		3 months ~ 6 months		6 months ~<br><br>1 year		1 year ~<br><br>5 years		More than<br><br>5 years		Total
Interest-earning assets:
Due from banks		19		-		-		-		-		-		19
Loans at amortized<br><br>cost	W	-		115,000		280,000		210,000		3,449,200		-		4,054,200
		19		115,000		280,000		210,000		3,449,200		-		4,054,219
Interest-bearing liabilities:
Borrowings		-		65,000		160,000		-		-		-		225,000
Debt securities issued		190,000		50,000		640,000		890,000		7,499,400		1,134,700		10,404,100
		190,000		115,000		800,000		890,000		7,499,400		1,134,700		10,629,100
Sensitivity gap	W	(189,981)		-		(520,000)		(680,000)		(4,050,200)		(1,134,700)		(6,574,881)
Cumulative gap		(189,981)		(189,981)		(709,981)		(1,389,981)		(5,440,181)		(6,574,881)

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(c) Market risk

ii) Foreign exchange risk

Foreign exchange risk refers to the risk of loss that may arise from fluctuations in the fair value or future cash flow of foreign exchange risk exposure due to exchange rate fluctuations. Foreign exchange risk exposure can be understood as the difference between foreign currency denominated assets and liabilities (net position), and derivative financial instruments with exchange rate as underlying asset. Meanwhile, there are no items in the company's foreign currency assets and liabilities that apply hedge accounting.

The Company's foreign currency financial assets are exposed to exchange rate risk. Exchange rate risk is calculated and managed based on the required capital by the standard method. The risk weighting for the currency has been raised from 8% to 15% (high-flow currency 10.6%) as the standard method of required capital is revised from 2023.

As of December 31, 2024 and 2023, the required capital amount by the standard method, exposure to foreign exchange risk-assuming 5% weaker dollar and stronger dollar-, and change in net assets are as follows.

		December 31, 2024
Classification		Foreign currency			Won equivalent		5% increase		5% decrease
		Currency	Amount
Assets in foreign currency
Due from banks		USD	5,984		9		9		9
Loans at amortized cost		USD	1,217,000,000		1,788,990		1,878,440		1,699,541
Financial asset - FVTPL		USD	282,172,057		414,793		435,533		394,053
Other financial assets at amortized cost		USD	10,952,433		16,100		16,905		15,295
		USD	1,510,130,474		2,219,892		2,330,887		2,108,898
Liabilities in foreign currency
Debt securities issued in foreign currency		USD	1,495,161,396		2,197,887		2,307,781		2,087,993
Other financial liabilities		USD	20,777,442		30,543		32,070		29,016
		USD	1,515,938,838		2,228,430		2,339,851		2,117,009
Amount of financial statement exposure			(5,808,364)		(8,538)		(8,964)		(8,111)
Net capital effect							(426)		427
Required capital (standard method)					389,673
		December 31, 2023
---	---	---	---	---	---	---	---	---	---
Classification		Foreign currency			Won equivalent		5% increase		5% decrease
		Currency	Amount
Assets in foreign currency
Due from banks		USD	7,180		9		9		9
Loans at amortized cost		USD	1,217,000,000		1,569,200		1,647,660		1,490,740
Financial asset - FVTPL		USD	268,008,230		345,570		362,849		328,292
Other financial assets at amortized cost		USD	10,938,205		14,104		14,809		13,399
		USD	1,495,953,615		1,928,883		2,025,327		1,832,440
Liabilities in foreign currency
Debt securities issued in foreign currency		USD	1,493,708,911		1,925,988		2,022,287		1,829,689
Other financial liabilities		USD	20,914,402		26,967		28,315		25,619
		USD	1,514,623,313		1,952,955		2,050,602		1,855,308
Amount of financial statement exposure			(18,669,698)		(24,072)		(25,275)		(22,868)
Net capital effect							(1,203)		1,204
Required capital (standard method)					449,030

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(d) Liquidity risk

Liquidity risk refers to the risk of unexpected losses (such as the disposal of assets abnormal pricing, the procurement of high interest rates, etc.) or insolvency due to inconsistency in funding periods between assets and liabilities or a sudden outflow of funds.

The Company is conducting currency-specific liquidity management. In addition, the Company are managing foreign currency liquidity indicators for liquidity management above the regulatory level of the Financial Supervisory Service.

Non-derivative financial instruments for financial instruments as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Less than<br><br>1 month		1 month ~<br><br>3 months		3 months ~<br><br>6 months		6 months ~<br><br>1 year		1 year ~<br><br>5 years		More than<br><br>5 years		Total
Non-derivatives
Assets:
Due from banks		9		-		151,194		-		-		-		151,203
Loans at amortized cost		16,540		804,810		364,413		1,369,150		1,388,544		-		3,943,457
Financial asset - FVTPL		1,069,628		-		-		-		-		-		1,069,628
Other financial assets		13,238		5,031		315,682		25,412		94,157		13,402		466,922
	W	1,099,415		809,841		831,289		1,394,562		1,482,701		13,402		5,631,210
Liabilities:
Borrowings		10,000		10,000		-		-		-		-		20,000
Debt securities issued		47,194		1,341,073		824,623		1,108,604		8,046,442		214,183		11,582,119
Other financial<br><br>liabilities		26,469		7,221		198,009		16,128		105,779		-		353,606
		83,663		1,358,294		1,022,632		1,124,732		8,152,221		214,183		11,955,725
Net assets (liabilities)	W	1,015,752		(548,453)		(191,343)		269,830		(6,669,520)		(200,781)		(6,324,515)

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(d) Liquidity risk (continued)

Contractual maturities for financial instruments as of December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Less than<br><br>1 month		1 month ~<br><br>3 months		3 months ~<br><br>6 months		6 months ~<br><br>1 year		1 year ~<br><br>5 years		More than<br><br>5 years		Total
Non-derivatives
Assets:
Due from banks		19		-		-		-		-		-		19
Loans at amortized cost		7,225		137,102		296,748		252,178		3,540,249		-		4,233,502
Financial asset - FVTPL		735,155		-		-		-		-		-		735,155
Other financial assets		10,121		108,257		349,996		-		4,113		12,853		485,340
	W	752,520		245,359		646,744		252,178		3,544,362		12,853		5,454,016
Liabilities:
Borrowings		-		65,000		160,000		-		-		-		225,000
Debt securities issued		233,951		97,847		699,244		1,031,484		8,151,841		1,190,936		11,405,303
Other financial<br><br>liabilities		34,226		125,749		300,336		723		493		-		461,527
		268,177		288,596		1,159,580		1,032,207		8,152,334		1,190,936		12,091,830
Net assets (liabilities)	W	484,343		(43,237)		(512,836)		(780,029)		(4,607,972)		(1,178,083)		(6,637,814)

The above amounts include both principal and interest cash flows. As of the December 31, 2024 and 2023, the deposit of W 3 million and W 3 million, which is limited to use as a checking deposit or escrow account, is excluded from the cash flows, respectively.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(e) Measurement for the fair value of financial instruments

The fair values of financial instruments being traded in an active market are determined by the published market prices of each period end. The published market prices of financial instruments being held by the Company are based on the trading agencies’ notifications. If the market for a financial instrument is not active, such as OTC (Over-The-Counter market) derivatives, fair value is determined either by using a valuation technique or independent third-party valuation service.

The Company uses its judgement to select a variety of methods and make rational assumptions that are mainly based on market conditions existing at the end of each reporting period. The fair value of financial instruments is determined using valuation techniques, such as, a method of using recent transactions between independent parties with reasonable judgement and willingness to trade, a method of referring to the current fair value of other financial instruments that are substantially identical, discounted cash flow model and option pricing models.

The Company classifies and discloses fair value of financial instruments into the following three-level hierarchy:

• Level 1: Financial instruments measured at quoted prices from active markets are classified as fair value level 1.
• Level 2: Financial instruments measured using valuation techniques where all significant inputs are observable market data are classified as level 2.
• Level 3: Financial instruments measured using valuation techniques where one or more significant inputs are not based on observable market data are classified as level 3.

i) Financial instruments measured at fair value

i-1) The fair value hierarchy of financial assets which are presented at their fair value in the statements of financial position as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Level 1		Level 2		Level 3		Total
Assets
Financial assets measured at fair value through profit or loss	W	-		1,069,628		1,483,122		2,552,750
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Level 1		Level 2		Level 3		Total
Assets
Financial assets measured at fair value through profit or loss	W	-		735,155		1,250,605		1,985,760

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(e) Measurement for the fair value of financial instruments (continued)

i-2) Changes in level 3 of the fair value hierarchy

• Changes in level 3 of the fair value hierarchy for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Financial assets measured<br><br>at FVTPL
Beginning balance	W	1,250,605
Recognized in profit or loss		82,517
Purchases		150,000
Ending balance	W	1,483,122
		December 31, 2023
---	---	---
		Financial assets measured<br><br>at FVTPL
Beginning balance	W	846,384
Recognized in profit or loss		104,221
Purchases		300,000
Ending balance	W	1,250,605

i-3) Valuation techniques and input variables unobservable in markets

i-3-1) The valuation techniques and the fair value measurement input variables of financial instruments classified as level 2 as of December 31, 2024 and 2023 are as follows:

	Classification		Valuation techniques		Type		Carrying amount		Inputs
2024	Financial assets measured at FVTPL		Net asset valuation approach		Beneficiary certificates		1,069,628		Prices of underlying assets such as bonds, exchange rates
2023	Financial assets measured at FVTPL		Net asset valuation approach		Beneficiary certificates		735,155		Prices of underlying assets such as bonds, exchange rates

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(e) Measurement for the fair value of financial instruments (continued)

i-3-2) Information about valuation techniques and significant unobservable inputs in measuring financial instruments categorized as level 3 as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Valuation<br><br>technique		Type of financial instrument			Book value		Significant<br><br>unobservable<br><br>input		Range of estimates for unobservable input
Financial assets
Financial assets measured<br><br>at FVTPL		Option model (*)		Hybrid bonds		W	1,483,122		Volatility of<br><br>interest rate		0.47%~1.13%

(*) It is calculated by applying the Hull-White model method.

