Form 6-K
Table of Contents

 
 
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 2010
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 þ          Form 40-F o
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): o
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): o
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 o          No þ
If “Yes” is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-                     .
 
 

 

 

Summary of 2010 3Q Business Report
On November 15, 2010, Shinhan Financial Group (“SFG”) filed its 2010 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 accounting principles generally accepted in Korea.
[Table of Contents]
     
1.  
2.  
3.  
4.  
5.  
6.  
 EX-99.1
Exhibit 99.1
Independent Accountant’s Review Report (Non-consolidated Financial Statements) of Shinhan Financial Group as of September 30, 2010

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1. Introduction of the Group
Company History in 2009 through 2010 (as of September 30, 2010)
  §   January 2009: Shinhan BNP Paribas Asset Management launched through the merger of Shinhan BNP Paribas ITMC and SH Asset Management
 
  §   June 2009: SH&C separated from SFG after SFG consummated share transfers of SH&C
 
  §   August 2009: Corporate name of Good Morning Shinhan Securities changed to Shinhan Investment Corporation
 
  §   September 2009: Shinhan Bank Japan became an indirect subsidiary of SFG
 
  §   October 2009: Shinhan Vietnam Bank became an indirect subsidiary of SFG
 
  §   November 2009: Liquidated Shinhan Finance Ltd. , an indirect subsidiary of SFG
 
  §   December 2009: Shinhan Capital Petra PEF became an indirect subsidiary of SFG
 
  §   January 2010: Shinhan Data System became a subsidiary of SFG
 
  §   June 2010: CHB Valuemeet 2001 First, Second and 2002 First SPC were disaffiliated from SFG
 
  §   August 2010: Shinhan Macquarie Financial Advisory separated from SFG
Principal Subsidiaries under Korean Law (as of September 30, 2010)
Direct Subsidiaries
         
Subsidiaries   Ownership by SFG
Shinhan Bank
     100.0 %
Shinhan Card
     100.0 %
Shinhan Investment Corp.
     100.0 %
Shinhan Life Insurance
     100.0 %
Shinhan Capital
     100.0 %
Jeju Bank1)
     68.9 %
Shinhan BNP Paribas Asset Management2)
     65.0 %
Shinhan Data System3)
     100.0 %
Shinhan Credit Information
     100.0 %
Shinhan Private Equity
     100.0 %
SHC Management
     100.0 %
 
1)   Jeju Bank is currently listed on the Korea Exchange.
 
2)   In January 2009, SH Asset Management and Shinhan BNP Paribas ITMC merged to form Shinhan BNP Paribas Asset Management.
 
3)   In January 2010, Shinhan Data System, formerly a subsidiary of Shinhan Bank became a direct subsidiary of the Group.

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Indirect subsidiaries held through direct subsidiaries
             
        Ownership
Direct Subsidiaries   Indirect Subsidiaries   by the Parent
Shinhan Bank
   Shinhan Asia Limited     100.0 %
 
   Shinhan Bank America     100.0 %
 
   Shinhan Bank Europe     100.0 %
 
   Shinhan Vina Bank     50.0 %
 
   Shinhan Khmer Bank Limited     90.0 %
 
   Shinhan Bank Kazakhstan     100.0 %
 
   Shinhan Bank China Limited     100.0 %
 
   Shinhan AITAS     89.6 %
 
   Shinhan Bank Canada     100.0 %
 
   Shinhan Bank Japan     100.0 %
 
   Shinhan Vietnam Bank     100.0 %
Shinhan Card
   Shinhan-KT Mobile Card     50.0 %
Shinhan Investment Corp.
   Shinhan Investment Corporation Europe Ltd.     100.0 %
 
   Shinhan Investment Corporation USA Inc.     100.0 %
 
   Shinhan Investment Corporation Asia Ltd.     100.0 %
Shinhan Private Equity
   Shinhan NPS Private Equity Fund 1st     5.0 % 1)
 
   Shinhan Private Equity Fund II     2.2 % 2)
Shinhan Capital
   PETRA PEF     23.8 %
 
1)   Shinhan Financial Group and its subsidiaries currently own 36.7% of Shinhan NPS Private Equity Fund 1st.
 
