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 November 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 3Q Business Report

On November 14, 2013, Shinhan Financial Group (“SFG”) filed its 2013 3Q 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			18

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 September 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 Bank ¹⁾		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 Management ⁴⁾		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 September 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 September 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)


	3Q 2013 (Jan. 1 ~ Sep. 30)		FY2012 (Jan. 1 ~ Dec. 31)		FY2011 (Jan. 1 ~ Dec. 31)
Operating income		2,170.2		3,194.0		4,172.4
Equity in income(loss) of associates		2.1		27.5		57.8
Non-Operating Income(loss)		48.4		11.5		(37.6	)
Earnings before income tax		2,220.7		3,233.0		4,192.6
Income taxes		541.0		738.9		920.0
Consolidated net income		1,679.7		2,494.1		3,272.6
Net income in majority interest		1,559.5		2,322.7		3,100.0
Net income in minority interest		120.2		171.3		172.6

•

Some of the totals may not sum due to rounding.

Source and Use of Funds


Consolidated Basis (KRW billion, %)		3Q 2013								FY2012								FY2011
		Jan. 1 ~ Sep. 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 (%)
	Deposits		176,229.8		56.34		3,003.0		2.27		168,233.4		56.45		4,515.0		2.68		156,280.5		55.28		4,181.0		2.68
	Borrowings		13,239.3		4.23		174.1		1.75		14,027.8		4.71		271.9		1.94		14,037.4		4.97		259.2		1.85
	Debentures		38,506.1		12.31		1,152.1		3.99		39,765.1		13.34		1,740.2		4.38		40,017.2		14.16		1,942.9		4.86
Source	Other Liabilities		55,849.2		17.85		—		—		48,172.5		16.16		—		—		44,174.6		15.63		—		—
	Total Liabilities		283,824.4		90.73		—		—		270,198.8		90.66		—		—		254,509.7		90.03		—		—
	Total Stockholder’s Equity		28,984.2		9.27		—		—		27,843.7		9.34		—		—		28,184.6		9.97		—		—
	Total Liabilities & SE		312,808.6		100.00		—		—		298,042.5		100.00		—		—		282,694.3		100.00		—		—
	Currency & Due from Banks		17,442.8		5.58		155.1		1.19		15,956.9		5.35		242.4		1.52		14,396.1		5.09		248.6		1.73
	Loans		202,637.8		64.78		7,651.1		5.03		195,495.2		65.59		11,273.2		5.77		186,828.2		66.09		11,265.3		6.03
	Loans in KRW		156,108.2		49.91		5,606.4		4.79		150,164.5		50.38		8,298.7		5.53		143,097.0		50.62		8,281.2		5.79
	Loans in Foreign Currency		10,508.9		3.36		295.5		3.75		10,347.1		3.47		439.1		4.24		9,510.8		3.36		379.1		3.99
	Credit Card Accounts		17,390.3		5.56		1,321.3		10.13		17,507.8		5.87		1,834.0		10.48		17,740.2		6.28		1,887.5		10.64
Use	Others		18,630.4		5.96		427.9		3.06		17,475.7		5.86		701.5		4.01		16,480.2		5.83		717.5		4.35
	AFS Financial Assets		29,924.5		9.57		748.4		3.33		30,198.0		10.13		1,152.3		3.82		25,588.5		9.05		1,025.9		4.01
	HTM Financial Assets		11,238.5		3.59		401.0		4.76		11,790.4		3.96		594.6		5.04		12,307.7		4.35		642.9		5.22
	Other Assets		51,565.1		16.48		—		—		44,602.1		14.97		—		—		43,573.8		15.41		—		—
	Total Assets		312,808.6		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 Sep. 30, 2013 listed herein may be subject to change.

1) Capital Adequacy


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


	Sep. 30, 2013			Dec. 31, 2012			Dec. 31, 2011
Aggregate Amount of Equity Capital (A)		25,987.8			25,075.7			22,315.4
Risk-Weighted Assets (B)		199,320.0			201,184.4			195,579.4
BIS Ratio (A/B) ¹⁾		13.04	%		12.46	%		11.41	%

1)	Based on Basel I.

2)	Group’s Consolidated BIS Ratio for 1H 2013 disclosed in 1H Business report has changed as follow

•

Aggregate Amount of Equity Capital : From 25,148.4 bil. to 25,257.9 bil.

•

Risk-Weighted Assets : From 200,897.8 bil. to 201,007.5 bil.

