Edgar Filing: SHINHAN FINANCIAL GROUP CO LTD

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the Month of May 2012

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant’s name into English)

120, 2-Ga, Taepyung-Ro, Jung-Gu, Seoul 100-102, Korea

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

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

Summary of 2012 1Q Business Report

On May 30, 2012, Shinhan Financial Group (“SFG”) filed its 2012 1Q Business Report (the “Business Report”) with the Financial Supervisory Service of the Republic of Korea (“Korea”) pursuant to the Financial Investment Services and Capital Market Act of Korea. This is the summary of the Business Report translated into English. Non-material or previously disclosed information are omitted or abridged.

The financial information in this report has been prepared in accordance with International Financial Reporting Standards.

Table of Contents


1. Introduction of the Group			3

2. Business Results			6

3. Independent Auditor			16

4. Directors, Executive Officers and Employees			17

5. Major Shareholder and Market Price Information of Our Common Shares and ADRs			19

6. Related Party Transactions			20

Exhibit 99-1

Independent Autitors’ Review Report (Separate Financial Statements) of Shinhan Financial Group as of March 31, 2012

Exhibit 99-2

Independent Autitors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of March 31, 2012

1. Introduction of the Group

Company History in 2009 through 2012

•

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

•

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

•

Sep. 2009 : SBJ became an indirect subsidiary of SFG

•

Oct. 2009 : Shinhan Vietnam Bank became an indirect subsidiary of SFG

•

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

•

Dec. 2009 : Shinhan Capital Petra PEF became an indirect subsidiary of SFG

•

Jan. 2010 : Shinhan Data System became a subsidiary of SFG

•

June 2010 : CHB Valuemeet 2001 First SPC was disaffiliated from SFG

•

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

•

Aug. 2010 : Shinhan Macquarie Financial Advisory was disaffiliated from SFG

•

Oct. 2010 : Shinhan Maritime Private Equity Fund I became an indirect subsidiary of SFG

•

Dec. 2010 : KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp. became an indirect subsidiary of SFG

•

Feb. 2011 : Shinhan BNP Paribas Asset Management (Hong Kong) Limited became an indirect subsidiary of SFG

•

Nov. 2011 : Shinhan Bank Vietnam was merged with Shinhan Vina Bank.

•

Dec. 2011 : Shinhan Savings Bank became a subsidiary of SFG

Principal Subsidiaries under Korean Law (as of March 31, 2012)

Direct Subsidiaries


Subsidiaries	Ownership by SFG
Shinhan Bank		100.0	%
Shinhan Card		100.0	%
Shinhan Investment Corp.		100.0	%
Shinhan Life Insurance		100.0	%
Shinhan Capital		100.0	%
Jeju Bank ¹⁾		68.9	%
Shinhan BNP Paribas Asset Management		65.0	%
Shinhan Data System		100.0	%
Shinhan Credit Information		100.0	%
Shinhan Private Equity Investment Management ²⁾		100.0	%
SHC Management		100.0	%
Shinhan Savings Bank ³⁾		100.0	%

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

2)	On November 2, 2011, Shinhan Private Equity renamed as “Shinhan Private Equity Investment Management” upon acquisition of a non-discretionary investment advisory license.

3)	On December 28, 2011, Shinhan Savings Bank became a direct subsidiary upon obtaining a savings bank license.

Indirect subsidiaries held through direct subsidiaries (as of March 31, 2012)