2)   Shinhan Financial Group and its subsidiaries currently own 32.6% of Shinhan Private Equity Fund II.
Number of Shares (As of September 30, 2010)
         
Types of Shares   Number of Shares
Common Shares
     474,199,587  
Redeemable Preferred Shares
     28,990,000  
Redeemable Convertible Preferred Shares
     14,721,000  
Total
     517,910,587  

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2. Business Results
Operation Results
(KRW billion)
                         
    2010 3Q   2009   2008
    (Jan. 1 ~ Sept. 30)   (Jan. 1~Dec. 31)   (Jan. 1~Dec. 31)
Operating income
     2,759.1       2,097.9       3,039.2  
Non-operating income
     98.4       126.2       223.6  
Non-operating expense
     91.2       244.7       261.9  
Earnings before income tax
     2,766.3       1,979.4       3,000.9  
Income taxes
     737.6       666.7       971.2  
Pre-acquisition income in subsidiaries
     0.0       0.0       (0.4 )
Consolidated net income
     2,028.7       1,328.2       2,025.6  
Net income in majority interest
     2,019.6       1,305.3       2,018.6  
Net income in minority interest
     9.1       22.9       7.0  
 
F
  Some of the totals may not sum due to rounding.

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Source and Use of Funds
Source of Funds
                                                                                                 
    2010   2009   2008
    (Jan. 1 ~ Sept. 30)   (Jan. 1 ~ Dec. 31)   (Jan. 1 ~ Dec. 31)
    Average   Ratio   Interest   Interest   Average   Ratio   Interest   Interest   Average   Ratio   Interest   Interest
(In KRW billion, %)   Balance   (%)   Paid   Rate (%)   Balance   (%)   Paid   Rate (%)   Balance   (%)   Paid   Rate (%)
Source
                                                                                                
Fund in KRW
                                                                                                
Deposits
     136,374.9       51.43       2,936.4       2.88       117,649.1       45.05       3,643.5       3.10       95,834.7       38.71       3,911.6       4.08  
CD
     5,080.7       1.92       175.4       4.62       11,462.6       4.39       644.7       5.62       15,737.2       6.36       960.0       6.10  
Borrowing
     6,489.8       2.45       141.8       2.92       7,409.0       2.84       251.9       3.40       6,727.7       2.72       333.2       4.95  
Call Loan
     2,203.9       0.83       32.5       1.97       1,328.4       0.51       33.3       2.51       2,191.2       0.89       104.3       4.76  
Debenture
     34,324.0       12.94       1,388.8       5.41       38,241.6       14.64       2,084.0       5.45       41,853.2       16.91       2,497.0       5.97  
Others
     4,180.4       1.58       95.7       3.06       6,461.1       2.47       248.8       3.85       7,624.3       3.08       425.9       5.59  
Subtotal
     188,653.7       71.15       4,770.6       3.38       182,551.8       69.91       6,906.2       3.78       169,968.3       68.66       8,232.0       4.84  
Fund in Foreign Currency
                                                                                                
Deposits
     11,685.2       4.41       110.7       1.27       10,550.7       4.04       218.7       2.07       6,743.1       2.72       179.1       2.66  
Borrowing
     6,302.7       2.38       63.7       1.35       7,776.1       2.98       183.3       2.36       9,794.5       3.96       308.3       3.15  
Call Loan
     643.3       0.24       2.5       0.52       1,188.4       0.46       36.7       3.09       1,091.3       0.44       46.6       4.27  
Debenture
     5,080.8       1.92       64.3       1.69       5,292.0       2.03       97.0       1.83       4,931.6       1.99       189.7       3.85  
Others
     265.7       0.10       13.2       6.64       201.4       0.08       5.7       2.83       1,093.8       0.44       44.5       4.07  
Subtotal
     23,977.7       9.04       254.4       1.42       25,008.6       9.58       541.4       2.16       23,654.3       9.56       768.2       3.25  
Interest bearing funding
     212,631.4       80.19       5,025.0       3.16       207,560.4       79.49       7,447.6       3.59       193,622.6       78.22       9,000.2       4.65  
Others
                                                                                                
Shareholder equity
     21,802.7       8.22       0       0.00       19,719.7       7.55       0.0       0.00       18,184.7       7.35       0.0       0.00  
Loan loss reserve
     1,497.2       0.56       0       0.00       1,548.8       0.59       0.0       0.00       1,570.7       0.63       0.0       0.00  
Others
     29,225.4       11.02       0       0.00       32,297.8       12.37       0.0       0.00       34,171.0       13.80       0.0       0.00  
Non-interest bearing funding
     52,525.3       19.81       0       0.00       53,566.3       20.51       0.0       0.00       53,926.4       21.78       0.0       0.00  
Total Funding
     265,156.7       100.00       5,025.0       2.53       261,126.7       100.00       7,447.6       2.85       247,549.0       100.00       9,000.2       3.64  
 
1)   The “Average Balance” is the arithmetic mean of the ending balance of each quarter.

