Edgar Filing: SHINHAN FINANCIAL GROUP CO LTD

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the Month of March 2012

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant’s name into English)

120, 2-Ga, Taepyung-Ro, Jung-Gu, Seoul 100-102, Korea

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .

Summary of FY2011 Business Report

On March 30, 2012, Shinhan Financial Group (“SFG”) filed its FY2011 Business Report (the “Business Report”) with the Financial Supervisory Service of the Republic of Korea (“Korea”) pursuant to the Financial Investment Services and Capital Market Act of Korea. This is the summary of the Business Report translated into English. Non-material or previously disclosed information are omitted or abridged.

The financial information in this report has been prepared in accordance with International Financial Reporting Standards.

Table of Contents


1.	Introduction of the Group	3
2.	Business Results	6
3.	Independent Auditor	18
4.	Directors, Executive Officers and Employees	19
5.	Major Shareholder and Market Price Information of Our Common Shares and ADRs	21
6.	Related Party Transactions	22

Exhibit 99-1

Independent Accountant’s Audit Report (Separate Financial Statements) of Shinhan Financial Group as of December 31, 2011

Exhibit 99-2

Independent Accountant’s Audit Report (Consolidated Financial Statements) of Shinhan Financial Group as of December 31, 2011

1. Introduction of the Group

Company History in 2009 through 2011

•

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

•

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

•

Sep. 2009 : SBJ became an indirect subsidiary of SFG

•

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

•

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

•

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

•

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

•

June 2010 : CHB Valuemeet 2001 First SPC was disaffiliated from SFG

•

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

•

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

•

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

•

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

•

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

•

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

•

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

Principal Subsidiaries under Korean Law (as of December 31, 2011)

Direct Subsidiaries


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

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

2)	On November 2, 2011, Shinhan Private Equity renamed as “Shinhan Private Equity Investment Management” upon acquisition of Non-discretionary investment advisory license.

3)	On December 28, 2011, Shinhan Savings Bank became a direct subsidiary upon obtaining a savings bank license.

Indirect subsidiaries held through direct subsidiaries (as of December 31, 2011)


Direct Subsidiaries	Indirect Subsidiaries	Ownership by the Parent
Shinhan Bank	Shinhan Asia Limited		100.0	%
	Shinhan Bank America		100.0	%
	Shinhan Bank Europe		100.0	%
	Shinhan Khmer Bank Limited		90.0	%
	Shinhan Bank Kazakhstan		100.0	%
	Shinhan Bank China Limited		100.0	%
	Shinhan AITAS		99.8	%
	Shinhan Bank Canada		100.0	%
	Shinhan Bank Japan		100.0	%
	Shinhan Vietnam Bank ²⁾		100.0	%

Shinhan Card	Shinhan-KT Mobile Card		50.0	%

Shinhan Investment Corp.	Shinhan Investment Corporation Europe Ltd.		100.0	%
	Shinhan Investment Corporation USA Inc.		100.0	%
	Shinhan Investment Corporation Asia Ltd.		100.0	%
	Shinhan Maritime Private Equity Fund I		7.1	%
	KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp ³⁾		8.5	%

Shinhan Capital	PETRA PEF		23.8	%

Shinhan BNP Paribas Asset Management	Shinhan BNP Paribas Asset Management (Hong Kong) Limited		100.0	%

Shinhan Private Equity Investment Management ¹⁾	Shinhan NPS Private Equity Fund 1st		5.0	% ⁴⁾
	Shinhan Private Equity Fund II		2.2	% ⁵⁾

1)	On November 2, 2011, Shinhan Private Equity renamed as “Shinhan Private Equity Investment Management” upon acquisition of Non-discretionary investment advisory license.

2)	On November 28, 2011, upon 100% acquisition of Shinhan Vina Bank, Shinhan Bank Vietnam was

merged with Shinhan Vina Bank.

3)	Shinhan Capital currently owns 6.5% of KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp.

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

5)	Shinhan Financial Group and its subsidiaries currently own 32.6% of Shinhan Private Equity Fund II.

