SFG 2019AR (AFS-only)

Independent Auditor’s Report (Consolidated Financial Statements) of Shinhan Financial Group as of December 31, 2019
SHINHAN FINANCIAL GROUP CO., LTD.

AND SUBSIDIARIES
Consolidated Financial Statements

December 31, 2019 and 2018
(With Independent Auditors’ Report Thereon)

Contents
Page
Independent Auditors' Report 1
Consolidated Statements of Financial Position 5
Consolidated Statements of Comprehensive Income 7
Consolidated Statements of Changes in Equity 9
Consolidated Statements of Cash Flows 11
Notes to the Consolidated Financial Statements 14

Independent Auditors’ Report
Based on a report originally issued in Korean
To the Board of Directors and Stockholders of

Shinhan Financial Group Co., Ltd.:
Opinion
We have audited the consolidated financial statements of Shinhan Financial Group Co., Ltd. and its subsidiaries (“the
Group”), which comprise the consolidated statements of financial position as of December 31, 2019 and 2018, the
consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and
notes, comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as of December 31, 2019 and 2018, and its consolidated financial
performance and its consolidated cash flows for the years then ended in accordance with Korean International
Financial Reporting Standards (“K-IFRS”).
Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing (KSAs). Our responsibilities under those
standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant
to our audit of the consolidated financial statements in the Republic of Korea, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements as of and for the year ended December 31, 2019. These matters were addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
(1) Assessment of the allowance for credit loss
As discussed in Notes 4(b) and 12 to the consolidated financial statements, the Group recognized an allowance for
credit loss using the Expected Credit loss (ECL) impairment model for the loans at amortized cost amounting to KRW
2,684,835 million as of December 31, 2019. ECL allowances are measured at amounts equal to either (i) 12-month
ECL; or (ii) lifetime ECL for those loans that have experienced a Significant Increase in Credit Risk (SICR) since
initial recognition or when the loans are impaired. The Group measures ECL allowance on an individual basis for
individually significant corporate loans which have had significant increases in credit risk or have become impaired.
The individual assessment involves judgment by the Group in estimating the future cash flows including the value of
related collateral. The allowance for credit loss for all other loans is measured on a collective basis. For these loans,
the Group measures ECL by estimating the Probability of Default (PD), the Loss Given Default (LGD) and the
Exposure at Default (EAD) as well as the impact of Forward-looking Information (FLI). For corporate loans, one
of the relevant inputs for determining PD is the internal credit risk rating of the borrower. The internal credit risk
rating of the borrower is defined by the Group using quantitative and qualitative factors. The evaluation of the
qualitative factors involves a high level of judgment by the Group.
We have identified the following as key audit matters, considering the possibility of errors, the level of involvement
of management judgment, and the impact of risks:
- Risk that the allowance for credit loss is misstated due to the Group’s biased judgment on the estimates of future
cash flows for the corporate loans with ECL measured on an individual basis
- Risk that the allowance for credit loss is misstated due to error or fraud in determination of when a loan’s credit risk
has significantly increased since initial recognition, the analysis of the qualitative factors in determining the internal
credit risk ratings of corporate loans, the calculation of 12 month and lifetime PD, the calculation of LGD and the
manner in which FLI is incorporated in the ECL calculation.
The primary audit procedures we performed to address the above key audit matters included:
• We tested certain internal controls over: (i) the estimated future cash flows for individually assessed
corporate loans, including controls over the work of external valuation specialists' engaged by the Group;
(ii) the assessment of qualitative factors in the process of determining the internal credit risk rating of the
loans, including the review of internal credit risk ratings performed by an independent department with
access to the same qualitative information; (iii) the validation of the models used to determine the inputs
to the collective ECL calculation and the impact of FLI; (iv) the determination of SICR; and (v) the
completeness and accuracy of data used in the models.
• We assessed the estimates of future cash flows on a sample basis by (i) comparing assumptions made with
information obtained from internal and external sources, and (ii) assessing the reliability of information
used in the estimates, including the qualification of external valuation specialists engaged by the Group.
• We involved credit risk and information technology professionals with specialized skills, industry
knowledge and relevant experience who assisted in: (i) evaluating the methodology and key inputs used
in determining the PD and LGD parameters and SICR; (ii) evaluating how FLI was incorporated in the
collective ECL model; and (iii) recalculating a sample of ECL models and related inputs.
• We checked, for a sample of corporate loans with ECL measured on a collective basis, that Group policy
was applied in the internal credit risk rating process and assessed if the Group's policy is aligned with
international financial reporting standards.
(2) Assessment of the measurement of fair value of level 3 financial instruments
As discussed in Note 4(e) to the consolidated financial statements, the Group classifies financial instruments measured
at fair value using valuation techniques where one or more significant inputs are not based on observable market data
as level 3. As of December 31, 2019, the recorded fair values of the Group’s debt securities, equity securities,
derivative assets, derivative liabilities, and financial liabilities designated at fair value through profit or loss classified
as level 3 were KRW 8,951,398 million, KRW 511,831 million, KRW 464,826 million, KRW 308,970 million, and
KRW 8,511,489 million, respectively. In order to measure these financial instruments, the Group uses discounted
cash flow models, option models, or net asset value models and these models use various inputs and assumptions,
depending on the nature of the level 3 financial instruments.
We have identified the following as key audit matters, considering the possibility of errors, the level of involvement
of management judgment, and the impact of risks:
- Risk that the estimate of the financial instruments’ fair value is misstated due to applying inappropriate valuation
methodologies, models’ significant inputs which were not directly observable in financial markets, such as volatility
of underlying assets, correlations, regression coefficients, discount rates, and growth rates, and the related assumptions.
The primary audit procedures we performed to address the above key audit matters included:
We tested certain internal controls over the Group’s process to measure the fair value of level 3 financial instruments.
This included controls related to (1) the development, validation and changes in the methodology of the models used
to value the level 3 financial instruments, (2) the development and application of the significant unobservable inputs
and assumptions used in the measurement of fair values, and (3) the monitoring of changes to the inputs and
assumptions. We evaluated the characteristics of new products and the valuation techniques used by the Group for
these new products. For a sample of level 3 financial instruments, we compared the Group’s fair value measurement
recorded at period end to the sales price of a subsequent transaction. We involved valuation professionals with
specialized skills and knowledge, who assisted in:
• Evaluating the valuation techniques and significant unobservable inputs on a sample basis; and
• Developing models and significant unobservable inputs independently and comparing the resulting fair
value estimate to the Group's fair value measurement for a sample of level 3 financial instruments.
Other Matter
The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may
differ from those generally accepted and applied in other countries.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with K-IFRS, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with KSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with KSAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial
statements and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or
conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent auditors’ report is Min-Seon Chae.
Seoul, Korea
March 5, 2020
This report is effective as of March 5, 2020, the audit report date. Certain subsequent events or circumstances, which
may occur between the audit report date and the time of reading this report, could have a material impact on the
accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should
understand that the above audit report has not been updated to reflect the impact of such subsequent events or
circumstances, if any.
SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Financial Position
As of December 31, 2019 and 2018
(In millions of won)

Note 2019 2018
Assets
Cash and due from banks at amortized cost 4, 8, 19 W 28,423,744 17,348,626
Financial assets at fair value through profit or
4, 9, 19
loss 53,163,143 43,534,766
Derivative assets 4, 10 2,829,274 1,793,613
Securities at fair value through other
comprehensive income 4, 11, 19 59,381,053 38,314,170
Securities at amortized cost 4, 11, 19 45,582,065 28,478,136
Loans at amortized cost 4, 12, 19 323,244,979 299,609,472
Property and equipment, net 13, 18, 19, 48 4,083,328 3,003,886
Intangible assets 14 5,558,714 4,320,134
Investments in associates 15 1,452,861 671,330
Current tax receivable 88,433 45,100
Deferred tax assets 41 218,254 426,965
Investment property 16 488,610 474,820
Employee benefits 25 1,682 -
Other assets 4, 17 27,878,281 21,571,918
Assets held for sale 25,160 7,574
Total assets W 552,419,581 459,600,510
See accompanying notes to the consolidated financial statements.
5
Consolidated Statements of Financial Position (Continued)
As of December 31, 2019 and 2018
(In millions of won) Note 2019 2018

Liabilities
Deposits 4, 20 W 294,874,256 265,000,190
Financial liabilities at fair value through profit
4, 21
or loss 1,632,457 1,420,306
Financial liabilities designated at fair value
4, 22
through profit or loss 9,409,456 8,535,800
Derivative liabilities 4, 10 2,303,012 2,439,892
Borrowings 4, 23 34,863,156 29,818,542
Debt securities issued 4, 24 75,363,364 63,227,699
Liabilities for defined benefit obligations 25 121,140 127,348
Provisions 26 557,024 508,416
Current tax payable 512,757 430,306
Deferred tax liabilities 41 451,603 22,020
Liabilities under insurance contracts 27 52,163,417 26,218,882
Other liabilities 4, 28, 48 38,237,558 25,199,679
Total liabilities 510,489,200 422,949,080
Equity 29
Capital stock 2,732,463 2,645,053
Hybrid bonds 1,731,235 1,531,759
Capital surplus 10,565,353 9,895,488
Capital adjustments (1,116,770) (552,895)
Accumulated other comprehensive loss (260,156) (753,220)
Retained earnings 25,525,821 22,959,440
Total equity attributable to equity holders of
Shinhan Financial Group Co., Ltd. 39,177,946 35,725,625
Non-controlling interests 2,752,435 925,805
Total equity 41,930,381 36,651,430
Total liabilities and equity W 552,419,581 459,600,510
6
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2019 and 2018
Interest income
Financial assets at fair value through other
comprehensive income and at amortized cost W 14,878,516 12,891,850
loss 828,846 680,606
15,707,362 13,572,456
Interest expense (5,969,398) (4,992,367)
Net interest income 31 9,737,964 8,580,089
Fees and commission income 3,557,013 3,295,256

Fees and commission expense (1,416,494) (1,356,259)
Net fees and commission income 32 2,140,519 1,938,997
Insurance income 7,569,425 4,398,738

Insurance expenses (8,066,351) (4,870,437)
Net insurance expenses 27 (496,926) (471,699)
Dividend income 33 82,158 87,826

Net gain on financial instruments at fair value
through profit or loss 34 1,385,482 420,026
Net gain (loss) on financial instruments at fair
value through profit or loss (overlay approach) 9 (247,585) 74,944
Net loss on financial instruments designated at fair
value through profit or loss 35 (846,046) (26,643)
Net foreign currency transaction gain 440,948 194,136
Net gain on disposal of financial asset at fair value
through other comprehensive income 11 152,278 20,554
Net gain (loss) on disposal of securities at
amortized cost 11 66 (9)
Provision for allowance for credit loss 36 (980,692) (747,877)
General and administrative expenses 37 (5,134,674) (4,741,575)
Other operating expenses, net 39 (1,187,242) (829,355)
Operating income 5,046,250 4,499,414
Equity method income 15 53,287 17,488

Other non-operating income (expense), net 40 (188,029) (50,292)
Profit before income taxes 4,911,508 4,466,610
Income tax expense 41 (1,269,124) (1,268,345)

Profit for the year W 3,642,384 3,198,265

7
Consolidated Statements of Comprehensive Income (Continued)
(In millions of won, except earnings per share data) Note 2019 2018
Other comprehensive income for the year, net of

income tax 29
Items that are or may be reclassified to profit or loss:
Gain on financial asset at fair value through other
comprehensive income W 352,085 161,008
Gain (loss) on financial instruments at fair value
through profit or loss (overlay approach) 9 162,967 (54,333)
Equity in other comprehensive income of
associates 3,302 7,407
Foreign currency translation adjustments for foreign
operations 105,771 19,983
Net change in unrealized fair value of cash flow
hedges (18,589) (20,192)
Other comprehensive income of separate
account 10,427 8,676
615,963 122,549
Items that will never be reclassified to profit or loss:
Remeasurements of the defined benefit liability (54,644) (93,098)
Equity in other comprehensive income (loss) of
associates (8) 28
Valuation gain on financial asset at fair value through
other comprehensive income 18,885 22,725
Loss on disposal of financial asset at fair value
through other comprehensive income (5,861) (2,635)
Changes in own credit risk on financial liabilities
designated at fair value through profit of loss (8,425) 1,723
(50,053) (71,257)
Total other comprehensive income, net of income tax 565,910 51,292
Total comprehensive income for the year W 4,208,294 3,249,557
Profit attributable to:

Equity holders of Shinhan Financial Group Co., Ltd. 29, 42 W 3,403,497 3,156,722
Non-controlling interests 238,887 41,543
W 3,642,384 3,198,265
Total comprehensive income attributable to:
Equity holders of Shinhan Financial Group Co., Ltd. W 3,890,701 3,207,602
Non-controlling interests 317,593 41,955
W 4,208,294 3,249,557
Earnings per share: 29, 42

Basic and diluted earnings per share in won W 7,000 6,579

8
Consolidated Statements of Changes in Equity
For the year ended December 31, 2019 and 2018
(In millions of won) Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.
Accumulated
other compre- Non-
Capital Hybrid Capital Capital hensive income Retained controlling
stock bonds surplus adjustments (loss) earnings Sub-total interests Total
Balance at January 1, 2018 2,645,053 423,921 9,887,335 (398,035) (806,745) 20,539,826 32,291,355 880,242 33,171,597
Total comprehensive income (loss) for the year
Profit for the year - - - - - 3,156,722 3,156,722 41,543 3,198,265
Other comprehensive income (loss), net of income tax:
comprehensive income - - - - 179,793 - 179,793 1,305 181,098
Loss on financial instruments at fair value through
profit or loss (overlay approach) - - - - (54,333) - (54,333) - (54,333)
Equity in other comprehensive income of associates - - - - 7,435 - 7,435 - 7,435
Foreign currency translation adjustments - - - - 20,465 - 20,465 (482) 19,983
Net change in unrealized fair value of cash flow hedges - - - - (20,192) - (20,192) - (20,192)
Other comprehensive income of separate account - - - - 8,676 - 8,676 - 8,676
Remeasurements of defined benefit plans - - - - (92,687) - (92,687) (411) (93,098)
designated at fair value through profit or loss - - - - 1,723 - 1,723 - 1,723
Total other comprehensive income - - - - 50,880 - 50,880 412 51,292
Total comprehensive income - - - - 50,880 3,156,722 3,207,602 41,955 3,249,557
Other changes in equity

Dividends - - - - - (687,589) (687,589) - (687,589)
Dividends to hybrid bonds - - - - - (40,357) (40,357) - (40,357)
Issuance of hybrid bonds - 1,107,838 - - - - 1,107,838 - 1,107,838
Acquisition of treasury stock - - - (155,923) - - (155,923) - (155,923)
Change in other capital adjustments - - 8,153 1,063 - (6,517) 2,699 - 2,699
Change in other non-controlling interests - - - - - - - 3,608 3,608
- 1,107,838 8,153 (154,860) - (734,463) 226,668 3,608 230,276
Reclassification of OCI to retained earnings - - - - 2,645 (2,645) - - -
Balance at December 31, 2018 W 2,645,053 1,531,759 9,895,488 (552,895) (753,220) 22,959,440 35,725,625 925,805 36,651,430
9
Consolidated Statements of Changes in Equity (Continued)
For the year ended December 31, 2019 and 2018
(In millions of won) Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.
Accumulated
other compre- Non-
Capital Hybrid Capital Capital hensive income Retained controlling
stock bonds surplus adjustments (loss) earnings Sub-total interests Total
Balance at January 1, 2019 W 2,645,053 1,531,759 9,895,488 (552,895) (753,220) 22,959,440 35,725,625 925,805 36,651,430
Total comprehensive income for the year
Profit for the year - - - - - 3,403,497 3,403,497 238,887 3,642,384
Other comprehensive income (loss), net of income tax:
comprehensive income - - - - 297,652 - 297,652 67,457 365,109
Gain on financial instruments at fair value through
profit or loss (overlay approach) - - - - 150,678 - 150,678 12,289 162,967
Equity in other comprehensive income of associates - - - - 3,294 - 3,294 - 3,294
Foreign currency translation adjustments - - - - 104,388 - 104,388 1,383 105,771
Net change in unrealized fair value of cash flow hedges - - - - (15,960) - (15,960) (2,629) (18,589)
Other comprehensive income of separate account - - - - 10,427 - 10,427 - 10,427
Remeasurements of defined benefit plans - - - - (54,850) - (54,850) 206 (54,644)
designated at fair value through profit or loss - - - - (8,425) - (8,425) - (8,425)
Total other comprehensive income - - - - 487,204 - 487,204 78,706 565,910
Total comprehensive income - - - - 487,204 3,403,497 3,890,701 317,593 4,208,294
Other changes in equity

Dividends - - - - - (753,041) (753,041) - (753,041)
Dividends to hybrid bonds - - - - - (61,993) (61,993) - (61,993)
Issuance of hybrid bonds - 199,476 - - - - 199,476 - 199,476
Issuance of convertible preferred shares 87,410 - 660,381 - - - 747,791 - 747,791
Acquisition of treasury stock - - - (444,077) - - (444,077) - (444,077)
Change in other capital adjustments - - 9,484 (119,798) - (16,222) (126,536) - (126,536)
Change in other non-controlling interests - - - - - - - 1,509,037 1,509,037
87,410 199,476 669,865 (563,875) - (831,256) (438,380) 1,509,037 1,070,657
Reclassification of OCI retained earnings - - - - 5,860 (5,860) - - -
Balance at December 31, 2019 W 2,732,463 1,731,235 10,565,353 (1,116,770) (260,156) 25,525,821 39,177,946 2,752,435 41,930,381
See accompanying notes to the consolidated financial statements
10
Consolidated Statements of Cash Flows
Cash flows from operating activities

Profit before income taxes W 4,911,508 4,466,610
Adjustments for:
Interest income 31 (15,707,362) (13,572,456)
Interest expense 31 5,969,398 4,992,367
Dividend income 33 (82,158) (87,826)
Net fees and commission expense 125,975 176,932
Net insurance loss 2,098,617 2,080,509
Net loss (gain) on financial instruments at fair value through
profit or loss 34 (427,618) 66,455
Net loss (gain) on financial instruments at fair value through
profit or loss (overlay approach) 9 247,585 (74,944)
Net foreign currency translation loss 147,952 377,632
Net loss (gain) on financial instruments designated at fair value
through profit or loss 35 33,872 (382,667)
Net gain on disposal of financial asset at fair value through other
comprehensive income 11 (152,278) (20,554)
Net loss (gain) on disposal of securities at amortized cost 11 (66) 9
Provision for allowance for credit loss 36 980,692 747,877
Employee costs 25 188,313 155,672
Depreciation and amortization 37 677,152 301,916
Other operating expense (income) 39 305,781 (278,274)
Equity method income, net 15 (53,287) (17,488)
Other non-operating expense 40 148,091 3,147
(5,499,341) (5,531,693)
Changes in assets and liabilities:

Cash and due from banks at amortized cost (10,059,356) 6,024,743
Securities at fair value through profit or loss (3,977,211) (3,082,516)
Due from banks at fair value through profit or loss 73,904 (82,014)
Loans at fair value through profit or loss (943,321) (422,326)
Financial asset designated at fair value through profit or loss 847,715 723,037
Derivative instruments 58,532 203,006
Loans at amortized cost (18,831,825) (27,547,413)
Other assets (4,452,651) (5,177,725)
11
Consolidated Statements of Cash Flows (Continued)
Deposits W 29,123,272 16,699,467

Liabilities for defined benefit obligations (263,882) (145,639)
Provisions 28,380 14,542
Other liabilities 7,851,505 174,590
(544,938) (12,618,248)
Income taxes paid (1,130,148) (850,696)

Interest received 15,200,114 13,208,601
Interest paid (5,793,865) (5,058,596)
Dividends received 35,716 63,826
Net cash provided by (used in) operating activities 7,179,046 (6,320,196)
Cash flows from investing activities

Decrease in financial instruments at fair value through profit or
loss 3,690,283 2,150,860
Increase in financial instruments at fair value through profit or loss (6,712,873) (3,290,960)
Proceeds from disposal of securities at fair value through other
comprehensive income 36,334,241 27,074,948
Acquisition of securities at fair value through other comprehensive
income (46,908,632) (27,037,290)
Proceeds from disposal of securities at amortized cost 6,722,627 2,093,506
Acquisition of securities at amortized cost (12,209,898) (5,836,342)
Proceeds from disposal of property and equipment 13, 40 51,942 39,202
Acquisition of property and equipment 13 (270,386) (142,933)
Proceeds from disposal of intangible assets 14, 40 24,825 3,638
Acquisition of intangible assets 14 (318,930) (157,160)
Proceeds from disposal of investments in associates 182,604 189,118
Acquisition of investments in associates (669,341) (227,914)
Proceeds from disposal of investment property 16, 40 86,422 15,433
Acquisition of investment property 16 (2,774) (115,333)
Proceeds from disposal of assets held for sale 137 4,498
Other, net (264,585) (311,744)
Proceeds from settlement of hedging derivative financial
instruments for available-for-sale financial assets 19,303 67,039
Settlement of hedging derivative financial instruments for
available-for-sale financial assets (195,900) (26,653)
Acquisition of subsidiaries, net of cash acquired 47 (2,246,932) (4,498)
Net cash used in investing activities (22,687,867) (5,512,585)
12
Consolidated Statements of Cash Flows (Continued)
Cash flows from financing activities

Issuance of hybrid bonds W 199,476 1,107,838
Net increase in borrowings 5,017,269 1,772,203
Proceeds from debt securities issued 31,083,390 26,487,712
Repayments of debt securities issued (19,881,717) (14,689,246)
Other liabilities (33,619) 528
Dividends paid (830,772) (714,705)
Proceeds from settlement of hedging derivative financial
instruments for debt securities issued 1,694,362 10,675
Settlement of hedging derivative financial instruments for debt
securities issued (1,716,320) (16,832)
Acquisition of treasury stock (444,077) (151,993)
Increase in non-controlling interests 312,390 347
Redemption of lease liabilities (269,362) -
Issuance of convertible preferred shares 747,791 -
Net cash provided by financing activities 15,878,811 13,806,527
Effect of exchange rate fluctuations on cash and cash

equivalents held 29,428 (30,640)
Increase in cash and cash equivalents 399,418 1,943,106
Cash and cash equivalents at beginning of year 44 8,179,756 6,236,650
Cash and cash equivalents at end of year 44 W 8,579,174 8,179,756
13
Notes to the Consolidated Financial Statements
1. Reporting entity
Shinhan Financial Group Co., Ltd., the controlling company, and its subsidiaries included in consolidation
(collectively the “Group”) are summarized as follows:
(a) Controlling company
Shinhan Financial Group Co., Ltd. (the “Shinhan Financial Group”), a controlling company, was incorporated on
September 1, 2001 for the main purposes of Shinhan Bank, Shinhan Securities Co., Ltd., Shinhan Capital Co.,Ltd.,
and Shinhan BNP Asset Management Co.,Ltd. with a stock transfer. The total capital stock amounted to W1,461,721
million. Also, Shinhan Financial Group’s shares has been listed on the Korea Exchange since September 10, 2001
and Shinhan Financial Group’s American Depositary Shares were listed on the New York Stock Exchange since
September 16, 2003.
(b) Ownership of Shinhan Financial Group and its major consolidated subsidiaries as of December 31, 2019 and
2018 are as follows:
Date of financial Ownership (%)

Investor Investee(*1) Location information 2019 2018
Shinhan Financial
Shinhan Bank Korea December 31 100.0 100.0
Group Co., Ltd.
〃 Shinhan Card Co., Ltd. 〃〃 100.0 100.0
〃 Shinhan Investment Corp.(*2) 〃〃 100.0 100.0
〃 Shinhan Life Insurance Co., Ltd. 〃〃 100.0 100.0
〃 Orange Life Insurance Co., Ltd.(*3) 〃〃 59.2 -
〃 Shinhan Capital Co., Ltd. 〃〃 100.0 100.0
〃 Jeju Bank(*4) 〃〃 75.3 71.9
〃 Shinhan Credit Information Co., Ltd. 〃〃 100.0 100.0
Shinhan Alternative Investment
〃〃〃 100.0 100.0
Management Inc.
Shinhan BNP Paribas Asset
〃〃〃 65.0 65.0
Management Co., Ltd.
〃 SHC Management Co., Ltd. 〃〃 100.0 100.0
〃 Shinhan DS 〃〃 100.0 100.0
〃 Shinhan Savings Bank 〃〃 100.0 100.0
〃 Asia Trust Co., Ltd.(*5) 〃〃 60.0 -
〃 Shinhan AITAS Co., Ltd. 〃〃 99.8 99.8
〃 Shinhan REITs Management Co., Ltd. 〃〃 100.0 100.0
〃 Shinhan AI Co., Ltd.(*6) 〃〃 100.0 -
Shinhan Bank Shinhan Asia Limited Hong Kong 〃 99.9 99.9
〃 Shinhan Bank America USA 〃 100.0 100.0
〃 Shinhan Bank Europe GmbH Germany 〃 100.0 100.0
〃 Shinhan Bank Cambodia Cambodia 〃 97.5 97.5
〃 Shinhan Bank Kazakhstan Limited Kazakhstan 〃 100.0 100.0
〃 Shinhan Bank Canada Canada 〃 100.0 100.0
〃 Shinhan Bank (China) Limited China 〃 100.0 100.0
〃 Shinhan Bank Japan Japan 〃 100.0 100.0
〃 Shinhan Bank Vietnam Ltd. Vietnam 〃 100.0 100.0
〃 Banco Shinhan de Mexico Mexico 〃 99.9 99.9
〃 PT Bank Shinhan Indonesia Indonesia 〃 99.0 99.0
Shinhan Card Co., Ltd. LLP MFO Shinhan Finance Kazakhstan 〃 100.0 100.0
〃 PT. Shinhan Indo Finance Indonesia 〃 50.0 50.0
〃 Shinhan Microfinance Co., Ltd. Myanmar 〃 100.0 100.0
〃 Shinhan Vietnam Finance(*7) Vietnam 〃 100.0 -
Shinhan Investment
Shinhan Investment Corp. USA Inc. USA 〃 100.0 100.0
Corp.
〃 Shinhan Investment Corp. Asia Ltd. Hong Kong 〃 100.0 100.0
14
1. Reporting entity (continued)
Date of financial Ownership (%)

Investor Investee(*1) Location information 2019 2018
Shinhan Investment SHINHAN SECURITIES VIETNAM
Vietnam December 31 100.0 100.0
Corp. CO., LTD
〃 PT. Shinhan Sekuritas Indonesia Indonesia 〃 99.0 99.0
PT Shinhan Sekuritas PT. Shinhan Asset Management
〃〃 75.0 75.0
Indonesia Indonesia
Shinhan BNP Paribas
Asset Management Hong Kong 〃 100.0 100.0
Management (Hong Kong) Limited
Co., Ltd.
Shinhan DS SHINHAN DS VIETNAM CO., LTD. Vietnam 〃 100.0 100.0
(*1) Trusts, beneficiary certificates, securitization special limited liability companies, associates and private equity
investment specialists that are not actually operating their own business are excluded.
(*2) The controlling company has participated in issuing additional shares of Shinhan Investment Corp. amounting
to W660 billion for the year ended December 31, 2019.
(*3) The Group entered into a share purchase agreement to acquire a 59.15% stake in Orange Life Insurance Co.,
Ltd. for the years ended December 31, 2018, and the effective stake increased to 60.24% due to the acquisition of
treasury shares by Orange Life Insurance Co. Ltd. for the years ended December 31, 2019.
(*4) The Group purchased 1,100,000 shares of Jeju Bank from the Group’s largest shareholder, the National Pension
Service for the year ended December 31, 2019.
(*5) The Group acquired 60.00% stake in Asia Trust Co., Ltd. for the year ended December 31, 2019.
(*6) Shinhan AI Co., Ltd. is a subsidiary newly invested for the year ended December 31, 2019. The controlling
company has participated in issuing additional shares of Shinhan AI Co., Ltd. shares amounting to W40 billion.
(*7) The Group acquired 100% stake in Vietnam-based Prudential Vietnam Finance Co., Ltd. for the year ended
December 31, 2019 and changed the name of corporate to Shinhan Vietnam Finance Co., Ltd.
15
1. Reporting entity (continued)
(c) Consolidated structured entities
Consolidated structured entities are as follows:
Consolidated
Category structured entities Description
Trust 18 trusts managed by A trust is consolidated when the Group as a trustee is exposed
Shinhan Bank including to variable returns, for example, if principle or interest amounts
development trust of the entrusted properties falls below guaranteed amount, the
Group should compensate it; and the Group has the ability to
affect those returns.
Asset-Backed MPC Yulchon Green I and An entity for asset backed securitization is consolidated when
Securitization 196 others the Group has the ability to dispose assets or change the
conditions of the assets, is exposed to variable returns and has
the ability to affect the variable returns providing credit
enhancement and purchases of subordinated securities.
Structured Financing SHPE Holdings One Co., An entity established for structured financing relating to real
Ltd. estate, shipping, or mergers and acquisitions is consolidated,
when the Group has granted credit to the entity, has sole
decision-making authority of these entities due to the entities
default, and is exposed to, or has rights to related variable
returns.
Investment Fund KoFC Shinhan Frontier An investment fund is consolidated, when the Group manages
Champ 2010-4 PEF and or invests assets of the investment funds on behalf of other
111 others investors, or has the ability to dismiss the manager of the
investment funds, and is exposed to, or has rights to, the variable
returns.
(*) The Group provides ABCP credit contribution (purchase agreements) of W3,901,421 million for the purpose of
credit enhancement of structured companies.
16
2. Basis of preparation
The consolidated financial statements have been prepared in accordance with Korean International Financial
Reporting Standards (“K-IFRS”), as prescribed the Act on External Audits of Stock Companies in the Republic of
Korea.
The consolidated financial statements were authorized for issue by the Board of Directors on February 5, 2020, which
will be submitted for approval to the stockholder’s meeting to be held on March 26, 2020.
(a) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis, except for the following material
items in the statement of financial position:
- derivative financial instruments measured at fair value

- financial instruments at fair value through profit or loss measured at fair value
- other comprehensive income at fair values measured at fair value
- liabilities for cash-settled share-based payment arrangements measured at fair value
- financial liabilities designated as hedged items in a fair value hedge accounting of which changes in fair value
attributable to the hedged risk recognized in profit or loss
- liabilities for defined benefit plans recognized at the net of the total present value of defined benefit obligations
less the fair value of plan assets
(b) Functional and presentation currency
These consolidated financial statements are presented in Korean won, which is the Controlling Company’s functional
currency and the currency of the primary economic environment in which the Group operates.
(c) Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with K-IFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have a significant effect on the amounts
recognized in the consolidated financial statements and information about assumptions and estimation uncertainties
that have a significant risk of resulting in a material adjustment within the next financial year are described in Note 5.
In preparing these consolidated financial statements, the significant judgments made by management in applying the
Group’s accounting policies and the key sources of estimation uncertainty are the same as those that applied to the
consolidated financial statements as of and for the year ended December 31, 2018 except for the main sources of
critical judgments and estimated uncertainties related to the adoption of K-IFRS No. 1116 ‘Leases’ described in Note
3.
17
2. Basis of preparation (continued)
(d) Change in accounting policy
Except for the following new standard, which has been applied from January 1, 2019, the accounting policies applied
by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated
financial statements as of and for the year ended December 31, 2018. There are other new standards applied from
January 1, 2019, which does not have a significant impact to the Group’s financial statements.
i) K-IFRS No.1116, ‘Leases’
K-IFRS No.1116, published on May 22, 2017, replaces existing standards including K-IFRS No.1017, ‘Leases’, K-
IFRS No.2104, ‘Determining whether an Arrangement contains a Lease’, K-IFRS No.2015, ‘Operating Leases -
Incentives’ and K-IFRS No.2027, ’Evaluating the Substance of Transactions Involving the Legal Form of a Lease’.
The Group has applied K-IFRS No.1116 from the year beginning on January 1, 2019, the date of initial application.
At the commencement date of the lease, the Group assesses whether the contract is, or contains, a lease, and assessed
whether the contract was, or contained, a lease in accordance with K-IFRS No.1116 at the date of initial application.
For a contract that is, or contains, a lease, a lessee or a lessor shall account for each lease component within the contract
as a lease separately from non-lease components (hereinafter called ‘non-lease components’) of the contract.
A lessee shall recognize a lease right-of-use asset, which indicates an asset that represents a lessee’s right to use an
underlying asset (leased asset) for the lease term, and a lease liability, which indicates obligation to make lease
payments. However, a lessee may elect not to apply the requirements to short-term leases and leases for which the
underlying asset is of low value. Also, the Group used the following practical expedients when applying K-IFRS
No.1116 to leases previously classified as operating leases applying K-IFRS No.1017.
- Elects not to apply the requirements to recognize lease right-of-use assets and lease liabilities to leases for
which the lease term ends within 12 months of the date of initial application.
- Excludes initial direct costs from the measurements of the lease right-of-use assets at the date of initial
application.
- If the contract contains an option to extend or terminate the lease, hindsight is used to determine the lease term
As a practical expedient, a lessee may elect, by class of underlying asset, not to separate non-lease components from
lease components, and instead account for each lease component and any associated non-lease components as a
single lease component.
The accounting treatment as a lessor did not change significantly from the one under K-IFRS No.1017.
The accumulated effect on retained earnings from initial application of K-IFRS No.1116 was zero, and the
comparative financial information presented has applied K-IFRS No.1017 and the related Interpretations as previously
reported and has not been retrospectively restated. The transition effects arising from changes in accounting policies
are explained in Note 48.
On December 16, 2019, the IFRS Interpretations Committee published the agenda decision on ‘Lease term and useful
life of leasehold improvements’ that the entity should consider all economic penalties for the termination of the lease
in the determination of the enforceable period. The Group is analyzing the impact of changes in accounting policies
of determination of the enforceable period on the consolidated financial statements, and plans to reflect the impact on
the consolidated financial statements when the analysis is completed.
18
2. Basis of preparation (continued)
(d) Change in accounting policy (continued)
ii) K-IFRS No.1109, ‘Financial Instruments’, K-IFRS No.1107, ‘Financial Instruments: Disclosures’ Revision
The interest rate index reform has added an exception that allows hedge accounting to be applied while uncertainty
exists. In a hedging relationship, the assume that the interest rate index that is the underlying variable of cash flows
does not change to the interest rate index reform when reviewing the probability of occurrence and the prospective
assessment of the effectiveness of the hedge. For hedges of non-contractually specified interest rate risk
components, the requirement that the hedged risk should be separately identifiable applies only at the inception of
the hedging relationship. Through the interest rate index reform, this application of exception is ended when the
timing and amount of cash flows based on the interest rate index will no longer appear, or the hedging relationship
is discontinued. These amendments take effect on 1 January 2020 but have been applied early as early entry is
allowed. A significant interest rate indicator for hedging relationships is LIBOR and CD rates. The subject
affected by this amendment is derivatives of Note 10.
19
3. Significant accounting policies
Except for the new standards and the amendment to the following standard, which are applied from January 1, 2019,
the accounting policies applied by the Group in these consolidated financial statements are the same as those applied
by the Group in its consolidated financial statements as of and for the year ended December 31, 2019 and have
mentioned on the note 2.
(a) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components, whose operating results are reviewed regularly by the chief operating decision maker to make
decisions about resources allocated to each segment and assess its performance, and for which discrete financial
information is available.
The segment reporting to a chief executive officer includes items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items comprise mainly general expenses and income tax
assets and liabilities. The Group considers the Chief Executive Officer (“CEO”) of the Bank as the chief operating
decision maker.
It is CEO’s responsible for evaluating the resources to be distributed to the business and the performance of the
business, and makes strategic decisions.
(b) Basis of consolidation
i) Subsidiaries
Subsidiaries are investees controlled by the Group. The Group controls an investee when it is exposed to, or has
rights to, variable returns from its involvement with the investee and has the ability to affect those returns through
its power over the investee. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
If a member of the Group uses accounting policies other than those adopted in the consolidated financial statements
for the same transactions and events in similar circumstances, appropriate adjustments are made to its financial
statements in preparing the consolidated financial statements.
ii) Structured entity
The Group establishes or invests in various structured entities. A structured entity is an entity designed so that its
activities are not governed by way of voting rights. When assessing control of a structured entity, the Group
considers factors such as the purpose and the design of the investee; its practical ability to direct the relevant activities
of the investee; the nature of its relationship with the investee; and the size of its exposure to the variability of returns
of the investee. The Group does not recognize any non-controlling interests as equity in relation to structured
entities in the consolidated statements of financial position since the non-controlling interests in these entities are
recognized as liabilities of the Group.
iii) Intra-group transactions eliminated on consolidation
Intra-group balances, transactions, and any unrealized income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Intra-group losses are recognized as expense if
intra-group losses indicate an impairment that requires recognition in the consolidated financial statements.
20
3. Significant accounting policies (continued)
(b) Basis of consolidation (continued)
iv) Non-controlling interests
Non-controlling interests in a subsidiary are accounted for separately from the parent’s ownership interests in a
subsidiary. Each component of net profit or loss and other comprehensive income is attributed to the owners of the
parent and non-controlling interest holders, even when the allocation reduces the non-controlling interests balance
below zero.
(c) Business combinations
i) Business combinations
A business combination is accounted for by applying the acquisition method, unless it is a combination involving
entities or businesses under common control.
Each identifiable asset and liability is measured at its acquisition-date fair value except for below:
- Leases and insurance contracts are required to be classified on the basis of the contractual terms and other factors
- Only those contingent liabilities assumed in a business combination that are a present obligation and can be
measured reliably are recognized
- Deferred tax assets or liabilities are recognized and measured in accordance with K-IFRS No.1012, ‘Income Taxes’
- Employee benefit arrangements are recognized and measured in accordance with K-IFRS No.1019, ‘Employee
Benefits’
- Indemnification assets are recognized and measured on the same basis as the indemnified liability or asset
- Reacquired rights are measured in accordance with special provisions
- Liabilities or equity instruments related to share-based payment transactions are measured in accordance with the
method in K-IFRS No.1102, ‘Share-based Payment’
- Non-current assets held for sale are measured at fair value less costs to sell in accordance with K-IFRS No.1105,
‘Non-current Assets Held for Sale and Discontinued Operations’
As of the acquisition date, non-controlling interests in the acquirer are measured as the non-controlling interests'
proportionate share of the acquirer’s identifiable net assets.
The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of
the acquisition-date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to
former owners of the acquirer and the equity interests issued by the acquirer. However, any portion of the acquirer's
share-based payment awards exchanged for awards held by the acquirer's employee that is included in consideration
transferred in the business combination shall be measured in accordance with the method described above rather than
at fair value.
Acquisition-related costs are costs the acquirer incurs to effect a business combination. Those costs include finder's
fees; advisory, legal, accounting, valuation and other professional or consulting fees; general administrative costs,
including the costs of maintaining an internal acquisitions department; and costs of registering and issuing debt and
equity securities. Acquisition-related costs, other than those associated with the issue of debt or equity securities,
which are recognized in accordance with K-IFRS No.1032 and 1109, are expensed in the periods in which the costs
are incurred and the services are received.
21
(c) Business combinations (continued)
ii) Goodwill
The Group measures goodwill at the acquisition date as:

- the fair value of the consideration transferred; plus
- the recognized amount of any non-controlling interests in the acquiree; plus
- if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree;
less
- the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss.
When the Group additionally acquires non-controlling interest, the Group does not recognize goodwill since the
transaction is regarded as equity transaction.
(d) Investments in associates and joint ventures
An associate is an entity in which the Group has significant influence, but not control, over the entity’s financial and
operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of
the voting power of another entity.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
The investment in an associate and a joint venture is initially recognized at cost, and the carrying amount is increased
or decreased to recognize the Group’s share of the profit or loss and changes in equity of the associate and the joint
venture after the date of acquisition. Intra-group balances and transactions, and any unrealized income and expenses
arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Intra-group
losses are recognized as expense if intra-group losses indicate an impairment that requires recognition in the
consolidated financial statements.
If an associate or a joint venture uses accounting policies different from those of the Group for like transactions and
events in similar circumstances, appropriate adjustments are made to its financial statements in applying the equity
method.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that
interest, including any long-term investments, is reduced to nil and the recognition of further losses is discontinued
except to the extent that the Group has an obligation or has to make payments on behalf of the investee for further
losses.
(e) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less
from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the
Group in the management of its short-term commitments. Equity instruments are excluded from cash equivalents
unless they are, in substance, cash equivalents, for example in the case of preferred shares acquired within a short
period of their maturity and with a specified redemption date. However, the Group’s account overdraft is included
in borrowings.
22
(f) Non-derivative financial assets
Financial assets are recognized when the Group becomes a party to the contractual provisions of the instrument. In
addition, a regular way purchase or sale (a purchase or sale of a financial asset under a contract whose terms require
delivery of the asset within the time frame established generally by regulation or convention in the market concerned)
is recognized on the trade date.
A financial asset is measured initially at its fair value plus, for an item not at Fair Value Through Profit or Loss
(“FVTPL”), transaction costs that are directly attributable to its acquisition of the financial asset. Transaction costs
on the financial assets at FVTPL that are directly attributable to the acquisition are recognized in profit or loss as
incurred.
i) Financial assets designated at FVTPL
Financial assets can be irrevocably designated as measured at FVTPL despite of classification standards stated below,
if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring
assets or liabilities or recognizing the gains or losses on them on different bases.
ii) Equity instruments
For the equity instruments that are not held for trading, at initial recognition, the Group may make an irrevocable
election to present subsequent changes in fair value in other comprehensive income. Equity instruments that are
not classified as financial assets at Fair Value through Other Comprehensive Income (“FVOCI”) are classified as
financial assets at FVTPL.
The Group subsequently measures all equity investments at fair value. Valuation gains or losses of the equity
instruments that are classified as financial assets at FVOCI previously recognized as other comprehensive income is
not reclassified as profit or loss on derecognition. The Group recognizes dividends in profit or loss when the
Group’s right to receive payments of the dividend is established.
Valuation gains or losses due to changes in fair value of the financial assets at FVTPL are recognized as gains or
losses on financial assets at FVTPL. Impairment loss (reversal) on equity instruments at FVOCI is not recognized
separately.
iii) Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model in which the asset is managed
and the contractual cash flow characteristics of the asset. Debt instruments are classified as financial assets at
amortized cost, at FVOCI, or at FVTPL. Debt instruments are reclassified only when the Group’s business model
changes.
① Financial assets at amortized cost
Assets that are held within a business model whose objective is to hold assets to collect contractual cash flows where
those cash flows represent solely payments of principal and interest are measured at amortized cost. Impairment
losses, and gains or losses on derecognition of the financial assets at amortized cost are recognized in profit or loss.
Interest income on the effective interest method is included in the ‘Interest income’ in the consolidated statement of
comprehensive income.
23
(f) Non-derivative financial assets (continued)
② Financial assets at FVOCI
Assets that are held within a business model whose objective is achieved by both collecting contractual cash flows
and selling financial assets, where the assets’ cash flows represent solely payments of principal and interest, are
measured at FVOCI. Other than impairment losses, interest income amortized using effective interest method and
foreign exchange differences, gains or losses of the financial assets at FVOCI are recognized as other comprehensive
income in equity. On derecognition, gains or losses accumulated in other comprehensive income are reclassified to
profit or loss. The interest income on the effective interest method is included in the ‘Interest income’ in the
consolidated statement of comprehensive income. Foreign exchange differences and impairment losses are included
in the ‘Net foreign currency transaction gain’ and ‘Provision for allowance for credit loss’ in the consolidated
statement of comprehensive income, respectively.
③ Financial assets at FVTPL
Debt securities other than financial assets at amortized costs or FVOCI are classified at FVTPL. Unless hedge
accounting is applied, gains or losses from financial assets at FVTPL are recognized as profit or loss and are included
in ‘Net gain on financial assets at fair value through profit or loss’ in the consolidated statement of comprehensive
income.
iv) Embedded derivatives
Financial assets with embedded derivatives are classified regarding the entire hybrid contract, and the embedded
derivatives are not separately recognized. The entire hybrid contract is considered when it is determined whether the
contractual cash flows represent solely payments of principal and interest.
v) Derecognition of financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets
that is created or retained by the Group is recognized as a separate asset or liability.
If the Group retains substantially all the risks and rewards of ownership of the transferred financial assets, the Group
continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration
received.
vi) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the consolidated statement of
financial position only when the Group currently has a legally enforceable right to set off the recognized amounts,
and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
24
(g) Derivative financial instruments
Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are accounted for as described below.
i) Hedge accounting
The Group holds forward exchange contracts, interest rate swaps, currency swaps and other derivative contracts to
manage interest rate risk and foreign exchange risk. The Group designated derivatives as hedging instruments to
hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign
currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).
On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s)
and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction,
together with the methods that will be used to assess the effectiveness of the hedging relationship.
① Fair value hedge
Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit
or loss. The gain or loss from remeasuring the hedging instrument at fair value for a derivative hedging instrument
and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line
item of the separate statement of comprehensive income.
The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or
exercised, or if the hedge no longer meets the criteria. Any adjustment arising from G/L on the hedged item attributable
to the hedged risk is amortized to profit or loss from the date the hedge accounting is discontinued.
② Cash flow hedge
When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with
a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective
portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and
presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is
recognized immediately in profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised,
or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss on
the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the
periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur,
then the balance in other comprehensive income is recognized immediately in profit or loss.
③ Net investment hedge
The portion of the change in fair value of a financial instrument designated as a hedging instrument that meets the
requirements for hedge accounting for a net investment in a foreign operation is recognized in other comprehensive
income and the ineffective portion of the hedge is recognized in profit or loss Recognize. The portion recognized as
other comprehensive income that is effective as a hedge is recognized in the statement of comprehensive income as a
result of reclassification adjustments in accordance with K-IFRS No. 1021, "Effect of Changes in Foreign Exchange
Rates" at the time of disposing of its overseas operations or disposing of a portion of its overseas operations To profit
or loss.
25
(g) Derivative financial instruments (continued)
ii) Other derivative financial instruments
Changes in the fair value of other derivative financial instrument not designated as a hedging instrument are
recognized immediately in profit or loss.
iii) Unobservable valuation differences at initial recognition
Any difference between the fair value of over the counter derivatives at initial recognition and the amount that would
be determined at that date using a valuation technique in a situation in which the valuation is dependent on
unobservable parameters is not recognized in profit or loss but is recognized on a straight-line basis over the life of
the instrument or immediately when the fair value becomes observable.
(h) Impairment: Financial assets and contract assets
The Group recognizes allowance for credit loss for debt instruments measured at amortized cost and fair value
through other comprehensive income, and lease receivable, loan commitments and financial guarantee contracts
using the expected credit loss impairment model. Financial assets migrate through the following three stages based
on the change in credit risk since initial recognition and allowance for credit loss for the financial assets are measured
at the 12-month expected credit losses (“ECL”) or the lifetime ECL, depending on the stage.
Category Allowance for credit loss

