SHINHAN FINANCIAL GROUP CO LTD Form 6-K Current Event Report

SECURITIES AND EXCHANGE COMMISSION

FORM 6-K Current report of foreign issuer pursuant to Rules 13a-16 and 15d-16 Amendments

Filing Date: 2021-08-19 | Period of Report: 2021-08-19 SEC Accession No. 0001564590-21-045094

(HTML Version on secdatabase.com)

FILER SHINHAN FINANCIAL GROUP CO LTD Mailing Address Business Address 120 2-GA TAEPYUNG RO 120 2-GA TAEPYUNG RO CIK:1263043| IRS No.: 000000000 JUNG GU JUNG GU Type: 6-K | Act: 34 | File No.: 001-31798 | Film No.: 211188630 SEOUL 100-102 SEOUL100-102 M5 00000 SIC: 6021 National commercial banks SEOUL M5 00000 82263603000

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER Pursuant to Rule 13a-16 or 15d-16 Under the Securities Exchange Act of 1934

For the Month of August 2021

SHINHAN FINANCIAL GROUP CO., LTD. (Translation of registrant's name into English)

20, Sejong-daero 9-gil, Jung-gu, Seoul 04513, 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 √ 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___√___

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

On August 17, 2021, Shinhan Financial Group (“SFG”) filed its 1H 2021 Business Report (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange 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 Korean International Financial Reporting Standards.

Table of Contents

1. Introduction of the Group 2. Business Results 3. Other Financial Information 4. Independent Auditor 5. Corporate Governance 6. Major Shareholders and Market Price Information of our Common Shares and ADRs 7. Directors, Executive Officers and Employees 8. Related Party Transactions 9. Material Information after the reporting period

Company History (from Jan. 2010 through the reporting date)

▪ Jan. 2010: Shinhan Data System became a direct subsidiary of SFG ▪ Aug. 2010: Shinhan Macquarie Financial Advisory was disaffiliated from SFG ▪ Feb. 2011: Shinhan BNP Paribas Asset Management (Hong Kong) Ltd. became an indirect subsidiary of SFG ▪ Nov. 2011: Shinhan Bank Vietnam was merged with Shinhan Vina Bank ▪ Dec. 2011: Shinhan Savings Bank became a direct subsidiary of SFG ▪ Nov. 2012: Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary ▪ Jan. 2013: Yehanbyoul Savings Bank joined SFG as a direct subsidiary ▪ Apr. 2013: Shinhan Savings Bank merged with Yehanbyoul Savings Bank. As a result of the integration, Shinhan Savings Bank has been liquidated and Yehanbyoul Savings Bank now exists under the name of “Shinhan Savings Bank” as an existing legal entity ▪ Nov. 2014: LLP MFO Shinhan Finance (Kazakhstan) became an indirect subsidiary of SFG ▪ Jul. 2015: Shinhan Securities Vietnam Co., Ltd became an indirect subsidiary of SFG ▪ Oct. 2015: Banco Shinhan de Mexico became an indirect subsidiary of SFG ▪ Nov. 2015: PT Bank Shinhan Indonesia became an indirect subsidiary of SFG ▪ Dec. 2015: PT. Shinhan Indo Finance became an indirect subsidiary of SFG ▪ Dec. 2015: PT Centratama Nasional Bank became an indirect subsidiary of SFG ▪ Mar. 2016: Shinhan Microfinance Co., Ltd. became an indirect subsidiary of SFG ▪ Jul. 2016: PT Shinhan Securities Indonesia became an indirect subsidiary of SFG ▪ Dec. 2016: Launched new integrated PT Bank Shinhan Indonesia ▪ Oct. 2017: Established Shinhan REITs(Real Estate Investment Trusts) Management Co.,Ltd. as SFG subsidiary ▪ Dec. 2017: Shinhan K REITs became an indirect subsidiary of SFG ▪ Apr. 2018: Shinhan Alpha REITs (formerly known as Shinhan K REITs) was disaffiliated from SFG’s indirect subsidiary due to a change in the largest shareholder ▪ May 2018: GX SHINHAN INTERVEST 1st PEF became an indirect subsidiary of SFG ▪ May 2018: Shinhan DS Vietnam became an indirect subsidiary of SFG ▪ Sep. 2018: Shinhan Alpha Yongsan REIT became an indirect subsidiary of SFG ▪ Oct. 2018: SFG entered into a share purchase agreement with Asia Trust Co., Ltd. for the 100% acquisition. ▪ Feb. 2019: Orange Life Insurance, Ltd. joined SFG as a direct subsidiary (acquisition from majority shareholders) ▪ May 2019: Asia Trust. Co., Ltd. joined SFG as a direct subsidiary ▪ Aug. 2019: Shinhan AI Co., Ltd. incorporated and joined as a direct subsidiary ▪ Jan. 2020: Orange Life Insurance, Ltd. became a wholly-owned subsidiary (acquisition of remaining interests by effecting a comprehensive stock exchange) ▪ Sep. 2020: Neoplux Co., Ltd. joined SFG as a direct subsidiary (acquisition from majority shareholder)

