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

Under the Securities Exchange Act of 1934

For the Month of August 2015

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant’s name into English)

20, Sejong-daero 9-gil, Jung-gu, Seoul 100-724, 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- n/a.

Summary of FY2015 1H Business Report

On August 17, 2015, Shinhan Financial Group (“SFG”) filed its FY2015 1H Business Report (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange 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			17

4. Directors, Executive Officers and Employees			18

5. Major Shareholder and Market Price Information of our Common Shares and ADRs			22

6. Related Party Transactions			23

1. Introduction of the Group

Company History in 2010 through 2015

•

Jan. 2010 : Shinhan Data System became a direct 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 direct 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, 2015)

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		100.0	%
SHC Management⁴⁾		100.0	%

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

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

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

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

4)	Currently in liquidation proceedings.

Indirect subsidiaries held through direct subsidiaries (as of June 30, 2015)


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 Limited¹⁾		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 Card	LLP MFO Shinhan Finance		100.0	%

Shinhan Investment Corp.	Shinhan Investment Corp. USA Inc.		100.0	%
	Shinhan Investment Corp. Asia Inc.		100.0	%
	Shinhan Maritime Private Equity Fund I		7.1	%
	KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp. ²⁾		8.5	%
	Shinhan Praxis K-Growth Global Private Equity Fund		14.1	%

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

Shinhan Private Equity	Shinhan NPS Private Equity Fund 1st³⁾		5.0	%
	Shinhan Private Equity Fund 2nd ⁴⁾		2.2	%
	Shinhan-Stonebridge Petro Private Equity Fund ⁵⁾		0.6	%

1)	Shinhan Financial Group and its subsidiaries currently own 93.3% of Shinhan Khmer Bank Limited

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

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

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

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

Number of Shares (as of June 30, 2015)


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)


	FY2015 (Jan. 1 ~ Jun. 30)		FY2014 (Jan. 1 ~ Dec. 31)		FY2013 (Jan. 1 ~ Dec. 31)
Operating income		1,638.7		2,654.8		2,632.0
Equity in income (loss) of associates		10.4		30.6		7.3
Non-Operating Income (loss)		61.3		182.2		37.3
Earnings before income tax		1,710.4		2,867.6		2,676.6
Income taxes		385.4		668.0		621.2

Consolidated net income		1,325.1		2,199.6		2,055.3
Net income in majority interest		1,284.1		2,081.1		1,898.6
Net income in minority interest		40.9		118.5		156.8

Notes :

•

Some of the totals may not sum due to rounding.

•

Financial Information for the years ended December 31, 2013 have been retroactively restated to reflect changes in accounting policies in accordance with reclassification of Hybrid bonds.

Source and Use of Funds


Consolidated Basis (KRW billion, %)		FY2015								FY2014								FY2013²⁾
		Jan. 1 ~ Jun. 30								Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31
		Average Balance¹⁾		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance¹⁾		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance¹⁾		Proportions (%)		Interest Paid		Interest Rate (%)
Source	Deposits		197,360.5		56.7		1,525.6		1.55		186,086.1		57.2		3,449.5		1.85		176,825.5		56.6		3,914.2		2.21
	Borrowings		12,810.3		3.7		78.8		1.23		12,145.2		3.7		190.0		1.56		13,054.6		4.2		229.3		1.76
	Debentures		38,370.4		11.0		605.9		3.16		36,609.9		11.3		1,301.9		3.56		38,303.2		12.3		1,521.5		3.97
	Other Liabilities		69,134.2		19.9		—		—		60,397.7		18.6		—		—		55,163.5		17.7		—		—

	Total Liabilities		317,675.4		91.2		—		—		295,238.9		90.8		—		—		283,346.8		90.7		—		—

	Total Stockholder’s Equity		30,610.4		8.8		—		—		30,023.9		9.2		—		—		29,157.1		9.3		—		—