•

BIS Ratio : From 12.52% to 12.57%


*Capital Adequacy Ratios (Subsidiaries)*		(%)


Subsidiary	Capital Adequacy Ratio	Sep. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Shinhan Bank	BIS Capital Adequacy Ratio		16.10		15.83		15.26
Jeju Bank	BIS Capital Adequacy Ratio		16.08		15.89		13.27
Shinhan Card	Adjusted Equity Capital Ratio		29.41		27.43		25.81
Shinhan Investment Corp.	Net Capital Ratio		610.52		666.34		700.78
Shinhan Life Insurance	Risk Based Capital Ratio		261.89		287.70		324.02
Shinhan BNPP AM	Net Capital Ratio		539.98		583.21		599.73
Shinhan Capital	Adjusted Equity Capital Ratio		15.19		14.98		14.90
Shinhan Savings Bank	BIS Capital Adequacy Ratio		13.26		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%.

•

Shinhan Bank’s BIS Ratio for 1H 2013 disclosed in 1H Business Report has changed from 15.57% to 15.50%.

2) Liquidity


*Won Liquidity Ratio*		(KRW billion, %)


Company	Sep. 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		481.1		189.4		254.0		189.1		93.4		202.6		4,225.5		3,911.2		108.0
Shinhan Bank		59,894.9		44,508.8		134.6		56,506.3		41,131.1		137.4		56,609.5		46,635.4		121.4
Shinhan Card		14,704.9		3,220.7		456.6		15,472.3		3,420.9		452.3		15,417.2		3,417.5		451.1
Shinhan Investment Corp.		11,681.9		7,237.8		161.4		9,358.8		6,725.4		139.2		6,161.4		5,036.5		122.3
Shinhan Life Insurance		1,114.4		405.1		275.1		969.1		377.2		256.9		843.5		341.5		247.0
Shinhan Capital		558.3		275.0		203.0		587.5		161.3		364.1		519.0		147.9		350.8
Jeju Bank		883.8		480.7		183.9		9,984.0		6,511.8		153.3		982.2		686.2		143.1
Shinhan Savings Bank		373.3		174.8		213.6		—		—		—		—		—		—

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*		(USD thousand, %)


Company	Sep. 30, 2013						Dec. 31, 2012						Dec. 31, 2011
Company	FC Assets		FC Liabilities		FC Liquidity Ratio(%)		FC Assets		FC Liabilities		FC Liquidity Ratio(%)		FC Assets		FC Liabilities		FC Liquidity Ratio(%)
Shinhan Financial Group		—		—		—		—		—		—		—		—		—
Shinhan Bank		27,469,161		22,743,818		120.8		25,501,141		20,005,132		127.5		25,887,879		22,254,239		116.3
Shinhan Investment Corp.		402,075		365,998		109.9		450,807		417,150		108.1		226,235		226,239		100.0
Shinhan Capital		44,102		4,134		1,066.7		108,100		71,391		151.4		44,675		18,958		235.7
Jeju Bank		18,328		14,832		123.6		11,253		5,676		198.3		15,362		9,351		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, %)


	Sep. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Total Loans		207,630.7		203,155.4		201,245.9
Substandard & Below		3,149.3		2,718.9		2,587.1
Substandard & Below Ratio		1.52		1.34		1.29
Non-Performing Loans		2,193.1		2,173.3		1,903.5
NPL Ratio		1.06		1.07		0.95
Substandard & Below Coverage Ratio		144.38		169.06		162.19
Loan Loss Allowance ¹⁾		4,546.8		4,596.5		4,196.0
Substandard & Below Loans		3,149.3		2,718.9		2,587.1

1)	Including reserve for credit losses.


*Separate Basis*		(%)


	Sep. 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		1.39		0.93		132.30		1.08		0.87		170.55		1.09		0.82		166.11
Shinhan Card		1.78		1.27		289.37		2.14		1.64		248.83		1.69		1.26		236.08
Shinhan Investment Corp.		11.18		11.18		84.42		11.17		11.18		77.61		16.97		16.92		71.46
Shinhan Life Insurance		0.22		0.22		431.04		0.50		0.26		361.33		0.45		0.23		280.64
Shinhan Capital		2.08		1.19		118.48		2.98		1.91		95.84		2.79		1.31		82.85
Jeju Bank		2.25		2.18		78.24		1.49		1.47		102.90		1.62		1.03		93.73
Shinhan Savings Bank		24.10		20.30		41.35		—		—		—		—		—		—

1)	Including reserve for credit losses.