Direct Subsidiaries	Indirect Subsidiaries	Ownership by the Parent
Shinhan Bank	Shinhan Asia Limited		100.0	%
	Shinhan Bank America		100.0	%
	Shinhan Bank Europe		100.0	%
	Shinhan Khmer Bank Limited		90.0	%
	Shinhan Bank Kazakhstan		100.0	%
	Shinhan Bank China Limited		100.0	%
	Shinhan AITAS		99.8	%
	Shinhan Bank Canada		100.0	%
	Shinhan Bank Japan		100.0	%
	Shinhan Vietnam Bank ²⁾		100.0	%
Shinhan Investment Corp.	Shinhan Investment Corporation Europe Ltd.		100.0	%
	Shinhan Investment Corporation USA Inc.		100.0	%
	Shinhan Investment Corporation Asia Ltd.		100.0	%
	Shinhan Maritime Private Equity Fund I		7.1	%
	KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp ³⁾		8.5	%
Shinhan BNP Paribas Asset Management	Shinhan BNP Paribas Asset Management (Hong Kong) Limited		100.0	%
Shinhan Private Equity Investment Management ¹⁾	Shinhan NPS Private Equity Fund 1st		5.0	% ⁴⁾
Shinhan Private Equity Investment Management ¹⁾	Shinhan Private Equity Fund II		2.2	% ⁵⁾

1)	On November 2, 2011, Shinhan Private Equity renamed as “Shinhan Private Equity Investment Management” upon acquisition of a non-discretionary investment advisory license.

2)	On November 28, 2011, upon 100% acquisition of Shinhan Vina Bank, Shinhan Bank Vietnam was merged with Shinhan Vina Bank.

3)	Shinhan Capital currently owns 6.5% of KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp.

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

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

Number of Shares (as of March 31, 2012)


Types of Shares	Number of Shares
Common Shares		474,199,587
Redeemable Preferred Shares 1)		11,100,000

Total		485,299,587

2. Business Results


*Operation Results*		(KRW billion)


	2012 (Jan. 1 ~ Mar. 31)		2011 (Jan. 1 ~ Dec. 31)		2010 (Jan. 1 ~ Dec. 31)
Operating income		1,137.3		4,134.8		3,414.5
Equity in income(loss) of associates		9.2		57.8		15.3
Earnings before income tax		1,146.5		4,192.6		3,429.8
Income taxes		277.7		919.9		570.4
Consolidated net income		868.8		3,272.6		2,859.4
Net income in majority interest		826.3		3,100.0		2,684.6
Net income in minority interest		42.5		172.6		174.8

LOGO Some of the totals may not sum due to rounding

Source and Use of Funds

(KRW billion)


Consolidated Basis (KRW billion, %)		2012								2011								2010
		Jan. 1 ~ Mar. 31								Jan. 1 ~ Dec. 31								Jan. 1 ~ Dec. 31
		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)		Average Balance		Proportions (%)		Interest Paid		Interest Rate (%)
Source	Deposits		166,073.0		56.87		1,145.9		2.76		156,280.5		55.28		4,181.0		2.68		149,653.3		56.11		3,935.6		2.63
	Borrowings		14,166.4		4.85		71.8		2.03		14,037.4		4.97		259.2		1.85		12,403.4		4.65		250.4		2.02
	Debentures		40,138.4		13.75		460.5		4.59		40,017.2		14.16		1,942.9		4.86		40,356.3		15.13		2,041.2		5.06
	Other Liabilities		44,653.8		15.29		—		—		44,174.6		15.63		—		—		38,446.2		14.41		—		—

	Total Liabilities		265,031.6		90.76		—		—		254,509.7		90.03		—		—		240,859.2		90.30		—		—

	Stockholder’s Equity		26,986.7		9.24		—		—		28,184.6		9.97		—		—		25,872.4		9.70		—		—

	Total Liabilities & SE		292,018.3		100.00		—		—		282,694.3		100.00		—		—		266,731.6		100.00		—		—

Use	Currency & Due from Banks		16,721.8		5.73		80.8		1.93		14,396.1		5.09		248.6		1.73		14,457.1		5.42		168.5		1.17
	Loans		192,366.5		65.87		2,858.0		5.94		186,828.2		66.09		11,265.3		6.03		174,360.4		65.37		10,561.5		6.06
	Loans in KRW		148,165.6		50.74		2,113.0		5.70		143,097.0		50.62		8,281.2		5.79		135,645.6		50.85		7,632.4		5.63
	Loans in Foreign Currency		10,116.7		3.46		106.8		4.22		9,510.8		3.36		379.1		3.99		8,940.8		3.35		377.3		4.22
	Credit Card Accounts		17,477.4		5.99		463.7		10.61		17,740.2		6.28		1,887.5		10.64		16,278.4		6.10		1,794.8		11.03
	Others		16,606.8		5.69		174.5		4.20		16,480.2		5.83		717.5		4.35		13,495.8		5.06		756.9		5.61
	AFS Financial Assets		29,794.5		10.20		295.5		3.97		25,588.5		9.05		1,025.9		4.01		22,045.7		8.27		953.6		4.33
	HTM Financial Assets		11,808.1		4.04		151.0		5.12		12,307.7		4.35		642.9		5.22		12,899.1		4.84		687.4		5.33
	Other Assets		41,327.4		14.15		—		—		43,573.8		15.41		—		—		42,969.3		16.11		—		—