STAGE 1 When credit risk has not increased 12-months ECL: the ECL associated with the probability of
significantly since the initial default events occurring within the next 12 months
recognition
STAGE 2 When credit risk has increased Lifetime ECL: a lifetime ECL associated with the probability
significantly since the initial of default events occurring over the remaining lifetime
recognition
STAGE 3 When assets are impaired Same as above
The Group, meanwhile, only recognizes the cumulative changes in lifetime expected credit losses since the initial
recognition as an allowance for credit loss for purchased or originated credit-impaired financial assets. The total
period refers to the expected life span of the financial instrument up to the contract expiration date.
26
(h) Impairment: Financial assets and contract assets (continued)
i) Reflection of forward-looking information
The Group reflects forward-looking information presented by internal experts based on a variety of information when
measuring expected credit losses. For the purpose of estimating these forward-looking information, the Group
utilizes the economic outlook published by domestic and overseas research institutes or government and public
agencies.
The Group reflects future macroeconomic conditions anticipated from a neutral standpoint that is free from bias in
measuring expected credit losses. Expected credit losses in this respect reflect conditions that are most likely to
occur and are based on the same assumptions that the Group used in its business plan and management strategy.
ii) Measurement of amortization cost regarding the expected credit loss of financial assets
The expected credit loss of an amortized financial asset is measured as the difference between the present value of the
cash flows expected to be received and the cash flow expected to be received. For this purpose, we calculate expected
cash flows for individually significant financial assets.
For non-individual significant financial assets, the financial assets collectively include expected credit losses as part
of a set of financial assets with similar credit risk characteristics.
Expected credit losses are deducted using the allowance for credit loss account and are written off if the financial
assets were not recoverable. The allowance for credit loss is increased when the written-off loan receivables are
subsequently collected and changes in the allowance for credit loss are recognized in profit or loss.
iii) Measurement of estimated credit loss of financial assets at FVOCI
The calculation of expected credit losses is the same as for financial assets measured at amortized cost, but changes
in allowance for credit loss are recognized in other comprehensive income. In the case of disposal and redemption
of other comprehensive income - fair value, the allowance for credit loss is reclassified from other comprehensive
income to profit or loss and recognized in profit or loss.
(i) Property and equipment
The Group recognizes in the carrying amount of an item of property and equipment the cost of replacing part of
property and equipment when that cost is incurred if it is probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of those parts
that are replaced is derecognized. The costs of the day-to-day servicing of property and equipment are recognized in
profit or loss as incurred.
Land is not depreciated. Other property and equipment are depreciated on a straight-line basis over the estimated
useful lives, which most closely reflect the expected pattern of consumption of the future economic benefits embodied
in the asset. Leased assets under finance leases are depreciated over the shorter of the lease term and their useful lives.
The estimated useful lives for the current and comparative periods are as follows:
Descriptions Useful lives

Buildings 40 years
Other properties 4~5 years
27
(i) Property and equipment (continued)
The gain or loss arising from the derecognition of an item of property and equipment, which is included in profit or
loss, is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
Depreciation methods, useful lives and residual values are reassessed at each fiscal year-end and any adjustment is
accounted for as a change in accounting estimate.
(j) Intangible assets
Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization
and accumulated impairment losses.
Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful
lives of intangible assets as below from the date that they are available for use. The residual value of intangible
assets is zero. However, as there are no foreseeable limits to the periods over which club memberships are expected
to be available for use, this intangible asset is determined as having indefinite useful lives and not amortized.
Descriptions Useful lives

Software and capitalized development cost 5 years
Other intangible assets 5 years or contract periods, whichever the shorter
Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at the
end of each reporting period. The useful lives of intangible assets that are not being amortized are reviewed at the
end of each reporting period to determine whether events and circumstances continue to support indefinite useful life
assessments for those assets. Changes are accounted for as changes in accounting estimates.
Expenditures on research activities, undertaken with the prospect of gaining new technical knowledge and
understanding, are recognized in profit or loss as incurred. Development expenditures are capitalized only if
development costs can be measured reliably, the product or process is technically and commercially feasible, future
economic benefits are probable, and the Group intends to and has sufficient resources to complete development and
to use or sell the asset. Other development expenditures are recognized in profit or loss as incurred.
(k) Investment properties
Investment property is property held either to earn rental income or for capital appreciation or both. An investment
property is initially recognized at cost including any directly attributable expenditure. Subsequent to initial
recognition, the asset is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
The depreciation method and the estimated useful lives for the current and comparative periods were as follows:
Descriptions Depreciation method Useful lives

Buildings Straight-line 40 years
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if
appropriate. The change is accounted for as changes in accounting estimates.
28
(l) Leased assets - policy applicable from January 1, 2019
i) Accounting treatment as the lessee
The Group leases various tangible assets, such as real estate and vehicles, and the each lease contract is negotiated
individually and includes a variety of terms and conditions. There are no other restrictions imposed by the lease
contracts, but the lease assets cannot be provided as collaterals for borrowings.
At the commencement date of the lease, the Group recognizes the right-of-use assets and the lease liabilities. Each
lease payment is allocated to payment for the principal portion of the lease liability and financial costs. The Group
recognizes in profit or loss the amount calculated to produce a constant periodic rate of interest on the lease liability
balance for each period as financial costs. Right-of-use assets are depreciated using a straight-line method from the
commencement date over the lease term.
Lease liabilities are measured at the present value of the lease payments that are not paid at the commencement date
of the lease, and the lease payments included in the measurement of the liabilities consist of the following payments:
- Fixed payments (including in-substance fixed payments, less any lease incentives receivable)
- Variable lease payments depending on the index or rate
- Amounts expected to be paid by the lessee under the residual value guarantee
- The exercise price of a purchase option if the lessee is reasonably certain to exercise that option
- Extended Lease payments in an optional renewal period if the lesses is reasonably certain to that they will exercise
the extension option
- Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease
If the interest rate implicit in the lease is readily determined, the lease payments are discounted by the rate; if the rate
is not readily determined, the lessee’s incremental borrowing rate is used.
The cost of the right-of-use assets comprise:
- The amount of the initial measurement of the lease liability

- Any lease payments made at or before the commencement date (less any lease incentives received)
- Any initial direct costs incurred by the lessee
- An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the
site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of
the lease
Lease payments related to short-term leases or low-value assets are recognized as current expenses over the lease term
using the straight-line method. A short-term lease is a lease that has a lease term of 12 months or less, and the low-
value assets lease is a lease of which the underlying asset value is not more than W6 million.
Extension and termination options are included in a number of real estate lease contracts of the Group. In determining
the lease term, management considers all relevant facts and circumstances that create an economic incentive not to
exercise the options. The periods covered by, a) an option to extend the lease if the lessee is reasonably certain to
exercise that option, or b) an option to terminate the lease if the lessee is reasonably certain not to exercise that option,
is included when determining the lease term. The Group reassesses whether the Group is reasonably certain to
exercise the extension option, or not to exercise a termination option, upon the occurrence of either a significant event
or a significant change in circumstances that is within the control of the lessee, and affects whether the lessee is
reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise
an option previously included in its determination of the lease term.
29
(l) Leased assets - policy applicable from January 1, 2019 (continued)
ii) Accounting treatment as the lessor
The Group leases out to lessees various tangible assets, including vehicles under operating and finance lease contracts,
and the each lease contract is negotiated individually and includes a variety of terms and conditions. The risk
management method for all rights held by the Group in the underlying assets includes repurchase agreements, residual
value guarantees, etc.
For finance leases, the Group recognizes them as a receivable at an amount equal to the net investment in the lease,
and the difference from the carrying amount of the leasing asset as of the commencement date is recognized as profit
or loss from disposal of the lease asset. In addition, interest income is recognized by applying the effective interest
method for the amount of the Group's net investment in finance leases. Lease-related direct costs are included in the
initial recognition of financial lease receivables and are accounted for in a way that reduces the revenue for the lease
term.
For operating leases, the Group recognizes the lease payments as income on straight-line basis, and adds the lease
initial direct costs incurred during negotiation and contract phase of the operating lease to the carrying amount of the
underlying asset. In addition, the depreciation policy of operating lease assets is consistent with the Group’s
depreciation policy of other similar assets.
(m) Leased assets - policy applicable before January 1, 2019
The Group classifies and accounts for leases as either a finance or operating lease, depending on the terms. Leases
where the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases.
All other leases are classified as operating leases.
i) Finance leases
At the commencement of the lease term, the Group recognizes as finance assets and finance liabilities in its
consolidated statements of financial position, the lower amount of the fair value of the leased property and the present
value of the minimum lease payments, each determined at the inception of the lease. Any initial direct costs are
added to the amount recognized as an asset.
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability.
The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest
on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are
incurred.
The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use on
a systematic basis consistent with the depreciation policy the lessee adopts for depreciable assets that are owned. If
there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset is fully
depreciated over the shorter of the lease term and its useful life. The Group reviews to determine whether the leased
asset may be impaired.
ii) Operating leases
Payments made under operating leases are recognized in profit or loss on a straight-line basis over the period of the
lease.
30
(m) Leased assets - policy applicable before January 1, 2019 (continued)
iii) Lessor
Under a finance lease, the lessor recognizes a finance lease receivable. Over the lease term the lessor accrues interest
income on the net investment. The receipts under the lease are allocated between reducing the net investment and
recognizing finance income, so as to produce a constant rate of return on the net investment.
Under an operating lease, the lessor recognizes the lease payments as income over the lease term and the leased asset
in its statement of financial position.
(n) Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily
through sale rather than through continuing use, are classified as held for sale. In order to be classified as held for
sale, the asset (or disposal group) must be available for immediate sale in its present condition and its sale must be
highly probable. The assets or disposal group that are classified as non-current assets held for sale are measured at
the lower of their carrying amount and fair value less cost to sell.
The Group recognizes an impairment loss for any initial or subsequent write-down of an asset (or disposal group) to
fair value less costs to sell, and a gain for any subsequent increase in fair value less costs to sell, up to the cumulative
impairment loss previously recognized in accordance with K-IFRS No. 1036 ‘Impairment of Assets’.
An asset that is classified as held for sale or part of a disposal group classified as held for sale is not depreciated (or
amortized).
31
(o) Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets, other than assets arising from employee benefits, deferred
tax assets and non-current assets held for sale, are reviewed at the end of the reporting period to determine whether
there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of
whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable
amount to their carrying amount.
The Group estimates the recoverable amount of an individual asset, if it is impossible to measure the individual
recoverable amount of an asset, then the Group estimates the recoverable amount of cash-generating unit (“CGU”).
A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the
cash inflows from other assets or group of assets. The recoverable amount of an asset or a CGU is the greater of its
value in use and its fair value less costs to sell. The value in use is estimated by applying a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset or the CGU for
which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated
by the asset or the CGU.
An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount.
Impairment losses are recognized in profit or loss.
Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergies
arising from the goodwill acquired. Any impairment identified at the CGU level will first reduce the carrying value
of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Except
for impairment losses in respect of goodwill which are never reversed, an impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortization, if no impairment loss had been recognized.
(p) Non-derivative financial liabilities
The Group recognizes financial liabilities in the consolidated statement of financial position when the Group becomes
a party to the contractual provisions of the financial liability in accordance with the substance of the contractual
arrangement and the definitions of financial liabilities.
Transaction costs on the financial liabilities at FVTPL are recognized in profit or loss as incurred.
i) Financial liabilities designated at FVTPL
Financial liabilities can be irrevocably designated as measured at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise from measuring assets or liabilities or recognizing the
gains and losses on them on different bases, or a group of financial instruments is managed and its performance is
evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. The
amount of change in the fair value of the financial liabilities designated at FVTPL that is attributable to changes in
the credit risk of that liabilities shall be presented in other comprehensive income.
ii) Financial liabilities at FVTPL
Since initial recognition, financial liabilities at FVTPL is measured at fair value, and changes in the fair value are
recognized as profit or loss.
32
(p) Non-derivative financial liabilities (continued)
iii) Other financial liabilities
Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss are classified as
other financial liabilities. At the date of initial recognition, other financial liabilities are measured at fair value minus
transaction costs that are directly attributable to the acquisition. Subsequent to initial recognition, other financial
liabilities are measured at amortized cost using the effective interest method.
The Group derecognizes a financial liability from the consolidated statement of financial position when it is
extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).
(q) Foreign currencies
i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group at exchange
rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting
date are retranslated to the functional currency using the reporting date’s exchange rate. The foreign currency gain
or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the
period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency
translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities denominated in
foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at
the date that the fair value was determined.
ii) Foreign operations
If the presentation currency of the Group is different from a foreign operation’s functional currency, the financial
statements of the foreign operation are translated into the presentation currency using the following methods:
The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary
economy, are translated to presentation currency at exchange rates at the reporting date. The income and expenses of
foreign operations are translated to functional currency at exchange rates at the dates of the transactions. Foreign
currency differences are recognized in other comprehensive income.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts
of assets and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of the
foreign operation and are translated using the exchange rate at the reporting date.
iii) Net investment in a foreign operation
If the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in
the foreseeable future, then foreign currency differences arising on the item form part of the net investment in the
foreign operation and are recognized in other comprehensive income and reclassified from equity to profit or loss on
disposal of the net investment.
33
(r) Equity capital
i) Capital stock
Capital stock is classified as equity. Incremental costs directly attributable to the transaction of stock are deducted
from equity, net of any tax effects.
Preferred stocks are classified as equity if they do not need to be repaid or are repaid only at the option of the Group
and if payment is determined by the Group's discretion, and dividends are recognized when the shareholders' meeting
approves the dividends. Preferred stocks that are eligible for reimbursement of a defined or determinable amount on
or after a certain date are classified as liabilities. The related dividend is recognized in profit or loss at the time of
occurrence as interest expense.
ii) Hybrid bonds
The Group classifies an issued financial instrument, or its component parts, as a financial liability or an equity
instrument depending on the substance of the contractual arrangement of such financial instrument. Hybrid bonds
where the Group has an unconditional right to avoid delivering cash or another financial asset to settle a contractual
obligation are classified as an equity instrument and presented in equity.
iii) Capital structure
The effect of changes in ownership interests in subsidiaries that do not lose control over the equity attributable to
owners of the parent is included in capital adjustments.
34
(s) Employee benefits
i) Short-term employee benefits
Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the
period in which the employees render the related service. When an employee has rendered service to the Group during
an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be
paid in exchange for that service.
ii) Other long-term employee benefits
The Group’s net obligation in respect of other long-term employee benefits that are not expected to be settled wholly
before 12 months after the end of the annual reporting period in which the employees render the related service, is the
amount of future benefit that employees have earned in return for their service in the current and prior periods. That
benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in
which they arise.
iii) Retirement benefits: defined contribution plans
The Group recognizes the contribution expense as an account of severance payments in profit or loss in the period
according to the defined contribution plans.
iv) Retirement benefits: defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net
obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior periods; that benefit is discounted to determine its
present value. The fair value of plan assets is deducted. The calculation is performed annually by an independent
actuary using the projected unit credit method.
Defined benefit liabilities are calculated annually by independent actuaries using the predicted unit credit method. If
the net present value of the defined benefit obligation less the fair value of the plan assets is an asset then the present
value of the economic benefits available to the entity in the form of a refund from the plan or a reduction in future
contributions to the plan.
The remeasurement component of net defined benefit liability is the change in the effect of the asset except for the
amount included in the net interest income of plan assets and net revenues of plan assets excluding actuarial gains and
losses to the net of defined benefit liabilities. It is immediately recognized in other comprehensive income. The Group
determines the net interest on the net defined benefit obligation (asset) by multiplying the net defined benefit
obligation (asset) by the discount rate determined at the beginning of the annual reporting period and is the net present
value of the net defined benefit obligation. It is determined by taking into consideration the fluctuations. Net interest
expense and other expenses related to defined benefit plans are recognized in profit or loss.
When an amendment or reduction of the system occurs, the gain or loss resulting from the change or decrease in the
benefits to the past service is immediately recognized in profit or loss. The Group recognizes gains or losses on
settlement when the defined benefit plan is settled.
35
(s) Employee benefit (continued)
v) Termination benefits
Termination benefits are recognized as an expense when the Group is committed demonstrably, without realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date,
or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits
for voluntary redundancies are recognized as an expense if the Group has made an offer of voluntary redundancy, it
is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are
payable more than 12 months after the reporting period, then they are discounted to their present value.
(t) Share-based payment transactions
The grant date fair value of share-based payment awards granted to employees is recognized as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the
awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service
and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense
is based on the number of awards that do meet the related service and non-market performance conditions at the
vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based
payment is measured to reflect such conditions and there is no true-up for differences between expected and actual
outcomes.
The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash,
is recognized as an expense with a corresponding increase in liabilities, over the period that the employees
unconditionally become entitled to payment. The liability is remeasured at each reporting date and at settlement date.
Any changes in the fair value of the liability are recognized as personnel expense in profit or loss.
(u) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching
the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at
the present value of the expected future cash flows.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation,
the provision is reversed.
Provisions shall be used only for expenditures for which the provisions are originally recognized.
36
(v) Financial guarantee contract
A financial guarantee contract is a contract that requires the Group to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or
modified terms of a debt instrument.
Financial guarantee contracts are recognized initially at their fair value, and the initial fair value is amortized over the
life of the financial guarantee contract. The financial guarantee liability is subsequently measured at the higher of the
amount of the best estimate of the expenditure required to settle the present obligation at the end of reporting period;
and the amount initially recognized less, cumulative amortization recognized on a straight-line basis over the guarantee
period. Financial guarantee liabilities are included within other liabilities.
After initial recognition, financial guarantee contracts are measured at the higher of:
- Loss allowance in accordance with K-IFRS No.1109, ‘Financial Instruments’
- The amount initially recognized less, when appropriate, the cumulative amount of income recognized in
accordance with the principles of K-IFRS No.1115, ‘Revenue from Contracts with Customers’
(w) Insurance contracts
i) Investment contract liabilities, including insurance contract liabilities and discretionary dividend factors
The group establishes liability reserves in accordance with the Insurance Business Law and the related regulations.
The reserves are calculated according to the insurance policy, insurance premiums and liability reserve calculation
method. The main contents are as follows.
i-1) Premium reserves
The present value of the premiums payable to the policy holders after the balance sheet date is the present value of
the net premium to be paid after the end of the reporting period. The amount is deducted from the value.
i-2) Unpaid premium reserves
As of the end of the reporting period, premiums that have paid due are calculated based on premiums and the liability
reserve calculation method.
i-3) Guarantee reserves
The total amount of reserve for variable minimum guarantee (①) and reserve for general account guarantee (②) is
provided as guarantee reserve.
① Variable minimum guarantee reserve

This reserve is the amount that must be accumulated to guarantee insurance premiums above a certain level for
contracts maintained as of the end of the reporting period, and is measured at the higher of :
i) the average amount of the top 30% of net loss expected in the future
ii) the minimum required amount by insurance types, minimum guarantees and limits of stock investment portion
37
(w) Insurance contracts (continued)
② General account guarantee reserve
As of the end of the reporting period, the amount of reserve for insurance contracts that are insured under general
account is required to be paid to guarantee the level of refunds,
i) Average of the amount deducted from the appropriateness of the liability reserve calculated by excluding the
guarantee option from the appropriateness evaluation of the liability reserve calculated by including the guarantee
option for each interest rate scenario
ii) The amount of compensation (including annulment contract) against the guarantee received from the policy
holder by the rate applied at the premium calculation in the insurance premium and liability reserve calculation
method
i-4) Reserve for outstanding claims
As of the end of the reporting period, the Group has accrued the amount for which the reason for the payment of
insurance claims, etc. has been incurred and the amount of the claim payment has not been paid yet due to the dispute
or lawsuit related to the insurance settlement. In addition, the Group recognizes unrecognized losses based on
historical experience.
i-5) Reserves for participating policyholders' dividends
The reserve is provided for the purpose of contributing to the policyholder dividend according to the laws and
regulations and the reserve for dividend reserve for the policyholder and the dividend reserve for the subsequent
business year.
The policyholder dividend reserve is the amount that is not paid as of the end of the reporting period for the settlement
amount and the reserve for dividend policy for the next fiscal year is based on the policyholder dividend calculated
on the insurance contract effective as of the end of the reporting period.
① Excess crediting rate reserve
In the case of a dividend insurance contract which has been maintained for more than one year as of the end of the
reporting period among contracts signed before October 1, 1997, the difference between the planned interest rate and
the one-year maturity deposit rate shall be preserved.
② Mortality dividend reserve
Dividends arising from contracts that are maintained for more than one year at the end of the reporting period are used
to offset the expected mortality and actual mortality rates applied to premiums.
③ Interest dividend reserve
For the contracts that have been maintained for more than one year as of the end of the reporting period, the amount
calculated by applying the interest dividend reserve rate to the net written premium reserve less the unearned
acquisition costs. However, the insurance sold before October 1, 1997 is applied to the amount deducted from the net
premium in the event that the planned interest rate by the insurance product is less than the dividend standard.
④ Reserves for long-term special dividends

For the effective dividend policy agreement that has been maintained for 6 years or more, the amount calculated by
applying the long-term special dividend rate to the amount deducted from the net premiums for the end of the year.
38
(w) Insurance contracts (continued)
However, insurance sold before October 1, 1997 is applied to the deduction of unearned premiums at the end of the
year when the expected interest rate by the insurance product is less than the dividend standard rate
i-6) Reserve for interest dividends
In order to cover the policyholder dividend in the future, the amount is accumulated in accordance with the laws and
regulations and the insurance contracts.
i-7) Reserve for dividend insurance loss reserve
In accordance with the regulations set by the supervisory authority, dividend insurance profit is accumulated within
30/100 of the contractor's stake. The reserve loss for dividend insurance shall be preserved at the end of the reporting
period and shall be used as the policyholder dividend source for the individual contractor.
ii) Contractor's equity adjustment
The Group classifies the gains and losses on available-for-sale financial assets as of the end of the reporting period as
contractor's equity and shareholder's equity based on the ratio of the average liability reserves of the dividend and
non-dividend policies for the fiscal year.
iii) Evaluation of debt appropriateness
At the end of each reporting period, the group assesses whether the recognized insurance liability is appropriate using
the current estimates of future cash flows of the policy, and if the carrying amount of the insurance liability is deemed
to be inappropriate in terms of the estimated future cash flows. The reserve for premiums is added to the profit or loss
by the amount corresponding to the deficiency.
iv) Reinsurance assets
The group presents the recoverable amount of reinsurance assets. The group assesses at the end of each reporting
period whether there is objective evidence that a reinsurance asset is impaired. If there is objective evidence that the
entity will not be able to collect all amounts under the terms of the agreement as a result of an event that occurred
after the initial recognition and if the event has a reliable and measurable impact on the amount to be received. If
reinsurance assets are determined to be impaired, impairment loss is recognized in the profit and loss for the current
period.
v) Deferred acquisition cost
The group recognizes unrealized gains and losses arising from long-term insurance contracts as assets and amortizes
the premiums over the life of the insurance contracts equally. If the contribution period exceeds 7 years, the
amortization period is 7 years if there is an unrecognized balance at the date of the cancellation, the entire amount of
the cancellation is amortized in the fiscal year to which the cancellation date belongs. But, if the ratio of additional
premiums is higher at the early stage of the insurance period for the purpose of recovering the excess of the unearned
premiums and the early settlement costs, the new settlement expenses are treated as the period expense.
39
(x) Recognition of revenues and expenses
Other than revenues under the scope of K-IFRS No.1017, ‘Leases’, K-IFRS No.1028, ‘Investments in Associates and
Joint Ventures’, K-IFRS No.1109, ‘Financial Instruments’, K-IFRS No.1110, ‘Consolidated Financial Statements’,
and K-IFRS No.1111, ‘Joint Arrangements’, the Group’s revenues are recognized using five-step revenue recognition
model as follows: ① ‘Identifying the contract’ → ② ‘Identifying performance obligations’ → ③ ‘Determining
the transaction price’ → ④ ‘Allocating the transaction price to performance obligations’ → ⑤ ‘Recognizing the
revenue by satisfying performance obligations’.
i) Interest income and expense
Interest income and expense are recognized in profit or loss using the effective interest method. The effective interest
rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the
financial asset or liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or
liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms
of the financial instrument, but does not consider future credit losses. The calculation includes all fees and points paid
or received between parties to the contract that are an integral part of the effective interest rate, and all other premiums
or discounts. When it is not possible to estimate reliably the cash flows or the expected life of a financial instrument,
the Group uses the contractual cash flows over the full contractual term of the financial instrument.
Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss,
interest income is thereafter recognized using the rate of interest used to discount the future cash flows for the purpose
of measuring the impairment loss.
ii) Fees and commission
The recognition of revenue for financial service fees depends on the purposes for which the fees are assessed and the
basis of accounting for any associated financial instrument.
① Fees that are an integral part of the effective interest rate of a financial instrument
Such fees are generally treated as an adjustment to the effective interest rate. Such fees may include compensation for
activities such as evaluating the borrower’s financial condition, evaluating and recording guarantees, collateral and
other security arrangements, preparing and processing documents, closing the transaction and the origination fees
received on issuing financial liabilities. However, when the financial instrument is measured at fair value with the
change in fair value recognized in profit or loss, the fees are recognized as revenue when the instrument is initially
recognized.
② Fees earned as services are provided
Fees and commission income, including investment management fees, sales commission, and account servicing fees,
are recognized as the related services are provided.
40
(x) Recognition of revenues and expenses (continued)
③ Fees that are earned on the execution of a significant act
The fees that are earned on the execution of a significant act including commission on the allotment of shares or other
securities to a client, placement fee for arranging a loan between a borrower and an investor and sales commission,
are recognized as revenue when the significant act has been completed.
iii) Insurance income
The Group recognizes insurance income for the insurance premium paid of which the payment date arrived by the
premium payment methods of the insurance contract; and recognizes advance receipts for the insurance premium
paid of which the payment date has not arrived at the end of the reporting period.
iv) Dividends
Dividends income is recognized when the shareholder’s right to receive payment is established. Usually this is the ex-
dividend date for equity securities. The Group provides compensation in various forms such as payment discounts and
gifts.
(y) Revenue from Contracts with Customers
The fair value of the consideration received or receivable in exchange for the initial transaction is allocated to the
reward points ("points") and the remainder of the fee income. The consideration to be allocated to the points is
estimated based on the fair value of the monetary benefits to be provided in consideration of the expected recovery
rate of points awarded in accordance with the customer loyalty program and the expected time of recovery. Points for
distribution through the cost paid by the customer is recognized by deducting from the revenue from fees.
41
(z) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or
loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other
i) Current tax
Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted
or substantively enacted at the end of the reporting period and any adjustment to tax payable in respect of previous
years. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated
excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of
future periods, and non-taxable or non-deductible items from the accounting profit.
ii) Deferred tax
Deferred tax is recognized, using the asset-liability method, in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A
deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is recognized for all
deductible temporary differences to the extent that it is probable that taxable profit will be available against which
they can be utilized. However, deferred tax is not recognized for the following temporary differences: taxable
temporary differences arising on the initial recognition of goodwill, or the initial recognition of assets or liabilities
in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income.
The Group recognizes deferred tax liabilities for all taxable temporary differences associated with investments in
subsidiaries, associates, and interests in joint ventures, except to the extent that the Group is able to control the timing
of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future. The Group recognizes deferred tax assets for all deductible temporary differences arising from
investments in subsidiaries and associates, to the extent that it is probable that the temporary difference will reverse
in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset
is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax
consequences that would follow from the manner in which the Group expects, at the end of the reporting period to
recover or settle the carrying amount of its assets and liabilities.
The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and reduced the carrying
amount to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit
of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are offset only if there is a legally enforceable right to offset the related current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority and they intend to settle current
tax liabilities and assets on a net basis.
If any additional income tax expense exists by payment of dividends, the Group recognizes it when the liability
relating to the payment is recognized.
Because of the tax polices taken by the Group, tax uncertainties arise from the complexity of transactions and
differences in tax law analysis. Also, it arises from a tax refund suit, tax investigation, or a refund suit against the tax
authorities' tax amount.
42
(z) Income tax (continued)
ii) Deferred tax (continued)
Because of the tax polices taken by the Group, tax uncertainties arise from the complexity of transactions and
differences in tax law analysis. Also, it arises from a tax refund suit, tax investigation, or a refund suit against the tax
authorities' tax amount. The Group paid the tax amount by the tax authorities in accordance with K-IFRS No. 2123.
However, it will be recognized as the corporate tax assets if there is a high possibility of a refund in the future. In
addition, the amount expected to be paid as a result of the tax investigation is recognized as the tax liability.
(aa) Accounting for trust accounts
The Group accounts for trust accounts separately from its bank accounts under the Financial Investment Services
and Capital Markets Act and thus the trust accounts are not included in the accompanying consolidated financial
statements. Borrowings from trust accounts are included in other liabilities. Trust fees and commissions in relation
to the service provided to trust accounts by the Group are recognized as fees and commission income.
(ab) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to the ordinary shareholder of the Group by the weighted average number
of common shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise
share options granted to employees.
(ac) Issued/Amended Accounting Standards that are not applied
The following issued/amended standards have been published but have not yet been effective during the fiscal year
beginning January 1, 2019. Hence, the Group did not apply the following issued/amended standards in preparing
financial statements:
i) K-IFRS No. 1001 ‘Presentation of Financial Statements’ and K-IFRS No. 1008 ‘Accounting Policies, Changes in
Accounting Estimates and Errors’ amended
The definition of materiality has been clarified, and the feature of information users is taken into account when
determining the information to be disclosed and the effects of immaterial information as well as omission or
misstatement of material information when determining materiality. This amendment is effective for annual periods
beginning on or after January 1, 2020. The Group expects that the amendment will not have a material impact on its
financial statements.
ii) K-IFRS No. 1103 ‘Business Combination’
The amended definition of business requires that the inputs that have the ability to create outputs and substantial
process to be included in the assessment of acquired businesses and the collection of assembled assets, excluding
economic benefits from cost reduction. In addition, if the fair value of most of the total assets acquired is concentrated
in a single identifiable asset or a set of assets, an optional concentration test has been added that determines that the
acquired activities and sets of assets are not a business but assets or a set of assets. This amendment is effective for
annual periods beginning on or after January 1, 2020. The Group expects that the amendment will not have a material
impact on its financial statements.
43
4. Financial risk management
(a) Overview
As a financial services provider, Shinhan Financial Group Co., Ltd. and its subsidiaries (collectively the “Group”)
are exposed to various risks relating to lending, credit card, insurance, securities investment, and trading and leasing
businesses, its deposit taking and borrowing activities in addition to the operating environment.
The principal risks to which the Group is exposed are credit risk, market risk, interest rate risk, liquidity risk and
operational risk. These risks are recognized, measured and reported in accordance with risk management guidelines
established at the Group level and implemented at the subsidiary level through a carefully stratified checks-and-
balances system.
i) Risk management principles
The Group risk management is guided by the following core principles:
- identifying and managing all inherent risks;

- standardizing risk management process and methodology;
- ensuring supervision and control of risk management independent of business activities;
- continuously assessing risk preference;
- preventing risk concentration;
- operating a precise and comprehensive risk management system including statistical models; and
- balancing profitability and risk management through risk-adjusted profit management.
ii) Risk management organization
The Group risk management system is organized along with the following hierarchy: from the top and at the Group
level, the Group Risk Management Committee, the Group Risk Management Council, the Chief Risk Officer and
the Group Risk Management Team, and at the subsidiary level, the Risk Management Committees and the Risk
Management Team of the relevant subsidiary.
The Group Risk Management Committee, which is under the supervision of the controlling company’s Board of
Directors, sets the basic group wide risk management policies and strategies. The controlling company’s Chief
Risk Officer reports to the Group Risk Management Committee, and the Group Risk Management Council, whose
members consist of the controlling company’s Chief Risk Officer and the risk management team heads of each of
subsidiaries, coordinates the risk management policies and strategies at the group level as well as at the subsidiary
level among each of subsidiaries.
Each of subsidiaries also has a separate Risk Management Committee, Risk Management Working Committee and
Risk Management Team, whose tasks are to implement the group wide risk management policies and strategies at
the subsidiary level as well as to set risk management policies and strategies specific to such subsidiary in line with
the group wide guidelines. The Group also has the Group Risk Management Team, which supports the controlling
company’s Chief Risk Officer in his or her risk management and supervisory role.
In order to maintain the group wide risk at an appropriate level, the Group use a hierarchical risk limit system under
which the Group Risk Management Committee assigns reasonable risk limits for the entire group and each of
subsidiaries, and the Risk Management Committee and the Risk Management Council of each of subsidiaries
manage the subsidiary-specific risks by establishing and managing risk limits in more details by type of risk and
type of product for each department and division within such subsidiary.
Shinhan Financial Group has a hierarchical limit system to manage the risks of the Group to an appropriate level.
The Group Risk Management Committee sets the risk limits that can be assumed by the Group and its subsidiaries,
while the Risk Management Committee and the Committee of each subsidiary set and manages detailed risk limits
such as risk, department, desk and product types.
44
4. Financial risk management (continued)
(a) Overview (continued)
ii) Risk management organization(continued)
① Group Risk Management Committee
The Group establish the risk management system for the Group and each of its subsidiaries, and comprehensively
manage group risk-related matters such as establishing risk policies, limits, and approvals. The Committee consists
of directors of the Group
The resolution of the Committee is as follows:
- Establish risk management basic policy in line with management strategy

- Determine the level of risk that can be assumed by the Group and each subsidiary
- Appropriate investment limit or loss allowance limit
- Enacted and revised the Group Risk Management Regulations and the Group Risk Council Regulations
- Matters concerning risk management organization structure and division of duties
- Matters concerning the operation of the risk management system;
- Matters concerning the establishment of various limits and approval of limits
- Decisions on approval of the FSS's internal rating law for non-retail and retail credit rating systems
- Matters concerning risk disclosure policy
- Analysis of crisis situation, related capital management plan and financing plan
- Matters deemed necessary by the board of directors
- Materials required by external regulations such as the Financial Services Commission and other regulations and
guidelines
- Matters deemed necessary by the Chairman
The resolution of the Group Risk Management Committee is reported to the Board of Directors.
② Group Risk Management Council
In order to maintain the Group's risk policy and strategy consistently, the Group decides what is necessary to discuss
the risks of the Group and to carry out the policies set by the Group Risk Management Committee.The members are
chaired by the group's risk management officer and consist of the risk management officers of major subsidiaries.
However, if the subsidiary's risk management officer is not an executive, the chief executive officer of risk
management may attend.
iii) Group Risk Management System
① Management of the risk capital
Risk capital refers to the capital required to compensate for the potential loss (risk) if it is actually realize
d. Risk capital management refers to the management of the risk assets considering its risk appetite, which
is a datum point on the level of risk burden compared to available capital, so as to maintain the risk ca
pital at an appropriate level. The Group and subsidiaries establish and operate a risk planning process to r
eflect the risk plan in advance when establishing financial and business plans for risk capital management,
and establish a risk limit management system to control risk to an appropriate level.
45
(a) Overview (continued)
iii) Group Risk Management System(continued)
② Risk Monitoring
In order to proactively manage risks by periodically identifying risk factors that can affect the group's business
environment, the Group has established a multi-dimensional risk monitoring system. Each subsidiary is required to
report to the Group on key issues that affect risk management at the group level. The Group prepares weekly, monthly
and occasional monitoring reports to report to Group management including the CRO.
In addition, the Risk Dash Board is operated to derive abnormal symptoms through three-dimensional monitoring
of major portfolios, increased risks, and external environmental changes (news) of assets for each subsidiary. If
necessary, the Group take preemptive risk management to establish and implement countermeasures.
③ Risk Reviewing
When conducting new product / new business and major policy changes, risk factors are reviewed by using a pre-
defined checklist to prevent indiscriminate promotion of business that is not easy to judge risk and support rational
decision making. The subsidiary's risk management department conducts a preliminary review and post-monitoring
process on products, services, and projects to be pursued in the business division. After consultation, the Group
conduct risk reviews.
④ Risk management
The Group maintain a group wide risk management system to detect the signals of any risk crisis and, in the event of
a crisis actually happening, to respond on a timely, efficient and flexible basis so as to ensure the Group’s survival as
a going concern. Each subsidiary maintains crisis planning for three levels of contingencies, namely, “alert”,
“imminent crisis” and “crisis”, determination of which is made based on quantitative and qualitative monitoring and
consequence analysis, and upon the happening of any such contingency, is required to respond according to a
prescribed contingency plan. At the controlling company level, the Group maintains and installs crisis detection
and response system which is applied consistently group wide, and upon the happening of any contingency at two or
more subsidiary level, the Group directly takes charge of the situation so that the Group manages it on a concerted
group wide basis.
46
(b) Credit risk
Credit risk is the risk of potential economic loss that may be caused if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and the largest risk which the Group is facing. The Group’s
credit risk management encompasses all areas of credit that may result in potential economic loss, including not just
transactions that are recorded on balance sheets, but also off-balance-sheet transactions such as guarantees, loan
commitments and derivative transactions.
 Credit Risk Management of Shinhan Bank
Major policies for Shinhan Bank’s credit risk management, including Shinhan Bank’s overall credit risk management
plan and credit policy guidelines, are determined by the Risk Policy Committee of Shinhan Bank, the executive
decision-making body for management of credit risk. The Risk Policy Committee is headed by the Chief Risk
Officer, and also comprises of the Chief Credit Officer, the heads of each business unit and the head of the Risk
Management Department. In order to separate the loan approval functions from credit policy decision-making,
Shinhan Bank has a Credit Review Committee that performs credit review evaluations, which focus on improving
the asset quality and profitability from the loans being made, and operates separately from the Risk Policy Committee.
Shinhan Bank complies with credit risk management procedures pursuant to internal guidelines and regulations and
continually monitors and improves these guidelines and regulations. Its credit risk management procedures include:
- credit evaluation and approval;

- credit review and monitoring; and
- credit risk assessment and control
Each of Shinhan Bank’s borrowers is assigned a credit rating, which is based on a comprehensive internal credit
evaluation system that considers a variety of criteria. For retail borrowers, the credit rating takes into account the
borrower’s past dealings with Shinhan Bank and external credit rating information, among others. For corporate
borrowers, the credit rating takes into account financial indicators as well as non-financial indicators such as industry
risk, operational risk and management risk, among others. The credit rating, once assigned, serves as the
fundamental instrument in Shinhan Bank’s credit risk management, and is applied in a wide range of credit risk
management processes, including credit approval, credit limit management, loan pricing and computation of
allowance for credit loss. Shinhan Bank has separate credit evaluation systems for retail customers, SOHO
customers and corporate customers, which are further segmented and refined to meet Basel Ⅲ requirements.
47
(b) Credit risk (continued)
Loans are generally approved after evaluations and approvals by the manager at the branch level as well as the
committee of the applicable business unit at Shinhan Bank. The approval limit for retail loans is made based on
Shinhan Bank’s automated credit scoring system. In the case of large corporate loans, approval limits are also
reviewed and approved by a Credit Officer at the headquarter level. Depending on the size and the importance of
the loan, the approval process is further reviewed by the Credit Officer Committee or the Master Credit Officer
Committee. If the loan is considered, further evaluation is made by the Credit Review Committee, which is Shinhan
Bank’s highest decision-making body in relation to credit approval.
Pursuant to the foregoing credit review and monitoring procedures and in order to promptly prevent deterioration of
loan qualities, Shinhan Bank classifies potentially problematic borrowers into (i) borrowers that show early warning
signals, (ii) borrowers that require close monitoring and (iii) normal borrowers, and treats them differentially
accordingly.
In order to maintain portfolio-level credit risk at an appropriate level, Shinhan Bank manages its loans using value-
at-risk (“VaR”) limits for the entire bank as well as for each of its business units. In order to prevent concentration
of risk in a particular borrower or borrower class, Shinhan Bank also manages credit risk by borrower, industry,
country and other detailed categories.
 Credit Risk Management of Shinhan Card
Major policies for Shinhan Card’s credit risk management are determined by Shinhan Card’s Risk Management
Council and Shinhan Card’s Risk Management Committee is responsible for approving them. Shinhan Card’s Risk
Management Council is headed by the Chief Risk Officer, and also comprises of the heads of each business unit,
supporting unit and relevant department at Shinhan Card. In order to separate credit policy decision-making from
credit evaluation functions, Shinhan Card also has a Risk Management Committee, which evaluates applications for
corporate loans exceeding a certain amount and other loans deemed important. Shinhan Card uses an automated
credit scoring system to approve credit card applications or credit card authorizations. The credit scoring system is
divided into two sub-systems: the application scoring system and the behaviour scoring system. The behaviour
scoring system is based largely on the credit history, and the application scoring system is based largely on personal
information of the applicant. For credit card applicants with whom the Shinhan Card has an existing relationship,
Shinhan Card’s credit scoring system considers internally gathered information such as repayment ability, total assets,
the length of the existing relationship and the applicant’s contribution to profitability. The credit scoring system
also automatically conducts credit checks on all credit card applicants.
If a credit score awarded to an applicant is above a minimum threshold, the application is approved unless overridden
based on other considerations such as delinquencies with other credit card companies.
Shinhan Card continually monitors all accountholders and accounts using a behaviour scoring system. The behaviour
scoring system predicts a cardholder’s payment pattern by evaluating the cardholder’s credit history, card usage and
amounts, payment status and other relevant data. The behaviour score is recalculated each month and is used to
manage the accounts and approval of additional loans and other products to the cardholder. Shinhan Card also uses
the scoring system to monitor its overall risk exposure and to modify its credit risk management strategy.
48
i) Techniques, assumptions and input variables used to measure impairment
i-1) Determining significant increases in credit risk since initial recognition
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly
since initial recognition. When making the assessment, the Group uses the change in the risk of a default occurring
over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To
make that assessment, the Group compares the risk of a default occurring on the financial instrument as at the
reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and
consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of
significant increases in credit risk since initial recognition.
i-1-1) Measuring the risk of default
The Group assigns an internal credit risk rating to each individual exposure based on observable data and historical
experiences that have been found to have a reasonable correlation with the risk of default. The internal credit risk
rating is determined by considering both qualitative and quantitative factors that indicate the risk of default, which
may vary depending on the nature of the exposure and the type of borrower.
i-1-2) Measuring term structure of probability of default
The Group accumulates information after analyzing the information regarding exposure to credit risk and default
information by the type of product and borrower and results of internal credit risk assessment. For some portfolios,
the Group uses information obtained from external credit rating agencies when performing these analyses.
The Group applies statistical techniques to estimate the probability of default for the remaining life of the exposure
from the accumulated data and to estimate changes in the estimated probability of default over time.
49
i-1-3) Significant increases in credit risk
The Group uses the indicators defined as per portfolio to determine the significant increase in credit risk and such
indicators generally consist of changes in the risk of default estimated from changes in the internal credit risk rating,
qualitative factors, days of delinquency, and others. The method used to determine whether credit risk of financial
instruments has significantly increased after the initial recognitions is summarized as follows:
Corporate exposures Retail exposures Card exposures
Significant change in credit ratings Significant change in credit ratings Significant change in credit ratings
Continued past due more than 30 Continued past due more than 30 Continued past due more than 7
days days days(personal card)
Loan classification of and below Loan classification of and below Loan classification of and below
precautionary precautionary precautionary
Borrower with early warning Borrower with early warning
Specific pool segment
signals signals
Negative net assets Specific pool segment
Adverse audit opinion or disclaimer Loans relating to constructor whose
of opinion collective loans are insolvent
Interest coverage ratios of below 1
for consecutive three years
Negative cash flows from operating
activities for consecutive two
years
The Group considers the credit risk of financial instrument has been significantly increased since initial recognition
if a specific exposure is past due more than 30 days (however, for a specific portfolio if it is past due more than 7
days). The Group counts the number of days past due from the earliest date on which the Group has not fully received
the contractual payments from the borrower and does not consider the grace period granted to the borrower.
The Group regularly reviews the criteria for determining if there have been significant increases in credit risk from
the following perspective.
- A significant increase in credit risk shall be identified prior to the occurrence of default.
- The criteria established to judge the significant increase in credit risk shall have a more predictive power than the
criteria for days of delinquency.
- As a result of applying the judgment criteria, financial instruments shall not be to move too frequently between the
12-months expected credit losses measurement and the lifetime expected credit losses measurement.
50
i-2) Modified financial assets
If the contractual cash flows on a financial asset have been renegotiated or modified and the financial asset was not
derecognized, the Group assesses whether there has been a significant increase in the credit risk of the financial
instrument by comparing the risk of a default occurring at initial recognition based on the original, unmodified
contractual terms and the risk of a default occurring at the reporting date based on the modified contractual terms.
The Group may adjust the contractual cash flows of loans to customers who are in financial difficulties in order to
manage the risk of default and enhance the collectability (hereinafter referred to as ‘debt restructuring’). These
adjustments generally involve extension of maturity, changes in interest payment schedule, and changes in other
contractual terms.
Debt restructuring is a qualitative indicator of a significant increase in credit risk and the Group recognizes lifetime
expected credit losses for the exposure expected to be the subject of such adjustments. If a borrower faithfully makes
payments of contractual cash flows that were modified in accordance with the debt restructuring or if the borrower's
internal credit rating has recovered to the level prior to the recognition of the lifetime expected credit losses, the
Group recognizes the 12-months expected credit losses for that exposure again.
i-3) Risk of default
The Group considers a financial asset to be in default if it meets one or more of the following conditions:
- If a borrower is overdue 90 days or more from the contractual payment date,
- If the Group judges that it is not possible to recover principal and interest without enforcing the collateral on a
financial asset
The Group uses the following indicators when determining whether a borrower is in default:
- Qualitative factors (e.g. breach of contract terms),
- Quantitative factors (e.g. if the same borrower does not perform more than one payment obligations to the Group,
the number of days past due per payment obligation. However, in the case of a specific portfolio, the Group uses
the number of days past due for each financial instrument)
- Internal data and external data
The definition of default applied by the Group generally conforms to the definition of default defined for regulatory
capital management purposes; however, depending on the situations, the information used to determine whether a
default has incurred and the extent thereof may vary.
51
i-4) Reflection of forward-looking information
The Group reflects forward-looking information presented by internal experts based on a variety of information when
measuring expected credit losses. For the purpose of estimating these forward-looking information, the Group
utilizes the economic outlook published by domestic and overseas research institutes or government and public
agencies.
The Group reflects future macroeconomic conditions anticipated from a neutral standpoint that is free from bias in
measuring expected credit losses. Expected credit losses in this respect reflect conditions that are most likely to
occur and are based on the same assumptions that the Group used in its business plan and management strategy.
The Group identified the key macroeconomic variables needed to forecast credit risk and credit losses for each
portfolio as follows by analyzing past experience data and drew correlations across credit risk for each variable.
Key macroeconomic variables Correlation with credit risk
Economic growth Negative