	Total Liabilities & SE		348,285.8		100.0		—		—		325,262.8		100.0		—		—		312,503.9		100.0		—		—

Use	Currency & Due from Banks		20,793.2		6.0		121.8		1.17		19,646.5		6.0		236.9		1.21		17,264.0		5.5		200.9		1.16
	Loans		225,790.2		64.8		4,548.3		4.03		212,237.2		65.3		9,722.5		4.58		203,254.8		65.0		10,173.4		5.01
	Loans in KRW		175,337.6		50.3		3,286.5		3.75		164,597.9		50.6		7,092.5		4.31		156,496.7		50.1		7,435.5		4.75
	Loans in Foreign Currency		13,231.6		3.8		203.7		3.08		11,598.8		3.6		403.0		3.47		10,506.0		3.4		394.6		3.76
	Credit Card Accounts		17,629.2		5.1		807.2		9.16		17,575.1		5.4		1,702.5		9.69		17,445.2		5.6		1,763.8		10.11
	Others		19,591.8		5.6		250.9		2.56		18,465.4		5.7		524.5		2.84		18,806.9		6.0		579.6		3.08
	AFS Financial Assets		26,181.2		7.5		336.3		2.57		26,801.5		8.2		814.8		3.04		29,620.6		9.5		979.2		3.31
	HTM Financial Assets		14,196.3		4.1		259.3		3.65		12,076.7		3.7		521.7		4.32		11,197.0		3.6		527.9		4.71
	Other Assets		61,324.9		17.6		—		—		54,500.9		16.8		—		—		51,167.5		16.4		—		—

	Total Assets		348,285.8		100.0		—		—		325,262.8		100.0		—		—		312,503.9		100.0		—		—

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

2)	Figs. for the years ended Dec. 31, 2013 have been retroactively restated to reflect changes in accounting policies in accordance with reclassification of Hybrid bonds.

Other Financial Information

ø	The main serial financial figures and indices for Jun. 30, 2015 listed herein may be subject to change.

1) Capital Adequacy


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


	Jun. 30, 2015			Dec. 31, 2014			Dec. 31, 2013
Aggregate Amount of Equity Capital (A)		26,798.4			25,938.0			25,605.8
Risk-Weighted Assets (B)		200,897.9			198,832.9			190,716.6
BIS Ratio (A/B)		13.34	%		13.05	%		13.43	%

Note) based on Basel III


*Capital Adequacy Ratios (Subsidiaries)*		(%)


Subsidiary	Capital Adequacy Ratio	Jun. 30, 2015		Dec. 31, 2014		Dec. 31, 2013
Shinhan Bank	BIS Capital Adequacy Ratio		15.32		15.43		16.29
Jeju Bank	BIS Capital Adequacy Ratio		13.52		14.33		15.95
Shinhan Card	Adjusted Equity Capital Ratio		28.57		29.64		30.41
Shinhan Investment Corp.	Net Capital Ratio		368.19		461.75		493.33
Shinhan Life Insurance	Risk Based Capital Ratio		227.2		228.47		253.06
	Net Capital Ratio		—		512.03		599.75
Shinhan BNPP AM	Equity Capital		147.0		159.0		—
	Minimum Capital Requirement		22.5		22.1		—
Shinhan Capital	Adjusted Equity Capital Ratio		16.23		15.55		15.05
Shinhan Savings Bank	BIS Capital Adequacy Ratio		16.52		16.28		12.22

Notes :

•

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

•

Basel III 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 is required to maintain a minimum net capital ratio of 150%.

•

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

•

Under the guidelines issued by the FSS, Shinhan BNP Paribas Asset Management is required to hold Equity Capital that exceeds the Minimum Capital Requirement.