		December 31, 2023
		Valuation<br><br>technique		Type of financial instrument			Book value		Significant<br><br>unobservable<br><br>input		Range of estimates for unobservable input
Financial assets
Financial assets measured<br><br>at FVTPL		Option model (*)		Hybrid bonds		W	1,250,605		Volatility of<br><br>interest rate		0.51%~1.35%

(*) It is calculated by applying the Hull-White model method.

i-4) Sensitivity to changes in unobservable inputs

• For level 3 fair value measurement, changing one or more of the unobservable inputs used to reasonably possible alternative assumptions would have the following effect on profit (loss), and other comprehensive income (loss) as of December 31, 2024 and 2023 are as follows:

				December 31, 2024
Type of financial instrument				Profit (loss) for the year
							Favorable<br><br>change		Unfavorable<br><br>change
Financial assets measured at FVTPL(*)	Financial assets measured<br><br>at FVTPL		W	493		(524)

(*) Based on 10% of increase or decrease in volatility of interest rate, which are major unobservable inputs.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(e) Measurement for the fair value of financial instruments (continued)

i-4) Sensitivity to changes in unobservable inputs (continued)

				December 31, 2023
Type of financial instrument				Profit (loss) for the year
							Favorable<br><br>change		Unfavorable<br><br>change
Financial assets measured at FVTPL(*)	Financial assets measured<br><br>at FVTPL		W	763		(905)

(*) Based on 10% of increase or decrease in volatility of interest rate, which are major unobservable inputs.

ii) The financial instruments measured at amortized cost

ii-1) The methods of measuring the fair value of financial instruments measured at amortized cost are as follows:

Type		Measurement methods of fair value
Due from banks		The carrying amount and the fair value for cash are identical and the most of deposits are floating interest rate deposit or the next day deposit of a short-term instrument. For this reason, the carrying value approximates fair value.
Loans		The fair value of the loans is measured by discounting the expected cash flow at the market interest rate and credit risk of the borrower, etc.
Borrowings and debt securities issued		The fair value of borrowings and debt securities issued is based on the published price quotations in an active market. In case there is no data for an active market price, it is measured by discounting the contractual cash flow at the market interest rate that takes into account the residual risk.

ii-2) The carrying value and fair value of the financial instruments measured at amortized cost as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
		Carrying value		Fair value		Carrying value		Fair value
Assets:
Due from banks at amortized cost	W	151,143		151,143		22		22
Loans at amortized cost		3,837,298		3,814,558		4,051,004		3,961,446
Other financial assets		488,756		488,756		507,171		507,171
	W	4,477,197		4,454,457		4,558,197		4,468,639
Liabilities:
Borrowings	W	19,914		19,922		223,722		221,255
Debt securities issued		10,731,336		10,761,924		10,389,276		10,238,060
Other financial liabilities		418,727		418,727		521,197		521,197
	W	11,169,977		11,200,573		11,134,195		10,980,512

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(e) Measurement for the fair value of financial instruments (continued)

ii) The financial instruments measured at amortized cost (continued)

ii-3) The fair value hierarchy of financial assets and liabilities which are not measured at their fair values in the statements of financial position but disclosed with their fair values as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Level 1		Level 2		Level 3		Total
Assets:
Due from banks at amortized cost	W	151,140		3		-		151,143
Loans at amortized cost		-		-		3,814,558		3,814,558
Other financial assets		-		-		488,756		488,756
	W	151,140		3		4,303,314		4,454,457
Liabilities:
Borrowings	W	-		19,922		-		19,922
Debt securities issued		-		10,761,924		-		10,761,924
Other financial liabilities		-		-		418,727		418,727
	W	-		10,781,846		418,727		11,200,573
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Level 1		Level 2		Level 3		Total
Assets:
Due from banks at amortized cost	W	19		3		-		22
Loans at amortized cost		-		-		3,961,446		3,961,446
Other financial assets		-		-		507,171		507,171
	W	19		3		4,468,617		4,468,639
Liabilities:
Borrowings	W	-		221,255		-		221,255
Debt securities issued		-		10,238,060		-		10,238,060
Other financial liabilities		-		-		521,197		521,197
	W	-		10,459,315		521,197		10,980,512

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(e) Measurement for the fair value of financial instruments (continued)

ii) The financial instruments measured at amortized cost (continued)

ii-4) Information on valuation technique and inputs used as of December 31, 2024 and 2023 in measuring financial instruments not measured at fair value classified as level 2 or 3 is as follows:

		December 31, 2024
		Valuation technique		Fair value		Inputs
Assets:
Due from banks at amortized cost		-	W	3		-
Loans at amortized cost		DCF		3,814,558		Discount rate
Other financial assets		DCF		488,756		Discount rate
			W	4,303,317
Liabilities:
Borrowings		DCF	W	19,922		Discount rate
Debt securities issued		DCF		10,761,924		Discount rate
Other financial liabilities		DCF		418,727		Discount rate
			W	11,200,573
		December 31, 2023
---	---	---	---	---	---	---
		Valuation technique		Fair value		Inputs
Assets:
Due from banks at amortized cost		-	W	3		-
Loans at amortized cost		DCF		3,961,446		Discount rate
Other financial assets		DCF		507,171		Discount rate
			W	4,468,620
Liabilities:
Borrowings		DCF	W	221,255		Discount rate
Debt securities issued		DCF		10,238,060		Discount rate
Other financial liabilities		DCF		521,197		Discount rate
			W	10,980,512

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(f) Classification by categories of financial instruments

i) Financial assets and liabilities are measured at fair value or amortized cost. The carrying amounts of each category of financial assets and financial liabilities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Financial assets measured at fair value through profit or loss		Financial assets measured<br><br>at amortized cost		Financial liabilities measured<br><br>at amortized cost
Assets:
Cash and due from banks at amortized cost	W	-		151,143		-
Financial assets at fair value through profit or loss		2,552,750		-		-
Loans at amortized cost		-		3,837,298		-
Other financial assets at amortized cost		-		488,756		-
	W	2,552,750		4,477,197		-
Liabilities:
Borrowings	W	-		-		19,914
Debt securities issued		-		-		10,731,336
Other financial liabilities		-		-		418,727
	W	-		-		11,169,977
		December 31, 2023
---	---	---	---	---	---	---
		Financial assets measured at fair value through profit or loss		Financial assets measured<br><br>at amortized cost		Financial liabilities measured<br><br>at amortized cost
Assets:
Cash and due from banks at amortized cost	W	-		22		-
Financial assets at fair value through profit or loss		1,985,760		-		-
Loans at amortized cost		-		4,051,004		-
Other financial assets		-		507,171		-
	W	1,985,760		4,558,197		-
Liabilities:
Borrowings	W	-		-		223,722
Debt securities issued		-		-		10,389,276
Other financial liabilities		-		-		521,197
	W	-		-		11,134,195

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

4. Financial risk management (continued)

(f) Classification by categories of financial instruments (continued)

ii) Comprehensive income by categories of financial instruments for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Net profit or loss										Other comprehensive income
		Interest income<br><br>(expenses) (*)		Provision for (reversal of) credit loss allowance		Valuation<br><br>and disposal		Foreign currency		Total
Financial assets at FVTPL	W	-		-		89,244		49,811		139,055		-
Financial assets measured at amortized cost		98,770		215		-		221,280		320,265		-
Financial liabilities measured at amortized cost	W	(334,798)		-		-		(273,219)		(608,017)		-

(*) Calculated by using the effective interest method.

		December 31, 2023
		Net profit or loss										Other comprehensive income
		Interest income<br><br>(expenses) (*)		Provision for (reversal of) credit loss allowance		Valuation<br><br>and disposal		Foreign currency		Total
Financial assets at FVTPL	W	-		-		151,698		22,230		173,928		-
Financial assets measured at amortized cost		93,504		1,363		-		29,044		123,911		-
Financial liabilities measured at amortized cost	W	(286,642)		-		-		(23,749)		(310,391)		-

(*) Calculated by using the effective interest method.