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Use of Funds
                                                                                                 
    2010   2009   2008
    (Jan. 1 ~ Sept. 30)   (Jan.1~Dec.31)   (Jan.1~Dec.31)
    Average   Ratio   Interest   Interest   Average   Ratio   Interest   Interest   Average   Ratio   Interest   Interest
(In KRW billion, %)   Balance   (%)   Paid   Rate (%)   Balance   (%)   Paid   Rate (%)   Balance   (%)   Paid   Rate (%)
Use
                                                                                                
Fund in KRW
                                                                                                
Deposits
     13,170.8       4.97       87.5       0.89       11,055.7       4.23       174.8       1.58       7,376.0       2.98       258.1       3.50  
Securities
     51,826.2       19.55       1,556.7       4.02       48,785.8       18.68       2,044.4       4.19       42,543.3       17.19       2,049.7       4.82  
Loans
     132,927.3       50.13       5,701.5       5.73       60,544.2       23.19       3,295.5       5.44       122,447.1       49.46       8,960.2       7.32  
(Household)
     62,648.4       23.63       2,540.2       5.42       60,544.2       23.19       3,295.5       5.44       57,406.1       23.19       4,092.5       7.13  
(Corporate)
     70,278.9       26.50       3,161.3       6.01       70,344.1       26.94       4,184.6       5.95       65,041.0       26.27       4,867.7       7.48  
Advances for customers
     34.8       0.01       0.2       0.77       81.9       0.03       1.1       1.34       39.7       0.02       1.1       2.77  
Call Loan
     2,964.3       1.12       47.0       2.12       1,464.8       0.56       38.8       2.65       1,066.7       0.43       49.6       4.65  
Debenture
     2,451.9       0.92       110.9       6.05       2,825.5       1.08       164.9       5.84       3,245.7       1.31       204.1       6.29  
Credit Card Assets
     14,472.8       5.46       2,547.8       23.54       11,823.6       4.53       3,148.8       26.63       10,055.1       4.06       2,783.9       27.69  
(Card Loan)
     3,046.1       1.15       381.6       16.75       2,530.1       0.97       392.6       15.52       2,968.1       1.20       535.1       18.03  
Others
     4,796.8       1.81       262.6       7.32       6,219.0       2.38       401.7       6.46       6,579.6       2.66       471.5       7.17  
Loan loss reserve
     -3,479.4       (1.31 )     0       0.00       -3,519.2       (1.35 )     0.0       0.00       -3,050.2       (1.23 )     0.0       0.00  
Subtotal
     219,165.5       82.66       10,314.2       6.29       209,625.4       80.28       13,454.6       6.42       190,303.0       76.87       14,778.2       7.77  
Fund in Foreign Currency
                                                                                                
Deposits
     2,926.2       1.10       26.8       1.22       2,883.5       1.10       21.4       0.74       1,657.3       0.67       39.4       2.38  
Securities
     2,278.7       0.86       22.7       1.33       2,331.8       0.89       53.3       2.29       2,011.7       0.81       89.1       4.43  
Loan
     13,403.1       5.05       343.3       3.42       13,368.1       5.12       518.5       3.88       14,175.9       5.73       687.3       4.85  
Call loan
     1,118.4       0.42       4.2       0.50       1,154.1       0.44       9.4       0.81       864.0       0.35       23.5       2.72  
Bills bought
     3,517.2       1.33       69.3       2.63       3,076.0       1.18       152.1       4.94       3,962.1       1.60       179.1       4.52  
Others
     310.3       0.12       8.4       3.62       379.9       0.15       14.7       3.87       549.3       0.22       46.6       8.48  
Loan loss reserve
     -369.2       (0.14 )     0       0.00       -273.3       (0.10 )     0.0       0.00       -234.2       (0.09 )     0.0       0.00  
Subtotal
     23,184.7       8.74       474.7       2.74       22,920.1       8.78       769.4       3.36       22,986.1       9.29       1,065.0       4.63  
Interest earning funding
     242,350.2       91.40       10,788.9       5.95       232,545.5       89.05       14,224.0       6.12       213,289.0       86.16       15,843.2       7.43  
Others
                                                                                                
Cash
     2,256.7       0.85       0       0.00       2,289.3       0.88       0.0       0.00       2,374.6       0.96       0.0       0.00  
PP&E
     2,359.1       0.89       0       0.00       2,370.0       0.91       0.0       0.00       2,419.4       0.98       0.0       0.00  
Others
     18,190.7       6.86       0       0.00       23,921.9       9.16       0.0       0.00       29,466.0       11.90       0.0       0.00  
Non-interest earning funding
     22,806.5       8.60       0       0.00       28,581.2       10.95       0.0       0.00       34,260.0       13.84       0.0       0.00  
Total use of funds
     265,156.7       100.00       10,788.9       5.44       261,126.7       100.00       14,224.0       5.45       247,549.0       100.00       15,843.2       6.40  
 
1)   The “Average Balance” is the arithmetic mean of the ending balance of each quarter.