Consumer price index Positive
Benchmark rate Positive
3-year Korea Treasury Bond Positive
3-year Corporate Bond Positive
KOSPI Negative
The predicted correlations between the macroeconomic variables and the risk of default, used by the Group, were
derived based on data from the past nine years.
52
i-5) Measurement of expected credit losses
Key variables used in measuring expected credit losses are as follows:
- Probability of default (“PD”)

- Loss given default (“LGD”)
- Exposure at default (“EAD”)
These variables have been estimated from historical experience data by using the statistical techniques developed
internally by the Group and have been adjusted to reflect forward-looking information.
Estimates of PD over a specified period are estimated by reflecting characteristics of counterparties and their
exposure, based on a statistical model at a specific point of time. The Group uses its own information to develop a
statistical credit assessment model used for the estimation, and additional information observed in the market is
considered for some portfolios such as a group of large corporates. When a counterparty or exposure is concentrated
in specific grades, the method of measuring PD for that grades would be adjusted, and the PD by grade is estimated
by considering contract expiration of the exposure.
LGD refers to the expected loss if a borrower defaults. The Group calculates LGD based on the experience recovery
rate measured from past default exposures. The model for measuring LGD is developed to reflect type of collateral,
seniority of collateral, type of borrower, and cost of recovery. In particular, LGD for retail loan products uses loan
to value (LTV) as a key variable. The recovery rate reflected in the LGD calculation is based on the present value of
recovery amount, discounted at the effective interest rate.
EAD refers to the expected exposure at the time of default. The Group derives EAD reflecting a rate at which the
current exposure is expected to be used additionally up to the point of default within the contractual limit. EAD of
financial assets is equal to the total carrying amount of the asset, and EAD of loan commitments or financial
guarantee contracts is calculated as the sum of the amount expected to be used in the future.
When measuring expected credit losses on financial assets, the Group reflects a period of expected credit loss
measurement based on a contractual maturity. The Group takes into consideration of the extension rights held by
a borrower when deciding the contractual maturity.
Risk factors of PD, LGD and EAD are collectively estimated according to the following criteria:
- Type of products
- Internal credit risk rating
- Type of collateral
- Loan to value (LTV)
- Industry that the borrower belongs to
- Location of the borrower or collateral
- Days of delinquency
The criteria classifying groups is periodically reviewed to maintain homogeneity of the group and adjusted if
necessary. The Group uses external benchmark information to supplement internal information for a particular
portfolio that did not have sufficient internal data accumulated from the past experience.
53
i-6) Write-off of financial assets
The Group writes off a portion of or entire loan or debt security that is not expected to receive its principal and
interest. In general, the Group conducts write-off when it is deemed that the borrower has no sufficient resources
or income to repay the principal and interest. Such determination on write-off is carried out in accordance with the
internal rules of the Group and is carried out with the approval of an external institution, if necessary. Apart from
write-off, the Group may continue to exercise its right of collection under its own recovery policy even after the
write-off of financial assets.
ii) Maximum exposure to credit risk
Exposure to credit risk is the exposure related to due from banks, loans, investments in debt securities, derivative
transactions, off-balance sheet accounts such as loan commitment. The exposures of due from banks and loans
were classified into government, bank, corporation, or retail based on the exposure classification criteria of BASEL
III credit risk weights.
The Group’s maximum exposure to credit risk without taking into account of any collateral held or other credit
enhancements as of December 31, 2019 and December 31, 2018 are as follows:
2019 2018
Due from banks and loans at amortized cost(*1)(*2):
Banks W 12,950,561 17,935,816
Retail 152,840,826 136,499,558
Government 19,461,567 6,517,215
Corporations 140,718,619 131,795,992
Card receivable 23,114,264 21,592,287
349,085,837 314,340,868
Deposits and loans at FVTPL(*1)(*2)
Bank 897,525 890,660
Corporations 2,154,821 1,189,190
3,052,346 2,079,850
Securities measured at FVTPL(*3) 48,512,857 40,289,846

Securities measured at fair value - OCI 58,573,094 37,677,646
Securities measured at amortized cost 45,582,065 28,478,136
Derivative assets 2,829,274 1,793,613
Other financial assets(*1)(*4) 17,477,778 16,837,141
Financial guarantee contracts 4,698,558 4,413,874
Loan commitments and other credit liabilities 177,660,547 165,399,937
W 707,472,356 611,310,911
(*1) The maximum exposure amounts for due from banks, loans and other financial assets at amortized cost are
recorded as net of allowances.
(*2) Due from banks and loans were classified as similar credit risk group when calculating the BIS ratio under new
Basel Capital Accord (Basel Ⅲ).
(*3) Financial asset at fair value through profit or loss comprise debt securities at fair value through profit of loss,
gold deposits.
(*4) Other financial assets mainly comprise brokerage, securities and spot transaction related receivables, accrued
interest receivables, secured key money deposits and domestic exchange settlement debit settled in a day.
54
iii) The maximum amount of exposure to credit risk by type of collateral of held financial instruments as of December,
2019 and 2018 is as follows:
2019
12 months Life time expected credit loss
Classification
Expected credit loss Not recognized Recognized Total
Guarantee W 12,232,197 3,756,006 64,386 16,052,589
Deposits and
Savings 1,058,353 266,407 2,437 1,327,197
Property and
equipment 1,021,002 307,502 12,840 1,341,344
Real estate 128,098,318 14,932,637 370,361 143,401,316
Securities 3,340,337 137,105 - 3,477,442
Other 5,035,192 4,437 364 5,039,993
Total W 150,785,399 19,404,094 450,388 170,639,881
2018
12 months Life time expected credit loss
Classification
Expected credit loss Not recognized Recognized Total
Guarantee W 13,608,254 3,870,047 61,623 17,539,924
Deposits and
Savings 1,016,391 241,567 1,379 1,259,337
Property and
equipment 1,051,573 244,571 18,766 1,314,910
Real estate 119,174,347 13,856,638 281,943 133,312,928
Securities 3,460,263 105,397 - 3,565,660
Other 2,593,792 28 218 2,594,038
Total W 140,904,620 18,318,248 363,929 159,586,797
55
iv) Impairment information by credit risk of financial assets
- Allowance for credit loss of financial assets as of December 31, 2019 and 2018 are as follows:
2019
12 months expected credit loss Life time expected credit loss Mitigation of
credit risk
due to
Grade 1(*1) Grade 2(*1) Grade 1(*1) Grade 2(*1) Impaired Total Allowances Net collateral
Due from banks and loans
at amortized cost:
Banks W 11,703,863 1,179,294 77,675 1,804 - 12,962,636 (12,075) 12,950,561 57,087
Retail 136,124,712 7,443,675 5,694,210 3,608,216 476,897 153,347,710 (506,884) 152,840,826 87,826,564
Government 19,274,854 111,987 80,648 - - 19,467,489 (5,922) 19,461,567 -
Corporations 85,202,285 32,112,103 10,219,343 13,546,622 956,772 142,037,125 (1,318,506) 140,718,619 77,732,792
Card receivable 17,161,184 2,249,276 1,879,073 2,233,942 444,311 23,967,786 (853,522) 23,114,264 8,728
269,466,898 43,096,335 17,950,949 19,390,584 1,877,980 351,782,746 (2,696,909) 349,085,837 165,625,171
Securities at fair value
through other
comprehensive
income(*2) 49,276,299 9,057,701 - 239,094 - 58,573,094 - 58,573,094 -
Securities at amortized
cost 44,296,882 1,271,681 23,272 - - 45,591,835 (9,770) 45,582,065 -
W 363,040,079 53,425,717 17,974,221 19,629,678 1,877,980 455,947,675 (2,706,679) 453,240,996 165,625,171
56
iv) Impairment information by credit risk of financial assets
- Allowance for credit loss of financial assets as of December 31, 2019 and 2018 are as follows:
2018
12 months expected credit Mitigation of
loss Life time expected credit loss credit risk
due to
Grade 1(*1) Grade 2(*1) Grade 1(*1) Grade 2(*1) Impaired Total Allowances Net collateral
Due from banks and loans
at amortized cost:
Banks W 16,873,064 980,673 94,866 11,493 - 17,960,096 (24,280) 17,935,816 55,008
Retail 122,318,451 6,122,202 4,991,709 3,103,779 402,975 136,939,116 (439,558) 136,499,558 81,216,489
Government 6,474,219 2,399 45,871 - - 6,522,489 (5,274) 6,517,215 17,050
Corporations 82,476,923 28,445,914 9,800,260 11,659,375 882,394 133,264,866 (1,468,874) 131,795,992 74,069,579
Card receivable 16,129,536 2,022,525 1,791,147 2,039,390 411,595 22,394,193 (801,906) 21,592,287 7,599
244,272,193 37,573,713 16,723,853 16,814,037 1,696,964 317,080,760 (2,739,892) 314,340,868 155,365,725
through other
comprehensive
income(*2) 30,705,879 6,865,937 - 105,830 - 37,677,646 - 37,677,646 -
cost 27,661,749 803,174 22,474 - - 28,487,397 (9,261) 28,478,136 -
W 302,639,821 45,242,824 16,746,327 16,919,867 1,696,964 383,245,803 (2,749,153) 380,496,650 155,365,725
57
iv) Impairment information by credit risk of financial assets (continued)
(*1) Credit quality of due from banks and loans was classified based on the internal credit rating as follows:
Type of Borrower Grade 1 Grade 2

Banks and governments OECD sovereign credit rating of 6 or OECD sovereign credit rating of below
above (as applied to the nationality of 6 (as applied to the nationality of the
the banks and governments) banks and governments)
Retail Pool of retail loans with probability of Pool of retail loans with probability of
default of less than 2.25% default of 2.25% or more
Corporations Internal credit rating of BBB+ or Internal credit rating of below BBB+
above (Probability of default for loans with internal
credit rating of BBB is 2.25%)
Credit cards For individual card holders, score of 7 For individual card holders, score of
or higher in Shinhan Card’s internal below 7 in Shinhan Card’s internal
behavior scoring system behavior scoring system
For corporate cardholders, same as For corporate cardholders, same as

corporate loans corporate loans
(*2) As of December 31, 2019 and 2018, allowance for credit loss for securities at fair value through other
comprehensive income amounted to W28,236 million and W26,084 million, respectively.
58
v) Credit risk exposures per credit grade of off-balance items
- Credit risk exposures per credit grade of off-balance items as of December 31, 2019 and 2018 are as follows:
2019
Grade 1(*1) Grade 2(*1) Impaired Total
Financial guarantee:
12 months expected credit loss W 2,805,417 1,495,091 - 4,300,508
Life time expected credit loss 248,544 148,696 - 397,240
Impaired - - 810 810
3,053,961 1,643,787 810 4,698,558
Loan commitment and
other credit line
12 months expected credit loss 146,010,944 21,044,977 - 167,055,921
Life time expected credit loss 7,850,945 2,730,143 - 10,581,088
Impaired - - 23,538 23,538
153,861,889 23,775,120 23,538 177,660,547
W 156,915,850 25,418,907 24,348 182,359,105
2018
Grade 1(*1) Grade 2(*1) Impaired Total
Financial guarantee:
12 months expected credit loss W 2,137,695 1,975,877 - 4,113,572
Life time expected credit loss 146,236 152,277 - 298,513
Impaired - - 1,789 1,789
2,283,931 2,128,154 1,789 4,413,874
Loan commitment and
other credit line
12 months expected credit loss 137,920,323 19,044,745 - 156,965,068
Life time expected credit loss 6,636,365 1,787,965 - 8,424,330
Impaired - - 10,539 10,539
144,556,688 20,832,710 10,539 165,399,937
W 146,840,619 22,960,864 12,328 169,813,811
(*1) The distinction between prime grade and normal grade is as follows:
Type of Borrower Corporations and banks

Grade: 1. Prime Internal credit rating of BBB+ or above
Grade: 2. Normal Internal credit rating of below BBB+
vi) Credit risk exposures per credit quality of derivative assets
Credit quality of derivative assets as of December 31, 2019 and 2018 are as follows:
2019 2018
Grade 1 W 2,377,548 1,687,005
Grade 2 451,726 106,608
W 2,829,274 1,793,613
(*) Credit quality of derivative assets was classified based on the internal credit ratings.
59
vii) Concentration by geographic location
An analysis of concentration by geographic location for financial instrument, net of allowance, as of December 31,
2019 and 2018 are as follows:
2019
Korea USA England Japan Germany Vietnam China Other Total
Due from banks and
loans at amortized
cost
Banks W 5,124,738 1,263,568 423,788 289,233 203,166 1,068,822 2,816,320 1,760,926 12,950,561
Retail 144,700,885 371,602 5,444 3,888,964 1,548 1,612,761 1,211,857 1,047,765 152,840,826
Government 16,805,176 529,096 - 1,080,381 - 140,960 445,526 460,428 19,461,567
Corporations 122,926,428 3,116,777 187,856 3,403,806 99,083 2,140,573 2,758,888 6,085,208 140,718,619
Card 22,916,799 9,068 321 2,233 214 141,844 25,513 18,272 23,114,264
312,474,026 5,290,111 617,409 8,664,617 304,011 5,104,960 7,258,104 9,372,599 349,085,837
Deposits and loans at
FVTPL
Bank 177,713 719,812 - - - - - - 897,525
Corporations 2,146,949 - - - - - - 7,872 2,154,821
2,324,662 719,812 - - - - - 7,872 3,052,346
Securities measured
at FVTPL 45,635,765 1,662,249 194,591 49,067 6,346 21,625 220,837 722,377 48,512,857
Securities at FVOCI 53,939,143 1,955,627 97,710 195,165 93,769 294,095 798,068 1,199,517 58,573,094
Securities at
amortized cost 42,927,646 769,884 - 163,112 - 604,019 40,741 1,076,663 45,582,065
W 457,301,242 10,397,683 909,710 9,071,961 404,126 6,024,699 8,317,750 12,379,028 504,806,199
(*) The following accounts are the net carrying value less provision for doubtful accounts.
2018
Korea USA England Japan Germany Vietnam China Other Total
Due from banks and
loans at amortized
cost
Banks W 8,996,272 1,712,675 462,540 640,895 213,399 947,315 3,221,442 1,741,278 17,935,816
Retail 130,034,683 359,668 4,432 3,440,623 2,151 1,031,299 974,568 652,134 136,499,558
Government 4,257,877 499,742 - 750,676 108,667 182,822 546,597 170,834 6,517,215
Corporations 116,621,693 2,707,273 109,295 2,578,989 96,468 1,846,470 2,621,744 5,214,060 131,795,992
Card 21,453,128 8,435 301 2,107 208 92,992 20,785 14,331 21,592,287
281,363,653 5,287,793 576,568 7,413,290 420,893 4,100,898 7,385,136 7,792,637 314,340,868
Deposits and loans at
FVTPL
Bank 186,465 704,195 - - - - - - 890,660
Corporations 1,189,190 - - - - - - - 1,189,190
1,375,655 704,195 - - - - - - 2,079,850
Securities measured
at FVTPL 38,782,201 973,716 163,658 28,062 11,507 20,740 104,853 205,109 40,289,846
Securities at FVOCI 34,667,702 1,209,756 21,749 197,234 46,417 392,668 616,143 525,977 37,677,646
Securities at
amortized cost 26,053,245 1,048,909 - 68,594 - 360,953 34,923 911,512 28,478,136
W 382,242,456 9,224,369 761,975 7,707,180 478,817 4,875,259 8,141,055 9,435,235 422,866,346
60
viii) Concentration by industry sector
An analysis of concentration by industry sector of financial instrument, net of allowance, as of December 31, 2019 and 2018 are as follows:
2019
Finance and Retail and Real estate and Construction Lodging and Retail
Manufacturing Total
insurance wholesale business service Restaurant Other customers
Due from banks and
loans at amortized
cost:
Banks W 12,461,379 - - - - - 489,182 - 12,950,561
Retail - - - - - - - 152,840,826 152,840,826
Government 19,342,308 - - 2,295 - - 116,964 - 19,461,567
Corporations 9,456,194 44,781,794 17,004,407 30,029,000 3,485,602 6,003,383 29,958,239 - 140,718,619
Card receivable 39,003 212,863 170,873 49,000 41,664 23,397 22,427,544 149,920 23,114,264
41,298,884 44,994,657 17,175,280 30,080,295 3,527,266 6,026,780 52,991,929 152,990,746 349,085,837
Due from banks and
loans at FVTPL:
Banks 897,525 - - - - - - - 897,525
Corporations 1,301,066 505,198 120,636 7,872 3,500 900 215,649 - 2,154,821
2,198,591 505,198 120,636 7,872 3,500 900 215,649 - 3,052,346
through profit or loss 29,826,338 2,466,874 1,112,688 350,720 262,183 75,152 14,418,902 - 48,512,857
through other
comprehensive
income 28,673,958 3,500,514 673,614 807,274 1,164,947 12,889 23,739,898 - 58,573,094
cost 9,930,409 49,876 - 884,072 1,076,086 - 33,641,622 - 45,582,065
W 111,928,180 51,517,119 19,082,218 32,130,233 6,033,982 6,115,721 125,008,000 152,990,746 504,806,199
61
viiii) Concentration by industry sector (continued)
An analysis of concentration by industry sector of financial instrument, net of allowance, as of December 31, 2019 and 2018 are as follows:
2018
Finance and Retail and Real estate and Construction Lodging and Retail
Total
insurance Manufacturing wholesale business service Restaurant Other customers
Due from banks and
loans at amortized
cost:
Banks W 17,579,099 2,219 - 300 - - 354,198 - 17,935,816
Retail - - - - - - - 136,499,558 136,499,558
Government 6,385,776 - - 2,795 - - 128,644 - 6,517,215
Corporations 8,456,599 43,957,565 17,420,532 27,009,286 3,272,406 5,610,146 26,066,753 2,705 131,795,992
Card receivable 36,343 210,324 169,070 43,236 42,209 23,506 20,968,820 98,779 21,592,287
32,457,817 44,170,108 17,589,602 27,055,617 3,314,615 5,633,652 47,518,415 136,601,042 314,340,868
Due from banks and
loans at FVTPL:
Banks 870,656 - - 20,004 - - - - 890,660
Corporations 554,832 213,715 209,631 2,593 1,621 900 205,898 - 1,189,190
1,425,488 213,715 209,631 22,597 1,621 900 205,898 - 2,079,850
through profit or loss 25,067,491 1,646,132 1,185,571 342,124 208,455 60,829 11,779,244 - 40,289,846
through other
comprehensive
income 22,436,768 1,695,624 302,789 480,979 480,585 - 12,280,901 - 37,677,646
cost 6,634,975 99,437 - 775,580 595,334 - 20,372,810 - 28,478,136
W 88,022,539 47,825,016 19,287,593 28,676,897 4,600,610 5,695,381 92,157,268 136,601,042 422,866,346
62
(c) Market risk
i) Market risk management from trading positions
i-1) Concept of Market risk
Market risk is defined as the risk of loss of trading account position of financial institutions due to fluctuations in
market price, such as interest rates, exchange rates and stock prices, etc. and is divided into general market risks and
individual risks. A general market risk refers to a loss from price variability caused by events affecting the market
as a whole, such as interest rates, exchange rates and stock prices; and an individual risk refers to a loss from price
variability related to individual events of securities issuer, such as bonds and stocks.
i-2) Market risk Management Method
The basic principle of market risk management in the trading sector is to maintain the maximum possible loss due to
market risks within a certain level. To that end, the Group sets and operates the VaR limit, investment limit, position
limit, sensitivity limit, and loss limit from portfolio to individual desks. These limits are managed daily by the Risk
Management Department independent of Operation Department. Trading position refers to securities, foreign
exchange position and derivative financial instruments held for the purpose of short-term trading profit. VaR is the
representative method for measuring market risk and is a statistical measure of maximum potential loss that can be
caused by changes in market conditions. VaR calculates the market risk amount of the standard method by using
TRMS, and Shinhan Bank and Shinhan Investment Corp. use own internal model of market risk calculation system.
The Group conducts stress test to supplement risk measurements by statistical method and to manage losses that may
arise from rapid changes in the economic environment.
Shinhan Bank measures the market risk of linear products, such as stocks and bonds, as well as non-linear products,
such as options by applying historical simulation method of 99% confidence level-based VaR. Trading position data
is automatically interfaced into measurement system, and the system conducts VaR measurement and manages the
limit. In addition, the Bank sets loss limit, sensitivity limit, investment limit, stress limit, etc. for Trading Department
and desks, and monitors daily.
Shinhan Investment measures daily market risk by applying historical simulation VaR method of 99.9% confidence
level-based VaR. Historical simulation VaR method does not require assumption on a particular distribution since
the method derives scenarios directly from historical market data, and measures non-linear products, such as options,
in details. In addition to the VaR limit, the Shinhan Investment sets and manages issuance and transaction limit,
stop-loss limit for each department.
63
(c) Market risk (continued)
i) Market risk management from trading positions (continued)
i-2) Managements (continued)
An analysis of the Group’s requisite capital in light of the market risk for trading positions as of and for the years
ended December 31, 2019 and 2018 based on the standard guidelines for risk management promulgated by the
Financial Supervisory Service, is as follows:
2019
Average Maximum Minimum December 31
Interest rate W 508,039 527,349 479,121 504,948
Stock price 191,019 210,589 162,595 210,589
Foreign exchange 143,317 151,779 138,543 139,562
Commodity 7,691 10,558 4,953 10,558
Option volatility 57,972 74,892 39,591 67,160
W 908,038 975,167 824,803 932,817
2018
Interest rate W 425,235 453,644 403,195 453,644
Stock price 201,408 227,167 143,238 143,238
Foreign exchange 143,202 174,702 124,292 139,617
Commodity 6,250 9,026 4,501 6,343
W 810,429 921,373 697,271 799,676
i-3) Shinhan Bank
The analyses of the ten-day 99% confidence level-based VaR for managing market risk for trading positions of
Shinhan Bank as of and for the years ended December 31, 2019 and 2018 are as follows:
2019
Interest rate W 21,208 32,430 12,709 28,313
Stock price 18,136 49,424 8,171 15,386
Foreign exchange(*) 24,727 29,085 22,259 25,910
Option volatility 161 325 60 212
Commodity 15 104 - 10
Portfolio diversification (21,879)
W 47,925 81,553 31,482 47,952
64
i-3) Shinhan Bank (continued)
2018
Interest rate W 22,559 29,748 16,194 18,797
Stock price 12,118 25,701 1,976 22,212
Foreign exchange(*) 39,282 45,738 34,162 34,294
Commodity 17 61 - 24
W 43,957 57,462 38,026 54,290
(*) Both trading and non-trading accounts are included since Shinhan Bank manages foreign exchange risk on a total
position basis.
i-4) Shinhan Card
The analyses of Shinhan Card’s requisite capital in light of the market risk for trading positions as of and for the
years ended December 31 2019, and 2018, based on the standard guidelines for risk management promulgated by
the Financial Supervisory Service, are as follows:
2019
Interest rate W 1,417 2,000 1,000 2,000
2018
Interest rate W 1,257 1,972 768 1,269
(*) Foreign subsidiaries are excluded from the calculation.
i-5) Shinhan Investment
The analyses of the ten-day 99.9% confidence level-based VaR for managing market risk for trading positions of
Shinhan Investment as of and for the years ended December 31, 2019 and 2018 are as follows:
2019
Interest rate W 13,725 20,857 5,671 11,946
Stock price 31,330 74,421 15,449 25,691
Foreign exchange 4,107 37,970 368 4,369
W 38,262 85,597 5,780 36,732
65
i-5) Shinhan Investment (continued)
2018
Interest rate W 7,563 14,314 3,656 7,321
Stock price 64,107 103,846 6,202 43,748
Foreign exchange 5,992 13,798 154 154
W 74,821 128,261 11,174 81,658
i-6) Shinhan Life Insurance
Shinhan Life Insurance as of and for the year ended December 31, 2019 and 2018 are as follows:
2019
Interest rate W 1,853 8,856 313 600
Stock price 5,015 6,520 4,374 4,978
Foreign exchange 1,581 3,434 3 2,050
W 8,765 19,442 4,814 8,100
2018
Interest rate W 2,994 6,410 260 293
Stock price 4,084 4,933 2,030 4,793
Foreign exchange 1,111 2,825 40 352
Option volatility 824 4,916 89 106
W 9,013 19,084 2,419 5,544
i-6) Orange Life Insurance Co., Ltd.
Orange Life Insurance as of and for the year ended December 31, 2019 are as follows:
2019
Foreign exchange W 18,578 23,614 12,577 16,710
66
ii) Interest rate risk management from non-trading positions
ii-1) Principle
Interest rate risk refers to the possibility of a decrease in net interest income or in net asset value that occurs when
interest rates fluctuate unfavorably from the Group's financial position. Through the interest rate risk management,
changes in net interest income or net asset value arising from interest rate fluctuations are anticipated by early
forecasting changes in interest rate risks related to net interest income and net asset value.
ii-2) Managements
Shinhan Financial Group's major financial subsidiaries manage interest rate risks independently by the risk
management organization and the treasury department, and have internal regulations on interest rate risk
management strategies, procedures, organization, measurement, and major assumptions.
One of the key indicators of managing interest rate risk is the Earnings at Risk (EaR) from an earning perspective
and the Value at Risk (VaR) from an economic value perspective. Interest rate VaR represents the maximum
anticipated loss in a net present value calculation, whereas interest rate EaR represents the maximum anticipated
loss in a net earnings calculation for the immediately following one-year period, in each case, as a result of negative
movements in interest rates. The precision of risk management system differs by each subsidiary. Interest rate VaR
and interest rate EaR are measured by internal method or IRRBB (Interest Rate Risk In The Banking Book), and
interest rate risk limits are set and monitored based on the interest rate VaR.
The Basel III-based IRRBB measures the interest rate risk more precisely than the existing BIS standard framework
by segmenting maturities of interest rates, reflecting customer behaviour models, and diversifying interest rate
shocks. The interest rate VaR scenario based IRRBB measures ① parallel up shock ② parallel down shock ③
Steepener shock ④ flattener shock ⑤ short rate up shock ⑥ short rate down shock. By the parallel up shock
and parallel down shock, the interest rate VaR scenario measures the scenario value with the largest loss as interest
rate risk. Under the existing BIS standard framework, ± 200bp parallel shock scenario was applied to all currency.
However, as the shock width is set differently by currency and period, interest rate risk is measured significantly by
the IRRBB. ((KRW) Parallel ± 300bp, Short Term ± 400bp, Long Term ± 200bp, (USD) Parallel ± 200bp, Short
Term ± 300bp, Long Term ± 150bp) In the IRRBB method, the existing interest rate VaR and the interest rate EaR
are expressed as △ EVE (Economic Value of Equity) and △ NII (Net Interest Income), respectively.
Since impacts of each subsidiary on changes of interest rates are differentiate by portfolios, the Group is preparing
to respond proactively while monitoring the financial market and regulatory environment, and making efforts to
hedge or reduce interest rate risk. In addition, the subsidiaries conduct the crisis analysis on changes in market
interest rates and report it to management and the Group.
In particular, through its asset and liability management system, Shinhan Bank measures and manages its interest
rate risk based on various analytical measures such as interest rate gap, duration gap and net present value and net
interest income simulations, and monitors on a monthly basis its interest rate VaR limits, interest rate earnings at
risk (“EaR”) limits and interest rate gap ratio limits.
67
ii) Interest rate risk management from non-trading positions (continued):
Non-trading positions for interest rate VaR and EaR as of December 31, 2019 and 2018 are as follows:
ii-3) Shinhan Bank
2019 2018
△EVE (*1) W 369,944 930,461
△NII (*2) 161,385 405,501
ii-4) Shinhan Card
2019 2018
△EVE (*1) W 696,505 773,293
△NII (*2) 554,499 501,272
ii-5) Shinhan Investment
2019 2018
△EVE (*1) W 77,436 82,568
△NII (*2) 127,476 72,906
ii-6) Shinhan Life Insurance
2019 2018
△EVE (*1) W 4,831,042 5,268,879
△NII (*2) 77,000 67,638
ii-7) Orange Life Insurance Co., Ltd.
2019
△EVE (*1) W 2,800,603
△NII (*2) 46,372
(*1) △EVE is the economic value of equity capital that can arise from changes in interest rates that affect the present
value of assets, liabilities and off-balance sheet items by using the Basel III standard based IRRBB method.
(*2) △NII is the change in net interest income that can occur over the next year due to changes in interest rates by
using the Basel III standard based IRRBB method.
68
iii) Foreign exchange risk
Exposure to foreign exchange risk can be defined as the difference (net position) between assets and liabilities
presented in foreign currency, including derivative financial instruments linked to foreign exchange rate. Foreign
exchange risk is a factor that causes market risk of the trading position and is managed by the Group under the market
risk management system.
The management of Shinhan Bank’s foreign exchange position is centralized at the FX & Derivatives Department.
Dealers in the FX & Derivatives Department manage Shinhan Bank’s overall position within the set limits through
spot trading, forward contracts, currency options, futures and swaps and foreign exchange swaps. Shinhan Bank sets
a limit for net open positions by currency and the limits for currencies other than the U.S. dollars, Japanese yen,
Euros and Chinese yuan are set in order to minimize exposures from the other foreign exchange trading.
Foreign currency denominated assets and liabilities as of December 31, 2019 and 2018 are as follows:
2019
USD JPY EUR CNY Other Total
Assets:
Cash and due from banks at
amortized cost W 4,235,225 1,532,661 354,686 1,714,524 1,715,443 9,552,539
Due from banks at FVTPL 719,812 - - - - 719,812
Loan receivables measured
at FVTPL 479,950 - 7,872 - - 487,822
Loan at amortized cost 18,275,153 8,256,756 955,836 3,350,557 7,960,731 38,799,033
Securities at FVTPL 5,391,450 32,565 303,917 - 357,018 6,084,950
Derivative assets 342,120 1,403 16,922 391 80,506 441,342
Securities at FVOCI 4,775,714 83,713 337,573 436,236 917,335 6,550,571
Securities at amortized cost 1,392,901 183,133 67,080 40,769 1,482,574 3,166,457
Other financial assets 3,176,509 136,419 171,080 380,955 462,734 4,327,697
W 38,788,834 10,226,650 2,214,966 5,923,432 12,976,341 70,130,223
Liabilities:
Deposits W 14,658,624 9,057,393 843,946 4,426,507 6,906,741 35,893,211
Financial liabilities at
FVTPL - - - - 474,080 474,080
Derivative liabilities 320,176 6,466 20,833 1,163 15,564 364,202
Borrowings 8,938,762 347,881 190,366 407,767 139,658 10,024,434
Debt securities issued 7,882,293 319,041 960,890 - 1,526,661 10,688,885
Financial liabilities
designated at FVTPL 1,444,254 - - - - 1,444,254
Other financial liabilities 4,391,046 155,736 125,172 567,860 978,153 6,217,967
W 37,635,155 9,886,517 2,141,207 5,403,297 10,040,857 65,107,033
Net assets W 1,153,679 340,133 73,759 520,135 2,935,484 5,023,190

Off-balance derivative
exposure (1,335,794) (160,734) 273,571 (114,015) (844,534) (2,181,506)
Net position W (182,115) 179,399 347,330 406,120 2,090,950 2,841,684
69
iii) Foreign exchange risk (continued)
Foreign currency denominated assets and liabilities as of December 31, 2019 and 2018 are as follows (continued):
2018
USD JPY EUR CNY Other Total
Assets:
amortized cost W 4,797,714 1,216,221 259,631 1,595,799 1,654,668 9,524,033
Due from banks at FVTPL 704,195 - - - - 704,195
Loan receivables measured
at FVTPL 347,966 3,430 4,127 - - 355,523
Loan at amortized cost 16,301,367 6,862,146 1,275,174 3,496,937 5,934,670 33,870,294
Securities at FVTPL 3,812,541 998 81,300 - 313,750 4,208,589
Derivative assets 133,197 285 2,299 406 11,875 148,062
Securities at FVOCI 3,209,293 125,512 - 357,682 728,456 4,420,943
Securities at amortized cost 1,405,775 128,512 - 34,955 1,175,733 2,744,975
Other financial assets 2,958,609 135,984 70,321 456,405 357,856 3,979,175
W 33,670,657 8,473,088 1,692,852 5,942,184 10,177,008 59,955,789
Liabilities:
Deposits W 13,333,500 7,217,318 727,291 4,565,067 5,232,529 31,075,705
Financial liabilities at
FVTPL 4,389 - - - 458,934 463,323
Derivative liabilities 172,556 - 1,914 2,089 4,892 181,451
Borrowings 6,287,797 446,102 280,949 395,719 173,731 7,584,298
Debt securities issued 6,168,615 317,125 293,708 - 1,715,780 8,495,228
designated at FVTPL 1,168,024 - - - - 1,168,024
Other financial liabilities 2,684,717 192,161 125,434 573,544 548,754 4,124,610
W 29,819,598 8,172,706 1,429,296 5,536,419 8,134,620 53,092,639
Net assets W 3,851,059 300,382 263,556 405,765 2,042,388 6,863,150

Off-balance derivative
exposure (2,056,586) (157,445) (217,232) (34,986) (164,797) (2,631,046)
Net position W 1,794,473 142,937 46,324 370,779 1,877,591 4,232,104
70
(d) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset.
Each subsidiary seeks to minimize liquidity risk through early detection of risk factors related to the sourcing and
managing of funding that may cause volatility in liquidity and by ensuring that it maintains an appropriate level of
liquidity through systematic management. At the group level, the Group manages liquidity risk by conducting
monthly stress tests that compare liquidity requirements under normal situations against those under three types of
stress situations, namely, the group-specific internal crisis, crisis in the external market and a combination of internal
and external crisis. In addition, in order to preemptively and comprehensively manage liquidity risk, the Group
measure and monitor liquidity risk management using various indices, including the “limit management index”,
“early warning index” and “monitoring index”.
Shinhan Bank applies the following basic principles for liquidity risk management:
- raise funding in sufficient amounts, at the optimal time at reasonable costs;

- maintain risk at appropriate levels and preemptively manage them through a prescribed risk limit system and an
early warning signal detection system;
- secure stable sources of revenue and minimize actual losses by implementing an effective asset-liability
management system based on diversified sources of funding with varying maturities;
- monitor and manage daily and intra-daily liquidity positions and risk exposures for timely payment and settlement
of financial obligations due under both normal and crisis situations;
- conduct periodic contingency analysis in anticipation of any potential liquidity crisis and establish and implement
emergency plans in case of a crisis actually happening; and
- consider liquidity-related costs, benefits of and risks in determining the pricing of the Group’s products and
services, employee performance evaluations and approval of launching of new products and services.
As for any potential liquidity shortage at or near the end of each month, Shinhan Card maintains liquidity at a level
sufficient to withstand credit shortage for three months. In addition, Shinhan Card manages liquidity risk by defining
and managing various indicators of liquidity risk, such as the actual liquidity gap ratio (in relation to the different
maturities for assets as compared to liabilities), the liquidity buffer ratio, the maturity repayment ratio, the ratio of
actual funding compared to budgeted funding and the ratio of asset-backed securities to total borrowings, at different
risk levels of “caution”, “unstable” and “at risk”, and the Group also has contingency plans in place in case of any
emergency or crisis.
71
(d) Liquidity risk (continued)
Contractual maturities for financial instruments including cash flows of principal and interest and off balance as of
December 31, 2019 and 2018 are as follows:
2019
More
Less than 1~3 3~6 6 months 1~5 than 5
1 month months months ~ 1 year years years Total
Non-derivative financial
instruments:
Assets:
amortized cost W 25,543,400 1,039,822 421,453 1,145,323 50,070 249,503 28,449,571
Due from banks at fair value
through profit or loss 130,780 150,217 594,643 21,885 - - 897,525
Loans at fair value through
profit or loss 29,961 783,429 12,638 142,756 773,305 488,326 2,230,415
Loans at amortized cost 28,857,297 36,706,993 46,672,732 74,931,639 103,334,861 70,169,035 360,672,557
Securities at fair value through
profit or loss 39,736,655 1,852,680 728,518 1,120,791 2,716,677 3,774,694 49,930,015
other comprehensive income 57,317,802 - - 40,145 30,195 2,111,220 59,499,362
Securities at amortized cost 1,214,108 2,015,590 1,704,574 2,098,374 17,491,024 32,951,459 57,475,129
Other financial assets 13,291,239 122,258 122,893 562,793 249,166 3,122,107 17,470,456
W 166,121,242 42,670,989 50,257,451 80,063,706 124,645,298 112,866,344 576,625,030
Liabilities:
Deposits(*2) W 149,773,324 31,415,213 38,077,790 61,746,589 14,972,484 3,590,916 299,576,316
Financial liabilities at fair
value through profit or loss 1,558,186 1,096 12,095 17,997 48,609 - 1,637,983
Borrowings 15,314,322 3,690,803 3,608,178 4,028,183 5,244,109 3,002,243 34,887,838
Debt securities issued 5,367,601 4,370,308 4,876,333 8,945,916 49,804,651 6,467,621 79,832,430
designated at fair value
through profit or loss 487,743 110,965 678,041 1,651,198 5,414,944 1,066,565 9,409,456
Other financial liabilities 23,504,746 118,689 253,779 510,768 416,868 3,449,392 28,254,242
W 196,005,922 39,707,074 47,506,216 76,900,651 75,901,665 17,576,737 453,598,265
Off balance(*3):
Finance guarantee contracts W 4,698,558 - - - - - 4,698,558
Loan commitments and other 178,516,047 - - - - - 178,516,047
W 183,214,605 - - - - - 183,214,605
Derivatives:
Net and gross settlement of
derivatives W 407,885 9,640 34,228 18,196 160,292 176,976 807,217
72
Contractual maturities for financial instruments including cash flows of principal and interest and off balance as of
December 31, 2019 and 2018 are as follows (continued):
2018
More
Less than 1~3 3~6 6 months 1~5 than 5
1 month months months ~ 1 year years years Total
Non-derivative financial
instruments:
Assets:
amortized cost W 14,451,366 796,510 905,259 1,196,790 1,526 57,259 17,408,710
Due from banks at fair value
through profit or loss 115,476 131,712 518,109 105,359 6,053 - 876,709
Loans at fair value through
profit or loss 290,724 388,218 42,550 201,591 257,873 48,982 1,229,938
Loans at amortized cost 34,025,588 34,254,065 45,151,571 68,239,781 87,760,434 66,889,553 336,320,992
profit or loss 36,043,891 41,287 35,677 403,849 1,572,268 3,351,681 41,448,653
other comprehensive income 37,519,813 12,093 5,145 20,291 255,091 507,920 38,320,353
Securities at amortized cost 505,417 1,378,525 481,193 2,270,447 15,067,164 16,896,833 36,599,579
Other financial assets 15,130,599 5,629 19,173 433,060 92,753 1,215,953 16,897,167
W 138,082,874 37,008,039 47,158,677 72,871,168 105,013,162 88,968,181 489,102,101
Liabilities:
Deposits(*2) W 123,166,403 24,736,962 34,096,334 56,060,670 28,316,319 2,880,197 269,256,885
value through profit or loss 1,402,726 193 53 10,403 10,124 - 1,423,499
Borrowings 13,542,317 2,879,693 2,207,560 2,965,132 5,854,335 2,553,162 30,002,199
Debt securities issued 3,779,407 5,433,266 5,633,286 10,468,221 36,694,200 5,291,240 67,299,620
designated at fair value
through profit or loss 332,249 303,996 171,927 1,061,443 5,552,824 1,113,361 8,535,800
Other financial liabilities 19,423,802 22,744 110,883 146,256 432,277 71,318 20,207,280
W 161,646,904 33,376,854 42,220,043 70,712,125 76,860,079 11,909,278 396,725,283
Off balance(*3):
Finance guarantee contracts W 4,413,874 - - - - - 4,413,874
Loan commitments and other 166,498,542 - - - - - 166,498,542
W 170,912,416 - - - - - 170,912,416
Derivatives:
Net and gross settlement of
derivatives W (451,926) (5,741) (26,570) (6,552) (37,532) (10,656) (538,977)
73
(*1) These amounts include cash flows of principal and interest on financial assets and financial liabilities.
(*2) Demand deposits amounting to W116,282,706 million and W106,160,833 million as of December 31, 2019 and
2018 are included in the ‘Less than 1 month’ category, respectively.
(*3) Financial guarantees such as financial guarantee contracts and loan commitments and others provided by the
Group are classified based on the earliest date at which the Group should fulfill the obligation under the guarantee
when the counterparty requests payment.
(e) Measurement of fair value
The fair values of financial instruments being traded in an active market are determined by the published market
prices of each period end. The published market prices of financial instruments being held by the Group are based
on the trading agencies’ notifications. If the market for a financial instrument is not active, such as OTC (Over The
Counter market) derivatives, fair value is determined either by using a valuation technique or independent third-party
valuation service.
The Group uses various valuation techniques and is setting rational assumptions based on the present market
situations. Such valuation techniques may include using recent arm’s length market transactions between
knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is
substantially the same, discounted cash flow analysis and option pricing models.
The Group classifies and discloses fair value of financial instruments into the following three-level hierarchy:
 Level 1: Financial instruments measured at quoted prices from active markets are classified as fair value level
1.
 Level 2: Financial instruments measured using valuation techniques where all significant inputs are observable
market data are classified as level 2.
 Level 3: Financial instruments measured using valuation techniques where one or more significant inputs are
not based on observable market data are classified as level 3.
74
(e) Measurement of fair value (continued)
i) Financial instruments measured at fair value
i-1) The fair value hierarchy of financial instruments presented at their fair values in the statements of financial
position as of December 31, 2019 and 2018 are as follows:
2019
Level 1 Level 2 Level 3 Total
Financial assets
Due from banks measured at FVTPL W - 66,870 830,655 897,525
Loan receivables measured at FVTPL - 686,446 1,468,375 2,154,821
Financial assets at FVTPL:
Debt securities and other securities 6,304,161 33,145,583 8,951,398 48,401,142
Equity securities 890,714 195,395 511,831 1,597,940
Gold deposits 111,715 - - 111,715
Derivative assets:
Trading 35,711 2,088,307 462,050 2,586,068
Hedging - 240,430 2,776 243,206
Securities measured at FVOCI:
Debt securities 16,892,704 41,645,124 35,266 58,573,094
Equity securities 183,107 - 624,852 807,959
W 24,418,112 78,068,155 12,887,203 115,373,470
Financial liabilities:
Financial liabilities measured at FVTPL:
Securities sold W 1,164,697 - - 1,164,697
Gold deposits 467,760 - - 467,760
Financial liabilities designated at fair
value through profit or loss:
Derivatives-combined securities - 897,967 8,511,489 9,409,456
Derivative liabilities:
Trading 46,854 1,834,930 119,220 2,001,004
Hedging - 112,258 189,750 302,008
W 1,679,311 2,845,155 8,820,459 13,344,925
75
i-1) The fair value hierarchy of financial instruments presented at their fair values in the statements of financial
position as of December 31, 2019 and 2018 are as follows (continued):
2018
Financial assets
Due from banks measured at FVTPL W - 57,236 813,420 870,656
Loan receivables measured at FVTPL - 891,636 317,558 1,209,194
Financial assets at FVTPL:
Debt securities and other securities 5,084,767 29,552,429 5,497,769 40,134,965
Equity securities 528,113 143,139 493,818 1,165,070
Gold deposits 154,881 - - 154,881
Derivative assets:
Trading 62,275 1,548,769 116,277 1,727,321
Hedging - 61,706 4,586 66,292
Securities measured at FVOCI:
Debt securities 10,532,244 27,095,555 49,846 37,677,645
Equity securities 135,866 - 500,659 636,525
W 16,498,146 59,350,470 7,793,933 83,642,549
Financial liabilities measured at FVTPL:
Securities sold W 961,372 - - 961,372
Gold deposits 458,934 - - 458,934
Financial liabilities designated at fair
value through profit or loss:
Derivatives-combined securities - 1,702,063 6,833,737 8,535,800
Derivative liabilities:
Trading 116,160 1,444,545 285,965 1,846,670
Hedging - 232,102 361,120 593,222
W 1,536,466 3,378,710 7,480,822 12,395,998
76
i-2) Changes in carrying values of financial instruments classified as Level 3 for the years ended December 31, 2019
and 2018 are as follows :
2019
Financial Securities Financial liabilities
asset at fair value through designated at fair
at fair value other comprehensive value through profit Derivative assets and
through profit or loss profit or loss or loss liabilities, net
Beginning balance W 7,122,565 550,505 (6,833,737) (526,223)
Recognized in total
comprehensive income
for the year:
Recognized in profit
(loss) for the year(*1) 61,738 1,461 (826,594) 591,332
Recognized in other
comprehensive
income (loss) for the
year 125,037 34,716 (13,654) -
186,775 36,177 (840,248) 591,332
Purchase 5,941,978 103,564 - 2,221
Issue - - (8,821,680) -
Settlement (2,332,781) (22,842) 7,984,176 88,312
Reclassification - (7,286) - -
Transfer to level3(*2) 162,906 - - 248
Transfer from level3(*2) (27,075) - - (34)
Business combination
(Note 47) 707,891 - - -
Ending balance W 11,762,259 660,118 (8,511,489) 155,856
77
and 2018 are as follows (continued):
2018
Financial
Securities liabilities
Financial Financial asset at fair value designated at
asset designated at fair through other fair value Derivative assets
at fair value value through comprehensive through and liabilities,
through profit or loss profit or loss profit or loss profit or loss net
Beginning balance W 5,831,369 152,091 621,207 (7,273,754) (250,662)
Recognized in total
for the year:
Recognized in profit
(loss) for the
year(*1) 359,160 3,390 4,692 10,090 (128,816)
Recognized in other
comprehensive
income (loss) for the
year - - 29,388 235 -
359,160 3,390 34,080 10,325 (128,816)
Purchase 2,143,853 - 2,510 - 2,236
Issue - - - (7,127,670) -
Settlement (1,212,202) (155,481) (107,292) 7,557,362 (148,987)
Transfer to level3(*2) 1,370 - - - 6
Transfer from level3(*2) (985) - - - -
Ending balance W 7,122,565 - 550,505 (6,833,737) (526,223)
(*1) Recognized profit or loss of the changes in carrying value of financial instruments classified as Level 3 for the
years ended December 31, 2019 and 2018 are included in the accounts of the statements of comprehensive income,
of which the amounts and the related accounts are as follows:
2019
Recognized profit or loss from
Amounts recognized in profit the financial instruments held
or loss as of December 31
Net gain (loss) on financial assets at fair value through
profit or loss W 544,849 23,912
Net gain on financial assets designated at fair value through
profit or loss (826,594) (66,113)
Net gain on securities at fair value through other
comprehensive income 1,461 1,191
Other operating expenses 108,221 109,547
W (172,063) 68,537
78
2018
Recognized profit or loss from
Amounts recognized in profit the financial instruments held
or loss as of December 31
Net gain (loss) on financial assets at fair value through
profit or loss W 179,658 (14,586)
Net gain on financial assets designated at fair value through
profit or loss 10,090 392,096
Net gain on securities at fair value through other
comprehensive income 2,575 -
Reversal of (provision for) allowance for credit loss
17 (28)
Other operating expenses 56,176 57,317
W 248,516 434,799
(*2) Changes in levels for the financial instruments occurred due to the change in the availability of observable market
data. The Group reviews the levels of financial instruments as of the end of the reporting period considering the related
events and circumstances in the reporting period.
79
i-3) Valuation techniques and significant inputs not observable in markets
i-3-1) Valuation techniques and inputs used in measuring the fair value of financial instruments classified as level 2
as of December 31, 2019 and 2018 are as follows:
2019
Valuation Carrying
Type of financial instrument technique Value Significant inputs
Assets
Financial asset at fair value through
profit or loss
Debt securities DCF W 33,898,899 Discount rate, interest rate, stock price
and price of underlying assets such
Equity securities NAV 195,395 as stocks, bonds, etc.
34,094,294
Derivative assets
Trading 2,088,307 Discount rate, foreign exchange rate,
Option model,
volatility, stock price, and
Hedging DCF
240,430 commodity index, etc.
2,328,737
Discount rate, growth rate and price of
DCF, NAV underlying assets such as stock,
other comprehensive income 41,645,124 bonds, etc.
W 78,068,155
Liabilities
Financial liabilities designated at
fair value through profit or loss
Borrowings DCF W 897,967 Discount rate
Derivative liabilities
Option model,
volatility, stock price, and
Hedging DCF
112,258 commodity index, etc.
1,947,188
W 2,845,155
80
i) Financial instruments measured at fair value (continued)
i-3) Valuation techniques and significant inputs not observable in markets (continued)
i-3-1) Valuation techniques and inputs used in measuring the fair value of financial instruments classified as level 2
as of December 31, 2019 and 2018 are as follows (continued):
2018
Valuation Carrying
Type of financial instrument technique Value Significant inputs
Assets
Financial asset at fair value through
profit or loss
Debt securities DCF W 30,501,301 Discount rate
Equity securities NAV 143,139 Price of underlying assets
30,644,440
Derivative assets
Option model,
volatility, stock price, commodity
Hedging DCF
61,706 index, etc.
1,610,475
Discount rate, foreign exchange rate,
DCF volatility, stock price, commodity
other comprehensive income 27,095,555 index, etc.
W 59,350,470
Liabilities
Financial liabilities designated at
DCF Discount rate
fair value through profit or loss W 1,702,063
Option model
volatility, stock price, commodity
Hedging DCF
232,102 index, etc.
1,676,647
W 3,378,710
81
i-3-2) Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial
instruments classified as level 3 as of December 31, 2019 and 2018 are as follows:
2019
Valuation Carrying
Type of financial instrument technique value(*2) Significant unobservable inputs Range
Financial assets
Financial asset at fair value
through profit or loss
DCF, The volatility of the underlying
0.00%~46.36%
Debt securities Option asset
1.14%~30.70%
model(*1) W 11,250,428 Discount rate
The volatility of the underlying
1.00%~43.00%
asset
Equity securities DCF, NAV 5.00%~88.00%
Correlations
5.06%~15.42%
511,831 Discount rate
11,762,259
Derivative assets
Equity and foreign 1.51%~56.00%
Option asset
exchange related -42.00%~82.00%
model(*1) 145,011 Correlations
0.50%~0.67%
asset
Interest rates related 1.30%~1.57%
Option Regression coefficient
59.53%
Credit and commodity 0.00%~39.00%
Option asset
related 0.00%~93.00%
464,826