(g) Capital risk management

Pursuant to Financial Holding Company Supervisory Regulation, the Company complies with the debt ratio calculated as ‘total liability divided by total equity subtracting regulatory reserve for credit loss’ and calculates the dual leverage ratio as 'total invested amount on subsidiaries divided by total equity subtracting regulatory reserve for credit loss', for capital risk management purposes.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

5. Significant estimates and judgments

The preparation of financial statements requires the Company to make estimates and assumptions concerning the future. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a significant risk of causing a material adjustment. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Income taxes

The Company has recognized current and deferred taxes that reflect tax consequences based on the best estimates in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. However, actual income taxes in the future may not be identical to the recognized deferred tax assets and liabilities, and this difference can affect current and deferred tax at the period when the final tax effect is determined.

(b) Fair value of financial instruments

The fair values of financial instruments which are not actively traded in the market are determined by using valuation techniques. The Company determines valuation techniques and assumptions based on significant market conditions at the end of each reporting period. Diverse valuation techniques are used to determine the fair value of financial instruments, from generic valuation techniques to internally developed valuation models that incorporate various types of assumptions and variables.

(c) Allowance for credit losses

The Company determines and recognizes allowances for losses on loans and other receivables measured at amortized cost. The accuracy of allowances and provisions for credit losses is determined by the assumptions used for collectively assessed allowances and provisions for groups of loans.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

6. Due from banks

(a) Due from banks as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Due from banks
Due from banks measured at amortized cost	W	151,206		22
Less: allowance		(63)		-
	W	151,143		22

(b) Restricted due from banks as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Margin deposit for current account	W	3		3

7. Financial assets at fair value through profit or loss

Financial instruments at fair value through profit or loss as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beneficiary certificates
Beneficiary certificates in Korean won	W	1,023,281		705,273
Beneficiary certificates in foreign currency		46,347		29,882
		1,069,628		735,155
Hybrid Bonds
Hybrid Bonds in Korean won		1,114,676		934,917
Hybrid Bonds in foreign currency		368,446		315,688
		1,483,122		1,250,605
	W	2,552,750		1,985,760

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Loans at amortized cost

(a) Loans at amortized cost as of December 31, 2024 and 2023 are as follows:

		December 31, 2024			December 31, 2023
Corporate loans	W	3,838,903			4,052,900
Less: allowance		(1,605)			(1,896)
	W	3,837,298			4,051,004

(b) Changes in loans at amortized cost and other assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Loans at amortized cost						Due from banks at amortized cost and other financial assets
		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		Total
Beginning balance	W	4,052,900		-		-		507,378		-		-		4,560,278
Transfer to 12-month expected credit loss		-		-		-		-		-		-		-
Transfer to life-time expected credit loss		-		-		-		-		-		-		-
Transfer to impaired financial asset		-		-		-		-		-		-		-
Origination		180,000		-		-		-		-		-		180,000
Collection		(615,000)		-		-		-		-		-		(615,000)
Others (*)		221,003		-		-		132,782		-		-		353,785
Ending balance	W	3,838,903		-		-		640,160		-		-		4,479,063

(*) Other changes are due to dividends receivables, consolidation tax receivables, accrued income, changes in foreign exchange rate, etc.

		December 31, 2023
		Loans at amortized cost						Due from banks at amortized cost and other financial assets
		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		Total
Beginning balance	W	4,012,304		-		-		905,675		-		-		4,917,979
Transfer to 12-month expected credit loss		-		-		-		-		-		-		-
Transfer to life-time expected credit loss		-		-		-		-		-		-		-
Transfer to impaired financial asset		-		-		-		-		-		-		-
Origination		415,000		-		-		-		-		-		415,000
Collection		(400,000)		-		-		-		-		-		(400,000)
Others (*)		25,596		-		-		(398,297)		-		-		(372,701)
Ending balance	W	4,052,900		-		-		507,378		-		-		4,560,278

(*) Other changes are due to dividends receivables, consolidation tax receivables, accrued income, changes in foreign exchange rate, etc.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

8. Loans at amortized cost (continued)

(c) Changes in allowances for loans at amortized cost and other assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Loans at amortized cost						Due from banks at amortized cost and other financial assets
		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		Total
Beginning allowance	W	1,896		-		-		185		-		-		2,081
Transfer to 12-month expected credit loss		-		-		-		-		-		-		-
Transfer to life-time expected credit loss		-		-		-		-		-		-		-
Transfer to impaired financial asset		-		-		-		-		-		-		-
Reversed		(291)		-		-		76		-		-		(215)
Ending allowance	W	1,605		-		-		261		-		-		1,866
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Loans at amortized cost						Due from banks at amortized cost and other financial assets
		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		12-month expected credit loss		Life-time expected credit loss		Impaired financial asset		Total
Beginning allowance	W	2,837		-		-		607		-		-		3,444
Transfer to 12-month expected credit loss		-		-		-		-		-		-		-
Transfer to life-time expected credit loss		-		-		-		-		-		-		-
Transfer to impaired financial asset		-		-		-		-		-		-		-
Reversed		(941)		-		-		(422)		-		-		(1,363)
Ending allowance	W	1,896		-		-		185		-		-		2,081

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

9. Property and equipment

(a) Property and equipment as of December 31, 2024 and 2023 are as follows:

		December 31, 2024						December 31, 2023
		Acquisition cost		Accumulated depreciation		Carrying<br><br>value		Acquisition<br><br>cost		Accumulated depreciation		Carrying<br><br>value
Furniture and fixtures	W	9,949		(6,932)		3,017		9,615		(6,034)		3,581
Other tangible assets		10,597		(7,860)		2,737		9,086		(6,898)		2,188
Right-of-use assets		5,843		(5,088)		755		4,667		(2,850)		1,817
	W	26,389		(19,880)		6,509		23,368		(15,782)		7,586

(b) Changes in property and equipment for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Furniture and fixtures		Others		Right-of-use assets		Total
Beginning balance	W	3,581		2,188		1,817		7,586
Acquisition		586		1,510		1,452		3,548
Disposal		(1)		-		(118)		(119)
Depreciation		(1,149)		(961)		(2,396)		(4,506)
Ending balance	W	3,017		2,737		755		6,509
		December 31, 2023
---	---	---	---	---	---	---	---	---
		Furniture and fixtures		Others		Right-of-use assets		Total
Beginning balance	W	3,013		1,858		949		5,820
Acquisition		1,546		1,020		3,559		6,125
Disposal		-		-		(467)		(467)
Depreciation		(978)		(690)		(2,224)		(3,892)
Ending balance	W	3,581		2,188		1,817		7,586

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

10. Intangible assets

(a) Intangible assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Acquisition cost		Accumulated<br><br>amortization		Carrying amount
Membership	W	3,020		-		3,020
Software		6,235		(5,894)		341
Development costs		3,785		(658)		3,127
	W	13,040		(6,552)		6,488
		December 31, 2023
---	---	---	---	---	---	---
		Acquisition cost		Accumulated<br><br>amortization		Carrying amount
Membership	W	5,352		-		5,352
Software		6,046		(5,818)		228
Development costs		2,268		(103)		2,165
	W	13,666		(5,921)		7,745

(b) Changes in intangible assets for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Beginning balance		Acquisition		Disposal		Amortization<br><br>(*)		Ending Balance
Membership		W		5,352		107		(2,439)		-		3,020
Software				228		189		-		(76)		341
Development costs				2,165		1,517		-		(555)		3,127
		W		7,745		1,813		(2,439)		(631)		6,488

(*) Amortization of intangible assets is classified as general administrative expenses.

				December 31, 2023
				Beginning balance		Acquisition		Disposal		Amortization<br><br>(*)		Ending Balance
Membership		W		5,352		-		-		-		5,352
Software				239		60		-		(71)		228
Development costs				-		2,268		-		(103)		2,165
		W		5,591		2,328		-		(174)		7,745

(*) Amortization of intangible assets is classified as general administrative expenses.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

11. Leases

(a) The details of the change in the right-of-use assets for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
				Real estate		Vehicle		Total
Beginning balance		W		1,160		657		1,817
Acquisitions				1,013		439		1,452
Disposals				-		(118)		(118)
Depreciation				(2,078)		(318)		(2,396)
Ending balance		W		95		660		755
				December 31, 2023
				Real estate		Vehicle		Total
Beginning balance		W		243		706		949
Acquisitions				2,858		701		3,559
Disposals				(80)		(388)		(468)
Depreciation				(1,861)		(362)		(2,223)
Ending balance		W		1,160		657		1,817

(b) The details of the maturity of the lease liabilities as the end of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		1 month<br><br>or less		1 month ~<br><br>3 months<br><br>or less		3 months ~<br><br>6 months<br><br>or less		6 months ~<br><br>1 year<br><br>or less		1 year ~<br><br>5 years<br><br>or less		More than 5 years		Total
Real estate	W	37		63		34		-		-		-		134
Vehicle		50		58		77		142		420		-		747
	W	87		121		111		142		420		-		881
		December 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		1 month<br><br>or less		1 month ~<br><br>3 months<br><br>or less		3 months ~<br><br>6 months<br><br>or less		6 months ~<br><br>1 year<br><br>or less		1 year ~<br><br>5 years<br><br>or less		More than 5 years		Total
Real estate	W	113		217		302		579		55		-		1,266
Vehicle		28		53		72		143		438		-		734
	W	141		270		374		722		493		-		2,000

(c) The exemptions from the application of lease standards for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Low value lease payments	W	50		60
Short-term lease payments (*)		407		703
Total	W	457		763

(*) Expenses with a lease period of less than 1 month are excluded.

