Edgar Filing: SHINHAN FINANCIAL GROUP CO LTD

2010 1H

FY 2009

FY 2008

Audit Opinion

Unqualified

Unqualified

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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 August 2010

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant’s name into English)

120, 2-Ga, Taepyung-Ro, 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 þ 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): o

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): o

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 þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .

Summary of 2010 1H Business Report

On Aug 16, 2010, Shinhan Financial Group (“SFG”) filed its 2010 1H 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 accounting principles generally accepted in Korea.

Table of Contents


1.		Introduction of the Group
2.		Business Results
3.		Independent Auditor
4.		Directors, Executive Officers and Employees
5.		Major Shareholders and Market Price Information of Our Common Shares and ADRs
6.		Related Party Transactions
EX-99.1

Exhibit 99.1

Independent Accountant’s Review Report (Non-consolidated Financial Statements) of Shinhan Financial Group as of June 30, 2010

1. Introduction of the Group

Company History in 2009 through 2010 (as of June 30, 2010)

	▪		January 2009: Shinhan BNP Paribas Asset Management launched through the merger of Shinhan BNP Paribas ITMC and SH Asset Management

	▪		June 2009 : SH&C separated from SFG after SFG consummated share transfers of SH&C

	▪		August 2009 : Corporate name of Good Morning Shinhan Securities changed to Shinhan Investment Corporation

	▪		September 2009 : Shinhan Bank Japan became an indirect subsidiary of SFG

	▪		October 2009 : Shinhan Vietnam Bank became an indirect subsidiary of SFG

	▪		November 2009 : Liquidated Shinhan Finance Ltd. , an indirect subsidiary of SFG

	▪		December 2009 : Shinhan Capital Petra PEF became an indirect subsidiary of SFG

	▪		January 2010 : Shinhan Data System became a subsidiary of SFG

	▪		June 2010: CHB Valuemeet 2001 First, Second and 2002 First SPC were disaffiliated from SFG

Principal Subsidiaries under Korean Law (as of June 30, 2010)

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 Capital		100.0	%
Jeju Bank¹⁾		68.9	%
Shinhan BNP Paribas Asset Management²⁾		65.0	%
Shinhan Data System³⁾		100.0	%
Shinhan Credit Information		100.0	%
Shinhan Private Equity		100.0	%
Shinhan Macquaire Financial Advisory		51.0	%
SHC Management		100.0	%


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

2)		In January 2009, SH Asset Management and Shinhan BNP Paribas ITMC merged to form Shinhan BNP Paribas Asset Management.

3)		In January 2010, Shinhan Data System, formerly a subsidiary of Shinhan Bank became a direct subsidiary of the Group.

Indirect subsidiaries held through direct subsidiaries


		Ownership
Direct Subsidiaries	Indirect Subsidiaries	by the Parent
	Shinhan Asia Limited		100.0	%
	Shinhan Bank America		100.0	%
	Shinhan Bank Europe		100.0	%
	Shinhan Vina Bank		50.0	%
	Shinhan Khmer Bank Limited		80.1	%
Shinhan Bank	Shinhan Bank Kazakhstan		100.0	%
	Shinhan Bank China Limited		100.0	%
	Shinhan AITAS		89.6	%
	Shinhan Bank Canada		100.0	%
	Shinhan Bank Japan		100.0	%
	Shinhan Vietnam Bank		100.0	%
Shinhan Card	Shinhan-KT Mobile Card		50.0	%
	Shinhan Investment Corporation Europe Ltd.		100.0	%
Shinhan Investment Corp.	Shinhan Investment Corporation USA Inc.		100.0	%
	Shinhan Investment Corporation Asia Ltd.		100.0	%
Shinhan Private Equity	Shinhan NPS Private Equity Fund 1^st		5.0	% ¹⁾
Shinhan Private Equity	Shinhan Private Equity Fund II		2.2	% ²⁾
Shinhan Capital	PETRA PEF		23.8	%


1)		Shinhan Financial Group and its subsidiaries currently own 36.7% of Shinhan NPS Private Equity Fund 1^st.

2)		Shinhan Financial Group and its subsidiaries currently own 32.6% of Shinhan Private Equity Fund II.

