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 August 2013

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant’s name into English)

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

(Address of principal executive offices)

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

Form 20-F x Form 40-F ¨

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

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

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

Yes ¨ No x

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

Summary of 2013 1H Business Report

On August 14, 2013, Shinhan Financial Group (“SFG”) filed its 2013 1H Business Report (the “Business Report”) with the Financial Supervisory Service of the Republic of Korea (“Korea”) pursuant to the Financial Investment Services and Capital Market Act of Korea. This is the summary of the Business Report translated into English. Non-material or previously disclosed information are omitted or abridged.

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

Table of Contents


1.	Introduction of the Group	3

2.	Business Results	6

3.	Independent Auditor	16

4.	Directors, Executive Officers and Employees	17

5.	Major Shareholder and Market Price Information of Our Common Shares and ADRs	19

6.	Related Party Transactions	20

1. Introduction of the Group

Company History in 2009 through 2013

•

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

•

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

•

Sep. 2009 : SBJ became an indirect subsidiary of SFG

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

Principal Subsidiaries under Korean Law (as of June 30, 2013)

Direct Subsidiaries


Subsidiaries	Ownership by SFG
Shinhan Bank		100.0	%
Shinhan Card		100.0	%
Shinhan Investment Corp.		100.0	%
Shinhan Life Insurance		100.0	%
Shinhan BNP Paribas Asset Management		65.0	%
Shinhan Capital		100.0	%
Jeju Bank¹⁾		68.9	%
Shinhan Savings Bank ²⁾		100.0	%
Shinhan Data System		100.0	%
Shinhan AITAS ³⁾		99.8	%
Shinhan Credit Information		100.0	%
Shinhan Private Equity Investment Management		100.0	%
SHC Management⁴⁾		100.0	%

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

On January 30, 2013, Yehanbyoul Savings Bank joined SFG as a direct subsidiary. On April 1, 2013, Shinhan Savings Bank merged with Yehanbyoul Savings Bank, both of which were direct subsidiaries of Shinhan Financial Group. As a result of the integration of the two savings banks, the previous Shinhan Savings Bank has been liquidated and is thus no longer a subsidiary of Shinhan Financial Group and instead, Yehanbyoul Savings Bank now exists under the name of “Shinhan Savings Bank” as an existing legal entity constituting a member of Shinhan Financial Group.

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

4)	Currently in liquidation proceedings.

Indirect subsidiaries held through direct subsidiaries (as of June 30, 2013)


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

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

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

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

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

Number of Shares (as of June 30, 2013)


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

Total		485,299,587

2. Business Results


*Operation Results*		(KRW billion)


	1H 2013 (Jan. 1 ~ Jun. 30)			FY2012 (Jan. 1 ~ Dec. 31)		FY2011 (Jan. 1 ~ Dec. 31)
Operating income		1,410.8			3,194.0		4,172.4
Equity in income(loss) of associates		(0.4	)		27.5		57.8
Non-Operating Income(loss)		50.4			11.5		(37.6	)
Earnings before income tax		1,460.8			3,233.0		4,192.6
Income taxes		346.0			738.9		920.0
Consolidated net income		1,114.8			2,494.1		3,272.6
Net income in majority interest		1,036.3			2,322.7		3,100.0
Net income in minority interest		78.5			171.4		172.6

Some of the totals may not sum due to rounding.