2) Liquidity


*Won Liquidity Ratio*		(KRW billion, %)


Company	Jun. 30, 2015						Dec. 31, 2014						Dec. 31, 2013
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		734.7		207.2		354.5		76.1		41.4		183.9		578.3		263.0		219.9
Shinhan Bank		—		—		—		55,338.0		45,258.5		122.3		53,589.9		41,699.5		128.5
Shinhan Card		14,779.0		3,644.2		405.5		14,583.7		3,014.5		483.8		14,490.7		3,902.1		371.4
Shinhan Investment Corp.		15,326.6		10,374.7		147.7		17,500.5		11,305.5		154.8		10,613.7		7,833.6		135.5
Shinhan Life Insurance		1,545.1		489.0		316.0		1,302.2		472.6		275.6		1,174.2		419.6		279.8
Shinhan Capital		592.4		293.4		201.9		567.6		161.1		352.3		510.9		221.1		231.1
Jeju Bank		—		—		—		798.2		716.9		111.3		937.3		559.0		167.7
Shinhan Savings Bank		190.4		177.9		107.0		242.0		94.9		255.0		257.4		91.8		280.2

Notes :

•

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

•

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

•

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

•

Liquidity Ratio for Shinhan Bank and Jeju Bank have been replaced by Liquidity Coverage Ratio from Mar 31, 2015 to reflect the recent amendments to detailed regulations on supervision of banking business


*Liquidity Coverage Ratio*		(KRW billion, %)


Company	Jun. 30, 2015						Dec. 31, 2014						Dec. 31, 2013
Company	High Quality Liquid Assets		Net Cash Outflows		Liquidity Coverage Ratio(%)		High Quality Liquid Assets		Net Cash Outflows		Liquidity Coverage Ratio(%)		High Quality Liquid Assets		Net Cash Outflows		Liquidity Coverage Ratio(%)
Shinhan Bank		32,954.7		35,335.8		93.2		—		—		—		—		—		—
Jeju Bank		523.7		347.2		150.9		—		—		—		—		—		—

Note) The “High quality liquid assets” and “Net cash outflows” are the arithmetic mean of the ending balance of every month.


*Foreign Currency (FC) Liquidity Ratio*		(USD millions, %)


Company	Jun. 30, 2015						Dec. 31, 2014						Dec. 31, 2013
Company	FC Assets		FC Liabilities		FC Liquidity Ratio(%)		FC Assets		FC Liabilities		FC Liquidity Ratio(%)		FC Assets		FC Liabilities		FC Liquidity Ratio(%)
Shinhan Financial Group		—		—		—		—		—		—		—		—		—
Shinhan Bank		31,565.6		26,682.5		118.3		25,309.1		19,472.6		130.0		25,808.1		20,294.0		127.2
Shinhan Investment Corp.		2,363.0		2,108.8		112.1		1,195.7		871.5		137.2		451.3		390.6		115.5
Shinhan Capital		43.6		38.6		112.7		81.2		54.6		148.8		84.4		55.6		151.8
Jeju Bank		7.9		3.1		257.9		9.8		6.1		160.0		8.5		5.2		163.1

Notes :

•

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

•

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

•

Shinhan Financial Group figures are separate basis

3) Asset Quality


*SFG Consolidated Basis*		(KRW billion, %)


	Jun. 30, 2015		Dec. 31, 2014		Dec. 31, 2013
Total Loans		231,645.7		226,503.2		207,680.2

Substandard & Below		2,324.6		2,595.3		2,609.1
Substandard & Below Ratio		1.00		1.15		1.26
Non-Performing Loans		1,761.0		2,031.7		1,990.2
NPL Ratio		0.76		0.90		0.96
Substandard & Below Coverage Ratio		184.21		168.88		162.96
Loan Loss Allowance ¹⁾		4,282.1		4,383.0		4,251.7
Substandard & Below Loans		2,324.6		2,595.3		2,609.1

1)	Including reserve for credit losses.