	Total Assets		292,018.3		100.00		—		—		282,694.3		100.00		—		—		266,731.6		100.00		—		—

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

Other Financial Information

1) Capital Adequacy


*Consolidated BIS Ratio (Shinhan Financial Group)*		(KRW billion)


	Mar. 31, 2012			Dec. 31, 2011			Dec. 31, 2010
Aggregate Amount of Equity Capital (A)		23,392.3			22,315.4			23,369.7

Risk-Weighted Assets (B)		197,238.9			195,579.4			188,785.7

BIS Ratio (A/B) ¹⁾		11.86	%		11.41	%		12.38	%

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

2)	BIS ratio for Dec. 31, 2010 based on Korean GAAP is 12.77%


*Capital Adequacy Ratios (Subsidiaries)*		(%)


Subsidiary	Capital Adequacy Ratio	Mar. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Shinhan Bank ¹⁾	BIS Capital Adequacy Ratio		15.33		15.26		15.47
Jeju Bank ¹⁾	BIS Capital Adequacy Ratio		12.96		13.27		13.40
Shinhan Card ¹⁾	Adjusted Equity Capital Ratio		26.11		24.84		25.18
Shinhan Investment Corp. ²⁾	Net Capital Ratio		842.36		700.78		658.31
Shinhan Life Insurance ²⁾	Solvency Margin Ratio		309.02		324.02		397.93
Shinhan BNPP AM ²⁾	Net Capital Ratio		634.14		599.73		708.31
Shinhan Capital²⁾	Adjusted Equity Capital Ratio		15.12		14.90		14.23
Shinhan Savings Bank	BIS Capital Adequacy Ratio		11.18		n/a		n/a

•

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

•

Basel II FIRB Approach was applied in calculating Shinhan Bank’s BIS Capital Adequacy Ratios

•

Basel II TSA Approach was applied in calculating Jeju Bank’s BIS Capital Adequacy Ratios

•

The Adjusted Equity Capital Ratio represents the ratio of total adjusted shareholder’s equity to total adjusted assets and is computed in accordance with the guidelines issued by FSC. Under these guidelines, Shinhan Card and Shinhan Capital are required to maintain a minimum adjusted equity capital ratio of 8%.

•

Net Capital Ratio is computed in accordance with the guidelines issued by the FSC. Under these guidelines, Shinhan Investment Corporation & Shinhan BNP Paribas Asset Management are required to maintain a minimum net capital ratio of 100%.

•

Under the guidelines issued by the FSC, Shinhan Life Insurance is required to maintain a minimum solvency margin ratio of 100%. The risk-based capital methodology was applied in calculating the solvency margin ratio of Shinhan Life Insurance.

1)	Capital adequacy ratios for Dec. 31, 2010 based on K-GAAP is as follows:

Shinhan Bank: 15.93%, Jeju Bank: 14.18%, Shinhan Card: 24.99%

2)	Capital adequacy ratios for Dec. 31, 2010 are based on K-GAAP

1) Liquidity Ratios


*Won Liquidity Ratio*		(KRW billion, %)