Source and Use of Funds


Consolidated Basis (KRW billion, %)		1H 2013								FY2012								FY2011
		Jan. 1 ~ Jun. 30								Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31
		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)
Source	Deposits		175,205.3		56.29		2,039.8		2.33		168,233.4		56.45		4,515.0		2.68		156,280.5		55.28		4,181.0		2.68
	Borrowings		13,332.3		4.28		116.6		1.75		14,027.8		4.71		271.9		1.94		14,037.4		4.97		259.2		1.85
	Debentures		38,601.3		12.40		775.1		4.02		39,765.1		13.34		1,740.2		4.38		40,017.2		14.16		1,942.9		4.86
	Other Liabilities		55,341.6		17.78		—		—		48,172.5		16.16		—		—		44,174.6		15.63		—		—
	Total Liabilities		282,480.5		90.75		—		—		270,198.8		90.66		—		—		254,509.7		90.03		—		—
	Total Stockholder’s Equity		28,799.4		9.25		—		—		27,843.7		9.34		—		—		28,184.6		9.97		—		—
	Total Liabilities & SE		311,279.9		100.00		—		—		298,042.5		100.00		—		—		282,694.3		100.00		—		—
Use	Currency & Due from Banks		16,280.3		5.23		106.3		1.31		15,956.9		5.35		242.4		1.52		14,396.1		5.09		248.6		1.73
	Loans		201,880.2		64.85		5,124.2		5.08		195,495.2		65.59		11,273.2		5.77		186,828.2		66.09		11,265.3		6.03
	Loans in KRW		155,448.4		49.94		3,769.8		4.85		150,164.5		50.38		8,298.7		5.53		143,097.0		50.62		8,281.2		5.79
	Loans in Foreign Currency		10,380.5		3.33		194.8		3.75		10,347.1		3.47		439.1		4.24		9,510.8		3.36		379.1		3.99
	Credit Card Accounts		17,466.9		5.61		875.5		10.02		17,507.8		5.87		1,834.0		10.48		17,740.2		6.28		1,887.5		10.64
	Others		18,584.4		5.97		284.2		3.06		17,475.7		5.86		701.5		4.01		16,480.2		5.83		717.5		4.35
	AFS Financial Assets		30,247.8		9.72		505.5		3.34		30,198.0		10.13		1,152.3		3.82		25,588.5		9.05		1,025.9		4.01
	HTM Financial Assets		11,396.5		3.66		267.8		4.70		11,790.4		3.96		594.6		5.04		12,307.7		4.35		642.9		5.22
	Other Assets		51,475.1		16.54		—		—		44,602.1		14.97		—		—		43,573.8		15.41		—		—
	Total Assets		311,279.9		100.00		—		—		298,042.5		100.00		—		—		282,694.3		100.00		—		—

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

Other Financial Information

The main serial financial figures and indices for Jun. 30, 2013 listed herein may be subject to change.

1) Capital Adequacy


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


	Jun. 30, 2013			Dec. 31, 2012			Dec. 31, 2011
Aggregate Amount of Equity Capital (A)		25,148.4			25,075.7			22,315.4
Risk-Weighted Assets (B)		200,897.8			201,184.4			195,579.4
BIS Ratio (A/B) ¹⁾		12.52	%		12.46	%		11.41	%

1)	Based on Basel I.


*Capital Adequacy Ratios (Subsidiaries)*		(%)


Subsidiary	Capital Adequacy Ratio	Jun. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Shinhan Bank	BIS Capital Adequacy Ratio		15.57		15.83		15.26
Jeju Bank	BIS Capital Adequacy Ratio		15.63		15.89		13.27
Shinhan Card	Adjusted Equity Capital Ratio		28.61		27.43		25.81
Shinhan Investment Corp.	Net Capital Ratio		652.14		666.34		700.78
Shinhan Life Insurance	Risk Based Capital Ratio		258.36		287.70		324.02
Shinhan BNPP AM	Net Capital Ratio		561.94		583.21		599.73
Shinhan Capital	Adjusted Equity Capital Ratio		14.35		14.98		14.90
Shinhan Savings Bank	BIS Capital Adequacy Ratio		12.82		n/a		n/a

•

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

•

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

•

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

•

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

•

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

•

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

•

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

2) Liquidity


*Won Liquidity Ratio*		(KRW billion, %)


