SFG's Business Results for 3Q 2026 (Including Script)

Good afternoon.

This is Jeong Hoon Jang, CFO of Shinhan Financial Group.

First of all, thank you for joining us for our 3Q of 2026 earnings presentation. 

Let me now walk you through our financial results for the third quarter of 2026. 
 
Page 2. Financial Highlights

As of the end of the third quarter of 2026, the Group's CET1 ratio is provisionally estimated at 13.62%, maintaining at a stable level. 

Based on this solid capital position, the BOD approved KRW 450 billion share buyback,

along with cash dividend of KRW 740 per share for the third quarter. 

Of the share buyback, KRW 200 billion is scheduled to be completed by year-end,

with the remaining KRW 250 billion to be completed by January next year.

Accordingly, our total share buyback scheduled through the end of this year will reach KRW 1.6 trillion, up 28% YoY. 

Meanwhile, if the quarterly cash dividend is maintained at the current level through year-end,

annual DPS will reach KRW 2,960, representing a 14.3% increase YoY. 
 
That said, through the year-end BOD meeting early next year, we will continue to seek an increase in the year-end dividend,

taking into consideration various factors including capital adequacy, earnings and the shareholder return ratio.

Based on our industry-leading Corporate Value-Up Plan, 

we will continue to pursue a flexible shareholder return policy that meets market expectations. 

Net income for the third quarter of 2026 totaled KRW 1.58 trillion, down 12.9% QoQ.

Group ROE and ROTCE stood at 11.9% and 13.4%, respectively, both improving by 0.9 %p YoY. 
 
As disclosed, we have decided to acquire an approximately 77% stake in Lotte Non-Life Insurance for KRW 693.3 billion. 

This decision is intended to strengthen the Group's insurance business portfolio

while enhancing medium- to long-term profitability and capital efficiency through the use of existing Group capital. 

The acquisition consideration will be funded through a reallocation of capital already held within the Group, without any external capital raising. 

The resulting impact on the Group's CET1 ratio is estimated at approximately negative 19bp.

Given our current CET1 ratio, we believe the impact will be fully manageable. 

This acquisition was decided after reviewing a broad range of alternatives.

If we can enhance profitability through the normalization of Lotte Non-Life Insurance, 

we expect the transaction to contribute to sustainable improvement in the Group's ROE. 

There are still a number of steps to complete before the acquisition and integration processes are finalized.

We will communicate closely with the market and listen carefully to feedback at each relevant stage. 

We appreciate the continued support and feedback from our investors. 
 
The next page presents a range of indicators representing Shinhan's shareholder value,

which we hope you will find useful in making investment decisions. 

Page 4. Capital. 

As of the end of the third quarter of 2026, the Group's CET1 ratio stood at 13.62%, improving by 12bp QoQ. 

This was driven by a 1.6% QoQ decline in Group RWA, reflecting the impact of the lower exchange rate together with our selective,

profitability-focused asset growth strategy. 
 
While continuing to provide sufficient funding where it is needed,

we will maintain a stable capital ratio through internal efficiency improvements and strategic resource allocation. 

Page 5. Assets and Liabilities. 

Please refer to this presentation for details regarding the Group’s assets and liabilities.

Page 6. Group Earnings. 

The Group's operating profit before expenses for the third quarter decreased 13.2% QoQ,

as solid net interest income was more than offset by lower non-interest income. 
 
Net income declined 12.9% QoQ, as the decrease in operating profit before expenses outweighed gains from the sale of property (building)

and well-controlled expenses.

I will explain the key drivers in more detail starting from the following pages. 

Page 7. Net Interest Income. 

The Group's net interest income increased 1.8% QoQ, despite a 3bp decline in Bank NIM,

supported by growth in average loan balances and higher interest income from our bond portfolio.

Bank NIM declined by 3bp QoQ, as the increase in the cost of liabilities exceeded the improvement in asset yields. 

