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 April 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 FY2012 Business Report

On April 1, 2013, Shinhan Financial Group (“SFG”) filed its FY2012 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.

Principal Subsidiaries under Korean Law (as of December 31, 2012)


*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		100.0%
Shinhan Data System		100.0%
Shinhan AITAS ²⁾		99.8%
Shinhan Credit Information		100.0%
Shinhan Private Equity Investment Management		100.0%
SHC Management ³⁾		100.0%

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

2)	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.

3)	Currently in liquidation proceedings.

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

Indirect subsidiaries held through direct subsidiaries (as of December 31, 2012)


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 Capital currently owns 6.5% 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 December 31, 2012)*

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)

	FY2012 (Jan. 1~Dec. 31)		FY2011 (Jan. 1~Dec. 31)			FY2010 (Jan. 1~Dec. 31)
Operating income		3,194.0		4,172.4			3,552.9
Equity in income(loss) of associates		27.5		57.8			15.3
Non-Operating Income(loss)		11.5		(37.6	)		(138.4	)
Earnings before income tax		3,233.0		4,192.6			3,429.8
Income taxes		738.9		919.9			570.4

Consolidated net income		2,494.1		3,272.6			2,859.4
Net income in majority interest		2,322.7		3,100.0			2,684.6
Net income in minority interest		171.3		172.6			174.8

Some of the totals may not sum due to rounding.

Source and Use of Funds


																		*(KRW billion)*
		FY2012								FY2011								FY2010
		Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31
Consolidated Basis (KRW billion, %)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)
Source	Deposits		168,233.4		56.45		4,515.0		2.68		156,280.5		55.28		4,181.0		2.68		149,653.3		56.11		3,935.6		2.63
	Borrowings		14,027.8		4.71		271.9		1.94		14,037.4		4.97		259.2		1.85		12,403.4		4.65		250.4		2.02
	Debentures		39,765.1		13.34		1,740.2		4.38		40,017.2		14.16		1,942.9		4.86		40,356.3		15.13		2,041.2		5.06
	Other Liabilities		48,172.5		16.16		—		—		44,174.6		15.63		—		—		38,446.2		14.41		—		—
	Total Liabilities		270,198.8		90.66		—		—		254,509.7		90.03		—		—		240,859.2		90.30		—		—
	Total Stockholder’s Equity		27,843.7		9.34		—		—		28,184.6		9.97		—		—		25,872.4		9.70		—		—
	Total Liabilities & SE		298,042.5		100.00		—		—		282,694.3		100.00		—		—		266,731.6		100.00		—		—

Use	Currency & Due from Banks		15,956.9		5.35		242.4		1.52		14,396.1		5.09		248.6		1.73		14,457.1		5.42		168.5		1.17
	Loans		195,495.2		65.59		11,273.2		5.77		186,828.2		66.09		11,265.3		6.03		174,360.4		65.37		10,561.5		6.06
	Loans in KRW		150,164.5		50.38		8,298.7		5.53		143,097.0		50.62		8,281.2		5.79		135,645.6		50.85		7,632.4		5.63
	Loans in Foreign Currency		10,347.1		3.47		439.1		4.24		9,510.8		3.36		379.1		3.99		8,940.8		3.35		377.3		4.22
	Credit Card Accounts		17,507.8		5.87		1,834.0		10.48		17,740.2		6.28		1,887.5		10.64		16,278.4		6.10		1,794.8		11.03
	Others		17,475.7		5.86		701.5		4.01		16,480.2		5.83		717.5		4.35		13,495.8		5.06		756.9		5.61
	AFS Financial Assets		30,198.0		10.13		1,152.3		3.82		25,588.5		9.05		1,025.9		4.01		22,045.7		8.27		953.6		4.33
	HTM Financial Assets		11,790.4		3.96		594.6		5.04		12,307.7		4.35		642.9		5.22		12,899.1		4.84		687.4		5.33
	Other Assets		44,602.1		14.97		—		—		43,573.8		15.41		—		—		42,969.3		16.11		—		—
	Total Assets		298,042.5		100.00		—		—		282,694.3		100.00		—		—		266,731.6		100.00		—		—

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

Other Financial Information

1) Capital Adequacy


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

	Dec. 31, 2012			Dec. 31, 2011			Dec. 31, 2010
Aggregate Amount of Equity Capital (A)		25,075.7			22,315.4			23,369.7

Risk-Weighted Assets (B)		201,184.4			195,579.4			188,785.7

BIS Ratio (A/B) ¹⁾		12.46	%		11.41	%		12.38	%

1)	Based on Basel I.

