Edgar Filing: SHINHAN FINANCIAL GROUP CO LTD

(As of Mar. 31, 2014)

Month and
Year
of Birth

Position

Service Term

Dong Woo Han

November. 1948

- Chairman of Shinhan Financial Group

- Board Steering Committee member

- Corporate Governance & CEO Recommendation Committee Member

6 years starting from March 23, 2011

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 March 2014

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant’s name into English)

20, Sejong-Daero 9-gil, 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 FY2013 Business Report

On March 31, 2014, Shinhan Financial Group (“SFG”) filed its FY2013 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		20

6. Related Party Transactions		21

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 December 31, 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		100.0	%
SHC Management ⁴⁾		100.0	%

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

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

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

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

4)	Currently in liquidation proceedings.

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

	FY2013 (Jan. 1 ~ Dec. 31)		FY2012 (Jan. 1 ~ Dec. 31)		FY2011 (Jan. 1 ~ Dec. 31)
Operating income		2,637.6		3,178.0		4,172.4
Equity in income(loss) of associates		7.3		27.5		57.8
Non-Operating Income(loss)		37.3		25.1		(37.6	)
Earnings before income tax		2,682.2		3,230.6		4,192.6
Income taxes		622.6		738.7		920.0

Consolidated net income		2,059.6		2,491.9		3,272.6
Net income in majority interest		1,902.8		2,321.9		3,100.0
Net income in minority interest		156.8		170.0		172.6

Some of the totals may not sum due to rounding.

Source and Use of Funds


Consolidated Basis (KRW billion, %)		FY2013								FY2012								FY2011
		Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31
		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)
Source	Deposits		176,825.5		56.58		3,914.2		2.21		170,937.0		56.64		4.636.9		2.71		156,280.5		55.28		4,181.0		2.68
	Borrowings		13,054.6		4.18		229.3		1.76		14,463.2		4.79		293.5		2.03		14,037.4		4.97		259.2		1.85
	Debentures		38,303.2		12.26		1,521.5		3.97		39,763.3		13.18		1.740.2		4.38		40,017.2		14.16		1,942.9		4.86
	Other Liabilities		55,163.7		17.65		—		—		48,721.2		16.14		—		—		44,174.6		15.63		—		—
	Total Liabilities		283,347.0		90.67		—		—		273,884.7		90.75		—		—		254,509.7		90.03		—		—
	Total Stockholder’s Equity		29,159.3		9.33		—		—		27,920.0		9.25		—		—		28,184.6		9.97		—		—
	Total Liabilities & SE		312,506.3		100.00		—		—		301,804.7		100.00		—		—		282,694.3		100.00		—		—
Use	Currency & Due from Banks		17,264.0		5.52		200.9		1.16		15,655.9		5.19		246.7		1.58		14,396.1		5.09		248.6		1.73
	Loans		203,254.8		65.04		10,173.5		5.01		196,161.4		65.00		11.309.1		5.77		186,828.2		66.09		11,265.3		6.03
	Loans in KRW		156,496.7		50.08		7,435.5		4.75		150,826.8		49.97		8.334.2		5.53		143,097.0		50.62		8,281.2		5.79
	Loans in Foreign Currency		10,506.0		3.36		394.6		3.76		10,335.9		3.42		439.1		4.25		9,510.8		3.36		379.1		3.99
	Credit Card Accounts		17,445.2		5.58		1,763.8		10.11		17,507.8		5.80		1.834.0		10.48		17,740.2		6.28		1,887.5		10.64
	Others		18,806.9		6.02		579.6		3.08		17,490.9		5.80		701.9		4.01		16,480.2		5.83		717.5		4.35
	AFS Financial Assets		29,620.6		9.48		979.2		3.31		28,996.9		9.61		1.111.9		3.83		25,588.5		9.05		1,025.9		4.01
	HTM Financial Assets		11,197.0		3.58		527.9		4.71		11,790.5		3.91		594.7		5.04		12,307.7		4.35		642.9		5.22
	Other Assets		51,169.9		16.37		—		—		49,200.0		16.30		—		—		43,573.8		15.41		—		—

	Total Assets		312,506.3		100.00		—		—		301,804.7		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