Company	Jun. 30, 2013						Dec. 31, 2012						Dec. 31, 2011
Company	Won Assets		Won Liabilities		Won Liquidity Ratio(%)		Won Assets		Won Liabilities		Won Liquidity Ratio(%)		Won Assets		Won Liabilities		Won Liquidity Ratio(%)
Shinhan Financial Group		451.6		171.2		263.8		189.1		93.4		202.6		4,225.5		3,911.2		108.0
Shinhan Bank		62,838.0		43,745.9		143.6		56,506.3		41,131.1		137.4		56,609.5		46,635.4		121.4
Shinhan Card		14,858.0		3,718.4		399.6		15,472.3		3,420.9		452.3		15,417.2		3,417.5		451.1
Shinhan Investment Corp.		10,940.0		6,652.3		164.5		9,358.8		6,725.4		139.2		6,161.4		5,036.5		122.3
Shinhan Life Insurance		1,810.7		396.5		456.7		969.1		377.2		256.9		843.5		341.5		247.0
Shinhan Capital		643.8		252.4		255.1		587.5		161.3		364.1		519.0		147.9		350.8
Jeju Bank		1,018.7		564.1		180.6		9,984.0		6,511.8		153.3		982.2		686.2		143.1
Shinhan Savings Bank		539.2		426.0		126.6		—		—		—		—		—		—

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

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

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

4)	Shinhan Financial Group figures are separate basis


*Foreign Currency (FC) Liquidity Ratio*		(%)


Company	Jun. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Shinhan Financial Group		—		—		—
Shinhan Bank		125.4		127.5		116.3
Shinhan Investment Corp.		105.8		108.1		99.0
Shinhan Capital		285.8		151.4		235.7
Jeju Bank		133.3		186.8		164.3

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

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

3)	Shinhan Financial Group figures are separate basis

3) Asset Quality


*SFG Consolidated Basis*		(KRW billion, %)


	Jun. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Total Loans		207,717.1		203,155.4		201,245.9
Substandard & Below		3,292.5		2,718.9		2,587.1
Substandard & Below Ratio		1.59		1.34		1.29
Non-Performing Loans		2,223.6		2,173.3		1,903.5
NPL Ratio		1.07		1.07		0.95
Substandard & Below Coverage Ratio		138.80		169.06		162.19
Loan Loss Allowance ¹⁾		4,569.9		4,596.5		4,196.0
Substandard & Below Loans		3,292.5		2,718.9		2,587.1

1)	Including reserve for credit losses.


*Separate Basis*		(%)


	Jun. 30, 2013						Dec. 31, 2012						Dec. 31, 2011
	Substandard & Below Ratio		NPL Ratio		Substandard & Below Coverage Ratio ¹⁾		Substandard & Below Ratio		NPL Ratio		Substandard & Below Coverage Ratio ¹⁾		Substandard & Below Ratio		NPL Ratio		Substandard & Below Coverage Ratio ¹⁾
Shinhan Financial Group		—		—		—		—		—		—		—		—		—
Shinhan Bank		1.43		0.92		127.38		1.08		0.87		170.55		1.09		0.82		166.11
Shinhan Card		1.85		1.35		282.46		2.14		1.64		248.83		1.69		1.26		236.08
Shinhan Investment Corp.		13.80		13.80		75.59		11.17		11.18		77.61		16.97		16.92		71.46
Shinhan Life Insurance		0.23		0.23		409.58		0.50		0.26		361.33		0.45		0.23		280.64
Shinhan Capital		2.16		1.48		94.34		2.98		1.91		95.84		2.79		1.31		82.85
Jeju Bank		2.09		2.01		83.21		1.49		1.47		102.90		1.62		1.03		93.73
Shinhan Savings Bank		26.56		23.36		42.68		—		—		—		—		—		—

1)	Including reserve for credit losses.

4) Write-Offs & Provision for Credit Losses

<SFG Consolidated Basis>

(KRW billion)


	Jun. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		2,928.1		2,893.0		2,729.1
Allowance for acceptances and guarantees		87.3		77.8		85.8
Allowance for unused loan commitments		428.4		415.4		444.8
Other allowance		228.2		253.6		339.0
Total allowance		3,672.0		3,639.8		3,598.7
Write-offs		633.8		1,417.2		1,382.1

<Shinhan Bank>

(KRW billion)


	Jun. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		1,725.7		1,649.0		1,580.9
Allowance for acceptances and guarantees		124.8		112.8		109.5
Allowance for unused loan commitments		89.0		78.1		85.2
Other allowance		153.8		168.8		256.2
Total allowance		2,093.3		2,008.7		2,031.8
Write-offs		283.3		695.6		811.8

<Shinhan Card>

(KRW billion)