*Separate Basis*		(%)


	Jun. 30, 2015						Dec. 31, 2014						Dec. 31, 2013
	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		0.90		0.67		169.69		1.03		0.78		154.16		1.16		0.90		149.22
Shinhan Card		1.48		0.98		321.01		1.69		1.21		295.10		1.53		1.00		314.75
Shinhan Investment Corp.		1.00		1.00		361.18		1.37		1.36		207.83		4.65		4.65		94.16
Shinhan Life Insurance		0.08		0.07		1,100.82		0.10		0.09		861.53		0.19		0.19		474.88
Shinhan Capital		3.68		4.19		70.75		2.87		4.08		96.34		2.23		1.88		111.21
Jeju Bank		1.31		0.80		117.50		2.04		1.84		80.10		1.53		1.49		102.47
Shinhan Savings Bank		7.74		7.74		59.90		12.60		12.60		48.76		19.28		19.28		48.18

1)	Including reserve for credit losses.

4) Write-Offs & Provision for Credit Losses

SFG Consolidated Basis

(KRW billion)


	Jun. 30, 2015		Dec. 31, 2014		Dec. 31, 2013
Allowance for loan losses		2,593.4		2,619.2		2,575.0
Allowance for acceptances and guarantees		81.0		107.2		93.0
Allowance for unused loan commitments		421.2		402.9		411.2
Other allowance		196.3		184.1		246.1

Total allowance		3,291.9		3,313.4		3,325.3

Write-offs		678.0		1,132.8		1,504.1

Shinhan Bank

(KRW billion)


	Jun. 30, 2015		Dec. 31, 2014		Dec. 31, 2013
Allowance for loan losses		1,507.7		1,435.2		1,502.1
Allowance for acceptances and guarantees		93.0		132.8		111.5
Allowance for unused loan commitments		77.4		71.9		80.3
Other allowance		115.2		106.0		180.0

Total allowance		1,793.3		1,745.9		1,873.9

Write-offs		372.7		519.3		750.8

Shinhan Card

(KRW billion)


	Jun. 30, 2015		Dec. 31, 2014		Dec. 31, 2013
Allowance for loan losses		706.0		753.0		673.5
Allowance for acceptances and guarantees		—		—		—
Allowance for unused loan commitments		325.5		316.2		318.6
Other allowance		42.7		50.0		52.7

Total allowance		1,074.2		1,119.2		1,044.8

Write-offs		251.7		532.8		647.5

5) Debt to Equity Ratios


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


	Jun. 30, 2015			Dec. 31, 2014			Dec. 31, 2013
Debt		6,665.5			6,859.4			7,450.2
Equity		20,882.5			20,235.1			19,974.5
Debt to Equity Ratio		31.92	%		33.90	%		37.30	%

Twenty Largest Exposures by Borrower

(KRW billion)


As of Jun. 30, 2015 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Bank of Korea		5,250.0		—		5,438.8		0.1		—		10,688.9
Ministry of Strategy & Finance		0.0		—		7,859.7		—		—		7,859.7
Korea Development Bank		14.0		14.0		4,647.6		—		—		4,675.6
Korea Housing Finance Corporation		0.0		—		3,468.2		—		—		3,468.2
Industrial Bank of Korea		506.6		45.7		1,532.1		—		—		2,084.4
Korea Deposit Insurance Corporation		—		—		2,014.2		—		—		2,014.2
Hyundai Heavy Industries Co., Ltd.		21.3		87.8		10.6		1,619.1		—		1,738.8
Woori Bank		389.3		134.9		1,035.5		—		—		1,559.6
Korea Securities Finance Corporation		100.0		—		1,186.0		—		—		1,286.0
Korea Land & Housing Corporation		—		—		1,145.2		—		—		1,145.2
Samsung Heavy Industries Co., Ltd.		150.0		—		20.4		873.6		—		1,043.9
Samsung Electronics co., ltd.		0.0		916.4		20.3		—		0.0		936.7
Hyundai Samho Heavy Industries Co., Ltd.		0.0		54.5		—		875.6		—		930.0
Export-Import Bank of Korea		—		—		802.0		0.8		—		802.7
Woori Card		—		—		797.4		—		—		797.4
KB Card		—		—		779.3		—		—		779.3
Hana Bank		122.5		13.8		642.9		—		—		779.2
Kookmin Bank		300.0		—		466.9		0.0		—		766.8
Hana Card		—		—		757.9		—		—		757.9
LG Electronics Inc.		48.6		54.1		144.6		462.3		—		709.6

