Shinhan Financial Group Co., Ltd. Q3 FY2025 earnings call

• Capital: The group's CET1 ratio was 13.56% as of end-September 2025. RWA increased by KRW 8 trillion Q-o-Q due to won depreciation and loan-driven asset growth.
• Profit and Loss: Q3 net income was down 8.1% Q-o-Q, but ROE and ROTCE rose Y-o-Y to 11.1% and 12.5% respectively.
• Interest Income: Driven by profitability-based asset growth and active margin control; bank's loan in won and retail/corporate segments saw growth.
• Noninterest Income: Impacted by market conditions, but some segments like brokerage and product sales fees surged. Insurance-related profits down Q-o-Q but stable.
• SG&A and Credit Cost: SG&A up due to voluntary retirement costs, but credit cost controlled; asset quality uncertainty remains due to macro environment.
• Subsidiary Performances: Varying results across subsidiaries, with overseas services showing differentiated outcomes.
• Digital/Sustainable Initiatives: Progress made, but details in provided materials.

In Q3 2025, Shinhan Financial Group's net income was KRW 1.4235 trillion, with an 8.1% Q-o-Q decline. Interest income rose 2.9% Q-o-Q due to profitability-based asset growth and margin control; the bank's loan in won increased 2.7% Q-o-Q, with retail up 3.1% and corporate up 2.3%, and NIM reached 1.56%. Noninterest income decreased Q-o-Q due to market conditions, but brokerage and product sales fees surged. SG&A expense increased 2.2% Q-o-Q due to voluntary retirement costs at Shinhan Card, but the cost/income ratio remained stable at 37.3%. Credit cost was 46 bp, up 2 bp Y-o-Y but improved Q-o-Q. Subsidiaries had varying performances: Shinhan Bank's earnings slightly down, Shinhan Card's earnings higher despite reduced merchant fees, Shinhan Securities' earnings down, Shinhan Capital subdued, and overseas services had differentiated results.

• Dividend: Board resolved on KRW 570 per share cash dividend for Q3; total shareholder return expected KRW 2.35 trillion.
• Capital Adequacy: Focus on maintaining stable CAR by managing RWA and ensuring sufficient funding.
• Loan Growth: Corporate loan growth expected, but household lending constrained by regulations.
• Credit Cost: Mid-40 bp range expected to hold, though seasonality may affect, but within anticipated range.

• Asset Quality: Uncertainty due to macro environment and domestic economy affecting asset quality trend.
• Regulatory: Impact on household lending growth due to regulatory constraints.
• Market Volatility: Securities-related profits impacted by market rate movements.

Q: About capital policy, dividend tax, and loan/deposit outlook.

A: Discussions on dividend policy considering tax changes, corporate loan growth plans with regulatory alignment, and funding management to ensure stability.

Q: Regarding bank and card delinquency rates, and credit cost.

A: Bank delinquency rate stabilizing, card delinquency improved, with credit cost expected to stay in mid-40 bp range.

Q: On interest spread, resource allocation.

A: Interest rate outlook with potential falls, and resource allocation to capital market in line with market circumstances.

Q: About RWA and CET1 ratio.

A: RWA growth managed, with focus on maintaining CET1 ratio through balanced resource allocation and regulatory compliance.