	Jun. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		744.8		777.4		706.2
Allowance for acceptances and guarantees		—		—		—
Allowance for unused loan commitments		328.9		328.5		345.3
Other allowance		61.5		46.7		50.6
Total allowance		1,135.2		1,152.6		1,102.1
Write-offs		294.2		511.6		451.5

5) Debt to Equity Ratios


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


	Jun. 30, 2013			Dec. 31, 2012			Dec. 31, 2011 ¹⁾
Debt		7,304.7			7,546.0			11,413.4
Equity		20,085.1			19,666.9			19,430.8
Debt to Equity Ratio		36.37	%		38.37	%		58.74	%

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

Twenty Largest Exposures by Borrower

(KRW billion)


As of Jun. 30, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Bank of Korea		3,760		—		4,281		—		—		8,041
Ministry of Strategy & Finance		—		—		6,913		—		—		6,913
Industrial Bank of Korea		534		23		2,970		—		—		3,526
Korea Development Bank		11		89		3,184		—		—		3,284
Hyundai Heavy Industries Co., Ltd.		16		227		17		2,724		—		2,983
Korea Finance Corporation		—		—		2,838		—		—		2,838
Korea Deposit Insurance Corporation		—		—		2,457		—		—		2,457
Korea Land & Housing Corporation		—		—		1,724		—		—		1,724
Korea Securities Finance Corporation		31		—		1,439		—		—		1,470
Woori Bank		75		11		1,322		—		—		1,408
Samsung Heavy Industries Co., Ltd.		—		20		22		1,265		—		1,307
Korea EximBank		400		—		780		—		—		1,180
Nonghyup Bank		137		17		787		11		—		951
KEPCO		2		—		877		8		—		887
Hana Bank		32		25		817		—		—		874
Standard Chartered Bank Korea		585		—		280		—		—		865
POSCO		1		92		724		35		—		853
Korea Housing-Finance Corporation		—		—		838		—		—		838
Songdo Cosmopolitan City Development Inc.		831		—		—		—		—		831
Hyundai Samho Heavy Industries Co., Ltd.		—		26		—		796		—		822

Total		6,415		530		32,270		4,838		—		44,054

Some of the totals may not sum due to rounding


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


As of Jun. 30, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Samsung		237		1,110		1,287		1,989				4,622
Hyundai Heavy Industries		115		329		38		3,942				4,425
Hyundai Motors		1,382		1,098		655		356				3,491
SK		499		762		741		690				2,693
LG		1,180		379		238		360		1		2,158
POSCO		134		371		808		223				1,535
Lotte		438		72		490		269				1,268
LS		172		316		158		501				1,147
GS		289		131		119		463				1,002
Hyosung		261		520		18		196				994

Total		4,706		5,088		4,551		8,988		1		23,334

Some of the totals may not sum due to rounding

Loan and due from banks Concentration by Industry

(KRW billion)


As of Jun. 30, 2013 Consolidated basis	Total Exposures
As of Jun. 30, 2013 Consolidated basis	Amount		Weight (%)
Finance and Insurance		59,776		21.6	%
Manufacturing		35,587		12.8	%
Real Estate, leasing and service		19,999		7.2	%
Retail and wholesale		13,586		4.9	%
Hotel and leisure		4,662		1.7	%
Construction		4,515		1.6	%
Others		39,605		14.3	%
Consumers		99,398		35.9	%

Total		277,129		100.0	%

*	Including deposits, loans, and securities

Top Twenty Non-Performing Loans

(KRW billion)


Borrower	Industry	Gross Principal Outstanding		Allowance for Loan Losses
A	Apartment Building Construction		99		55
B	Development and Subdividing of Residential Buildings		98		14
C	Building of Steel Ships		43		18
D	Renting of Non-Residential Buildings		33		1
E	Manufacture of Other Paper and Paperboard		32		12
F	Development and Subdividing of Residential Buildings		30		23
G	Other Civil Engineering Construction		29		24
H	Development and Subdividing of Residential Buildings		27		3
I	Manufacture of Synthetic Resin and Other Plastic Materials		25		6
J	Manufacture of Tires and Tubes		24		24
K	Renting of Non-Residential Buildings		24		1
L	Renting of Non-Residential Buildings		23		11
M	Building of Steel Ships		23		0
N	Manufacture of Sections for Ships		22		0
O	Apartment Building Construction		22		9
P	Manufacture of Other Basic Iron and Steel		21		13
Q	Development and Subdividing of Residential Buildings		21		15
R	Development and Subdividing of Residential Buildings		20		3
S	Construction of Highways, Streets and Roads		19		9
T	Non-Financial Holding Companies		18		18

	Total		651		260

1)	Consolidated basis as of Jun. 30, 2013.