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ▪ Dec. 2020: SFG acquired the remaining interests in Neoplux by effecting a small-scale stock exchange and hence Neoplux has become our wholly owned subsidiary and on January 11, 2021, Neoplux changed its legal name to Shinhan Venture Investment. ▪ Jan. 2021: SFG acquired the remaining 35% interests in Shinhan BNPP Asset Management and it became a wholly- owned subsidiary. Shinhan BNPP Asset Management changed its legal name to Shinhan Asset Management.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Principal(Direct) Subsidiaries under Korean Law (as of Jun. 30, 2021) Subsidiaries Ownership by SFG Shinhan Bank 100.0% Shinhan Card 100.0% Shinhan Investment Corp. 100.0% Shinhan Life Insurance 100.0% Orange Life Insurance 100.0% Shinhan Capital 100.0% Shinhan Asset Management 1) 100.0% Jeju Bank 2) 75.3% Shinhan Savings Bank 3) 100.0% Asia Trust. Co., Ltd. 60.0% Shinhan DS 100.0% Shinhan AITAS 4) 99.8% Shinhan Credit Information 100.0% Shinhan Alternative Investment Management 100.0% Shinhan REITs Management 100.0% Shinhan AI 100.0% Shinhan Venture Investrment 5) 100.0% SHC Management 6) 100.0% 1)On January 15, SFG acquired remaining 35% interests in Shinhan BNP Paribas Asset Management and it became our wholly-owned subsidiary (changed its legal name to Shinhan Asset Management) 2)Jeju Bank is currently listed on the Korea Exchange. 3)On January 30, 2013, Yehanbyoul Savings Bank joined SFG as a direct subsidiary. On April 1, 2013, Shinhan Savings Bank merged with Yehanbyoul Savings Bank, both of which were direct subsidiaries of Shinhan Financial Group. As a result of the integration of the two savings banks, the previous Shinhan Savings Bank has been liquidated and is thus no longer a subsidiary of Shinhan Financial Group and instead, Yehanbyoul Savings Bank now exists under the name of “Shinhan Savings Bank” as an existing legal entity constituting a member of Shinhan Financial Group. 4)On November 30, 2012, Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary. Prior to November 30, 2012, Shinhan AITAS was an indirect subsidiary of SFG under Shinhan Bank, a wholly-owned bank subsidiary of SFG. 5)On January 11, Neoplux changed its legal name to Shinhan Venture Investment. 6)Currently in liquidation proceedings