Number of Shares (as of December 31, 2011)


Types of Shares	Number of Shares
Common Shares		474,199,587
Redeemable Preferred Shares 1)		40,090,000
Redeemable Convertible Preferred Shares 1)		14,721,000

Total		529,010,587

1)	Upon the resolution of Board of Directors on December 15, 2011,Shinhan Financial Group redeemed Series 10 redeemable preferred shares (28,990,000 shares) and Series 11 redeemable convertible preferred shares (14,721,000) on January 25, 2012.

2. Business Results

Operation Results


	(KRW billion)
	2011 (Jan. 1 ~ Dec. 31)		2010 (Jan. 1 ~ Dec. 31)
Operating income		4,134.8		3,414.5
Equity in income(loss) of associates		57.8		15.3
Earnings before income tax		4,192.6		3,429.8
Income taxes		919.9		570.4

Consolidated net income		3,272.6		2,859.4
Net income in majority interest		3,100.0		2,684.6
Net income in minority interest		172.6		174.8

F	Some of the totals may not sum due to rounding

Dividend Payout

•	The Annual General Meeting of Shinhan Financial Group, held on March 29, 2012, approved cash dividend payment for the fiscal year of 2011 as follows:

Total Dividend Amount: KRW 629,507,710,945

Dividend Amount for Common Stocks: KRW 355,649,690,250

Dividend Amount for Preferred Stocks: KRW 273,858,020,695

Source and Use of Funds

Source of Funds


		2011								2010
		Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31
Consolidated Basis (KRW billion, %)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)
Source	Deposits		1,562,805		55.28		4,181.0		2.68		1,496,533		56.11		3,935.6		2.63
	Borrowings		140,374		4.97		259.2		1.85		124,034		4.65		250.4		2.02
	Debentures		400,172		14.16		1,942.9		4.86		403,563		15.13		2,041.2		5.06
	Other Liabilities		441,746		15.63		—		—		384,462		14.41		—		—
	Total Liabilities		2,545,097		90.03		—		—		2,408,592		90.30		—		—
	Stockholder’s Equity		281,846		9.97		—		—		258,724		9.70		—		—
	Total Liabilities & SE		2,826,943		100.00		—		—		2,667,316		100.00		—		—

Use	Currency & Due from Banks		14,396.1		5.09		248.6		1.73		14,457.1		5.42		168.5		1.17
	Loans		186,828.2		66.09		11,265.3		6.03		174,360.4		65.37		10,561.5		6.06
	Loans in KRW		143,097.0		50.62		8,281.2		5.79		135,645.6		50.85		7,632.4		5.63
	Loans in Foreign Currency		9,510.8		3.36		379.1		3.99		8,940.8		3.35		377.3		4.22
	Credit Card Accounts		17,740.2		6.28		1,887.5		10.64		16,278.4		6.10		1,794.8		11.03
	Others		16,480.2		5.83		717.5		4.35		13,495.8		5.06		756.9		5.61
	AFS Financial Assets		25,588.5		9.05		1,025.9		4.01		22,045.7		8.27		953.6		4.33
	HTM Financial Assets		12,307.7		4.35		642.9		5.22		12,899.1		4.84		687.4		5.33
	Other Assets		43,573.8		15.41		—		—		42,969.3		16.11		—		—
	Total Assets		282,694.3		100.00		—		—		266,731.6		100.00		—		—

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

Other Financial Information

1) Capital Adequacy


*Consolidated BIS Ratio (Shinhan Financial Group)*


	(KRW billion)
	Dec. 31, 2011			Dec. 31, 2010
Aggregate Amount of quity Capital (A)		22,315.4			23.369.7
Risk-Weighted Assets (B)		195,579.4			188,785.7
BIS Ratio (A/B) ¹⁾		11.41	%		12.38	%

1)	In accordance with the amendments in the Financial Holding Company Guidelines of the Financial Service Commission (“FSC”), the Group BIS Ratio under BASEL I. is used as an index for measuring capital adequacy.