through other
Debt securities DCF 35,266 Discount rate 7.78%~19.32%
Equity securities NAV 624,852 Growth rate 0.00%~2.00%
660,118
W 12,887,203
value through profit or
loss
Option 0.00%~140.00%
Equity related asset
model(*1) -46.00%~93.00%
W 8,511,489 Correlations
Equity and foreign Option 0.00%~140.00%
asset
exchange related model(*1) 0.00%~78.00%
30,412 Correlations
82
instruments classified as level 3 as of December 31, 2019 and 2018 are as follows (continued):
2019
Valuation Carrying
The volatility of the underlying asset 0.00%~55.00%
Option
Interest rates related Regression coefficient 1.30%~2.77%
model(*1)
W 213,170 Correlations 45.06%~90.34%
Credit and commodity Option The volatility of the underlying asset 0.00%~109.00%
related model(*1) 65,388 Correlations -46.00%~93.00%
308,970
W 8,820,459
(*1) Option model that the Group uses in derivative valuation includes Black-Scholes model, Hull-White model,
Monte Carlo simulation, etc.
(*2) There is no disclosure for valuation techniques and input variables related to items where the carrying amount is
recognized as a reasonable approximation of fair value and the carrying amount is disclosed at fair value.
83
i-3) Valuation techniques and significant inputs not observable in markets
instruments classified as level 3 as of December 31, 2019 and 2018 are as follows (continued):
2018
Valuation Carrying
Financial assets
Financial asset at fair value
through profit or loss
DCF, 16.39%~42.56%
The volatility of the underlying asset
Debt securities Option W 1.26%~39.45%
Correlations
model(*1) 6,628,747 0.00%
DCF, The volatility of the underlying asset 5.80%~41.00%
Equity securities
NAV 493,818 Correlations 0.00%~74.00%
7,122,565
Derivative assets
Equity and foreign exchange Option The volatility of the underlying asset 2.20%~38.00%
related model(*1) 43,183 Correlations 12.00%~82.00%
Interest rates related Option Regression coefficient 0.42%~1.65%
model(*1) 44,848 Correlations 44.93%~91.00%
related model(*1) 32,832 Correlations 33.00%~67.00%
120,863

other comprehensive income
Debt securities DCF 49,846 Discount rate 8.43%~17.40%
Equity securities NAV 500,659 Growth rate 0.00%~3.00%
550,505
W 7,793,933
loss
Option The volatility of the underlying asset 0.00%~107.00%
Equity related
model(*1) W 6,833,737 Correlations -42.00%~93.00%
Equity and foreign Option The volatility of the underlying asset 2.20%~98.00%
exchange related model(*1) 199,504 Correlations -3.00%~82.00%
Option
Interest rates related Regression coefficient 0.42%~2.77%
model(*1)
374,976 Correlations 28.15%~91.00%
related model(*1) 72,605 Correlations -20.00%~93.00%
647,085
W 7,480,822
(*1) Option model that the Group uses in derivative valuation includes Black-Scholes model, Hull-White model,
Monte Carlo simulation, etc.
(*2) There is no disclosure for valuation techniques and input variables related to items where the carrying amount is
recognized as a reasonable approximation of fair value and the carrying amount is disclosed at fair value.
84
i-4) Sensitivity analysis for fair value measurements in Level 3
For level 3 fair value measurement, changing one or more of the unobservable inputs used to reasonably possible
alternative assumptions would have the following effects on profit or loss, or other comprehensive income as of
December 31, 2019 and 2018.
2019
Favorable Unfavorable
changes changes
Financial assets:
Effects on profit or loss for the period(*1):
Financial asset at fair value through profit or loss W 44,108 (23,618)
Derivative assets 24,792 (22,184)
68,900 (45,802)
Effects on other comprehensive income for the period:
Securities at fair value through other comprehensive income(*2) 36,258 (22,183)
W 105,158 (67,985)
Financial liabilities designated at fair value through profit or loss W 55,224 (53,294)
Derivative liabilities 16,830 (22,535)
W 72,054 (75,829)
2018
Favorable Unfavorable
changes changes
Financial assets:
Financial asset at fair value through profit or loss W 45,760 (20,662)
Derivative assets 28,115 (27,201)
73,875 (47,863)
Effects on other comprehensive income for the period:
Securities at fair value through other comprehensive income(*2) 23,885 (17,231)
W 97,760 (65,094)
Financial liabilities designated at fair value through profit or loss W 112,212 (131,080)
Derivative liabilities 103,938 (88,348)
W 216,150 (219,428)
(*1) Fair value changes are calculated by increasing or decreasing the volatility of the underlying asset
(-10~10%) or correlations (-10~10%).
(*2) Fair value changes are calculated by increasing or decreasing discount rate (-1~1%) or growth rate (0~1%).
85
ii) Financial instruments measured at amortized cost
ii-1) The method of measuring the fair value of financial instruments measured at amortized cost is as follows:
Type Measurement methods of fair value
Cash and The carrying amount and the fair value for cash are identical and most of deposits are
due from banks floating interest rate deposits or next day deposits of a short-term instrument. For
this reason, the carrying value approximates fair value.
Loans The fair value of the loans is measured by discounting the expected cash flow at the
market interest rate and credit risk.
Securities measured at The minimum price between the Korea Asset Pricing’s valuation, and KIS Pricing’s
amortized cost is used as a fair value.
Deposits and borrowings The carrying amount and the fair value for demand deposits, cash management
account deposits, call money as short-term instrument are identical. The fair value
of others is measured by discounting the contractual cash flow at the market interest
rate that takes into account the residual risk.
Debt securities issued Where available, the fair value of deposits and borrowings is based on the published
price quotations in an active market. In case there is no data for an active market
price, it is measured by discounting the contractual cash flow at the market interest
rate that takes into account the residual risk.
86
ii) Financial instruments measured at amortized cost (continued)
ii-2) The carrying value and the fair value of financial instruments measured at amortized cost as of December 31,
2019 2018
Carrying value Fair value Carrying value Fair value
Assets:
Deposits measured at amortized cost W 25,840,858 25,852,497 14,731,395 14,731,327
Loans measured at amortized cost

Retails 134,510,282 135,620,862 125,265,676 126,266,820
Corporations 159,560,873 160,818,205 146,302,462 147,420,557
Public and other funding loans 3,427,855 3,446,485 2,868,154 2,891,202
Loans between banks 2,629,999 2,644,603 3,579,169 3,580,576
Credit card 23,115,970 23,489,180 21,594,011 21,930,174
Securities measured at amortized cost

Government bonds 30,385,084 32,242,339 18,000,454 18,974,413
Financial institution bonds 4,770,204 4,882,081 2,171,623 2,195,425
Debentures 10,426,777 10,878,059 8,306,059 8,506,853
Other financial assets 17,477,778 17,493,331 16,837,141 16,859,986
W 412,145,680 417,367,642 359,656,144 363,357,333
Deposit liabilities:
Demand deposits W 116,282,707 116,282,707 106,160,834 106,160,834
Time deposits 158,427,447 158,478,949 139,644,763 139,580,314
Certificate of deposit 9,707,791 9,714,806 9,247,088 9,298,457
Issued bill deposit 4,579,587 4,579,425 4,087,530 4,087,338
CMA deposits 3,987,372 3,987,372 4,084,709 4,084,709
Other 1,889,352 1,889,700 1,775,266 1,775,276
Borrowing debts:
Call-money 712,247 712,247 1,425,162 1,425,162
Bills sold 19,070 19,035 14,536 14,506
Bonds sold under repurchase
agreements 9,089,736 9,089,736 7,614,659 7,614,659
Borrowings 25,042,103 25,205,292 20,764,185 20,844,318
Debts:
Borrowings in won 64,717,212 65,322,413 54,769,670 55,240,467
Borrowings in foreign currency 10,646,152 10,783,027 8,458,029 8,265,842
Other financial liabilities 28,231,911 27,949,306 20,545,181 20,233,920
W 433,332,687 434,014,015 378,591,612 378,625,802
87
ii-3) The fair value hierarchy of financial assets and liabilities which are not measured at their fair values in the
statements of financial position but with their fair value disclosed as of December 31, 2019 and 2018 are as follows:
2019
Assets:
Deposits measured at amortized cost W 3,133,425 22,149,706 569,366 25,852,497

Retails - - 135,620,862 135,620,862
Corporations 108 - 160,818,097 160,818,205
Public and other funding loans - - 3,446,485 3,446,485
Loans between banks - 960,827 1,683,776 2,644,603
Credit card - - 23,489,180 23,489,180
Securities measured at amortized cost:

Government bonds 20,524,820 11,717,519 - 32,242,339
Financial institution bonds 2,252,484 2,629,597 - 4,882,081
Debentures - 10,792,000 86,059 10,878,059
Other financial assets 526,813 10,813,821 6,152,697 17,493,331

W 26,437,650 59,063,470 331,866,522 417,367,642
Demand deposits W 1,053,963 115,216,336 12,408 116,282,707
Time deposits - - 158,478,949 158,478,949
Certificate of deposit - - 9,714,806 9,714,806
Issued bill deposit - - 4,579,425 4,579,425
CMA deposits - 3,987,372 - 3,987,372
Other 1,747,509 - 142,191 1,889,700
Borrowing debts:
Call-money 174,000 538,247 - 712,247
Bills sold - - 19,035 19,035
Bonds sold
under repurchase agreements 6,734,162 - 2,355,574 9,089,736
Borrowings - - 25,205,292 25,205,292
Debts:
Borrowings in won - 43,747,553 21,574,860 65,322,413
Borrowings in foreign currency - 7,535,065 3,247,962 10,783,027
Other financial liabilities 526,685 7,932,723 19,489,898 27,949,306
W 10,236,319 178,957,296 244,820,400 434,014,015
88
ii-3) The fair value hierarchy of financial assets and liabilities which are not measured at their fair values in the
statements of financial position but with their fair value disclosed as of December 31, 2019 and 2018 are as follows
(continued):
2018
Assets:
Deposits measured at amortized cost W 3,364,995 10,587,086 779,246 14,731,327

Retails - - 126,266,820 126,266,820
Corporations - - 147,420,557 147,420,557
Public and other funding loans - - 2,891,202 2,891,202
Loans between banks 590 2,498,193 1,081,793 3,580,576
Credit card - - 21,930,174 21,930,174
Securities measured at amortized cost:

Government bonds 7,887,135 11,087,278 - 18,974,413
Financial institution bonds 719,925 1,475,500 - 2,195,425
Debentures - 8,423,809 83,044 8,506,853
Other financial assets 74,625 11,606,369 5,178,992 16,859,986

W 12,047,270 45,678,235 305,631,828 363,357,333
Demand deposits W 1,136,610 104,998,305 25,919 106,160,834
Time deposits - - 139,580,314 139,580,314
Certificate of deposit - - 9,298,457 9,298,457
Issued bill deposit - - 4,087,338 4,087,338
CMA deposits - 4,084,709 - 4,084,709
Other 1,665,090 - 110,186 1,775,276
Borrowing debts:
Call-money 465,000 960,162 - 1,425,162
Bills sold - - 14,506 14,506
Bonds sold
under repurchase agreements 5,243,217 - 2,371,442 7,614,659
Borrowings - 123,874 20,720,444 20,844,318
Debts:
Borrowings in won - 36,335,879 18,904,588 55,240,467
Borrowings in foreign currency - 5,558,527 2,707,315 8,265,842
Other financial liabilities 74,638 6,630,725 13,528,557 20,233,920
W 8,584,555 158,692,181 211,349,066 378,625,802
89
ii-4) For financial instruments not measured at fair value in the statement of financial position but for which the fair
value is disclosed, information on valuation technique and inputs used in measuring fair value of financial
instruments classified as level 2 or level 3 at December 31, 2019 and 2018 are as follows:
2019
Valuation
Fair value(*) technique Inputs
Financial instruments classified as level 2 :
Assets
Due from banks measured at amortized cost W 22,149,706 DCF Discount rate
Discount rate, credit spread,
DCF
Loans measured at amortized cost 960,827 prepayment rate
Securities measured at amortized cost 25,139,116 DCF Discount rate
Other financial assets 10,813,821 DCF Discount rate
59,063,470

Assets
Due from banks measured at amortized cost 569,366 DCF Discount rate
Loans measured at amortized cost DCF
325,058,400 prepayment rate
Securities measured at amortized cost 86,059 DCF Discount rate
331,866,522
W 390,929,992

Liabilities
Deposits W 119,203,708 DCF Discount rate
Borrowings 538,247 DCF Discount rate
Debt securities issued 51,282,618 DCF Discount rate
Other financial liabilities 7,932,723 DCF Discount rate
178,957,296

Liabilities
Deposits 172,927,779 DCF Discount rate
Borrowings 27,579,901 DCF Discount rate
Discount rate,
DCF regression coefficient,
Debt securities issued 24,822,822 correlation coefficient
244,820,400
W 423,777,696
90
- For financial instruments not measured at fair value in the statement of financial position but for which the fair
value is disclosed, information on valuation technique and inputs used in measuring fair value of financial
instruments classified as level 2 or level 3 at December 31, 2019 and 2018 are as follows:
2018
Valuation
Fair value(*) technique Inputs
Assets
Due from banks measured at amortized cost W 10,587,086 DCF Discount rate
Securities measured at amortized cost 20,986,587 DCF Discount rate
W 45,678,235
Liabilities
Debt securities issued 41,894,406 DCF Discount rate
W 158,692,181

Assets
Due from banks measured at amortized cost W 779,246 DCF Discount rate
Securities measured at amortized cost 83,044 DCF Discount rate
Other financial assets 5,178,992 DCF
W 305,631,828
Liabilities
Discount rate,
Debt securities issued DCF regression coefficient,
21,611,903 correlation coefficient
W 211,349,066
(*) Valuation techniques and inputs are not disclosed when the carrying amount is a reasonable approximation of
fair value
ⅲ) Changes in the difference between the fair value at initial recognition (the transaction price) and the value using
models with unobservable inputs for the years ended December 31, 2019 and 2018
2019 2018
Beginning balance W (126,111) (137,393)
Deferral on new transactions (178,223) (91,625)
Recognized in profit for the year 131,475 102,907
Ending balance W (172,859) (126,111)
91
(f) Classification by categories of financial instruments
Financial assets and liabilities are measured at fair value or amortized cost. The financial instruments measured at
fair value or amortized costs are measured in accordance with the Group’s valuation methodologies, which are
described in Note 4.(e) Measurement of fair value.
The carrying amounts of each category of financial assets and financial liabilities as of December 31, 2019 and 2018
are as follows:
2019
Derivatives held
FVTPL FVOCI Amortized cost for hedging Total
Assets:
Cash and due from
banks at amortized
cost W - - 28,423,744 - 28,423,744
Due from banks at
fair value through
profit or loss 897,525 - - - 897,525
Securities at fair
value through profit
or loss 50,110,797 - - - 50,110,797
Derivatives assets 2,586,068 - - 243,206 2,829,274
Loans at fair value
through profit or
loss 2,154,821 - - - 2,154,821
Loans at amortized
cost - - 323,244,979 - 323,244,979
Securities at fair
value through other
comprehensive
income - 59,381,053 - - 59,381,053
Securities at
amortized cost - - 45,582,065 - 45,582,065
Other - - 17,477,778 - 17,477,778
W 55,749,211 59,381,053 414,728,566 243,206 530,102,036
92
(f) Classification by categories of financial instruments (continued)
are as follows:
2019
Financial
FVTPL liabilities
liabilities measured at Derivatives held
FVTPL designated amortized cost for hedging Total
Liabilities:
Deposits W - - 294,874,256 - 294,874,256
at fair value
through profit or
loss 1,632,457 - - - 1,632,457
designated at
FVTPL - 9,409,456 - - 9,409,456
Derivatives
liabilities 2,001,004 - - 302,008 2,303,012
Borrowings - - 34,863,156 - 34,863,156
Debt securities
issued - - 75,363,364 - 75,363,364
Other - - 28,231,911 - 28,231,911
W 3,633,461 9,409,456 433,332,687 302,008 446,677,612
93
(f) Classification by categories of financial instruments (continued)
are as follows:
2018
Derivatives held for
FVTPL FVOCI Amortized cost hedging Total
Assets:
Cash and due from
banks at amortized
cost W - - 17,348,626 - 17,348,626
Due from banks at fair
value through profit
or loss 870,656 - - - 870,656
through profit or loss 41,454,916 - - - 41,454,916
Derivatives 1,727,321 - - 66,292 1,793,613
Loans at fair value
through profit or loss 1,209,194 - - - 1,209,194
Loans at amortized
cost - - 299,609,472 - 299,609,472
through other
comprehensive
income - 38,314,170 - - 38,314,170
cost - - 28,478,136 - 28,478,136
Other - - 16,837,141 - 16,837,141
W 45,262,087 38,314,170 362,273,375 66,292 445,915,924
2018
Financial
FVTPL liabilities
liabilities measured at Derivatives held
FVTPL designated amortized cost for hedging Total
Liabilities:
Deposits W - - 265,000,190 - 265,000,190
at fair value
through profit or
loss 1,420,306 - - - 1,420,306
designated at
FVTPL - 8,535,800 - - 8,535,800
Derivatives 1,846,669 - - 593,223 2,439,892
Borrowings - - 29,818,542 - 29,818,542
Debt securities
issued - - 63,227,699 - 63,227,699
Other - - 20,545,181 - 20,545,181
W 3,266,975 8,535,800 378,591,612 593,223 390,987,610
94
(g) Transfer of financial instruments
i) Transfers that do not qualify for derecognition
① Sale of repurchase bonds
Among the Group’s sale of repurchase bonds, followings are the details of financial instruments that do not qualify
for derecognition because the Group sold on the condition that the Group repurchases at a fixed price as of December
31, 2019 and 2018:
2019 2018
Transferred asset:
Securities at FVTPL W 7,924,953 6,711,060
Securities at FVOCI 1,867,470 688,593
Securities at amortized cost 818,470 156,066
W 10,610,893 7,555,719
Associated liabilities:
Bonds sold under repurchase agreements
W 8,717,336 7,167,364
② Securities loaned
If the securities owned by the Group are loaned, the ownership of the securities is transferred, but is required to be
returned at the end of the loan period. Thus, the Group continues to recognize all of the securities loaned as it holds
most of the risks and compensation of the securities.
Securities loaned as of December 31, 2019 and 2018 are as follows:
2019 2018 Borrowers

Korea Securities Finance Corp.,
Korea Securities Depository,
Government bonds
Sumitomo Mitsui Banking Corp and
W 3,951,869 1,216,381 etc.
Korea Securities Finance Corp.,
Financial institutions bonds
460,052 409,831 Korea Securities Depository
Mirae Asset Daewoo Securities Co.,
Equity securities
30,242 6,029 Ltd, and etc.
W 4,442,163 1,632,241
ii) Financial instruments qualified for derecognition and continued involvement
There was no financial instruments which qualify for derecognition and in which the Group has continuing
involvements as of December 31, 2019, and 2018.
95
(h) Offsetting financial assets and financial liabilities
Financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31, 2019 and 2018 are as follows:
2019
Gross amounts of Net amounts of Related amounts not set off in the
recognized financial financial assets/ statement of financial position
Gross amounts of assets/ liabilities set liabilities presented
recognized financial off in the statement in the statement of Financial Cash collateral
assets/ liabilities of financial position financial position instruments received Net amount
Assets:
Derivatives(*1) W 2,694,236 - 2,694,236
8,090,372 263,541 1,645,802
Other financial instruments(*1) 8,624,844 1,319,365 7,305,479
Bonds purchased under repurchase agreements(*2) 11,828,135 - 11,828,135 11,051,075 - 777,060
Securities loaned(*2) 1,927,674 - 1,927,674 1,927,674 - -
Domestic exchange settlement debit(*3) 31,814,310 27,008,189 4,806,121 526,653 - 4,279,468
Receivables from disposal of securities(*4) 25,808 1,134 24,674 - - 24,674
Insurance receivables 10,353 - 10,353 8,008 - 2,345
W 56,925,360 28,328,688 28,596,672 21,603,782 263,541 6,729,349
Liabilities:
Derivatives(*1) W 12,803,450 - 12,803,450
8,279,924 11,693 10,704,107
Bonds purchased under repurchase agreements(*2) 8,717,336 - 8,717,336 8,717,336 - -
Securities borrowed(*2) 1,135,614 - 1,135,614 1,135,614 - -
Domestic exchange settlement pending(*3) 28,936,661 27,008,189 1,928,472 1,857,152 - 71,320
Payable from purchase of securities(*4) 1,607 1,134 473 473 - -
Insurance payables 8,202 - 8,202 8,008 - 194
W 59,114,509 28,328,688 30,785,821 19,998,507 11,693 10,775,621
96
(h) Offsetting financial assets and financial liabilities (continued)
Financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31, 2019 and 2018 are as follows:
2018
Gross amounts of Net amounts of Related amounts not set off in the
Gross amounts of recognized financial financial assets/ statement of financial position
recognized financial assets/ liabilities set liabilities presented
assets/ liabilities off in the statement in the statement of Financial Cash collateral
of financial position financial position instruments received Net amount
Assets:
Derivatives(*1) W 1,730,828 - 1,730,828
6,746,640 26,638 1,165,276
Bonds purchased under repurchase agreements(*2) 12,945,380 - 12,945,380 12,557,025 - 388,355
Securities loaned(*2) 1,827,066 - 1,827,066 1,246,157 - 580,909
Domestic exchange settlement debit(*3) 32,647,367 26,502,611 6,144,756 74,552 - 6,070,204
Receivables from disposal of securities(*4) 22,906 519 22,387 - - 22,387
Insurance receivables 8,014 - 8,014 4,872 - 3,142
W 56,658,066 27,771,909 28,886,157 20,629,246 26,638 8,230,273
Liabilities:
Derivatives(*1) W 11,858,108 - 11,858,108
7,850,210 - 9,334,098
Bonds purchased under repurchase agreements(*2) 7,170,744 - 7,170,744 7,170,744 - -
Securities borrowed(*2) 746,521 - 746,521 746,521 - -
Domestic exchange settlement pending(*3) 27,647,185 26,502,611 1,144,574 1,090,808 - 53,766
Payable from purchase of securities(*4) 552 519 33 33 - -
Insurance payables 4,984 - 4,984 4,871 - 113
W 54,023,073 27,771,909 26,251,164 16,863,187 - 9,387,977
(*1) The Group has certain derivative transactions subject to the ISDA (International Derivatives Swaps and Dealers Association) agreement. According to the ISDA agreement, when credit events (e.g.
default) of counterparties occur, all derivative agreements are terminated and set off.
(*2) Resale and repurchase agreement, securities borrowing and lending agreement are also similar to ISDA agreement with respect to enforceable netting agreements.
(*3) The Group has legally enforceable right to set off and settles financial assets and liabilities on a net basis under normal business terms. Therefore, domestic exchanges settlement receivables (payables)
are recorded on a net basis in the consolidated statements of financial position.
(*4) Receivables and payables related to settlement of purchase and disposition of enlisted securities are offset and the net amount is presented in the consolidated statement of financial position because
the Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis.
97
(i) Capital risk management
The controlling company, banks or other financial institutions conducting banking business as prescribed in the
Financial Holding Company Act, is required to maintain a minimum consolidated equity capital ratio of 8.0%.
“Consolidated equity capital ratio” is defined as the ratio of equity capital as a percentage of risk-weighted assets on
a consolidated basis, determined in accordance with the Financial Services Commission requirements that have been
formulated based on Bank of International Settlement standards. “Equity capital”, as applicable to bank holding
companies, is defined as the sum of Common Equity Tier 1 capital (including common stock, share premium
resulting from the issue of instruments classified as common equity Tier 1, retained earnings, etc.), Additional Tier
1 capital (with the minimum set of criteria for an instrument issued by the Group to meet, i.e. ‘perpetual’) and Tier
2 capital (to provide loss absorption on a gone-concern basis) less any deductible items (including goodwill, income
tax assets, etc.), each as defined under the Regulation on the Supervision of Financial Holding Companies. “Risk-
weighted assets” is defined as the sum of credit risk-weighted assets and market risk-weighted assets.
The capital adequacy ratio of the Group as of December 31, 2019 and 2018 are as follows:
2019 2018
Capital :
Tier I common equity capital W 28,561,567 28,696,267
Additional tier 1 capital 3,138,262 1,981,609
Tier I capital 31,699,830 30,677,876
Tier II capital 4,014,740 3,315,185
Total capital (A) W 35,714,570 33,993,061
Total risk-weighted assets (B) W 256,891,664 228,678,105
Capital adequacy ratio (A/B) 13.90% 14.87%

Tier I capital adequacy ratio 12.34% 13.42%
Common equity capital adequacy ratio 11.12% 12.55%
The Group complies with the capital adequacy criteria as shown in the table above (the minimum capital adequacy
ratio of 8%).
98
5. Significant estimates and judgments
The preparation of consolidated financial statements requires the application of certain critical estimates and
judgments relative to the future. Management’s estimated outcomes may differ from actual outcomes. The change
in an accounting estimate is recognized prospectively in profit or loss in the period of the change, if the change affects
that period only, or the period of the change and future periods, if the change affects both.
(a) Estimation of impairment of goodwill
The Group reviews the goodwill annually in accordance with the accounting policy in Note 3. The recoverable
amount of the cash-generating unit (group) was determined based on the value-in-use calculation. These calculations
are based on estimates.
(b) Income taxes
The Group is subject to tax laws from various countries. In the normal course of business, there are various types of
transactions and different accounting methods that may add uncertainties to the decision of the final income taxes.
The Group has recognized current and deferred taxes that reflect tax consequences based on the best estimates in
which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities. However, actual income taxes in the future may not be identical to the recognized deferred tax assets and
liabilities, and this difference can affect current and deferred tax at the period when the final tax effect is determined.
(c) Fair value of financial instruments
The fair values of financial instruments which are not actively traded in the market are determined by using valuation
techniques. The Group determines valuation techniques and assumptions based on significant market conditions at
the end of each reporting period. Diverse valuation techniques are used to determine the fair value of financial
instruments, from generic valuation techniques to internally developed valuation models that incorporate various types
of assumptions and variables.
(d) Allowance for credit loss, guarantees and unused loan commitments
The Group determines and recognizes allowances for losses on debt securities, loans and other receivables measured
at amortized cost or FVOCI, and recognizes provisions for guarantees and unused loan commitments through
impairment testing. The accuracy of allowances and provisions for credit losses are determined by the estimation of
expected cash flows for individually assessed allowances, and methodology and assumptions used for collectively
assessed allowances and provisions for groups of loans, guarantees and unused loan commitments.
(e) Defined benefit obligation
The present value of a defined benefit obligation that is measured by actuarial valuation methods uses various
assumptions which can change according to various elements. The rate used to discount post-employment benefit
obligations is determined by reference to market yields at the end of the reporting period on high quality corporate
bonds. The currency and term of the corporate bonds are consistent with the currency and estimated term of the post-
employment benefit obligations. Actuarial gains and losses including experience adjustments and the effects of
changes in actuarial assumptions are recognized in other comprehensive income. Other significant assumptions related
to defined benefit obligations are based on current market situations.
99
5. Significant estimates and judgments (continued)
(f) Hedging relationship
The Group expects a high risk hedging effect throughout the hedging period in designating the hedging relationship
and it is probable that the hedged transaction will be highly probable in the cash flow hedge.
6. Investment in subsidiaries
(a) The summarized financial information of the controlling company and the Group’s major subsidiaries as of
December 31, 2019 and 2018 is as follows:
2019 2018
Asset Liability Equity Asset Liability Equity

Investees(*1) balance balance balance balance balance balance
Shinhan Financial
Group(separate) W 32,261,322 9,795,896 22,465,426 30,114,232 8,464,164 21,650,068
Shinhan Bank 392,723,044 366,629,929 26,093,115 348,523,615 324,331,076 24,192,539
Shinhan Card Co., Ltd. 32,917,910 26,769,044 6,148,866 29,429,455 23,427,988 6,001,467
Shinhan Investment Corp. 37,375,487 33,138,930 4,236,557 28,987,216 25,614,647 3,372,569
Shinhan Life Insurance Co.,
Ltd. 34,133,649 32,062,490 2,071,159 31,823,631 30,078,522 1,745,109
Orange Life Insurance Co., Ltd. 32,841,359 29,654,711 3,186,648 - - -
Shinhan Capital Co., Ltd. 7,566,428 6,612,519 953,909 6,116,585 5,368,265 748,320
Jeju Bank 6,192,927 5,695,223 497,704 5,980,941 5,507,949 472,992
Shinhan Credit Information
Co., Ltd. 25,292 10,044 15,248 24,377 8,750 15,627
Management Inc. 87,694 75,665 12,029 102,079 92,194 9,885
Management Co., Ltd. 184,203 19,678 164,525 173,964 14,841 159,123
SHC Management Co., Ltd. 9,639 - 9,639 9,755 198 9,557
Shinhan DS 89,141 67,954 21,187 43,095 23,118 19,977
Shinhan Savings Bank 1,602,902 1,418,317 184,585 1,454,290 1,291,012 163,278
Asia Trust Co., Ltd. 172,793 43,933 128,860 - - -
Shinhan AITAS Co., Ltd. 77,086 10,962 66,124 65,725 7,367 58,358
Shinhan REITs Management
Co., Ltd. 45,832 5,619 40,213 36,298 3,496 32,802
Shinhan AI Co., Ltd. 42,402 1,674 40,728 - - -
(*1) The consolidated financial statements of the consolidated subsidiaries are based on consolidated financial
statements, if applicable.
100
6. Investment in subsidiaries (continued)
(b) The summarized income information of the controlling company and the Group’s major subsidiaires for the years
ended December 31, 2019 and 2018 is as follows:
2019 2018
Operating
Operating Net Comprehensive Operating Net Comprehensive
Investees(*1) Revenue Income Income Revenue Income Income
Shinhan Financial
Group(separate) W 1,480,030 1,129,173 1,127,202 1,519,197 1,234,883 1,234,044
Shinhan Bank 23,145,476 2,329,268 2,527,665 19,731,711 2,279,362 2,333,266
Shinhan Card Co., Ltd. 3,892,257 509,032 486,114 3,752,232 517,761 477,135
Shinhan Investment Corp. 6,139,926 220,764 225,963 5,279,567 251,268 269,058
Shinhan Life Insurance Co.,
Ltd. 5,413,175 123,870 326,783 5,633,679 131,021 150,997
Orange Life Insurance Co., Ltd. 4,662,085 271,455 433,510 - - -
Shinhan Capital Co., Ltd. 455,246 126,050 123,032 439,031 103,400 100,317
Jeju Bank 239,732 27,934 30,519 224,766 27,446 30,579
Shinhan Credit Information Co.,
Ltd. 38,648 507 658 37,616 1,392 985
Management Inc. 32,401 2,144 2,144 21,590 (780) (780)
Management Co., Ltd. 84,256 23,090 22,655 78,378 18,868 18,980
SHC Management Co., Ltd. 154 82 82 140 309 309
Shinhan DS 138,697 2,074 1,292 99,279 1,314 1,525
Shinhan Savings Bank 116,849 23,122 22,972 94,636 19,384 18,919
Asia Trust Co., Ltd. 54,920 18,098 18,128 - - -
Shinhan AITAS Co., Ltd. 51,823 10,821 10,821 44,729 8,461 8,461
Shinhan REITs Management
Co., Ltd. 7,342 7,414 7,411 7,386 3,564 3,552
Shinhan AI Co., Ltd. 3,088 (654) (654) - - -
(*1) The consolidated financial statements of the consolidated subsidiaries are based on consolidated financial
statements, if applicable.
101
6. Investment in subsidiaries (continued)
(c) Change in the scope of consolidation
i) Change in consolidated subsidiaries for the year ended December 31, 2019 are as follows:
Company Description
Orange Life Insurance Co., Ltd. Newly acquired subsidiary
Asia Trust Co., Ltd. Newly acquired subsidiary
Included
Shinhan Vietnam Finance Ltd. Newly acquired subsidiary
Shinhan AI Co., Ltd. Newly invested subsidiary
ii) Change in consolidated subsidiaries for the year ended December 31, 2018 are as follows:
Company Description
PT Shinhan Asset Management Indonesia Newly acquired subsidiary
Included
SHINHAN DS VIETNAM CO,LTD Newly invested subsidiary
(*) Subsidiaries such as trust, beneficiary certificate, corporate restructuring fund and private equity fund which
are not actually operating their own business are excluded.
102
7. Operating segments
(a) Segment information
The general descriptions by operating segments as of December 31, 2019 are as follows:
Segment Description
Banking The banking segment offers commercial banking services such as

lending to and receiving deposits from corporations and individuals
and also includes securities investing and trading and derivatives
trading primarily through domestic and overseas bank branches and
subsidiaries.
Credit card The credit card segment primarily consists of the credit card
business of Shinhan Card, including its installment finance and
automobile leasing businesses.
Securities Securities segment comprise securities trading, underwriting and

brokerage services.
Life insurance Life insurance segment consists of life insurance services provided
by Shinhan Life Insurance and Orange Life Insurance.
Others Leasing, assets management and other businesses
103
7. Operating segments (continued)
(b) The following tables provide information of income and expense for each operating segment for the years ended
December 31, 2019 and 2018:
2019
Life Consolidation
Banking Credit card Securities insurance Others adjustment Total
Net interest income W 5,989,462 1,753,966 457,852 1,647,795 127,564 (238,675) 9,737,964
Net fees and
commission income 950,389 403,259 351,303 167,324 272,244 (4,000) 2,140,519
Reversal of (provision
for) allowance for
credit loss (“ACL”) (389,004) (566,415) 1,325 (797) (25,030) (771) (980,692)
General and
administrative
expenses (3,177,158) (745,848) (511,418) (443,013) (335,090) 77,853 (5,134,674)
Other income (expense),
net (211,882) (33,204) (59,006) (786,103) 129,272 244,056 (716,867)
Operating income 3,161,807 811,758 240,056 585,206 168,960 78,463 5,046,250
Equity method income
(loss) (764) - 18,163 (1,296) 12,265 24,919 53,287
Income tax expense 718,650 205,863 68,311 187,608 73,213 15,479 1,269,124
Profit for the year W 2,256,652 609,582 220,764 395,325 100,259 59,802 3,642,384
Controlling interest W 2,256,576 609,350 220,850 395,325 100,259 (178,863) 3,403,497
Non-controlling interests 76 232 (86) - - 238,665 238,887
2018
Life Consolidation
Net interest income W 5,707,813 1,583,100 429,095 761,742 95,618 2,721 8,580,089
Net fees and
commission income 850,646 433,043 388,944 69,780 198,828 (2,244) 1,938,997
Reversal of (provision
for) ACL (250,134) (466,447) (9,226) (13,400) (10,238) 1,568 (747,877)
General and
administrative
expenses (3,098,629) (751,580) (493,906) (227,740) (263,046) 93,326 (4,741,575)
Other income (expense),
net (163,104) 74,954 17,963 (409,151) 80,857 (131,739) (530,220)
Operating income(loss)
(expense) 3,046,592 873,070 332,870 181,231 102,019 (36,368) 4,499,414
Equity method income
(loss) (977) - 15,228 (1,026) 6,909 (2,646) 17,488
Income tax expense 832,494 225,837 95,438 50,429 59,556 4,591 1,268,345
Profit for the year W 2,195,263 629,307 251,268 131,021 49,168 (57,762) 3,198,265
Controlling interest W 2,194,950 630,993 251,265 131,021 49,168 (100,675) 3,156,722
Non-controlling interests 313 (1,686) 3 - - 42,913 41,543
104
(c) The following tables provide information of net interest income (expense) of each operating segment for the
years ended December 31, 2019 and 2018:
2019
Consolidation
Life adjustment
Banking Credit card Securities insurance Others (*) Total
Net interest income from:

External customers(*) W 5,995,097 1,781,266 450,268 1,647,988 103,161 (239,816) 9,737,964
Internal transactions (5,635) (27,300) 7,584 (193) 24,403 1,141 -
W 5,989,462 1,753,966 457,852 1,647,795 127,564 (238,675) 9,737,964
(*) Consolidated adjustment to net interest income from external customers is from the securities and others which
were measured in fair values as a part of business combination accounting .
2018
Life Consolidation
Net interest income from:

External customers W 5,714,568 1,602,849 423,156 762,978 76,538 - 8,580,089
Internal transactions (6,755) (19,749) 5,939 (1,236) 19,080 2,721 -
W 5,707,813 1,583,100 429,095 761,742 95,618 2,721 8,580,089
(d) The following tables provide information of net fees and commission income (expense) of each operating
segment for the years ended December 31, 2019 and 2018:
2019
Life Consolidation
Net fees and commission
income from:
External customers W 1,157,020 254,139 361,526 175,171 192,663 - 2,140,519
Internal transactions (206,631) 149,120 (10,223) (7,847) 79,581 (4,000) -
W 950,389 403,259 351,303 167,324 272,244 (4,000) 2,140,519
2018
Life Consolidation
Net fees and commission
income from:
External customers W 872,631 464,342 400,227 77,145 124,652 - 1,938,997
Internal transactions (21,985) (31,299) (11,283) (7,365) 74,176 (2,244) -
W 850,646 433,043 388,944 69,780 198,828 (2,244) 1,938,997
105
(e) Financial information of geographical area
The following table provides information of income from external consumers by geographical area for the years
ended December 31, 2019 and 2018.
2019 2018
Domestic W 4,378,239 4,023,916
Overseas 668,011 475,498
W 5,046,250 4,499,414
The following table provides information of non-current assets by geographical area as of December 31, 2019 and
2018.
2019 2018
Domestic W 9,816,600 7,597,266
Overseas 314,052 201,574
W 10,130,652 7,798,840
(*) Non-current assets comprise property and equipment, intangible assets and investment properties.
106
8. Cash and due from banks at amortized cost
(a) Cash and due from banks at amortized cost as of December 31, 2019 and 2018 are as follows:
2019 2018
Cash and cash equivalents W 2,582,886 2,617,231
Deposits in won:
Reserve deposits 13,840,988 2,360,416
Time deposits 1,413,964 1,346,015
Other 1,890,541 2,271,812
17,145,493 5,978,243
Deposits in foreign currency:
Deposits 5,616,049 5,045,513
Time deposits 2,393,885 2,791,486
Other 697,505 930,977
8,707,439 8,767,976
Allowance for credit losses (12,074) (14,824)

W 28,423,744 17,348,626
(b) Restricted due from banks at amortized cost as of December 31, 2019 and 2018 are as follows:
2019 2018
Deposits denominated in won:
Reserve deposits W 13,840,988 2,360,416
Other 1,081,698 2,182,119
14,922,686 4,542,535
Deposits denominated in foreign currency 1,584,239 1,632,971

W 16,506,925 6,175,506
107
9. Financial assets at fair value through profit or loss
(a) Financial assets at fair value through profit or loss as of December 31, 2019 and 2018 are as follows:
2019 2018
Debt instruments:
Governments W 2,873,419 2,765,054
Financial institutions 12,711,074 9,415,470
Corporations 8,541,514 6,664,839
Stocks with put option 598,858 381,844
Equity investment with put option 1,458,933 1,080,723
Beneficiary certificates 10,678,620 9,062,004
Commercial papers 5,160,063 5,535,397
CMA 3,723,401 3,001,831
Others(*) 2,655,260 2,227,802
48,401,142 40,134,964
Equity instruments:
Stocks 1,488,743 1,050,097
Equity investment - 4,908
Others 109,197 110,066
1,597,940 1,165,071
49,999,082 41,300,035
Other:
Loans at fair value 2,154,821 1,209,194
Due from banks at fair value 897,525 870,656
Gold deposits 111,715 154,881
W 53,163,143 43,534,766
(*) As of December 31, 2019 and 2018, restricted reserve for claims of customers’ deposits (trusts) are W1,103,050
million and 1,040,180 million, respectively.
108
9. Financial assets at fair value through profit or loss (continued)
(b) Financial assets to which overlay approach were applied in accordance with K-IFRS No. 1109 ‘Financial
Instruments’ and K-IFRS No. 1104 ‘Insurance Contracts’ as of December 31, 2019 and 2018 are as follows.
2019 2018
Due from banks at fair value through profit or loss W 897,525 870,656
Securities at fair value through profit or loss 5,139,380 3,160,525
W 6,036,905 4,031,181
A financial asset is eligible for designation for the overlay approach, if it is measured at fair value through profit or
loss applying K-IFRS No. 1109 but would not have been measured at fair value through profit or loss in its entirety
applying K-IFRS No. 1039; and it is not held in respect of an activity that is not associated with contracts within the
scope of K-IFRS No. 1104.
The reclassified amounts between profit or loss and other comprehensive income due to the overlay approach as of
and for the years ended December 31, 2019 and 2018 are as follows:
2019
Other comprehensive
Profit or loss income
By K-IFRS No. By K-IFRS No.
1109 1039 Amount Tax effect
Net gain (loss) on valuation of financial
assets at fair value through profit or loss W 150,865 (74,586) 225,451 (50,042)
Net gain (loss) on disposal of financial
assets at fair value through profit or loss 65,627 43,493 22,134 (4,672)
W 216,492 (31,093) 247,585 (54,714)
2018
Other comprehensive
Profit or loss income
By K-IFRS No. By K-IFRS No.
1109 1039 Amount Tax effect
Net gain (loss) on valuation of financial
assets at fair value through profit or loss W (77,179) (4,425) (72,754) 20,007
Net gain (loss) on disposal of financial
assets at fair value through profit or loss 4,310 6,498 (2,188) 602
W (72,869) 2,073 (74,942) 20,609
109
10. Derivatives
(a) The notional amounts of derivatives as of December 31, 2019 and 2018 are as follows:
2019 2018
Foreign currency related:
Over the counter:
Currency forwards W 137,383,704 139,804,552
Currency swaps 40,826,444 31,794,900
Currency options 2,758,801 1,939,939
180,968,949 173,539,391
Exchange traded:
Currency futures 1,045,138 436,714
182,014,087 173,976,105
Interest rates related:
Over the counter:
Interest rate swaps 37,801,528 31,228,489
Interest rate options 286,000 294,000
38,087,528 31,522,489
Exchange traded:
Interest rate futures 2,455,450 1,739,697
Interest rate swaps(*) 65,868,540 56,862,374
68,323,990 58,602,071
106,411,518 90,124,560
Credit related:
Over the counter:
Credit swaps 5,404,257 3,840,660
Equity related:
Over the counter:
Equity swaps and forwards 4,255,831 5,134,004
Equity options 864,038 645,709
5,119,869 5,779,713
Exchange traded:
Equity futures 876,220 630,409
Equity options 4,039,226 2,708,557
4,915,446 3,338,966
10,035,315 9,118,679
Commodity related:
Over the counter:
Commodity swaps and forwards 758,533 890,289
Commodity options - 4,780
758,533 895,069
Exchange traded:
Commodity futures and options 344,329 245,751
1,102,862 1,140,820
Hedge:
Currency forwards 1,869,518 1,522,306
Currency swaps 4,532,114 4,143,828
Interest rate swaps 10,091,632 10,147,731
16,493,264 15,813,865
W 321,461,303 294,014,689
(*) The notional amount of derivatives which is settled in the ‘Central Counter Party (CCP)’ system.
110
10. Derivatives (continued)
(b) Fair values of derivative instruments as of December 31, 2019 and 2018 are as follows:
2019 2018
Assets Liabilities Assets Liabilities
Foreign currency related:
Over the counter:
Currency forwards W 1,360,384 1,056,760 912,795 870,984
Currency swaps 473,797 519,445 393,702 372,725
Currency options 9,007 9,430 7,637 12,273
1,843,188 1,585,635 1,314,134 1,255,982
Exchange traded:
Currency futures - - 11 -
1,843,188 1,585,635 1,314,145 1,255,982
Interest rates related:
Over the counter:
Interest rate swaps 260,020 247,723 251,251 172,019
Interest rate options 835 5,626 - 5,347
260,855 253,349 251,251 177,366
Exchange traded:
Interest rate futures 697 595 412 1,569
261,552 253,944 251,663 178,935
Credit related:
Over the counter:
Credit swaps 283,015 38,598 43,382 30,372
Equity related:
Over the counter:
Equity swap and forwards 144,276 39,422 51,243 205,611
Equity options 4,526 9,402 2,265 2,352
148,802 48,824 53,508 207,963
Exchange traded:
Equity futures 4,318 6,417 15,937 778
Equity options 28,355 29,741 37,690 109,795
32,673 36,158 53,627 110,573
181,475 84,982 107,135 318,536
Commodity related:
Over the counter:
Commodity swaps and forwards 14,496 27,745 2,743 58,800
Commodity options - - 27 29
14,496 27,745 2,770 58,829
Exchange traded:
Commodity futures 2,342 10,100 8,226 4,016
16,838 37,845 10,996 62,845
Hedge:
Currency forwards 14,380 21,121 9,185 30,497
Currency swaps 74,240 48,396 21,976 79,492
Interest rate swaps 154,586 232,491 35,131 483,233
243,206 302,008 66,292 593,222
W 2,829,274 2,303,012 1,793,613 2,439,892
111
(c) Gain or loss on valuation of derivatives for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Foreign currency related
Over the counter:
Currency forwards W 174,340 41,188
Currency swaps (24,827) (34,444)
Currency options 4,056 8,247
153,569 14,991
Exchange traded:
Currency futures - 11
153,569 15,002
Interest rates related
Over the counter:
Interest rate swaps (75,349) 86,675
Interest rate options (1,938) (1,459)
(77,287) 85,216
Exchange traded:
Interest rate futures 1,008 (2,512)
(76,279) 82,704
Credit related
Over the counter:
Credit swaps 213,754 (18,396)
Equity related
Over the counter:
Equity swap and forwards 46,770 (271,457)
Equity options (841) 4,326
45,929 (267,131)
Exchange traded:
Equity futures (2,275) 15,159
Equity options 58,721 (44,163)
56,446 (29,004)
102,375 (296,135)
Commodity related
Over the counter:
Commodity swaps and forwards 3,191 (79,296)
Commodity options 29 33
3,220 (79,263)
Exchange traded:
Commodity futures (7,759) 4,209
(4,539) (75,054)
Hedge 332,778 78,892