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indirect subsidiaries held through direct subsidiaries (as of the reporting date) Ownership by Direct Subsidiaries Indirect Subsidiaries the Parent Shinhan Bank America 100.0% Shinhan Bank Japan 100.0% Shinhan Bank Europe 100.0% Shinhan Bank Cambodia 97.5% Shinhan Bank Shinhan Bank Kazakhstan 100.0% Shinhan Bank China Limited 100.0% Shinhan Bank Canada 100.0% Shinhan Bank Vietnam 100.0% Banco Shinhan de Mexico 99.99% PT Bank Shinhan Indonesia 99.0% LLP MFO Shinhan Finance 100.0% PT. Shinhan Indo Finance 50.0% Shinhan Card Shinhan Microfinance Co., Ltd. 100.00% Shinhan Vietnam Finance Co. Ltd. 100.00% Shinhan Investment America Inc. 100.0% Shinhan Investment Asia Ltd. 100.0% Shinhan Securities Vietnam Co., Ltd 100.0% PT Shinhan Sekuritas Indonesia 99.0% Shinhan Investment Corp. KOFC Shinhan Frontier Champ 2010-4 8.5% PEF1) GX SHINHAN INTERVEST 1st PEF5) 14.5% Shinhan Praxis K-Growth Global Private 14.1% Equity Fund 2) Shinhan Life Insurance Shinhan Financial Plux 100.0% KOFC Shinhan Frontier Champ 2010-4 Shinhan Capital 6.5% PEF1) Shinhan Asset Management Shinhan Asset Management 100.0% (Hong Kong) Limited Shinhan Alternative Shinhan Private Equity Fund 2nd 3) 66.3% Investment Management Shinhan DS Shinhan DS Vietnam Co. Limited 100.0% Neoplux 3rd PEF 10.0% Shinhan Venture Investment KTCNP Growth Champ 5.56% 1) Shinhan Financial Group and its subsidiaries currently own 34.6% of KOFC Shinhan Frontier Champ 2010-4 PEF Investment Corp. 2) Shinhan Financial Group and its subsidiaries currently own 18.9% of Shinhan Praxis K-Growth Global Private Equity Fund. 3) Shinhan Financial Group and its subsidiaries currently own 96.74% of Shinhan Private Equity Fund 2nd. 4) Shinhan Financial Group and its subsidiaries currently own 25.27% of GX SHINHAN INTERVEST 1st PEF.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Credit Ratings Rating Company Date Types of Issuance Credit Rating (Rating Range) Electronic Korea Rating(AAA~D) / KIS Rating(AAA~D) / 6/30/2020 A1 Short-term Bond NICE Investors Service(AAA~D) 7/10/2020 Debentures A Standard & Poors (AAA~D) 7/10/2020 Debentures A1 Moody’s (Aaa~C) Write-down Contingent Korea Rating(AAA~D) / KIS Rating(AAA~D) / 9/10/2020 AA- Capital Securities NICE Investors Service(AAA~D) Korea Rating(AAA~D) / KIS Rating(AAA~D) / 10/28/2020 Debentures AAA NICE Investors Service(AAA~D) Korea Rating(AAA~D) / KIS Rating(AAA~D) / 12/22/2020 Debentures AAA NICE Investors Service(AAA~D) Electronic Korea Rating(AAA~D) / KIS Rating(AAA~D) / 2/8/2021 A1 Short-term Bond NICE Investors Service(AAA~D) Korea Rating(AAA~D) / KIS Rating(AAA~D) / 2/18/2021 Debentures AAA NICE Investors Service(AAA~D) Korea Rating(AAA~D) / KIS Rating(AAA~D) / 2/24/2021 Debentures AAA NICE Investors Service(AAA~D) Write-down Contingent Korea Rating(AAA~D) / KIS Rating(AAA~D) / 3/4/2021 AA- Capital Securities NICE Investors Service(AAA~D) Write-down Contingent Korea Rating(AAA~D) / KIS Rating(AAA~D) / 3/4/2021 AA- Capital Securities NICE Investors Service(AAA~D) Korea Rating(AAA~D) / KIS Rating(AAA~D) / 4/22/2021 Debentures AAA NICE Investors Service(AAA~D)s Korea Rating(AAA~D) / KIS Rating(AAA~D) / 5/7/2021 Commercial Paper A1 NICE Investors Service(AAA~D) Write-down Contingent 5/12/2021 Baa3 Moody’s(Aaa~C) Capital Securities Korea Rating(AAA~D) / KIS Rating(AAA~D) / 5/28/2021 Debentures AAA NICE Investors Service(AAA~D)