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


*Capital Adequacy Ratios (Subsidiaries)*						(%)

Subsidiary	Capital Adequacy Ratio	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Shinhan Bank ¹⁾	BIS Capital Adequacy Ratio		15.83		15.26		15.47
Jeju Bank ¹⁾	BIS Capital Adequacy Ratio		15.89		13.27		13.40
Shinhan Card ²⁾	Adjusted Equity Capital Ratio		27.43		25.81		24.99
Shinhan Investment Corp. ²⁾	Net Capital Ratio		666.34		700.78		658.31
Shinhan Life Insurance ²⁾	Risk Based Capital Ratio		287.70		324.02		397.93
Shinhan BNPP AM ²⁾	Net Capital Ratio		583.21		599.73		708.31
Shinhan Capital²⁾	Adjusted Equity Capital Ratio		14.98		14.90		14.23
Shinhan Savings Bank	BIS Capital Adequacy Ratio		15.20		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 Ratios.

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

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

The Adjusted Equity Capital Ratio represents the ratio of total adjusted shareholder’s equity to total adjusted assets and is computed in accordance with the guidelines issued by 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%.

1)	Capital adequacy ratios for Dec. 31, 2010 based on K-GAAP is as follows:

Shinhan Bank: 15.93%, Jeju Bank: 14.18%

2)	Capital adequacy ratios of Shinhan Card, Shinhan Investment Corp., Shinhan Life Insurance, Shinhan BNPP AM, and Shinhan Capital for Dec. 31, 2010 are based on K-GAAP.

2) Liquidity Ratios


*Won Liquidity Ratio*																	(KRW billion, %)

Company	Dec. 31, 2012						Dec. 31, 2011						Dec. 31. 2010
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		189.1		93.4		202.6		4,225.5		3,911.2		108.0		972.6		246.0		395.3
Shinhan Bank		56,506.3		41,131.1		137.4		56,609.5		46,635.4		121.4		54,646.2		45,786.9		119.3
Shinhan Card		15,472.3		3,420.9		452.3		15,417.2		3,417.5		451.1		13,160.9		3,450.1		381.5
Shinhan Investment Corp.		9,358.8		6,725.4		139.2		6,161.4		5,036.5		122.3		6,615.7		5,293.5		125.0
Shinhan Life Insurance		969.1		377.2		256.9		843.5		341.5		247.0		517.3		254.7		203.1
Shinhan Capital		587.5		161.3		364.1		519.0		147.9		350.8		758.8		295.0		257.2
Jeju Bank		9,984.0		6,511.8		153.3		982.2		686.2		143.1		899.3		618.8		145.3
Shinhan Savings Bank		299.4		151.8		197.3		—		—		—		—		—		—

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


*Foreign Currency (FC) Liquidity Ratio*													(KRW billion, %)

Company	Dec. 31, 2012						Dec. 31, 2011						Dec. 31, 2010
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		25,501.1		20,005.1		127.5		25,887.9		22,254.2		116.3		24,238.7		23,092.8		105.0
Shinhan Investment Corp.		482.9		446.8		108.1		23.3		23.5		99.0		11.5		10.3		111.5
Shinhan Capital		108.1		71.4		151.4		51.5		21.9		235.7		333.5		285.0		117.0
Jeju Bank		11.4		6.1		186.8		15.4		9.4		164.3		13.0		10.5		123.8

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

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

3) Asset Quality


*SFG Consolidated Basis*					(KRW billion, %)

	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Total Loans		203,155.4		201,245.9		184,676.3
Substandard & Below		2,718.9		2,587.1		2,736.8
Substandard & Below Ratio		1.34		1.29		1.48
Non-Performing Loans		2,173.3		1,903.5		1,977.7
NPL Ratio		1.07		0.95		1.07
Substandard & Below Coverage Ratio		169.06		162.19		132.80
Loan Loss Allowance ¹⁾		4,596.5		4,196.0		3,634.5
Substandard & Below Loans		2,718.9		2,587.1		2,736.8

1)	Including reserve for credit losses.