Total		6,902.3		1,321.1		32,769.4		3,831.4		0.0		44,824.2

Note) Some of the totals may not sum due to rounding

Exposure to ten Main Debtor Groups

(KRW billion)


As of Jun. 30, 2015 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Samsung		353.3		1,707.1		1,262.8		1,632.2		0.0		4,955.4
Hyundai Motors		1,185.7		1,273.7		1,802.0		375.7		1.0		4,638.1
Hyundai Heavy Industries		217.3		326.5		440.8		3,178.9		0.0		4,163.5
Lotte		565.8		975.5		1,090.5		471.3		1.0		3,104.1
SK		427.9		547.0		628.8		971.3		0.0		2,575.0
LG		443.0		480.5		449.5		739.7		0.0		2,112.7
GS		464.6		446.7		284.5		184.0		0.0		1,379.7
LS		191.7		398.9		161.3		526.2		0.0		1,278.1
POSCO		133.4		496.8		335.4		175.0		4.0		1,144.5
Hanwha		410.0		235.1		143.1		107.1		0.1		895.4

Total		4,392.7		6,887.7		6,598.6		8,361.4		6.2		26,246.6

Note) Some of the totals may not sum due to rounding

Loans, Due from banks and Securities Concentration by Industry

(KRW billion)


As of Jun. 30, 2015 Consolidated basis	Total Exposures
As of Jun. 30, 2015 Consolidated basis	Amount		Weight (%)
Finance and Insurance		67,901.4		21.6	%
Manufacturing		39,476.8		12.6	%
Retail and wholesale		15,400.0		4.9	%
Real Estate, leasing and service		20,852.0		6.6	%
Construction		4,014.4		1.3	%
Hotel and Restaurant		5,085.5		1.6	%
Others		47,908.3		15.3	%
Consumers		113,358.0		36.1	%

Total		313,996.5		100.0	%

Note) Some of the totals may not sum due to rounding

Top Twenty Non-Performing Loans

(KRW billion)


Borrower	Industry	Gross Principal Outstanding		Substandard & Below		Allowance for Loan Losses
A	Construction of Highways, Streets and Roads		148.7		148.7		65.7
B	Building of Steel Ships		96.9		94.4		17.9
C	Manufacture of Distilling Machinery, Heat exchange unit and Gas Generators		81.0		81.0		76.2
D	Manufacture of Plastic Products for Fabricating of Machine		56.8		56.8		42.2
E	Apartment Building Construction		44.5		44.5		44.2
F	Building of Steel Ships		44.3		44.3		0.2
G	Manufacture of Other Insulated Wire and Cable		39.1		39.1		27.7
H	Wholesale of Liquid Fuel and Related Products		39.1		39.1		21.8
I	Renting of Non-Residential Buildings		32.9		32.9		0.4
J	Development and Subdividing of Residential Buildings		30.0		30.0		21.3
K	Other Civil Engineering Construction		29.8		29.8		23.8
L	Building of Steel Ships		28.8		28.8		2.7
M	Oceangoing Foreign Freight Transport		26.2		26.2		18.5
N	Manufacture of Other Paper and Paperboard		24.4		23.1		7.7
O	Building of Steel Ships		22.4		22.4		0.8
P	Apartment Building Construction		22.0		22.0		15.2
Q	Manufacture of Sections for Ships		22.0		22.0		0.0
R	Manufacture of Other Basic Iron and Steel n. e. c.		20.5		18.9		13.8
S	Manufacture of Synthetic Resin and Other Plastic Materials		18.2		18.2		0.0
T	Construction of Highways, Streets and Roads		18.0		18.0		7.7

	Total		845.8		840.2		407.8

Notes :

•

Consolidated basis as of Jun. 30, 2015.