Number of Shares (As of June 30, 2010)


Types of Shares	Number of Shares
Common Shares		474,199,587
Redeemable Preferred Shares		38,373,459
Redeemable Convertible Preferred Shares		14,721,000
Total		527,294,046

2. Business Results

Operation Results


					(KRW billion)
	2010 1H		2009		2008
	(Jan. 1~June 30)		(Jan.1~Dec.31)		(Jan.1~Dec.31)
Operating income		1,869.8		2,097.9		3,039.2
Non-operating income		53.1		126.2		223.6
Non-operating expense		69.0		244.7		261.9
Earnings before income tax		1,853.9		1,979.4		3,000.9
Income taxes		479.4		666.7		971.2
Pre-acquisition income in subsidiaries		0.0		0.0		(0.4	)
Consolidated net income		1,374.5		1,328.2		2,025.6
Net income in majority interest		1,367.6		1,305.3		2,018.6
Net income in minority interest		6.9		22.9		7.0


F		Some of the totals may not sum due to rounding.

Source and Use of Funds

Source of Funds


	2010							2009							2008
	(Jan.1~June 30)							(Jan.1~Dec.31)							(Jan.1~Dec.31)
(In KRW billion, %)	Average Balance Ratio (%)			Interest Paid		Interest Rate (%)		Average Balance Ratio (%)			Interest Paid		Interest Rate (%)		Average Balance Ratio (%)			Interest Paid		Interest Rate (%)
Source
Fund in KRW
Deposits		135,296.8	51.40		1,937.1		2.89		117,649.1	45.05		3,643.5		3.10		95,834.7	38.71		3,911.6		4.08
CD		5,629.8	2.14		134.9		4.83		11,462.6	4.39		644.7		5.62		15,737.2	6.36		960.0		6.10
Borrowing		6,886.2	2.62		94.1		2.76		7,409.0	2.84		251.9		3.40		6,727.7	2.72		333.2		4.95
Call Loan		2,123.1	0.81		19.9		1.89		1,328.4	0.51		33.3		2.51		2,191.2	0.89		104.3		4.76
Debenture		34,154.4	12.98		925.5		5.46		38,241.6	14.64		2,084.0		5.45		41,853.2	16.91		2,497.0		5.97
Others		3,754.1	1.43		65.9		3.54		6,461.1	2.47		248.8		3.85		7,624.3	3.08		425.9		5.59
Subtotal		187,844.4	71.36		3,177.4		3.41		182,551.8	69.91		6,906.2		3.78		169,968.3	68.66		8,232.0		4.84
Fund in Foreign Currency
Deposits		11,628.1	4.42		84.4		1.46		10,550.7	4.04		218.7		2.07		6,743.1	2.72		179.1		2.66
Borrowing		6,073.6	2.31		42.2		1.40		7,776.1	2.98		183.3		2.36		9,794.5	3.96		308.3		3.15
Call Loan		578.1	0.22		1.5		0.52		1,188.4	0.46		36.7		3.09		1,091.3	0.44		46.6		4.27
Debenture		5,141.8	1.95		44.3		1.74		5,292.0	2.03		97.0		1.83		4,931.6	1.99		189.7		3.85
Others		139.9	0.05		3.4		4.90		201.4	0.08		5.7		2.83		1,093.8	0.44		44.5		4.07
Subtotal		23,561.5	8.95		175.8		1.50		25,008.6	9.58		541.4		2.16		23,654.3	9.56		768.2		3.25
Interest bearing funding		211,405.9	80.32		3,353.2		3.20		207,560.4	79.49		7,447.6		3.59		193,622.6	78.22		9,000.2		4.65
Others
Shareholder equity		21,517.9	8.17		0.0		0.00		19,719.7	7.55		0.0		0.00		18,184.7	7.35		0.0		0.00
Loan loss reserve		1,478.6	0.56		0.0		0.00		1,548.8	0.59		0.0		0.00		1,570.7	0.63		0.0		0.00
Others		28,815.1	10.95		0.0		0.00		32,297.8	12.37		0.0		0.00		34,171.0	13.80		0.0		0.00
Non-interest bearing funding		51,811.6	19.68		0.0		0.00		53,566.3	20.51		0.0		0.00		53,926.4	21.78		0.0		0.00
Total Funding		263,217.5	100.00		3,353.2		2.57		261,126.7	100.00		7,447.6		2.85		247,549.0	100.00		9,000.2		3.64


1)		The “Average Balance” is the arithmetic mean of the ending balance of each quarter.