(d) Cash outflows from leases for the years ended December 31, 2024 and 2023 are W 2,076 million and W 2,471 million, respectively.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

12. Investments in subsidiaries

Investments in subsidiaries as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
Investees		Ownership<br><br>percentage<br><br>(%)		Carrying value		Ownership<br><br>percentage<br><br>(%)		Carrying value
Shinhan Bank		100.0		13,617,579		100.0		13,617,579
Shinhan Card Co., Ltd		100.0		7,919,672		100.0		7,919,672
Shinhan Securities Co., Ltd		100.0		3,001,420		100.0		3,001,420
Shinhan Life Insurance Co., Ltd		100.0		4,204,533		100.0		4,204,533
Shinhan Capital Co., Ltd		100.0		558,921		100.0		558,921
Shinhan Asset Management Co., Ltd		100.0		326,206		100.0		326,206
Jeju Bank		75.3		179,643		75.3		179,643
Shinhan Savings Bank		100.0		157,065		100.0		157,065
Shinhan Asset Trust Co. Ltd(*1)(*2)		100.0		364,789		100.0		429,491
Shinhan DS		100.0		23,026		100.0		23,026
Shinhan Fund Partners Co., Ltd.		99.8		50,092		99.8		50,092
Shinhan REITs Management Co., Ltd		100.0		30,000		100.0		30,000
Shinhan AI Co., Ltd (*3)		-		-		100.0		34,734
Shinhan Venture Investment Co., Ltd.		100.0		75,840		100.0		75,840
Shinhan EZ General Insurance, Ltd		85.1		106,210		85.1		106,210
SHC Management Co., Ltd		100.0		8,655		100.0		8,655
			W	30,623,651			W	30,723,087

(*1) During the current period, signs of impairment were discovered, so the recoverable amount was re-evaluated, and the difference between the recoverable amount and the book value, W 165,659 million, was recognized as an impairment loss.

(*2) During the current period, the company participated in a common stock rights offering in the amount of W 100,000 million.

(*3) The difference between the carrying amount and the net fair value for the year was recognized as a disposal gain (loss) of W 1,930 million, and was liquidated as of December 31, 2024.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

13. Other assets

Other assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Guarantee deposits	W	13,402		12,853
Accounts receivable		447,733		467,660
Accrued income		27,819		26,843
Advance payments		-		24
Prepaid expenses		74		67
Sundry assets		12		12
Less: allowance		(198)		(185)
	W	488,842		507,274

14. Borrowings

Borrowings as of December 31, 202 and December 31, 2023 are as follows:

					December 31, 2024				December 31, 2023
	Lender		Period		Interest<br><br>rate (%)		Amount		Interest<br><br>rate (%)		Amount
Borrowings<br><br>in Korean won	Kiwoom Securities Co., Ltd.		2023.02.02<br><br>~2024.02.01		-	W	-		3.79	W	14,950
	Bookook Securities Co., Ltd		2023.10.26<br><br>~2024.02.26		-		-		4.51		29,789
	Kyobo Securities Co., Ltd.		2023.10.26<br><br>~2024.02.26		-		-		4.51		19,859
	Bookook Securities Co., Ltd		2023.10.30<br><br>~2024.04.30		-		-		4.61		29,542
	Kyobo Securities Co., Ltd.		2023.10.30<br><br>~2024.04.30		-		-		4.61		19,694
	DB Financial Investment Co.,LTD.		2023.12.11<br><br>~2024.04.11		-		-		4.01		9,888
			2024.02.01<br><br>~2025.01.30		3.71		9,969		-		-
	Kyobo Securities Co., Ltd		2024.10.11<br><br>~2025.02.26		3.54		9,945		-		-
	Korea Development Bank		2023.10.30<br><br>~2024.04.30		-		-		4.74		100,000
						W	19,914			W	223,722

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

15. Debt securities issued

Debt securities issued as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
		Interest<br><br>rate (%)		Amount		Interest<br><br>rate (%)		Amount
Debt securities issued in Korean won:
Debt securities issued		1.40 ~ 6.17	W	8,540,000		1.38 ~ 6.17	W	8,470,000
Discount				(6,551)				(6,713)
				8,533,449				8,463,287
Debt securities issued in foreign currency:
Debt securities issued		1.37 ~ 5.06		1,470,000		1.37 ~ 5.06		1,289,400
Subordinated debt securities issued		3.34		735,000		3.34		644,700
Discount				(7,113)				(8,111)
				2,197,887				1,925,989
			W	10,731,336			W	10,389,276

16. Net defined benefit liabilities (assets)

(a) Defined benefit obligations and plan assets

Defined benefit obligations and plan assets as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Present value of defined benefit obligations	W	23,895		19,728
Fair value of plan assets		(29,517)		(26,805)
Recognized assets for defined benefit obligations	W	(5,622)		(7,077)

(*) Profit or loss arising from defined benefit plans is included in general and administrative expenses.

(b) Changes in the present value of defined benefit obligation and plan assets for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Defined benefit<br><br>obligation		Plan assets		Net defined benefit liability
Beginning balance	W	19,728		(26,805)		(7,077)
Recognized in profit or loss (*)
Current service costs		1,768		-		1,768
Interest expense (income)		954		(1,308)		(354)
		2,722		(1,308)		1,414
Recognized in other comprehensive income:
Remeasurements loss:
- Actuarial losses arising from:
Demographics assumptions		(48)		-		(48)
Financial assumptions		1,537		-		1,537
Experience adjustment		1,654		-		1,654
- Return on plan assets
excluding interest income		-		478		478
		3,143		478		3,621
Others:
Benefits paid by the plan		(1,494)		1,219		(275)
Contributions paid into the plan		-		(3,101)		(3,101)
Succession		(204)		-		(204)
		(1,698)		(1,882)		(3,580)
Ending balance	W	23,895		(29,517)		(5,622)

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

16. Net defined benefit liabilities(assets) (continued)

(b) Changes in the present value of defined benefit obligation and plan assets for the years ended December 31, 2024 and 2023 are as follows (continued):

		December 31, 2023
		Defined benefit<br><br>obligation		Plan assets		Net defined benefit liability
Beginning balance	W	20,586		(22,332)		(1,746)
Recognized in profit or loss (*)
Current service costs		1,990		-		1,990
Interest expense (income)		1,144		(1,244)		(100)
		3,134		(1,244)		1,890
Recognized in other comprehensive income:
Remeasurements loss:
- Actuarial losses arising from:
Demographics assumptions		-		-		-
Financial assumptions		175		-		175
Experience adjustment		1,411		-		1,411
- Return on plan assets
excluding interest income		-		350		350
		1,586		350		1,936
Others:
Benefits paid by the plan		(1,527)		665		(862)
Contributions paid into the plan		-		(4,244)		(4,244)
Succession		(4,051)		-		(4,051)
		(5,578)		(3,579)		(9,157)
Ending balance	W	19,728		(26,805)		(7,077)

(*) Profit or loss arising from defined benefit plans is included in general and administrative expenses.

(c) The Company’s plan assets as of December 31, 2024 and 2023 are completely deposits.

(d) Actuarial assumptions as of December 31, 2024 and 2023 are as follows:

	December 31, 2024		December 31, 2023		Description
Discount rate	4.30%		5.00%		AA0 corporate bond yields
Future salary increasing rate	2.40%<br><br>+ Upgrade rate		2.24%<br><br>+ Upgrade rate		Average of past 5 years

(e) Sensitivity analysis

As of December 31, 2024 and 2023, reasonably possible changes in one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

		December 31, 2024				December 31, 2023
		The present value of defined benefit obligation				The present value of defined benefit obligation
		Increase		Decrease		Increase		Decrease
Discount rate (1%p movement)	W	(1,719)		1,927		(1,487)		1,675
Future salary increasing rate<br><br>(1%p movement)		1,946		(1,767)		1,707		(1,540)

(f) As of December 31, 2024 and 2023, the weighted-average duration of the defined benefit obligation are 7.99 years and 8.40 years, respectively.

(g) As of December 31, 2025, the estimated contribution is W 2,100 million.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

17. Other liabilities

Other liabilities as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Accounts payable	W	189,580		318,229
Accrued expenses		223,478		195,004
Income taxes payable		132,701		46,393
Dividends payable		4,826		6,043
Lease liabilities (*)		844		1,932
Taxes withheld		931		226
	W	552,360		567,827

(*) As of December 31, 2024, the Company accounts for the lease liabilities as other liabilities. For the year ended December 31, 2024, there is no expense of variable lease payments that is not included in the measurement of lease liabilities. For the years ended December 31, 2024 and 2023, interest expense on lease liabilities is W 63 million and W 79 million, respectively.

18. Equity

(a) Equity as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Capital stock (*1)
Common stock	W	2,695,586		2,695,586
Preferred stock		274,055		274,055
		2,969,641		2,969,641
Hybrid bonds		4,600,121		4,001,731
Capital surplus
Share premium		11,350,744		11,350,744
Capital adjustments		(296,024)		(148,464)
Accumulated other comprehensive loss		(9,307)		(6,642)
Retained earnings
Legal reserve (*2)		2,865,461		2,698,360
Regulatory reserve for loan losses		20,656		21,078
Other legal reserves		2,000		2,000
Unappropriated retained earnings		4,844,883		5,210,693
		7,733,000		7,932,131
	W	26,348,175		26,099,141

(*1) Due to the retirement of earned surplus reserve, the capital is different from the total face value of the issued stock.