W 721,658 (212,987)
112
(d) Impact of hedge accounting on the consolidated financial statements
i) Gains (losses) on fair value hedged items and hedging instruments attributable to the hedged ineffectiveness for the
years ended December 31, 2019 and 2018 were as follows:
2019
Gains (losses) on Gains (losses) on Hedge ineffectiveness
fair value hedges fair value hedges recognized in profit
(hedged items) (hedging instruments) or loss (*2)
Fair value hedges
Interest rate swaps(*1) W (370,787) 377,121 6,334
Foreign exchange risk(*1) 13,725 (18,786) (5,061)
W (357,062) 358,335 1,273
2018
Gains (losses) on Gains (losses) on Hedge ineffectiveness
fair value hedges fair value hedges recognized in profit
(hedged items) (hedging instruments) or loss (*2)
Fair value hedges
Interest rate swaps(*1) W (76,573) 79,635 3,062
W (21,385) 19,255 (2,130)
(*1) The related account categories are presented as interest rate swap assets / liabilities and currency swap assets.
(*2) Ineffective portion of hedge: the difference between hedging instruments and hedged items.
ii) Due to the ineffectiveness of hedge of cash flow risk and hedge of net investment in foreign operations during the
year, the amounts recognized in the income statement and other comprehensive income are as follows.
2019
From cash flow hedge
Gains (losses) on hedges Hedge ineffectiveness reserve to profit or
recognized in other recognized in profit loss
comprehensive income or loss (*2) Reclassified amount
Cash flow hedges
Interest rate risk(*1) W (11,126) - -
Discontinuation of
cash flow hedges (7,986) - 7,986
Hedge of net investments
Foreign exchange risk(*1) (49,463) (2,327) -
W (15,643) (28,036) (49,884)
113
(d) Impact of hedge accounting on the consolidated financial statements (continued)
ii) Due to the ineffectiveness of hedge of cash flow risk and hedge of net investment in foreign operations during the
year, the amounts recognized in the income statement and other comprehensive income are as follows (continued):
2018
From cash flow
Gains on hedges Hedge ineffectiveness hedge reserve to
recognized in other recognized in profit profit or loss
comprehensive income or loss (*2) Reclassified amount
Cash flow hedges
Interest rate risk(*1) W (23,186) - -
Foreign exchange risk(*1) 65,386 (5,188) 70,051
Hedge of net investments
Foreign exchange risk(*1) (35,879) (3,765) -
W 6,321 (8,953) ) 70,051
(*1) The related account categories are presented as interest rate swap assets / liabilities and currency swap assets
/ liabilities, currency forwards assets / liabilities and borrowings.
(*2) Ineffective portion of hedge: The difference between hedging instruments and hedged items.
(e) Nominal values and average hedge ratio for derivatives as of December 31, 2019 and December 31, 2018 were as
follows:
2019
More
Less than 1~2 2~3 3~4 4~5 than 5
1 year years years years years years Total
Interest risk:
Nominal values: W 750,469 704,985 717,948 1,228,424 575,481 6,114,325 10,091,632
Average hedge ratio: 100% 100% 100% 100% 100% 100% 100%
Exchange risk:
Nominal values: 3,651,118 1,075,886 1,269,520 968,770 84,275 534,898 7,584,467
2018
More
Less than 1~2 2~3 3~4 4~5 than 5
1 year years years years years years Total
Interest risk:
Nominal values: W 190,000 737,632 723,177 707,254 1,305,584 6,484,084 10,147,731
Exchange risk:
Nominal values: 2,731,517 1,958,746 827,158 1,038,935 302,423 - 6,858,779
Average hedge ratio: 100% 100% 100% 100% 100% - 100%
114
(f) Effect of hedge accounting on financial statement, statement of comprehensive income, statement of changes in
equity
i) Purpose and strategy of risk avoidance
The Group transacts with derivative financial instruments to hedge its interest rate risk and currency risk arising from
the assets and liabilities of the Group. The Group applies the fair value hedge accounting for the changes in the market
interest rates of the Korean won structured notes, foreign currency generated financial debentures, structured deposits
in foreign currencies, foreign currency structured deposits and foreign currency investment receivables; and cash flow
hedge accounting for interest rate swaps and currency swaps to hedge cash flow risk due to interest rates and foreign
exchange rates of the Korean won debt, the Korean won bonds, foreign currency bonds, etc. In addition, in order to
hedge the exchange rate risk of the net investment in overseas business, the Group applies the net investment hedge
accounting for foreign operations using currency forward and non-derivative financial instruments.
ii) Effect of derivatives on statement financial position, statement of comprehensive income, statement of changes in
equity
2019
Carrying value Carrying value of Changes if fair
Nominal amount of asset(*) liabilities(*) value in the period
Fair value hedges
Interest rate swap W 9,371,632 154,586 210,079 -
Currency swap - - 248 (1,813)
Currency forward 261,486 776 1,358 (582)
Cash flow hedge

Interest rate swap 720,000 - 22,412 (11,126)
Currency swap 4,532,114 74,240 48,148 (29,829)
Currency forward 1,376,472 11,854 19,763 (4,426)
Hedge of net investments in

foreign operations
Currency forward 231,560 1,750 - (4,036)
Borrowings 1,182,835 - 1,177,897 (47,755)
2018
Carrying value Carrying value of Changes if fair
Nominal amount of asset(*) liabilities(*) value in the period
Fair value hedges
Interest rate swap W 9,377,731 35,093 467,381 55,244
Currency swap 33,543 433 - (1,502)
Cash flow hedge

Interest rate swap 770,000 38 15,853 (23,186)
Currency swap 4,110,285 21,543 79,492 (54)
Currency forward 1,298,686 3,191 24,925 (33,460)
Hedge of net investments in

foreign operations
Currency forward 223,620 5,994 5,572 (3,261)
Borrowings 1,192,645 - 1,186,792 (36,383)
(*) The related account categories are presented as interest rate swap assets / liabilities and currency forwards
115
(f) Effect of hedge accounting on financial statement, statement of comprehensive income, statement of changes in
equity (continued)
iii) Effect of hedging items on statement financial position, statement of comprehensive income, statement of
changes in equity
2019
Assets of
Cumulative Liabilities of Foreign
Carrying Carrying fair value Cumulative fair Changes if currency
value of value of hedge value hedge fair value in Cash flow conversion
asset(*) liabilities(*) adjustment adjustment the year hedge reserve reserves
Fair value hedges
Interest rate risk W 432,172 8,859,022 4,846 (56,292) (308,463) - -
Foreign exchange risk 306,638 - - - 1,671 - -
Cash flow hedge

Interest rate risk 645,723 1,740,000 - - (11,126) 80,674 -
Foreign exchange risk 4,116,068 3,035,423 - - 115,867 (11,188) -
Hedge of net
investments in
foreign operations
Foreign exchange risk - - - - (49,463) - (88,953)
2018
Assets of
Cumulative Liabilities of Foreign
Carrying Carrying fair value Cumulative fair Changes if currency
value of value of hedge value hedge fair value in Cash flow conversion
asset(*) liabilities(*) adjustment adjustment the year hedge reserve reserves
Fair value hedges
Interest rate risk W 293,215 8,873,059 (2,832) (524,459) (56,462) - -
Foreign exchange risk 62,406 - - - 2,675 - -
Cash flow hedge

Interest rate risk - 1,539,005 - - - (10,184) -
Foreign exchange risk 2,795,320 2,716,148 - - 63,860 (2,006) -
Hedge of net
investments in
foreign operations
Foreign exchange risk - - - - (35,879) - 138,416
(*) The related account categories are presented as interest rate swap assets / liabilities and currency forwards.
116
11. Securities at fair value through other comprehensive income and securities at amortized cost
(a) Details of securities at FVOCI and securities at amortized cost as of December 31, 2019 and 2018 are as follows:
2019 2018
Securities at FVOCI:
Debt securities:
Government bonds W 17,597,910 8,975,391
Financial institutions bonds 21,527,242 17,341,330
Corporate bonds and others 19,447,942 11,360,924
58,573,094 37,677,645
Equity securities(*):
Stocks 728,311 630,010
Equity investments 5,356 6,515
Others 74,292 -
807,959 636,525
59,381,053 38,314,170
Securities at amortized cost:
Debt securities:
Government bonds 30,385,084 18,000,454
Financial institutions bonds 4,770,204 2,171,623
Corporate bonds and others 10,426,777 8,306,059
45,582,065 28,478,136
W 104,963,118 66,792,306
(*) Equity securities in the above table are classified as other comprehensive income - equity securities designated as
fair value items, and other comprehensive income and fair value options were exercised for the purpose of holding as
required by the policy.
117
11. Securities at fair value through other comprehensive income and securities at amortized cost (continued)
(b) Changes in carrying value of debt securities at fair value through other comprehensive income and securities at amortized cost for the years ended December 31, 2019 and 2018
are as follows:
2019
Securities at fair value through other comprehensive income Securities at amortized cost
12 months expected Life time expected 12 months expected Life time expected
credit loss credit loss Total credit loss credit loss Total
Beginning allowance W 37,571,814 105,831 37,677,645 28,464,921 22,475 28,487,396

Transfer to 12 months
expected credit loss 34,555 (34,555) - 20,198 (20,198) -
Transfer to life time
expected credit loss (64,928) 64,928 - - - -
Transfer to impaired
financial asset - - - - - -
Purchase 46,847,222 61,410 46,908,632 12,209,898 - 12,209,898
Disposal (16,109,006) (10,222) (16,119,228) - - -
Repayment (21,129,182) - (21,129,182) (6,722,560) - (6,722,560)
Others (*) 230,733 51,702 282,435 322,107 20,995 343,102
(Note 47) 10,952,792 - 10,952,792 11,273,999 - 11,273,999
Ending balance W 58,334,000 239,094 58,573,094 45,568,563 23,272 45,591,835
(*) Included the effects from changing currency rate, amortization of fair value adjustments recognized through business combination accountings.
118
(b) Changes in carrying value of debt securities at fair value through other comprehensive income and securities at amortized cost for the years ended December 31, 2019 and 2018
are as follows (continued):
2018
12 months expected Life time expected 12 months expected Life time expected credit
credit loss credit loss Total credit loss loss Total
Beginning allowance W 36,641,928 15,879 36,657,807 24,403,423 21,444 24,424,867

expected credit loss - - - - - -
expected credit loss (26,187) 26,187 - - - -
Purchase 26,938,512 98,778 27,037,290 5,836,342 - 5,836,342
Disposal (7,182,343) (18,687) (7,201,030) - - -
Repayment (19,338,938) - (19,338,938) (1,607,467) (3) (1,607,470)
Others (*) 538,842 (16,326) 522,516 (167,377) 1,034 (166,343)
Ending balance W 37,571,814 105,831 37,677,645 28,464,921 22,475 28,487,396
(*) Included the effects from changing currency rate.
119
(c) Changes in allowance for credit loss of debt securities at fair value through other comprehensive income and securities at amortized cost for the years ended December 31, 2019
and 2018 are as follows:
2019
12 months expected Life time expected credit 12 months expected Life time expected credit
credit loss loss Total credit loss loss Total
Beginning allowance W 25,722 362 26,084 9,243 17 9,260

expected credit loss 33 (33) - 4,301 (4,301) -
expected credit loss (60) 60 - - - -
Provision (reversal) 8,403 (2,616) 5,787 (3,752) 4,295 543
Disposal (5,340) (258) (5,598) - - -
Others (*) (1,177) 3,140 1,963 (33) - (33)
Ending balance W 27,581 655 28,236 9,759 11 9,770
(*) Included the effects from changing currency rate, restructuring, bond-equity swap.
120
(c) Changes in allowance for credit loss of debt securities at fair value through other comprehensive income and securities at amortized cost for the years ended December 31, 2019
2018
12 months expected Life time expected credit 12 months expected Life time expected credit
credit loss loss Total credit loss loss Total
Beginning allowance W 17,038 1,938 18,976 6,327 2,232 8,559

expected credit loss - - - - - -
expected credit loss (234) 234 - - - -
Provision (reversal) 15,286 (3,220) 12,066 4,615 (2,215) 2,400
Disposal (5,251) (229) (5,480) - - -
Others (*) (1,117) 1,639 522 (1,699) - (1,699)
Ending balance W 25,722 362 26,084 9,243 17 9,260
(*) Included the effects from changing currency rate.
121
(d) Gain or loss on disposal of securities at fair value through other comprehensive income and securities at amortized
cost for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Gain on disposal of securities at FVOCI W 159,883 28,018

Loss on disposal of securities at FVOCI (7,605) (7,464)
Gain on disposal of securities at amortized cost (*) 86 -
Loss on disposal of securities at amortized cost (*) (20) (9)
W 152,344 20,545
(*) The issuers of those securities have exercised the early redemption options.
(e) Income or loss on equity securities at fair value through other comprehensive income
As of December 31, 2019 and 2018, the Group recognizes dividends amounting to W16,586 million and W16,871
million related to equity securities at fair value through other comprehensive income.
In addition, the disposition of equity securities at fair value through other comprehensive income are as follows:
2019 2018
Fair value at the date of disposal W 45,074 3,285

Cumulative net loss at the time of disposal (10,843) (3,635)
122
12. Loans at amortized cost
(a) Loans at amortized cost as of December 31, 2019 and 2018 are as follows:
2019 2018
Household loans W 134,423,473 120,832,081
Corporate loans 161,029,877 152,164,476
Public and other loans 3,311,735 2,831,026
Loans to banks 2,633,532 3,585,563
Credit card receivables 24,024,491 22,447,614
325,423,108 301,860,760
Discount (27,824) (23,588)
Deferred loan origination costs 534,530 497,368
325,929,814 302,334,540
Less: Allowance for credit loss (2,684,835) (2,725,068)
W 323,244,979 299,609,472
123
12. Loans at amortized cost (continued)
(b) Changes in carrying value of loans at amortized cost and other assets as of December 31, 2019 and 2018 are as follows:
i) Loans at amortized cost
2019
Retail Corporate Credit card Others
12 months Life time Impaired 12 months Life time Impaired 12 months Life time Impaired 12 months Life time Impaired
expected expected financial expected expected financial expected expected financial expected expected financial
credit loss credit loss asset credit loss credit loss asset credit loss credit loss asset credit loss credit loss asset Total
Beginning balance W 114,279,870 6,820,058 348,722 129,468,766 21,782,590 919,381 18,155,156 3,830,509 413,175 5,695,187 605,440 15,686 302,334,540
Transfer (from) to 12
months expected credit
losses 2,619,036 (2,614,416) (4,620) 4,093,725 (4,088,373) (5,352) 320,288 (320,129) (159) 37,430 (37,430) - -
Transfer (from) to
lifetime expected credit
losses (5,385,659) 5,406,091 (20,432) (16,484,206) 16,597,346 (113,140) (603,069) 603,280 (211) (210,161) 210,333 (172) -
Transfer (from) to credit-
impaired financial assets (627,950) (43,168) 671,118 (1,088,270) (76,177) 1,164,447 (36,483) (22,473) 58,956 (39,844) - 39,844 -
Origination 51,784,970 25,296 4,469 75,800,467 480,163 2,485 1,647,393 315,643 305,487 5,495,139 - - 135,861,512
Collection (38,870,803) (1,814,003) (238,174) (56,902,113) (9,966,512) (395,670) (59,799) (5,328) 253 (5,949,565) (149,802) (11,979) (114,363,495)
Charge off - - (257,742) - - (259,400) - - (332,862) - - (8,718) (858,722)
Disposal - (5,122) (108,624) (273,058) (3,806) (283,747) - - - - - (18,398) (692,755)
Others (*1) 320,096 88,420 10,744 583,534 (80,749) (50,283) (3,880) (276,926) (404) 139,207 927 - 730,686
(Note 47) 2,466,991 7,752 10,431 392,828 17,180 22,866 - - - - - - 2,918,048
Ending balance W 126,586,551 7,870,908 415,892 135,591,673 24,661,662 1,001,587 19,419,606 4,124,576 444,235 5,167,393 629,468 16,263 325,929,814
(*1) Other changes are due to restructuring, debt-equity swap and exchange rate fluctuations.
(*2) The amount of uncollected loans currently in recovery (principal and interest) is W10,155,562 million, which is written off as of December 31, 2019.
124
(b) Changes in carrying value of loans at amortized cost and other assets as of December 31, 2019 and 2018 are as
follows (continued):
ii) Other financial assets
2019
12 month Life time
expected expected Impaired
credit loss credit loss financial asset Total
Beginning balance W 31,508,694 99,461 32,003 31,640,158
Transfer (from) to 12 month expected credit
losses 12,685 (12,675) (10) -
Transfer (from) to lifetime expected credit
losses (253,546) 253,575 (29) -
Transfer (from) to credit- impaired financial
assets (3,124) (5,324) 8,448 -
Origination 62,331,232 29,315 27,281 62,387,828
Collection (51,845,962) (259,371) (2,036) (52,107,369)
Charge off - - (29,456) (29,456)
Disposal (*2) (182,212) (3) (1,062) (183,277)
Others (*3) 261,019 42 - 261,061
Business combination (Note 47) 1,416,216 1,497 10,826 1,428,539
Ending balance W 43,245,002 106,517 45,965 43,397,484
(*1) The amortized cost includes the gross carrying amount of deposits and other assets.
(*2) Included the disposal amount of financial instruments for the purpose of collecting loans for credit concentration
risk management of non-current assets, which recognized gains of W13,317 million.
125
(b) Changes in carrying value of loans at amortized cost and other assets as of December 31, 2019 and 2018 are as follows (continued):
2018
Retail Corporate Credit cards Others
Life time
12 months Life time Impaired 12 months Life time Impaired 12 months expected Impaired 12 months Life time Impaired
expected expected financial expected expected financial expected credit financial expected expected financial
credit loss credit loss asset credit loss credit loss asset credit loss loss asset credit loss credit loss asset Total
Beginning balance W 104,325,268 7,345,842 301,838 119,852,620 18,455,422 1,084,348 16,467,623 3,743,265 385,252 4,665,298 486,090 13,163 277,126,029
months expected credit
losses 3,406,566 (3,402,543) (4,023) 3,736,019 (3,734,730) (1,289) 318,142 (318,025) (117) 71,381 (71,381) - -
Transfer (from) to lifetime
expected credit losses (4,920,514) 4,935,853 (15,339) (15,002,047) 15,051,204 (49,157) (587,777) 588,002 (225) (366,998) 366,998 - -
impaired financial assets (536,996) (36,489) 573,485 (1,349,787) (114,560) 1,464,347 (37,526) (25,522) 63,048 (24,068) (8,557) 32,625 -
Origination 47,789,131 34,200 5,396 75,450,183 386,318 9,260 2,633,086 6,285 181,250 5,244,411 - - 131,739,520
Collection (35,972,892) (2,046,703) (215,294) (53,902,860) (8,365,144) (758,426) (74,777) (120,969) (1,511) (3,988,422) (169,909) (12,980) (105,629,887)
Charge off - - (227,787) - - (312,841) - - (308,202) - - (2,567) (851,397)
Disposal (42,664) (3,059) (74,664) (79,250) (15,997) (493,273) - - - - - (14,555) (723,462)
Others (*1) 231,971 (7,043) 5,110 763,888 120,077 (23,588) (563,615) (42,527) 93,680 93,585 2,199 - 673,737
Ending balance W 114,279,870 6,820,058 348,722 129,468,766 21,782,590 919,381 18,155,156 3,830,509 413,175 5,695,187 605,440 15,686 302,334,540
(*2) The amount of uncollected loans currently in recovery (principal and interest) is W9,597,389 million, which is written off as of December 31, 2018.
126
(b) Changes in carrying value of loans at amortized cost and other assets as of December 31, 2019 and 2018 are as
2018
12 months Life time
Transfer (from) to 12 months expected credit losses 28,028 (28,024) (4) -
Transfer (from) to lifetime expected credit losses (51,596) 51,607 (11) -
Transfer (from) to credit- impaired financial assets (22,162) (2,986) 25,148 -
Origination 30,085,141 27,251 21,930 30,134,322
Collection (30,207,574) (410,559) (4,236) (30,622,369)
Charge off - - (20,984) (20,984)
Disposal - (495) (13,083) (13,578)
Others (*2) 77,654 6,129 - 83,783
Ending balance W 31,508,694 99,461 32,003 31,640,158
127
(c) Changes in allowance for credit loss of loans at amortized cost and other financial assets as of December 31, 2019 and 2018 are as follows:
2019
Retail Corporate Credit cards Others
12 month Life time Impaired 12 month Life time Impaired 12 month Life time Impaired 12 month Life time Impaired
Beginning balance W 115,295 88,360 156,459 434,793 581,915 519,683 170,242 351,765 280,098 10,670 5,882 9,906 2,725,068
months expected credit 18,079 (17,592) (487) 50,720 (48,295) (2,425) 55,815 (55,712) (103) 757 (757) - -
losses
(9,411) 17,342 (7,931) (35,790) 118,605 (82,815) (20,607) 20,756 (149) (159) 289 (130) -
expected credit losses
(942) (3,739) 4,681 (565) (13,332) 13,897 (1,250) (3,916) 5,166 - - - -
impaired financial assets
Provision (reversal) (7,751) 19,130 214,260 (43,230) (31,265) 277,436 57,062 280,047 147,332 (4,067) 1,907 37 910,898
Charge off - - (257,742) - - (259,400) - - (332,862) - - (8,718) (858,722)
Amortization of discount - - (274) - - (19,396) - - (5,541) - - - (25,211)
Disposal - (241) (21,561) (6) (245) (30,436) - - - - - (820) (53,309)
Collection - - 70,319 - - 62,973 - - 190,738 - - 1,876 325,906
Others (*) 2,484 (15,353) 4,522 13,810 (76,711) (27,910) (75,933) (208,284) (682) 300 160 - (383,597)
15,658 3,118 6,792 20 614 17,600 - - - - - - 43,802
(Note 47)
Ending balance W 133,412 91,025 169,038 419,752 531,286 469,207 185,329 384,656 283,997 7,501 7,481 2,151 2,684,835
(*) Other changes are due to restructuring, debt-equity swap and exchange rate fluctuations.
128
(c) Changes in allowance for credit loss of loans at amortized cost and other financial assets as of December 31, 2019
2019
12 months Life time
Beginning balance W 39,927 6,930 24,764 71,621
Transfer (from) to 12 months expected credit
458 (453) (5) -
losses
Transfer (from) to lifetime expected credit
(231) 244 (13) -
losses
Transfer (from) to credit- impaired financial
(172) (2,310) 2,482 -
assets
Provision 2,822 2,667 28,456 33,945
Charge off - - (29,456) (29,456)
Collection - - 1,873 1,873
Others (*2) (9,738) 9 435 (9,294)
Business combination (Note 47) 921 185 9,054 10,160
Ending balance W 33,987 7,272 37,590 78,849
(*2) Other changes are due to restructuring, debt-equity swap and exchange rate fluctuations
129
(c) Changes in allowance for credit loss of loans at amortized cost and other financial assets as of December 31, 2019 and 2018 are as follows (continued):
2018
Retail Corporate Credit cards Others (*)
12 months Life time Impaired 12 months Life time Impaired 12 months Life time Impaired 12 months Life time Impaired
Beginning balance W 88,167 125,362 160,536 472,685 624,730 609,925 160,478 335,170 278,759 9,283 2,997 3,894 2,871,986
month expected credit
losses 45,985 (45,516) (469) 49,898 (49,552) (346) 57,848 (57,814) (34) 433 (433) - -
expected credit losses (5,862) 11,415 (5,553) (43,180) 79,567 (36,387) (19,671) 19,687 (16) (221) 221 - -
impaired financial assets (750) (3,551) 4,301 (798) (34,627) 35,425 (1,288) (3,793) 5,081 (4) (140) 144 -
Provision (reversal) (10,735) 369 169,495 (49,962) (43,876) 203,667 122,112 132,670 166,338 1,165 3,229 10,043 704,515
Charge off - - (227,787) - - (312,841) - - (308,202) - - (2,567) (851,397)
Amortization of discount - - (218) - - (17,653) - - (2,907) - - - (20,778)
Disposal (302) (17) (4,242) (334) (357) (52,871) - - - - - (2,454) (60,577)
Collection - - 57,065 - - 78,249 - - 175,120 - - 846 311,280
Others (*) (1,208) 298 3,331 6,484 6,030 12,515 (149,237) (74,155) (34,041) 14 8 - (229,961)
Ending balance W 115,295 88,360 156,459 434,793 581,915 519,683 170,242 351,765 280,098 10,670 5,882 9,906 2,725,068
(*) Other changes are due to restructuring, debt-equity swap and exchange rate fluctuations.
130
(c) Changes in allowance for credit loss of loans at amortized cost and other financial assets as of December 31, 2019
2018
12 months Life time
Transfer (from) to 12 months expected credit losses 581 (578) (3) -
Transfer (from) to lifetime expected credit losses (212) 222 (10) -
Transfer (from) to credit- impaired financial assets (94) (2,209) 2,303 -
Provision (reversal) (1,998) 1,775 24,293 24,070
Charge off - - (20,984) (20,984)
Disposal - (7) (2,736) (2,743)
Collection - - 1,815 1,815
Others (*2) 2,602 61 (80) 2,583
Ending balance W 39,927 6,930 24,764 71,621
(d) Changes in deferred loan origination costs for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Beginning balance W 497,368 434,746
Loan origination 232,943 235,032
Amortization (208,998) (172,410)
Business combination (Note 47) 13,217 -
Ending balance W 534,530 497,368
131
13. Property and equipment
(a) Details of property and equipment as of December 31, 2019 and 2018 are as follows:
2019
Accumulated
Acquisition cost depreciation Carrying value
Land W 1,815,112 - 1,815,112
Buildings 1,167,514 (377,065) 790,449
Right-of-use assets 1,357,206 (244,410) 1,112,796
Others 2,130,805 (1,765,834) 364,971
W 6,470,637 (2,387,309) 4,083,328
2018
Accumulated
Land W 1,827,711 - 1,827,711
Buildings 1,173,888 (321,319) 852,569
Others 2,002,755 (1,679,149) 323,606
W 5,004,354 (2,000,468) 3,003,886
(b) Changes in property and equipment for the years ended December 31, 2019 and 2018 are as follows:
2019
Right-of-use
assets
Land Buildings (Note 18) Others Total
Beginning balance(*1) W 1,827,711 852,569 583,576 313,853 3,577,709
Acquisitions(*2) 69,045 16,946 805,783 184,630 1,076,404
Disposals(*2) (249) (1,719) (12,595) (29,081) (43,644)
Depreciation - (55,450) (298,538) (125,669) (479,657)
Amounts transferred from(to) investment
property (81,311) (23,262) - - (104,573)
Amounts transferred from(to) intangible
assets - - - 271 271
Amounts transferred from(to) non-current
assets held for sale(*3) (410) (45) - - (455)
Effects of foreign currency movements 326 1,410 2,981 9,314 14,031
Business combination (Note 47) - - 31,589 11,653 43,242
Ending balance W 1,815,112 790,449 1,112,796 364,971 4,083,328

(*1) The 9,753 million is transferred from other property and equipment to right-of-use assets due to the adoption of
K-IFRS No. 1116.
(*2) W76,004 million transferred from construction-in progress was included.
(*3) Included buildings, and land.
132
13. Property and equipment (continued)
(b) Changes in property and equipment for the years ended December 31, 2019 and 2018 are as follows (continued):
2018
Land Buildings Others Total
Acquisitions(*1) 33 14,612 136,244 150,889
Disposals(*1) (17,735) (3,282) (9,699) (30,716)
Depreciation - (47,207) (124,564) (171,771)
Amounts transferred from(to) investment
properties 23,972 4,227 - 28,199
Amounts transferred from(to) non-current assets
held for sale (*2) (32) (48) - (80)
Effects of foreign currency movements 1,561 846 3,186 5,593
Ending balance W 1,827,711 852,569 323,606 3,003,886
(*1) W6,319 million transferred from construction-in progress was included.
(*2) Included buildings, land.
(c) Insured assets and liability insurance as of December 31, 2019 are as follows:
2019
Amount
Type of insurance Insured assets covered Insurance company
Comprehensive insurance for Samsung Fire & Marine
financial institutions Cash(including ATM) 23,200 Insurance Co., Ltd., etc.
Comprehensive Property Property Total Risk, Machine Risk, Samsung Fire & Marine
insurance General Liability Liability Collateral Insurance Co., Ltd.,
1,315,820 etc.
Fire insurance Meritz Fire & Marine
Business property and real estate 22,141 Insurance Co., Ltd., etc.
Meritz Fire & Marine
Compensation liability insurance
Insurance Co., Ltd.,
for officers
Officer liability 60,000 etc.
Compensation liability insurance
for employee accident Executives Meritz Fire & Marine
70,841 Insurance Co., Ltd., etc.
Burglary insurance Samsung Fire & Marine
Insurance Co., Ltd.,
Cash and securities 87,015 etc.
Others Personal information liability insurance Samsung Fire & Marine
etc. 28,730 Insurance Co., Ltd.
133
14. Intangible assets
(a) Details of intangible assets as of December 31, 2019 and 2018 were as follows:
2019 2018
Goodwill W 4,690,049 3,903,518
Software 129,235 102,393
Development cost 144,100 82,536
Others 595,330 231,687
W 5,558,714 4,320,134
(b) Changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows:
2019
Development
Goodwill Software cost Others Total
Beginning balance W 3,903,518 102,393 82,536 231,687 4,320,134
Acquisitions - 56,834 71,713 675,070 803,617
(Note 47) 786,531 9,469 30,435 44,850 871,285
Disposals - (428) (1,310) (16,476) (18,214)
Amounts transferred
from(to) property and
equipment - 697 (968) - (271)
Impairment(*1)(*2) - - (474) (151,169) (151,643)
Amortization(*3) - (40,578) (37,832) (189,533) (267,943)
Effects of foreign
currency movements - 848 - 901 1,749
Ending balance W 4,690,049 129,235 144,100 595,330 5,558,714
(*1) The Group reviewed the recoverable value of intangible assets related to the rights to be the depository bank of
local governments due to the performance below forecast and future prospects. For the year ended December 31,
2019, the impairment loss amounted to W151,523 million. The impairment loss was included in the non-operating
expenses in the consolidated statement of comprehensive income.
(*2) Memberships such as golf and condominium memberships are intangible assets that cannot be limited to a specific
period of time. If the market value of the exchanges is less than the carrying amount at the end of the reporting period,
the impairment loss is recognized.
(*3) Included in general administrative expense and other operating income of the consolidated statements of
134
14. Intangible assets
(b) Changes in intangible assets for the years ended December 31, 2019 and 2018 were as follows (continued):
2018
Development
Goodwill Software cost Others Total
Beginning balance W 3,901,260 83,829 75,322 212,910 4,273,321
Acquisitions - 56,009 38,230 69,501 163,740
Disposals - (334) (5,880) (7,117) (13,331)
Impairment(*1) - - (706) (362) (1,068)
Amortization(*2) - (40,792) (24,430) (41,957) (107,179)
Effects of foreign
currency movements - 3,681 - (1,288) 2,393
Business combination 2,258 - - - 2,258
Ending balance W 3,903,518 102,393 82,536 231,687 4,320,134
(*1) Memberships such as golf and condominium memberships are intangible assets that cannot be limited to a specific
period of time. If the market value of the exchanges is less than the carrying amount at the end of the reporting period,
the impairment loss is recognized.
(*2) Included in general administrative expense and other operating income of the consolidated comprehensive
income.
135
14. Intangible asset (continued)
(c) Goodwill
i) Goodwill allocated in the Group’s CGUs as of December 31, 2019 and 2018
2019 2018
Banking W 810,058 810,058
Credit card 2,880,383 2,773,231
Securities 7,904 7,904
Life insurance (Shinhan Life Insurance ) 275,371 275,371
Life insurance (Orange Life Insurance Co., Ltd.) 564,576 -
Others 151,757 36,954
W 4,690,049 3,903,518
ii) Changes in goodwill for the years ended December 31, 2019 and 2018
2019 2018
Beginning balance W 3,903,518 3,901,260
Acquisitions through business combinations (*1)(*2) 786,531 2,258
Ending balance W 4,690,049 3,903,518
(*1) recognized as a result of the Group’s acquisitions of Orange Life Insurance Co., Ltd.(“Orange Life”), Asia Trust
Co., and the Shinhan Card’s acquisition of the new business for the year ended December 31, 2019 (Note 47).
(*2) recognized as a result of the Shinhan Financial Investment Corp. acquisition of the new business for the year
ended December 31, 2018.
iii) Goodwill impairment test
The recoverable amounts of each CGU were evaluated based on their respective value in use.
- Explanation on evaluation method
The income approach was applied when evaluating the recoverable amounts based on value in use, considering the
characteristics of each unit or group of CGU.
- Projection period
When evaluating the value in use, 5.0~5.5 years of cash flow estimates were used in projection and the value
thereafter was reflected as terminal value. 30 years and 60 years of cash flow estimates for Shinhan Life and Orange
Life, respectively were applied and the present value of the future cash flows thereafter is not considered as it is
insignificant.
136
14. Intangible assets, net (continued)
- Discount rates and terminal growth rates
The required rates of return expected by shareholders were applied to the discount rates by calculating the cost of
capital which comprises a risk-free interest rate, a market risk premium and systemic risk (beta factor). Expected
terminal growth rate is on the basis of inflation rates.
Discount rates and terminal growth rates applied to each CGU are as follows:
Discount rates(%) Terminal growth rate(%)

Banking 8.3 ~ 13.9 1.0 ~ 3.0
Credit card 8.9 ~ 13.3 1.0 ~ 3.0
Securities 12.1 ~ 13.3 3.0
Life insurance (Shinhan Life Insurance ) 8.0 -
Life insurance (Orange Life Insurance Co., Ltd.) 8.0 -
Others 9.2 ~ 14.0 1.0
iv) Key assumptions
Key assumptions used in the discounted cash flow calculations of CGUs (other than life insurance components) are
as follows:
2019 2020 2021 2022 2023 2024

CPI growth(%) 0.7 1.1 1.6 1.8 1.7 1.7
Private consumption growth(%) 2.0 2.0 2.2 2.5 2.4 2.4
Real GDP growth(%) 1.9 2.2 2.4 2.7 2.6 2.6
Key assumptions used in the discounted cash flow calculations of life insurance components are as follows:
Key assumptions
Rate of return on investment(%) 2.45 ~ 2.75
Risk-based capital ratio(%) 150.00
The values for the CPI growth rate, real retail sales growth rate, real GDP growth rate, rate of return on investment
and risk-based capital ratio are based on a combination of internal and external analysis.
v) Total recoverable amount and total carrying value of CGUs to which goodwill has been allocated, are as follows:
Amount
Total recoverable amount W 46,896,966
Total carrying value 41,902,106
W 4,994,860
137
15. Investments in associates
(a) Investments in associates as of December 31, 2019 and December 31, 2018 are as follows:
Reporting Ownership (%)

Investees Country date 2019 2018
BNP Paribas Cardif Life Insurance(*1),(*3) Korea September 30 14.99 14.99
Songrim Partners.(*1),(*4) “ December 31 35.34 35.34
Daewontos Co., Ltd.(*7) “ - - 36.33
Neoplux Technology Valuation Investment Fund(*1) “ September 30 33.33 33.33
Partners 4th Growth Investment Fund(*1) “ “ 25.00 25.00
KTB Newlake Global Healthcare PEF(*1) “ “ 30.00 30.00
JAEYANG INDUSTRY(*7) “ - - 25.90
Daekwang Semiconductor Co., Ltd. (*1),(*4) “ September 30 20.94 20.94
Shinhan-Neoplux Energy Newbiz Fund(*1) “ September 30 23.33 23.33
Shinhan-Albatross tech investment Fund “ December 31 50.00 50.00
KCLAVIS Meister Fund No.17 “ “ 26.09 26.09
Plutus-SG Private Equity Fund “ “ 26.67 26.67
SG ARGES Private Equity Fund No.1(*7) “ - - 24.06
Eum Private Equity Fund No.3 “ December 31 20.76 20.76
KTB Confidence Private Placement “ “ 31.43 30.29
Meritz AI-SingA330-A Investment Type Private Placement
“ “
Special Asset Fund 23.89 23.89
Meritz AI-SingA330-B Investment Type Private Placement
“ “
Special Asset Fund 20.16 20.16
VOGO Debt Strategy Qualified INV Private
“ “
R/E INV TR 4 20.00 20.00
Platform Partners brick save Private Investment trust(*7) “ - - 98.77
Shinhan-Midas Donga Secondary Fund “ December 31 50.00 50.00
ShinHan – Soo Young Entrepreneur Investment Fund No.1 “ “ 24.00 24.00
Synergy-Shinhan Mezzanine New Technology Investment
Fund “ “ 47.62 47.62
Shinhan Praxis K-Growth Global Private Equity Fund(*5) “ “ 18.87 18.87
Credian Healthcare Private Equity Fund II “ “ 34.07 34.07
Kiwoom Milestone Professional Private Real Estate Trust
19 “ “ 50.00 50.00
AIP EURO Green Private Real Estate Trust No.3 “ “ 21.28 21.28
Brain Professional Private Trust No.4(*7) “ - - 27.50
Hanhwa US Equity Strategy Private Real Estate Fund No.1 “ December 31 44.84 44.84
Brain KS Qualified Privately Placed Fund No.6(*7) “ - - 50.00
Shinhan Global Healthcare Fund 1(*5) “ December 31 4.41 4.41
JB Power TL Investment Type Private Placement Special
“ “
Asset Fund 7 33.33 33.33
IBK AONE convertible 1 “ “ 47.25 47.25
Rico synergy collabo Multi-Mezzanine 3(*8) “ “ 50.03 50.03
KB NA Hickory Private Special Asset Fund “ “ 37.50 37.50
GB Professional Private Investment Trust 6(*7) “ - - 94.51
Koramco Europe Core Private Placement Real Estate Fund
No.2-2 “ December 31 44.02 44.02
138
15. Investments in associates (continued)
(a) Investments in associates as of December 31, 2019 and December 31, 2018 are as follows (continued):

SHBNPP Private Korea Equity Long-Short Professional Feeder(*10) Korea - - 21.52
Shinhan-Stonebridge Petro PEF(*5) “ December 31 1.82 1.82
BNP Paribas Cardif General Insurance(*1),(*2) “ September 30 10.00 10.00
Axis Global Growth New Technology Investment Association “ December 31 31.85 31.85
Polaris No7 Start up and Venture Private Equity Fund “ “ 28.57 28.57
Hermes Private Investment Equity Fund “ “ 29.17 29.17
SHC ULMUS Fund No.1 “ “ 29.41 29.41
Shinhan-Nvestor Liquidity Solution Fund “ “ 24.92 24.92
Shinhan AIM FoF Fund 1a “ “ 25.00 24.91
Daishin Heim Qualified Investor Private Investment Trust
No.1808(*7) “ - - 34.48
Heungkuk High Class Professional Trust Private Fund 37(*7) “ - - 50.00
IGIS Global Credit Fund 150-1 “ December 31 25.00 25.11
GX Shinhan Intervest 1st Private Equity Fund “ “ 25.27 25.27
Soo Commerce Platform Growth Fund “ “ 24.62 24.62
Partner One Value up I Private Equity Fund “ “ 27.91 27.91
Genesis No.1 Private Equity Fund “ “ 22.80 22.80
GMB ICT New Technology Investment Fund “ “ 26.75 26.75
Korea Omega Project Fund III “ “ 23.53 23.53
Soo Delivery Platform Growth Fund “ “ 30.00 30.00
Genesis North America Power Company No.1 PEF “ “ 39.92 39.92
Hyungje art printing(*1),(*4) “ “ 31.54 31.54
SHBNPP MAIN Professional Investment Type Private Mixed Asset
Investment Trust No.3 “ “ 23.33 23.33
Shinhan-Rhinos 1 Fund “ “ 22.48 -
Pacific Private Investment Trust No.20 “ “ 21.74 -
Susung Mezzanine project P1 Private Investment Trust “ “ 41.18 -
Korea Finance Security (*1),(*9) “ September 30 14.91 -
MIEL CO.,LTD(*4) “ December 31 28.77 -
AIP Transportation Specialized Privately Placed Fund Trust #1 “ “ 35.73 -
Lime Neptune Professional Private 6 “ “ 50.00 -
PCC S/W 2nd Fund “ “ 29.56 -
E&Healthcare Investment Fund No.6(*5) “ “ 20.37 -
One Shinhan Global Fund 1(*5) “ “ 19.98 -
Kiwoom-Shinhan Innovation Fund I “ “ 50.00 -
Daishin-K&T New Technology Investment Fund “ “ 31.25 -
Midas Asset Global CRE Debt Private Fund No.6 “ “ 20.05 -
Richmond Private Investment Trust No.82(*6) “ “ 60.00 -
Tiger Alternative Real Estate Professional Private5 “ “ 48.71 -
Samchully Midstream Private Placement Special Asset Fund 5-4 “ “ 42.92 -
SHBNPP Senior Loan Professional Investment Type Private Mixed
Asset Investment Trust No.3 “ “ 20.00 -
139