Use of Funds


	2010								2009								2008
	(Jan.1~June 30)								(Jan.1~Dec.31)								(Jan.1~Dec.31)
(In KRW billion, %)	Average Balance Ratio (%)				Interest Paid		Interest Rate (%)		Average Balance Ratio (%)				Interest Paid		Interest Rate (%)		Average Balance Ratio (%)				Interest Paid		Interest Rate (%)
Use
Fund in KRW
Deposits		13,260.1	5.04			55.6		0.85		11,055.7	4.23			174.8		1.58		7,376.0	2.98			258.1		3.50
Securities		51,850.4	19.70			1,050.9		4.09		48,785.8	18.68			2,044.4		4.19		42,543.3	17.19			2,049.7		4.82
Loans		132,283.4	50.26			3,821.8		5.83		60,544.2	23.19			3,295.5		5.44		122,447.1	49.46			8,960.2		7.32
(Household)		62,401.2	23.71			1,702.2		5.50		60,544.2	23.19			3,295.5		5.44		57,406.1	23.19			4,092.5		7.13
(Corporate)		69,882.2	26.55			2,119.6		6.12		70,344.1	26.94			4,184.6		5.95		65,041.0	26.27			4,867.7		7.48
Advances for customers		32.4	0.01			0.1		0.62		81.9	0.03			1.1		1.34		39.7	0.02			1.1		2.77
Call Loan		2,697.7	1.02			27.1		2.03		1,464.8	0.56			38.8		2.65		1,066.7	0.43			49.6		4.65
Debenture		2,511.7	0.95			77.6		6.23		2,825.5	1.08			164.9		5.84		3,245.7	1.31			204.1		6.29
Credit Card Assets		14,136.5	5.37			1,672.2		23.85		11,823.6	4.53			3,148.8		26.63		10,055.1	4.06			2,783.9		27.69
(Card Loan)		2,951.9	1.12			246.5		16.84		2,530.1	0.97			392.6		15.52		2,968.1	1.20			535.1		18.03
Others		4,583.1	1.74			169.0		7.44		6,219.0	2.38			401.7		6.46		6,579.6	2.66			471.5		7.17
Loan loss reserve		-3,449.6	(1.31	)		0.0		0.00		-3,519.2	(1.35	)		0.0		0.00		-3,050.2	(1.23	)		0.0		0.00
Subtotal		217,905.7	82.79			6,874.3		6.36		209,625.4	80.28			13,454.6		6.42		190,303.0	76.87			14,778.2		7.77
Fund in Foreign Currency
Deposits		2,859.9	1.09			17.6		1.24		2,883.5	1.10			21.4		0.74		1,657.3	0.67			39.4		2.38
Securities		2,326.5	0.88			16.9		1.46		2,331.8	0.89			53.3		2.29		2,011.7	0.81			89.1		4.43
Loan		13,197.8	5.01			228.6		3.49		13,368.1	5.12			518.5		3.88		14,175.9	5.73			687.3		4.85
Call loan		1,083.3	0.41			2.6		0.48		1,154.1	0.44			9.4		0.81		864.0	0.35			23.5		2.72
Bills bought		3,417.0	1.30			45.9		2.71		3,076.0	1.18			152.1		4.94		3,962.1	1.60			179.1		4.52
Others		311.2	0.12			5.3		3.43		379.9	0.15			14.7		3.87		549.3	0.22			46.6		8.48
Loan loss reserve		-346.7	(0.13	)		0.0		0.00		-273.3	(0.10	)		0.0		0.00		-234.2	(0.09	)		0.0		0.00
Subtotal		22,849.0	8.68			316.9		2.80		22,920.1	8.78			769.4		3.36		22,986.1	9.29			1,065.0		4.63
Interest earning funding		240,754.7	68.862			7,191.2		6.02		232,545.5	89.05			14,224.0		6.12		213,289.0	86.16			15,843.2		7.43
Others
Cash		2,193.2	0.83			0.0		0.00		2,289.3	0.88			0.0		0.00		2,374.6	0.96			0.0		0.00
PP&E		2,354.2	0.89			0.0		0.00		2,370.0	0.91			0.0		0.00		2,419.4	0.98			0.0		0.00
Others		17,915.4	6.81			0.0		0.00		23,921.9	9.16			0.0		0.00		29,466.0	11.90			0.0		0.00
Non-interest earning funding		22,462.8	8.53			0.0		0.00		28,581.2	10.95			0.0		0.00		34,260.0	13.84			0.0		0.00
Total use of funds		263,217.5	100.00			7,191.2		5.51		261,126.7	100.00			14,224.0		5.45		247,549.0	100.00			15,843.2		6.40


1)		The “Average Balance” is the arithmetic mean of the ending balance of each quarter.