The Bank's KRW loans increased 1.4% QoQ, as we responded to customer demand while pursuing a profitability-focused growth strategy. 

Please refer to page 24 for further details. 

Page8. Non-Interest Income.

The Group's non-interest income decreased 45.5% QoQ,

reflecting weaker capital market conditions and uncertainty in the interest-rate environment.

Securities custody fees declined 27.7% QoQ, reflecting generally weaker performance in capital market-related businesses.

Securities-related income also declined significantly QoQ, mainly due to valuation losses on bonds resulting from higher market interest rates. 

Insurance-related income decreased QoQ as experience variance losses widened and the effects of changes in actuarial guidelines continued. 

Overall, third-quarter non-interest income softened amid market volatility.

Each business line will continue to respond accordingly and focus on securing a stable earnings base. 

Page 9. SG&A Expenses and Credit Costs. 

The Group's SG&A expenses decreased 5.0% QoQ, due to lower seasonal taxes , dues and the absence of the performance compensation expense recognized at Shinhan Securities in the previous quarter, among other factors. 

As a result, the CIR stood at 37.6% and remained well controlled at a stable level. 

The Group's credit costs increased QoQ as we maintained our proactive provisioning approach.

Nevertheless, the credit cost ratio stood at 42bp, improving by 4bp YoY,

and remained stable within the management range planned at the beginning of the year. 

We will continue to maintain a conservative provisioning policy, together with proactive asset quality management and ongoing risk reviews. 

Page 10. Asset Quality

The Group's NPL coverage ratio improved slightly QoQ to 115.48%.

Although the allowance balance decreased modestly, the volume of substandard-or-below loans declined,

mainly due to the Bank's disposal of large non-performing assets and asset reclassification. 
 
The Bank's delinquency ratio improved by 5bp QoQ, while the Card delinquency ratio increased by 2bp.

Overall, both remain at manageable levels. 

However, with the economic recovery remaining challenging and credit risks persisting, particularly among certain vulnerable borrowers,

we will continue to closely monitor asset quality and proactively manage risks. 

Detailed information on the Group's loss absorption capacity and NPL disposal activities is provided on the following page for your reference. 

Page 12. Subsidiary Performance. 

Shinhan Bank declined 5.9% QoQ.

While product sales fees from funds, bank-insurance and trusts, as well as securities-related gains,

decreased, solid net interest income helped limit overall earnings volatility. 

Shinhan Securities and Shinhan Asset Management, posted weaker earnings QoQ due to lower equity trading value

and heightened market volatility. However, profitability remained solid compared with the same period last year. 

Shinhan Card improved 68.4% QoQ, reflecting gains from the sale of its office building amid continued uncertainty in the operating environment. 

Shinhan Capital decreased 29.7% QoQ, reflecting continued funding cost pressures and weaker returns on its securities portfolio. 

Shinhan Life decreased 31.3% QoQ, due to wider experience variance losses and lower insurance finance income

following the recognition of valuation losses on securities held. 

Page 13. Overseas Business.

Shinhan continues to deliver differentiated performance. 

The Group's overseas business earnings decreased 9.9% QoQ, largely due to the lower exchange rate,

despite solid earnings generation at our major overseas subsidiaries. 

SBJ has continued to deliver stable growth despite the lower exchange rate,

supported by a strong real estate market and higher net interest income following policy rate increases. 

The Bank's MMC business also continues to deliver solid performance, led by expansion in IB activities. 

Meanwhile, heightened uncertainty in global financial markets, including higher interest rates in major economies,

has increased funding and credit costs in certain countries.

Overall, however, these remain within manageable levels. 

Pages 14-15

Pages 14 through 15 provide updates on our Digital and sustainability management initiatives.

Beginning on Page 16, we provide financial information and detailed earnings, investment and funding data by Group subsidiary for your reference.
 
This concludes our presentation. 

Thank you for your attention.