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Other Financial Information
Financial information for 2010 3Q contained in this section are provisional figures.
Group BIS Ratio
(KRW million)
                         
    Sept. 30, 2010   Dec. 31, 2009   Dec. 31, 2008
Aggregate Amount of Equity Capital (A)
     23,708,240       22,572,130       18,723,461  
Risk-Weighted Assets (B)
     182,811,400       179,083,070       183,741,412  
BIS Ratio (A/B) 1)
     12.97 %     12.60 %     10.19 %
 
1)   In accordance with the Financial Holding Company Guidelines of the Financial Service Commission (“FSC”), the Group BIS Ratio under BASEL I is used as an index for measuring capital adequacy.
Won Liquidity Ratio
(KRW million)
                         
    Sept. 30, 2010   2009   2008 1)
Won Assets due within 1 months (A)
     695,531       470,681       920,661  
Won Liabilities due within 1 months (B)
     165,117       376,446       690,397  
Won Liquidity Ratio (A/B)
     421.24 %     125.03 %     133.35 %
 
1)   2008 figures are due within 3 months
Liabilities to Equity Ratio
(KRW million)
                         
    Sept. 30, 2010   2009   2008
Liabilities (A)
     6,648,620       6,392,346       8,307,683  
Equity (B)
     22,261,667       20,728,361       17,605,883  
Liabilities to Equity Ratio (A/B)
     29.86 %     30.84 %     47.19 %
Capital Adequacy Ratio and Other Ratios of Certain Subsidiaries
(1) BIS Capital Adequacy Ratio (%) 1)
                         
    Sept. 30, 2010   Dec. 31, 2009   Dec. 31, 2008
Shinhan Bank 2)
     16.26       15.13       13.44  
 
1)   The BIS Capital Adequacy Ratio is computed in accordance with the guidelines issued by the FSC for commercial banks. Under these guidelines, commercial banks are required to maintain a minimum capital adequacy ratio of 8%.
 
2)   Basel II FIRB Approach was applied in calculating BIS.

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(2) Adjusted Equity Capital Ratio (%)
                         
    Sept. 30, 2010   Dec. 31, 2009   Dec. 31, 2008
Shinhan Card
     25.17       26.73       20.32  
 
*   The Adjusted Equity Capital Ratio represents the ratio of total adjusted shareholder’s equity to total adjusted assets and is computed in accordance with the guidelines issued by FSC for credit card companies. Under these guidelines, Shinhan Card is required to maintain a minimum adjusted equity capital ratio of 8%.
(3) Net Capital Ratio (%)
                         
    Sept. 30, 2010   Mar. 31, 2010   Mar. 31, 2009
Shinhan Investment Corp.
     654.01 %     558.65       678.79  
 
*   Net Capital Ratio is computed in accordance with the guidelines issued by the FSC for securities brokerage businesses. Under these guidelines, Shinhan Investment Corp. is required to maintain a minimum net capital ratio of 100%.
(4) Solvency Margin Ratio (%)
                         
    Sept. 30, 2010   Mar. 31, 2010   Mar. 31, 2009
Shinhan Life Insurance
     363.96       306.24       208.60  
 
*   Under the guidelines issued by the FSC, Shinhan Life Insurance is required to maintain a minimum solvency margin ratio of 100%.
 
*   2010 figures are calculated in Risk-Based Capital solvency ratios and 2009 figure is calculated in solvency margin ratio. Solvency margin ratios for Sept. 30, 2010 & Mar. 31, 2010 are 232.8% and 223.0% respectively.
Non- Performing Loans of Certain Subsidiaries 1)
(1) Non- Performing Loans
(KRW million)
                                                 
    Sept. 30, 2010   Dec. 31, 2009   Dec. 31, 2008
    Balance of   NPL to total   Balance of   NPL to total   Balance of   NPL to total
    NPL   Loans (%)   NPL   Loans (%)   NPL   Loans (%)
Shinhan Bank
     1,856,564       1.21       1,158,985       0.77       1,306,316       0.85  
Shinhan Card 2)
     300,613       1.85       435,083       3.08       339,101       2.91  
 
    Sept. 30, 2010   Mar. 31, 2010   Mar. 31, 2009
            NPL to           NPL to           NPL to
    Balance of   total   Balance of   total   Balance of   total
    NPL   Loans (%)   NPL   Loans (%)   NPL   Loans (%)
Shinhan Investment Corp. 2)
     173,316       14.64       230,228       17.90       125,366       12.14  
Shinhan Life Insurance 3)
     35,825       1.38       38,298       1.47       40,369       1.69  
 
1)   Non-performing loans of banks are defined as those loans are past due longer than 90 days or those are placed on non-accrual status according to the guidelines of the FSC.
 