2)	BIS ratio for Dec. 31, 2010 based on Korean GAAP is 12.77%


*Capital Adequacy Ratios (Subsidiaries)*


		(%)
Subsidiary	Capital Adequacy Ratio	Dec. 31, 2011		Dec. 31, 2010
Shinhan Bank ¹⁾	BIS Capital Adequacy Ratio		15.26		15.47
Jeju Bank ¹⁾	BIS Capital Adequacy Ratio		13.27		13.40
Shinhan Card ¹⁾	Adjusted Equity Capital Ratio		24.84		25.18
Shinhan Investment Corp. ²⁾	Net Capital Ratio		700.78		658.31
Shinhan Life Insurance ²⁾	Solvency Margin Ratio		324.02		397.93
Shinhan BNPP AM ²⁾	Net Capital Ratio		599.73		708.31
Shinhan Capital²⁾	Adjusted Equity Capital Ratio		14.90		14.23

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

•	Basel II FIRB Approach was applied in calculating Shinhan Bank’s BIS Capital Adequacy Ratios

•	Basel II TSA Approach was applied in calculating Jeju Bank’s BIS Capital Adequacy Ratios

•

The Adjusted Equity Capital Ratio represents the ratio of total adjusted shareholder’s equity to total adjusted assets and is computed in accordance with the guidelines issued by FSC. Under these guidelines, Shinhan Card and Shinhan Capital are required to maintain a minimum adjusted equity capital ratio of 8%.

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

•	Under the guidelines issued by the FSC, Shinhan Life Insurance is required to maintain a minimum solvency margin ratio of 100%.

1)	Capital adequacy ratios for Dec. 31, 2010 based on K-GAAP: Shinhan Bank: 15.93%, Jeju Bank: 14.18%, Shinhan Card: 24.99%

2)	Capital adequacy ratios for Dec. 31, 2010 are based on K-GAAP

1) Liquidity Ratios

Won Liquidity Ratio


	(KRW billion, %)
Company	FY2011						FY2010
Company	Won Assets		Won Liabilities		Won Liquidity Ratio		Won Assets		Won Liabilities		Won Liquidity Ratio
Shinhan Financial Group		4,226		3,911		108.0		973		246		395.3
Shinhan Bank		56,610		46,635		121.4		54,646		45,787		119.3
Shinhan Card		15,417		3,418		451.1		13,161		3,450		381.5
Shinhan Investment Corp.		6,161		5,037		122.3		6,616		5,294		125.0
Shinhan Life Insurance		844		342		247.0		517		255		203.1
Shinhan Capital		519		148		350.8		759		295		257.2
Jeju Bank		982		686		143.1		899		619		145.3

1)	Shinhan Financial Group, Shinhan Bank, Jeju Bank: Due within 1 month, Other Subsidiaries: Due within 3 months

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

Foreign Currency Liquidity Ratio


	(KRW billion, %)
Company	FY2011						FY2010
Company	Foreign Currency Assets		Foreign Currency Liabilities		Foreign Currency Liquidity Ratio		Foreign Currency Assets		Foreign Currency Liabilities		Foreign Currency Liquidity Ratio
Shinhan Financial Group		—		—		—		—		—		—
Shinhan Bank		25,888		22,254		116.3		24,239		23,093		105.0
Shinhan Card		—		—				—		—
Shinhan Investment Corp.		23		24		99.0		12		10		111.5
Shinhan Life Insurance		—		—				—		—
Shinhan Capital		52		22		235.7		334		285		117.0
Jeju Bank		15		9		164.3		13		11		123.8

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

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

3) Asset Quality

Consolidated Basis


	(KRW billion, %)
	Dec. 31, 2011		Dec. 31, 2010		Changes
Total Loans		201,245.9		184,676.3		16,569.6
Substandard & Below		2,587.1		2,736.8		(149.7	)
Substandard & Below Ratio		1.29%		1.48%		(0.19%p	)
Non-Performing Loans		1,903.5		1,977.7		(74.3	)
NPL Ratio		0.95%		1.07%		(0.12%p	)
NPL Coverage Ratio		162.39		132.8		29.6%p
Loan Loss Allowance ¹⁾		4,201.2		3,634.5		566.7
Substandard & Below		2,587.1		2,736.8		(149.7	)

1)	Including reserve for credit losses

Separate Basis


	(KRW billion, %)
	Dec. 31, 2011						Dec. 31, 2010
	Substandard & Below Ratio		NPL Ratio		NPL Coverage Ratio ¹⁾		Substandard & Below Ratio		NPL Ratio		NPL Coverage Ratio ¹⁾
Shinhan Financial Group		—		—		—		—		—		—
Shinhan Bank		1.09		0.82		166.11		1.31		0.91		133.10
Shinhan Card		1.69		1.26		236.08		1.90		1.44		182.65
Shinhan Investment Corp.		16.97		16.92		71.46		12.29		12.29		82.41
Shinhan Life Insurance		0.45		0.23		280.64		0.62		1.48		226.89
Shinhan Capital		2.79		1.31		82.85		2.38		1.86		80.44
Jeju Bank		1.62		1.03		93.73		1.57		1.28		113.74