Other Financial Information

Financial information for 2010 1H contained in this section are provisional figures.

Group BIS Ratio


(KRW million)
	June 30, 2010			Dec. 31, 2009			Dec. 31, 2008
Aggregate Amount of Equity Capital (A)		23,735,983			22,572,130			18,723,461
Risk-Weighted Assets (B)		181,008,807			179,083,070			183,741,412
BIS Ratio (A/B) ¹⁾		13.11	%		12.60	%		10.19	%


1)		In accordance with the Financial Holding Company Guidelines of the Financial Service Commission (“FSC”), the Group BIS Ratio under BASEL I is used as an index for measuring capital adequacy.

Won Liquidity Ratio


(KRW million)
	2010 1H			2009			2008¹⁾
Won Assets due within 1 months (A)		584,597			470,681			920,661
Won Liabilities due within 1 months (B)		257,672			376,446			690,397
Won Liquidity Ratio (A/B)		178.82	%		125.03	%		133.35	%


1)		2008 figures are due within 3 months

Liabilities to Equity Ratio


(KRW million)
	2010 1H			2009			2008
Liabilities (A)		6,383,670			6,392,346			8,307,683
Equity (B)		21,489,939			20,728,361			17,605,883
Liabilities to Equity Ratio (A/B)		29.70	%		30.84	%		47.19	%

Capital Adequacy Ratio and Other Ratios of Certain Subsidiaries

(1) BIS Capital Adequacy Ratio (%) ¹⁾


	June 30, 2010		Dec. 31, 2009		Dec. 31, 2008
Shinhan Bank ²⁾		16.15		15.13		13.44


1)		The BIS Capital Adequacy Ratio is computed in accordance with the guidelines issued by the FSC for commercial banks. Under these guidelines, commercial banks are required to maintain a minimum capital adequacy ratio of 8%.

2)		Basel II FIRB Approach was applied in calculating BIS.

(2) Adjusted Equity Capital Ratio (%)


	June 30, 2010		Dec. 31, 2009		Dec. 31, 2008
Shinhan Card		24.64		26.73		20.32


*		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 FSC for credit card companies. Under these guidelines, Shinhan Card is required to maintain a minimum adjusted equity capital ratio of 8%.

(3) Net Capital Ratio (%)


	June 30, 2010		Mar. 31, 2010		Mar. 31, 2009
Shinhan Investment Corp.		636.94		558.65		678.79


*		Net Capital Ratio is computed in accordance with the guidelines issued by the FSC for securities brokerage businesses. Under these guidelines, Shinhan Investment Corp. is required to maintain a minimum net capital ratio of 100%.

(4) Solvency Margin Ratio (%)


	June 30, 2010		Mar. 31, 2010		Mar. 31, 2009
Shinhan Life Insurance		329.67		306.24		208.60


*		Under the guidelines issued by the FSC, Shinhan Life Insurance is required to maintain a minimum solvency margin ratio of 100%.

Non- Performing Loans of Certain Subsidiaries ¹⁾

(1) Non- Performing Loans


(KRW million)
	June 30, 2010				Dec. 31, 2009				Dec. 31, 2008
	Balance of		NPL to total		Balance of		NPL to total		Balance of		NPL to total
	NPL		Loans (%)		NPL		Loans (%)		NPL		Loans (%)
Shinhan Bank		1,622,647		1.07		1,158,985		0.77		1,306,316		0.85
Shinhan Card ²⁾		285,010		1.91		435,083		3.08		339,101		2.91


	June 30, 2010				Mar. 31, 2010				Mar. 31, 2009
	Balance of		NPL to total		Balance of		NPL to total		Balance of		NPL to total
	NPL		Loans (%)		NPL		Loans (%)		NPL		Loans (%)
Shinhan Investment Corp. ²⁾		176,525		15.74		230,228		17.90		125,366		12.14
Shinhan Life Insurance³⁾		36,415		1.40		38,298		1.47		40,369		1.69


1)		Non-performing loans of banks are defined as those loans are past due longer than 90 days or those are placed on non-accrual status according to the guidelines of the FSC.