	Mar. 31, 2012						Dec. 31, 2011						Dec. 31. 2010
Company	Won Assets		Won Liabilities		Won Liquidity Ratio		Won Assets		Won Liabilities		Won Liquidity Ratio		Won Assets		Won Liabilities		Won Liquidity Ratio
Shinhan Financial Group		1,026.1		921.1		111.4		4,225.5		3,911.2		108.0		972.6		246.0		395.3
Shinhan Bank		65,567.5		40,112.5		163.5		56,609.5		46,635.4		121.4		54,646.2		45,786.9		119.3
Shinhan Card		14,609.5		3,421.0		427.1		15,417.2		3,417.5		451.1		13,160.9		3,450.1		381.5
Shinhan Investment Corp.		7,954.3		5,688.3		139.8		6,161.4		5,036.5		122.3		6,615.7		5,293.5		125.0
Shinhan Life Insurance		938.4		336.4		278.9		843.5		341.5		247.0		517.3		254.7		203.1
Shinhan Capital		348.9		161.7		215.7		519.0		147.9		350.8		758.8		295.0		257.2
Jeju Bank		976.8		517.1		188.9		982.2		686.2		143.1		899.3		618.8		145.3

1)	Shinhan Financial Group, Shinhan Bank, Jeju Bank: Due within 1 month, Other Subsidiaries: Due within 3 months

2)	Shinhan Life Insurance: (Won assets due within 3 months /3 months average of Claim payments )*100


*Foreign Currency (FC) Liquidity Ratio*		(KRW billion, %)


	Mar. 31, 2012						Dec. 31, 2011						Dec. 31, 2010
Company	FC Assets		FC Liabilities		FC Liquidity Ratio		FC Assets		FC Liabilities		FC Liquidity Ratio		FC Assets		FC Liabilities		FC Liquidity Ratio
Shinhan Financial Group		—		—		—		—		—		—		—		—		—
Shinhan Bank		31,338.1		25,468.8		123.0		25,887.9		22,254.2		116.3		24,238.7		23,092.8		105.0
Shinhan Investment Corp.		255.1		284.4		89.7		23.3		23.5		99.0		11.5		10.3		111.5
Shinhan Capital		143.9		94.6		152.2		51.5		21.9		235.7		333.5		285.0		117.0
Jeju Bank		12.1		5.6		216.4		15.4		9.4		164.3		13.0		10.5		123.8

1)	Foreign currency liquidity ratios are computed with assets and liabilities due within 3 months

2)	Shinhan Bank’s foreign currency liquidity ratio reflected securitization weight with the guidelines issued by the FSS

3) Asset Quality


*Consolidated Basis*		(KRW billion, %)


	Mar. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Total Loans		199,164.3		201,245.9		184,676.3
Substandard & Below		3,026.7		2,587.1		2,736.8
Substandard & Below Ratio		1.52		1.29		1.48
Non-Performing Loans		2,399.8		1,903.5		1,977.7
NPL Ratio		1.20		0.95		1.07
NPL Coverage Ratio		143.23		162.19		132.8
Loan Loss Allowance ¹⁾		4,335.1		4,196.0		3,634.5
Substandard & Below		3,026.7		2,587.1		2,736.8

1)	Including reserve for credit losses


*Separate Basis*		(KRW billion, %)


	Mar. 31, 2012						Dec. 31, 2011						Dec. 31, 2010
	Substandard & Below Ratio		NPL Ratio		NPL Coverage Ratio ¹⁾		Substandard & Below Ratio		NPL Ratio		NPL Coverage Ratio ¹⁾		Substandard & Below Ratio		NPL Ratio		NPL Coverage Ratio ¹⁾
Shinhan Financial Group		—		—		—		—		—		—		—		—		—
Shinhan Bank		1.27		1.01		150.01		1.09		0.82		166.11		1.31		0.91		133.10
Shinhan Card		2.04		1.58		209.86		1.69		1.26		236.08		1.90		1.44		182.65
Shinhan Investment Corp.		15.58		15.53		71.43		16.97		16.92		71.46		12.29		12.29		82.41
Shinhan Life Insurance		0.47		0.26		226.95		0.45		0.23		280.64		0.62		1.48		226.89
Shinhan Capital		2.94		2.10		73.36		2.79		1.31		82.85		2.38		1.86		80.44
Jeju Bank		1.70		1.65		90.10		1.62		1.03		93.73		1.57		1.28		113.74
Shinhan Savings Bank		35.91		35.91		10.44		—		—		—		—		—		—

