Shinhan Financial Group Co Ltd

Thank you for attending the annual Business Performance Announcement. Today's performance announcement was attended by the Chief Executive Officer of the Group CFO, the Chief Executive Officer of the Group CSO, the Chief Executive Officer of the Group CRO, and the Chief Executive Officer of the Group Future Strategy Research Institute. Bank CFO, Lee Jung-bin Group, Card CFO, Park Hae-chang Group, Investment Securities CFO, Jang Jung-hoon Group, and Life CFO, Ju Sung-hwan Group. Today's performance announcement will be a Q&A session for those who attended after the presentation on annual business performance in 2024. Then, there will be a presentation on the business performance of Cheonsangnyeon branch.

Hello. I would like to thank all of you who participated in the annual performance announcement of the Shinhwan Financial Group in 2024. I will explain in order from the 5-page business performance highlights. Despite the decline in non-profit interest in 2024, the company has achieved a short-term profit of 5,175 billion won, which increased by 3.4% compared to the previous year due to the increase in the interest rate and the reduction in the loss. The interest rate has increased by 5.4% compared to the previous year due to the strategic growth of the bank's loan asset and efficient margin management in the environment in which the market interest is decreasing. Despite the increase in the interest rate of the fee, the interest rate of the interest rate of the interest rate of the interest rate of the interest rate of the and the loss of insurance and interest due to the change in household expenses and the impact of the previous year's negative effects, which decreased by 5.0% compared to the previous year. Income was increased by 3.7% compared to the previous year due to the impact of the increase in the size of retirement, but the related CIR of the group recorded 41.7%, which is similar to the previous year, with the increase in the business interest rate before the financial crisis with well-managed income. The year-on-year loss rate has recorded 47BP, which has decreased by 10BP compared to the year-on-year loss, while still securing the ability to absorb losses related to real estate. Despite various changes in the end-of-the-year exchange rate, the 2024 CET-1 ratio remains at 13.03% and continues to maintain more than 13% of the group's goal. On Friday, the Board of Directors agreed to receive a total of 5.5 billion won in self-employment benefits, along with 5.4 billion won in paid benefits. Therefore, in order to implement a policy of self-employment without a gap year-on-year, the total of 4.5 billion won of self-employment benefits announced last October, including 1.5 billion won of self-employment benefits completed in January of 2025, and the total of 6.5 billion won of self-employment benefits extended until February of 2025. In the future, we will continue to work hard to implement a strong financial stability based on flexible response to capital-related regulation changes as well as effective capital ratio management and active decision-making. We will work hard to carry out the promised value-added growth education. Please note that the main profit indicators of the group are displayed on the next 6 pages. From the next 7 pages, I will explain the detailed performance of the group. Despite the overall deterioration of profitability due to the decline in market interest rates, Group's interest rates continued to grow by 5.4% compared to the previous year, with the interest rates of the bank focusing on the bank loan. The bank's interest rate loan grew by 10.3% per year, undermining interest rate growth rates. However, in the fourth quarter, the company's loan increased by 0.9% due to the regulated environment and seasonal factors, and in the case of corporate loans, it continued to grow by 0.9% centered on large-scale companies. In 2025, we plan to align with group corporate values and quality growth centered on actual demand to primarily manage capital efficiency and asset competitiveness. Considering the year-long planned RWA limit of the group, we will manage the portfolio from the point of view of group ROC stock, and in particular, we will be able to prevent profitability as much as possible with the efficient growth of the interest rate drop period through the growth method of Jodal Center. In the quarter, NIMB recorded a 1.52% level of market interest rate drop, despite the influence of the market interest rate drop in the quarter. The bank's bond yield fell 14BP in response to a drop in market interest, but the interest rate has improved by 10BP compared to the previous quarter through regular interest repayment repricing and stock portfolio efficiency. We will continue to actively respond to the drop in NIM through flexible monetary policy and strategic ALM operation based on short-term environment. Next is page 8. Group B's profit was reduced by 5.0% compared to the previous year, responding to the growth of the capital market variability and reducing by 5.0% compared to the previous year. The profit of the new credit card was reduced due to the increase in marketing costs, but it was increased by 2.6% compared to the previous year due to the sales of financial products based on WM business power. However, the profit from the birth of the child's right has decreased by 7.3% compared to the previous year due to the damage of the child's right, which has been recognized as a guarantee for the future loss of the capital market variability and the one-time loss factor of the Shinhwan investment right, which was in the third quarter. While Han Gwan-byul is well managed at an increase of 3.7% compared to the previous year, Group CIR recorded 41.7%, which is similar to the previous year, with an increase of 2.9% in business profits before the financial crisis. Despite the active recognition of losses related to real estate and finance, we recorded 47BP, which was improved by 10BP compared to the previous year, through the existing preemptive additional deposit settlement effect and financial stability improvement efforts. Next is the 9th page. The group's financial stability index is relatively stable through active sales, and we continue to monitor it closely. The interest rate of the bank has been improving since the 1st quarter, but the card interest rate has risen to a similar level at the end of last year, while maintaining the annual drop rate. The card interest rate before the 2-month interest rate, which can be seen as the leading indicator of the group's interest rate, has recently risen again in the form of continuous improvement after the 1st quarter. In the quarter of 2024, the standard interest rate has been reduced twice, but the high interest rate is still sustained and the sense of security has been restored. In the future, we will continue to maintain conservative management of asset reliability with a sense of security. Please refer to the data on the short-term profit and real estate P&F of each group. Next page. In the end of 2014, the average capital ratio fell by 13.03%, which is 14BP compared to the previous quarter. This is due to the increase in foreign assets due to the increase in exchange rates, which leads to an increase of 5.8 trillion won in group household assets. In 2025, we will continue to maintain the CTO ratio of more than 13% based on stable financial performance while managing RWA at the appropriate level. I will explain in more detail about the stock market in the future. The next page is the global business situation. In 2014, the group's global profit increased by 7,589 billion won, which increased by 38.1% compared to the previous year. This increased the group's global profit by 16.8%, which is the highest in the past. In addition to the exchange rate effect, this is the result of the long-term accumulation of local and business and internal management efforts, focusing on Vietnam and Japan, as well as sustainable results. In the future, the Group will continue to make steady results in the global business, which is a new growth power through choice, concentration, and efficient growth. From page 12 to page 13, the content of the digital and sustainable management activities of the party is included, so please refer to it. From the next 14 pages, I will talk about the outlook for 2025. First, I would like to talk about the management environment of the future strategy research institute.