Number of Shares (as of Jun. 30, 2021) Types of Shares Number of Shares Number of shares authorized 1,000,000,000 for issuance Number of common shares issued (1) 516,599,554 Number of preferred shares issued (2) 17,482,000 Total outstanding shares 534,081,554 Treasury stocks (3) 6,350 Total outstanding shares 516,593,204 with voting rights (1) SFG issued 8,232,906 shares of common stock in relation to a comprehensive stock exchange between SFG and Orange Life Insurance on January 28, 2020. On June 1, 2020, SFG cancelled 5,035,658 treasury shares. On September 29, 2020, SFG had a paid-in capital increase and issued 39,130,000 common shares (third-party allocation). On December 30, 2020, SFG issued 72,719 shares of common stock in relation to a small-scale stock exchange between SFG and Neoplux. (2) For more information, please refer to SFG’s reports on Form 6-K furnished to the Securities and Exchange Commission on February 12, 2019 and April 30, 2019. (3) SFG acquired treasury stocks through the acquisition of fractional shares as a result of a stock exchange between SFG and Orange Life Insurance on January 28, 2020 and between SFG and Neoplux on December 30, 2020.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Dividends (KRW million) FY2021 FY2020 FY2019 Items (Jan. 1 ~ Jun. 30) (Jan. 1 ~ Dec. 31) (Jan. 1 ~ Dec. 31) Par value per share (Won) 5,000 5,000 5,000 (Consolidated) Net Income 2,443,779 3,414,595 3,403,497 (Separate) Net Income 1,486,038 1,274,443 1,129,173 (Consolidated Earnings per share (Won) 4,480 6,654 7,000 Total Cash dividends - 803,838 883,929 Total stock dividends - - - (Consolidated) Cash dividend payout ratio (%) - 23.54 25.97 Cash dividend yield (%) – common shares - 4.52 4.06 Cash dividend yield (%) – preferred shares - 5.17 4.06 Stock dividend yield (%) - - - Cash dividend per share (Won) - 1,500 1,850 Stock dividend per share - - - Note) Cash dividend payout ratio on a common share basis for FY2020 is 22.66%

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2. Business Results Operating Results (KRW billion) FY2021 FY2020 FY2019 (Jan. 1 ~ Jun. 30) (Jan. 1 ~ Dec. 31) (Jan. 1 ~ Dec. 31) Net interest income 5,231 9,883 9,738 Interest income 7,126 14,774 15,707 Interest expense 1,895 4,891 5,969 Net fees and commission income 1,404 2,383 2,141 Fees and commission income 2,125 3,815 3,557 Fees and commission expense 721 1,432 1,417 Net insurance income -331 -604 -497 Insurance income 3,334 7,248 7,569 Insurance expense 3,665 7,852 8,066 Net gain(loss) on securities and FX trading/derivatives 907 1,125 982 Provision for credit loss and impairment loss -359 -1,391 -951 Net other operating income(expense) -840 -1,254 -1,231 General and administrative expenses 2,636 5,212 5,135 Net operating income 3,376 4,930 5,046 Equity method income 66 160 53 Other non-operating income(expense), net -68 -335 -188 Profit before income taxes 3,374 4,754 4,912 Income tax expense 879 1,256 1,269 Consolidated net profit 2,496 3,498 3,642 Net profit attributable to equity holders of the Group 2,444 3,415 3,404 Net profit attributable to non-controlling interest 52 84 239 Notes : Some of the totals may not sum due to rounding.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Source and Use of Funds FY2021 FY2020 FY2019 Jan. 1 ~ Jun. 30 Jan. 1 ~ Dec. 31 Jan. 1 ~ Dec. 31 Consolidated Basis Interest Interest Interest (KRW billion, %) Average Propor-tions Interest Average Propor-tions Interest Average Propor-tions Interest Rate Rate Rate Balance1) (%) Paid Balance1) (%) Paid Balance1) (%) Paid (%) (%) (%) Deposits 336,554.5 54.6 1,034.2 0.62 280,108.9 53.8 3,644.6 1.30 257,656.5 58.2 3,091.7 1.20 Borrowings 28,704.2 4.7 111.5 0.78 22,705.0 4.4 400.2 1.76 19,211.9 4.3 316.9 1.65 Debt Securities Issued 76,126.4 12.3 687.7 1.82 69,636.9 13.4 1,666.3 2.39 57,284.3 12.9 1,336.8 2.33 Source Other Liabilities 128,097.7 20.7 - - 108,013.9 20.7 - - 73,666.5 16.7 - - Total Liabilities 569,482.8 92.3 - - 480,464.7 92.3 - - 407,819.2 92.1 - - Total Stockholder's Equity 47,188.6 7.7 - - 39,922.0 7.7 - - 34,911.0 7.9 - - Total Liabilities & SE 616,671.4 100.0 - - 520,386.7 100.0 - - 442,730.2 100.0 - - Cash & Due from Banks 30,128.8 4.9 45.5 0.30 24,598.6 4.7 241.9 0.98 20,581.4 4.6 188.9 0.92 Loans 368,825.0 59.8 5,750.0 3.14 313,159.5 60.2 12,508.9 3.99 287,925.9 65.0 11,190.7 3.89 Loans in KRW 287,223.6 46.6 4,059.5 2.85 244,234.3 46.9 8,737.8 3.58 224,504.2 50.7 7,892.5 3.52 Loans in Foreign Currency 30,563.3 5.0 529.6 3.49 24,284.0 4.7 1,082.6 4.46 19,306.0 4.4 795.6 4.12 Credit Card Accounts 24,081.1 3.9 937.4 7.85 23,058.3 4.4 1,916.8 8.31 21,543.9 4.9 1,790.2 8.31 Use Others 26,957.0 4.3 223.5 1.67 21,582.9 4.2 771.6 3.58 22,571.8 5.0 712.5 3.16 FVOCI Financial Assets 57,772.7 9.4 426.2 1.49 50,641.0 9.7 1,072.9 2.12 37,064.0 8.4 754.6 2.04 AC Financial Assets 47,856.4 7.8 535.6 2.26 40,955.7 7.9 1,061.3 2.59 26,456.1 6.0 730.4 2.76 Other Assets 112,088.5 18.1 - - 91,031.9 17.5 - - 70,702.8 16.0 - - Total Assets 616,671.4 100.0 - - 520,386.7 100.0 - - 442,730.2 100.0 - - 1) The “Average Balance” is the arithmetic mean of the ending balance of each quarter.