AUCTUS FITRIN Corporate Recovery Private Equity Fund “ “ 21.43 -

NH-Amundi Global Infrastructure Trust 14 “ “ 30.00 -
Pacific Private Real Estate Fund Investment Trust No.30 “ “ 37.50 -
Jarvis Memorial Private Investment Trust 1(*6) “ “ 99.01 -
Mastern Private Private Investment Trust 68(*6) “ “ 53.76 -
Vestas Qualified Investors Private Real Estate Fund Investment Trust
“
No.37(*8) “ 60.00 -
Milestone Private Real Estate Fund 3 (Derivative Type) “ “ 32.06 -
IGIS Private Real Estate Investment Trust 286 (2 class) “ “ 41.56 -
Nomura-Rifa Private Real Estate Investment Trust 31 (2 class) “ “ 31.31 -
Lime Pricing Private Equity Fund “ “ 25.85 -
SHBNPP Senior Loan Professional Investment Type Private Mixed
“
Asset Investment Trust No.2 “ 21.27 -
DS Solid.II Hedge Fund “ “ 27.41 -
Hana Semiconductor New Technology Fund “ “ 24.30 -
J&Magnet Startup Venture Specialized Private Equity Fund(*1) “ September 30 24.39 -
Cape IT Fund No.3 “ December 31 32.89 -
Vogo Realty Partners Private Real Estate Fund V “ “ 21.64 -
IL GU FARM CO.,LTD(*1)(*4) - “ 28.47 -
Korea Credit Bureau(*1)(*9) “ September 30 9.00 -
SBC PFV Co., Ltd(*11) “ December 31 25.00 -
Sprott Global Renewable Private Equity Fund II “ “ 23.10 -
NH-amundi global infra private fund 16 “ “ 50.00 -
IMM Global Private Equity Fund “ “ 31.85 -
HANA Alternative Estate Professional Private122(*8) “ “ 75.19 -
Hanwha-Incus Plus New Technology Fund No.1 “ “ 42.64 -
SHBNPP Corporate Professional Investment Type Private Security
“
Investment Trust No.7[Bond] “ 45.96 -
SHBNPP BNCT Professional Investment Type Private Special Asset
“
Investment Trust(*8) “ 57.50 -
PSA EMP Private Equity Fund “ “ 28.99 -
Deutsche Global Professional Investment Type Private Real Estate
“
Investment Trust No. 24(*8) “ 52.28 -
SHBNPP Peace of Mind TDF 2035 Security Investment Trust [Equity
“
Balanced-FoF] “ 25.70 -
SHBNPP Peace of Mind TDF 2040 Security Investment Trust [Equity
“
Balanced-FoF] “ 25.42 -
BRAIN DO PROFESSIONALE PRIVATE No. 27 “ “ 29.13 -
VISION US Muni US Local Debt Opportunities Professional
“
Private1(S) “ 25.00 -
140
(*1) The latest financial statements were used for the equity method since the financial statements as of December 31,
2019 were not available. Significant trades and events occurred within the period were properly reflected.
(*2) The Group applies the equity method accounting as the Group has significant influence on the financial and
operating policies of the investee through the ability to elect investees’ board members and representation in decision
making bodies of the investee.
(*3) The Group applies the equity method accounting as the Group has a significant influence on the investees through
important business transactions.
(*4) As a part of the rehabilitation process, the Group acquired shares through the conversion of equity investments,
as the Group cannot exercise voting rights during the process, the Group has classified the shares as investments at
fair value through profit or loss. The Group reclassified Securities at fair value through profit or loss to investments
in associates as the reorganization procedures were completed and now the Group can normally exercise its voting
rights to the investees.
(*5) As a managing partner, the Group has a significant influence over the investees.
(*6) As a limited partner, the Group does not have an ability to participate in policy-making processes to obtain
economic benefit from the investees that would allow the Group to control the entity.
(*7) Excluded from the investments in associates due to full or partial disposal of shares, or loss of significant influence.
(*8) Although the ownership interests were more than 50%, the Group applies the equity method accounting as the
Group does not have an ability to participate in the financial and operating policy-making process.
(*9) Although the ownership percentages were less than 20%, the Group applies the equity method accounting since
it participates in policy-making processes and therefore can exercise significant influence on investees.
(*10) The investment in the associate is consolidated due to the additional acquisition of the shares from the year
(*11) The rate of Group’s voting rights is 4.65%.
141
(b) Changes in investments in associates for the years ended December 31, 2019 and 2018 were as follows:
2019
Equity Change in
Investment method other
Beginning and income comprehensive Impairment Ending
Investees balance dividend (loss) income loss balance
BNP Paribas Cardif Life Insurance W 49,816 (373) (517) 3,660 - 52,586
Songrim Partners.(*1) - - - - - -
Neoplux Technology Valuation
Investment Fund 18,738 (1,661) (693) - - 16,384
Partners 4th Growth Investment
Fund 16,612 (1,219) (476) - - 14,917
KTB Newlake Global Healthcare
PEF 9,885 1,500 (105) - - 11,280
Daekwang Semiconductor Co., Ltd. 3,334 - 52 2 - 3,388
Shinhan-Neoplux Energy Newbiz
Fund 3,974 4,200 (294) - - 7,880
Shinhan-Albatross tech investment
Fund 8,908 - 132 (306) - 8,734
KCLAVIS Meister Fund No.17 3,083 (1,801) (84) - - 1,198
Plutus-SG Private Equity Fund 4,252 (132) 111 - - 4,231
SG ARGES Private Equity Fund
No.1 4,341 (4,796) 455 - - -
Eum Private Equity Fund No.3 4,889 (2,476) 1,161 - - 3,574
KTB Confidence Private Placement 5,302 (215) 980 - - 6,067
Meritz AI-SingA330-A Investment
Type Private Placement Special
Asset Fund 5,432 (1,266) 90 - - 4,256
Meritz AI-SingA330-B Investment
Asset Fund 8,429 242 245 - - 8,916
VOGO Debt Strategy Qualified
INV Private R/E INV TR 4 4,831 4,820 279 - - 9,930
Platform Partners brick save Private
Investment trust 8,120 (8,197) 77 - - -
Shinhan-Midas Donga Secondary
Fund 2,061 1,750 (325) - - 3,486
ShinHan – Soo Young Entrepreneur
Investment Fund No.1 2,554 1,968 27 - - 4,549
Synergy-Shinhan Mezzanine New
Technology Investment Fund 10,149 (6,492) 255 - - 3,912
Shinhan Praxis K-Growth Global
Private Equity Fund 16,527 (8,745) 2,520 - - 10,302
Credian Healthcare Private Equity
Fund II 4,553 (2,526) 350 - - 2,377
Kiwoom Milestone Professional
Private Real Estate Trust 19 10,419 (241) 229 - - 10,407
AIP EURO Green Private Real
Estate Trust No.3 20,544 (1,248) 1,588 - - 20,884
Brain Professional Private Trust
No.4 5,244 (5,175) (69) - - -
Hanhwa US Equity Strategy Private
Real Estate Fund No.1 26,232 (1,866) 1,598 - - 25,964
Brain KS Qualified Privately Placed
Fund No.6 5,097 (5,041) (56) - - -
Shinhan Global Healthcare Fund 1 3,285 - (76) - - 3,209
142
(b) Changes in investments in associates for the years ended December 31, 2019 and 2018 were as follows
(continued):
2019
Equity Change in
JB Power TL Investment Type
Private Placement Special Asset
Fund 7 W 17,484 (1,513) 829 - - 16,800
IBK AONE convertible 1 5,906 - 171 - - 6,077
Rico synergy collabo Multi-
Mezzanine 3 5,290 (2,501) 428 - - 3,217
KB NA Hickory Private Special
Asset Fund 34,360 445 1,125 - - 35,930
GB Professional Private Investment
Trust 6 8,588 (8,588) - - - -
Koramco Europe Core Private
Placement Real Estate Fund No.2-2 18,616 (1,458) 2,404 - - 19,562
SHBNPP Private Korea Equity
Long-Short Professional Feeder 14,370 (14,325) (45) - - -
Shinhan-Stonebridge Petro PEF 18,681 (19,589) 909 - - 1
BNP Paribas Cardif General
Insurance 3,423 - (1,296) (14) - 2,113
Axis Global Growth New
Technology Investment
Association 4,875 (1,592) (78) - - 3,205
Polaris No7 Start up and Venture
Private Equity Fund 4,338 (2,300) 265 - - 2,303
Hermes Private Investment Equity
Fund 7,065 - (689) - - 6,376
SHC ULMUS Fund No.1 2,890 - 259 - - 3,149
Shinhan-Nvestor Liquidity Solution
Fund 2,689 2,700 (524) - - 4,865
Shinhan AIM FoF Fund 1a 4,351 2,363 528 - - 7,242
Daishin Heim Qualified Investor
Private Investment Trust No.1808 10,126 (10,297) 171 - - -
Heungkuk High Class Professional
Trust Private Fund 37 9,438 (9,505) 67 - - -
IGIS Global Credit Fund 150-1 8,896 781 41 - - 9,718
GX Shinhan Intervest 1st Private
Equity Fund 31,831 - 1,335 - - 33,166
Soo Commerce Platform Growth
Fund 6,378 - (35) - - 6,343
Partner One Value up I Private
Equity Fund 11,939 - (48) - - 11,891
Genesis No.1 Private Equity Fund 45,758 404 4,988 - - 51,150
GMB ICT New Technology
Investment Fund 7,934 - (80) - - 7,854
Korea Omega Project Fund III 1,992 - 1,024 - - 3,016
Soo Delivery Platform Growth Fund 8,983 (171) 110 - - 8,922
Genesis North America Power
Company No.1 PEF 20,824 (4,035) 1,486 - - 18,275
Hyungje art printing(*1) - - - - - -
143
(continued) :
2019
Equity Change in
SHBNPP MAIN Professional
Investment Type Private Mixed
Asset Investment Trust No.3 W 6,204 14,147 361 - - 20,712
Shinhan-Rhinos 1 Fund - 3,000 29 - - 3,029
Pacific Private Investment Trust
No.20 - 3,819 257 - - 4,076
Susung Mezzanine project P1 Private
Investment Trust - 4,000 1,128 - - 5,128
Korea Finance Security (*2) - 3,448 (213) - - 3,235
MIEL CO.,LTD(*3) - - - - - -
AIP Transportation Specialized
Privately Placed Fund Trust #1 - 31,136 444 - - 31,580
Lime Neptune Professional Private 6 - 5,000 63 - - 5,063
PCC S/W 2nd Fund - 3,000 1 - - 3,001
E&Healthcare Investment Fund No.6 - 7,030 746 - - 7,776
One Shinhan Global Fund 1 - 4,520 (79) - - 4,441
Kiwoom-Shinhan Innovation Fund I - 7,500 (216) - - 7,284
Daishin-K&T New Technology
Investment Fund - 7,000 57 - - 7,057
Midas Asset Global CRE Debt
Private Fund No.6 - 23,194 537 - - 23,731
Richmond Private Investment Trust
No.82 - 14,569 551 - - 15,120
Tiger Alternative Real Estate
Professional Private5 - 19,876 (56) - - 19,820
Samchully Midstream Private
Placement Special Asset Fund 5-4 - 29,436 1,306 - - 30,742
SHBNPP Senior Loan Professional
Asset Investment Trust No.3 - 52,048 1,783 - - 53,831
AUCTUS FITRIN Corporate
Recovery Private Equity Fund - 14,250 108 - - 14,358
NH-Amundi Global Infrastructure
Trust 14 - 17,769 728 - - 18,497
Pacific Private Real Estate Fund
Investment Trust No.30 - 14,236 580 - - 14,816
Jarvis Memorial Private Investment
Trust 1 - 9,888 278 - - 10,166
Mastern Private Private Investment
Trust 68 - 9,764 235 - - 9,999
Vestas Qualified Investors Private
Real Estate Fund Investment Trust
No.37 - 4,434 (37) - - 4,397
Milestone Private Real Estate Fund 3
(Derivative Type) - 17,016 170 - - 17,186
IGIS Private Real Estate Investment
Trust 286 (2 class) - 10,100 (332) - - 9,768
Nomura-Rifa Private Real Estate
Investment Trust 31 (2 class) - 9,018 (104) - - 8,914
Lime Pricing Private Equity Fund - 8,400 (100) - - 8,300
144
(continued) :
2019
Equity Change in
Asset Investment Trust No.2 W - 39,376 2,615 - - 41,991
DS Solid.II Hedge Fund - 4,300 (177) - - 4,123
Hana Semiconductor New
Technology Fund - 13,000 (144) - - 12,856
J&Magnet Startup Venture
Specialized Private Equity Fund - 6,000 (21) - - 5,979
Cape IT Fund No.3 - 10,000 (33) - - 9,967
Vogo Realty Partners Private Real
Estate Fund V - 10,611 (235) - - 10,376
IL GU FARM CO.,LTD - - - - - -
Korea Credit Bureau(*2) - 4,500 2,312 - - 6,812
SBC PFV Co., Ltd - 20,000 - - - 20,000
Sprott Global Renewable Private
Equity Fund II - 20,131 (1,115) - - 19,016
NH-amundi global infra private fund
16 - 49,530 (1,372) - - 48,158
IMM Global Private Equity Fund - 28,945 (20) - - 28,925
HANA Alternative Estate
Professional Private122 - 28,487 (2,282) - - 26,205
Hanwha-Incus Plus New Technology
Fund No.1 - 5,500 (1) - - 5,499
SHBNPP Corporate Professional
Investment Type Private Security
Investment Trust No.7[Bond] - 51,293 - - - 51,293
SHBNPP BNCT Professional
Investment Type Private Special
Asset Investment Trust - 146,045 4,272 - - 150,317
PSA EMP Private Equity Fund - 10,000 (73) - - 9,927
Deutsche Global Professional
Investment Type Private Real
Estate Investment Trust No. 24 - 28,314 1,149 - - 29,463
SHBNPP Peace of Mind TDF 2035
Security Investment Trust [Equity
Balanced-FoF] - 5,727 - - - 5,727
Balanced-FoF] - 5,729 - - - 5,729
BRAIN DO PROFESSIONALE
PRIVATE No. 27 - 3,000 65 - - 3,065
VISION US Muni US Local Debt
Opportunities Professional
Private1(S) - 9,500 369 - - 9,869
Others 81,490 (14,513) 18,954 - - 85,931
W 671,330 724,902 53,287 3,342 - 1,452,861
145
(continued):
(*1) The Group has stopped recognizing its equity method income or loss due to the investees’ cumulative loss.
(*2) Classified as investments in associates without cash transactions.
(*3) No gains or losses from the equity method investees have been recognized after the acquisition of a debt-to-
equity swap in 2019.
146
(continued):
2018
Equity Change in
BNP Paribas Cardif Life Insurance W 52,616 (2,043) 783 (1,540) - 49,816
Daewontos Co., Ltd.(*1) - - - - - -
Songrim Partners.(*1) 48 - (48) - -
Investment Fund 13,470 6,000 (242) (490) - 18,738
JAEYOUNG SOLUTEC CO., LTD. 3,849 (2,865) (836) (148) - -
Fund 13,390 2,597 625 - - 16,612
JAEYANG INDUSTRY(*1) - - - - - -
PEF 2,653 7,470 (238) - - 9,885
DAEKWANG SEMICONDUCTOR
CO., LTD. 3,824 - (490) - - 3,334
Fund 1,400 2,800 (226) - - 3,974
Shinhan-Albatross Tech Investment
Fund 2,672 6,000 (70) 306 - 8,908
Asia Pacific No.39 Ship Investment
Co., Ltd. 4,682 (4,803) 121 - - -
KCLAVIS Meister Fund No.17 3,039 - 44 - - 3,083
SG No.9 Corporate Recovery
Private Equity Fund 3,963 (3,102) 566 - - 1,427
Plutus-SG Private Equity Fund 4,251 (132) 133 - - 4,252
No.1 6,422 (2,295) 214 - - 4,341
OST Progress- 2 Fund 4,895 (4,895) - - - -
Eum Private Equity Fund No.3 4,925 (277) 241 - - 4,889
Richmond Private Yong in Retail
Facility Real Estate Fund No.1 8,101 (10,286) 2,185 - - -
KTB Confidence Private Placement 6,403 (389) 387 (1,099) - 5,302
Asset Fund 6,757 (1,518) 193 - - 5,432
Asset Fund 8,387 (305) 347 - - 8,429
Pine Asia Unsecured Individual
Rehabilitation Bond Fund 18 6,012 (6,035) 23 - - -
VOGO DEBT STRATEGY
QUALIFIED INV PRIVATE R/E
INV TR 4 1,638 3,060 133 - - 4,831
Platform Partners Brick Save
Private Investment Trust 8,069 (496) 547 - - 8,120
Technology Investment Fund 4,999 5,000 150 - - 10,149
The Asia Pacific Capital Fund II
L.P. 7,307 (3,004) (656) 2,602 (5,849) 400
147
(continued):
2018
Equity Change in
Private Equity Fund W 18,954 (7,473) 5,046 - - 16,527
Fund II 3,813 - 740 - - 4,553
Private Real Estate Trust 19 10,408 (199) 210 - - 10,419
AIP EURO GREEN PRIVATE
REAL ESTATE TRUST No.3 20,460 (1,253) 1,337 - - 20,544
Brain Professional Private Trust No.4 5,847 (1,274) 671 - - 5,244
Real Estate Fund No.1 25,479 (2,000) 2,753 - - 26,232
Fund No.6 4,805 - 292 - - 5,097
M360 CRE Income Fund 153,905 (171,215) 6,183 11,127 - -
Shinhan Global Healthcare Fund 1 3,407 - (122) - - 3,285
Fund 7 18,690 (2,075) 869 - - 17,484
IBK AONE convertible 1 5,122 - 784 - - 5,906
Mezzanine 3 5,026 - 264 - - 5,290
Asset Fund 34,091 (1,560) 1,829 - - 34,360
Trust 6 8,600 - (12) - - 8,588
Placement Real Estate Fund No.2-2 20,760 (2,357) 213 - - 18,616
Long-Short Professional Feeder 4,861 9,412 97 - - 14,370
Shinhan-Stonebridge Petro PEF 19,201 (1,133) 613 - - 18,681
Insurance 4,429 - (1,026) 20 - 3,423
Association 4,953 - (78) - - 4,875
Private Equity Fund 4,359 - (21) - - 4,338
Fund 17,497 (5,158) (5,274) - - 7,065
Shinhan AIM FoF Fund 1a - 4,125 226 - - 4,351
Private Investment Trust No.1808 - 9,786 340 - - 10,126
Trust Private Fund 37 - 9,178 260 - - 9,438
IGIS Global Credit Fund 150-1 - 8,529 367 - - 8,896
GX SHINHAN INTERVEST 1st
Private Equity Fund - 34,900 (3,069) - - 31,831
148
(continued):
2018
Equity Change in
Fund W - 6,500 (122) - - 6,378
Equity Fund - 12,000 (61) - - 11,939
Genesis No.1 Private Equity Fund - 46,068 (310) - - 45,758
Investment Fund - 8,000 (66) - - 7,934
Soo Delivery Platform Growth Fund 9,000 (17) - - 8,983
Company No.1 PEF 21,592 (768) - - 20,824
Asset Investment Trust No.3 6,300 (96) 6,204
Others(*2) 52,855 37,442 1,550 2 - 91,849
W 631,294 17,617 17,488 10,780 (5,849) 671,330
(*1) The Group has stopped recognizing its equity method income or loss due to the investees’ cumulative loss.
(*2) Included disposal by account reclassification involving non-cash transactions.
149
(c) The statement of financial information as of and for the year ended December 31, 2019 and 2018 were as
follows:
2019
Other Total
comprehen- comprehen-
Operating Net profit sive income sive income
Investees Asset Liability revenue (loss) (loss) (loss)
BNP Paribas Cardif Life

Insurance W 3,896,875 3,545,682 37,067 (3,919) 24,402 20,483
Investment Fund 49,890 738 3,953 (2,078) - (2,078)
Fund 60,775 1,106 14 (1,904) - (1,904)
PEF 37,187 151 387 (349) - (349)
Daekwang Semiconductor Co.,
Ltd. 23,507 7,328 1,248 248 9 257
Fund 33,791 18 26 (1,259) - (1,259)
Shinhan-Albatross tech
investment Fund 17,681 182 1,263 551 (917) (366)
KCLAVIS Meister Fund No.17 4,689 96 425 (322) - (322)
Plutus-SG Private Equity Fund 16,006 138 700 419 - 419
Eum Private Equity Fund No.3 17,243 27 6,305 5,604 - 5,604
KTB Confidence Private
Placement 19,369 64 7,328 3,122 - 3,122
Meritz AI-SingA330-A
Investment Type Private
Placement Special Asset Fund 17,821 1 1,280 377 - 377
Meritz AI-SingA330-B
Placement Special Asset Fund 44,228 2 3,445 1,217 - 1,217
VOGO Debt Strategy Qualified
INV Private R/E INV TR 4 49,683 33 4,198 1,391 - 1,391
Shinhan-Midas Donga Secondary
Fund 6,973 1 88 (651) - (651)
ShinHan – Soo Young
Entrepreneur Investment Fund
No.1 18,963 9 1,656 113 - 113
Technology Investment Fund 8,266 51 834 535 - 535
Private Equity Fund 54,786 185 27,588 13,361 - 13,361
Fund II 7,001 24 1,542 1,031 - 1,031
Private Real Estate Trust 19 59,559 38,744 3,100 470 - 470
AIP EURO Green Private Real
Estate Trust No.3 98,221 86 18,362 7,462 - 7,462
Hanhwa US Equity Strategy
Private Real Estate Fund No.1 59,652 1,750 14,838 3,742 - 3,742
Shinhan Global Healthcare Fund
1 73,388 701 5,480 (1,722) - (1,722)
150
2019
Other Total
Fund 7 W 50,468 66 15,476 2,487 - 2,487
IBK AONE convertible 1 12,861 0 1,515 410 - 410
Mezzanine 3 6,433 2 1,296 856 - 856
Asset Fund 96,289 476 16,132 2,489 - 2,489
Placement Real Estate Fund
No.2-2 46,742 2,304 9,328 5,462 - 5,462
Shinhan-Stonebridge Petro PEF 1,388 1,350 52,928 49,878 - 49,878
Insurance 43,064 21,936 17,613 (12,962) (136) (13,098)
Association 10,064 - 1 (244) - (244)
Private Equity Fund 8,113 52 1,037 928 - 928
Fund 21,954 95 45 (2,366) - (2,366)
SHC ULMUS Fund No.1 10,706 - 1,073 881 - 881
Shinhan-Nvestor Liquidity
Solution Fund 19,524 - 209 (2,101) - (2,101)
Shinhan AIM FoF Fund 1a 28,987 20 5,556 2,111 - 2,111
IGIS Global Credit Fund 150-1 38,912 38 2,674 166 - 166
Equity Fund 131,237 - 6,689 5,283 - 5,283
Fund 25,765 3 36 (140) - (140)
Equity Fund 42,602 - 457 (173) - (173)
Genesis No.1 Private Equity Fund 224,322 7 23,180 21,872 - 21,872
Investment Fund 29,359 - 2 (298) - (298)
Korea Omega Project Fund III 12,818 - 4,432 4,351 - 4,351
Soo Delivery Platform Growth
Fund 29,743 3 675 367 - 367
Company No.1 PEF 46,041 281 4,323 3,756 - 3,756
Asset Investment Trust No.3 89,450 687 4,262 1,546 - 1,546
Shinhan-Rhinos 1 Fund 13,474 - 143 129 - 129
No.20 18,764 15 1,247 1,187 - 1,187
Susung Mezzanine project P1
Private Investment Trust 10,023 351 22 (91) - (91)
151
2019
Other Total
Korea Finance Security W 32,079 10,386 64,964 (1,297) - (1,297)
Privately Placed Fund Trust #1 94,437 6,042 12,473 1,242 - 1,242
Lime Neptune Professional
Private 6 10,166 41 460 125 - 125
PCC S/W 2nd Fund 10,154 - 151 4 - 4
E&Healthcare Investment Fund
No.6 38,181 2 4,405 3,664 - 3,664
One Shinhan Global Fund 1 22,244 - 92 (406) - (406)
Kiwoom-Shinhan Innovation Fund
I 14,719 151 13 (432) - (432)
Investment Fund 55,686 33,103 1,292 183 - 183
Midas Asset Global CRE Debt
Private Fund No.6 118,438 70 3,907 2,677 - 2,677
Richmond Private Investment
Trust No.82 50,079 24,879 1,155 919 - 919
Professional Private5 40,792 103 1,628 (116) - (116)
Placement Special Asset Fund 5-
4 71,680 55 14,423 3,015 - 3,015
SHBNPP Senior Loan
Professional Investment Type
Private Mixed Asset Investment
Trust No.3 269,203 48 8,854 8,289 - 8,289
Recovery Private Equity Fund 67,222 218 1,187 449 - 449
Trust 14 61,696 39 7,404 2,427 - 2,427
Investment Trust No.30 39,779 270 1,817 1,547 - 1,547
Jarvis Memorial Private
Investment Trust 1 10,279 12 293 281 - 281
Mastern Private Private
Investment Trust 68 18,600 2 533 437 - 437
Real Estate Fund Investment
Trust No.37 7,336 7 214 (61) - (61)
Milestone Private Real Estate
Fund 3 (Derivative Type) 53,610 3 603 532 - 532
IGIS Private Real Estate
Investment Trust 286 (2 class) 75,372 51,870 2,838 (798) - (798)
Investment Trust 31 (2 class) 99,976 71,507 2,383 (331) - (331)
Lime Pricing Private Equity Fund 32,231 118 10 (388) - (388)
SHBNPP Senior Loan
Professional Investment Type
Private Mixed Asset Investment
Trust No.2 197,536 119 12,963 12,296 - 12,296
DS Solid.II Hedge Fund 15,042 - 4 (605) - (605)
152
follows (continued) :
2019
Other Total
Hana Semiconductor New
Technology Fund W 52,905 - 73 (595) - (595)
Specialized Private Equity Fund 24,513 - - (87) - (87)
Cape IT Fund No.3 30,333 35 - (101) - (101)
Estate Fund V 47,992 34 281 (1,084) - (1,084)
Korea Credit Bureau 95,764 20,075 66,314 10,604 - 10,604
SBC PFV Co., Ltd 120,000 40,000 - - - -
Equity Fund II 82,721 3 1,416 (4,833) - (4,833)
NH-amundi global infra private
fund 16 100,513 4,197 4,128 (2,744) - (2,744)
IMM Global Private Equity Fund 90,870 63 - (63) - (63)
HANA Alternative Estate
Professional Private122 34,897 45 1,561 (3,035) - (3,035)
Hanwha-Incus Plus New
Technology Fund No.1 12,900 1 - (1) - (1)
Security Investment Trust
No.7[Bond] 127,339 15,732 - - - -
Asset Investment Trust 402,633 141,200 10,036 7,256 - 7,256
PSA EMP Private Equity Fund 34,535 285 1 (250) - (250)
Investment Type Private Real
Estate Investment Trust No. 24 57,088 728 2,735 2,198 - 2,198
SHBNPP Peace of Mind TDF
2035 Security Investment Trust
[Equity Balanced-FoF] 22,926 641 - - - -
SHBNPP Peace of Mind TDF
2040 Security Investment Trust
[Equity Balanced-FoF] 23,865 1,329 - - - -
PRIVATE No. 27 10,305 10 58 (5) - (5)
Private1(S) 39,175 80 1,440 1,088 - 1,088
(*) Excluded the associates’ financial information that are not subject to recognizing equity method income or loss or
financial information is not available.
153
2018
Other Total
BNP Paribas Cardif Life
Insurance W 3,995,746 3,662,567 53,756 5,191 (10,268) (5,077)
Investment Fund 57,018 804 390 (724) (1,969) (2,693)
Fund 67,403 954 4,424 3,025 - 3,025
PEF 32,508 123 69 (793) - (793)
DAEKWANG
SEMICONDUCTOR CO., LTD. 25,459 9,537 15,794 (2,341) - (2,341)
Fund 17,347 315 19 (968) - (968)
Shinhan-Albatross Tech
Investment Fund 18,009 182 299 (435) 917 482
KCLAVIS Meister Fund No.17 11,866 47 398 167 - 167
SG No.9 Corporate Recovery
Private Equity Fund 5,566 181 - 2,136 - 2,136
Plutus-SG Private Equity Fund 16,012 69 778 499 - 499
No.1 18,085 46 - 888 - 888
Eum Private Equity Fund No.3 23,552 5 1,667 1,311 - 1,311
KTB Confidence Private
Placement 38,559 21,054 506 256 (3,629) (3,373)
Meritz AI-SingA330-A
Placement Special Asset Fund 22,739 1 1,451 62 - 62
Meritz AI-SingA330-B
Placement Special Asset Fund 41,809 2 3,027 1,044 - 1,044
VOGO DEBT STRATEGY
QUALIFIED INV PRIVATE
R/E INV TR 4 24,174 15 3,046 1,165 - 1,165
Platform Partners brick save
Private Investment trust 8,286 64 809 763 - 763
Technology Investment Fund 21,312 - 553 331 - 331
154
2018
Other Total
The Asia Pacific Capital Fund II
L.P. W 1,674 86 1 (25,828) - (25,828)
Private Equity Fund 87,897 307 31,059 26,381 - 26,381
Fund II 13,408 47 2,364 2,171 - 2,171
Private Real Estate Trust 19 57,678 36,839 3,383 422 - 422
AIP EURO GREEN PRIVATE
REAL ESTATE TRUST No.3 96,624 86 18,700 6,287 - 6,287
Brain Professional Private Trust
No.4 19,113 46 4,306 2,435 - 2,435
Hanhwa US Equity Strategy
Private Real Estate Fund No.1 58,575 77 10,098 6,139 - 6,139
Brain KS Qualified Privately
Placed Fund No.6 10,089 - 812 477 - 477
Shinhan Global Healthcare Fund 1 74,409 - 4 (2,757) - (2,757)
Fund 7 52,627 174 9,878 2,607 - 2,607
IBK AONE Convertible 1 12,807 307 2,042 1,660 - 1,660
Rico Synergy Collabo Multi-
Mezzanine 3 10,736 161 686 529 - 529
Asset Fund 91,694 67 9,601 4,877 - 4,877
GB Professional Private
Investment Trust 6 9,088 1 1 (13) - (13)
Placement Real Estate Fund
No.2-2 44,491 2,202 6,470 878 - 878
Long-Short Professional Feeder 77,465 10,728 18,729 728 - 728
Shinhan-Stonebridge Petro PEF 1,025,884 807 36,968 33,616 - 33,616
Insurance 51,211 16,986 10,972 (10,264) 196 (10,068)
Association 15,308 - 1 (245) - (245)
Private Equity Fund 15,193 10 - (75) - (75)
Fund 24,233 8 6 (18,025) - (18,025)
Shinhan AIM FoF Fund 1a 17,478 11 3,004 342 - 342
Private Investment Trust
No.1808 29,770 405 806 741 - 741
Heungkuk High Class
Professional Trust Private Fund
37 20,523 1,646 1,045 1,005 - 1,005
155
follows (continued) :
2018
Other Total
IGIS Global Credit Fund 150-1 W 35,453 27 3,457 214 - 214
Private Equity Fund 125,954 - 6 (12,146) - (12,146)
Fund 25,905 3 - (497) - (497)
Equity Fund 42,776 - 326 (224) - (224)
Genesis No.1 Private Equity Fund 201,103 434 - (1,360) - (1,360)
Investment Fund 29,657 - 3 (242) - (242)
Soo Delivery Platform Growth
Fund 29,946 2 - (56) - (56)
Company No.1 PEF 52,393 223 1 (1,922) - (1,922)
Asset Investment Trust No.3 26,826 237 2 (411) - (411)
(*) Excluded the associates’ financial information that are not subject to recognizing equity method income or loss or
financial information is not available.
156
(d) Reconciliation of the financial information to the carrying values of its interests in the associates as of December
31, 2019 and 2018 are as follows:
2019
Interests in the
Net assets Ownership net assets Intra-group Carrying
Investees (a) (%)(b) (a)*(b) transactions Other Value
BNP Paribas Cardif Life Insurance W 351,193 14.99 52,665 (79) - 52,586
Songrim Partners.(*1) (62) 35.34 (22) - 22 -
Investment Fund 49,152 33.33 16,384 - - 16,384
Partners 4th Growth Investment Fund 59,669 25.00 14,917 - - 14,917
PEF(*2) 37,036 30.00 11,110 - 170 11,280
Daekwang Semiconductor Co., Ltd. 16,179 20.94 3,388 - - 3,388
Shinhan-Neoplux Energy Newbiz Fund 33,773 23.33 7,880 - - 7,880
Shinhan-Albatross tech investment
Fund 17,499 50.00 8,734 - - 8,734
KCLAVIS Meister Fund No.17 4,593 26.09 1,198 - - 1,198
Plutus-SG Private Equity Fund 15,868 26.67 4,231 - - 4,231
Eum Private Equity Fund No.3 17,216 20.76 3,574 - - 3,574
KTB Confidence Private Placement 19,305 31.43 6,067 - - 6,067
Type Private Placement Special Asset
Fund 17,820 23.89 4,256 - - 4,256
Fund 44,226 20.16 8,916 - - 8,916
VOGO Debt Strategy Qualified INV
Private R/E INV TR 4 49,650 20.00 9,930 - - 9,930
Shinhan-Midas Donga Secondary Fund 6,972 50.00 3,486 - - 3,486
Investment Fund No.1 18,954 24.00 4,549 - - 4,549
Technology Investment Fund 8,215 47.62 3,912 - - 3,912
Private Equity Fund 54,601 18.87 10,302 - - 10,302
Fund II 6,977 34.07 2,377 - - 2,377
Private Real Estate Trust 19 20,816 50.00 10,407 - - 10,407
AIP EURO Green Private Real Estate
Trust No.3 98,135 21.28 20,884 - - 20,884
Real Estate Fund No.1 57,901 44.84 25,964 - - 25,964
Shinhan Global Healthcare Fund 1 72,687 4.41 3,209 - - 3,209
JB Power TL Investment Type Private
Placement Special Asset Fund 7 50,402 33.33 16,800 - - 16,800
IBK AONE convertible 1 12,861 47.25 6,077 - - 6,077
Rico synergy collabo Multi-Mezzanine
3 6,431 50.03 3,217 - - 3,217
KB NA Hickory Private Special Asset
Fund 95,813 37.50 35,930 - - 35,930
Placement Real Estate Fund No.2-2 44,438 44.02 19,562 - - 19,562
Shinhan-Stonebridge Petro PEF 38 1.82 1 - - 1
BNP Paribas Cardif General Insurance 21,128 10.00 2,113 - - 2,113
157
31, 2019 and December 31, 2018 are as follows (continued):
2019
Interests in the
Axis Global Growth New Technology
Investment Association W 10,064 31.85 3,205 - - 3,205
Fund 21,859 29.17 6,376 - - 6,376
SHC ULMUS Fund No.1 10,706 29.41 3,149 - - 3,149
Shinhan-Nvestor Liquidity Solution
Fund 19,524 24.92 4,865 - - 4,865
Shinhan AIM FoF Fund 1a 28,967 25.00 7,242 - - 7,242
IGIS Global Credit Fund 150-1 38,874 25.00 9,718 - - 9,718
Equity Fund 131,237 25.27 33,166 - - 33,166
Fund 25,762 24.62 6,343 - - 6,343
Partner One Value up I Private Equity
Fund 42,602 27.91 11,891 - - 11,891
Genesis No.1 Private Equity Fund 224,315 22.80 51,150 - - 51,150
Investment Fund 29,359 26.75 7,854 - - 7,854
Korea Omega Project Fund III 12,818 23.53 3,016 - - 3,016
Soo Delivery Platform Growth Fund 29,740 30.00 8,922 - - 8,922
Company No.1 PEF 45,759 39.92 18,275 - - 18,275
Hyungje art printing(*1) (264) 31.54 (83) - 83 -
Asset Investment Trust No.3 88,763 23.33 20,712 - - 20,712
Shinhan-Rhinos 1 Fund 13,474 22.48 3,029 - - 3,029
No.20 18,749 21.74 4,076 - - 4,076
Susung Mezzanine project P1 Private
Investment Trust 9,672 41.18 5,128 - - 5,128
Korea Finance Security 21,693 14.91 3,235 - - 3,235
MIEL CO.,LTD(*1) (119) 28.77 (34) - 34 -
Privately Placed Fund Trust #1 88,395 35.73 31,580 - - 31,580
Lime Neptune Professional Private 6 10,125 50.00 5,063 - - 5,063
PCC S/W 2nd Fund 10,154 29.56 3,001 - - 3,001
E&Healthcare Investment Fund No.6 38,179 20.37 7,776 - - 7,776
One Shinhan Global Fund 1 22,244 19.98 4,441 - - 4,441
Kiwoom-Shinhan Innovation Fund I 14,568 50.00 7,284 - - 7,284
Investment Fund 22,583 31.25 7,057 - - 7,057
Midas Asset Global CRE Debt Private
Fund No.6 118,368 20.05 23,731 - - 23,731
Richmond Private Investment Trust
No.82 25,200 60.00 15,120 - - 15,120
Professional Private5 40,689 48.71 19,820 - - 19,820
158
2019
Interests in the
Placement Special Asset Fund 5-4 W 71,625 42.92 30,742 - - 30,742
Recovery Private Equity Fund 67,004 21.43 14,358 - - 14,358
Trust 14 61,657 30.00 18,497 - - 18,497
Investment Trust No.30 39,509 37.50 14,816 - - 14,816
Jarvis Memorial Private Investment
Trust 1 10,267 99.01 10,166 - - 10,166
Mastern Private Private Investment
Trust 68 18,598 53.76 9,999 - - 9,999
Real Estate Fund Investment Trust
No.37 7,329 60.00 4,397 - - 4,397
Milestone Private Real Estate Fund 3
(Derivative Type) 53,608 32.06 17,186 - - 17,186
IGIS Private Real Estate Investment
Trust 286 (2 class) 23,502 41.56 9,768 - - 9,768
Investment Trust 31 (2 class) 28,469 31.31 8,914 - - 8,914
Lime Pricing Private Equity Fund 32,113 25.85 8,300 - - 8,300
DS Solid.II Hedge Fund 15,042 27.41 4,123 - - 4,123
Hana Semiconductor New Technology
Fund 52,905 24.30 12,856 - - 12,856
Specialized Private Equity Fund 24,513 24.39 5,979 - - 5,979
Cape IT Fund No.3 30,298 32.89 9,967 - - 9,967
Estate Fund V 47,958 21.64 10,376 - - 10,376
IL GU FARM CO.,LTD(*1) (316) 28.47 (90) - 90 -
Korea Credit Bureau 75,689 9.00 6,812 - - 6,812
SBC PFV Co., Ltd 80,000 25.00 20,000 - - 20,000
Equity Fund II 82,718 23.10 19,016 - - 19,016
NH-amundi global infra private fund
16 96,316 50.00 48,158 - - 48,158
IMM Global Private Equity Fund 90,807 31.85 28,925 - - 28,925
HANA Alternative Estate Professional
Private122 34,853 75.19 26,205 - - 26,205
Hanwha-Incus Plus New Technology
Fund No.1 12,899 42.64 5,499 - - 5,499
159
2019
Interests in the
Investment Type Private Security
Investment Trust No.7[Bond] W 111,607 45.96 51,293 - - 51,293
Asset Investment Trust 261,433 57.50 150,317 - - 150,317
PSA EMP Private Equity Fund 34,250 28.99 9,927 - - 9,927
Investment Type Private Real Estate
Investment Trust No. 24 56,360 52.28 29,463 - - 29,463
Balanced-FoF] 22,285 25.70 5,727 - - 5,727
Balanced-FoF] 22,536 25.42 5,729 - - 5,729
PRIVATE No. 27 10,295 29.13 3,065 - - 3,065
Private1(S) 39,095 25.00 9,869 - - 9,869
Other 337,794 - 85,931 - - 85,931
W 4,951,196 - 1,452,541 (79) 399 1,452,861

(*1) Other adjustments represent the unrecognized equity method losses because the Group has stopped recognizing
its equity method losses as the balance of the investment has been reduced to zero.
(*2) Other represents the adjustments of fair value when acquired.
(*3) Other represents the amount of preferred stock capital.
160
2018
Interests in the
BNP Paribas Cardif Life Insurance W 333,179 14.99 49,952 (136) - 49,816
Daewontos Co., Ltd.(*1) (2,092) 36.33 (760) - 760 -
Songrim Partners(*1) (23) 35.34 (8) - 8 -
Investment Fund 56,214 33.33 18,738 - - 18,738
Partners 4th Growth Investment Fund 66,449 25.00 16,612 - - 16,612
JAEYANG INDUSTRY(*2) (2,571) 25.90 (666) - 666 -
PEF(*2) 32,385 30.00 9,715 - 170 9,885
DAEKWANG SEMICONDUCTOR
CO., LTD. 15,922 20.94 3,334 - - 3,334
Shinhan-Neoplux Energy Newbiz Fund 17,032 23.33 3,974 - - 3,974
Shinhan-Albatross Tech Investment
Fund 17,827 50.00 8,908 - - 8,908
KCLAVIS Meister Fund No.17 11,819 26.09 3,083 - - 3,083
SG No.9 Corporate Recovery Private
Equity Fund 5,385 26.49 1,427 - - 1,427
Plutus-SG Private Equity Fund 15,943 26.67 4,252 - - 4,252
SG ARGES Private Equity Fund No.1 18,039 24.06 4,341 - - 4,341
Eum Private Equity Fund No.3 23,547 20.76 4,889 - - 4,889
KTB Confidence Private Placement 17,505 30.29 5,302 - - 5,302
Fund 22,738 23.89 5,432 - - 5,432
Fund 41,807 20.16 8,429 - - 8,429
VOGO DEBT STRATEGY
QUALIFIED INV PRIVATE R/E
INV TR 4 24,159 20.00 4,831 - - 4,831
Platform Partners brick save Private
Investment trust 8,222 98.77 8,120 - - 8,120
Technology Investment Fund 21,312 47.62 10,149 - - 10,149
The Asia Pacific Capital Fund II L.P. 1,588 25.18 400 - - 400
Fund II 13,361 34.07 4,553 - - 4,553
Private Real Estate Trust 19 20,839 50.00 10,419 - - 10,419
AIP EURO GREEN PRIVATE REAL
ESTATE TRUST No.3 96,538 21.28 20,544 - - 20,544
Brain Professional Private Trust No.4 19,067 27.50 5,244 - - 5,244
161
31, 2019 and December 31, 2018 are as follows (continued) :
2018
Interests in the
Real Estate Fund No.1 W 58,498 44.84 26,232 - - 26,232
Fund No.6 10,089 50.00 5,097 - - 5,097
Shinhan Global Healthcare Fund 1 74,409 4.41 3,285 - - 3,285
JB Power TL Investment Type Private
Placement Special Asset Fund 7 52,453 33.33 17,484 - - 17,484
IBK AONE Convertible 1 12,500 47.25 5,906 - - 5,906
Rico Synergy Collabo Multi-
Mezzanine 3 10,575 50.03 5,290 - - 5,290
KB NA Hickory Private Special Asset
Fund 91,627 37.50 34,360 - - 34,360
Trust 6 9,087 94.51 8,588 - - 8,588
Placement Real Estate Fund No.2-2 42,289 44.02 18,616 - - 18,616
SHBNPP Private Korea Equity Long-
Short Professional Feeder 66,737 21.52 14,370 - - 14,370
Shinhan-Stonebridge Petro PEF 1,025,077 1.82 18,681 - - 18,681
BNP Paribas Cardif General Insurance 34,225 10.00 3,423 - - 3,423
Axis Global Growth New Technology
Investment Association 15,308 31.85 4,875 - - 4,875
Fund 24,225 29.17 7,065 - - 7,065
Shinhan AIM FoF Fund 1a 17,467 24.91 4,351 - - 4,351
Private Investment Trust No.1808 29,365 34.48 10,126 - - 10,126
Trust Private Fund 37 18,877 50.00 9,438 - - 9,438
IGIS Global Credit Fund 150-1 35,426 25.11 8,896 - - 8,896
Fund 25,902 24.62 6,378 - - 6,378
Partner One Value up I Private Equity
Fund 42,776 27.91 11,939 - - 11,939
Genesis No.1 Private Equity Fund 200,669 22.80 45,758 - - 45,758
Investment Fund 29,657 26.75 7,934 - - 7,934
Soo Delivery Platform Growth Fund 29,944 30.00 8,983 - - 8,983
Company No.1 PEF 52,170 39.92 20,824 - - 20,824
Others 315,179 - 91,483 366 91,849
W 3,476,038 - 669,496 (136) 1,970 671,330
162
31, 2019 and 2018 are as follows (continued):
(*1) Other adjustments represent the unrecognized equity method losses because the Group has stopped recognizing
its equity method losses as the balance of the investment has been reduced to zero.
(*2) Other on this investee represents the cumulative losses as the Group has stopped the equity method, and its
carrying value becomes zero due to the adjustment for the difference between the cost of the investment and the
Group’s interests in the net carrying value of the investee’s assets and liabilities at the investment date.
(*3) Other represents the adjustments of fair value when acquired.
163
(e) The unrecognized equity method losses as of and for the years ended December 31, 2019 and 2018 are as follows:
2019
Unrecognized equity method Cumulative unrecognized
Investees losses equity method losses
Songrim Partners. W (14) (22)
Hyungje art printing (45) (83)
MIEL CO.,LTD (34) (34)
IL GU FARM CO.,LTD (90) (90)
W (183) (229)
2018
Unrecognized equity method Cumulative unrecognized
Investees losses equity method losses
Daewontos Co., Ltd.(*) W - (760)
JAEYANG INDUSTRY(*) - (18)
Songlim Partners. (8) (8)
Hyungje art printing (38) (38)
W (46) (824)
(*) Since the Group has disposed the investees fully or partially, the investees were excluded from the investments
in associates.
164
16. Investment properties
(a) Investment properties as of December 31, 2019 and 2018 are as follows:
2019 2018
Acquisition cost W 605,773 579,852
Accumulated depreciation (117,163) (105,032)
Carrying value W 488,610 474,820
(b) Changes in investment properties for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Beginning balance W 474,820 418,303
Acquisitions 2,767 115,333
Disposals (73,588) (13,608)
Depreciation (17,565) (16,917)
Amounts transferred from (to) property and equipment 104,573 (28,199)
Amounts transferred to assets held for sale(*) (15,795) -
Foreign currency adjustment (169) (92)
Business combination (Note 47) 13,567 -
Ending balance W 488,610 474,820
(*) Comprise land and buildings, etc.
(c) Income and expenses on investment property for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Rental income W 43,777 32,488
Direct operating expenses for investment properties that generated
rental income 12,107 12,191
(d) The fair value of investment property as of December 31, 2019 and 2018 is as follows:
2019 2018
Land and buildings(*) W 1,062,195 1,121,985
(*) Fair value of investment properties is estimated based on the recent market transactions and certain significant
unobservable inputs. Accordingly, fair value of investment properties is classified as level 3.
165
17. Other assets
Other assets as of December 31, 2019 and 2018 are as follows:
2019 2018
Accounts receivable W 9,355,388 7,666,217
Domestic exchange settlement debit 4,337,628 6,121,332
Guarantee deposits 1,184,572 1,152,434
Present value discount on guarantee deposits (45,316) (44,694)
Accrued income 2,612,823 1,896,822
Prepaid expense 193,849 194,040
Suspense payments 71,764 73,153
Sundry assets 93,766 92,221
Separate account assets 8,253,351 2,650,302
Advance payments 317,365 616,996
Unamortized deferred acquisition cost 907,868 786,134
Other 661,998 423,759
Allowances for credit loss of other assets (66,775) (56,798)
W 27,878,281 21,571,918
18. Leases
(a) Finance lease receivables of the Group as lessor as of December 31, 2019 and 2018 are as follows:
2019
Unearned finance Present value of minimum
Gross investment income lease payment
Not later than 1 year W 529,326 94,809 434,517
1 ~ 2 years 443,708 63,226 380,482
2 ~ 3 years 469,754 37,725 432,029
3 ~ 4 years 289,798 16,773 273,025
4 ~ 5 years 150,811 4,225 146,586
Later than 5 years 16,782 44 16,738
W 1,900,179 216,802 1,683,377
(*) Interest income on finance lease receivables recognized during the year is W74,933 million.
2018
Unearned finance Present value of minimum
Gross investment income lease payment
1 ~ 5 years 1,306,571 106,333 1,200,238
W 1,918,527 191,704 1,726,823
166
18. Leases (continued)
(b) The scheduled maturities of minimum lease payments for operating leases of the Group as lessor as of December
i) Finance lease
2019
Minimum lease Present value Present value of minimum
payment adjustment lease payment
1 ~ 2 years 443,708 63,226 380,482
2 ~ 3 years 469,754 37,725 432,029
3 ~ 4 years 289,798 16,773 273,025
4 ~ 5 years 150,811 4,225 146,586
W 1,900,179 216,802 1,683,377
2018
Minimum lease Present value Present value of minimum
payment adjustment lease payment
1 ~ 5 years 1,306,571 106,333 1,200,238
W 1,918,527 191,704 1,726,823
ii) Operating lease
2019
Minimum lease payment
Not later than 1 year W 142,140
1 ~ 2 years 118,781
2 ~ 3 years 76,379
3 ~ 4 years 37,047
4 ~ 5 years 14,984
Later than 5 years 83
W 389,414
2018
Minimum lease payment
Not later than 1 year W 94,540
1 ~ 5 years 180,304
Later than 5 years 10
W 274,854
167
(c) The details of the changes in operating lease assets for the year ended December 31, 2019 are as follows:
2019
Beginning balance W 370,868
Acquisition 411,971
Disposition (134,810)
Depreciation (98,288)
Ending balance W 549,741
(d) The details of the right-of-use assets by the lessee’s underlying asset type as of December 31, 2019 are as
follows:
2019
Accumulated
Real estate W 1,306,759 (228,956) 1,077,803
Vehicle 30,051 (8,057) 21,994
Others 20,396 (7,397) 12,999
W 1,357,206 (244,410) 1,112,796
(e) The details of the changes in the right-of-use assets for the year ended December 31, 2019 are as follows:
2019
Real estate Vehicle Others Total
Acquisitions 781,097 16,523 8,163 805,783
Disposals (10,808) (1,638) (149) (12,595)
Depreciation (280,691) (10,094) (7,753) (298,538)
Effects of foreign currency
movements 2,890 91 - 2,981
Business combination (Note 47) 30,837 584 168 31,589
Ending balance W 1,077,803 21,994 12,999 1,112,796
(f) The details of the maturity of the lease liability as of December 31, 2019 are as follows:
2019
1 month ~ 3 months ~ 6 months ~ 1 year ~
1 month 3 months 6 months 1 year 5 years More than
or less or less or less or less or less 5 years Total
Real estate W 20,967 34,357 47,644 86,228 848,699 28,973 1,066,868
Vehicle 1,378 1,542 2,178 4,108 14,410 - 23,616
Others 959 994 1,288 2,057 8,477 - 13,775
W 23,304 36,893 51,110 92,393 871,586 28,973 1,104,259
(*) The above amounts are based on undiscounted cash flows, and have been classified at the earliest maturity that
the Group has the obligation to pay.
168
(g) The lease payments for low-value assets and short-term leases for the year ended December 31, 2019 are as
follows:
2019
Low-value assets W 5,045
Short-term lease (*) 907
Total W 5,952
(*) The payments less than 1 month are included.
19. Pledged assets
(a) Assets pledged as collateral as of December 31, 2019 and 2018 are as follows:
2019 2018
Loans
Loans at amortized cost W 128,163 129,210
Securities
Securities at FVTPL 15,016,057 11,533,107
Securities at FVOCI 2,387,555 1,372,746
Securities at amortized cost 12,791,744 10,670,253
30,195,356 23,576,106
Deposits
Deposits at amortized cost 1,090,161 1,481,085
Property and Equipment (real estate) 121,446 154,490
Other financial assets 404 -
W 31,535,530 25,340,891
The carrying amounts of assets pledged that the pledgees have the right to sell or re-pledge regardless of the Group’s
default as of December 31, 2019 and 2018 are W9,696,487 million and W8,026,332 million, respectively.
(b) The fair value of collateral held that the Group has the right to sell or re-pledge regardless of pledger’s default
as of December 31, 2019 and 2018 are as follows:
2019
Collateral held
Assets pledged as collateral Assets received as collateral
Securities W 9,240,573 2,007,036
2018
Collateral held
Assets pledged as collateral Assets received as collateral
Securities W 7,342,239 5,190,387
169
20. Deposits
Deposits as of December 31, 2019 and 2018 are as follows:
2019 2018
Demand deposits:
Korean won W 103,048,895 94,210,806
Foreign currencies 13,233,812 11,950,027
116,282,707 106,160,833
Time deposits:
Korean won 139,824,896 123,572,793
Foreign currencies 18,602,551 16,071,970
158,427,447 139,644,763
Negotiable certificates of deposits 9,707,791 9,247,088
Note discount deposits 4,579,587 4,087,530
CMA 3,987,372 4,084,709
Others 1,889,352 1,775,267
W 294,874,256 265,000,190
170
21. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss as of December 31, 2019 and 2018 are as follows:
2019 2018
Securities sold:
Stocks W 298,008 488,873
Bonds 825,942 440,382
Others 40,747 32,117
1,164,697 961,372
Gold deposits 467,760 458,934
W 1,632,457 1,420,306
22. Financial liabilities designated at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss as of December 31, 2019 and 2018 are as follows:
Reason for
2019 2018 designation
Equity-linked securities sold W 6,880,811 6,439,292 Combined instrument
Securities sold with embedded derivatives 2,528,645 2,096,508 Combined instrument
W 9,409,456 8,535,800
(*) The Group designated the financial liabilities at the initial recognition (or subsequently) in accordance with
paragraph 6.7.1 of K-IFRS No. 1109 as financial liabilities at fair value through profit or loss.
Maximum credit risk exposure of the financial liabilities designated at fair value through profit or loss amounts to
W9,409,456 million as of December 31, 2019. Decrease in values of the liability due to credit risk changes are
W11,621 million for the year ended December 31, 2019 and the accumulated changes in values are W(-)11,386
million as of December 31, 2019.
171
23. Borrowings
Borrowings as of December 31, 2019 and 2018 are as follows:
2019 2018
Interest Interest
rate (%) Amount rate (%) Amount
Call money 0.00~ 5.25 W 712,247 0.00~6.85 W 1,425,162
Bill sold 0.80~ 1.60 19,070 0.75~1.70 14,536
Bonds sold under repurchase

agreements: 0.95~ 5.40 9,089,736 0.50~6.50 7,614,659
Borrowings in Korean won:

Borrowings from Bank of Korea 0.50~0.75 2,429,346 0.50~0.75 2,329,946
Others 0.00~6.00 14,202,096 0.00~4.25 12,108,741
16,631,442 14,438,687
Borrowings in foreign currencies:
Overdraft due to banks 0.00 86,791 0.00 77,673
Borrowings from banks 0.11~7.50 6,576,849 0.00~12.00 4,653,055
Others 1.94~13.65 1,748,031 2.60~7.90 1,596,626
8,411,671 6,327,354
Deferred origination costs (1,010) (1,856)
W 34,863,156 W 29,818,542
172
24. Debt securities issued
Debt securities issued as of December 31, 2019 and 2018 were as follows:
2019 2018
Interest Interest
rate (%) Amount rate (%) Amount
Debt securities issued in Korean won:
Debt securities issued 0.71~8.00 W 60,501,093 0.00~8.00 W 50,661,472
Subordinated debt securities issued 2.20~4.60 4,370,145 2.20~4.60 4,400,145
Loss on fair value hedges (87,692) (206,985)
Discount on debt securities issued (66,334) (84,962)
64,717,212 54,769,670
Debt securities issued in foreign
currencies:
Debt securities issued 0.01~7.59 6,750,085 0.20~4.01 6,278,680
Subordinated debt securities issued 3.34~5.10 3,797,536 3.75~5.00 2,271,799
Gain(Loss) on fair value hedges 141,264 (55,251)
Discount on debt securities issued (42,733) (37,199)
10,646,152 8,458,029
W 75,363,364 W 63,227,699
25. Employee benefits
(a) Defined benefit obligations and plan assets
Defined benefit obligations and plan assets as of December 31, 2019 and 2018 are as follows:
2019 2018
Present value of defined benefit obligations W 2,063,102 1,841,982
Fair value of plan assets (1,943,644) (1,714,634)
Recognized liabilities for defined benefit obligations(*) W 119,458 127,348

(*) The net defined benefit liability of W119,458 million as of December 31, 2019 is the net defined benefit liability
of W121,140 million less the net plan assets of W1,682 million.
173
25. Employee benefits (continued)
(b) Changes in the present value of defined benefit obligation and plan assets for the years ended December 31, 2019
2019
Defined benefit Net defined
obligation Plan assets benefit liability
Beginning balance W 1,841,982 (1,714,634) 127,348
Included in profit or loss:
Current service cost 172,490 - 172,490
Past service cost (1,588) - (1,588)
Interest expense (income) 57,253 (54,336) 2,917
Settlement expense (income) (29) - (29)
228,126 (54,336) 173,790
Included in other comprehensive income:
Remeasurement loss (gain):
- Actuarial gains (losses) arising from :
Demographic assumptions (7,584) - (7,584)
Financial assumptions 53,475 - 53,475
Experience adjustment 8,001 - 8,001
- Return on plan assets excluding interest
- 21,719 21,719
income
53,892 21,719 75,611
Other:
Benefits paid by the plan (87,066) 80,063 (7,003)
Contributions paid into the plan - (252,858) (252,858)
Settlement gain or loss 216 - 216
Business combination (Note 47) 25,965 (23,598) 2,367
Effect of movements in exchange rates (13) - (13)
(60,898) (196,393) (257,291)
Ending balance W 2,063,102 (1,943,644) 119,458
(*) Profit and loss related to defined benefit plans are included in the general administrative expense.
174
(b) Changes in the present value of defined benefit obligation and plan assets for the years ended December 31, 2019
and 2018 were as follows (continued):
2018
Defined benefit Net defined
obligation Plan assets benefit liability
Beginning balance W 1,695,191 (1,688,047) 7,144
Included in profit or loss:
Current service cost 144,923 - 144,923
Past service cost 54 - 54
Interest expense (income) 59,836 (66,676) (6,840)
204,813 (66,676) 138,137
Included in other comprehensive income:
Remeasurement loss (gain):
- Actuarial gains (losses) arising from :
Demographic assumptions 18,399 - 18,399
Financial assumptions 79,038 - 79,038
Experience adjustment (10,762) - (10,762)
- Return on plan assets excluding interest
-
income 41,701 41,701
86,675 41,701 128,376
Other:
Benefits paid by the plan (142,938) 137,335 (5,603)
Contributions paid into the plan - (139,348) (139,348)
Settlement gain or loss 407 - 407
Effect of movements in exchange rates (1,273) - (1,273)
Others(*2) (893) 401 (492)
(144,697) (1,612) (146,309)
Ending balance W 1,841,982 (1,714,634) 127,348
(*1) Profit or loss arising from defined benefit plans is included in general and administrative expenses.
(*2) Others represent the change amounts due to the conversion to defined contribution.
175
(c) The composition of plan assets as of December 31, 2019 and 2018 are as follows:
2019 2018
Plan assets comprise:
Equity securities W 256,353 257,581
Debt securities 28,094 817
Due from banks 1,577,274 1,394,634
Other 81,923 61,602
W 1,943,644 1,714,634
(d) Actuarial assumptions as of December 31, 2019 and 2018 are as follows:
2019 2018 Description

Discount rate 2.71%~3.17% 3.02%~3.22% AA0 corporate bond yields
1.80%~4.00% 0.99%~3.40%
Future salary increase rate Average for 5 years
+ Upgrade rate + Upgrade rate
8.2 years~ 7.7 years ~
Weighted average maturity
16.2 years 9.9 years
(e) Sensitivity analysis
As of December 31, 2019 and 2018, reasonably possible changes in one of the relevant actuarial assumptions, holding
other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.
2019
Defined benefit obligation
Increase Decrease
Discount rate (1%p movement) W (201,770) 233,057
Future salary increase rate (1%p movement) 231,967 (204,242)
2018
Defined benefit obligation
Increase Decrease
Discount rate (1%p movement) W (159,549) 180,542
Future salary increase rate (1%p movement) 176,924 (159,169)
26. Provisions
(a) Provisions as of December 31, 2019 and 2018 are as follows:
2019 2018
Asset retirement obligations W 64,922 49,183
Expected loss related to litigation 8,789 25,554
Unused credit commitments 263,752 232,347
Financial guarantee contracts issued 100,430 115,325
Others 119,131 86,007
W 557,024 508,416
176
26. Provisions (continued)
(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the years ended December 31, 2019 and 2018 are as follows:.
2019
Unused credit commitments Financial guarantee contracts issued
12 months expected Life time expected Impaired 12 months expected Life time expected Impaired financial
credit loss credit loss financial asset credit loss credit loss asset Total
Beginning allowance W 126,402 100,808 5,137 64,194 5,904 1,757 304,202

expected credit loss 42,838 (42,728) (110) 2,629 (2,629) - -
expected credit loss (9,286) 9,314 (28) (1,245) 1,245 - -
financial asset (229) (752) 981 (12) - 12 -
Provided (reversed) (28,611) 53,076 5,905 (4) 96 (943) 29,519
FX change 914 121 - 1,302 323 102 2,762
OtOthers (*) - - - 1,603 630 (117) 2,116
Ending balance W 132,028 119,839 11,885 68,467 5,569 811 338,599
(*) Others include effects of the provision from the new financial guarantee contracts measured at fair value, and the expired contracts, and the change of discount rate.
177
(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the years ended December 31, 2019 and 2018 are as follows (continued):
2018
Unused credit commitments Financial guarantee contracts issued
12 months expected Life time expected Impaired 12 months expected Life time expected Impaired financial
credit loss credit loss financial asset credit loss credit loss asset Total
Beginning allowance W 124,492 96,010 2,137 31,456 3,368 2,464 259,927

expected credit loss 42,514 (42,057) (457) 1,140 (1,140) - -
expected credit loss (8,899) 8,976 (77) (1,804) 1,804 - -
financial asset (213) (802) 1,015 (13) - 13 -
Provided (reversed) (32,070) 38,576 2,519 (3,964) 455 (690) 4,826
FX change 578 105 - 758 481 449 2,371
OtOthers (*) - - - 36,621 936 (479) 37,078
Ending balance W 126,402 100,808 5,137 64,194 5,904 1,757 304,202
(*) Others include effects of the provision from the new financial guarantee contracts measured at fair value, and the expired contracts, and the change of discount rate.
178
(c) Changes in provisions for the years ended December 31, 2019 and 2018 are as follows:
2019
Asset
retirement Litigation Guarantee Other Total
Beginning balance W 49,183 25,554 43,470 86,007 204,214
Provision(reversal) (1,280) (981) (19,329) (5,753) (27,343)
Provision used (1,930) (17,365) - (47,217) (66,512)
Foreign exchange
translation - - 1,420 382 1,802
Others(*) 4,476 - 22 3,784 8,282
(Note 47) 14,473 1,581 - 81,928 97,982
Ending balance W 64,922 8,789 25,583 119,131 218,425
(*)Others include the effects of unwinding and changes in discount rate.
2018
Asset
retirement Litigation Guarantee Other Total
Beginning balance(*1) W 45,495 32,650 46,340 75,512 199,997
Provision(reversal) 4,789 (1,138) (2,833) 4,900 5,718
Provision used (4,210) (6,343) - (7,554) (18,107)
Foreign exchange
translation - 385 1,677 (1,006) 1,056
Others(*2) 3,109 - (1,714) 14,155 15,550
Ending balance W 49,183 25,554 43,470 86,007 204,214
(*1) In accordance with K-IFRS No. 1115, the Group has adjusted all bonus card point reward program related to
customer loyalty programs.
(*2) Others include the effects of unwinding and changes in discount rate.
(d) Asset retirement obligation liabilities represent the estimated cost to restore the existing leased properties which
is discounted to the present value using the appropriate discount rate at the end of the reporting period.
Disbursements of such costs are expected to incur at the end of lease contract. Such costs are reasonably estimated
using the average lease year and the average restoration expenses. The average lease year is calculated based on the
past ten-year historical data of the expired leases. The average restoration expense is calculated based on the actual
costs incurred for the past three years using the three-year average inflation rate.
(e) Allowance for guarantees and acceptances as of December 31, 2019 and 2018 are as follows:
2019 2018
Guarantees and acceptances outstanding W 9,317,412 9,437,691
Contingent guarantees and acceptances 3,669,681 3,985,532
ABS and ABCP purchase commitments 2,116,354 2,083,522
Endorsed bill 11,287 37,667
W 15,114,734 15,544,412
Allowance for loss on guarantees and acceptances W 100,430 115,325
Ratio % 0.66 0.74
179
27. Liability under insurance contracts
(a) Insurance liabilities as of December 31, 2019 and 2018 are as follows:
2019 2018
Policy reserve W 52,086,132 26,211,044
Policyholder’s equity adjustment 77,285 7,838
W 52,163,417 26,218,882
(b) Policy reserve as of December 31, 2019 and 2018 are as follows:
2019 2018
Interest rate linked W 30,058,020 17,328,353
Fixed interest rate 22,028,112 8,882,691
W 52,086,132 26,211,044
180
27. Liability under insurance contracts (continued)
(c) The details of policy reserves as of December 31, 2019 and 2018 are as follows:
2019
Individual insurance Group insurance
Pure endowment Death Endowment Subtotal Pure protection Savings Subtotal Total
Premium reserve W 14,668,777 24,979,936 10,443,287 50,092,000 21,912 60 21,972 50,113,972
Guarantee reserve 29,400 249,845 744 279,989 - - - 279,989
Unearned premium reserve 2 945 - 947 291 - 291 1,238
Reserve for outstanding claims 212,641 1,084,472 233,259 1,530,372 16,858 - 16,858 1,547,230
Interest rate difference guarantee
reserve 2,158 149 10 2,317 - - - 2,317
Mortality gains reserve 8,945 42,173 153 51,271 2 - 2 51,273
Interest gains reserve 24,486 267 17 24,770 - - - 24,770
Expense gains reserve 6,211 9,434 1 15,646 - - - 15,646
Long term duration dividend reserve 31,202 15,388 13 46,603 - - - 46,603
Reserve for policyholder’s profit
dividend 2,268 - - 2,268 - - - 2,268
Reserve for losses on dividend
insurance contract 826 - - 826 - - - 826
W 14,986,916 26,382,609 10,677,484 52,047,009 39,063 60 39,123 52,086,132
181
(c) The details of policy reserves as of December 31, 2019 and 2018 are as follows (continued):
2018
Individual insurance Group insurance
Pure endowment Death Endowment Subtotal Pure protection Savings Subtotal Total
Premium reserve W 5,729,045 11,722,964 7,482,084 24,934,093 24,422 58 24,480 24,958,573
Guarantee reserve 10,148 64,978 124 75,250 - - - 75,250
Unearned premium reserve 3 301 - 304 506 - 506 810
Reserve for outstanding claims 99,676 837,317 185,328 1,122,321 18,089 - 18,089 1,140,410
Interest rate difference guarantee
reserve 2,068 148 11 2,227 - - - 2,227
Mortality gains reserve 7,026 4,741 176 11,943 3 - 3 11,946
Interest gains reserve 18,662 254 19 18,935 - - - 18,935
Long term duration dividend reserve 52 9 1 62 - - - 62
Reserve for policyholder’s profit
dividend 1,773 - - 1,773 - - - 1,773
Reserve for losses on dividend
insurance contract 1,058 - - 1,058 - - - 1,058
W 5,869,511 12,630,712 7,667,743 26,167,966 43,020 58 43,078 26,211,044
182
(d) Reinsurance credit risk as of December 31, 2019 and 2018 are as follows:
2019 2018
Reinsurance Reinsurance
Reinsurance account Reinsurance account
assets receivable assets receivable
AAA W 11,477 18,192 - -
AA- to AA+ 34,498 46,302 2,451 4,416
A- to A+ 2,287 4,113 1,622 3,598
W 48,262 68,607 4,073 8,014
(e) Income or expenses on insurance for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Insurance income:
Premium income W 7,386,854 4,348,745
Reinsurance income 146,564 15,222
Separate account income 36,007 34,771
7,569,425 4,398,738
Insurance expenses:
Claims paid 5,436,069 2,549,147
Reinsurance premium expenses 165,979 18,482
Provision for policy reserves (*) 1,724,816 1,694,716
Separate account expenses 36,007 34,770
Discount charge 657 669
Acquisition costs 805,508 454,479
Collection expenses 19,049 16,046
Deferred acquisition costs (495,534) (283,665)
Amortization of deferred acquisition costs 373,800 385,793
8,066,351 4,870,437
Net loss on insurance W (496,926) (471,699)

(*) Interest expenses on savings insurance contracts are included. (Accumulated W1,907,954 million as of
December 31, 2019 and accumulated W964,816 million as of December 31, 2018)
183
(f) Maturity of premium reserve as of December 31, 2019 and 2018 are as follows:
2019
Less than 1~3 3~7 7 ~ 10 10 ~ 20 More than
Total
1 year years years years years 20 years
Fixed interest rate W 845,304 2,079,125 2,118,652 941,413 2,236,313 20,732,909 28,953,716
Interest rate linked 213,892 329,647 1,032,366 572,153 2,058,859 16,953,340 21,160,257
Ending balance W 1,059,196 2,408,772 3,151,018 1,513,566 4,295,172 37,686,249 50,113,973
2018
Less than 1~3 3~7 7 ~ 10 10 ~ 20 More than
Total
1 year years years years years 20 years
Fixed interest rate W 111,102 247,619 741,222 502,572 1,288,815 5,284,548 8,175,878
Interest rate linked 195,843 922,832 1,247,871 343,562 1,500,893 12,571,694 16,782,695
Ending balance W 306,945 1,170,451 1,989,093 846,134 2,789,708 17,856,242 24,958,573
(g) Liability adequacy test, LAT – Shinhan Life Insurance Co., Ltd.
i) Scope
Liability adequacy tests were performed on the premium reserve, unearned premium reserve and guarantee reserve
for the contracts held at December 31, 2019 and 2018. The premium reserve considered the amount net level
premium reserve less, where appropriate, deferred acquisition cost in accordance with the article 6-3 of Regulation
on Supervision of Insurance Business Act.
ii) Output overview
In the debt appraisal system, the insurance premium surplus method is applied to calculate premium deficits.
Premium deficiency refers to deficiency when the amount of accumulated reserve is insufficient due to a decrease in
the interest rate after the sale of the product or an increase in the risk rate compared with the expected basic rate at
the time of product development.
The insurance premium standard inspection method is a method of calculating the reserve amount based on the
present value of total income reflecting the interest rate, the risk rate, the business ratio, the cancellation rate, etc.
and the present value of the total expenditure, that is, (discount rate), business ratio, risk rate, and cancellation rate
calculated based on the Group’s own experience, which reflects company-specific characteristics, and does not
reflect subjective factors such as management's willingness to improve management.
184
(g) Liability adequacy test, LAT – Shinhan Life Insurance Co., Ltd. (continued)
iii) The assumptions of the current estimation used to assessment and their basis for calculation was as follows:
Assumptions
2019 2018 Measurement basis
The scenario adding liquidity
Discount premium to risk-free rate, which is
2.02% ~ 8.35% 2.25% ~ 8.32%
rate suggested from Financial Supervisory
Service
Ratio by claims paid per premium
Mortality paid on risk premium based on
11.36% ~ 497.99% 2.58% ~ 247.65%
rate experience-based rate by products,
collateral of last 5 years.
Acquisition cost Acquisition cost
- The first time : - The first time :
90.00% ~ 1,022.75% 90.00% ~ 982.70%
- From the second time : - From the second time :
Operating 0.00% ~ 193.50% 0.00% ~ 193.50% Business rate on insurance premium
expense Maintenance expense (each Maintenance expense (each or expenses per contract based on
rate case): case): experience-based rate of last 1 year
1,229 won ~ 3,332 won 207 won ~ 3,531 won
Collection expenses (on gross Collection expenses (on gross
premium): premium):
0.05% ~ 1.27% 0.04% ~ 1.10%
Surrender ratio by elapsed period,
Surrender
0.76% ~ 33.03% 0.95% ~ 48.35% classes of sales channel, product of
ratio
last 5 years
iv) The result of liability adequacy test as of December 31, 2019 and 2018 are as follows:
2019
Premium loss
Provisions for test LAT base (surplus)
Participating:
Fixed interest W 595,317 1,248,489 653,172
Variable interest 900,378 1,002,149 101,771
1,495,695 2,250,638 754,943
Non- Participating:
Fixed interest 6,608,221 3,079,715 (3,528,506)
Variable interest 14,563,065 12,340,762 (2,222,303)
21,171,286 15,420,477 (5,750,809)
W 22,666,981 17,671,115 (4,995,866)
185
(g) Liability adequacy test, LAT – Shinhan Life Insurance Co., Ltd. (continued)
iv) The result of liability adequacy test as of December 31, 2019 and 2018 are as follows (continued):
2018
Premium loss
Provisions for test LAT base(*) (surplus)
Participating:
Fixed interest W 589,618 1,322,481 732,863
Variable interest 859,858 939,791 79,933
1,449,476 2,262,272 812,796
Non- Participating:
Fixed interest 6,009,771 2,822,160 (3,187,611)
Variable interest 14,149,581 12,037,953 (2,111,628)
20,159,352 14,860,113 (5,299,239)
W 21,608,828 17,122,385 (4,486,443)
(*) It is recalculated in accordance with the revised discount rate calculation rules for the year December 31, 2019.
v) Sensitivity analysis as of December 31, 2019 and 2018 are as follows:
LAT fluctuation
2019 2018(*)
Discount rate increased by 0.5% W (1,582,746) (1,610,988)
Discount rate decreased by 0.5% 1,906,134 1,938,357
Operating expense increased by 10% 292,246 229,339
Mortality rate increased by 10% 873,184 837,453
Mortality rate increased by 5% 438,685 420,774
Surrender ratio increased by 10% 373,062 291,806
(*) It is recalculated in accordance with the revised discount rate calculation rules for the year December 31, 2019.
186
(h) Liability adequacy test, LAT – Orange Life Insurance Co., Ltd.
i) Scope
Liability adequacy tests were performed on the premium reserve, unearned premium reserve and guarantee reserve
for the contracts held at December 31, 2019. The premium reserve considered the amount net level premium reserve
less, where appropriate, deferred acquisition cost in accordance with the article 6-3 of Regulation on Supervision of
Insurance Business Act.
ii) Output overview
In the debt appraisal system, the insurance premium surplus method is applied to calculate premium deficits.
Premium deficiency refers to deficiency when the amount of accumulated reserve is insufficient due to a decrease in
the interest rate after the sale of the product or an increase in the risk rate compared with the expected basic rate at
the time of product development.
The insurance premium standard inspection method is a method of calculating the reserve amount based on the
present value of total income reflecting the interest rate, the risk rate, the business ratio, the cancellation rate, etc.
and the present value of the total expenditure, that is, (discount rate), business ratio, risk rate, and cancellation rate
calculated based on the Group’s own experience, which reflects company-specific characteristics, and does not
reflect subjective factors such as management's willingness to improve management.
187
(h) Liability adequacy test, LAT – Orange Life Insurance Co., Ltd. (continued)
iii) The assumptions of the current estimation used to assessment and their basis for calculation was as follows:
Assumptions
2019 Measurement basis
The scenario adding liquidity premium to risk-free
Discount rate 2.07% ~ 10.86% rate, which is suggested from Financial
Supervisory Service
Ratio by claims paid per premium paid on risk

Mortality rate 20.00% ~ 255.00% premium based on experience-based rate by
products, collateral of last 5 years.
Acquisition cost (each case):
5,500 won ~ 1,227,000 won
- Proportional to annualized premium: Based on the recent one-year experience statistics,
0.00% ~ 12.55% the Company reflects the company's future
Operating Maintenance expense (each case): business cost policy to calculate the unit business
expense rate 50 won ~ 32,500 won cost by cost driver by division (new contract cost /
- Proportional to premium income: maintenance cost) and sales channel. However,
0.42% ~ 3.45% temporary expenses incurred unusually is excluded.
- Proportional to surrender value:
0.12%
Based on experience statistics for the last five years
or more, annual premiums are calculated based on
Surrender ratio 0.00% ~ 50.00% product group, payment method, channel, and
elapsed period. Payment status (full payment and
pension initiation) and tax benefits are included.
iv) The result of liability adequacy test as of December 31, 2019 are as follows:
2019
Premium loss
Provisions for test LAT base (surplus)
Participating:
Fixed interest W 716,607 644,715 (71,892)
Variable interest 1,134,245 1,541,967 407,722
1,850,852 2,186,682 335,830
Non- Participating:
Fixed interest 9,296,542 4,629,266 (4,667,276)
Variable interest 9,236,731 8,635,022 (601,709)
Variable type (*) (268,818) (1,882,573) (1,613,755)
18,264,455 11,381,715 (6,882,740)
W 20,115,307 13,568,397 (6,546,910)
(*) Variable type refers to a variable insurance.
188
(h) Liability adequacy test, LAT – Orange Life Insurance Co., Ltd. (continued)
v) Sensitivity analysis as of December 31, 2019 is as follows:
LAT fluctuation
2019
Discount rate increased by 0.5% W (1,203,136)
Discount rate decreased by 0.5% 1,686,867
Operating expense increased by 10% 245,181
Mortality rate increased by 10% 877,624
Mortality rate increased by 5% 440,025
Surrender ratio increased by 10% 421,767
28. Other liabilities
Other liabilities as of December 31, 2019 and 2018 are as follows:
2019 2018
Lease liabilities W 1,104,259 -
Accounts payable 11,894,764 9,748,168
Accrued expenses 3,502,538 3,267,188
Dividend payable 31,599 49,486
Advance receipts 173,850 131,386
Unearned income 294,710 236,827
Withholding value-added tax and other taxes 720,053 547,097
Securities deposit received 1,903,119 651,153
Foreign exchange remittances pending 243,532 225,956
Domestic exchange remittances pending 1,452,955 1,115,939
Borrowing from trust account 5,350,285 2,999,445
Due to agencies 744,660 779,473
Deposits for subscription 60,500 76,019
Separate account liabilities 8,700,695 2,845,380
Sundry liabilities 1,968,823 2,496,169
Other 151,056 50,881
Present value discount (59,840) (20,888)
W 38,237,558 25,199,679
(*) As of December 31, 2019, the Group accounts for the lease liabilities as other liabilities. During the year ended
December 31, 2019, the amount of variable lease payments that are not included in the measurement of lease liabilities
is W189 million, cash outflows from leases are W275,218 million, and interest expense on lease liabilities is W11,291
million.
189
29. Equity
(a) Equity as of December 31, 2019 and 2018 are as follows:
2019 2018
Capital stock:
Common stock W 2,370,998 2,370,998
Preferred stock(*1) 361,465 274,055
2,732,463 2,645,053
Hybrid bond 1,731,235 1,531,759
Capital surplus:
Share premium(*1) 10,155,150 9,494,769
Others 410,203 400,719
10,565,353 9,895,488
Capital adjustments(*2) (1,116,770) (552,895)
Accumulated other comprehensive income, net of tax:

Gain on financial assets at fair value through other comprehensive
income 306,470 2,958
Gain(Loss) on financial assets at fair value through profit or loss
(overlay approach) 71,621 (79,057)
Equity in other comprehensive income of associates 8,177 4,883
Foreign currency translation adjustments for foreign operations (217,465) (321,853)
Net loss from cash flow hedges (33,711) (17,751)
Other comprehensive income of separate account 14,539 4,112
Actuarial losses (401,532) (346,682)
Changes in own credit risk on financial liabilities designated under fair
value option (8,255) 170
(260,156) (753,220)
Retained earnings(*3),(*4),(*5) 25,525,821 22,959,440
Non-controlling interest (*6),(*7) 2,752,435 925,805

W 41,930,381 36,651,430
(*1) For the year ended December 31, 2019, W750,000 million scale of convertible preferred share was issued.
Investors may claim the conversion after one year from the date of issue to the day before the fourth year from the
date of issue and convertible shares not converted until the fourth year from the date of issue will be automatically
converted on the day of the fourth year from the date of issue.
(*2) The Group acquired treasury stocks through a treasury stock trust for the years ended December 31, 2019 and
2018 and has recognized the consideration paid in equity, directly. The Group entered into a shareholders’ agreement
to acquire additional shares in the Asia Trust Co., Ltd., resulting in decrease of W125,829 million in capital adjustment
for the year ended December 31, 2019.
(*3) As of December 31, 2019 and 2018, profits reserved by the Group as of Article 53 of the Financial Holding
Companies Act amounted to W2,191,677 million and W2,068,190 million, respectively.
(*4) As of December 31, 2019 and 2018, the regulatory reserves for loan losses the Group appropriated in retained
earnings are W8,728 million and W7,572 million, respectively.
(*5) As of December 31, 2019, profit dividends within retained earnings of subsidiaries of the Group subject to a
restricted dividend in accordance with laws, etc. are amounted to W6,419,934 million.
190
(In millions of won, except per share data)
29. Equity (continued)
(a) Equity as of December 31, 2019 and 2018 are as follows (continued):
(*6) As of December 31, 2019 and 2018, the total amounts of hybrid bonds that Shinhan Bank, Jeju Bank and Shinhan
Capital have recognized as non-controlling interests were W1,147,635 million and W748,497 million, respectively.
And, as of December 31, 2019 and 2018, the amounts of dividends paid for the hybrid bonds by Shinhan Bank, Jeju
Bank, and Shinhan Capital, W36,729 million and W27,546 million, respectively, are allocated to the net income of
non-controlling interest.
(*7) The non-controlling interest of W1,250,333 million increased due to business combination with Orange Life
Insurance Co.,Ltd and Asia Trust Co., Ltd. for the year ended December 31, 2019. (Note 47)
(b) Capital stock
Capital stock of the Group as of December 31, 2019 and 2018 are as follows:
Number of authorized shares 1,000,000,000

Par value per share in won W 5,000
Number of issued common stocks outstanding 474,199,587
Number of issued preferred stocks outstanding as of December 31,2019 17,482,000
(c) Hybrid bonds
Hybrid bonds classified as other equity instruments as of December 31, 2019 and December 31, 2018 are as follows:
Interest
Issue date Currency Maturity date rate (%) 2019 2018
June 25, 2015 KRW June 25, 2045 4.38 W 199,455 199,455
September 15, 2017 〃 - 3.77 134,683 134,683
September 15, 2017 〃 - 4.25 89,783 89,783
April 13, 2018 〃 - 4.08 134,678 134,678
April 13, 2018 〃 - 4.56 14,955 14,955
August 29, 2018 〃 - 4.15 398,679 398,679
June 28, 2019 〃 - 3.27 199,476 -
August 13, 2018 USD - 5.88 559,526 559,526
W 1,731,235 1,531,759
The Group can make advanced redemption for the above bonds, after 5 or 10 years from the issuance date; and has
unconditional rights to extend the maturity under the same condition. In addition, if the determination has been made
that dividend is not paid for common shares, then the interest for the above bonds is also not paid.
(d) Capital adjustments
Changes in capital adjustments for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Beginning balance W (552,895) (398,035)
Acquisition of stocks (444,077) (155,923)
The Acqusition commitment amount for subsidiaries’s remaining
shares (125,830) -
Other transactions with owners 6,032 1,063
Ending balance W (1,116,770) (552,895)
191
(e) Accumulated other comprehensive income
Changes in accumulated other comprehensive income for the years ended December 31, 2019 and 2018 are as follows:
2019
Items that are or may be reclassified to profit or loss Items that will never be reclassified to profit or loss
Gain (loss) on
Gain (loss) on financial
Gain (loss) on valuation of Foreign Gain (loss) on Liabilities meas
financial asset financial asset Equity in currency Net gain Other Remeasure Equity in financial asset ured at
at fair value measured at other translation (loss) comprehend- -ments of other at fair value FVTPL
through other FVTPL comprehensiv adjustments from cash sive income the defined comprehensiv through attributable to
comprehensive (overlay e income of for foreign flow of separate benefit e income of other comprehe changes in
income approach) associates operations hedges account plans associates -nsive income credit risk Total
Beginning balance W (51,300) (79,057) 4,891 (321,853) (17,751) 4,112 (346,682) (8) 54,258 170 (753,220)
Change due to fair value 491,953 225,706 3,353 - - 14,382 - (11) 19,935 (11,621) 743,697
Reclassification:
Change due to
impairment or
disposal (23,281) - - - - - - - - - (23,281)
Effect of hedge
accounting - - - - (75,020) - - - - - (75,020)
Hedging (731) - - (49,361) 50,083 - - - - - (9)
Effects from exchange
rate fluctuations - - - 147,899 - - - - 293 - 148,192
Remeasurements of the
defined benefit plans - - - - - - (75,595) - - - (75,595)
Deferred income taxes (115,856) (62,739) (51) 7,233 6,348 (3,955) 20,951 3 (7,204) 3,196 (152,074)
Transfer to other
account - - - - - - - - 5,860 - 5,860
Non-controlling
interests (67,457) (12,289) - (1,383) 2,629 - (206) - - - (78,706)
Ending balance W 233,328 71,621 8,193 (217,465) (33,711) 14,539 (401,532) (16) 73,142 (8,255) (260,156)
192
(e) Accumulated other comprehensive income (continued)
Changes in accumulated other comprehensive income for the years ended December 31, 2019 and 2018 are as follows (continued):
2018
Items that are or may be reclassified to profit or loss Items that will never be reclassified to profit or loss
Gain (loss) on
Gain (loss) on financial
Gain (loss) on valuation of Foreign Gain (loss) on Liabilities meas
financial asset financial asset Equity in currency Net gain Other Remeasure Equity in financial asset ured at
at fair value measured at other translation (loss) comprehend- -ments of other at fair value FVTPL
through other FVTPL comprehensiv adjustments from cash sive income the defined comprehensiv through attributable to
comprehensive (overlay e income of for foreign flow of separate benefit e income of other comprehe changes in
income approach) associates operations hedges account plans associates -nsive income credit risk Total
Beginning balance W (211,003) (24,724) (2,516) (342,318) 2,441 (4,564) (253,995) (46) 31,533 (1,553) (806,745)
Change due to fair value 225,173 (74,942) (2,327) - - 11,967 - 39 25,077 2,376 187,363
Reclassification:
Change due to
impairment or
disposal 15,812 - 13,103 - - - - - - - 28,915
Effect of hedge
accounting - - - - (92,272) - - - - - (92,272)
Hedging (2,365) - - (35,879) 60,501 - - - - - 22,257
Effects from exchange
rate fluctuations 1,733 - - 45,904 - - - - 423 - 48,060
Remeasurements of the
defined benefit plans - - - - - - (128,139) - - - (128,139)
Deferred income taxes (79,345) 20,609 (3,369) 9,958 11,579 (3,291) 35,041 (11) (5,410) (653) (14,892)
Transfer to other
account - - - - - - - 10 2,635 - 2,645
Non-controlling
interests (1,305) - - 482 - - 411 - - - (412)
Ending balance W (51,300) (79,057) 4,891 (321,853) (17,751) 4,112 (346,682) (8) 54,258 170 (753,220)
193
(f) Appropriation of retained earnings
Statements of appropriation of retained earnings for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Date of appropriation: March 26, 2020 March 27, 2019
Unappropriated retained earnings:
Balance at beginning of year W 5,184,339 4,867,521
Net effect due to change in accounting policy - (23)
Dividend to hybrid bonds (61,993) (40,357)
Net income 1,129,173 1,234,883
6,251,519 6,062,024
Appropriation of retained earnings:
Legal reserve (112,917) (123,488)
Dividends
Dividends on common stocks paid (851,587) (753,041)
Dividends on preferred stocks paid (32,342) -
Regulatory reserve for loan losses (3,260) (1,156)
(1,000,106) (877,685)
Unappropriated retained earnings
to be carried over to subsequent year W 5,251,413 5,184,339
(*) These statements of appropriation of retained earnings are based on the separate financial statements of Shinhan
Finance Group.
(g) Regulatory reserve for loan losses
In accordance with Regulations for the Supervision of Financial Institutions, the Group reserves the difference
between allowance for credit losses by K-IFRS and that as required by the Regulations at the account of regulatory
reserve for loan losses in retained earnings.
i) Changes in regulatory reserve for loan losses including non-controlling interests for the years ended December
2019 2018
Beginning balance W 2,844,690 2,885,018
K-IFRS No. 1109 adoption - (388,551)
Business combination 25,608 -
Planned regulatory reversal of loan losses 290,872 348,223
Ending balance W 3,161,170 2,844,690
194
(g) Regulatory reserve for loan losses (continued)
ii) Profit attributable to equity holders of Shinhan Financial Group and earnings per share after factoring in
regulatory reserve for loan losses for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Profit attributable to equity holders of Shinhan Financial Group W 3,403,497 3,156,722
Provision for regulatory reserve for loan losses (*1) (292,728) (348,127)
Profit attributable to equity holders of Shinhan Financial Group adjusted
for regulatory reserve W 3,110,769 2,808,595
Basic and diluted earnings per share adjusted for regulatory reserve in
won(*2) 6,387 5,844
(*1) The increase in reserve for credit losses, W25,608 million, due to the business combination with Orange Life
insurance and Asia Trust. during the year is excluded.
(*2) Dividends for hybrid bonds are deducted.
(h) Treasury stock
The acquisitions of treasury stock as of December 31, 2019 and 2018 are as follows::
2019
Beginning Ending
balance Acquisition balance
The number of share 3,648,659 10,233,403 13,882,062
Carrying value W 155,923 444,077 600,000
(*) The Group entered into a treasury stock trust agreement with Samsung Securities Co., Ltd., and acquired treasury
stocks.
2018
Beginning Ending
balance Acquisition balance
The number of share - 3,648,659 3,648,659
Carrying value W - 155,923 155,923
195
30. Dividends
(a) Details of dividends recognized as distributions to stockholders for the years ended December 31, 2019 and 2018
are as follows:
2019 (*1) 2018

Common Stock
Total number of shares issued and outstanding W 474,199,587 474,199,587
Par value per share in won 5,000 5,000
Dividend per share in won 1,850 1,600
Dividends(*2) W 851,587 753,041
Dividend rate per share % 37.0 32.0
Preferred Stock
Total number of shares issued and outstanding W 17,482,000 -
Par value per share in won 5,000 -
Dividend per share in won 1,850 -
Dividends W 32,342 -
Dividend rate per share % 37.0 -
(*1) The dividend is the amount of dividend that will be paid on March 26, 2020 and is not recognized as a
distribution to the owners during the year.
(*2) Dividends on own shares held by the Group are excluded.
(b) Dividend for hybrid bond was calculated as follows for the years ended December 31, 2019 and 2018:
2019 2018
Amount of hybrid bond W 1,738,150 1,538,150
Interest rate % 3.27 ~ 5.88 3.77 ~ 5.88
Dividend W 61,993 40,357
196
31. Net interest income
Net interest income for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Interest income:
Cash and deposits at amortized cost W 210,415 155,075
Deposits at FVTPL 31,506 33,845
Securities at FVTPL 740,378 623,651
Securities at FVOCI 1,077,995 759,301
Securities at amortized cost 1,061,262 730,382
Loans at amortized cost 12,435,302 11,158,558
Loans at FVTPL 56,961 23,110
Others 93,543 88,534
15,707,362 13,572,456
Interest expense:
Deposits (3,644,632) (3,091,659)
Borrowings (551,416) (468,068)
Debt securities issued (1,666,257) (1,336,840)
Others (107,093) (95,800)
(5,969,398) (4,992,367)
Net interest income W 9,737,964 8,580,089
197
32. Net fees and commission income
Net fees and commission income for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Fees and commission income:
Credit placement fees W 66,666 62,766
Commission received as electronic charge receipt 151,584 146,309
Brokerage fees 353,382 412,165
Commission received as agency 140,484 120,508
Investment banking fees 151,031 91,273
Commission received in foreign exchange activities 244,325 214,395
Asset management fees 307,167 235,275
Credit card fees 1,234,239 1,360,322
Operating lease fees (*) 142,025 82,141
Others 766,110 570,102
3,557,013 3,295,256
Fees and commission expense:
Credit-related fee (42,023) (36,817)
Credit card fees (915,521) (944,533)
Others (458,950) (374,909)
(1,416,494) (1,356,259)
Net fees and commission income W 2,140,519 1,938,997

(*) Among operating lease fees recognized during the current period, there is no variable lease fee income which does
not vary by index or rate.
33. Dividend income
Dividend income for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Securities at FVTPL W 65,572 70,955
Securities at FVOCI 16,586 16,871
W 82,158 87,826
198
34. Net gain (loss) on financial instruments measured at fair value through profit or loss
Net gain (loss) on financial instruments measured at fair value through profit or loss for the ended December 31,
2019 2018
Net gain (loss) on deposits measured at FVTPL
Gain (loss) on valuation W 87,374 (61,848)
Gain on sale 13,400 -
100,774 (61,848)
Net gain (loss) on loans measured at FVTPL
Gain (loss) on valuation (248,032) 916
Gain on sale 10,395 9,133
(237,637) 10,049
Net gain (loss) on securities measured at FVTPL
Debt securities
Gain on valuation 137,181 111,029
Gain on sale 125,431 78,718
Other gains 297,024 223,731
559,636 413,478
Equity securities
Gain (loss) on sale 183,969 (275,356)
325,215 11,445
Other
Net gain (loss) on financial liabilities measured at FVTPL

Debt securities
Loss on valuation (16,810) (115,667)
Gain (loss) on disposition (35,710) 268,932
(52,520) 153,265
Other
Loss on valuation (91,025) (14,892)
Gain on disposition 4,169 1,394
(86,856) (13,498)
Derivatives:
Gain (loss) on valuation 388,880 (291,879)
Gain on transaction 359,187 179,928
748,067 (111,951)
W 1,385,482 420,026
199
35. Net gain (loss) on financial instruments designated at fair value through profit or loss
Net gain (loss) on financial instruments designated at fair value through profit or loss for the years ended December
2019 2018
Financial assets designated at fair value through profit or loss:
Equity securities:
Loss on sale W - (4,737)
Financial liabilities designated at fair value through profit or loss:
Borrowings:
Gain (loss) on valuation (33,871) 382,667
Loss on sale and redemption (812,175) (404,573)
W (846,046) (26,643)
36. Provision for allowance for credit loss
Provision for allowance for credit loss on financial assets for the years ended December 31, 2019 and 2018 are as
follows:
2019 2018
Loans at amortized cost W (910,898) (704,515)

Other financial assets at amortized cost (33,945) (24,070)
Securities at fair value through other comprehensive income (5,787) (12,066)
Others (unused credit line and financial guarantee, etc) (29,519) (4,826)
Securities at amortized cost (543) (2,400)
W (980,692) (747,877)
37. General and administrative expenses
General and administrative expenses for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Employee benefits:
Salaries W 2,918,065 2,736,604
Severance benefits:
Defined contribution 35,972 23,745
Defined benefit 168,732 133,749
Termination benefits 122,732 115,275
3,245,501 3,009,373
Entertainment 36,931 30,442

Depreciation 479,657 171,771
Amortization 99,208 73,575
Taxes and dues 197,691 176,133
Advertising 265,739 287,688
Research 17,742 13,928
Others 792,205 978,665
W 5,134,674 4,741,575
200
38. Share-based payments
(a) Stock options granted as of December 31, 2019 are as follows:
5th grant(*1) 6th grant(*1) 7th grant(*1)(*2)
Type Cash payment Cash payment Cash payment
Grant date March 21, 2006 March 20, 2007 March 19, 2008
Exercise price in won W 38,829 W 54,560 W 49,053
Number of shares granted 3,296,200 1,301,050 808,700
May 17, 2021/

Options expiry dates August 21, 2019 August 19, 2020
September 17,2021
Changes in number of shares granted:

Balance at January 1, 2019 2,500 58,764 45,628
Exercised and cancelled 2,500 - 9,466
Balance at December 31, 2019 - 58,764 36,162
W1,122
(Expiration of
contractual
exercise period :
May 17, 2021)
Fair value per share in won - W 88
W 1,301
(Expiration of
contractual exercise
period :
Sep 17, 2021)
(*1) The weighted average exercise price for 94,926 stock options outstanding at December 31, 2019 is W52,462.
(*2) As of December 31, 2019, the exercise of the remaining for 9,466 stock options (7th grant) was cancelled.
201
38. Share-based payments (continued)
(b) Performance shares granted as of December 31, 2019 are as follows:
Expired Not expired