1) Capital Adequacy

Consolidated BIS Ratio (Shinhan Financial Group)


							(KRW billion)

	Dec. 31, 2013			Dec. 31, 2012			Dec. 31, 2011
Aggregate Amount of Equity Capital (A)		25,605.8			25,075.7			22,315.4
Risk-Weighted Assets (B)		190,716.6			201,184.4			195,579.4
BIS Ratio (A/B)		13.43	%		12.46	%		11.41	%

•

Figs. for 2013 based on Basel III, Figs. for 2011~2012 based on Basel I

Capital Adequacy Ratios (Subsidiaries)


						(%)

Subsidiary	Capital Adequacy Ratio	Dec. 31, 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		15.95		15.89		13.27
Shinhan Card	Adjusted Equity Capital Ratio		30.41		27.43		25.81
Shinhan Investment Corp.	Net Capital Ratio		493.33		666.34		700.78
Shinhan Life Insurance	Risk Based Capital Ratio		253.06		287.70		324.02
Shinhan BNPP AM	Net Capital Ratio		599.75		583.21		599.73
Shinhan Capital	Adjusted Equity Capital Ratio		15.05		14.98		14.90
Shinhan Savings Bank	BIS Capital Adequacy Ratio		12.22		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 III FIRB was applied in calculating Shinhan Bank’s BIS Capital Adequacy Ratio for 2013 whereas, Basel II FIRB was applied for 2011~2012

•

Basel III TSA was applied in calculating Jeju Bank’s BIS Capital Adequacy Ratio for 2013 whereas, Basel II TSA was applied for 2011~2012

•

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

•

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

•

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

•

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

2) Liquidity

Won Liquidity Ratio


															(KRW billion, %)

Company	Dec. 31, 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		578.3		263.0		219.9		189.1		93.4		202.6		4,225.5		3,911.2		108.0
Shinhan Bank		53,589.9		41,699.5		128.5		56,506.3		41,131.1		137.4		56,609.5		46,635.4		121.4
Shinhan Card		14,490.7		3,902.1		371.4		15,472.3		3,420.9		452.3		15,417.2		3,417.5		451.1
Shinhan Investment Corp.		10,613.7		7,833.6		135.5		9,358.8		6,725.4		139.2		6,161.4		5,036.5		122.3
Shinhan Life Insurance		1,174.2		419.6		279.8		969.1		377.2		256.9		843.5		341.5		247.0
Shinhan Capital		510.9		221.1		231.1		587.5		161.3		364.1		519.0		147.9		350.8
Jeju Bank		937.3		559.0		167.7		9,984.0		6,511.8		153.3		982.2		686.2		143.1
Shinhan Savings Bank		257.4		91.8		280.2		—		—		—		—		—		—

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	Dec. 31, 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		25,808,136		20,294,035		127.2		25,501,141		20,005,132		127.5		25,887,879		22,254,239		116.3
Shinhan Investment Corp.		451,293		390,614		115.5		450,807		417,150		108.1		226,235		226,239		100.0
Shinhan Capital		84,439		55,637		151.8		108,100		71,391		151.4		44,675		18,958		235.7
Jeju Bank		8,486		5,203		163.1		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, %)

	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Total Loans		207,680.2		203,155.4		201,245.9
Substandard & Below		2,609.1		2,718.9		2,587.1
Substandard & Below Ratio		1.26		1.34		1.29
Non-Performing Loans		1,990.2		2,173.3		1,903.5
NPL Ratio		0.96		1.07		0.95
Substandard & Below Coverage Ratio		163.45		169.06		162.19
Loan Loss Allowance ¹⁾		4,264.6		4,596.5		4,196.0
Substandard & Below Loans		2,609.1		2,718.9		2,587.1

1)	Including reserve for credit losses.

Separate Basis


																	(%)

	Dec. 31, 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		1.16		0.90		149.82		1.08		0.87		170.55		1.09		0.82		166.11
Shinhan Card		1.53		1.00		314.75		2.14		1.64		248.83		1.69		1.26		236.08
Shinhan Investment Corp.		4.65		4.65		94.16		11.17		11.18		77.61		16.97		16.92		71.46
Shinhan Life Insurance		0.20		0.19		472.62		0.50		0.26		361.33		0.45		0.23		280.64
Shinhan Capital		2.23		1.88		111.21		2.98		1.91		95.84		2.79		1.31		82.85
Jeju Bank		1.53		1.49		105.10		1.49		1.47		102.90		1.62		1.03		93.73
Shinhan Savings Bank		17.70		13.64		33.30		—		—		—		—		—		—

1)	Including reserve for credit losses.