1) Capital Adequacy

Consolidated BIS Ratio (Shinhan Financial Group) (KRW billion) Jun. 30, 2021 Dec. 31, 2020 Dec. 31, 2019 Aggregate Amount of Equity Capital (A) 42,885.3 39,709.1 35,712.3 Risk-Weighted Assets (B) 259,385.9 252,321.4 256,891.7 BIS Ratio (A/B) 16.53% 15.74% 13.90% Note) based on Basel III

Capital Adequacy Ratios (Subsidiaries) (%) Capital Adequacy Jun. 30, Dec. 31, Dec. 31, Subsidiary Ratio 2021 2020 2019 BIS Capital Adequacy Shinhan Bank 18.7 18.5 15.9 Ratio Adjusted Equity Capital Shinhan Card 19.1 19.9 20.1 Ratio Shinhan Investment Net Capital Ratio 1,663.1 1,677.7 1,217.4 Corp. Shinhan Life Risk Based Capital Ratio 243.5 249.5 227.9 Insurance Orange Life Insurance Risk Based Capital Ratio 364.9 395.4 393.9 Adjusted Equity Capital Shinhan Capital 15.7 15.2 13.1 Ratio Equity Capital (KRW 188.9 170.6 164.5 billion) Shinhan Asset Minimum Capital Management Requirement (KRW 31.5 30.7 29.3 billion) BIS Capital Adequacy Jeju Bank 19.3 15.8 14.9 Ratio BIS Capital Adequacy Shinhan Savings Bank 13.7 15.8 15.5 Ratio Asia Trust Net Capital Ratio 956.4 1,016.5 969.6 Notes: 1)The BIS Capital Adequacy Ratio is computed in accordance with the guidelines issued by the FSS for commercial banks. Under these guidelines, commercial banks are required to maintain a minimum capital adequacy ratio of 8%. 2)Basel III FIRB was applied in calculating Shinhan Bank’s BIS Capital Adequacy Ratio. 3)Basel III TSA was applied in calculating Jeju Bank’s BIS Capital Adequacy Ratio. 4)Basel I was applied in calculating Shinhan Savings Bank’s BIS Capital Adequacy Ratio. 5)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 FSS. Under these guidelines, Shinhan Card and Shinhan Capital are required to maintain a minimum adjusted equity capital ratio of 8%. 6)Net Capital Ratio is computed in accordance with the guidelines issued by the FSS. Under these guidelines, Shinhan Investment Corporation is required to maintain a minimum net capital ratio of 100%. 7)Under the guidelines issued by the FSS, Shinhan Life Insurance is required to maintain a minimum RBC ratio of 100%. 8)Under the guidelines issued by the FSS, Shinhan Asset Management is required to hold Equity Capital that exceeds the Minimum Capital Requirement.