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

3. Independent Auditor

Audit Opinion for the last 3 years

1H 2013

FY 2012

FY 2011

Audit Opinion

—

Unqualified

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

Compensation to the Independent Auditor for Audit and Review Services

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


Year	Auditor	Payment ¹⁾ (KRW mil.)	Details	Working hours
2013	KPMG Samjong Accounting Corp.	508 (annualized basis)	Review/Audit of Financial Statements		2,700 hours	²⁾
2013	KPMG Samjong Accounting Corp.	140 (annualized basis)	K-IFRS Report Package Audit for Shinhan Savings Bank		510 hours

2012	KPMG Samjong Accounting Corp.	498	Review/Audit of Financial Statements		6,380 hours
	KPMG Samjong Accounting Corp.	35	K-IFRS Report Package Audit for Shinhan Savings Bank		372 hours
	KPMG Samjong Accounting Corp.	70	Non-statutory audit of subsidiaries under the consolidated corporate tax system for CY2012		690 hours

2011	KPMG Samjong Accounting Corp.	487	Review/Audit of Financial Statements		9,016 hours

1)	Excluding value-added taxes.

2)	As of June 30, 2013.

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

4. Directors, Executive Officers and Employees

Directors and Executive Officers

1) Executive Directors

Name

Month and Year

of Birth

Position

Service Term

Dong Woo Han

Nov. 1948

• Chairman of Shinhan Financial Group

• Board Steering Committee chair

• Corporate Governance & CEO Recommendation Committee Member

3 years starting from March 23, 2011

2) Non-Executive Directors

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

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

Our non-executive directors are as follows:


Name	Month and Year of Birth	Outside Director	Sub-Committees	Service Term
Jin Won Suh	April 1951	X	—	4 years starting from March 23, 2011
Taeeun Kwon	January 1941	O	Audit Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 23, 2011
Kee Young Kim	October 1937	O	Board Steering Committee member Risk Management Committee chair Corporate Governance & CEO Recommendation Committee chair	3 years starting from March 23, 2011
Seok Won Kim	April 1947	O	Board Steering Committee member Audit Committee member	3 years starting from March 23, 2011
Hoon Namkoong	June 1947	O	Chairman of Board of Directors Risk Management Committee member Compensation Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 23, 2011
Boo In Ko	December 1941	O	Board Steering Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 28, 2013
Sang-Kyeong Lee	September 1945	O	Audit Committee member Compensation Committee chair	2 years starting from March 29, 2012
Ke Sop Yun	May 1945	O	Audit Committee chair Compensation Committee member	5 years starting from March 17, 2009
Jung Il Lee	August 1952	O	Compensation Committee member	3 years starting from March 23, 2011
Haruki Hirakawa	November 1964	O	Board Steering Committee member	3 years starting from March 23, 2011
Philippe Aguignier	September 1957	O	Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	4 years starting from March 24, 2010

3) Executive Officers

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


Name	Month and Year of Birth	Position	In charge of
Hyung Jin Kim	Jul. 1958	Deputy President	• Strategic Planning Team • Global Business Strategy Team • Shinhan FSB Research Institute
Jae-Gwang Soh	Aug. 1961	Deputy President	• Synergy Management Team • Information & Technology Planning Team • Smart Finance Team • Audit Team
Jung Kee Min	Mar. 1959	Deputy President & Chief Financial Officer	• Finance Management Team • Investor Relations Team • HR Team
Sin Gee Lee	Jul. 1956	Deputy President	• Public Relations Team • CSR & Culture Management Team • General Affairs Team
Dong Hwan Lee	Sep. 1959	Deputy President	• Corporate & Investment Banking Planning Office
Young Jin Lim	Nov. 1960	Deputy President	• Wealth Management Planning Office
Bo Hyuk Yim	Mar. 1961	Managing Director	• Risk Management Team
Woo Gyun Park	Mar. 1959	Managing Director	• Compliance Team
Byung Chul Lim	Jan. 1964	Managing Director	• Shinhan FSB Research Institute