1)	Including reserve for credit losses

4) Write-Offs & Provision for Credit Losses

<Consolidated Basis>

(KRW billion)


	1Q 2012		FY2011		FY2010
Allowance for loan losses		2,901.7		2,729.1		2,993.3
Allowance for acceptances and guarantee		101.5		85.8		171.0
Allowance for unused loan commitments		434.2		444.8		462.5
Other allowance		322.3		339.0		225.9

Total		3,759.7		3,598.7		3,852.7

Write-offs		151.5		1,382.1		1,284.7

<Shinhan Bank>

(KRW billion)


	1Q 2012		FY2011		FY2010
Allowance for loan losses		1,680.0		1,580.9		1,803.8
Allowance for acceptances and guarantee		129.9		109.5		208.7
Allowance for unused loan commitments		78.6		85.2		85.8
Other allowance		244.9		256.2		155.4

Total		2,133.4		2,031.8		2,253.8

Write-offs		39.8		811.8		773.1

<Shinhan Card>

(KRW billion)


	1Q 2012		FY2011		FY2010
Allowance for loan losses		736.9		706.2		703.8
Allowance for acceptances and guarantee		—		—		—
Allowance for unused loan commitments		343.8		345.3		367.5
Other allowance		49.3		50.6		42.5

Total		1,130.0		1,102.1		1,113.8

Write-offs		98.0		451.5		436.8

4) Debt to Equity Ratios


*Shinhan Financial Group*		(KRW billion)


Separate Basis	Mar. 31, 2012			Dec. 31, 2011 ¹⁾			Dec. 31, 2010
Debt		8,529.3			11,413.4			6,907.6
Equity		19,439.7			19,430.8			20,753.0
Debt to Equity Ratio		43.88	%		58.74	%		33.29	%

1)	Upon the resolution of Board of Directors to redeem Series 10 redeemable preferred shares and Series 11 convertible redeemable preferred shares held on December 15, 2011, KRW 3.75 trillion capital decrease and liability increase reflected on Debt to Equity Ratio.

Twenty Largest Exposures by Borrower

(KRW billion)


As of Mar. 31, 2012 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptance		Others		Total Exposures
Ministry of Strategy & Finance		—		—		9,056		—		—		9,056
Bank of Korea		1,080		—		5,035		0		—		6,115
Korea Deposit Insurance Corporation		1,247		—		2,192		—		—		3,439
Industrial Bank of Korea		540		119		2,553		—		—		3,213
Hyundai Heavy Industries Co., Ltd.		8		181		224		2,548		0		2,961
Korea Development Bank		16		27		2,141		—		—		2,184
Korea Finance Corporation		—		—		1,956		—		—		1,956
Korea Land & Housing Corporation		—		—		1,940		—		—		1,940
Korea Securites Finance Corporation		31		—		1,750		—		—		1,781
Woori Bank		149		114		1,003		6		—		1,271
Hana Bank		13		39		1,134		—		—		1,186
Kookmin Bank		101		34		1,033		3		—		1,172
Samsung Heavy Industries Co., LTd.		0		—		0		1,151		—		1,151
Hyundai Samho Heavy Industries Co., Ltd.		0		27		30		1,039		0		1,096
Songdo Cosmopolitan City Development Inc.		954		—		120		—		—		1,074
National Agricultural Cooperative Federation		57		—		946		3		—		1,005
POSCO		3		32		873		43		—		951
Samsung Electronics		0		861		22		0		0		883
Samsung C&T		27		46		548		242		0		862
LG U+		608		—		238		—		—		845

Total		4,834		1,480		32,793		5,035		0		44,143

LOGO Some of the totals may not sum due to rounding


*Exposure to Main Debtor Groups*		(KRW billion)