Won Liquidity Ratio (KRW billion, %)

Jun. 30, 2021 Dec. 31, 2020 Dec. 31, 2019

Won Won Won Company Won Won Won Won Assets Liquidity Won Assets Liquidity Won Assets Liquidity Liabilities Liabilities Liabilities Ratio(%) Ratio(%) Ratio(%)

Shinhan Financial Group 2,021.4 38.0 5,319.7 1,562.0 451.8 345.7 192.7 37.9 508.2 Shinhan Card 18,453.1 5,185.2 355.9 17,596.2 4,658.9 377.7 17,922.1 4,464.9 401.4 Shinhan Investment Corp. 20,168.0 14,190.9 142.1 18,292.3 13,295.7 137.6 15,099.7 10,869.3 138.9 Shinhan Life Insurance 1,122.7 790.7 142.0 1,475.7 778.7 189.5 1,130.3 703.7 160.6 Orange Life Insurance 1,093.2 555.1 196.9 1,292.8 612.5 211.1 1,291.8 655.4 197.1 Shinhan Capital 1,296.8 750.5 172.8 1,280.7 628.5 203.8 970.1 659.9 147.0 Shinhan Savings Bank 401.0 357.0 112.3 314.7 184.8 170.3 226.1 188.8 119.8 Asia Trust 102.7 17.2 597.1 185.5 21.8 851.4 101.8 10.9 933.1 Notes: 1)Shinhan Financial Group: Due within 1 month 2)Shinhan Life Insurance and Orange Life Insurance: (Won assets due within 3 months /3 months average of Claim payments )*100 3)Shinhan Card, Shinhan Investment Corp., Shinhan Capital, and Shinhan Savings Bank : Due within 3 months 4)Liquidity Ratio for Shinhan Bank and Jeju Bank have been replaced by Liquidity Coverage Ratio from Mar 31, 2015 5)to reflect the recent amendments to detailed regulations on supervision of banking business.

Liquidity Coverage Ratio (KRW billion, %)

Jun. 30, 2021 Dec. 31, 2020 Dec. 31, 2019

High High High Liquidity Liquidity Liquidity Company Quality Net Cash Quality Net Cash Quality Net Cash Coverage Coverage Coverage Liquid Outflows Liquid Outflows Liquid Outflows Ratio(%)* Ratio(%) Ratio(%) Assets Assets Assets Shinhan Bank 63,271.5 71,083.9 89.0 63,154.4 70,453.2 89.6 63,054.8 60,280.6 104.6 Jeju Bank 702.4 623.4 113.0 600.5 572.9 106.0 642.0 510.7 126.2 Notes: 1)Liquidity Coverage Ratios are the arithmetic mean of daily LCRs for 3 months. 2)Financial Services Commission temporarily eased the regulatory minimum from 100.0% to 85.0% in response to COVID-19 pandemic until September 30, 2021.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Foreign Currency (FC) Liquidity Ratio (USD millions, %) Jun. 30, 2021 Dec. 31, 2020 Dec. 31, 2019

FC FC FC Company FC FC FC FC FC FC Liquidity Liquidity Liquidity Assets Liabilities Assets Liabilities Assets Liabilities Ratio(%) Ratio(%) Ratio(%)

Shinhan Financial Group 95.3 9.9 965.0 108.8 9.9 1,099.0 135.3 6.7 2,019.4 Shinhan Investment Corp. 8,197.6 7,762.8 105.6 6,426.3 6,587.4 97.6 6,769.9 6,488.4 104.3 Shinhan Capital 114.2 20.4 559.6 19.2 6.5 221.5 131.9 128.0 103.0 Jeju Bank 24.9 7.2 344.4 21.7 16.3 132.7 29.1 13.9 209.4 Notes : 1)Foreign currency liquidity ratios are computed with assets and liabilities due within 3 months. 2)Jeju Bank’s foreign currency liquidity ratio reflected securitization weight with the guidelines issued by the FSS. 3)Shinhan Bank’s foreign currency liquidity ratio has been replaced by Foreign Liquidity Coverage Ratio.