(*2) Legal reserve is restricted for the dividend to stockholders by law or legislation. According to the article 53 of the Financial Holding Companies Act, the Company is required to appropriate a legal reserve in an amount equal to at least 10% of cash dividends for each accounting period until the reserve equals 100% of stated capital. The legal reserve may only be used to reduce a deficit or to transfer capital.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

18. Equity (continued)

(b) Capital

i) Capital as of December 31, 2024 and 2023 are as follows:

		December 31, 2024				December 31, 2023
Total number of shares to be issued		1,000,000,000				1,000,000,000
Type of share		Ordinary share		Preferred stock		Ordinary share		Preferred stock
The amount per share	W	5,000		-		5,000		-
Total number of shares issued		503,445,325		-		512,759,471		-
Capital Stock (*)		2,695,586		274,055		2,695,586		274,055

(*) Due to the retirement of earned surplus reserve, the capital is different from the total face value of the issued stock.

ii) Changes in the number of ordinary shares for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning	W	512,753,119		508,778,517
Increase		6,353		17,482,000
Decrease		(13,899,708)		(13,507,398)
Ending	W	498,859,764		512,753,119

iii) Changes in the number of preferred stocks for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning	W	-		17,482,000
Decrease (*)		-		(17,482,000)
Ending	W	-		-

(*) 17,482,000 convertible preferred shares issued on May 1, 2019 were converted to common shares on May 1, 2023 (conversion ratio of 1:1).

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

18. Equity (continued)

(c) Hybrid bonds

Hybrid bonds classified as other equity instruments as of December 31, 2024 and 2023 are as follows:

	Issue date		Maturity date				Interest rate (%)					December 31, 2024				December 31, 2023
Hybrid bonds in KRW	June 25, 2015		June 25, 2045				4.38		W			199,455				199,455
	September 15, 2017		Perpetual bond				4.25					89,783				89,783
	April 13, 2018		Perpetual bond				4.56					14,955				14,955
	June 28, 2019		Perpetual bond				3.27					-				199,476
	September 17, 2020		Perpetual bond				3.12					448,699				448,699
	March 16, 2021		Perpetual bond				2.94					429,009				429,009
	March 16, 2021		Perpetual bond				3.30					169,581				169,581
	January 25, 2022			Perpetual bond				3.90			560,438				560,438
	January 25, 2022			Perpetual bond				4.00			37,853				37,853
	August 26, 2022			Perpetual bond				4.93			343,026				343,026
	August 26, 2022			Perpetual bond				5.15			55,803				55,803
	January 30, 2023			Perpetual bond				5.14			398,831				398,831
	July 13, 2023			Perpetual bond				5.40			498,815				498,815
	January 31, 2024			Perpetual bond				4.49			398,833				-
	September 12, 2024			Perpetual bond				4.00			399,033				-
Hybrid bonds in USD	May 12, 2021		Perpetual bond				2.88					556,007				556,007
									W			4,600,121				4,001,731

(*) For the year ended December 31, 2024, the deduction for capital related to hybrid bond issued is W 2,134 million.

The Company can make early redemption for the above bonds, after 5 or 10 years from the issue date; and has the rights to extend the maturity under the same condition.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

18. Equity (continued)

(d) Capital adjustments

i ) Changes in accumulated capital adjustments for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	(148,464)		(46,114)
Disposal of retained earnings		102,667		317
Repayment of hybrid bonds		(524)		(102,667)
Acquisition of treasury stock		(700,300)		(486,919)
Disposal of treasury stock		297		-
Retirement of treasury stock		450,300		486,919
Ending balance	W	(296,024)		(148,464)

ii) Changes in treasury stocks for the years ended December 31, 2024 are as follows:

				December 31, 2024
		Beginning balance		Acquisition			Disposal	Retirement (*)		Ending balance
The number of shares		6,352		13,899,708			(6,353)	(9,314,146)		4,585,561
Book value	W	227		700,300			(227)	(450,300)		250,000

(*) The Company acquired treasury stocks for retirement during the current period and completed the profit cancellation of 3,366,257 shares and 5,947,889 shares on March 22, 2024 and November 1, 2024 respectively.

(e) Changes in accumulated other comprehensive loss for years ended the December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	(6,642)		(5,210)
Remeasurement of the defined benefit liabilities (assets)		(3,621)		(1,936)
Tax effect		956		504
Ending balance	W	(9,307)		(6,642)

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

18. Equity (continued)

(f) Regulatory reserve for loan losses

In accordance with Supervisory Regulations on Financial Holding Companies (the “Regulations”), the Company reserves the difference between allowance for credit losses under K-IFRS and that as required by the Regulations at the account of regulatory reserve for loan losses.

i) Changes in regulatory reserve for loan losses for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beginning balance	W	20,656		21,078
Planned reversal of regulatory reserve for loan losses		(194)		(422)
Ending balance	W	20,462		20,656

ii) Profit for the period and earnings per share after adjusted for regulatory reserve for loan losses for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Profit for the period	W	1,619,867		1,671,011
Provision for regulatory reserve for loan losses		194		422
Profit for the period adjusted for regulatory reserve	W	1,620,061		1,671,433
Basic and diluted earnings per share in won factoring in regulatory reserve (*)	W	2,851		2,854

(*) Dividends for hybrid bonds are deducted.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

18. Equity (continued)

(g) Appropriation of retained earnings

The appropriation of retained earnings for the years ended December 31, 2024 and 2023, is as follows:

			December 31, 2024		December 31, 2023
Unappropriated retained earnings:
Balance at beginning of year		W	4,672,650		5,033,475
Retirement for treasury stock			(450,402)		(486,999)
Dividend on hybrid bonds			(176,945)		(189,672)
Interim dividends			(820,287)		(817,122)
Profit for the year			1,619,867		1,671,011
			4,844,883		5,210,693
Transfer from voluntary reserves		W	194		422
			4,845,077		5,211,115
Appropriation of retained earnings:
Legal reserve			104,180		167,101
Dividends
Dividends on common stocks paid			267,755		268,697
Loss on repayments of hybrid bonds			524		102,667
			372,459		538,465
Unappropriated retained earnings<br><br>to be carried over to subsequent year		W	4,472,618		4,672,650

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

19. Dividends

(a) Details of dividends recognized as distributions to common stockholders for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Common Stock
Total number of shares issued and outstanding	W	503,445,325		512,759,471
Par value per share in won		5,000		5,000
Dividend per share in won (*3)		540		525
Dividends (*1), (*2)	W	267,755		268,697
Dividend rate per share (*3)	%	10.8		10.5
Record date (*4)		2025-02-21		2024-02-23

(*1) The current dividend (plan) is expected to be approved on March 26, 2025, and has not been recognized as a distribution to owners during the period.

(*2) The dividend applies to common shares excluding treasury shares, with 7,603,260 treasury shares acquired between the end of the reporting period and the dividend record date being excluded.

(*3) The amount excludes quarterly dividends. When including quarterly dividends, the dividend per share for the current and prior periods is \ 2,160 and \ 2,100, respectively, with a dividend rate per share of 43.2% and 42.0%, respectively.

(*4) The Articles of Incorporation were amended through a resolution of the Board of Directors at the regular general meeting of shareholders on March 23, 2023, to allow the determination of the dividend record date by the Board’s decision. The dividend record date for the annual dividend of 2024 is February 21, 2025.

(b) The interim dividends paid for the years ended December 31, 2024 and 2023 are as follows:

Dividend base date				Amount
On March 31, 2024(Q1)		Common stock (W 540 per share)	W	275,069
On June 30, 2024(Q2)		Common stock (W 540 per share)	W	273,358
On September 30, 2024(Q3)		Common stock (W 540 per share)	W	271,860
				820,287
Dividend base date				Amount
---	---	---	---	---
On March 31, 2023(Q1)		Common stock (W 525 per share)	W	265,179
		Convertible preferred stock (W 525 per share)		9,178
			W	274,357
On June 30, 2023(Q2)		Common stock (W 525 per share)	W	272,129
On September 30, 2023(Q3)		Common stock (W 525 per share)	W	270,636
				817,122

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

19. Dividends (continued)

(c) The details of dividends paid by the Company related to the preferred stock issued for the year ended December 31, 2023 are as follows:

		December 31, 2023
		Number of shares		Dividend per share<br><br>(in won)		Total dividend paid		Issue price per share<br><br>(in won)		Dividend rate per issue price (%)
Convertible preferred stock		17,482,000		525		9,178		42,900		1.22

(*) 17,482,000 convertible preferred shares that the Company issued on May 1, 2019 were converted to common shares on May 1, 2023 (conversion ratio of 1:1) and the dividends are paid before the conversion.