2)   Under the guidelines of the FSC, every securities brokerage company and credit card company shall classify its loans into five categories: “normal,” “precautionary,” “substandard,” “doubtful” and “estimated loss. ” Under the Group’s internal measures, non-performing loans of Shinhan Investment Corp., and Shinhan Card includes loans classified as “substandard,” “doubtful,” and “estimated loss.”
 
3)   Non-performing loans of Life Insurance Company are defined as loans past due longer than 90 days

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(2) Loan Loss Allowances & Write-offs for the period
(KRW million)
                         
    Jan. 1, 2010 ~   Jan. 1, 2009 ~   Jan. 1, 2008 ~
    Sept. 30, 2010   Dec. 31, 2009   Dec. 31, 2008
Shinhan Bank
                        
Allowance for Possible Loan Losses
     3,119,636       2,641,918       2,661,427  
Allowance for doubtful accounts on Acceptance and Guarantees
     153,759       105,629       113,669  
Allowances for Losses Related to Unused Ceiling
     278,075       267,859       249,442  
Other Allowances
     92,392       88,337       69,557  
Allowance for Valuation of Bonds
     7,203       7,609       8,152  
Total
     3,651,065       3,111,352       3,102,247  
 
                        
Write-offs
     331,504       1,006,941       340,942  
Shinhan Card
                        
Allowance for Possible Loan Losses
     593,008       793,469       773,960  
Allowance for reward on credit card use
     283,638       273,233       246,429  
Allowances for Losses Related to Unused Ceiling
     507,367       488,559       485,738  
Other Allowances
     8,833       12,619       22,325  
Total
     1,392,845       1,567,880       1,528,452  
 
                        
Write-offs
     392,826       469,087       603,883  
                         
    Apr. 1, 2010 ~   Apr. 1, 2009 ~   Apr. 1, 2008 ~
    Sept. 30, 2010   Mar. 31, 2010   Mar. 31, 2009
Shinhan Investment Corp.
                        
Allowance for Possible Loan Losses
     127,158       168,257       110,753  
Other Allowances
     21,942       21,942       —  
Total
     149,100       190,199       110,753  
 
                        
Write-offs
     7,234       14,838       502  
Shinhan Life Insurance
                        
Allowance for Possible Loan Losses
     39,573       37,705       31,589  
Total
     39,573       37,705       31,589  
 
                        
Write-offs
     3,599       6,230       1,330  

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Note that the financial information contained in the following four tables (Twenty Largest Exposres by Borrower, Exposure to Main Debtor Group, Loan Concentration by Industry and Top Twenty Non-Performing Loans) have been formulated under the non-consolidated basis of Shinhan Bank.
Twenty Largest Exposures by Borrower
                                                     
(KRW billion)  
                Loans in                
                Foreign   Equity   Debt   Guarantees and   Total
Rank   As of Sept. 30, 2010   Loans in Won   Currency   Securities   Securities   Acceptances   Exposures
1  
Ministry of Strategy & Finance
     —       —       —       9,873       —       9,873  
2  
Bank of Korea
     —       —       —       3,660       —       3,660  
3  
Korea Deposit Insurance Corporation
     —       —       —       2,147       —       2,147  
4  
Hyundai Heavy Industries Co., Ltd.
     100       4       2       10       1,886       2,002  
5  
Hyundai Samho Heavy Industries Co., Ltd.
     35       —       —       —       1,145       1,180  
6  
Samsung Heavy Industries Co., Ltd.
     234       —       —       —       875       1,109  
7  
POSCO
     —       —       900       91       —       991  
8  
Woori Bank
     —       —       —       940       —       940  
9  
Hyundai Mipo Dockyard Co., Ltd.
     —       —       3       —       879       882  
10  
Kookmin Bank
     —       —       —       877       —       877  
11  
Songdo Cosmopolitan City Development Inc.
     843       —       —       —       —       843  
12  
Industrial Bank of Korea
     —       —       —       823       —       823  
13  
Korea Development Bank
     —       —       —       815       —       815  
14  
Samsung Electronics
     —       786       6       —       0       792  
15  
STX Offshore & Shipbuilding Co., Ltd.
     —       —       —       —       700       700  
16  
SK Energy
     199       82       —       36       330       647  
17  
Korea Land & Housing Corporation
     —       —       —       605       —       605  
18  
Hynix Semiconductor
     105       78       317       —       88       588  
19  
KEPCO
     —       —       28       555       —       584  
20  
Hana Bank
     —       —       —       573       —       573  
    Total     1,516       950       1,256       21,005       5,904       30,631  
 
1)   Shinhan Bank’s non-consolidated figures

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Exposure to Main Debtor Groups
                                                 