As of Mar. 31, 2012 Consolidated basis	Loans in Won		Loans in Foreign Currency		Securities		Guarantees and Acceptances		Others		Total Exposures
Hyundai Heavy Industries		114		345		286		3,890		0		4,634
Samsung		146		1,356		1,040		1,732		0		4,274
Hyundai Motors		1,093		1,367		630		450		0		3,540
LG		1,818		548		402		124		0		2,892
SK		435		454		782		1,163		0		2,834
POSCO		208		220		925		409		6		1,768
GS		323		292		312		526		0		1,453
Lotte		389		60		446		215		1		1,111
Hanwha		393		228		111		96		3		831
LS		266		244		132		173		0		815

Total		5,184		5,112		5,066		8,779		11		24,152

LOGO Some of the totals may not sum due to rounding


*Loan Concentration by Industry*		(KRW billion)


As of Mar. 31, 2012 Consolidated basis	Total Exposures
As of Mar. 31, 2012 Consolidated basis	Amount		Weight (%)
Finance and Insurance		54,085		20.68	%
Manufacturing		35,583		13.60	%
Retail and wholesale		12,097		4.62	%
Real Estate, leasing and service		19,127		7.31	%
Construction		5,219		2.00	%
Hotel and leisure		3,586		1.37	%
Others		39,854		15.24	%
Consumers		92,019		35.18	%

Total		261,569		100.00	%

*	Including deposits, loans, and securities

Top Twenty Non-Performing Loans

(KRW billion)


Borrower	Industry	Gross Principal Outstanding		Allowance for Loan Losses
A	Real estate, leasing and service		130		11
B	Construction		54		13
C	Construction		48		19
D	Real estate, leasing and service		47		14
E	Manufacturing		46		21
F	Construction		40		39
G	Construction		44		25
H	Finance and insurance		36		0
I	Manufacturing		33		37
J	Real estate, leasing and service		31		4
K	Real estate, leasing and service		30		21
L	Finance and insurance		30		0
M	Manufacturing		30		0
N	Construction		28		30
O	Manufacturing		25		7
P	Manufacturing		24		24
Q	Retail and wholesale		27		15
R	Manufacturing		23		0
S	Real estate, leasing and service		23		9
T	Real estate, leasing and service		23		0

Total			769		290

1)	Consolidated basis as of Mar. 31, 2012

2)	Non-Performing Loans are defined as loans past due longer than 90 days.

LOGO Some of the totals may not sum due to rounding

3. Independent Auditor

Audit Opinion for the last 3 years

1Q 2012

FY 2011

FY 2010

Audit Opinion

—

Unqualified

*	For the first quarter of 2012, the independent accountant conducted a review for our financial statements instead of auditing them.

Compensation to the Independent Auditor for Audit and Review Services

The following is a description of the fees for audit and review services performed by our independent auditor for the last three years in connection with our financial statements preparation.


Year	Auditor	Payment (KRW mil.)	Details	Working hours
2012	KPMG Samjong Accounting Corp.	498	Review/Audit of Financial Statements	1,630 hours
2011	KPMG Samjong Accounting Corp.	487	Review/Audit of Financial Statements	9,016 hours
2010	KPMG Samjong Accounting Corp.	366	Review/Audit of Financial Statements	4,650 hours

4. Directors, Executive Officers and Employees

Directors and Executive Officers

1) Executive Directors

Name

Month and
Year

of Birth

Position

Service Term

Dong Woo Han

Nov. 1948

Chairman of Shinhan Financial Group Board Steering Committee Chair

Corporate Governance & CEO Recommendation Committee member

3 years starting from March 23, 2011

2) Non-Executive Directors

Currently, 11 non-executive directors are in office, 10 of which outside directors who are nominated by our Outside Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting on March 29, 2012.