1)	Including reserve for credit losses

4) Write-Offs & Provision for Credit Losses

<Consolidated Basis>

Allowance for Loan Losses


	(KRW billion)
	FY2011		FY2010		Changes
Allowance for loan losses		2,729		2,993		(264	)
Allowance for acceptances and guarantee		86		171		(85	)
Allowance for unused loan commitments		445		463		(18	)
Other allowance		339		226		113

Total		3,599		3,853		(254	)

Write-Offs by Loan Types


	(KRW billion)
	FY2011		FY2010		Changes
Household Loans		70.5		86.4		(15.9	)
Card Receivables		447.0		428.1		18.9
Corporate Loans and Others		864.6		770.2		94.4

Total		1,382.1		1,284.7		97.4

NPL Sales by Loan Types


	(KRW billion)
	FY2011		FY2010		Changes
Household Loans		34.8		89.0		(54.2	)
Card Receivables		0.1		0.0		0.1
Corporate Loans and Others		641.0		493.8		147.2

Total		675.9		582.8		93.1

<Shinhan Bank>

Allowance for Loan Losses


	(KRW billion)
	FY2011		FY2010		Changes
Allowance for loan losses		1,580.9		1,803.8		(222.9	)
Allowance for acceptances and guarantee		109.5		208.7		(99.3	)
Allowance for unused loan commitments		85.2		85.8		(0.6	)
Other allowance		256.2		155.4		100.9

Total		2,031.9		2,253.8		(221.9	)

Write-Offs by Loan Types


	(KRW billion)
	FY2011		FY2010		Changes
Household Loans		63.9		78.1		(14.2	)
Card Receivables		—		—		0.0
Corporate Loans and Others		747.9		695.0		52.9

Total		811.8		773.1		38.7

NPL Sales by Loan Types


	(KRW billion)
	FY2011		FY2010		Changes
Household Loans		79.1		86.6		(7.5	)
Card Receivables		—		—		0
Corporate Loans and Others		608.1		458.3		149.8

Total		687.2		544.9		142.3

<Shinhan Card>

Allowance for Loan Losses


	(KRW billion)
	FY2011		FY2010		Changes
Allowance for loan losses		706.2		703.8		2.4
Allowance for acceptances and guarantee		0.0		0.0		0.0
Allowance for unused loan commitments		345.3		367.5		(22.2	)
Other allowance		50.6		42.5		8.1

Total		1,102.1		1,113.8		(11.7	)

Write-Offs by Loan Types


	(KRW billion)
	FY2011		FY2010		Changes
Household Loans		—		—		—
Card Receivables		446.5		427.4		19.1
Corporate Loans and Others		5.0		9.4		(4.4	)

Total		451.5		436.8		14.7

NPL Sales by Loan Types

•

Not Applicable

4) Debt to Equity Ratios

Shinhan Financial Group


	(KRW billion)
Separate Basis	Dec. 31, 2011 ¹⁾			Dec. 31, 2010
Debt		11,413.4			6,907.6
Equity		19,430.8			20,753.0
Debt to Equity Ratio		58.74	%		33.29	%