•

Some of the totals may not sum due to rounding.

3. Independent Auditor

Audit Opinion for the last 3 years

1H 2015

FY2014

FY2013

Audit Opinion

—

Unqualified

*	For the first half of 2015, 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
FY2015	KPMG Samjong Accounting Corp.	561 (annualized basis)	Review/Audit of Financial Statements	2,680 ²⁾ Hours
FY2015	KPMG Samjong Accounting Corp.	73 (annualized basis)	K-IFRS Report Package Audit for Shinhan Savings Bank	286 ²⁾ Hours
FY2014	KPMG Samjong Accounting Corp.	500 (annualized basis)	Review/Audit of Financial Statements	6,564 Hours
	KPMG Samjong Accounting Corp.	73 (annualized basis)	K-IFRS Report Package Audit for Shinhan Savings Bank	845 Hours
	KPMG Samjong Accounting Corp.	12 (annualized basis)	Non-statutory audit of subsidiaries under the consolidated corporate tax system for CY2014	182 hours
FY2013	KPMG Samjong Accounting Corp.	508 (annualized basis)	Review/Audit of Financial Statements	6,270 hours
	KPMG Samjong Accounting Corp.	140 (annualized basis)	K-IFRS Report Package Audit for Shinhan Savings Bank	1,511 hours
	KPMG Samjong Accounting Corp.	45 (annualized basis)	Non-statutory audit of subsidiaries under the consolidated corporate tax system for CY2013	510 hours

1)	Excluding value-added taxes.

2)	As of June 30, 2015.

*	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 agreed to pay KRW1,274 million (Excluding value-added taxes) for FY2015

4. Directors, Executive Officers and Employees

Directors and Executive Officers


1) Executive Director		(As of Jun. 30, 2015)

Name

Month and

Year

of Birth

Position

Service Term

Han Dongwoo

November. 1948

- Chairman of Shinhan Financial Group

- Board Steering Committee member

- Corporate Governance & CEO Recommendation Committee member

- Outside Director Recommendation Committee member

- Corporate Social Responsibility Committee member

6 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.

8 outside directors were appointed as board of directors at the 14th Annual General Meeting of Shareholders on March 25, 2015, of which 5 directors renewed their terms and 3 directors newly appointed.


Our non-executive directors are as follows: Director		(As of Jun. 30, 2015)


Name	Month and Year of Birth	Outside Director	Sub-Committees	Service Term
Cho Yong-byoung	June. 1957	X	-	2 years starting from March 25, 2015
Namkoong Hoon	June. 1947	O	Chairman of Board of Directors Board Steering Committee member Risk Management Committee member Corporate Governance & CEO Recommendation Committee member Outside Director Recommendation Committee member	5 years starting from March 23, 2011
Ko Boo-in	December. 1941	O	Corporate Governance & CEO Recommendation Committee member	3 years starting from March 28, 2013
Kwon Taeeun	January. 1941	O	Audit Committee chair Corporate Governance & CEO Recommendation Committee member Outside Director Recommendation Committee member	5 years starting from March 23, 2011
Park Cheul	April. 1946	O	Risk Management Committee member Compensation Committee member Outside Director Recommendation Committee member	2 years starting from March 25, 2015
Kim Seok-won	April. 1947	O	Audit Committee member Compensation Committee member Corporate Social Responsibility Committee member	5 years starting from March 23, 2011
Lee Man-woo	November. 1954	O	Compensation Committee member Audit Committee member Corporate Social Responsibility Committee member	2 years starting from March 26, 2014
Lee Sang-kyung	September. 1945	O	Audit Committee member Board Steering Committee member Corporate Governance & CEO Recommendation Committee chair	4 years starting from March 29, 2012
Chung Jin	March. 1937	O	Board Steering Committee member Compensation Committee member	2 years starting from March 26, 2014
Yuki Hirakawa	October. 1960	O	Board Steering Committee member Outside Director Recommendation Committee member Corporate Social Responsibility Committee member	2 years starting from March 25, 2015
Philippe Avril	April. 1960	O	Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 25, 2015