2)		Under the guidelines of the FSC, every securities brokerage company and credit card company shall classify its loans into five categories: “normal,” “precautionary,” “substandard,” “doubtful” and “estimated loss. ” Under the Group’s internal measures, non-performing loans of Shinhan Investment Corp., and Shinhan Card includes loans classified as “substandard,” “doubtful,” and “estimated loss.”

3)		Non-performing loans of Life Insurance Company are defined as loans past due longer than 90 days

(2) Loan Loss Allowances & Write-offs for the period

(KRW million)


	Jan. 1, 2010 ~ June		Jan. 1, 2009 ~ Dec.		Jan. 1, 2008 ~ Dec.
	30, 2010		31, 2009		31, 2008
Shinhan Bank
Allowance for Possible Loan Losses		2,909,650		2,641,918		2,661,427
Allowance for doubtful accounts on Acceptance and Guarantees		136,629		105,629		113,669
Allowances for Losses Related to Unused Ceiling		268,437		267,859		249,442
Other Allowances		85,314		88,337		69,557
Allowance for Valuation of Bonds		7,219		7,609		8,152
Total		3,407,249		3,111,352		3,102,247
Write-offs		271,469		1,006,941		340,942
Shinhan Card
Allowance for Possible Loan Losses		581,658		793,469		773,960
Allowance for reward on credit card use		263,843		273,233		246,429
Allowances for Losses Related to Unused Ceiling		504,950		488,559		485,738
Other Allowances		1,121		12,619		22,325
Total		1,351,572		1,567,880		1,528,452
Write-offs		302,941		469,087		603,883


	Apr. 1, 2010 ~ June		Apr. 1, 2009 ~ Mar.		Apr. 1, 2008 ~ Mar.
	30, 2010		31, 2010		31, 2009
Shinhan Investment Corp.
Allowance for Possible Loan Losses		127,497		168,257		110,753
Other Allowances		21,942		21,942		—
Total		149,439		190,199		110,753
Write-offs		7,234		14,838		502
Shinhan Life Insurance
Allowance for Possible Loan Losses		36,969		37,705		31,589
Total		36,969		37,705		31,589
Write-offs		1,776		6,230		1,330

Note that the financial information contained in the following four tables (Twenty Largest Exposres by Borrower, Exposure to Main Debtor Group, Loan Concentration by Industry and Top Twenty Non-Performing Loans) have been formulated under the non-consolidated basis of Shinhan Bank.

Twenty Largest Exposures by Borrower


(KRW billion)
			Loans in
			Foreign		Equity		Debt		Guarantees and		Total
As of June 30, 2010	Loans in Won		Currency		Securities		Securities		Acceptances		Exposures
Ministry of Strategy & Finance		—		—		—		10,090		—		10,090
Bank of Korea		—		—		—		4,980		—		4,980
Korea Deposit Insurance Corporation		—		—		—		2,117		—		2,117
Hyundai Heavy Industries Co., Ltd.		22		221		2		10		1,442		1,698
Hyundai Samho Heavy Industries Co., Ltd.		11		38		—		—		1,322		1,372
POSCO		7		80		875		95		73		1,132
Samsung Heavy Industries Co., LTd.		100		181		—		—		833		1,114
Hynix Semiconductor		38		432		486		—		30		985
Songdo Cosmopolitan City Development Inc.		838		—		—		—		—		838
Hyundai Mipo Dockyard Co., Ltd		—		10		2		—		802		814
Kookmin Bank		—		—		—		806		—		806
Korea Development Bank		—		—		—		785		—		785
STX Offshore & Shipbuilding Co., Ltd		20		2		—		—		733		755
Samsung Electronics		—		737		5		—		—		743
Woori Bank		—		—		—		704		—		704
Industrial Bank of Korea		—		—		—		593		—		593
GS Caltex		20		273		—		72		211		576
Hana Bank		—		—		—		543		—		543
Korea Land & Housing Corporation		—		—		—		512		—		512
Korea Finance Corporation		—		—		—		485		—		485
Total		1,056		1,974		1,371		21,792		5,447		31,640