(d) Dividends for hybrid bonds for the years ended December 31, 2024 and 2023 are calculated as follows:

		December 31, 2024		December 31, 2023
Amount of hybrid bond	W	4,614,550		4,014,550
Interest rate		2.88% ~ 5.40%		2.88% ~ 5.40%
Dividend to hybrid bonds	W	176,945		189,672

20. Net interest expense

Net interest expense for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Interest income:
Cash and due from banks at amortized cost	W	3,122		204
Loans at amortized cost		94,766		92,788
Others		882		512
		98,770		93,504
Interest expense:
Borrowings in won		(3,443)		(2,927)
Debt securities issued in won		(331,292)		(283,636)
Others		(63)		(79)
		(334,798)		(286,642)
Net interest expense	W	(236,028)		(193,138)

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

21. Net fees and commission income

Net fees and commission income for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Fees and commission income:
Royalty	W	71,038		69,502
Others		15		15
		71,053		69,517
Fees and commission expense:
Others		(617)		(439)
Net fees and commission income	W	70,436		69,078

22. Dividend income

Dividend income for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Dividend from subsidiaries	W	1,971,428		1,736,958
Dividend to hybrid bonds		54,528		49,009
		2,025,956		1,785,967

23. Reversal of credit loss allowance

Reversal of credit loss allowance for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Reversal of credit losses allowance	W	215		1,363

24. Gain and loss on financial instruments at fair value through profit or loss

Gain and loss on financial instruments at FVTPL for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Beneficiary certificates
Gain on valuation of beneficiary certificates	W	1,127		557
Gain on sale of beneficiary certificates		49,817		51,896
		50,944		52,453
Hybrid Bonds
Gain (loss) on valuation of hybrid Bonds		38,300		99,245
	W	89,244		151,698

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

25. General and administrative expenses

General and administrative expenses for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Salaries:
Salary expenses and bonuses	W	45,979		45,697
Severance benefits		1,414		1,890
Rent		1,854		1,110
Lease		575		881
Entertainment		1,898		2,212
Depreciation		4,506		3,892
Amortization		631		174
Taxes and dues		802		902
Advertising		61,354		56,298
Others		27,819		22,797
	W	146,832		135,853

26. Share-based payments

(a) Performance shares granted as of December 31, 2024 are as follows:

		Expired		Not expired
Type		Cash-settled share-based payment
Performance conditions		Relative stock price linked (20.0%), management index (80.0%)
Exercising period		4 years from the commencement date of the year to which the grant date belongs
Estimated number of shares vested at December 31, 2024		964,742		2,211,101
Fair value per share in Korean won (*)		W33,122, W 37,387,<br><br>W 37,081, W 38,156, W 50,444 for the expiration of exercising period from 2020 to 2024		W 47,650

(*) Based on performance-based stock compensation, the reference stock price (the arithmetic average of the weighted average share price of transaction volume for the past two month, the previous one month, and the past one week) of four years after the commencement of the grant year is paid in cash, and the fair value of the reference stock to be paid in the future is assessed as the closing price of the settlement.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

26. Share-based payments (continued)

(b) Share-based compensation costs

Based on the share-based payment arrangements held by the Company, the share-based compensation costs for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Employees of
		Shinhan<br><br>Financial<br><br>Group		Subsidiaries		Total
Performance shares	W	4,950		41,686		46,636
		December 31, 2023
---	---	---	---	---	---	---
		Employees of
		Shinhan<br><br>Financial<br><br>Group		Subsidiaries		Total
Performance shares	W	5,123		36,751		41,874

(c) Share-based compensation payable

In accordance with the share-based compensation agreements by the Company, the share-based compensation payable as of December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Accrued expense
		Shinhan<br><br>Financial<br><br>Group		Subsidiaries (*)			Total
Performance shares	W	16,396		135,356			151,752

(*) The Company recognizes W 135,356 million to be preserved from the subsidiary as the amount to be paid to the executives and employees of the subsidiary.

		December 31, 2023
		Accrued expense
		Shinhan<br><br>Financial<br><br>Group		Subsidiaries (*)			Total
Performance shares	W	16,079		111,056			127,135

(*) The Company recognizes W 111,056 million to be preserved from the subsidiary as the amount to be paid to the executives and employees of the subsidiary.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

27. Non-operating income and expense

Non-operating income and expense for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Non-operating income:
Gain on termination of right-of-use assets	W	4		11
Others		1,023		3,263
		1,027		3,274
Non-operating expense:
Loss on termination of right-of-use assets		(82)		(15)
Donations and contributions		(2,404)		(3,172)
Impairment loss of investments in subsidiaries		(165,659)		(7,266)
Loss on disposal of investments in subsidiaries		(1,930)		-
Others		(63)		(44)
		(170,138)		(10,497)
	W	(169,111)		(7,223)

28. Operating income

Operating income for the years ended December 31, 2024 and 2023 are as follows.

		December 31, 2024		December 31, 2023
Dividend income	W	2,025,956		1,785,967
Fees and commission income		71,053		69,517
Interest income		98,770		93,504
Gains on financial instruments at FVTPL		89,244		151,698
Gains on foreign currency transaction		271,265		58,043
Reversal of credit losses		215		1,363
	W	2,556,503		2,160,092

29. Income taxes

• Income tax expense for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Current income tax expense	W	-		2
Temporary differences		10,929		27,900
Income tax expense recognized directly in equity		956		504
Income tax expense	W	11,885		28,406

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

29. Income taxes (continued)

(b) Income tax expensecalculated by applying statutory tax rates to the Company’s taxable income differs from the actual income tax expense in the separate statements of comprehensive income for the years ended December 31, 2024 and 2023 for the following reasons:

		December 31, 2024		December 31, 2023
Profit before income taxes	W	1,631,752		1,699,417
Income taxes at statutory tax rates		430,782		448,646
Adjustments:
Non-taxable income		(438,292)		(383,986)
Non-deductible expense		1,152		1,471
Changes in deferred tax due to changes in future tax rates		-		61
Others		18,243		(37,786)
Income tax expense	W	11,885		28,406
Effective income tax rate	%	0.73		1.67

(c) Deferred tax expenses by origination and reversal of deferred assets and liabilities and temporary differences for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Beginning<br><br>balance		Net income effect		Other comprehensive income effect		Ending<br><br>Balance (*)
Financial asset at FVTPL	W	10,848		(10,507)		-		341
Net gain on foreign currency conversion		(26,549)		784		-		(25,765)
Allowances		504		(77)		-		427
Defined benefit obligation		5,208		270		830		6,308
Plan assets		(6,840)		(1,078)		126		(7,792)
Accrued expenses		5,117		628		-		5,745
Lease assets		(480)		281		-		(199)
Lease liabilities		510		(287)		-		223
Others		2,093		(1,899)		-		194
	W	(9,589)		(11,885)		956		(20,518)

(*) The Company does not recognize deferred tax assets and liabilities associated with the Global Minimum Corporate Tax Act by applying the temporary exception to deferred tax in K-IFRS No. 1012.

		December 31, 2023
		Beginning<br><br>balance		Net income effect		Other comprehensive income effect		Ending<br><br>Balance (*)
Financial asset at FVTPL	W	37,297		(26,449)		-		10,848
Net gain on foreign currency conversion		(24,318)		(2,231)		-		(26,549)
Allowances		757		(253)		-		504
Defined benefit obligation		5,455		(660)		413		5,208
Plan assets		(5,918)		(1,013)		91		(6,840)
Accrued expenses		4,868		249		-		5,117
Lease assets		(252)		(228)		-		(480)
Lease liabilities		259		251		-		510
Others		163		1,930		-		2,093
	W	18,311		(28,404)		504		(9,589)

(*) The Company does not recognize deferred tax assets and liabilities associated with the Global Minimum Corporate Tax Act by applying the temporary exception to deferred tax in K-IFRS No. 1012.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

29. Income taxes (continued)

(d) The amount of deductible temporary differences that are not recognized as deferred tax assets as of December 31, 2024 and 2023 are as follows:

			December 31, 2024		December 31, 2023
Investment in subsidiary related(*)	Taxable temporary differences	W	(7,248,127)		(7,265,229)
	Deductible temporary differences		332,650		184,093
Other accumulated temporary differences			59		52

(*) Deferred tax assets were not recognized due to the company controls the timing of the disappearance of temporary differences, and temporary differences are unlikely to be extinguished in the foreseeable future.

(e) As of December 31, 2024, there are no tax loss and tax credits carry forwards that are not recognized as deferred tax assets.

(f) The Company set off a deferred tax asset against a deferred tax liability of the same taxable entity if, and only if, they relate to income taxes levied by the same taxation authority and the entity has a legally enforceable right to set off current tax assets against current tax liabilities.

(g) Deferred tax assets and liabilities presented on a gross basis prior to any offsetting as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Deferred tax assets	W	13,238		24,280
Deferred tax liabilities		(33,756)		(33,869)

(h) Under the Global Minimum Corporate Tax Act, effective from 2024, the Company is required to pay additional taxes on the difference between the effective tax rate and the minimum tax rate of 15% for each unit of jurisdiction in which each constituent company belongs. However, since most jurisdictions either qualify for the transitional relief provisions or already have an effective tax rate of 15% or higher, it is anticipated that no significant additional taxes will arise. As a result, the Company has not recognized any amount related to the Global Minimum Corporate Tax Act in its current period income tax expense. Additionally, the Company also applies the temporary exception to deferred tax in K-IFRS No. 1012, which does not recognize deferred tax assets and liabilities related to the Global Minimum Corporate Tax Act and does not disclose information related to deferred tax.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won, except per share data)

30. Earnings per share

(a) Basic and diluted earnings per share for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Net profit for the year	W	1,619,867		1,671,011
Less:
Dividends to hybrid bond		(176,945)		(189,672)
Net profit available for common stock		1,442,922		1,481,339
Weighted average number of common shares outstanding (*)		506,231,595		519,207,776
Basic and diluted earnings per share in won	W	2,850		2,853

(*) The number of common shares issued by the Company is 503,445,325 shares. The above weighted average number of outstanding common stocks is calculated by including treasury stocks that are acquired and retired during the current and previous periods.

