Shinhan Financial Group(US:SHG)2024-03-04 14:36Financial Performance - Shinhan Financial Group reported a net income of KRW 4.4 trillion for FY2023, representing a 6.4% decrease from the previous year due to conservative loan loss provisioning[33]. - Operating income grew by 15.6% year-on-year, driven by stable market interest rates and growth in interest income from corporate loans[32]. - The Group's net income for Shinhan Bank was KRW 3,067.7 billion, with a return on equity (ROE) of 9.39%[36]. - Shinhan Asset Management reported a net income of KRW 51.3 billion, achieving an ROE of 20.14%[36]. Shareholder Returns - Shinhan Financial Group implemented share buybacks and cancellations totaling KRW 485.9 billion, enhancing total returns to shareholders[3]. - The Group's total shareholder return reached 36.0% in 2023, up from 30.0% in the previous year[38]. - The Group paid out a cash dividend of KRW 2,100 per share in 2023, with a total dividend amount of KRW 1,086 billion[39][43]. - The dividend yield for 2023 was 4.9%, based on the Korea Exchange[43]. - Share buyback and cancellation programs worth KRW 500 billion were implemented to address undervaluation[39]. - For 2024, the Group plans to distribute profits in a 6:4 ratio, with 60% allocated for internal reserves and 40% for shareholder returns[40][41]. - The total amount of dividends paid in 2023 was KRW 1,086 billion, including both common and preferred shares[43]. - The Group aims to gradually increase total shareholder returns while considering macroeconomic conditions and regulatory stress test results[46]. - In February 2024, the Board of Directors decided to carry out share buyback and cancellations worth KRW 150 billion[41]. Governance and Board Composition - The Board consists of 11 directors, with 82% being independent directors, ensuring a strong governance structure[116]. - The Board has maintained a majority of independent directors, with at least 8 independent members, to enhance decision-making efficiency[115]. - The company aims to ensure the collective suitability of the BOD by appointing independent directors with expertise in areas such as finance, IT, and consumer protection[127]. - The independent directors make up the majority of all sub-committees, ensuring independence and expertise in decision-making[137]. - The Company established the Nomination Advisory Group in 2023 to enhance the objectivity and transparency of the independent director nomination process, expanding it from four to five steps[165]. - The evaluation of independent directors will shift to a 0% weight for self-evaluation and a 90% weight for peer evaluation starting in 2024, aiming for more accurate assessments[170]. - The Company has a two-year term for the initial appointment of independent directors and one-year terms for subsequent reappointments[167]. Organizational Changes and Strategy - An organizational reform was carried out in July 2023 to establish a Customer Protection Division, enhancing customer-centric management[5]. - The Group's management plan for 2024 is under discussion, focusing on alignment with the macroeconomic outlook[68]. - The direction of the Group's ESG management is a key agenda item for discussion among the board members[68]. - The Group's Recovery and Resolution Plan (RRP) is under review to align with strategic objectives[68]. - The board is discussing organizational reform in line with the Group's strategy to enhance operational efficiency[68]. - The Customer Protection Division will integrate the Compliance Team to strengthen links between customer protection and internal control roles starting January 2024[200]. Diversity and Inclusion - The representation of women on the Board of Directors increased from 7.1% in 2021 to a projected 27.3% following the upcoming Annual General Meeting[7]. - The company is committed to enhancing board diversity and expertise, proposing the re-election of 7 independent directors and the appointment of 2 new independent directors[7]. - The nominee Ms. SONG Seongjoo brings expertise in financial engineering and risk management, enhancing the Board's capabilities in these areas[109]. - Mr. CHOI Young-Gwon is recognized for his experience in ESG and capital markets, expected to contribute significantly to the company's strategic direction[113]. Management and Succession Planning - The CEO Recommendation Committee conducted three Management Succession Plan adequacy reviews in 2023, ensuring proper management succession processes[188]. - The Subsidiary CEO Recommendation Committee was renamed in February 2023, focusing on nominating candidates for subsidiary CEOs[142]. - The Company transferred the authority to nominate candidates for subsidiary management to the subsidiaries by the end of 2020, with further delegation of management succession roles to subsidiary CEOs by the end of 2023[142].