SFG's Business Results for FY2025 (Including Script)

Good morning.

My name is Jung-Hoon Jang, and I have assumed the role of CFO of Shinhan Financial Group as of this year.

We will continue to pursue sustainable value creation for the Group through consistent execution, and we will remain committed to transparent communication with the market regarding our progress.

Let me now walk you through our full-year 2025 financial performance.

Page 2. 2025 Financial Highlights

As of year-end 2025, the Group’s CET1 ratio was provisionally calculated at 13.33%, despite FX volatility, as Group RWAs were managed within our planned range. Based on our sound capital position, the Board resolved a final cash dividend of KRW 570 per share and an additional cash dividend of KRW 310 per share.

Subject to shareholder approval, total shareholder return for 2025 will amount to KRW 2.5 trillion, and the total shareholder return ratio will reach 50.2%, achieving our 50% target ahead of schedule.

In addition, the Board approved KRW 500 billion of share buybacks. Including the KRW 200 billion already completed in January, total share repurchases to be executed by July will amount to KRW 700 billion.

Full-year net profit attributable to shareholders increased by 11.7% year-on-year to KRW 4,971.6 billion, supported by non-interest-driven top-line growth and well-controlled costs.

Reflecting solid earnings momentum and disciplined capital management, Group ROE and ROTCE improved by 0.7 percentage points year-on-year to 9.1% and 10.3%, respectively.

Next page. 2026 Capital Policy Direction

As mentioned earlier, taking into account recent tax reforms, the Board approved a final cash dividend of KRW 570 per share and an additional dividend of KRW 310 per share.

As a result, total cash dividends increased by 14.9% year-on-year, and the dividend payout ratio reached 25.1%.
Eligible retail shareholders will be able to benefit from the separate taxation scheme, subject to individual qualification criteria.

Please note that the dividend record date is February 20, and shares must be purchased by February 13, considering the Lunar New Year holidays, to be eligible for this dividend.

In addition, the capital reduction dividend resolved today will be utilized as a dividend source upon approval at the AGM.

Given that we have achieved our 50% shareholder return target under the Value-Up Plan at a much earlier stage, we will proceed with preparations to upgrade the Value-Up framework.
We will continue to engage actively with the market and provide transparent updates on our progress.

Page 4. Capital

The Group’s CET1 ratio declined by 22 basis points quarter-on-quarter due to RWA growth and lower quarterly earnings, but remains at a stable level.

Group RWAs increased by KRW 5.1 trillion quarter-on-quarter, mainly due to FX movements, but rose by KRW 10.9 trillion, or 3.2% year-on-year, staying within our planned range.

We will continue to provide sufficient funding to the real economy while maintaining stable capital ratios through internal efficiency initiatives and strategic capital allocation.

Page 5. Assets and Liabilities

Please refer to the materials for details.

Page 6. Group Earnings

Full-year net profit increased by 11.7% year-on-year, supported by growth in operating profit driven by non-interest income, despite the recognition of fines related to ELS, and well-controlled expenses.

Quarterly profit declined by 64.1%, reflecting lower securities-related gains due to recent interest rate increases and higher SG&A expenses driven by expanded voluntary retirement programs.

I will provide a breakdown by item on the following slides.

Page 7. Net Interest Income

Group net interest income increased by 2.6% year-on-year, supported by profitability-focused asset growth and funding cost optimization.

KRW-denominated bank loans increased by 4.4% year-on-year.
Retail loans grew by 5.0% or KRW 6.9 trillion, mainly driven by policy-related lending amid improving demand.
Corporate loans increased by 3.9% or KRW 7.1 trillion, as we actively expanded lending from the second half to support productive finance.

Please refer to Page 28 for further details.

Bank NIM declined by 2 basis points year-on-year to 1.56%, as lower asset yields were offset by improvements in funding costs.

Next page. Non-Interest Income

Group non-interest income increased by 14.4% year-on-year, with balanced growth across all business areas.

Fee income rose by 7.6% year-on-year, excluding credit card fees, which were pressured by higher customer acquisition costs. Fees related to government initiatives to revitalize capital markets recorded strong growth.

Securities-related gains declined by 53% quarter-on-quarter due to bond valuation losses amid rapid rate increases, but increased by 13.5% year-on-year.

Insurance profit increased by 7.4% year-on-year, and we expect earnings to remain stable going forward through disciplined CSM management.