3) Executive Officers

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

(As of Jun. 30, 2015)


Name	Month and Year of Birth	Position	In charge of
Kim Hyung-jin	August. 1958	Deputy President & Chief Strategy Officer	- Strategic Planning Team - Global Business Strategy Team - Future Strategy Research Institute - Corporate Culture Development Team
Soh Jae-gwang	August. 1961	Deputy President	- Synergy Management Team - Information & Communication Technology Planning Team - Smart Finance Team - Audit Team
Lee Sin-gee	July. 1956	Deputy President	- Public Relations Team - CSR Team - Management Support Team
Lim Young-jin	November. 1960	Deputy President	- Wealth Management Planning Office
Lee Dong-hwan	September. 1959	Deputy President	- Corporate & Investment Banking Planning Office
Yim Bo-hyuk	March. 1961	Executive Vice President & Chief Financial Officer	- Finance Management Team - Investor Relations Team - HR Team
Park Woo-gyun	March. 1959	Managing Director	- Compliance Team
Lim Byung-chul	January. 1964	Managing Director	- Future Strategy Research Institute
Jeon Young-kyo	August. 1962	Managing Director	- Finance Management Team
Choi Joon-hwan	September. 1963	Managing Director	- Information & Communication Technology Planning Team
Kim Im-geun	July. 1963	Managing Director	- Risk Management Team

Compensation to Directors

Total Amount Approved at the Meeting of Shareholders

(KRW millions)


	Total number of persons	Total amount approved at shareholders’ meeting		Notes
Directors (Outside directors)	12(10)		4,500		—

Note) Represents the aggregate amount for all directors (including Outside directors). Excludes long-term incentives.

2) Total Amount Paid as of Jun. 30, 2015

(KRW millions)


	Total number of Persons		Total Compensation		Average Compensation per person		Notes
Registered Directors		2		829		415	Excluding outside directors
Outside Directors		6		165		28	Excluding Audit committee members
Audit committee members or internal auditor		4		121		30
Total		12		1,116		93

Notes :

•

Represents the total number of applicable persons as of June 30, 2015.

•

Under the Financial Supervisory Service’s standards for preparing corporate disclosure forms, which standards were amended in November 2013, we are required to disclose in our Business Report the individual annual compensation paid by us to our directors and auditors if such individual annual compensation is W500 million or greater. In 2015, Han Dongwoo, our Chairman and Chief Executive Officer, received W829 million which consisted of W400 million in salaries and wages and W429 million in bonus payments. He also currently holds 9,372 performance shares. The exercisability of these performance shares will be determined based on a review of our business performance and share price movements during the period from 2015 to 2018.

Stock Options

(As of Jun. 30, 2015)


	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		967,092		205,313		58,764		54,560
Granted in 2008		805,174		574,150		185,396		45,628		49,053

Total		7,862,847		6,425,401		1,122,309		315,137		—

Notes :

•

The weighted-average exercise price of outstanding exercisable options as of Jun. 30, 2015 is KRW 39,726

•

The closing price of our common stock was KRW 41,550 on Jun. 30, 2015.