4) Write-Offs & Provision for Credit Losses

<SFG Consolidated Basis>


					(KRW billion)

	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		2,575.0		2,903.5		2,729.1
Allowance for acceptances and guarantees		93.0		77.8		85.8
Allowance for unused loan commitments		411.2		415.4		444.8
Other allowance		246.1		254.6		339.0

Total allowance		3,325.3		3,651.3		3,598.7

Write-offs		1,504.1		1,417.2		1,382.1

<Shinhan Bank>


					(KRW billion)

	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		1,502.1		1,649.8		1,580.9
Allowance for acceptances and guarantees		111.5		112.8		109.5
Allowance for unused loan commitments		80.3		78.1		85.2
Other allowance		180.0		168.8		256.2

Total allowance		1,873.9		2,009.5		2,031.8

Write-offs		750.8		695.6		811.8

<Shinhan Card>


					(KRW billion)

	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for loan losses		673.5		777.4		706.2
Allowance for acceptances and guarantees		—		—		—
Allowance for unused loan commitments		318.6		328.5		345.3
Other allowance		52.7		46.7		50.6

Total allowance		1,044.8		1,152.6		1,102.1

Write-offs		647.5		511.6		451.5

5) Debt to Equity Ratios

Shinhan Financial Group (Separate Basis)


							(KRW billion)

	Dec. 31, 2013			Dec. 31, 2012			Dec. 31, 2011 ¹⁾
Debt		7,450.2			7,546.0			11,413.4
Equity		19,974.5			19,666.9			19,430.8
Debt to Equity Ratio		37.30	%		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 Dec. 31, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Bank of Korea		2,730		—		5,060		0		—		7,790
Ministry of Strategy & Finance		0		—		6,197		—		—		6,197
Korea Development Bank		9		84		2,782		—		—		2,875
Hyundai Heavy Industries Co., Ltd.		35		174		309		2,255		0		2,774
Industrial Bank of Korea		492		63		2,205		—		—		2,760
Korea Deposit Insurance Corporation		0		—		2,710		—		—		2,710
Woori Bank		857		34		1,483		—		—		2,374
Korea Finance Corporation		—		—		2,195		—		—		2,195
Korea Securities Finance Corporation		36		—		1,490		—		—		1,526
Korea Land & Housing Corporation		0		—		1,497		—		—		1,497
Nonghyup Bank		529		—		792		11		—		1,332
Samsung Heavy Industries Co., Ltd.		0		19		53		1,257		0		1,328
Hyundai Samho Heavy Industries Co., Ltd.		4		34		10		1,137		0		1,185
Korea Housing-Finance Corporation		0		—		974		—		—		974
Hana Bank		57		72		766		—		—		894
KEPCO		2		—		841		20		—		863
Korea EximBank		—		—		853		—		—		853
Hyundai Steel		493		171		98		42		0		803
Hyundai Mipo Dockyard Co., Ltd.		0		0		1		761		—		762
LG Electronics Co., Ltd.		196		—		86		438		—		720

Total		5,440		650		30,401		5,921		0		42,413

Some of the totals may not sum due to rounding

Exposure to ten Main Debtor Groups


									(KRW billion)

As of Dec. 31, 2013 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Hyundai Heavy Industries		152		377		340		4,180		1		5,050
Samsung		395		1,026		1,112		1,892		—		4,425
SK		488		637		1,192		1,189		—		3,506
Hyundai Motors		1,229		938		992		325		—		3,484
LG		795		313		474		507		—		2,089
Lotte		555		529		756		248		—		2,088
POSCO		253		409		461		232		1		1,356
LS		188		381		171		342		—		1,082
Hyosung		253		492		76		142		—		963
GS		227		103		193		365		—		888

Total		4,535		5,205		5,767		9,422		2		24,931

Some of the totals may not sum due to rounding

Loan and due from banks Concentration by Industry


	(KRW billion)