*Separate Basis*																	(%)

	Dec. 31, 2012						Dec. 31, 2011						Dec. 31, 2010
	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		1.08		0.87		170.55		1.09		0.82		166.11		1.31		0.91		133.10
Shinhan Card		2.14		1.64		248.83		1.69		1.26		236.08		1.90		1.44		182.65
Shinhan Investment Corp.		11.17		11.18		77.61		16.97		16.92		71.46		12.29		12.29		82.41
Shinhan Life Insurance		0.50		0.26		361.33		0.45		0.23		280.64		0.62		1.48		226.89
Shinhan Capital		2.98		1.91		95.84		2.79		1.31		82.85		2.38		1.86		80.44
Jeju Bank		1.49		1.47		102.90		1.62		1.03		93.73		1.57		1.28		113.74
Shinhan Savings Bank		31.71		31.71		38.30		—		—		—		—		—		—

1)	Including reserve for credit losses.

4) Write-Offs & Provision for Credit Losses


*<SFG Consolidated Basis>*					(KRW billion)

	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Allowance for loan losses		2,893.0		2,729.1		2,993.3
Allowance for acceptances and guarantees		77.8		85.8		171.0
Allowance for unused loan commitments		415.4		444.8		462.5
Other allowance		253.6		339.0		225.9
Total allowance		3,639.8		3,598.7		3,852.7
Write-offs		1,417.2		1,382.1		1,284.7


*<Shinhan Bank>*					(KRW billion)

	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Allowance for loan losses		1,649.0		1,580.9		1,803.8
Allowance for acceptances and guarantees		112.8		109.5		208.7
Allowance for unused loan commitments		78.1		85.2		85.8
Other allowance		168.8		256.2		155.4
Total allowance		2,008.7		2,031.8		2,253.8
Write-offs		695.6		811.8		773.1


*<Shinhan Card>*					(KRW billion)

	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Allowance for loan losses		777.4		706.2		703.8
Allowance for acceptances and guarantees		—		—		—
Allowance for unused loan commitments		328.5		345.3		367.5
Other allowance		46.7		50.6		42.5
Total allowance		1,152.6		1,102.1		1,113.8
Write-offs		511.6		451.5		436.8

5) Debt to Equity Ratios


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

	Dec. 31, 2012			Dec. 31, 2011 ¹⁾			Dec. 31, 2010
Debt		7,546.0			11,413.4			6,907.6
Equity		19,666.9			19,430.8			20,753.0
Debt to Equity Ratio		38.37	%		58.74	%		33.29	%

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


*Twenty Largest Exposures by Borrower*											(KRW billion)

As of Dec. 31, 2012 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Ministry of Strategy & Finance		—		—		8,139		—		—		8,139
Bank of Korea		2,560		—		4,628		—		—		7,188
Industrial Bank of Korea		503		44		2,885		—		—		3,432
Hyundai Heavy Industries Co., Ltd.		28		109		538		2,739		—		3,414
Korea Development Bank		12		92		3,132		—		—		3,237
Korea Finance Corporation		—		—		3,028		—		—		3,028
Korea Deposit Insurance Corporation		—		—		2,978		—		—		2,978
Korea Land & Housing Corporation		—		—		1,842		—		—		1,842
Samsung Heavy Industries Co., Ltd.		—		82		61		1,484		—		1,626
Korea Securities Finance Corporation		31		—		1,329		—		—		1,360
Woori Bank		319		39		956		3		—		1,318
Nonghyup Bank		90		—		910		—		—		1,000
POSCO		36		189		712		28		—		965
Songdo Cosmopolitan City Development Inc.		888		—		—		—		—		888
Samsung C&T Corporation		41		56		461		304		—		861
KEPCO		1		—		828		8		—		837
Korea EximBank		—		—		836		—		—		836
Hana Bank		32		42		760		—		—		834
Kookmin Bank		144		5		678		—		—		827
Hyundai Samho Heavy Industries Co., Ltd.		—		19		50		704		—		773