*Employees*		(As of Jun. 30, 2015)


Gender	Number of Employees		Average length of Service	Total Salaries and wages paid in 2015 (KRW million)		Average Payment per person (KRW million)
Male		119	3 yrs (13 yrs 8 mths)¹⁾		8,196		69
Female		29	4 yrs 11 mths (8 yrs 3 mths)¹⁾		1,157		40

Total		148	3 yrs 5 mths (12 yrs 7 mths)¹⁾		9,353		63

1)	Average length of service including service within group subsidiaries

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

Major Shareholders¹⁾ of Shinhan Financial Group as of Jun. 30, 2015


Name	No. of Common Shares owned		Ownership%
National Pension Service²⁾		43,174,488		9.10	%³⁾
BNP Paribas		25,356,276		5.35	%

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

2)	In addition to the common share holdings, National Pension Service holds a total of 2,000,000 shares of Shinhan Financial Group’s series 12 non-voting redeemable preferred stock as of Dec. 31, 2014.

3)	Based on a public disclosure made by the Korean National Pension Service on April 8, 2015, which stated that as of March 3, 2015, the National Pension Service held 43,174,488 shares of SFG’s common shares.


*Share ownership of Employee Stock Ownership Association*		(Number of shares, %)


Beginning Balance (Jan. 1, 2015)		Increase		Decrease		Ending Balance (Jun. 30, 2015)		Ownership%¹⁾ (Jun. 30, 2015)
	19,344,136		2,698,015		1,122,774		20,919,377		4.41	%

1)	Common share basis.


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


		Nov.2014		Dec.2014		Jan.2015		Feb.2015		Mar.2015		Apr.2015		May.2015		Jun.2015
Price per share	High		50,400		49,450		46,650		45,700		44,000		45,400		46,000		42,200
	Low		47,900		44,450		42,500		41,250		40,850		39,300		40,200		40,000
	Avg.		49,275		47,869		44,333		43,353		41,984		42,389		43,594		40,927
Trading Volume			14,306,227		16,132,270		17,355,213		16,909,232		31,181,608		29,206,584		17,066,980		17,406,446
Highest Daily Trading Volume			1,377,262		1,259,931		1,473,811		2,234,154		3,069,192		2,764,169		2,122,921		1,509,236
Lowest Daily Trading Volume			272,065		430,427		303,159		308,039		766,552		425,698		484,325		384,223

*American Depositary Receipts traded on the New York Stock Exchange*															(USD, number of shares)
		Nov.2014		Dec.2014		Jan.2015		Feb.2015		Mar.2015		Apr.2015		May.2015		Jun.2015
Price per share	High		46.69		44.39		42.83		42.00		39.21		42.66		42.67		38.02
	Low		43.36		40.00		38.50		37.57		36.54		36.19		36.65		35.85
	Avg.		44.81		43.06		40.41		39.30		37.70		39.37		40.15		36.74
Trading Volume			684,400		1,349,500		1,460,121		1,071,781		1,599,253		2,313,020		2,131,316		1,522,605
Highest Daily Trading Volume			80,200		154,100		195,186		104,104		166,729		407,242		334,221		179,735
Lowest Daily Trading Volume			17,300		17,900		38,471		31,811		35,478		32,536		28,250		30,922

Note) 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, 2015)		Decrease		Increase		Ending Balance (Jun. 30, 2015)
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		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	%		50.0		—		—		50.0
	Loans in KRW		2013-09-05		2018-09-05		3.61	%		80.0		—		—		80.0
	Loans in KRW		2014-01-27		2019-01-27		3.60	%		50.0		—		—		50.0
Shinhan Private Equity	Loans in KRW		2014-08-08		2015-08-07		2.81	%		2.5		—		—		2.5
Shinhan Private Equity	Loans in KRW		2014-11-26		2015-11-25		2.42	%		5.0		—		—		5.0

Total										1,337.5		—		—		1,337.5

Exhibit 99.1

Independent Auditors’ Review Report (Separate Financial Statements) of Shinhan Financial Group as of June 30, 2015

Exhibit 99.2

Independent Auditors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of June 30, 2015

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/ Yim Bo-hyuk
Name:		Yim Bo-hyuk
Title:		Chief Financial Officer

Date: August 17, 2015