As of Dec. 31, 2013 Consolidated basis	Total Exposures
As of Dec. 31, 2013 Consolidated basis	Amount		Weight (%)
Finance and Insurance		58,720		21
Manufacturing		34,694		13
Retail and wholesale		13,607		5
Real Estate, leasing and service		18,723		7
Construction		4,261		2
Hotel and leisure		4,602		2
Others		39,692		14
Consumers		102,096		37

Total		276,395		100

*	Including deposits, loans, and securities

Top Twenty Non-Performing Loans


						(KRW billion)

Borrower	Industry	Gross Principal Outstanding		NPL		Allowance for Loan Losses
A	Building of Steel Ships		231		154		27
B	Apartment Building Construction		110		101		101
C	Development and Subdividing of Residential Buildings		90		90		7
D	Wholesale of Non-Specialized Goods		84		84		59
E	Building of Steel Ships		77		76		36
F	Apartment Building Construction		67		54		54
G	Building of Steel Ships		44		44		0
H	Renting of Non-Residential Buildings		30		30		3
I	Development and Subdividing of Residential Buildings		30		30		23
J	Building of Steel Ships		29		29		3
K	Other Civil Engineering Construction		28		28		23
L	Manufacture of Other Paper and Paperboard		27		25		8
M	Building of Steel Ships		34		23		9
N	Manufacture of liquid crystal Flat Display Boards		21		21		0
O	Building of Steel Ships		21		21		1
P	Apartment Building Construction		21		21		18
Q	Manufacture of Sections for Ships		20		20		2
R	Development and Subdividing of Residential Buildings		19		19		3
S	Apartment Building Construction		18		18		0
T	Manufacture of Synthetic Resin and Other Plastic Materials		18		18		0

	Total		1,019		908		377

1)	Consolidated basis as of Dec. 31, 2013.

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

3. Independent Auditor

Audit Opinion for the last 3 years

FY2013

FY 2012

FY 2011

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 ¹⁾ (KRW mil.)		Details	Working hours
2013	KPMG Samjong Accounting Corp.		508	Review/Audit of Financial Statements	6,270 hours
2013	KPMG Samjong Accounting Corp.		140	K-IFRS Report Package Audit for Shinhan Savings Bank	1,511 Hours
2012	KPMG Samjong Accounting Corp.		498	Review/Audit of Financial Statements	6,380 hours
	KPMG Samjong Accounting Corp.		35	K-IFRS Report Package Audit for Shinhan Savings Bank	372 hours
	KPMG Samjong Accounting Corp.		70	Non-statutory audit of subsidiaries under the consolidated corporate tax system for CY2012	690 hours
2011	KPMG Samjong Accounting Corp.		487	Review/Audit of Financial Statements	9,016 hours

1)	Excluding value-added taxes.

*	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 Director

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 13th Annual General Meeting of Shareholders on March 26, 2014, of which 7 directors renewed their terms and 2 director newly appointed.

Our non-executive directors are as follows: Director


				(As of Mar. 31, 2014)

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

Hoon Namkoong	June 1947	O	Chairman of Board of Directors Risk Management Committee member Compensation Committee member Corporate Governance & CEO Recommendation Committee member	4 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

Taeeun Kwon	January 1941	O	Audit Committee chair Corporate Governance & CEO Recommendation Committee member	4 years starting from March 23, 2011

Kee Young Kim	October 1937	O	Board Steering Committee member Risk Management Committee member	4 years starting from March 23, 2011

Seok Won Kim	April 1947	O	Audit Committee member Board Steering Committee member Compensation Committee member	4 years starting from March 23, 2011

Man Woo Lee	November 1954	O	Compensation Committee member Audit Committee member	2 years starting from March 26, 2014

Sang Kyung Lee	September 1945	O	Audit Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 29, 2012

Jin Chung	March 1937	O	Board Steering Committee member	2 years starting from March 26, 2014

Haruki Hirakawa	November 1964	O	Compensation Committee member	4 years starting from March 23, 2011

Philippe Aguignier	September 1957	O	Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	5 years starting from March 24, 2010

3) Executive Officers

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


			(As of Mar. 31, 2014)