Our non-executive directors are as follows:


Name	Month and Year of Birth	Outside Director	Sub-Committees	Service Term
Jin Won Suh	April 1951	X	-	4 years starting from March 23, 2011
Taeeun Kwon	January 1941	O	Audit Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 23, 2011
Kee Young Kim	October 1937	O	Risk Management Committee Chair Compensation Committee member Corporate Governance & CEO Recommendation Committee Chair	2 years starting from March 23, 2011
Seok Won Kim	April 1947	O	Audit Committee member Compensation Committee Chair	2 years starting from March 23, 2011
Hoon Namkoong	June 1947	O	Chairman of Board of Directors Board Steering Committee member Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	2 years starting from March 23, 2011
Jaekun Yoo	August 1941	O	Corporate & CEO Recommendation Committee member	2 years starting from March 23, 2011
Sang-Kyeong Lee	September 1945	O	Audit Committee member Compensation Committee member	2 years starting from March 29, 2012
Ke Sop Yun	May 1945	O	Audit Committee Chair Board Steering Committee member	4 years starting from March 17, 2009
Jung Il Lee	August 1952	O	Board Steering Committee member	2 years starting from March 23, 2011
Haruki Hirakawa	November 1964	O	Compensation Committee member	2 years starting from March 23, 2011
Philippe Aguignier	September 1957	O	Risk Management Committee member Corporate Governance & CEO Recommendation Committee member	3 years starting from March 24, 2010

3) Executive Officers

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


Name	Month and Year of Birth	Position	In charge of
Buhmsoo Choi	Aug. 1956	Deputy President	• Strategic Planning Team • Global Business Strategy Team • Shinhan FSB Research Institute
Sung Ho Wi	June 1958	Deputy President	• Wealth Management Planning Office
Se Il Oh	Sep. 1957	Deputy President	• Corporate & Investment Banking Planning Office
Jae-Gwang Soh	Aug. 1961	Executive Vice-President	• Synergy Management Team • Information & Technology Planning Team • Audit Team
Jung Kee Min	Mar. 1959	Executive Vice-President & Chief Financial Officer	• Finance Management Team • Investor Relations Team • Business Management Team
Dong Hwan Lee	Sep. 1959	Executive Vice-President	• Public Relations Team • CSR & Culture Management Team • General Affairs Team
Bo Hyuk Yim	Mar. 1961	Managing Director	• Risk Management Team
Woo Gyun Park	Mar. 1959	Managing Director	• Compliance Team


*Stock Options*		(as of Apr. 30, 2012)


	No. of Granted Options (A)		No. of Exercised Options (B)		No. of Cancelled Options (C)		No. of Exercisable Options (D = A – B – C)		Exercise Price (KRW)
Granted in 2005		2,620,331		2,266,642		251,300		102,389		28,006
Granted in 2006		3,206,173		711,367		480,300		2,014,506		38,829
Granted in 2007		1,231,169		0		205,313		1,025,856		54,560
Granted in 2008		805,174		0		185,396		619,778		49,053

Total		7,862,847		2,978,009		1,122,309		3,762,529		—


Note 1)		The weighted-average exercise price of outstanding exercisable options as of Mar. 31, 2012 is KRW 44,508.
2)		The closing price of our common stock was KRW 39,500 on Apr. 30, 2012.


*Employees*		(As of Mar. 31, 2012)

Gender

Number of
Employees

Average length of Service

Total Salaries and wages
paid in 1Q 2012
(KRW million)

Average Payment
per person
(KRW million)

Male

127

2 yrs 2 mths

3,790

Female

3 yrs 6 mths

451

Total

154

2 yrs 5 mths

4,241

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

Major Shareholders¹⁾ of Shinhan Financial Group as of Mar. 31, 2012


Name	No. of Common Shares owned		Ownership%
National Pension Service		34,829,793		7.34	%

BNP Paribas Group		30,106,276		6.35	%

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

2)	In addition to the common share holdings, National Pension Service holds a total of 2,000,000 shares of Shinhan Financial Group’s series 12 non-voting redeemable preferred stock as of Dec. 31, 2011.