(b) The calculation details of the weighted average number of ordinary shares are as follows:

		December 31, 2024				December 31, 2023
		Number of shares		Accumulated number of shares		Number of shares		Accumulated<br><br>number of shares
Number of common shares issued		503,445,325		186,347,761,912		512,759,471		187,756,015,279
Shares of convertible preferred stock		-		-		-		2,097,840,000
Shares of treasury stock		(4,585,561)		(1,066,997,991)		(6,352)		(343,017,080)
Average number of ordinary shares		498,859,764		185,280,763,921		512,753,119		189,510,838,199
Days				366 days				365 days
Weighted average number of ordinary shares				506,231,595				519,207,776

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

31. Commitments and contingencies

(a) Commitments

The Commitments with financial institutions for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024				December 31, 2023
	Financial institutions			Borrowing Limit		Balance after Execution		Borrowing Limit		Balance after Execution
Borrowing agreement<br><br>in Korean won	Korea Development Bank		W	100,000		-		100,000		100,000
	Kookmin Bank			200,000		-		200,000		-
	Hana Bank			200,000		-		200,000		-
			W	500,000		-		500,000		100,000

(b) Liquidation of subsidiary investment stocks

On December 29, 2023, the Company’s subsidiary, Shinhan AI, signed a contract to transfer major assets to its subsidiary Shinhan Bank. The liquidation process was completed on July 15, 2024, and the difference between the carrying amount and the net fair value of W 1,929 million was recognized as a disposal gain(loss). (Note12)

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

32. Statement of cash flows

(a) Cash and cash equivalents as of December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Due from financial institutions with a maturity less<br><br>than three months from date of acquisition	W	151,203		19

(b) Significant non-cash activities for the years ended December 31, 2024 and 2023 are as follows:

		December 31, 2024		December 31, 2023
Share-based payments granted to the employees of subsidiaries	W	24,299		19,587
Income tax receivable offset by income tax payable due to consolidated corporate income tax filing		307,767		349,309
Transaction for right-of-use assets		(948)		(3,095)

(c) Changes in liabilities arising from financing activities for the years ended December 31, 2024 and 2023 are as follows:

				December 31, 2024
		Borrowings				Debentures		Lease liabilities (*)		Total
Beginning balance	W	223,722				10,389,276		1,933		10,614,931
Changes from cash flows		(205,684)				66,934		(1,619)		(140,369)
Changes from non-cash flows:
Amortization of discount on debentures		1,876				5,199		63		7,138
Foreign currency difference		-				269,927		-		269,927
Other changes		-				-		466		466
Ending balance	W	19,914				10,731,336		843		10,752,093

(*) Cash outflows due to small lease fees and short-term lease fees not recognized as lease liabilities are W 50 million and W 407 million, respectively.

				December 31, 2023
		Borrowings				Debentures		Lease liabilities (*)		Total
Beginning balance	W	20,000				9,815,457		979		9,836,436
Changes from cash flows		201,713				543,547		(1,708)		743,552
Changes from non-cash flows:
Amortization of discount on debentures		2,009				4,732		79		6,820
Foreign currency difference		-				25,540		-		25,540
Other changes		-				-		2,583		2,583
Ending balance	W	223,722				10,389,276		1,933		10,614,931

(*) Cash outflows due to small lease fees and short-term lease fees not recognized as lease liabilities are W 60 million and W 706 million, respectively.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

33. Related party transactions

The Company defines subsidiaries, key managements, and their families as a range of the related parties in accordance with K-IFRS No.1024 and discloses the transaction amounts between the Company and the related parties and the balance of receivables and payables. For details of the subsidiaries, refer to 'Note 12'.

(a) Significant transactions with the related parties for the years ended December 31, 2024 and 2023 are as follows:

Related party		Account		December 31,<br><br>2024		December 31,<br><br>2023
Revenue:
Shinhan Bank		Interest income	W	424		512
〃		Fees and commission income		46,442		41,682
〃		Dividend income		1,196,396		1,157,105
		Reversal of credit losses		-		252
Shinhan Card Co., Ltd.		Interest income		52,528		53,518
〃		Fees and commission income		13,340		14,251
〃		Dividend income		342,306		286,705
〃		Reversal of credit losses		283		547
〃		Non-operating income		-		1
Shinhan Securities Co., Ltd		Interest income		21,186		20,041
〃		Fees and commission income		3,524		5,105
〃		Dividend income		51,144		110,306
		Non-operating income		-		1
〃		Reversal of credit losses		-		294
Shinhan Life Insurance Co., Ltd.		Fees and commission income		4,879		4,737
〃		Dividend income		315,343		162,257
〃		Reversal of credit losses		-		1
Shinhan Capital Co.,Ltd.		Interest income		13,184		14,274
〃		Fees and commission income		1,994		1,889
〃		Dividend income		84,655		54,121
〃		Reversal of credit losses		63		222
Jeju Bank		Fees and commission income		40		231
〃		Dividend income		2,420		2,420
Shinhan Asset Management Co., Ltd		Fees and commission income		164		389
〃		Dividend income		24,400		7,000
〃		Reversal of credit losses		-		1
Shinhan DS		Interest income		397		569
〃		Fees and commission income		21		23
〃		Reversal of credit losses		4		7
Shinhan Fund Partners		Fees and commission income		104		131
〃		Dividend income		6,083		6,054
Shinhan Savings Bank		Interest income		2,678		2,678
〃		Fees and commission income		332		355
〃		Reversal of credit losses		4		43

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

33. Related party transactions (continued)

(a) Significant transactions with the related parties for the years ended December 31, 2024 and 2023 are as follows (continued):

Related party		Account			December 31,<br><br>2024		December 31,<br><br>2023
Revenue:
Shinhan REITs Management Co., Ltd		Fees and commission income			75		84
Shinhan Asset Trust Co. Ltd		Interest income			2,894		-
〃		Fees and commission income			96		563
〃		Dividend income			3,210		-
Shinhan Venture Investment Co., Ltd.		Interest income			2,364		1,911
〃		Fees and commission income			41		78
		Reversal of credit losses			3		-
			W		2,193,021		1,950,358
Expenses:
Shinhan Bank		Interest expenses	W	25			34
〃		General and administrative expenses		2,098			1,414
〃		Provision for credit losses		27			-
Shinhan Card Co., Ltd.		Interest expenses		4			8
〃		General and administrative expenses		61			79
Shinhan Securities Co., Ltd		Interest expenses		161			155
〃		Fees and commission expenses (*1)		584			1,412
〃		General and administrative expenses		3			126
〃		Provision for credit losses		7			-
Shinhan Life Insurance Co., Ltd.		Interest expenses		875			873
〃		Provision for credit losses		2			-
Shinhan Asset Management Co., Ltd		Provision for credit losses		3			-
Shinhan DS		General and administrative expenses		2,016			1,875
Shinhan Fund Partners<br><br>Co., Ltd.		Provision for credit losses		1			-
Shinhan REITs Management Co., Ltd		Provision for credit losses		-			1
Shinhan Asset Trust Co. Ltd.		Provision for credit losses		39			4
Shinhan AI Co., Ltd. (*2)		General and administrative expenses		-			37
Shinhan EZ General Insurance Co., Ltd.		General and administrative expenses		79			-
			W	5,985			6,018

(*1) It consists of commissions paid for acquisitions of hybrid bonds and trading commissions paid for retirement of treasury stock, and it was directly deducted from the equity.