1)		Shinhan Bank’s non-consolidated figures

Exposure to Main Debtor Groups


(KRW billion)
			Loans in						Guarantees
			Foreign		Equity		Debt		and		Total
As of June 30, 2010	Loans in Won		Currency		Securities		Securities		Acceptances		Exposures
Hyundai Heavy Industries		33		293		4		10		3,567		3,908
Samsung		681		1,416		354		101		1,012		3,564
Hyundai Motors		780		948		95		148		152		2,123
SK		510		426		356		92		214		1,597
LG		320		900		—		46		58		1,325
POSCO		58		99		878		119		86		1,241
STX		131		273		34		—		737		1,175
Hynix		38		432		486		—		30		985
GS		145		355		—		120		231		851
Lotte		448		98		19		126		44		734
Total		3,144		5,240		2,225		763		6,132		17,504


1)		Shinhan Bank’s non-consolidated figures

Loan Concentration by Industry


(KRW million)
					Loans in Foreign
	Loans in Won				Currency				Others				Total Exposures
As of June 30, 2010	Amount		Weight (%)		Amount		Weight (%)		Amount		Weight (%)		Amount		Weight (%)
Manufacturing		19,583,769		15.92		2,509,066		36.81		7,497,580		49.24		29,590,415		20.39
Retail and wholesale		11,390,579		9.26		524,765		7.70		1,697,492		11.15		13,612,836		9.38
Real estate and rental service		15,369,365		12.49		614,128		9.01		1,586,629		10.42		17,570,122		12.11
Construction		4,671,191		3.80		58,282		0.86		644,502		4.23		5,373,975		3.70
Lodging and restaurants		3,760,326		3.06		55,891		0.82		82,741		0.54		3,898,958		2.69
Financial service and insurance		2,642,838		2.15		619,217		9.09		3,245,691		21.31		6,507,746		4.49
Others corporate loans		6,371,462		5.18		2,433,410		35.71		473,734		3.11		9,278,606		6.39
Household loans		59,260,865		48.14		—		—		—		—		59,260,865		40.85
Total		123,050,395		100.00		6,814,759		100.00		15,228,369		100.00		145,093,523		100.00


1)		Shinhan Bank’s non-consolidated figures

Top Twenty Non-Performing Loans


As of June 30, 2010			(KRW billion)
		Gross Principal
Borrower	Industry	Outstanding	Allowance for Loan Losses
A	Manufacturing	24	18
B	Manufacturing	23	6
C	Manufacturing	18	3
D	Manufacturing	16	3
E	Real estate and rental service	14	6
F	Manufacturing	13	6
G	Real estate and rental service	13	10
H	Real estate and rental service	12	7
I	Others	10	3
J	Real estate and rental service	9	0
K	Transportation	9	2
L	Construction	8	4
M	Transportation	8	1
N	Others	8	1
O	Real estate and rental service	7	5
P	Manufacturing	6	1
Q	Others	6	1
R	Others	6	1
S	Real estate and rental service	5	1
T	Real estate and rental service	5	1
	Total	220	80


1)		Non-performing loans are defined as loans past due longer than 90 days

2)		Shinhan Bank’s non-consolidated figures

3. Independent Auditor

Audit Opinion for the last 3 years

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 prepared in accordance with generally accepted accounting principles in Korea.


Year	Auditor	Payment (KRW mil.)		Details	Working hours
2010 1H	KPMG Samjong Accounting Corp.		366	Review/Audit of Financial Statements	1,500 hours
2009	KPMG Samjong Accounting Corp.		355	Review/Audit of Financial Statements	4,595 hours
2008	KPMG Samjong Accounting Corp.		355	Review/Audit of Financial Statements	5,106 hours

4. Directors, Executive Officers and Employees

Directors and Executive Officers

1) Executive Directors


Name	Date of Birth	Position	Service Term
Eung Chan Ra	Nov. 25, 1938	Chairman of Shinhan Financial Group Board Steering Committee Chair	3 years starting from March 24, 2010
Sang Hoon Shin	Jul. 1, 1948	President & CEO	2 years starting from March 17, 2009

2) Non-Executive Directors

Currently, 10 non-executive directors are in office, 8 of which outside directors who are nominated by our Outside Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting on March 24, 2010.