4) Write-Offs & Provision for Credit Losses


*<SFG Consolidated Basis>*		(KRW billion)


	Sep. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		2,930.6		2,902.6		2,729.1
Allowance for acceptances and guarantees		81.9		77.8		85.8
Allowance for unused loan commitments		430.0		415.4		444.8
Other allowance		279.2		254.7		339.0

Total allowance		3,721.7		3,650.5		3,598.7

Write-offs		910.3		1,417.2		1,382.1


*<Shinhan Bank>*		(KRW billion)


	Sep. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		1,740.9		1,649.0		1,580.9
Allowance for acceptances and guarantees		117.3		112.8		109.5
Allowance for unused loan commitments		90.7		78.1		85.2
Other allowance		199.2		168.8		256.2

Total allowance		2,148.1		2,008.7		2,031.8

Write-offs		378.4		695.6		811.8


*<Shinhan Card>*		(KRW billion)


	Sep. 30, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		722.1		777.4		706.2
Allowance for acceptances and guarantees		—		—		—
Allowance for unused loan commitments		328.4		328.5		345.3
Other allowance		66.6		46.7		50.6

Total allowance		1,117.1		1,152.6		1,102.1

Write-offs		453.2		511.6		451.5

5) Debt to Equity Ratios


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


	Sep. 30, 2013			Dec. 31, 2012			Dec. 31, 2011 ¹⁾
Debt		7,249.8			7,546.0			11,413.4
Equity		20,033.0			19,666.9			19,430.8
Debt to Equity Ratio		36.19	%		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 Sep. 30, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Bank of Korea		2,720		—		4,968		—		—		7,688
Ministry of Strategy & Finance		—		—		6,173		—		—		6,173
Industrial Bank of Korea		522		124		2,655		—		—		3,301
Korea Development Bank		10		85		2,874		—		—		2,969
Hyundai Heavy Industries Co., Ltd.		3		192		327		2,306		—		2,828
Korea Deposit Insurance Corporation		—		—		2,594		—		—		2,594
Korea Finance Corporation		—		—		2,481		—		—		2,481
Woori Bank		229		194		1,379		—		—		1,801
Korea Securities Finance Corporation		31		—		1,769		—		—		1,800
Korea Land & Housing Corporation		—		—		1,571		—		—		1,571
Samsung Heavy Industries Co., Ltd.		—		13		42		1,338		—		1,394
Hyundai Samho Heavy Industries Co., Ltd.		—		42		—		978		—		1,019
Songdo Cosmopolitan City Development Inc.		809		—		182		—		—		991
Korea Housing-Finance Corporation		0		—		987		—		—		987
Nonghyup Bank		137		—		806		11		—		954
Korea EximBank		100		—		787		—		—		887
Daewoo Shipbuilding & Marine Engineering Co., Ltd.		101		111		11		571		—		794
KEPCO		—		—		776		8		—		785
Hana Bank		37		75		643		—		—		755
Small & Medium business Corporation		—		—		722		—		—		722

Total		4,698		835		31,748		5,212		—		42,493

•

Some of the totals may not sum due to rounding


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


As of Sep. 30, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Samsung		109		418		348		3,761		0		4,636
Hyundai Heavy Industries		291		673		1,046		1,947		1		3,958
Hyundai Motors		1,476		878		871		309		0		3,534
SK		485		798		940		1,029		0		3,251
LG		1,064		340		310		504		0		2,218
POSCO		352		76		684		242		1		1,354
Lotte		185		383		444		227		0		1,239
LS		335		483		28		173		0		1,020
GS		186		329		104		335		0		954
Hyosung		156		111		38		576		0		881

Total		4,638		4,490		4,812		9,104		3		23,047

•

Some of the totals may not sum due to rounding

Loan and due from banks Concentration by Industry

(KRW billion)


As of Sep. 30, 2013 Consolidated basis	Total Exposures
As of Sep. 30, 2013 Consolidated basis	Amount		Weight (%)
Finance and Insurance		60,771		21.8	%
Manufacturing		35,576		12.7	%
Real Estate, leasing and service		19,290		6.9	%
Retail and wholesale		13,379		4.8	%
Hotel and leisure		4,636		1.7	%
Construction		4,296		1.5	%
Others		41,796		15.0	%
Consumers		99,617		35.7	%

Total		279,361		100.0	%

*	Including deposits, loans, and securities

Top Twenty Non-Performing Loans

(KRW billion)


