Shinhan Financial Group(SHG) - 2024 Q4 - Annual Report

Financial Performance - Profit for the year reached W 4,558,170 million in 2024, a slight increase from W 4,478,000 million in 2023, marking a growth of 1.8%[35] - Total comprehensive income for the year decreased to W 3,812,505 million in 2024 from W 5,322,389 million in 2023, a decline of 28.3%[35] - Basic and diluted earnings per share increased to W 8,441 in 2024, up from W 8,048 in 2023, reflecting a growth of 4.9%[35] - Net interest income rose to W 11,402,302 million in 2024, compared to W 10,817,922 million in 2023, reflecting an increase of 5.4%[34] - Interest income grew to W 29,209,338 million in 2024, compared to W 27,579,211 million in 2023, an increase of 5.9%[34] - Net insurance income decreased to W 983,166 million in 2024 from W 1,113,615 million in 2023, a decline of 11.7%[34] Assets and Liabilities - Total assets of Shinhan Financial Group increased to KRW 739,764,256 million in 2024, up from KRW 691,795,333 million in 2023, representing a growth of approximately 6.9%[30] - Total liabilities increased to W 680,943,223 million in 2024, up from W 635,473,468 million in 2023, representing a growth of 7.1%[31] - Loans at amortized cost rose to KRW 449,295,238 million in 2024, compared to KRW 411,739,562 million in 2023, indicating an increase of about 9.1%[30] - Cash and due from banks at amortized cost increased to KRW 40,525,712 million in 2024 from KRW 34,629,251 million in 2023, marking a rise of approximately 17.3%[30] - The Group's total liabilities also increased, reflecting the overall growth in assets and financial activities[30] Equity and Retained Earnings - Total equity attributable to equity holders of Shinhan Financial Group rose to W 56,053,756 million in 2024, compared to W 53,720,537 million in 2023, an increase of 4.3%[31] - Retained earnings increased to W 39,020,580 million in 2024, up from W 36,387,314 million in 2023, indicating a growth of 4.5%[31] - The balance at December 31, 2023, showed total equity attributable to equity holders of 56,321,865 million won, indicating a strong financial position[40] Cash Flow and Investments - Net cash inflow from operating activities significantly increased to W 4,626,299 million from W 529,846 million in 2023[48] - Proceeds from disposal of securities at fair value through other comprehensive income rose to W 44,576,886 million, compared to W 36,748,023 million in 2023, indicating a growth of approximately 21.2%[48] - Cash and cash equivalents at the end of the year increased to W 35,247,543 million from W 30,416,884 million, marking an increase of approximately 16.3%[49] Financial Reporting and Compliance - Management is responsible for ensuring the preparation of consolidated financial statements in accordance with K-IFRS, emphasizing the importance of internal controls[19] - The audit report expressed an unmodified opinion on the effectiveness of the Group's internal control over financial reporting as of December 31, 2024[7] - The consolidated financial statements were authorized for issue by the Board of Directors on February 6, 2025, and will be submitted for approval at the stockholders' meeting on March 26, 2025[58] - The Group's financial statements are prepared in accordance with K-IFRS, with significant judgments and estimates affecting reported amounts of assets, liabilities, income, and expenses[60] Credit Losses and Provisions - The allowance for credit losses for loans was recognized at KRW 4,565,931 million as of December 31, 2024, reflecting the application of the Expected Credit Loss impairment model[10] - The provision for allowance for credit loss was 2,013,274 million won, down from 2,244,503 million won in 2023, showing a decrease of approximately 10.3%[46] Insurance and Financial Instruments - The Group estimates future cash flows for insurance contracts using a probability-weighted average based on all relevant information available[167] - The Group measures insurance liabilities as the sum of fulfillment cash flows and contractual service margin at initial recognition[165] - Insurance revenue is recognized based on expected amounts received for providing insurance services, including changes in liabilities for remaining coverage[199] Derivatives and Financial Assets - The fair value of level 3 derivatives was reported at KRW 718,788 million, while the fair value of derivative-linked securities issued amounted to KRW 7,146,909 million as of December 31, 2024[15] - The Group utilizes various derivative contracts, including forward exchange contracts and interest rate swaps, to manage interest rate and foreign exchange risks[101] Capital Management - The total capital stock of Shinhan Financial Group amounted to W 1,461,721 million as of December 31, 2024[51] - The retirement of treasury stock resulted in a reduction of 486,028 million won in equity, indicating a proactive approach to capital management[40]