Total		4,685		677		34,753		5,269		—		45,384

Some of the totals may not sum due to rounding


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

As of Dec. 31, 2012 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Hyundai Heavy Industries		134		207		600		3,731		—		4,672
Samsung		338		902		1,196		2,117		—		4,553
Hyundai Motors		1,370		1,458		757		334		—		3,919
SK		689		774		1,151		1,005		—		3,618
LG		1,510		326		275		77		—		2,188
POSCO		217		338		830		342		—		1,726
Lotte		361		120		684		333		1		1,498
GS		268		274		227		270		—		1,040
LS		189		308		197		309		—		1,004
Hyosung		251		463		17		147		—		878

Total		5,327		5,170		5,933		8,665		1		25,097

Some of the totals may not sum due to rounding


*Loan and due from banks Concentration by Industry*			(KRW billion)

As of Dec. 31, 2012 Consolidated basis	Total Exposures
As of Dec. 31, 2012 Consolidated basis	Amount		Weight (%)
Finance and Insurance		52,782		19.84	%
Manufacturing		35,179		13.22	%
Retail and wholesale		12,534		4.71	%
Real Estate, leasing and service		19,475		7.32	%
Construction		5,008		1.88	%
Hotel and leisure		4,215		1.58	%
Others		38,328		14.40	%
Consumers		98,558		37.04	%

Total		266,079		100	%

*	Including deposits, loans, and securities


*Top Twenty Non-Performing Loans*

				(KRW billion)

Borrower	Industry	Gross Principal Outstanding		Allowance for Loan Losses
A	Development and Subdividing of Residential Buildings		116		26
B	Building of Steel Ships		43		19
C	Office and Commercial Building Construction		40		30
D	Development and Subdividing of Residential Buildings		37		2
E	Manufacture of Television		35		32
F	Manufacture of Other Paper and Paperboard		34		15
G	Renting of Non-Residential Buildings		31		2
H	Development and Subdividing of Residential Buildings		30		22
I	Other Civil Engineering Construction		29		26
J	Development and Subdividing of Residential Buildings		27		0
K	Manufacture of Synthetic Resin and Other Plastic Materials		25		2
L	Development and Subdividing of Residential Buildings		23		2
M	Manufacture of Sections for Ships		22		0
N	Building of Steel Ships		21		2
O	Manufacture of Other Basic Iron and Steel n. e. c.		20		14
P	Construction of Highways, Streets and Roads		19		11
Q	Other Cast of Non-ferrous Metals		18		3
R	Non-Financial Holding Companies		18		18
S	Renting of Non-Residential Buildings		18		0
T	Real Estate Consultancy and Brokerage		17		2

	Total		623		227

1)	Consolidated basis as of Dec. 31, 2012.

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

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

3. Independent Auditor

Audit Opinion for the last 3 years

FY 2012

FY 2011

FY 2010

Audit Opinion

Unqualified

Compensation to the Independent Auditor for Audit and Review Services

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

Year

Auditor

Payment
(KRW mil.)

Details

Working
hours

2012

KPMG Samjong Accounting

Corp.

498

Review/Audit of Financial Statements

6,380
hours

2011

KPMG Samjong Accounting

Corp.

487

Review/Audit of Financial Statements

9,016
hours

2010

KPMG Samjong Accounting

Corp.

366

Review/Audit of Financial Statements

4,650
hours

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 Member

- 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 member Corporate Governance & CEO Recommendation Committee member	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

Buhmsoo Choi	Aug. 1956	Deputy President	- Strategic Planning Team - Global Business Strategy Team - Shinhan FSB Research Institute

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

Dong Hwan Lee	Sep. 1959	Deputy President	- Corporate & Investment Banking Planning Office

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	July 1956	Deputy President	- Public Relations Team - CSR & Culture Management Team - General Affairs Team

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

Woo Gyun Park	Mar. 1959	Managing Director	- Compliance Team

Byung chul Lim	Jan. 1964	Managing Director	- Shinhan FSB Research Institute


*Stock Options*									(As of Feb. 28, 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		996,722		480,300		1,729,151		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		3,263,364		1,122,309		3,477,174		—

Note	1) The weighted-average exercise price of outstanding exercisable options as of Feb. 28, 2013 is KRW 44,974.