Type Cash-settled share-based payment
Increase rate of the stock price and

Performance conditions
achievement of target ROE
Operating period 4 or 5 years
Estimated number of shares vested at December 31, 2019 20,427 2,074,713
W40,889,
W45,766,
W49,405,
W40,580,
Fair value per share in won W43,350
W44,222,
for the expiration of
operating period from
2015 to 2019
The amount of cash payment for the Group’s cash-settled share-based payment arrangements with performance
conditions is determined at the fourth anniversary date from the grant date based on the share price which is an
arithmetic mean of weighted average share prices of the past two-months, past one-month and past one-week. Share
price to be paid in the future is evaluated using the share price as of the end of the reporting period. For share-
based payment transactions among the controlling company and its subsidiaries, the controlling company and its
subsidiaries receiving the services shall measure the services received as a cash-settled and an equity-settled share-
based payment transaction, respectively.
202
(c) Share-based compensation costs for the years ended December 31, 2019 and 2018 were as follows:
2019
Employees of
The controlling
company The subsidiaries Total
Stock options granted:
5th W - 9 9
6th (3) (15) (18)
7th (5) (6) (11)
Performance share 4,678 32,646 37,324
W 4,670 32,634 37,304
2018
Employees of
The controlling
4th W - (14) (14)
5th - (19) (19)
6th (23) (139) (162)
7th (59) (86) (145)
W 1,072 9,510 10,582
203
(d) Accrued expenses and the intrinsic value as of December 31, 2019 and 2018 are as follows:
2019
Accrued expenses(*)
The controlling
6th W 1 4 5
7th 19 27 46
W 10,023 81,383 91,406
(*)The intrinsic value of share-based payments is W91,355 million as of December 31, 2019. For calculating, the
quoted market price W43,350 per share was used for stock options and the fair value was considered as intrinsic
value for performance shares, respectively.
2018
Accrued expenses(*)
The controlling
5th W - 7 7
6th 3 20 23
7th 24 33 57
W 7,355 61,850 69,205
(*) The intrinsic value of share-based payments is W69,120 million as of December 31, 2018. For calculating, the
quoted market price W39,600 per share was used for stock options and the fair value was considered as intrinsic
value for performance shares, respectively.
204
39. Net other operating expense
Other operating income and other operating expense for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Other operating income
Gain on sale of assets:
Loans at amortized cost W 18,298 40,624
Others:
Gain on hedged items 564,438 418,390
Reversal of allowance for acceptances and guarantee 19,329 2,834
Gain on trust account 27 -
Reversal of other allowance 11,194 5,033
Others 97,777 131,345
692,765 557,602
711,063 598,226
Other operating expense
Loss on sale of assets:
Loans at amortized cost (27,291) (14,271)
Others:
Loss on hedged items (596,533) (406,872)
Contribution (311,336) (283,331)
Provision for other allowance (6,939) (13,036)
Depreciation of operating lease assets (98,288) (56,570)
Others (857,918) (653,501)
(1,871,014) (1,413,310)
(1,898,305) (1,427,581)
Net other operating expenses W (1,187,242) (829,355)
205
40. Net other non-operating income
Other non-operating income and other non-operating expense for the years ended December 31, 2019 and 2018 are
as follows:
2019 2018
Other non-operating income
Gain on disposal of assets:
Property and equipment (*) W 1,452 12,611
Investment property 12,640 4,783
Lease assets 1,681 1,153
Right-of-use assets 1,112 -
Others 407 -
17,292 18,547
Gain on disposal of Investments in associates 3,461 17,427
Others:
Rental income on investment property 43,777 32,488
Reversal of impairment losses on intangible asset 438 62
Gain from assets contributed 86 77
Others 82,879 49,276
127,180 81,903
147,933 117,877
Other non-operating expense
Loss on disposal of assets:
Property and equipment (*) (870) (3,082)
Investment property - (2,958)
Lease assets (3,221) (3,964)
Right-of-use assets (306) -
Others - (3)
(4,397) (10,007)
Loss on disposal of investments in associates (3,974) (11,546)
Impairment loss on investments in associates - (5,849)
(3,974) (17,395)
Others:
Donations (94,937) (88,650)
Depreciation of investment properties (17,565) (16,917)
Impaired loss on intangible assets (152,081) (771)
Write-off of intangible assets (9,221) (1,537)
Collecting of written-off expenses (7,322) (6,048)
Others (46,465) (26,844)
(327,591) (140,767)
(335,962) (168,169)
Net other non-operating loss W (188,029) (50,292)
(*) Gains or losses on sale and leaseback transactions are included in gains or losses on disposal of property and
equipment respectively, and there are no gains or losses recognized on sale and leaseback transactions for the year
206
41. Income tax expense
(a) Income tax expense for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Current income tax expense W 1,115,724 896,755
Temporary differences 296,244 383,190
Income tax recognized in other comprehensive income (142,844) (11,600)
Income tax expenses W 1,269,124 1,268,345
(b) Income tax expense calculated by multiplying net income before tax with the tax rate for the years ended December
2019 2018
Profit before income taxes W 4,911,508 4,466,610
Income taxes at statutory tax rates 1,345,187 1,222,840

Adjustments:
Non-taxable income 8,500 (9,561)
Non-deductible expense 18,461 12,854
Tax credit (2,289) (23,317)
Other (100,735) 65,529
Income tax expense W 1,269,124 1,268,345
Effective tax rate % 25.84 28.40
207
41. Income tax expense (continued)
(c) Deferred tax expenses by origination and reversal of deferred assets and liabilities and temporary differences for
the years ended December 31, 2019 and 2018 are as follows:
2019
Other
Beginning Business comprehensive Ending
Balance combination Profit or loss income Balance(*)
Unearned income W (255,336) (62,077) (14,266) - (331,679)
Account receivable (24,139) - (2,185) - (26,324)
Financial assets at fair value
through profit or loss 48,277 9,284 (20,972) (56,654) (20,065)
other comprehensive income 177,358 (554,017) 425,491 (130,344) (81,512)
Investment in associates 24,743 - (5,937) (48) 18,758
Valuation and depreciation of
property and equipment (161,996) - 10,950 - (151,046)
Derivative asset (liability) 111,751 (1,132) (97,147) 7,533 21,005
Deposits 28,036 - 2,605 - 30,641
Accrued expenses 132,689 15,298 (2,493) - 145,494
Defined benefit obligation 447,658 4,805 33,321 20,348 506,132
Plan assets (446,323) (4,610) (57,165) 958 (507,140)
Other provisions 194,475 2,283 16,297 - 213,055
Allowance for acceptances and
guarantees 29,157 42,234 8,623 - 80,014
Allowance related to asset
revaluation (49,713) - - - (49,713)
Allowance for expensing
depreciation (465) - 64 - (401)
Deemed dividend - - - - -
Accrued contributions 21,711 - 15,107 - 36,818
Financial instruments designated at
fair value through profit of loss (87,408) - 130,225 - 42,817
Allowances 48,784 - (10,716) - 38,068
Fictitious dividend 1,325 - 16 - 1,341
Liability under insurance contracts 22,593 - 1,554 - 24,147
Deficit carried over - - - - -
Other (225,676) 204,351 (537,808) 15,363 (543,770)
37,501 (343,581) (104,436) (142,844) (553,360)
Expired unused tax losses:
Extinguishment of deposit and
insurance liabilities 367,444 - (47,433) - 320,011
W 404,945 (343,581) (151,869) (142,844) (233,349)
(*) Deferred tax assets from overseas subsidiaries were increased by W1,530 million due to foreign exchange rate
movements.
208
(c) Deferred tax expenses by origination and reversal of deferred assets and liabilities and temporary differences for
the years ended December 31, 2019 and 2018 are as follows (continued) :
2018
Other
Beginning comprehensive Ending
Balance (*1) Profit or loss income Balance(*2)
Unearned income W (202,069) (53,267) - (255,336)
Account receivable (19,267) (4,872) - (24,139)
loss (47,548) 79,000 16,825 48,277
Securities at fair value through other
comprehensive income 307,729 (47,548) (82,823) 177,358
Investment in associates 24,918 3,205 (3,380) 24,743
Valuation and depreciation of property and
equipment (163,313) 1,317 - (161,996)
Derivative asset (liability) (70,828) 171,000 11,579 111,751
Deposits 27,904 132 - 28,036
Accrued expenses 171,310 (38,621) - 132,689
Defined benefit obligation 408,266 6,965 32,427 447,658
Plan assets (411,935) (37,117) 2,729 (446,323)
Other provisions 191,298 3,177 - 194,475
Allowance for acceptances and
guarantees 23,929 5,228 - 29,157
Allowance related to asset revaluation (52,886) 3,173 - (49,713)
Allowance for expensing depreciation (529) 64 - (465)
Deemed dividend 5,317 (5,317) - -
Accrued contributions 11,904 9,807 - 21,711
Financial instruments designated at fair value
through profit of loss (7,194) (80,214) - (87,408)
Allowances 131,222 (82,438) - 48,784
Fictitious dividend 4,990 (3,665) - 1,325
Liability under insurance contracts 18,105 4,488 - 22,593
Deficit carried over 1,505 (1,505) - -
Other 59,471 (296,190) 11,043 (225,676)
412,299 (363,198) (11,600) 37,501
Expired unused tax losses:
Extinguishment of deposit and insurance
liabilities 375,807 (8,363) - 367,444
W 788,106 (371,561) (11,600) 404,945
(*1) Changes in the scope of application of K-IFRS No.1109 and 1115 have been reflected.
(*2) Deferred tax assets from overseas subsidiaries were increased by W29 million due to foreign exchange rate
movements.
209
(d) Deferred tax assets and liabilities that were directly charged or credited to equity for the years ended December
January 1, 2019 Changes December 31, 2019

OCI Tax effect OCI Tax effect OCI Tax effect
Gain (loss) on valuation of financial assets
measured at FVOCI W 11,713 (8,754) 427,657 (124,147) 439,370 (132,901)
Gain (loss) on financial liabilities measured at
FVTPL attributable to changes in credit risk 235 (65) (11,621) 3,196 (11,386) 3,131
Foreign currency translation adjustments for
foreign operations (306,766) (15,087) 98,418 5,970 (208,348) (9,117)
Gain (loss) on cash flow hedge (24,485) 6,733 (23,492) 7,533 (47,977) 14,266
associates 4,957 (74) 3,343 (48) 8,300 (122)
The accumulated other comprehensive income
in separate account(*) 5,672 (1,560) 14,382 (3,955) 20,054 (5,515)
Remeasurements of the defined benefit liability (477,382) 130,700 (76,156) 21,306 (553,538) 152,006
Gain (loss) on valuation of financial asset
measured at FVTPL (Overlay approach) (108,655) 29,597 207,333 (56,654) 98,678 (27,057)
Income tax charged or credited directly to
equity W (894,711) 141,490 639,864 (146,799) (254,847) (5,309)
January 1, 2018 Changes December 31, 2018

OCI Tax effect OCI Tax effect OCI Tax effect
Gain (loss) on valuation of financial assets
measured at FVOCI W (255,593) 76,124 267,306 (84,878) 11,713 (8,754)
Gain (loss) on financial liabilities measured at
FVTPL attributable to changes in credit risk (2,141) 588 2,376 (653) 235 (65)
Foreign currency translation adjustments for
foreign operations (317,264) (25,054) 10,498 9,967 (306,766) (15,087)
Gain (loss) on cash flow hedge 7,286 (4,845) (31,771) 11,578 (24,485) 6,733
associates (5,868) 3,306 10,825 (3,380) 4,957 (74)
The accumulated other comprehensive income
in separate account(*) (6,295) 1,731 11,967 (3,291) 5,672 (1,560)
Remeasurements of the defined benefit liability (349,538) 95,543 (127,844) 35,157 (477,382) 130,700
Gain (loss) on valuation of financial asset
measured at FVTPL (Overlay approach) (33,713) 8,988 (74,942) 20,609 (108,655) 29,597
Income tax charged or credited directly to
equity W (963,126) 156,381 68,415 (14,891) (894,711) 141,490
(*) Deferred tax effects, which are originated from the accumulated other comprehensive income in separate account,
were included in the other liabilities of separate account's financial statement.
210
(e) The amount of deductible temporary differences, unused tax losses, and unused tax credits that are not recognized
as deferred tax assets as of December 31, 2019 and 2018 are as follows:
2019 2018
Tax loss carry forward W - 99,449
(f) The amount of temporary difference regarding investment in subsidiaries that are not recognized as deferred tax
liabilities as of December 31, 2019 and 2018 are as follows:
2019 2018
Investment in associates W (766,888) (686,107)
(g) The Group set off a deferred tax asset against a deferred tax liability of the same taxable entity if, and only if, they
relate to income taxes levied by the same taxation authority and the entity has a legally enforceable right to set off
current tax assets against current tax liabilities. Deferred tax assets and liabilities presented on a gross basis prior
to any offsetting as of December 31, 2019 and 2018 are as follows:
2019 2018
Deferred tax assets W 518,337 483,517
Deferred tax liabilities (751,686) (78,572)
(h) As of December 31, 2019, the Group has filed a dispute against the tax authorities and the courts for the refund of
the corporate tax on seven cases (claim amount: W 34,449 million). If the likelihood of winning a lawsuit
increases, the Group will recognize the related assets.
211
42. Earnings per share
Basic and diluted earnings per share for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Profit attributable to equity holders of Shinhan Financial Group W 3,403,497 3,156,722
Less:
Dividends to hybrid bond (61,993) (40,357)
Net profit available for common stock W 3,341,504 3,116,365
Weighted average number of common shares outstanding(*) 477,346,731 473,649,076
Basic and diluted earnings per share in won W 7,000 6,579

(*) The number of basic ordinary shares outstanding is 474,199,587 shares and the above weighted-average stocks
are calculated by reflecting treasury stocks issued and 17,482,000 shares of convertible preferred shares issued on
May 1, 2019. If the convertible preferred shares issued during the year are not included in common stocks, the basic
and diluted earnings per share of the net profit of the Group is W7,176.
43. Commitments and contingencies
(a) Guarantees, acceptances and credit commitments as of December 31, 2019 and 2018 are as follows:
2019 2018
Guarantees:
Guarantees outstanding W 9,319,885 9,437,691
Contingent guarantees 3,669,697 3,985,532
12,989,582 13,423,223
Commitments to extend credit:
Loan commitments in won 74,393,722 69,906,336
Loan commitments in foreign currency 22,542,776 19,967,297
ABS and ABCP commitments 2,116,354 2,083,522
Others 81,387,165 73,816,233
180,440,017 165,773,388
Endorsed bills:
Secured endorsed bills 11,287 37,667
Unsecured endorsed bills 6,737,097 7,758,242
6,748,384 7,795,909
Loans sold with recourse 2,099 2,099
W 200,180,082 186,994,619
212
43. Commitments and contingencies (continued)
(b) Legal contingencies
The Group’s pending lawsuits as a defendant as of December 31, 2019 are as follows:
Number of
Case claim Descriptions Claim amount
The plaintiff filed claims against the Group for guarantee deposit of
Payment receivable-backed ABL of KT ENS. The case are currently pending in
1 w 10,767
Guarantee its second appeal.
According to the asset custody contract, the plaintiff is liable for

damages caused by a fire in the property of the real estate investment
Compensation
1 company in which the Group is holding assets. 6,893
for a loss
In 2015 and 2017, the plaintiffs prevailed, but the first and second
decisions were different.
Hanwha Savings Bank, a party to the lender of Meat Loan, filed a lawsuit
Confirm deposit against all creditors to confirm deposit accounts for the sale of frozen
1 5,575
accounts meat. As a result, the lawsuit has been commissioned by the legal firm
proceed a Matron's private lawsuit related the Group.
Others 425 Compensation for a loss claim, etc. 234,131
428 w 257,366
As of the December 31, 2019, the Group has recorded W8,789 million and W1,727 million, respectively, as other
provisions and insurance contract liabilities (reserve for claims) for litigations, etc., The outcome of the lawsuits is
not expected to have a material impact on the consolidated financial statements, but additional losses may result from
future litigation.
(c) The Group entered into an agreement with Asia Trust Co., Ltd. (60% of its total shares) to acquire remaining
stake in the Group. In accordance with the agreement, the Group has the right to purchase shares held by the
shareholders of Asia Trust Co., Ltd. In response, the shareholders of Asia Trust Co., Ltd. have the right to demand
to purchase the shares to the Group.
(d) In relation to Asia Trust Co., Ltd.,(“Asia Trust”) a subsidiary of the Group, a number of complaints have arisen
due to misuse of the seals discarded by employees prior to the Group’s acquisition of Asia Trust. Some of them filed
a lawsuit against the Group (claim amount of W50.3 billion) during the current year, and a special inspection was
conducted by the Financial Supervisory Service in February 2019. The Group did not reflect these financial effects
in the consolidated financial statements as of December 31, 2019 because the Group could not reliably measure the
likelihood of loss and extent of loss.
(e) Regarding the currency option contracts, the Group has received the dispute arbitration request from the Financial
Dispute Arbitration Committee on December 19, 2019; the Group will proceed with Board of Directors’ decision.
The Group's management anticipates that the result of the adjustment will not have a significant impact on the Group's
financial position.
213
43. Commitments and contingencies (continued)
(f) The Group as the Prime Brokerage Service provider has performed the TRS transactions (Total Return Swap:
Derivatives that exchange risk with income from underlying assets, such as stocks, bonds, funds, etc.) as per the TRS
Agreement with a fund managed by Lime Asset Management (“Lime Fund”).
Through the TRS Agreement with the Group, Lime Fund indirectly invested about $200 million of IIG Global Trade
Finance Fund, IIG Trade Finance Fund and IIG Trade Finance Fund-FX Hedged (collectively, “IIG Funds”) from May
2017 to September 2017.
In accordance with the Lime Fund's directions in 2019, the Group invested IIG Fund in kind in LAM Enhanced
Finance III L.P. (“LAM III Fund”) and acquired the LAM III Fund's beneficiary certificates. The recoverable amount
on the LAM III Fund beneficiary certificates is affected by the recoverable amounts of the IIG funds contributed in
kind. The IIG Funds received cancellation of registration and asset freeze order from the U.S Securities and Exchange
Commission in November 2019.
The Financial Supervisory Service (“FSS”) announced in February 2020 that the Group was suspected of being
involved in misconduct and fraudulent activities while the Group made the TRS transactions with the Lime Asset
Management. The related prosecutors’ investigations on Lime Asset Management are also underway. As of now
whether the Group as the Prime Brokerage Service provider is legally responsible depends on the FSS’s additional
inspections, prosecutors’ inspections and the future litigation; and the legal obligation of the Group relating to the
suspected involvement in the fraudulent activities is not determined.
In addition, some of the private equity funds sold by the Group and managed by Lime Asset management are being
inspected for whether any mis-selling has been involved by the supervisory authority. Depending on the results of the
inspection, proceedings for dispute settlement and loss compensation on the miss-selling, if any, may take place.
Whether a mis-selling has happened or the amount of compensation cannot be estimated reliably, the Group did not
recognized a provision.
214
44. Statement of cash flows
(a) Cash and cash equivalents in the consolidated statements of cash flows as of December 31, 2019 and 2018 are as
follows:
2019 2018
Cash and due from banks at amortized cost W 28,435,818 17,363,450
Adjustments: (3,349,719) (3,008,188)
Due from financial institutions with a maturity over three
months from date of acquisition (16,506,925) (6,175,506)
Restricted due from banks (19,856,644) (9,183,694)
W 8,579,174 8,179,756
(b) Significant non-cash activities for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Debt-equity swap W 224,093 28,759
Transfers from construction-in-progress to property and
equipment 76,004 6,319
Transfers between property and equipment and investment
property 104,573 28,199
Transfers between assets held for sale to property and equipment 455 80
Transfers between investment property and assets held for sale 15,795 -
Accounts payable for purchase of intangible assets, etc. 472,798 1,047
Transaction for right-of-use assets 1,376,764 -
215
44. Statement of cash flows (continued)
(c) Changes in assets and liabilities arising from financing activities for the years ended December 31, 2019 and
2018 are as follows:
2019
Assets Liabilities
Derivative Derivative Borrowi- Lease
Debentures Total
assets liabilities ngs liabilities(*)
Balance at January 1, 2019 W 7,477 84,579 29,818,542 63,227,699 536,842 93,675,139
Changes from cash flows - (21,958) 5,017,269 11,201,673 (269,362) 15,927,622
Changes from non-cash flows
Amortization of discount on
borrowings and debentures - - 58,320 352,524 11,291 422,135
Changes in foreign currency
exchange rate - - 173,623 282,534 - 456,157
Others 47,020 (13,946) (204,598) 298,934 792,901 920,311
Business combination(Note47) - - - - 32,587 32,587
Balance at December 31, 2019 W 54,497 48,675 34,863,156 75,363,364 1,104,259 111,434,951
(*) At the beginning balance of 2019, the lease liabilities are included due to the adoption of K-IFRS No. 1116.
2018
Assets Liabilities
Derivative Derivative
Borrowings Debentures Total
assets liabilities
Balance at January 1, 2018 W 3,966 146,278 27,586,610 51,340,821 79,077,675
Changes from cash flows (5,845) (12,002) 1,772,203 11,798,466 13,552,822
Changes from non-cash flows
Amortization of discount on
borrowings and debentures - - 181,050 335,935 516,985
Changes in foreign currency
exchange rate - - 955,512 229,277 1,184,789
Others 9,356 (49,697) (676,833) (476,800) (1,193,974)
Balance at December 31, 2018 W 7,477 84,579 29,818,542 63,227,699 93,138,297
216
45. Related parties
Intra-group balances, and income and expenses arising from intra-group transactions are eliminated in preparing the
consolidated financial statements.
(a) Balances with the related parties as of December 31, 2019 and 2018 are as follows:
Related party Account 2019 2018

Investments in associates:
BNP Paribas Cardif Life Insurance Other assets W 92 9,860
〃 Credit card loans 173 116
〃 Deposits 402 444
Partners 4th Growth Investment Fund Deposits 1,443 1,855
BNP Paribas Cardif General Insurance Credit card loans 26 29
Allowances for credit
〃
Loss (“ACL”) - (2)
〃 Other assets 401 -
〃 Deposits 17 157
Shinhan Praxis K-Growth Global Private Equity Fund Other assets 91 151
Dream High Fund Ⅲ Deposits 5 4
Midas Dong-A Snowball Venture Fund(*1) Deposits - 159
Credian Healthcare Private Equity Fund II Deposits 4 45
Midas Dong-A Snowball Venture Fund 2 Deposits 233 354
IBKS-Shinhan Creative Economy New Technology
Deposits
Fund II (*1) - 672
Eum Private Equity Fund No.3 Deposits 353 49
SHBNPP Private Korea Equity Long-Short Professional
Other assets
Feeder (*2) - 133
Shinhan Global Healthcare Fund 1 Unearned revenue - 360
Shinhan Fintech New Technology Fund No.1(*1) Unearned revenue - 123
Taihan Industrial System Co., Ltd.(*3) Deposits - 85
Incorporated association Finance Saving Credit card loans - 3
Information Center Deposits 6 4
GX Shinhan interest 1st Private Equity Fund Unearned revenue 248 278
Nomura investment property trust No.19 Loans 11,973 11,966
〃 Other assets 42 45
SHBNPP MAIN Professional Investment Type Private
Other assets
Mixed Asset Investment Trust No.3 678 236
Shinhan-Stonebridge Petro Private Equity Fund Other assets 810 484
Korea Finance Security Deposits 362 -
SHINHAN-CORE TREND GLOBAL FUND 1 Unearned revenue 9 -
Hermes Private Investment Equity Fund Deposits 275 -
Multimedia Tech Co.Ltd Deposits 3 -
Korea Credit Bureau Deposits 80 -
Goduck Gangil1 PFV Co., Ltd
Loans
24,000 -
〃 ACL (78) -
SBC PFV Co., Ltd
Deposits
5,142 -
GMG Development Co,. Ltd Deposits 300 -
Sprott Global Renewable Private Equity Fund I Deposits 342 -
IMM Global Private Equity Fund Loans 800 -
〃 ACL (3) -
〃 Deposits 7,598 -
Key management personnel
Loans
and their immediate relatives: 4,426 3,313
Assets 43,431 26,334
Liabilities W 16,822 4,589
217
45. Related parties (continued)
(a) Balances with the related parties as of December 31, 2019 and 2018 are as follows (continued) :
(*1) Excluded from related parties due to the disposal or liquidation.

(*2) As the Group held control due to increases in the equity ratio during the year, it was changed from an associates
to a consolidated subsidiary.
(*3) As the Group does not have significant influence to this entity, this has been removed from the related parties
218
(b) Transactions with the related parties for the years ended December 31, 2019 and 2018 are as follows:

Investments in associates
BNP Paribas Cardif Life Insurance Fees and commission income W 4,230 3,716
〃 Reversal of credit losses 3 4
〃 Other operating expenses (1) -
〃 General and administrative expenses (9) (17)
Shinhan Praxis K-Growth Global Private
Fees and commission income
Equity Fund 448 685
BNP Paribas Cardif General Insurance Fees and commission income 11 9
〃 Other operating expenses 468 -
〃 Provision for credit losses - (2)
Midas Dong-A Snowball Venture
Fund(*1) 119 47
〃 Interest expense (1) (2)
SP New Technology Business
investment Fund Ⅰ (*2) - 317
IBKS-Shinhan Creative Economy New
Technology Fund I (*2) 380 13
IBKS-Shinhan Creative Economy New
Technology Fund II(*1) 8 16
SM New Technology Business
Investment Fund I 14 55
JAEYOUNG SOLUTEC CO., LTD.(*2) Interest income - 523
〃 Fees and commission income - 2
〃 Other operating income - 3
〃 Interest expenses - (2)
〃 Provision for credit losses - (1)
Partners 4th Growth Investment Fund Interest expense (7) (19)
Shinhan-Albatross Technology
Investment 216 216
SHBNPP Private Korea Equity Long-
Short Professional Feeder(*3) 363 975
KDBC Midas Dong-A Snowball Venture
Interest expense
Fund II - (2)
STI-New Growth Engines
Investment(*2) - 16
Shinhan Fintech New Technology Fund
No.1(*1) 38 153
Shinhan Global health Care Investment
No.1 360 785
Taihan Industrial System Co., Ltd.(*4) Fees and commission income - 1
Shinhan capital-Cape FN Fund No.1(*1) Fees and commission income 101 82
SHC-K2 Global Material Fund Fees and commission income 19 20
Technology Investment Fund Fees and commission income W 94 127
219
(b) Transactions with the related parties for the years ended December 31, 2019 and 2018 are as follows:

Shinhan-Midas Dong-A Secondary Venture
Fees and commission income W
Fund 187 71
GX Shinhan interest 1st Private Equity Fund Fees and commission income 545 412
Shinhan-Nvestor Liquidity Solution Fund Fees and commission income 361 214
SHC ULMUS Fund No.1 Fees and commission income 76 51
Shinhan-PS Investment Fund No.1 Fees and commission income 20 12
Nomura investment property trust No.19 Interest income 519 312
〃 Other operating income 7 -
〃 Provision for credit loss - (34)
SHBNPP MAIN Professional Investment
Type Private Mixed Asset Investment Fees and commission income
Trust No.3 2,694 236
Shinhan-Stonebridge Petro Private Equity
Fund 1,762 1,920
Korea Finance Security Fees and commission income 10 -
Investment Fund No.1 275 -
Shinhan-Rhinos 1 Fund Fees and commission income 64 -
SHINHAN-CORE TREND GLOBAL
FUND 1 45 -
Kiwoom-Shinhan Innovation Fund I Fees and commission income 67 -
One Shinhan Global Fund 1 Fees and commission income 151 -
Yeollim-Shinhan Portfolio Fund I Fees and commission income 59 -
FuturePlay-Shinhan TechInnovation Fund 1 Fees and commission income 7 -
WON JIN HOME PLAN CO.,LTD Interest income 186 -
Korea Credit Bureau Fees and commission income 13 -
〃 Interest expense (5) -
Goduck Gangil1 PFV Co., Ltd Interest income 328 -
〃 Fees and commission income 1,120 -
〃 Provision for credit loss (78) -
SBC PFV Co., Ltd Interest expense (3) -
IMM Global Private Equity Fund Interest income 28 -
〃 Interest expense (25) -
〃 Provision for credit loss (3) -
Key management personnel and their immediate relatives
Interest income 161 101
W 15,425 11,015
(*1) Excluded from the associates due to disposal and liquidation for the year ended December 31, 2019.
(*2) Excluded from the associates due to disposal and liquidation for the year ended December 31, 2018
(*3) Included in the related party due to the additional acquisition for the year ended December 31, 2019.
(*4) As the Group does not have significant influence to this entity, this has been removed from the related parties
220
(c) Key management personnel compensation
Key management personnel compensation for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
Short-term employee benefits W 21,237 22,502
Severance benefits 731 419
Share-based payment transactions(*) 12,343 4,944
W 34,311 27,865
(*) The expenses of share-based payment transactions are the renumeration expenses during the vesting period.
(d) The guarantees provided between the related parties as of December 31, 2019 and 2018 are as follows:
Amount of guarantees
Guarantor Guaranteed Parties 2019 2018 Account
Shinhan Bank BNP Paribas Cardif Life Insurance W 10,000 10,000 Unused credit line
(e) Details of collaterals provided by the related parties as of December 31, 2019 and December 31, 2018 are as
follows:
Provided to Provided by Pledged assets 2019 2018

BNP Paribas Cardif Life Government
Shinhan Bank 12,000 12,000
Insurance bonds W
〃 Hyungje art printing Properties 120 -
Goduck Gangil1 PFV Co., Guarantee insurance
Ltd policy 28,800 -
W 40,920 12,000
(f) Details of significant loan transactions with related parties as of December 31, 2019 and 2018 are as follows:
2019
Other
Classification Company Beginning Loan Recover (*) Ending
Investments in Nomura investment property
associates trust No.19 W 11,966 - - 7 11,973
Goduck Gangil1 PFV Co.,
〃
Ltd - 24,000 - - 24,000
IMM Global Private Equity
〃
Fund - 800 - - 800
Total W 11,966 24,800 - 7 36,773
(*)The effect on changes in allowance for credit loss is included.
2018
Other
Classification Company Beginning Loan Recover (*) Ending
Investments in Nomura investment property
associates trust No.19 W - 12,000 - (34) 11,966
(*)The effect on changes in allowance for credit loss is included.
221
46. Interests in unconsolidated structured entities
(a) The nature and extent of interests in unconsolidated structured entities
The Group involved in assets-backed securitization, structured financing, beneficiary certificates (primarily
investment funds) and other structured entities and characteristics of these structured entities are as follows:
Description
Assets-backed Securitization vehicles are established to buy assets from originators and issue asset-
securitization backed securities in order to facilitate the originators’ funding activities and enhance
their financial soundness. The Group is involved in the securitization vehicles by
purchasing (or committing to purchase) the asset-backed securities issued and/or
providing other forms of credit enhancement.
The Group does not consolidate a securitization vehicle if (i) the Group is unable to
make or approve decisions as to the modification of the terms and conditions of the
securities issued by such vehicle or disposal of such vehicles’ assets, (ii) (even if the
Group is so able) if the Group does not have the exclusive or primary power to do
so, or (iii) if the Group does not have exposure, or right, to a significant amount of
variable returns from such entity due to the purchase (or commitment to purchase)
of asset-backed securities so issued or subordinated obligations or by providing
other forms of credit support.
Structured financing Structured entities for project financing are established to raise funds and invest in
a specific project such as M&A (mergers and acquisitions), BTL (build-transfer-
lease), shipping finance, etc. The Group is involved in the structured entities by
originating loans, investing in equity, or providing credit enhancement.
Investment fund Investment fund means an investment trust, a PEF (private equity fund) or a
partnership which invests in a group of assets such as stocks or bonds by issuing a
type of beneficiary certificates to raise funds from the general public, and distributes
its income and capital gains to their investors. The Group manages assets by
investing in shares of investment fund or playing a role of an operator or a GP
(general partner) of investment fund, on behalf of other investors.
The size of unconsolidated structured entities as of December 31, 2019 and 2018 are as follows:
2019 2018
Total assets:
Asset-backed securitization W 208,441,947 196,108,655
Structured financing 195,374,046 132,050,391
Investment fund 215,371,530 71,487,406
W 619,187,523 399,646,452
222
46. Interests in unconsolidated structured entities (continued)
(b) Nature of risks
i) The carrying amounts of the assets and liabilities relating to its interests in unconsolidated structured entities as
of December 31, 2019 and 2018 are as follows:
2019
Assets-backed Structured Investment
securitization financing fund Total
Assets:
Loans measured at fair value
through profit or loss W 10,646 69,727 - 80,373
Loan at amortized cost 785,134 10,207,866 664,024 11,657,024
profit or loss 3,705,565 70,407 9,378,374 13,154,346
Derivate assets 21,494 1,027 - 22,521
other
comprehensive
income 2,144,846 188,429 - 2,333,275
Securities at amortized cost 4,894,942 - - 4,894,942
Other assets 3,244 14,776 58,948 76,968
W 11,565,871 10,552,232 10,101,346 32,219,449
Liabilities:
Other liabilities W 682 10,457 - 11,139
223
(b) Nature of risks (continued)
2018
Assets:
Loans measured at fair
loss W 292 504,571 802,825 1,307,688
Loan at amortized cost 478,998 6,925,438 33,500 7,437,936
through profit or loss 4,263,817 288,757 5,293,807 9,846,381
Derivate assets 16,390 578 - 16,968
through other
comprehensive
income 2,244,364 91,316 32,279 2,367,959
cost 4,277,675 - - 4,277,675
Other assets 5,453 48,457 34,333 88,243
W 11,286,989 7,859,117 6,196,744 25,342,850
Liabilities:
Derivative liabilities W 111 - - 111
Other 5,368 4,128 - 9,496
W 5,479 4,128 - 9,607
ii) Exposure to risk relating to its interests in unconsolidated structured entities as of December 31, 2019 and 2018
are as follows:
2019
Assets held W 11,565,871 10,552,232 10,101,346 32,219,449
ABS and ABCP
commitments 1,208,707 2,300 868,498 2,079,505
Loan commitments 845,904 855,520 - 1,701,424
Guarantees 139,522 4,000 - 143,522
Others - 118,969 - 118,969
W 13,760,004 11,533,021 10,969,844 36,262,869
224
(b) Nature of risks (continued)
ii) Exposure to risk relating to its interests in unconsolidated structured entities as of December 31, 2019 and 2018
are as follows (continued):
2018
Assets held W 11,286,989 7,859,117 6,196,744 25,342,850
ABS and ABCP
commitments 1,395,417 2,300 602,594 2,000,311
Loan commitments 1,791,650 815,910 26,100 2,633,660
Guarantees 88,810 142,032 - 230,842
Others - 49,464 - 49,464
W 14,562,866 8,868,823 6,825,438 30,257,127
225
47. Business combination
(a) Orange Life Insurance Co., Ltd
i) General information
On February 1, 2019, the Group obtained control over Orange Life Insurance Co., Ltd. by acquiring 59.15% of its
shares after obtaining approval from the Financial Services Commission on January 16, 2019. The primary reason
for the acquisition is to strengthen the life insurance business in response to changes in the financial market
environment.
ii) Identifiable net assets
Fair values of assets acquired and liabilities assumed as of acquisition date are as follows:
Amount(*1)
Assets:
Cash and due from banks at amortized cost W 739,071
Financial assets at fair value through profit or loss 1,573,453
Securities at fair value through other comprehensive income 11,111,395
Securities at amortized cost 11,273,999
Loans at amortized cost 2,588,588
Derivatives 13,934
Properties and equipment 35,489
Intangible assets(*2) 38,475
Other assets 5,847,621
33,222,025
Liabilities:
Liabilities under insurance contracts(*3) 24,187,474
Derivative liabilities 3,991
Other liabilities 6,098,301
30,289,766
Fair value of the identifiable net assets W 2,932,259
(*1) The Group measured the identifiable assets and liabilities of the acquirer at fair value at the date of the business
combination for the allocation of the consideration transferred. The fair value was measured at the price that would
be received at the date of the business combination when the asset was sold, or when the liability was transferred in
an orderly transaction between market participants, and in case the price was not directly observed, it was estimated
using appropriate valuation techniques.
(*2) Includes membership, software, and development costs that Orange Life Insurance Co., Ltd. holds.
(*3) The Group has reflected VOBA (Value of Business Acquired), which was measured separately by applying the
indirect method based on the intrinsic value, to the carrying value of the liabilities under insurance contracts that the
Orange Life Insurance Co., Ltd. had.
226
47. Business combination (continued)
(a) Orange Life Insurance Co., Ltd (continued)
iii) Goodwill
Goodwill recognized as a result of business combination is as follows:
Amount
Consideration paid in cash W 2,298,900
Fair value of identifiable net assets (2,932,259)
Non-controlling interests (*) 1,197,935
Goodwill W 564,576
(*) The non-controlling interests in Orange Life Insurance Co., Ltd was measured as a proportionate shares of the
non-controlling interests in the identifiable net assets at acquisition date.
iv) Cost related to business combination
In connection with the business combination, the Group incurred expenses of W8,415 million, including legal fees
and due diligence fees, which were recognized as fees and commission expense in the consolidated statement of
v) Net cash outflows due to business combination
Net cash outflows due to business combination for the year ended December 31, 2019 are as follows:
Amount
Consideration transferred in cash W 2,298,900
Acquired cash and cash equivalents (154,754)
W 2,144,146
Operating income and net profit for the year ended December 31, 2019 from Orange Life Insurance Co., Ltd, are
W387,440 million and W271,455 million, respectively, which are reflected in the consolidated statement of
comprehensive income after the acquisition date.
227
(b) Asia Trust Co., Ltd
On May 2, 2019, the Group obtained control over Asia Trust Co., Ltd. by acquiring 60% of its shares after obtaining
approval from the Financial Services Commission on April 17, 2019. The primary reason for the acquisition is to
strengthen the non-banking portfolio through real estate business line.
Fair values of assets acquired and liabilities assumed as of acquisition date are as follows:
Amount
Assets:
Financial assets at fair value through profit or loss 53,477
Loans at amortized cost(*1)(*3) 26,197
Properties and equipment 662
Intangible assets(*2) 40,649
Investment property 13,567
Other assets 13,367
175,566
Liabilities:
Other liabilities(*3) 44,571
Fair value of the identifiable net assets W 130,995

(*1) Acquired loans were measured at fair value. The total amount of loans under contract is W44,356 million, and
the cash flows that are not expected to be collected as of the acquisition date is W18,159 million.
(*2) Includes the value of contract balance of W36,584 million. The Group has considered the contracts that Asia
Trust Co., Ltd held to be significant enough to generate future additional revenue, and evaluated them by incremental
cash flow method.
(*3) In regard to the land trust project at Ramada Hotel in Gampo, Gyeongju, some owners of parcels filed a lawsuit
to return the down payments, and the intermediate payments. The loan financial institution of the business has
filed a suit against Asia Trust Co., Ltd for the balance of the loans delinquent based on the intermediate payment
loan agreement and subsequent agreement with the Group. The Group recorded the expected loss as allowance
and provision for the trust business loans. In addition, the creditor of the constructor filed a suit claiming the
construction fee; however, the Group did not reflect the effect in the consolidated financial statements as of
December 31, 2019 since the potential and extent of the losses regarding the lawsuit is not reliably estimated.
228
(b) Asia Trust Co., Ltd (continued)
iii) Goodwill
Goodwill recognized as a result of the business combination is as follows:
Amount
Consideration paid in cash W 193,400
Fair value of identifiable net assets (130,995)
Non-controlling interests (*) 52,398
Goodwill W 114,803
(*) The non-controlling interests in Asia Trust Co., Ltd was measured as a proportionate shares of the non-controlling
interests in the identifiable net assets at acquisition date.
In connection with the business combination, the Group incurred expenses of W2,124 million, including legal fees
and due diligence fees, which were recognized as fees and commission expense in the consolidated statement of

Amount
Consideration transferred W 193,400
W 174,753
Operating income and profit for the year ended December 31, 2019 from Asia Trust Co., Ltd. are W29,394 million
and W18,098 million, respectively, which are reflected in the consolidated statement of comprehensive income after
the acquisition date.
229
(c) Shinhan Vietnam Finance Company Limited
On January 22, 2019, the Group has acquired control over Prudential Vietnam Finance Co., Ltd in Vietnam by
acquiring 100% of its shares, and changed the name to Shinhan Vietnam Finance Co., Ltd. The primary reason for
the acquisition is to expand its new market through credit loan business in Vietnam.
Fair values of assets acquired and liabilities assumed as follows:
Amount
Assets:
Loans at amortized cost 259,082
Properties and equipment 4,163
Intangible assets 5,629
Other assets 12,258
293,403
Liabilities:
Deposits 211,325
Other liabilities 19,036
230,361
Fair value of the identifiable net assets W 63,042
iii) Goodwill
Goodwill recognized as a result of the business combination is as follows:
Amount
Consideration paid in cash W 170,194
Fair value of identifiable net assets (63,042)
Goodwill W 107,152
The Group assessed the goodwill based on the financial information as of January 1, 2019 (“assessment date”) as
reliable financial information as of the acquisition date, January 22, 2019, were not available.
Between the assessment date and the acquisition date, no significant transactions that affected the fair value of the
identifiable net assets were identified.
In connection with the business combination, the Group incurred expenses of W92 million, including legal fees and
due diligence fees, which were recognized as fees and commission expense in the consolidated statement of
230
(c) Shinhan Vietnam Finance Company Limited (continued)

Amount
Consideration transferred W 170,194
W 157,923
Operating income and profit for the year ended December 31, 2019 from Shinhan Vietnam Finance Company
Limited are W22,912 million and W18,363 million, respectively, which are reflected in the consolidated statement
of comprehensive income after the acquisition date.
(d) If the business combination had been consolidated from the beginning of 2019, the operating income and net
income that would have been included in the consolidated statement of comprehensive income do not differ
materially from the current operating income and net income recognised from the acquisition date of the business
combination.
231
48. Transition effects arising from changes in accounting policies
Upon adoption of K-IFRS No.1116 ‘Leases’, the Group recognized lease liabilities in relation to leases that had
previously been classified as operating leases in accordance with K-IFRS No.1017. These liabilities were measured
at the present value of the future lease payments at the lessee's incremental borrowing rate on January 1, 2019. The
lessee's incremental borrowing rates applied to the lease liabilities are between 2.06% and 8.96% on January 1, 2019.
The difference between the amount of operating lease agreements disclosed as of December 31, 2018 discounted at
the Group’s incremental borrowing rate and the lease liabilities recognized at the date of initial application is as follows:
Amount
Operating lease agreement commitment disclosed as of December 31, 2018 W 610,080
Amount discounted using the Group's incremental borrowing rate 591,725
Less:
Low-value leases recognized as current expenses through the straight-line method (3,454)
Value-added Tax (51,429)
Lease liabilities recognized at the beginning of 2019 W 536,842
Right-of-use assets were measured by adjusting the amount of prepaid or unpaid lease payments in relation to leases
recognized in the consolidated statement of financial position at the same amount as the lease liability. As a result,
property, plant and equipment increased by W573,823 million at the beginning of 2019, and prepaid expense, unearned
revenue and accrued expenses decreased by W42,196 million, W5,197 million and W17 million, respectively.
49. Subsequent events occurred after reporting period
The Group, pursuant to its Board of Directors’ resolution on November 14, 2019, reached a decision on exchanging
of the common shares of Shinhan Financial Group Co., Ltd.(the “Company”) and Orange Life Insurance Co. Ltd.
(“Orange Life”) by means of a small-scale stock exchange, with the purpose to enable the Group to hold 100% of the
stock of Orange Life. The stock exchange was consummated on January 28, 2020, at an exchange ratio of 0.6601483
shares of the Company for each share of Orange Life. As a result, the shares issued by Orange Life and owned by
shareholders of Orange Life other than the Company were transferred to the Company on January 28, 2020 and such
shareholders became shareholders of the Group by acquiring 8,232,906 newly issued shares in exchange for
13,882,062 treasury shares of the Group. Upon the share exchange, Orange Life became a wholly owned subsidiary
of the Group.
232

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Independent Auditor’s Report (Consolidated Financial Statements) of Shinhan Financial Group as of December 31, 2019

SHINHAN FINANCIAL GROUP CO., LTD.

Consolidated Financial Statements

(With Independent Auditors’ Report Thereon)

Independent Auditors' Report 1

Consolidated Statements of Financial Position 5

Consolidated Statements of Comprehensive Income 7

Consolidated Statements of Changes in Equity 9

Consolidated Statements of Cash Flows 11

Notes to the Consolidated Financial Statements 14

To the Board of Directors and Stockholders of

Basis for Opinion

Key Audit Matters

(1) Assessment of the allowance for credit loss

(2) Assessment of the measurement of fair value of level 3 financial instruments

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

(In millions of won)

Total assets W 552,419,581 459,600,510

See accompanying notes to the consolidated financial statements.

(In millions of won) Note 2019 2018

Total liabilities 510,489,200 422,949,080

Total liabilities and equity W 552,419,581 459,600,510

See accompanying notes to the consolidated financial statements.

(In millions of won) Note 2019 2018

Fees and commission income 3,557,013 3,295,256

Insurance income 7,569,425 4,398,738

Dividend income 33 82,158 87,826

Operating income 5,046,250 4,499,414

Equity method income 15 53,287 17,488

Income tax expense 41 (1,269,124) (1,268,345)

See accompanying notes to the consolidated financial statements.

Other comprehensive income for the year, net of

Total comprehensive income for the year W 4,208,294 3,249,557

Profit attributable to:

Earnings per share: 29, 42

See accompanying notes to the consolidated financial statements.

Other changes in equity

See accompanying notes to the consolidated financial statements.

Other changes in equity

See accompanying notes to the consolidated financial statements

(In millions of won) Note 2019 2018

Cash flows from operating activities

Changes in assets and liabilities:

See accompanying notes to the consolidated financial statements.

(In millions of won) Note 2019 2018

Deposits W 29,123,272 16,699,467

Income taxes paid (1,130,148) (850,696)

Net cash provided by (used in) operating activities 7,179,046 (6,320,196)

Cash flows from investing activities

See accompanying notes to the consolidated financial statements.

(In millions of won) Note 2019 2018

Cash flows from financing activities

Effect of exchange rate fluctuations on cash and cash

Cash and cash equivalents at beginning of year 44 8,179,756 6,236,650

Cash and cash equivalents at end of year 44 W 8,579,174 8,179,756

See accompanying notes to the consolidated financial statements.

(a) Controlling company

Date of financial Ownership (%)

1. Reporting entity (continued)