Borrower	Industry	Gross Principal Outstanding		Allowance for Loan Losses
A	Building of Steel Ships		238		21
B	Building of Steel Ships		110		23
C	Building of Steel Ships		107		81
D	Development and Subdividing of Residential Buildings		90		6
E	Wholesale of Non-Specialized Goods		75		45
F	Apartment Building Construction		66		55
G	Wholesale of Metal Ores		49		45
H	Building of Steel Ships		44		0
I	Building of Steel Ships		43		16
J	Renting of Non-Residential Buildings		33		1
K	Development and Subdividing of Residential Buildings		30		23
L	Other Civil Engineering Construction		30		23
M	Manufacture of Other Paper and Paperboard		28		9
N	Renting of Non-Residential Buildings		23		11
O	Renting of Non-Residential Buildings		23		2
P	Manufacture of Sections for Ships		22		0
Q	Building of Steel Ships		21		1
R	Development and Subdividing of Residential Buildings		21		0
S	Development and Subdividing of Residential Buildings		21		15
T	Apartment Building Construction		21		19

Total			1,095		396

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

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

3. Independent Auditor

Audit Opinion for the last 3 years

3Q 2013

FY 2012

FY 2011

Audit Opinion

—

Unqualified

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

Compensation to the Independent Auditor for Audit and Review Services

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


Year	Auditor	Payment ¹⁾ (KRW mil.)	Details	Working hours
2013	KPMG Samjong Accounting Corp.	508 (annualized basis)	Review/Audit of Financial Statements	4,100 hours ²⁾
2013	KPMG Samjong Accounting Corp.	140 (annualized basis)	K-IFRS Report Package Audit for Shinhan Savings Bank	1,050 Hours ²⁾
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 September 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 agreed to pay KRW1,304 million(Excluding value-added taxes) for FY2013

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 Oct. 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 Oct. 31, 2013 is KRW 50,339

2) The closing price of our common stock was KRW 46,350 on Oct. 31, 2013.


*Employees*		(As of Sep. 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

119

2 yrs 8 mths

11,460

Female

3 yrs 9 mths

1,482

Total

149

2 yrs 11 mths

12,943

Note)

Average length of service including service within group subsidiaries as of Sep. 30, 2013 is Male 12 yrs 11 mths and Female 7yrs 1 mths, whereas total average is 11yrs 9mths.

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

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


Name	No. of Common Shares owned		Ownership%
National Pension Service		38,399,881		8.10	%²⁾
BNP Paribas		25,356,276		5.35	%³⁾

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

2)	As of Aug. 2, 2013

3)	As of Oct. 22, 2013

4)	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 Sep. 30, 2013.

Share ownership of Employee Stock Ownership Association

Beginning Balance

(Jan. 1, 2013)

Increase

Decrease

Ending Balance
(Sep. 30, 2013)

Ownership%¹⁾
(Sep. 30, 2013)

18,787,067

2,713,921

1,715,963

19,785,025

4.17

1)	Common share basis.


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


		Apr. 2013		May. 2013		Jun. 2013		Jul. 2013		Aug. 2013		Sep. 2013	Oct. 2013
Price per share	High		40,600		40,700		40,600		41,000		41,550	44,850		48,650
	Low		37,250		37,050		35,950		37,300		39,050	41,050		43,800
	Avg.		39,036		38,857		38,258		39,257		40,500	43,572		45,990
Trading Volume			19,273,274		22,474,182		17,255,195		18,255,240		18,868,266	17,224,587		24,337,853
Highest Daily Trading Volume			1,551,531		2,090,943		1,587,521		1,721,529		1,517,466	1,831,529		6,514,753
Lowest Daily Trading Volume			467,707		443,285		341,055		305,551		421,376	591,708		400,603


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


		Apr. 2013		May. 2013		Jun. 2013		Jul. 2013		Aug. 2013		Sep. 2013	Oct. 2013
	High		36.26		35.63		36.10		36.47		37.15	42.34		45.61
Price per share	Low		32.73		33.50		30.82		32.58		34.82	37.62		40.63
	Avg.		34.42		34.62		33.45		34.90		36.15	40.38		43.04
Trading Volume			2,039,053		2,521,769		1,609,642		1,165,631		1,025,411	996,438		878,337
Highest Daily Trading Volume			391,395		458,417		259,491		294,654		150,611	89,551		90,686
Lowest Daily Trading Volume			37,164		21,474		34,116		20,547		19,500	24,299		12,881

*	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 (Sep. 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		—		—
	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	%		—		—		50.0		50.0
	Loans in KRW		2013-09-05		2018-09-05		3.61	%		—		—		80.0		80.0
Shinhan PE Investment Management	Loans in KRW		2012-08-10		2013-08-09		4.09	%		5.0		5.0		—		—
	Loans in KRW		2012-11-27		2013-11-27		3.07	%		5.0		—		—		5.0
	Loans in KRW		2013-08-09		2014-08-08		2.81	%		—		—		2.5		2.5

Total										1,360.0		155.0		132.5		1,337.5

Exhibit 99.1

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

Exhibit 99.2

Independent Auditors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of September 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: November 14, 2013