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

Twenty Largest Exposures by Borrower


	(KRW billion)
As of Dec. 31, 2011 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Ministry of Strategy & Finance		0		0		8,029		0		0		8,029
Bank of Korea		780		0		4,836		0		0		5,616
Korea Deposit Insurance Corporation		1,982		0		2,067		0		0		4,049
Industrial Bank of Korea		537		88		2,906		0		0		3,530
Hyundai Heavy Industries Co., Ltd.		2		176		365		2,526		0		3,069
Korea Development Bank		17		0		2,257		0		0		2,274
Korea Land & Housing Corporation		0		0		2,059		0		0		2,059
Korea Finance Corporation		0		0		1,838		0		0		1,838
Hana Bank		13		15		1,393		0		0		1,421
Samsung Heavy Industries Co., LTd.		0		0		0		1,351		0		1,352
Hyundai Samho Heavy Industries Co., Ltd.		0		27		10		1,200		0		1,237
Woori Bank		59		88		1,036		6		0		1,188
Songdo Cosmopolitan City Development Inc.		975		0		211		0		0		1,186
Kookmin Bank		79		53		973		3		0		1,108
SH Corporation		190		0		896		0		0		1,086
National Agricultural Cooperative Federation		58		3		937		3		0		1,000
POSCO		11		37		899		45		0		992
Samsung Electronics		0		956		12		0		0		968
Export-Import Bank of Korea		0		0		892		0		0		892
KEPCO		2		0		864		9		0		875

Total		4,704		1,443		32,479		5,144		0		43,769

F	Some of the totals may not sum due to rounding

Exposure to Main Debtor Groups


	(KRW billion)
As of Dec. 31, 2011 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Hyundai Heavy Industries		102		257		429		4,286		0		5,074
Samsung		215		1,247		849		1,900		0		4,212
Hyundai Motors		1,216		1,342		680		457		0		3,695
SK		497		462		644		1,088		0		2,691
LG		1,441		328		239		154		0		2,162
POSCO		236		221		950		346		6		1,760
Lotte		556		97		500		180		1		1,334
GS		345		256		229		467		0		1,297
LS		256		327		112		271		0		968
Hanwha		379		197		81		109		0		767

Total		5,245		4,735		4,713		9,258		8		23,959

F	Some of the totals may not sum due to rounding

Loan Concentration by Industry


	(KRW billion)
As of Dec. 31, 2011 Consolidated basis	Total Exposures
As of Dec. 31, 2011 Consolidated basis	Amount		Weight (%)
Finance and Insurance		49,710		19.35	%
Manufacturing		34,849		13.57	%
Retail and wholesale		12,044		4.69	%
Real Estate, leasing and service		19,147		7.45	%
Construction		5,069		1.97	%
Hotel and leisure		3,569		1.39	%
Others		39,350		15.32	%
Consumers		93,154		36.26	%

Total		256,892		100.00	%

*	Including deposits, loans, and securities

Top Twenty Non-Performing Loans


		(KRW billion)
Borrower	Industry	Gross Principal Outstanding		Allowance for Loan Losses
A	Real estate, leasing and service		130		13
B	Construction		53		14
C	Construction		48		38
D	Real estate, leasing and service		47		14
E	Manufacturing		47		21
F	Construction		44		25
G	Construction		39		37
H	Finance and insurance		36		0
I	Real estate, leasing and service		35		2
J	Manufacturing		32		35
K	Construction		30		30
L	Real estate, leasing and service		30		20
M	Manufacturing		30		0
N	Retail and wholesale		27		14
O	Manufacturing		26		8
P	Manufacturing		25		25
Q	Manufacturing		25		0
R	Manufacturing		23		2
S	Real estate, leasing and service		23		9
T	Real estate, leasing and service		23		1

Total			770		309

1)	Consolidated basis as of Dec. 31, 2011

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

F	Some of the totals may not sum due to rounding

3. Independent Auditor

Audit Opinion for the last 3 years

FY 2011

FY 2010

FY 2009

Audit Opinion

Unqualified

Compensation to the Independent Auditor for Audit and Review Services

The following is a description of the fees for audit and review services performed by our independent auditor for the last three years in connection with our financial statements preparation.


Year	Auditor	Payment (KRW mil.)	Details	Working hours
2011	KPMG Samjong Accounting Corp.	487	Review/Audit of Financial Statements		9,016 hours

2010	KPMG Samjong Accounting Corp.	366	Review/Audit of Financial Statements		4,650 hours

2009	KPMG Samjong Accounting Corp.	355	Review/Audit of Financial Statements		4,595 hours

4. Directors, Executive Officers and Employees

Directors and Executive Officers

1) Executive Directors

Name

Month and Year

of Birth

Position

Service Term

Dong Woo Han

Nov. 1948

Chairman of Shinhan Financial Group Board Steering Committee Chair Corporate Governance & CEO Recommendation Committee Chair

3 years starting from March 23, 2011

2) Non-Executive Directors

Currently, 11 non-executive directors are in office, 10 of which outside directors who are nominated by our Outside Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting on March 29, 2012.