Our non-executive directors are as follows:


		Outside
Name	Date of Birth	Director	Sub-Committees	Service Term
Baek Soon Lee	Oct. 8, 1952	X	—	3 years starting from March 17, 2009
Shee Yul Ryoo	Sept. 5, 1938	X	Risk Management Committee chair Board Steering Committee member Compensation Committee member	1 year starting from March 24, 2010
Byung-il Kim	Sep. 1, 1945	O	Compensation Committee chair Board Steering Committee member	1 year starting from March 24, 2010
Yo Koo Kim	Mar. 23, 1950	O	Audit Committee member	1 year starting from March 24, 2010
Hui Mook Kim	Aug. 17, 1957	O	—	1 year starting from March 24, 2010
Ke Sup Yun	May 20, 1945	O	Audit Committee chair Risk Management Committee member Compensation Committee member	1 year starting from March 24, 2010
Sung Bin Chun	Jan. 21, 1953	O	Chairman of Board of Directors Board Steering Committee member Audit Committee member	1 year starting from March 24, 2010
Haeng Nam Chung	Mar. 15, 1941	O	Board Steering Committee member	1 year starting from March 24, 2010
Yoji Hirakawa	Feb. 13, 1953	O	—	1 year starting from March 24, 2010
Philippe Aguignier	Sep. 26, 1957	O	Risk Management Committee member	1 year starting from March 24, 2010

For personal profiles of the outside directors, please refer to our Form 6-K filed on February 26, 2010.

3) Executive Officers

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


Name	Date of Birth	Position	In charge of
Buhmsoo Choi	Aug. 8, 1956	Deputy President & Chief Financial Officer	— Finance Management Team — Investor Relations Team — Strategic Planning Team — Global Business Strategy Team — Shinhan FSB Research Institute
Sung Ho Wi	Jun. 12, 1958	Deputy President	— General Affairs Team — Business Management Team — Public Relations Team — CSR & Culture Management Team
Chan Hee Jin	Jun. 10, 1955	Deputy President	— Synergy Management Team — Information & Technology Planning Team — Audit Team
Hyo Il Lee	Sep. 26, 1959	Managing Director	— Synergy Management Team
Yee Yong Jo	Feb. 13, 1957	Managing Director	— Compliance Team
Sam Yong Lee	June 11, 1953	Managing Director	— Risk Management Team

Stock Options (as of June 30, 2010)


					No. of
	No. of		No. of Exercised		Cancelled		No. of Exercisable
	Granted Options		Options		Options		Options			Exercise
	(A)		(B)		(C)		(D = A – B – C)		Exercise Period	Price
Granted in 2005		2,620,331		692,260		251,300		1,676,771	2008.3.30~2012.3.29		28,006
Granted in 2006		3,206,173		151,570		480,300		2,574,303	2009.3.21~2013.3.20		38,829
Granted in 2007		1,231,169		0		148,700		1,082,469	2010.3.20~2014.3.19		54,560
Granted in 2008		808,700		0		112,090		696,610	2011.3.19~2015.3.18		49,053
Granted in 2009		614,735		0		614,735		0	2012.3.17~2016.3.16		23,405
Total		8,481,108		843,830		1,607,125		6,030,153	—		—


Note)		The weighted-average exercise price of outstanding exercisable options as of June 30, 2010 is KRW 39,824.

Employees (as of June 30, 2010)


			Total Salaries and wages	Average Payment
	Number of		paid in 2010	per person
	Employees	Average length of Service	(KRW million)	(KRW million)
Total	139	2 years	5,625	40

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

Major Shareholders¹⁾ of Shinhan Financial Group as of June 30, 2010


Name	No. of Common Shares owned	Ownership%
BNP Paribas Group	30,106,276	6.35
National Pension Service	23,915,225	5.04


1)		Shareholders who own beneficial ownership of 5% or more.

2)		Based on the public filing submitted by the Korea National Pension Service on July 9, 2010 to report change of beneficial ownership of 5% or more. Number of common shares owned is as of June 3, 2010.