Share ownership of Employee Stock Ownership Association

Beginning Balance

(Jan. 1, 2012)

Increase

Decrease

Ending Balance
(Mar. 31, 2012)

Ownership%
(Mar. 31, 2012)

16,974,245

700,183

774,756

16,899,672

3.56


*Common Share Traded on the Korea Exchange*		(KRW, number of shares)

	52,563,124		52,563,124		52,563,124		52,563,124		52,563,124		52,563,124		52,563,124		52,563,124
		Oct. 2011		Nov. 2011		Dec. 2011		Jan. 2012		Feb. 2012		Mar. 2012		Apr. 2012
Price per share	High		47,850		43,850		43,200		45,350		47,000		45,450		44,650
	Low		43,550		37,300		37,600		38,650		43,300		41,850		39,500
	Avg.		45,338		40,561		40,548		41,503		44,733		44,024		42,175
Trading Volume			52,563,124		33,721,051		23,231,994		29,029,924		24,503,901		25,877,380		19,115,298
Highest Daily Trading Volume			5,909,348		3,303,835		2,490,608		3,951,641		2,333,552		2,880,865		1,347,832
Lowest Daily Trading Volume			1,368,202		710,455		384,626		612,935		640,488		734,827		563,905


*American Depositary Shares traded on the New York Stock Exchange*		(USD, number of shares)

	52,563,124		52,563,124		52,563,124		52,563,124		52,563,124		52,563,124		52,563,124		52,563,124
		Oct. 2011		Nov. 2011		Dec. 2011		Jan. 2012		Feb. 2012		Mar. 2012		Apr. 2012
Price per share	High		86.76		78.85		76.16		79.83		84.44		80.95		79.08
	Low		77.55		63.94		62.92		67.34		76.92		74.09		69.54
	Avg.		81.19		71.76		70.06		73.82		79.79		77.94		73.73
Trading Volume			1,305,987		869,510		804,717		1,006,821		959,192		790,114		441,508
Highest Daily Trading Volume			165,478		75,178		122,342		140,487		81,667		78,920		55,206
Lowest Daily Trading Volume			13,811		15,244		17,589		20,666		23,554		16,636		5,464

*	1 ADR = 2 Common Shares

6. Related Party Transactions


*Loans to Subsidiaries*		(As of Mar. 31, 2012, KRW billion)


Subsidiary	Loan Type	Origination Date	Maturity Date	Lending Rate			Beginning Balance (Jan. 1, 2012)		Decrease		Increase		Ending Balance (Mar. 31, 2012)
Shinhan Investment Corp.	Loans in KRW	2006-07-31	2012-01-31		5.64	%		100		100		0		0
Shinhan Investment Corp.	Loans in KRW	2012-01-30	2017-01-30		4.11	%		0		0		100		100
Shinhan Card	Loans in KRW	2010-10-29	2015-10-29		4.37	%		100		0		0		100
	Loans in KRW	2011-01-28	2016-01-28		4.91	%		100		0		0		100
	Loans in KRW	2011-02-24	2016-02-24		4.82	%		250		0		0		250
	Loans in KRW	2011-05-17	2016-05-17		4.47	%		100		0		0		100
	Loans in KRW	2012-03-14	2017-03-14		4.12	%		0		0		150		150
Shinhan Capital	Loans in KRW	2007-03-23	2012-03-23		5.48	%		50		50		0		0
	Loans in KRW	2007-06-08	2012-06-08		5.95	%		50		0		0		50
	Loans in KRW	2008-01-23	2013-01-23		6.60	%		50		0		0		50
	Loans in KRW	2010-09-28	2013-09-28		4.12	%		100		0		0		100
	Loans in KRW	2011-01-28	2014-01-28		4.53	%		50		0		0		50
	Loans in KRW	2011-04-29	2016-04-29		4.65	%		100		0		0		100
	Loans in KRW	2011-05-17	2016-05-17		4.47	%		50		0		0		50
	Loans in KRW	2012-03-14	2017-03-14		4.12	%		0		0		50		50
Shinhan PE	Loans in KRW	2011-08-12	2012-08-10		4.09	%		5		0		0		5

Total								1,105		150		300		1,255

Exhibit 99-1

Independent Autitors’ Review Report (Separate Financial Statements) of Shinhan Financial Group as of March 31, 2012

Exhibit 99-2

Independent Autitors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of March 31, 2012

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


SHINHAN FINANCIAL GROUP CO., LTD.

By /s/ Jung Kee Min
Name: Jung Kee Min
Title: Chief Financial Officer

Date: May 30, 2012