SFG's Business Results for 2Q 2026 (Including Script)

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

First of all, I would like to thank everyone for joining us today for Shinhan Financial Group’s earnings presentation for 2Q of 2026.

Let me now walk you through our financial results for the second quarter.

Page 2. Financial Highlights

As of the end of the second quarter of 2026, the Group’s CET1 ratio was preliminarily recorded at 13.43%, maintaining a solid capital position despite external uncertainties, including foreign exchange volatility.

Based on this strong capital position, the BOD approved KRW 700 billion share buyback over the next 3 months, along with a cash dividend of KRW 740 per share for the second quarter.

With this decision, the total amount of share buyback scheduled through October 2026 has reached KRW 1.4 trillion.

Taking into account our expected full-year earnings and capital adequacy, we plan to announce an additional share buyback program during the fourth quarter.

For your reference, the record date for 2Q26 dividend is 30th July, and we have already completed the KRW 700 billion share buyback and cancellation that we committed to during the first half of the year.

If quarterly cash dividends continue at the current level through year-end, our annual DPS will reach KRW 2,960, representing a 14.3% increase YoY.

In addition, share buyback through October alone will increase by 12.0% compared to last year.

We will continue to execute a flexible and sustainable shareholder return policy in line with our industry-leading Corporate Value-up Plan,

while providing investors with greater confidence and visibility.

For the second quarter of 2026, net income totaled KRW 1.82 trillion, up 12.2% QoQ.

Supported by continued efforts to enhance profitability across the Group, both ROE and ROTCE improved by approximately 1%p YoY, reaching 12.4% and 13.9%, respectively.

The next page summarizes several key shareholder value indicators, which we hope will serve as useful reference points for your investment assessment.

Page 4. Capital

First, our CET1 ratio as of the end of the first quarter has been adjusted to 13.30%, an increase of 11bp from the previously disclosed preliminary figure.

This adjustment reflects the approval of certain measures under the government’s capital regulation rationalization initiative aimed at expanding productive financing, which resulted in a KRW 3.2 trillion reduction in the Group’s RWA.

As of the end of the second quarter of 2026, despite the impact of a stronger exchange rate, our CET1 ratio further improved by 13bp to 13.43%, supported by solid earnings generation during the quarter.

We will continue to maintain a stable capital position by efficiently allocating capital and enhancing internal capital management, while providing sufficient financial support where it is needed most.

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 income before expenses increased 8.8% QoQ, driven by resilient net interest income and another quarter of strong growth in non-interest income.

I will now provide more details on each component beginning on the following pages.

Page 7. Net Interest Income

The Group’s net interest income increased 3.6% QoQ, supported by an improvement in the Bank’s NIM and growth in average interest-earning assets.

The Bank’s NIM improved by 1bp from the previous quarter, as loan yields increased in line with higher market interest rates.

The Bank’s KRW loans grew 0.4% QoQ, reflecting balanced funding support for both households and corporates.

Please refer to Page 25 for further details.

Page 8. Non-Interest Income

The Group’s non-interest income increased 22.0% QoQ, driven primarily by strong fee income, led by fee income, continuing its expansion from the first quarter.

Fee income increased across all business areas.

Supported by robust equity market activity, securities custody fees increased 29.5% QoQ, while wealth management product sales fees rose 60.8%, leading the overall growth in fee income.

In addition, IB fees, which were relatively weak in the previous quarter, rebounded strongly, improving 151.3% QoQ.

Securities-related gains increased 30.9% QoQ. Although higher market interest rates resulted in bond valuation losses, these were more than offset by gains from the appreciation of other securities.

Insurance-related income declined 44.6% QoQ, mainly due to larger insurance service result variances and the impact of changes in actuarial guidelines.

Page 9. SG&A Expenses and Credit Cost

The Group’s SG&A expenses increased 8.1% QoQ, mainly reflecting higher taxes and public charges, including education and property taxes, as well as the recognition of performance-based compensation at Shinhan Securities.

Despite the increase in operating expenses, the CIR remained stable at 36.6%, unchanged from the same period last year, supported by continued growth in operating income.

The Group’s credit cost declined 14.7% QoQ, primarily due to the base effect of our conservative provisioning policy in prior periods.

As a result, the credit cost ratio improved by 8bp YoY to 42bp.

Credit quality remains well within our initial annual guidance.

Nevertheless, we will continue to maintain a prudent risk management approach amid ongoing macroeconomic uncertainties, including higher policy rates, a persistently strong U.S. dollar, and geopolitical risks.

Page 10. Asset Quality

The Group’s NPL coverage ratio improved by 2%p QoQ, reflecting continued asset quality management across the Group, a reduction in non-performing assets, and conservative provisioning policy.

At the Bank, although the delinquency ratio increased slightly from the first quarter, we recorded the lowest net increase in delinquent loans among the peers.

At Shinhan Card, the delinquency ratio declined by 9bp QoQ, returning to the level seen at the end of last year, supported by continued portfolio management despite higher transaction volumes.

Given the slow recovery in domestic demand, rising credit risks among corporates, and continued financial pressure on vulnerable customer segments, we believe disciplined asset quality management will remain a key priority.

Further details on the Group’s loss absorption capacity and NPL disposal activities are provided on the following page for your reference.

Page 12. Subsidiary Performance

Shinhan Bank delivered a 12.5% QoQ increase in net income, driven by top-line growth, the reversal of regulatory penalty provisions, and lower credit costs, despite higher SG&A expenses, including taxes and public charges.

Following another quarter of strong recurring earnings at Shinhan Securities,

Shinhan Asset Management reported a 92.5% QoQ increase in earnings, supported by continued growth in SOL ETF AUM and higher proprietary investment income.

Shinhan Card recorded a 19.5% QoQ increase in earnings, benefiting from lower credit costs and the absence of one-off expenses related to the voluntary retirement program implemented in the previous quarter, despite a challenging funding environment.

Shinhan Capital, although credit costs improved significantly, earnings declined 28.9% QoQ, mainly due to lower securities valuation gains compared with the previous quarter.

Shinhan Life reported an 81.8% QoQ increase in earnings.

Despite higher insurance service result variances and changes in actuarial guidelines, insurance finance income improved substantially during the quarter.

The ROC of our banking businesses remained at a healthy level and continued to improve.

Meanwhile, the ROC of our capital market subsidiaries improved significantly YoY, supported primarily by stronger fee-based income.

Within the consumer finance businesses, we continue to enhance profitability through cost-efficiency initiatives while optimizing RWA by reducing exposure to lower-return assets.

Page 13. Overseas Business

Turning to Page 13, this slide highlights the differentiated performance of Shinhan’s overseas businesses.

The Group’s overseas earnings increased 13.0% QoQ, supported by continued growth at our key operations in Japan and Vietnam.

At Shinhan Bank Japan, net interest income continued to expand, benefiting from a robust real estate market and higher policy interest rates in Japan.

Meanwhile, Shinhan Bank Money Market Centers (MMCs) continued to deliver solid recurring earnings.

At the same time, we are also enhancing the efficiency of our global business portfolio.

For example, we have decided to exit the New York subsidiary of Shinhan Securities as part of our ongoing efforts to improve profitability.

Pages 14–16

Pages 14 through 16 provide updates on our digital initiatives and sustainability management activities.

Beginning on Page 17, you will find detailed financial information for each Group subsidiary,  including earnings performance, balance sheet highlights, and funding and liquidity status.

This concludes my presentation.

Thank you very much for your attention.