Page 9. SG&A and Credit Costs

SG&A expenses increased by 4.7% year-on-year, mainly due to higher personnel expenses from voluntary retirement programs at major subsidiaries.
However, the cost-to-income ratio remained stable at 41.5%, supported by operating income growth and ongoing cost discipline.

Full-year credit costs declined by 4.1% year-on-year, as previously conservative provisioning for real estate PF exposures normalized, despite higher recurring credit costs reflecting a challenging macro environment.
Accordingly, the credit cost ratio improved by 4 basis points to 45 basis points.

On a quarterly basis, recurring credit costs declined due to asset quality management efforts, but total credit costs increased by 15.7% due to seasonal effects, including RC parameter adjustments.

Next. Asset Quality

The Group’s NPL coverage ratio improved by 1.89 percentage points quarter-on-quarter, reflecting active NPL sales following the launch of the bad bank.
However, it declined by 16.89 percentage points year-on-year to 125.98%, mainly due to higher substandard assets related to trust-managed project finance exposures.

Delinquency ratios at the Bank and Card businesses continued to improve gradually.

Given persistent credit pressure on corporates and vulnerable borrowers amid a delayed economic recovery, we will maintain conservative asset quality management while continuing to provide liquidity to areas of need.

Details on loss-absorption capacity and NPL sales are provided on the next page.

Page 12. Subsidiaries and Overseas Earnings

Shinhan Bank’s profit increased by 2.1% year-on-year, supported by non-interest-driven top-line growth, despite higher credit costs and SG&A.

Shinhan Card’s profit declined by 16.7% year-on-year, reflecting continued pressure from funding and credit costs, despite cost-structure optimization efforts and expanded customer acquisition.

Shinhan Securities recorded a rapid recovery in core earnings, driven by higher brokerage fees amid strong equity trading volumes and improved proprietary trading performance.
Further earnings upside is expected following the recent approval of the short-term note issuance business.

Shinhan Capital’s performance remained weak year-on-year due to continued pressure from funding and credit costs.

Non-bank finance subsidiaries, including Card and Capital, are progressing with asset rebalancing and structural improvement initiatives, and we expect gradual recovery in profitability.

Group overseas profit exceeded KRW 1 trillion on a pre-tax basis for the first time among domestic financial groups, led by Japan and Vietnam, despite ongoing external uncertainties, further increasing the contribution of overseas businesses to Group earnings.

Page 13. 2026 Outlook

Korea’s GDP growth is expected to rebound to around 1.8% in 2026, from 1.0% last year, although the recovery is likely to remain below potential growth.

The Bank of Korea is expected to maintain a policy rate hold stance to address FX weakness and housing price pressures.
This rate environment is supportive of bank NIM stability, but may pose challenges for asset quality among vulnerable borrowers.

The KRW/USD exchange rate is expected to stabilize in the 1,400 range, supported by foreign capital inflows and a current account surplus, despite policy uncertainty in the U.S.

The real estate market is expected to remain polarized, centered on Seoul and the metropolitan area.
Government policy to redirect funds from real estate to productive finance is expected to strengthen.

Accordingly, household loan growth, particularly mortgage lending, is likely to remain constrained, while competition for productive corporate lending is expected to intensify.

Next page. 2026 Financial Management Direction

We will maintain a total shareholder return ratio above 50% based on stable capital management, while targeting mid-9% ROE in 2026 and exceeding the 10% ROE target under our Value-Up Plan in 2027.

Operating profit will continue to expand, led by non-interest income growth, while we seek additional opportunities aligned with the government’s productive finance policy direction.

We will pursue cost structure optimization to maintain the cost-to-income ratio at a level similar to the current level, and expect the credit cost ratio to stabilize year-on-year, supported by Shinhan’s differentiated asset quality management framework.

Pages 15–16 cover our digital and sustainability initiatives.
Pages 17–19 present our Value-Up Plan implementation progress.

In 2025, we maintained a stable CET1 ratio supported by strong fundamentals and risk management, while achieving our 50% shareholder return target ahead of schedule.
The total number of shares outstanding continues to decline toward our target of 450 million shares, and ROE and ROTCE are improving at a solid pace.

Amid recent changes in commercial and tax laws and continued efforts to revitalize capital markets, Shinhan Financial Group will actively engage with the market to capture new growth opportunities arising from productive finance initiatives.

We will continue to upgrade our Value-Up Plan with a sustained focus on ROE improvement.

From Page 19 onwards, detailed financials by subsidiary, along with asset, funding, and liquidity information, are provided for your reference.

This concludes my presentation.

Thank you for your attention.