Foreign Currency (FC) Liquidity Coverage Ratio (USD millions, %) 2021 2Q 2020 2Q 2019 2Q Company Apr. 1 ~ Jun. 30 Apr. 1 ~ Jun. 30 Apr. 1 ~ Jun. 30 Shinhan Bank 112.6 124.8 96.0 Notes : 1)The minimum requirement of the foreign currency liquidity coverage ratio was set at 60% in 2017, 70% in 2018 and was increased gradually to 80% in 2019. 2)Financial Services Commission temporarily eased the regulatory minimum from 80% to 70% in response to COVID-19 pandemic until September 30, 2021. 3)Foreign Currency Liquidity Coverage Ratio is calculated by averaging the daily foreign liquidity coverage ratio for the quarter.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3) Asset Quality SFG Consolidated Basis (KRW billion) Jun. 30, 2021 Dec. 31, 2020 Dec. 31, 2019 Total Loans 374,295.1 357,566.8 326,413.7 Substandard & Below 1,855.5 1,878.3 1,818.0 Substandard & Below Ratio 0.50% 0.53% 0.56% Non-Performing Loans 1,489.9 1,390.3 1,433.3 NPL Ratio 0.40% 0.39% 0.44% Substandard & Below 159.68% 162.95% 148.29% Coverage Ratio Loan Loss Allowance 2,962.8 3,060.8 2,695.8 Substandard & Below 1,855.5 1,878.3 1,818.0 Loans

Separate Basis Jun. 30, 2021 Dec. 31 2020 Dec. 31, 2019

Substandard Substandard Substandard (%) Substandard NPL & Below Substandard NPL & Below Substandard NPL & Below & Below & Below & Below Coverage Ratio Ratio Coverage Ratio Ratio Coverage Ratio Ratio Ratio Ratio Ratio 1) Shinhan Financial ------Group Shinhan Bank 0.35 0.28 134 0.36 0.29 143 0.45 0.36 116 Shinhan Card 0.93 0.41 306 1.09 0.56 277 1.15 0.6 265 Shinhan Investment 4.39 4.39 57 4.63 1.95 60 0.07 0.07 808 Corp Shinhan Life 0.11 0.10 249 0.13 0.12 234 0.12 0.11 208 Insurance Orange Life 0.02 0.05 103 0.02 0.04 97 0.02 0.06 100 Insurance Shinhan Capital 0.55 0.70 246 0.72 0.73 282 0.77 0.99 162 Jeju Bank 0.47 0.39 90 0.6 0.54 93 0.54 0.46 94 Shinhan Savings 2.00 2.22 116 2.69 2.82 88 2.9 2.85 88 Bank Asia Trust 87.0387.03 63 84.8484.84 61 50.6150.37 67

Shinhan Financial Group (Separate Basis) (KRW billion) Jun. 30, 2021 Dec. 31, 2020 Dec. 31, 2019 Debt 10,382.8 10,426.8 9,795.9 Equity 26,842.1 25,057.1 22,465.4 Debt to Equity Ratio 38.68% 41.61% 43.60%

Loans in Guarantees As of Jun. 30, 2021 Loans in Total Foreign Securities and Others Consolidated basis Won Exposures Currency Acceptances Ministry of Economy & - - 41,358.6 - - 41,358.6 Finance Korea Housing Finance - - 9,534.6 - - 9,534.6 Corporation Bank of Korea 2,640.0 - 5,718.5 0.1 - 8,358.6 Korea Development Bank 3.3 127.8 5,891.3 - - 6,022.4 Industrial Bank of Korea 653.3 78.0 3,667.1 - - 4,398.4 NongHyup Bank 861.1 143.2 1,059.4 29.2 - 2,092.9 Samsung Electronics - 2,029.4 - - - 2,029.4 Export-Import Bank of Korea - 11.9 1,681.7 14.0 - 1,707.6 National Agricultural 835.4 - 855.2 - - 1,690.6 Cooperative Federation Korea Land & Housing - - 1,459.1 - - 1,459.1 Corporation Korea Expressway Corporation - - 1,393.6 - - 1,393.6 Kookmin Bank 633.4 261.1 433.7 34.6 - 1,362.8 LG Display 70.9 632.8 60.3 453.7 - 1,217.8 Hana Bank 682.6 119.7 406.2 1.0 - 1,209.5 Woori Bank 547.5 171.9 487.7 - - 1,207.0 Korea SMEs and Startups - - 1,191.6 - - 1,191.6 Agency KB Koonmin Card - - 1,130.8 - - 1,130.8 Hyundai Steel 361.2 303.9 287.0 14.9 0.0 967.0 Korea Electric Power 0.3 - 813.8 118.1 - 932.2 Corporation Korea National Railway 0.1 - 906.1 - - 906.2 Total 7,289.0 3,879.6 78,336.5 665.7 - 90,170.8 Note) Some of the totals may not sum due to rounding