Common Share Traded on the Korea Exchange


										(KRW, number of shares)
		Jan. 2010		Feb. 2010		Mar. 2010		Apr. 2010		May 2010		June 2010
Price per share	High		45,700		45,050		43,250		49,100		47,150		47,200
	Low		39,250		42,200		39,650		45,150		41,050		43,300
	Avg.		42,843		43,782		42,011		47,214		43,892		46,002
Trading Volume			43,955,182		33,744,419		26,862,396		41,082,098		31,413,955		29,798,840
Highest Daily Trading Volume			3,844,278		2,604,479		2,273,117		1,867,368		2,542,563		2,866,392
Lowest Daily Trading Volume			1,148,972		893,737		617,996		970,832		924,396		825,333

American Depositary Shares traded on the New York Stock Exchange


										(USD, number of shares)
		Jan. 2010		Feb. 2010		Mar. 2010		Apr. 2010		May 2010		June 2010
Price per share	High		81.37		75.26		80.31		88.35		85.14		79.17
	Low		68.42		66.37		73.61		81.51		66.31		69.44
	Avg.		75.22		72.60		77.14		84.93		74.86		75.34
Trading Volume			1,482,395		1,226,473		1,484,473		949,667		1,214,625		1,354,999
Highest Daily Trading Volume			253,870		104,598		438,722		84,994		142,378		115,236
Lowest Daily Trading Volume			23,393		32,649		20,054		14,565		13,715		40,118


*		1ADR = 2 Common Shares

6. Related Party Transactions

Loans to Subsidiaries


														(KRW billion)
		Origination	Maturity	Funding			Lending			Beginning						Ending
Subsidiary	Loan Type	Date	Date	Rate			Rate			Balance		Increase		Decrease		Balance
Shinhan Investment Corporation	Loan in KRW	2005-01-31	2010-07-31		4.59	%		5.25	%		70		—		—		70
Shinhan Investment Corporation	Loan in KRW	2006-07-31	2012-01-31		5.16	%		5.64	%		100		—		—		100
Shinhan Capital	Loan in KRW	2006-09-26	2011-09-26		4.91	%		4.99	%		50		—		—		50
Shinhan Capital	Loan in KRW	2007-04-13	2010-04-13		5.24	%		5.38	%		50		—		50		—
Shinhan Capital	Loan in KRW	2007-03-23	2012-03-23		5.28	%		5.48	%		50		—		—		50
Shinhan Capital	Loan in KRW	2007-06-08	2012-06-08		5.54	%		5.95	%		50		—		—		50
Shinhan Capital	Loan in KRW	2007-09-27	2010-09-27		5.91	%		6.05	%		100		—		—		100
Shinhan Capital	Loan in KRW	2007-11-27	2010-11-27		6.24	%		6.37	%		50		—		—		50
Shinhan Card	Loan in KRW	2007-11-27	2012-11-27		6.33	%		6.41	%		100		—		—		100
Shinhan Capital	Loan in KRW	2007-12-18	2010-12-18		6.69	%		6.83	%		50		—		—		50
Shinhan Card	Loan in KRW	2007-12-18	2012-12-18		6.78	%		6.86	%		50		—		—		50
Shinhan Capital	Loan in KRW	2008-01-23	2011-01-23		6.46	%		6.60	%		50		—		—		50
Shinhan Capital	Loan in KRW	2008-01-23	2013-01-23		6.51	%		6.60	%		50		—		—		50
Shinhan Card	Loan in KRW	2008-02-21	2011-02-21		5.51	%		5.66	%		150		—		—		150
Shinhan Card	Loan in KRW	2008-03-12	2011-03-12		5.71	%		5.84	%		200		—		—		200
Shinhan Capital	Loan in KRW	2008-03-12	2011-03-12		5.71	%		5.84	%		50		—		—		50
Shinhan Card	Loan in KRW	2008-06-27	2011-06-27		6.41	%		6.53	%		200		—		—		200
Shinhan Card	Loan in KRW	2008-07-31	2011-07-31		6.76	%		6.90	%		100		—		—		100
Shinhan Capital	Loan in KRW	2008-07-31	2011-07-31		6.76	%		6.90	%		50		—		—		50
Shinhan PE	Loan in KRW	2009-08-13	2010-08-13		3.93	%		3.99	%		5		—		—		5
Total	—	—	—		—			—			1,575				50		1,525

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.
By	/s/ Buhmsoo Choi
	Name:	Buhmsoo Choi
	Title:	Chief Financial Officer

Date : August 16, 2010