(KRW billion)
        Loans in           Guarantees    
        Foreign   Equity   Debt   and   Total
As of Sept. 30, 2010   Loans in Won   Currency   Securities   Securities   Acceptances   Exposures
Hyundai Heavy Industries
     300       32       4       10       4,003       4,350  
Samsung
     665       968       421       122       1,230       3,406  
Hyundai Motors
     1,028       615       29       61       357       2,090  
SK
     625       282       392       71       507       1,876  
POSCO
     256       100       902       64       364       1,686  
LG
     510       510       2       10       277       1,310  
STX
     185       109       48       —       742       1,084  
Lotte
     620       2       1       134       70       827  
LS
     367       14       —       82       178       641  
GS
     154       21       —       61       368       605  
Total
     4,711       2,653       1,799       616       8,097       17,876  
 
1)   Shinhan Bank’s non-consolidated figures
Loan Concentration by Industry
                                                                 
(KRW million)
                    Loans in Foreign        
    Loans in Won   Currency   Others   Total Loans
As of Sept. 30, 2010   Amount   Weight (%)   Amount   Weight (%)   Amount   Weight (%)   Amount   Weight (%)
Manufacturing
    20,625,758       16.34       2,391,558       36.28       7,586,091       54.21       30,603,407       20.85  
Retail and wholesale
    11,769,378       9.33       549,077       8.33       1,717,651       12.27       14,036,106       9.56  
Real estate and rental service
    15,854,520       12.56       587,828       8.92       544,063       3.89       16,986,411       11.57  
Construction
    4,870,999       3.86       16,892       0.26       742,462       5.31       5,630,353       3.84  
Lodging and restaurants
    3,978,462       3.15       55,354       0.84       83,667       0.60       4,117,483       2.81  
Financial service and insurance
    2,675,825       2.12       738,259       11.20       2,535,123       18.12       5,949,207       4.05  
Others corporate loans
    6,513,692       5.17       2,252,391       34.17       758,549       5.60       9,551,632       6.50  
Household loans
    59,913,064       47.47       —       —       —       —       59,913,064       40.82  
Total
    126,201,698       100.00       6,591,359       100.00       13,994,606       100.00       146,787,663       100.00  
 
1)   Shinhan Bank’s non-consolidated figures

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Top Twenty Non-Performing Loans
     
As of Sept. 30, 2010   (KRW billion)
                     
        Gross Principal   Allowance for Loan
Borrower   Industry   Outstanding   Losses
A  
Manufacturing
    42       24  
B  
Manufacturing
    23       6  
C  
Manufacturing
    29       13  
D  
Transportation
    22       2  
E  
Manufacturing
    18       3  
F  
Manufacturing
    16       6  
G  
Transportation
    14       5  
H  
Real estate, leasing and service
    14       6  
I  
Manufacturing
    13       10  
J  
Real estate, leasing and service
    13       2  
K  
Real estate, leasing and service
    13       10  
L  
Manufacturing
    12       6  
M  
Manufacturing
    11       5  
N  
Others
    10       3  
O  
Real estate, leasing and service
    9       0  
P  
Transportation
    9       2  
Q  
Construction
    9       4  
R  
Others
    8       1  
S  
Manufacturing
    8       5  
T  
Others
    8       1  
   
Total
    302       114  
 
1)   Non-performing loans are defined as loans past due longer than 90 days
 
2)   Shinhan Bank’s non-consolidated figures

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3. Independent Auditor
Audit Opinion for the last 3 years
                         
    2010 3Q   2009 3Q   FY 2009   FY 2008
Audit Opinion
     —       —     Unqualified   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 prepared in accordance with generally accepted accounting principles in Korea.
                         
            Payment       Working
Year   Auditor   (KRW mil.)   Details   hours
2010 3Q  
KPMG Samjong Accounting Corp.
    366     Review/Audit of Financial Statements   2,620 hours
  2009    
KPMG Samjong Accounting Corp.
    355     Review/Audit of Financial Statements   4,595 hours
  2008    
KPMG Samjong Accounting Corp.
    355     Review/Audit of Financial Statements   5,106 hours
4. Directors, Executive Officers and Employees
Directors and Executive Officers
1) Executive Directors
             
Name   Date of Birth   Position   Service Term
Shee Yul Ryoo 1)
   Sept. 5, 1938   Acting Chairman, President & CEO   1 years starting from March 24, 2010
    Risk Management Committee chair  
    Board Steering Committee member  
    Compensation Committee member  
 
Sang Hoon Shin
  Jul. 1, 1948   President & CEO 2)   2 years starting from March 17, 2009
 
1)   Mr. Shee Yul Ryoo assumed the roles of former Chairman- Mr. Eung Chan Ra upon his resignation.
 