*Stock Options*		(As of Jul. 31, 2013)


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

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


Note		1) The weighted-average exercise price of outstanding exercisable options as of July 31, 2013 is KRW 50,339
		2) The closing price of our common stock was KRW 41,000 on July 31, 2013.


*Employees*		(As of Jun. 30, 2013)

Gender

Number of
Employees

Average length of Service

Total Salaries and wages
paid in 2013
(KRW million)

Average Payment
per person
(KRW million)

Male

128

2 yrs 7 mths

8,343

Female

3 yrs 9 mths

1,047

Total

157

2 yrs 10 mths

9,390

Note)

Average length of service including service within group subsidiaries as of Jun. 30, 2013 is Male 12 yrs 11 mths

and Female 7yrs 3 mths, whereas total average is 11yrs 11mths.

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

Major Shareholders¹⁾ of Shinhan Financial Group as of Jun. 30, 2013


Name	No. of Common Shares owned		Ownership%
National Pension Service		34,506,886		7.28	%²⁾
BNP Paribas		30,106,276		6.35	%²⁾

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

2)	As of Dec. 31, 2012

3)	In addition to the common share holdings, National Pension Service holds a total of 2,000,000 shares of Shinhan Financial Group’s series 12 non-voting redeemable preferredstock as of Jun. 30, 2013.

Share ownership of Employee Stock Ownership Association


Beginning Balance (Jan. 1, 2013)		Increase		Decrease		Ending Balance (Jun. 30, 2013)		Ownership%¹⁾ (Jun. 30, 2013)
	18,787,067		2,301,310		1,158,291		19,930,086		4.20	%

1)	Common share basis.


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


		Jan. 2013		Feb. 2013		Mar. 2013		Apr. 2013		May. 2013		Jun. 2013		Jul. 2013
Price per share	High		42,150		42,650		42,650		40,600		40,700		40,600		41,000
	Low		38,900		39,200		37,650		37,250		37,050		35,950		37,300
	Avg.		40,302		40,884		40,423		39,036		38,857		38,258		39,257
Trading Volume			22,521,117		19,289,381		24,282,510		19,273,274		22,474,182		17,255,195		18,255,240
Highest Daily Trading Volume			1,982,508		2,245,654		2,312,600		1,551,531		2,090,943		1,587,521		1,721,529
Lowest Daily Trading Volume			499,305		568,054		518,345		467,707		443,285		341,055		305,551


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


		Jan. 2013		Feb. 2013		Mar. 2013		Apr. 2013		May. 2013		Jun. 2013		Jul. 2013
Price per share	High		39.01		38.86		39.32		36.26		35.63		36.10		36.47
	Low		37.02		35.89		33.60		32.73		33.50		30.82		32.58
	Avg.		37.84		37.40		36.63		34.42		34.62		33.45		34.90
Trading Volume			1,595,732		1,294,323		1,770,037		2,039,053		2,521,769		1,609,642		1,165,631
Highest Daily Trading Volume			263,937		143,978		207,959		391,395		458,417		259,491		294,654
Lowest Daily Trading Volume			23,475		37,682		32,386		37,164		21,474		34,116		20,547

*	1 ADR = 1 Common Shares

6. Related Party Transactions


*Loans to Subsidiaries*		(KRW billion)


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

Total								1,360.0		50.0		50.0		1,360.0

Exhibit 99.1

Independent Auditors’ Review Report (Separate Financial Statements) of Shinhan Financial Group as of June 30, 2013

Exhibit 99.2

Independent Auditors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of June 30, 2013

SIGNATURES

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


SHINHAN FINANCIAL GROUP CO., LTD.

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

Date: August 14, 2013