(*2) During the current period, Shinhan AI was liquidated, and the amount from the prior period had been accrued before the liquidation.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

33. Related party transactions (continued)

(b) Significant balances with the related parties as of December 31, 2024 and 2023 are as follows:

Creditor		Debtor		Account		December 31,<br><br>2024		December 31,<br><br>2023
Assets:
Shinhan Financial Group Co., Ltd.		Shinhan Bank		Cash and due from banks	W	12		22
〃		〃		Property and equipment		-		1,003
〃		〃		Other assets		270,791		184,059
〃		Shinhan Card Co., Ltd.		Financial assets at fair value through profit or loss (*1)		718,491		699,787
		〃		Loans		1,852,100		2,233,665
〃		〃		Reserve for loan losses		(774)		(1,045)
〃		〃		Property and equipment		101		162
〃		〃		Other assets		105,040		119,351
〃		Shinhan Securities Co., Ltd		Financial assets at fair value through profit or loss (*2)		368,446		315,688
〃		〃		Loans		862,890		756,878
〃		〃		Reserve for loan losses		(361)		(354)
〃		〃		Other assets		27,406		24,500
〃		Shinhan Life Insurance Co., Ltd.		Other assets		16,704		10,152
〃		Shinhan Capital Co.,Ltd.		Financial assets at fair value through profit or loss (*3)		245,460		235,130
〃		〃		Loans		804,000		837,880
〃		〃		Reserve for loan losses		(336)		(392)
〃		〃		Other assets		20,470		34,237
〃		Shinhan Asset Management Co., Ltd.		Other assets		15,400		7,305
〃		Jeju Bank		Other assets		3,421		3,059
〃		Shinhan DS		Loans		9,969		14,949
〃		〃		Reserve for loan losses		(4)		(7)
〃		〃		Property and equipment		235		402
〃		〃		Intangible assets		112		55
〃		〃		Other assets		3,296		4,690
〃		Shinhan Fund Partners<br><br>Co., Ltd.		Other assets		4,293		941

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

33. Related party transactions (continued)

• Significant balances with the related parties as of December 31, 2024 and 2023 are as follows (continued):

Creditor		Debtor		Account		December 31,<br><br>2024		December 31,<br><br>2023
Assets:
Shinhan Financial Group Co., Ltd.		Shinhan Savings Bank		Loans		150,000		150,000
〃		〃		Reserve for loan losses		(63)		(70)
〃		〃		Other assets		11,826		3,701
〃		Shinhan Asset Trust Co. Ltd.		Financial assets at fair value through profit or loss (*4)		150,725		-
〃		〃		Loans		100,000		-
〃		〃		Reserve for loan losses		(42)		-
〃		〃		Other assets		3,160		9,647
〃		Shinhan REITS management		Other assets		2,531		2,491
〃		Shinhan AI Co., Ltd.		Other assets		-		327
〃		Shinhan Venture Investment Co., Ltd.		Loans		59,944		59,528
〃		〃		Reserve for loan losses		(25)		(28)
〃		〃		Other assets		2,410		1,687
〃		Shinhan EZ General Insurance, Ltd		Other assets		167		89
					W	5,807,795		5,709,489
Liabilities:
Shinhan Bank.		Shinhan Financial Group<br><br>Co., Ltd.		Other liabilities	W	1,103		3,824
Shinhan Card Co., Ltd.		〃		Other liabilities		643		22,302
Shinhan Securities Co., Ltd		〃		Other liabilities		91,463		206,112
Shinhan Life<br><br>Insurance Co., Ltd.		〃		Debt security issued in won		30,000		30,000
〃		〃		Other liabilities		82,649		70,934
Shinhan Capital Co., Ltd.		〃		Other liabilities		14		18
Shinhan DS		〃		Other liabilities		43		22
Shinhan Savings Bank		〃		Other liabilities		-		1,337
Shinhan AI Co., Ltd. (*5)		〃		Other liabilities		-		199
					W	205,915		334,748

(*1) The amount represents the book value for the purchase of hybrid bonds, and includes gains of W 18,704 million and W 56,828 million on financial assets at fair value through profit or loss for the period ended December 31,2024 and for the year ended December 31, 2023, respectively.

(*2) The amount represents the book value for the purchase of hybrid bonds, and includes gains of W 8,541 million and W 25,406 million on financial assets at fair value through profit or loss for the period ended December 31,2024 and for the year ended December 31, 2023, respectively.

(*3) The amount represents the book value for the purchase of hybrid bonds, and includes gains of W 10,330 million and W 17,011 million on financial assets at fair value through profit or loss for the period ended December 31,2024 and for the year ended December 31, 2023, respectively.

(*4) The amount represents the book value for the purchase of hybrid bonds, and includes gains of W 725 million on financial assets at fair value through profit or loss for the period ended December 31, 2024.

(*5) During the current period, Shinhan AI was liquidated, and the amount as of December 31, 2023, represents the balance before the liquidation of Shinhan AI.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

33. Related party transactions (continued)

(c) Right-of-use assets and lease liabilities recognised through lease transactions with related parties as of December 31, 2024 and 2023 are as follows:

Related parties		December 31, 2024		December 31, 2023
Right-of-use assets
Shinhan Bank.	W	-		1,003
Shinhan Card Co., Ltd.		101		162
	W	101		1,165
Lease liabilities
Shinhan Bank.	W	-		967
Shinhan Card Co., Ltd.		109		171
	W	109		1,138

(d) Financing transaction

Major financing transactions with related parties for the years ended the December 31, 2024 and 2023 are as follows:

		December 31, 2024
		Beginning balance		Lending		Acquisition(*1)		Collection		Others (*2)		Ending balance
Shinhan Card Co., Ltd.	W	2,933,452		-		-		(460,000)		97,138		2,570,590
Shinhan Securities Co., Ltd.		1,072,565		-		-		-		158,770		1,231,335
Shinhan Capital Co., Ltd.		1,073,011		-		-		(70,000)		46,450		1,049,461
Shinhan Asset Trust Co. Ltd.		-		100,000		150,000		-		725		250,725
Shinhan Savings Bank		150,000		-		-		-		-		150,000
Shinhan DS		14,949		10,000		-		(15,000)		21		9,970
Shinhan Venture Investment<br><br>Co., Ltd.		59,528		70,000		-		(70,000)		416		59,944
	W	5,303,505		180,000		150,000		(615,000)		303,520		5,322,025

(*1) The purchase amount of hybrid bonds issued by subsidiaries.

(*2) Other transactions include financial asset assessment, foreign currency translation, etc.

		December 31, 2023
		Beginning balance		Lending		Acquisition(*1)		Collection		Others (*2)		Ending balance
Shinhan Card Co., Ltd.	W	2,567,898		250,000		300,000		(250,000)		65,554		2,933,452
Shinhan Securities Co., Ltd		1,029,211		-		-		-		43,354		1,072,565
Shinhan Capital Co., Ltd.		1,051,580		-		-		-		21,431		1,073,011
Shinhan Savings Bank		150,000		-		-		-		-		150,000
Shinhan DS		20,000		15,000		-		(20,000)		(51)		14,949
Shinhan Venture Investment<br><br>Co., Ltd.		40,000		150,000		-		(130,000)		(472)		59,528
	W	4,858,689		415,000		300,000		(400,000)		129,816		5,303,505

(*1) The purchase amount of hybrid bonds issued by subsidiaries includes W 90,000 million acquired from Shinhan Securities Co., Ltd.

(*2) Other transactions are the amount due to financial asset evaluation and foreign currency conversion.

SHINHAN FINANCIAL GROUP CO., LTD.

Notes to the Separate Financial Statements

December 31, 2024 and 2023

(In millions of won)

33. Related party transactions (continued)

(e) Related-party transactions

Major equity transactions with related parties for the years ended the December 31, 2024 and 2023 are as follows:

Related parties		December 31, 2024		December 31, 2023
Shinhan Asset Trust Co. Ltd.	W	100,000		-
Shinhan AI Co., Ltd. (*)		(32,804)		-
	W	67,196		-

(*) The amount received during the current period from the liquidation of Shinhan AI, a subsidiary.

(f) Management Compensation

Compensation for key management executives for the years ended December 31, 2024 and 2023 is as follows:

		December 31, 2024		December 31, 2023
Short-term employee benefits	W	4,676		6,560
Severance benefits		128		157
Share-based payment expenses (*)		3,068		4,040
	W	7,872		10,757

(*) Expenses recognized during the vesting period under the agreement on share-based payments.

(g) Shinhan Securities Co., Ltd., the subsidiary, acquired bonds of both W 231 billion and W 360 billion issued by the Company for the years ended December 31, 2024 and 2023, respectively.

(h) As of the December 31, 2024, the deposit of credit card use provided by Shinhan Card Co., Ltd., a subsidiary company, is W 4,000 million.

34. subsequent events

To enhance the shareholders’ value, the Company made a decision on the acquisition and retirement of treasury stock amounted to W 500 billion based on the resolution of the board of directors on February 6, 2025.

Independent Auditors’ Report on Internal Control over Financial Reporting

Based on a report originally issued in Korean

The Board of Directors and Stockholders

Shinhan Financial Group Co., Ltd.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting (“ICFR”) of Shinhan Financial Group Co., Ltd. (the “Company”) as of December 31, 2024 based on the criteria established in the Conceptual Framework for Designing and Operating ICFR (“ICFR Design and Operation Framework”) issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea (the “ICFR Committee”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on ICFR Design and Operation Framework.

We have also audited, in accordance with Korean Standards on Auditing (KSAs), the separate financial statements of the Company, which comprise the separate statement of financial position as of December 31, 2024, the separate statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of material accounting policies and other explanatory information, and our report dated March 4, 2025 expressed an unmodified opinion on those separate financial statements.

Basis for Opinion on Internal Control over Financial Reporting

We conducted our audit in accordance with KSAs. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Internal Control over Financial Reporting section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the internal control over financial reporting in the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Internal Control over Financial Reporting

The Company’s management is responsible for designing, operating and maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ‘ICFR Operating Status Report by CEO and IAM.’

Those charged with governance are responsible for overseeing the Company’s internal control over financial reporting.

Auditors’ Responsibilities for the Audit of the Internal Control over Financial Reporting

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with KSAs. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Korean International Financial Reporting Standards (“K-IFRS”). A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with K-IFRS, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The engagement partner on the audit resulting in this independent auditors’ report is Jung-Soo Bok.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 4, 2025

This report is effective as of March 4, 2025, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the internal control over financial reporting. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.