    Please refer to our Form 6-K filed on November 1, 2010 for details
 
2)   Mr. Sang Hoon Shin has been suspended from his duty since September 14, 2010 by the Board of Directors’ resolution. Please refer to our Form 6-K filed on September 14, 210 for details.
2) Non-Executive Directors
     Currently, 10 non-executive directors are in office, 8 of which outside directors who are nominated by our Outside

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Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting on March 24, 2010.
Our non-executive directors are as follows:
                 
        Outside        
Name   Date of Birth   Director   Sub-Committees   Service Term
Eung Chan Ra
  Nov. 25, 1938   X   —   3 years starting from March 24, 2010
Baek Soon Lee
  Oct. 8, 1952   X   —   3 years starting from March 17, 2009
Byung-il Kim
   Sep. 1, 1945   O   Compensation Committee chair    
      Board Steering Committee member   1 year starting from March 24, 2010
Yo Koo Kim
  Mar. 23, 1950   O   Audit Committee member   1 year starting from March 24, 2010
Hui Mook Kim
  Aug. 17, 1957   O   —   1 year starting from March 24, 2010
Ke Sup Yun
   May 20, 1945   O   Audit Committee chair   1 year starting from March 24, 2010
      Risk Management Committee member    
      Compensation Committee member  
Sung Bin Chun
   Jan. 21, 1953   O   Chairman of Board of Directors   1 year starting from March 24, 2010
      Board Steering Committee member  
      Audit Committee member  
Haeng Nam Chung
  Mar. 15, 1941   O   Board Steering Committee member   1 year starting from March 24, 2010
Yoji Hirakawa
  Feb. 13, 1953   O   —   1 year starting from March 24, 2010
Philippe Aguignier
  Sep. 26, 1957   O   Risk Management Committee member   1 year starting from March 24, 2010
     For personal profiles of the outside directors, please refer to our Form 6-K filed on February 26, 2010.
     3) Executive Officers
     In addition to the executive directors, we currently have the following executive officers:
             
Name   Date of Birth   Position   In charge of
Buhmsoo Choi
   Aug. 8, 1956   Deputy President &
Chief Financial Officer		   - Finance Management Team
      - Investor Relations Team
      - Strategic Planning Team
      - Global Business Strategy Team
      - Shinhan FSB Research Institute
Sung Ho Wi
   Jun. 12, 1958   Deputy President   - General Affairs Team
      - Business Management Team
      - Public Relations Team
      - CSR & Culture Management Team
Jung Kee Min
   Mar. 13, 1959   Executive Vice President   - Synergy Management Team
      - Information & Technology Planning Team
      - Audit Team
Hyo Il Lee
  Sep. 26, 1959   Managing Director   - Synergy Management Team
Yee Yong Jo
  Feb. 13, 1957   Managing Director   - Compliance Team
Sam Yong Lee
  June 11, 1953   Managing Director   - Risk Management Team

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Stock Options (as of Sept. 30, 2010)
                                             
                            No. of        
    No. of   No. of   No. of   Exercisable        
    Granted   Exercised   Cancelled   Options       Exercise
    Options (A)   Options (B)   Options (C)   (D = A - B - C)   Exercise Period   Price
Granted in 2005
     2,620,331       755,760       251,300       1,613,271     2008.3.30~2012.3.29     28,006  
Granted in 2006
     3,206,173       191,170       480,300       2,534,703     2009.3.21~2013.3.20     38,829  
Granted in 2007
     1,231,169       0       148,700       1,082,469     2010.3.20~2014.3.19     54,560  
Granted in 2008
     808,700       0       146,896       661,804     2011.3.19~2015.3.18     49,053  
Granted in 2009
     614,735       0       614,735       0     2012.3.17~2016.3.16     23,405  
Total
     8,481,108       946,930       1,641,931       5,892,247     —     —  
    Note) The weighted-average exercise price of outstanding exercisable options as of Sept. 30, 2010 is KRW 39,904.
Employees (as of Sept. 30, 2010)
                             
                Total Salaries and wages   Average Payment
    Number of       paid in 2010   per person
    Employees   Average length of Service   (KRW million)   (KRW million)
Total
     145     2 years 2 months     8,499       58.6  

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5. Major Shareholders and Market Price Information of our Common Shares and ADRs
Major Shareholders 1) of Shinhan Financial Group as of Sept. 30, 2010
                 
Name   No. of Common Shares owned   Ownership%
BNP Paribas Group
     30,106,276       6.35  
National Pension Service
     23,915,225       5.04  
 
1)   Shareholders who own beneficial ownership of 5% or more.
     