Our non-executive directors are as follows:


Name	Month and Year of Birth	Outside Director	Sub-Committees	Service Term
Jin Won Suh	April 1951	X	—	4 years starting from March 23, 2011

Taeeun Kwon	January 1941	O	Audit Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 23, 2011

Kee Young Kim	October 1937	O	Risk Management Committee member Compensation Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 23, 2011

Seok Won Kim	April 1947	O	Audit Committee member Compensation Committee member	2 years starting from March 23, 2011

Hoon Namkoong	June 1947	O	Chairman of Board of Directors Board Steering Committee member Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 23, 2011

Jaekun Yoo	August 1941	O	Corporate & CEO Recommendation Committee member	2 years starting from March 23, 2011

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

Ke Sop Yun	May 1945	O	Audit Committee Chair Board Steering Committee member	4 years starting from March 17, 2009

Jung Il Lee	August 1952	O	Board Steering Committee member	2 years starting from March 23, 2011

Haruki Hirakawa	November 1964	O	Compensation Committee member	2 years starting from March 23, 2011

Philippe Aguignier	September 1957	O	Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 24, 2010

3) Executive Officers

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


Name	Month and Year of Birth	Position	In charge of
Buhmsoo Choi	Aug. 1956	Deputy President	• Strategic Planning Team • Global Business Strategy Team • Shinhan FSB Research Institute

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

Se Il Oh	Sep. 1957	Deputy President	• Corporate & Investment Banking Planning Office

Jae-Gwang Soh	Aug. 1961	Executive Vice-President	• Synergy Management Team • Information & Technology Planning Team • Audit Team

Jung Kee Min	Mar. 1959	Executive Vice-President & Chief Financial Officer	• Finance Management Team • Investor Relations Team • Business Management Team

Dong Hwan Lee	Sept. 1959	Executive Vice-President	• Public Relations Team • CSR & Culture Management Team • General Affairs Team

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

Woo Gyun Park	Mar. 1959	Managing Director	• Compliance Team

Stock Options


	(as of Feb. 29, 2012)
	No. of Granted Options (A)		No. of Exercised Options (B)		No. of Cancelled Options (C)		No. of Exercisable Options (D = A – B – C)		Exercise Price (KRW)
Granted in 2005		2,620,331		1,819,332		251,300		549,699		28,006
Granted in 2006		3,206,173		698,967		480,300		2,026,906		38,829
Granted in 2007		1,231,169		0		205,313		1,025,856		54,560
Granted in 2008		805,174		0		185,396		619,778		49,053

Total		7,862,847		2,518,299		1,122,309		4,222,239		—

Note	1) The weighted-average exercise price of outstanding exercisable options as of Feb 29, 2012 is KRW 42,743.

2) The closing price of our common stock was KRW 43,300 on Feb. 29, 2012.

Employees

(As of Dec. 31, 2011)

Gender

Number of
Employees

Average length of Service

Total Salaries and wages
paid in FY 2011
(KRW million)

Average Payment
per person
(KRW million)

Male

131

2 yrs 5 mths

13,946

107

Female

3 yrs 3 mths

1,503

Total

158

2 yrs 6 mths

15,449

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

Major Shareholders¹⁾ of Shinhan Financial Group as of Dec. 31, 2011


Name	No. of Common Shares owned		Ownership%
National Pension Service		34,829,793		7.34	%
BNP Paribas Group		30,106,276		6.35	%

1)	Shareholders who own beneficial ownership of 5% or more.


*Share ownership of Employee Stock Ownership Association*

Beginning Balance

(Jan. 1, 2011)

Increase

Decrease

Ending Balance
(Dec. 31, 2011)

Ownership%
(Dec. 31, 2011)

17,005,029

2,592,940

2,623,724

16,974,245

3.58

Common Share Traded on the Korea Exchange


		(KRW, number of shares)
		July 2011		Aug. 2011		Sep. 2011		Oct. 2011		Nov. 2011		Dec. 2011
Price per share	High		52,900		50,800		43,800		46,250		43,850		43,200
	Low		49,250		42,200		36,150		39,500		37,300		37,600
	Avg.		51,362		45,586		40,763		43,855		40,561		40,548
Trading Volume			35,896,858		44,919,359		35,264,287		36,745,227		33,721,051		23,231,994
Highest Daily Trading Volume			8,453,913		4,499,948		2,742,072		3,023,527		3,303,835		2,490,608
Lowest Daily Trading Volume			858,287		951,613		975,661		1,113,873		710,455		384,626