2) The closing price of our common stock was KRW 42,650 on Feb. 28, 2013.

Employees

(As of Dec. 31, 2012)

Gender

Number of
Employees

Average length of Service

Total Salaries and wages
paid in 2012
(KRW million)

Average Payment
per person
(KRW million)

Male

127

2 yrs 5 mths

15,198

120

Female

3 yrs 4 mths

1,870

Total

155

2 yrs 7 mths

17,068

110

Note 1)

Average length of service including service within group subsidiaries as of Dec. 31, 2012 is Male 13 yrs 3 mths

and Female 7yrs 4 mths, whereas total average is 12yrs 2mths.

2)	Total salaries and average payment per person excludes retired employees. Including retired employees, total salaries

paid stands at KRW19,412 million and average payment per person KRW99million.

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


*Major Shareholders¹⁾ of Shinhan Financial Group as of Dec. 31, 2012*

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

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, 2012.

Share ownership of Employee Stock Ownership Association

Beginning Balance

(Jan. 1, 2012)

Increase

Decrease

Ending Balance

(Dec. 31, 2012)

Ownership%¹⁾

(Dec. 31, 2012)

16,974,245

3,618,670

1,805,848

18,787,067

3.96%

1)	Common share basis.


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

		Jul. 2012		Aug. 2012		Sep. 2012		Oct. 2012		Nov. 2012		Dec. 2012		Jan. 2013		Feb. 2013
Price per share	High		40,900		37,600		39,350		38,700		38,000		38,950		42,150		42,650
	Low		33,350		34,250		34,500		36,750		33,550		34,100		38,900		39,200
	Avg.		36,970		36,367		37,020		37,652		35,355		37,017		40,302		40,884
Trading Volume			29,538,364		29,398,615		30,282,383		16,965,939		20,246,247		21,836,849		22,521,117		19,289,381
Highest Daily Trading Volume			2,623,823		2,479,453		3,497,457		1,531,700		1,711,287		2,242,260		1,982,508		2,245,654
Lowest Daily Trading Volume			587,270		594,170		551,598		396,731		461,578		587,830		499,305		568,054

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

		Jul. 2012		Aug. 2012		Sep. 2012		Oct. 2012		Nov. 2012		Dec. 2012		Jan. 2013		Feb. 2013
Price per share	High		72.84		66.30		69.90		34.97		34.84		36.64		39.01		38.86
	Low		58.54		61.83		60.77		33.07		31.25		31.42		37.02		35.89
	Avg.		64.74		64.41		66.17		33.95		32.59		34.44		37.84		37.40
Trading Volume			593,047		848,141		565,578		974,446		1,073,368		1,251,615		1,595,732		1,294,323
Highest Daily Trading Volume			57,657		205,904		69,439		87,800		145,651		211,507		263,937		143,978
Lowest Daily Trading Volume			9,613		7,520		9,852		11,364		26,591		22,122		23,475		37,682

1)	Shinhan Financial Group changed the ratio on its American Depositary Receipts (ADRs) from one (1) ADR representing two (2) common shares to one (1) ADR representing one (1) common share effective October 15, 2012.

2)	Figures from July 2012 to September 2012 reflect the previous ratio (2:1), whereas figures for October 2012 reflect the changed ratio(1:1).

6. Related Party Transactions


*Loans to Subsidiaries*											(KRW billion)

Subsidiary	Loan Type	Origination Date	Maturity Date	Lending Rate	Beginning Balance (Jan. 1, 2012)		Decrease		Increase		Ending Balance (Dec. 31, 2012)
Shinhan Investment Corp.	Loans in KRW	2006-07-31	2012-01-31	5.64%		100.0		100.0		—		—
	Loans in KRW	2012-01-30	2017-01-30	4.11%		—		—		100.0		100.0
	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	2007-03-23	2012-03-23	5.48%		50.0		50.0		—		—
	Loans in KRW	2007-06-08	2012-06-08	5.95%		50.0		50.0		—		—
	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

Shinhan PE Investment Management	Loans in KRW	2011-08-12	2012-08-10	4.09%		5.0		5.0		—		—
	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

Total						1,105.0		205.0		460.0		1,360.0

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: April 1, 2013