Name	Month and Year of Birth	Position	In charge of
Hyung Jin Kim	July. 1958	Deputy President	- Strategic Planning Team - Global Business Strategy Team - Future Strategy Research Institute - Corporate Culture Development Team

Jae Gwang Soh	August. 1961	Deputy President	- Synergy Management Team - Information & Communication Technology Planning Team - Smart Finance Team - Audit Team

Jung Kee Min	March. 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 Team - Management Support Team

Young Jin Lim	November. 1960	Deputy President	- Wealth Management Planning Office

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

Bo Hyuk Yim	March. 1961	Executive Vice President	- Risk Management Team

Woo Gyun Park	March. 1959	Managing Director	- Compliance Team

Byung Chul Lim	January. 1964	Managing Director	- Future Strategy Research Institute

Young Kyo Jeon	August. 1962	Managing Director	- Finance Management Team

Stock Options


									(As of Feb. 28, 2014)

	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 Feb. 28, 2014 is KRW 50,339 2) The closing price of our common stock was KRW 44,450 on Feb. 28, 2014.

Employees


						(As of Dec. 31, 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		118	2 yrs 11 mths (12 yrs 11 mths)¹⁾		14,391		122
Female		30	4 yrs (7 yrs 4 mths)¹⁾		2,020		67

Total		148	3 yrs 2 mths (11 yrs 10 mths)¹⁾		16,411		111

1)	Average length of service including service within group subsidiaries

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

Major Shareholders¹⁾ of Shinhan Financial Group as of Dec. 31, 2013


Name	No. of Common Shares owned		Ownership%
National Pension Service		41,795,962		8.81	%
BNP Paribas		25,356,276		5.35	%

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

2)	In addition to the common share holdings, National Pension Service holds a total of 2,000,000 shares of Shinhan Financial Group’s series 12 non-voting redeemable preferred stock as of Dec. 31, 2013.

Share ownership of Employee Stock Ownership Association

Beginning Balance

(Jan. 1, 2013)

Increase

Decrease

Ending Balance
(Dec. 31, 2013)

Ownership%¹⁾
(Dec. 31, 2013)

18,787,067

3,084,368

2,538,933

19,332,502

4.08

1)	Common share basis.

Common Share Traded on the Korea Exchange


														(KRW, number of shares)

		Jul. 2013		Aug. 2013		Sep. 2013		Oct. 2013		Nov. 2013		Dec. 2013		Jan. 2014		Feb. 2014
Price per share	High		41,000		41,550		44,850		48,650		46,800		47,500		46,600		45,250
	Low		37,300		39,050		41,050		43,800		42,150		43,900		43,000		42,000
	Avg.		39,257		40,500		43,572		45,990		44,455		45,605		44,478		43,970
Trading Volume			18,255,240		18,868,266		17,224,587		24,337,853		17,171,084		18,627,562		20,153,930		19,455,940
Highest Daily Trading Volume			1,721,529		1,517,466		1,831,529		6,514,753		1,319,749		1,744,554		1,526,941		2,137,863
Lowest Daily Trading Volume			305,551		421,376		591,708		400,603		389,937		461,270		568,070		387,779
*American Depositary Receipts traded on the New York Stock Exchange*
												(USD, number of shares)

		Jul. 2013		Aug. 2013		Sep. 2013		Oct. 2013		Nov. 2013		Dec. 2013		Jan. 2014		Feb. 2014
Price per share	High		36.47		37.15		42.34		45.61		43.87		45.70		43.77		41.79
	Low		32.58		34.82		37.62		40.63		40.06		41.27		39.77		39.44
	Avg.		34.90		36.15		40.38		43.04		41.92		43.32		41.72		40.86
Trading Volume			1,165,631		1,025,411		996,438		878,337		743,184		1,095,729		1,326,446		1,414,926
Highest Daily Trading Volume			294,654		150,611		89,551		90,686		106,513		189,109		123,661		147,578
Lowest Daily Trading Volume			20,547		19,500		24,299		12,881		9,616		18,566		27,613		37,416

*	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 (Dec. 31, 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
	Loans in KRW	2013-11-27	2014-11-26		3.01	%						5.0		5.0

Total								1,360.0		160.0		137.5		1,337.5

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: March 31, 2014