American Depositary Shares traded on the New York Stock Exchange


		(USD, number of shares)
		July 2011		Aug. 2011		Sep. 2011		Oct. 2011		Nov. 2011		Dec. 2011
Price per share	High		101.33		95.66		81.70		84.00		78.85		76.16
	Low		92.04		77.32		61.77		64.00		65.66		62.92
	Avg.		96.86		83.97		71.44		75.45		72.15		70.10
Trading Volume			934,142		1,563,192		1,155,501		1,214,393		817,985		751,682
Highest Daily Trading Volume			94,089		139,207		137,235		142,754		75,178		122,342
Lowest Daily Trading Volume			22,815		21,376		19,585		15,943		15,244		17,589

*	1ADR = 2 Common Shares

6. Related Party Transactions

Loans to Subsidiaries


	(As of Dec. 31, 2011, KRW billion)
Subsidiary	Loan Type	Origination Date		Maturity Date		Lending Rate			Beginning Balance (Jan. 1, 2011)		Decrease		Increase		Ending Balance (Dec. 31, 2011)
Shinhan Investment Corp.	Loans in KRW		2006-07-31		2012-01-31		5.64	%		100		0		0		100

Shinhan Card	Loans in KRW		2007-11-27		2012-11-27		6.41	%		100		100		0		0
	Loans in KRW		2007-12-18		2012-12-18		6.86	%		50		50		0		0
	Loans in KRW		2008-02-21		2011-02-21		5.66	%		150		150		0		0
	Loans in KRW		2008-03-12		2011-03-12		5.84	%		200		200		0		0
	Loans in KRW		2008-06-27		2011-06-27		6.53	%		200		200		0		0
	Loans in KRW		2008-07-31		2011-07-31		6.90	%		100		100		0		0
	Loans in KRW		2010-10-29		2015-10-29		4.37	%		100		0		0		100
	Loans in KRW		2011-01-28		2016-01-28		4.91	%		0		0		100		100
	Loans in KRW		2011-02-24		2016-02-24		4.82	%		0		0		250		250
	Loans in KRW		2011-05-17		2016-05-17		4.47	%		0		0		100		100

Shinhan Capital	Loans in KRW		2006-09-26		2011-09-26		4.99	%		50		50		0		0
	Loans in KRW		2007-03-23		2012-03-23		5.48	%		50		0		0		50
	Loans in KRW		2007-06-08		2012-06-08		5.95	%		50		0		0		50
	Loans in KRW		2008-01-23		2011-01-23		6.60	%		50		50		0		0
	Loans in KRW		2008-01-23		2013-01-23		6.60	%		50		0		0		50
	Loans in KRW		2008-03-12		2011-03-12		5.84	%		50		50		0		0
	Loans in KRW		2008-07-31		2011-07-31		6.90	%		50		50		0		0
	Loans in KRW		2010-09-28		2013-09-28		4.12	%		100		0		0		100
	Loans in KRW		2011-01-28		2014-01-28		4.53	%		0		0		50		50
	Loans in KRW		2011-04-29		2016-04-29		4.65	%		0		0		100		100
	Loans in KRW		2011-05-17		2016-05-17		4.47	%		0		0		50		50

Shinhan PE	Loans in KRW		2010-08-13		2011-08-12		3.64	%		5		5		0		0
	Loans in KRW		2011-08-12		2012-08-10		4.09	%		0		0		5		5

Total	—		—		—		—			1,455		1,005		655		1,105

Exhibit 99-1

Independent Accountant’s Audit Report (Separate Financial Statements) of Shinhan Financial Group as of December 31, 2011

Exhibit 99-2

Independent Accountant’s Audit Report (Consolidated Financial Statements) of Shinhan Financial Group as of December 31, 2011

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


SHINHAN FINANCIAL GROUP CO., LTD.

By /s/ Jung Kee Min
Name: Jung Kee Min
Title: Chief Financial Officer

Date: March 30, 2012