Yes, hello. I would like to talk about the economic and business environment of 2025. First of all, it is the GDP growth rate. At the beginning, we expected to be able to grow by about 1.8% in 2025, but the education conditions are deteriorating along with the launch of the Trump administration. As you know, the political uncertainty in Korea is quickly cooling down the domestic market. These two factors seem to play a role in the growth rate and lower control factors, so we expect a 1% medium growth rate. In view of this growth rate, the environment of loan or asset growth is judged to be somewhat negative. Above all, it is decided that the period in which we should be more careful in terms of asset positivity will continue. The second is the interest rate. At the beginning of the year, when the standard interest rate was 2025, due to the exchange rate and the issues of the stock market, I expected a gradual decline of about two times. However, considering the negative factors of the domestic market, I think there is a possibility of an additional decline of about one time. However, I think that we need to consider these aspects in order to observe the future of the call policy, as these parts such as time, intensity, and number of calls can cause some variability in the call policy. From this point of view, it seems impossible to reduce the margin of the ranking, but I think it will work more positively in the non-banking part and the operating part. Above all, the exchange rate, which was the most unstable in the financial market in 2024, is expected to show a more stable trend in 2025. The expansion of the interest rate, uncertainty in the presidential election, and some political uncertainty at the end of the year due to the change in the exchange rate in the U.S. In 2025, these variables will not act as additional source tax factors because there is a preemptive part. However, I think it will be difficult to expect a source tax basis that will quickly stabilize below 1,400 won per dollar. Because the results of Trump's policies and U.S. priorities are likely to be reflected in the dollar strength, we expect that the dollar exchange rate will be listed at the center of 1,400 won for the time being. However, I would like to say that the positive parts, such as what I mentioned earlier, have been finished. Lastly, real estate. Real estate 경기는 아무래도 지역별로 좀 차별화되면서 움직이는 그런 흐름들을 볼 것으로 보여집니다. 경기가 부진하고 그리고 대출 여건들이 크게 늘어나지 않은 상황이기 때문에 가격 급등의 가능성은 낮고 대신 공급이 제한되어 있고 그리고 인플레 환경에 대한 그런 부분들을 감안했을 경우에 부동산 가격의 급락 가능성도 낮다는 점을 말씀드리고자 합니다. Most of all, the PF failure that troubled the financial institutions the most. In 2022, the construction economy collapsed, and in 2023 and 2024, the environment in which the failure intensified seemed to have passed through the tunnel in 2025. In the last year, the framework of PF failure and rescue adjustment provided by the government seems to be in the stage of progressive rescue adjustment rather than additional failure in 2025, so I expect that the burden of these parts will be eased compared to 2024. I will end the presentation on the economic and business environment of 2025.