Common Share Traded on the Korea Exchange   (KRW, number of shares)
                                                         
            Apr. 2010   May 2010   June 2010   July 2010   Aug. 2010   Sept. 2010
Price per share
 
High
     49,100       47,150       47,200       49,200       49,100       46,200  
 
Low
     45,150       41,050       43,300       44,300       45,100       42,300  
 
Avg.
     47,214       43,892       46,002       47,264       47,000       43,747  
Trading Volume
     41,082,098       31,413,955       29,798,840       30,636,767       24,140,249       54,422,382  
Highest Daily Trading Volume
     1,867,368       2,542,563       2,866,392       2,479,092       1,675,582       8,441,035  
Lowest Daily Trading Volume
     970,832       924,396       825,333       680,553       731,963       1,157,371  
     
American Depositary Shares traded on the New York Stock Exchange   (USD, number of shares)
                                                         
            Apr. 2010   May 2010   June 2010   July 2010   Aug. 2010   Sept. 2010
Price per share
 
High
     88.35       85.14       79.17       83.36       84.91       79.40  
 
Low
     81.51       66.31       69.44       73.09       75.42       72.77  
 
Avg.
     84.93       74.86       75.34       79.50       79.70       75.91  
Trading Volume
     949,667       1,214,625       1,354,999       1,010,625       804,623       849,639  
Highest Daily Trading Volume
     84,994       142,378       115,236       96,979       72,180       86,709  
Lowest Daily Trading Volume
     14,565       13,715       40,118       17,688       11,592       11,067  
 
*   1 ADR = 2 Common Shares

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6. Related Party Transactions
     
Loans to Subsidiaries   (KRW billion)
                                                             
        Origination   Maturity   Funding   Lending   Beginning                   Ending
Subsidiary   Loan Type   Date   Date   Rate   Rate   Balance   Increase   Decrease   Balance
Shinhan Investment Corporation
   Loan in KRW   2005-01-31   2010-07-31     4.59 %     5.25 %     70       —       70       —  
Shinhan Investment Corporation
   Loan in KRW   2006-07-31   2012-01-31     5.16 %     5.64 %     100       —       —       100  
Shinhan Capital
   Loan in KRW   2006-09-26   2011-09-26     4.91 %     4.99 %     50       —       —       50  
Shinhan Capital
   Loan in KRW   2007-03-23   2012-03-23     5.28 %     5.48 %     50       —       —       50  
Shinhan Capital
   Loan in KRW   2007-04-13   2010-04-13     5.24 %     5.38 %     50       —       50       —  
Shinhan Capital
   Loan in KRW   2007-06-08   2012-06-08     5.54 %     5.95 %     50       —       —       50  
Shinhan Capital
   Loan in KRW   2007-09-27   2010-09-27     5.91 %     6.05 %     100       —       100       —  
Shinhan Capital
   Loan in KRW   2007-11-27   2010-11-27     6.24 %     6.37 %     50       —       —       50  
Shinhan Card
   Loan in KRW   2007-11-27   2012-11-27     6.33 %     6.41 %     100       —       —       100  
Shinhan Capital
   Loan in KRW   2007-12-18   2010-12-18     6.69 %     6.83 %     50       —       —       50  
Shinhan Card
   Loan in KRW   2007-12-18   2012-12-18     6.78 %     6.86 %     50       —       —       50  
Shinhan Capital
   Loan in KRW   2008-01-23   2011-01-23     6.46 %     6.60 %     50       —       —       50  
Shinhan Capital
   Loan in KRW   2008-01-23   2013-01-23     6.51 %     6.60 %     50       —       —       50  
Shinhan Card
   Loan in KRW   2008-02-21   2011-02-21     5.51 %     5.66 %     150       —       —       150  
Shinhan Card
   Loan in KRW   2008-03-12   2011-03-12     5.71 %     5.84 %     200       —       —       200  
Shinhan Capital
   Loan in KRW   2008-03-12   2011-03-12     5.71 %     5.84 %     50       —       —       50  
Shinhan Card
   Loan in KRW   2008-06-27   2011-06-27     6.41 %     6.53 %     200       —       —       200  
Shinhan Card
   Loan in KRW   2008-07-31   2011-07-31     6.76 %     6.90 %     100       —       —       100  
Shinhan Capital
   Loan in KRW   2008-07-31   2011-07-31     6.76 %     6.90 %     50       —       —       50  
Shinhan PE
   Loan in KRW   2009-08-13   2010-08-13     3.93 %     3.99 %     5       —       5       0  
Shinhan PE
   Loan in KRW   2010-08-13   2011-08-12     3.58 %     3.64 %     —       5       —       5  
Shinhan Capital
   Loan in KRW   2010-09-28   2013-09-28     3.95 %     4.12 %     —       100       —       100  
Total
   —   —   —     —       —       1,575       105       225       1,455  

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Table of Contents

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
  SHINHAN FINANCIAL GROUP CO., LTD.
 		  
  By   /s/ Buhmsoo Choi    
  Name:   Buhmsoo Choi   
  Title:   Chief Financial Officer   
 
Date : November 15, 2010

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