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exposure to ten Main Debtor Groups (KRW billion) Loans in Guarantees As of Jun. 30, 2021 Loans in Total Foreign Securities and Others Consolidated basis Won Exposures Currency Acceptances Samsung 425.7 2,601.5 1,213.9 1,301.8 - 5,543.0 Hyundai Motor 827.8 1,952.3 2,180.1 360.2 0.1 5,320.5 Group Lotte 64.5 1,021.0 1,730.7 447.4 0.1 3,263.6 LG 237.5 890.6 1,033.4 831.4 - 2,992.9 SK 399.4 303.7 1,470.5 349.6 - 2,523.1 Hanwha 276.3 428.5 1,112.6 277.1 - 2,094.5 Hyundai Heavy 155.6 202.2 316.6 1,117.8 - 1,792.3 Industries LS 185.3 542.4 291.0 728.1 0.1 1,746.8 GS 28.3 128.2 478.4 396.1 - 1,031.0 Posco 131.1 365.9 398.9 69.0 - 965.0 Total 2,965.6 7,919.4 10,797.9 5,147.7 0.3 26,830.9 Note) Some of the totals may not sum due to rounding

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Top Twenty Non-Performing Loans (KRW billion) Gross Allowance Substandard Borrower Industry Principal for Loan & Below Outstanding Losses A Other financial service activities n.e.c. 107.3 107.3 21.0 B Other financial service activities n.e.c. 56.5 56.5 56.5 C Manufacture of sections for ships 42.3 40.1 25.2 D Manufacture of plastic products for fabricating of machine 37.5 37.5 29.8 E Other financial service activities n.e.c. 23.7 23.7 9.3 F Building of steel ships 22.6 22.6 0.6 G Other financial service activities n.e.c. 7.3 7.3 7.3 H Other financial service activities n.e.c. 7.3 7.3 7.3 I Manufacture of metal frameworks or skeletons for marine structure and parts thereof 9.0 7.3 5.8 J Manufacture of sections for ships 7.0 7.0 0.0 K Manufacture of other new parts and accessories for motor vehicles n.e.c. 6.3 6.3 2.0 L Building of steel ships 5.8 5.8 5.6 M Quarrying of sand and gravel 5.1 5.1 2.6 N General hospitals 5.0 5.0 1.4 O Manufacture of taps, valves and similar products 4.9 4.6 0.4 P Manufacture of taps, valves and similar products 5.1 4.5 0.7 Q Wholesale of cosmetics and related products 4.5 4.5 0.2 R Manufacture of other textiles n.e.c. 4.5 4.5 0.0 S Retail sale of household textile articles 5.5 4.4 0.6 T Manufacture of polystyrene foam products 4.2 4.2 0.0 Total 371.4 365.3 176.2 Notes : 1)Consolidated basis as of Jun. 30, 2021 2)Some of the totals may not sum due to rounding.

Audit Opinion for the last 3 years FY2020 FY2019 FY2018 KPMG KPMG PwC Samil Independent Samjong Samjong Accounting Auditor Accounting Accounting Corp. Corp. Corp. Audit Opinion Unqualified Unqualified Unqualified

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.

Payment 1) Working Year Auditor Details (KRW mil.) hours 634 PwC Samil Review/Audit of 8,809 (annualized Accounting Corp. Financial Statements Hours basis) FY2020 K-IFRS Report 120 PwC Samil Package Audit for 1,195.5 (annualized Accounting Corp. Shinhan Savings Hours basis) Bank 1,160 KPMG Samjong Review/Audit of 11,497 (annualized Accounting Corp. Financial Statements Hours basis) FY2019 K-IFRS Report 102 KPMG Samjong Package Audit for 1,272 (annualized Accounting Corp. Shinhan Savings Hours basis) Bank 715 KPMG Samjong Review/Audit of 8,470 (annualized Accounting Corp. Financial Statements Hours basis) FY2018 K-IFRS Report 94 KPMG Samjong Package Audit for 850 (annualized Accounting Corp. Shinhan Savings Hours basis) Bank 1)Excluding value-added taxes. * In addition to above mentioned description of fees for audit and review services, PwC Samil Accounting Corp. also provided services related to US listing and ICOFR audit in accordance with the standards of the PCAOB which we agreed to pay KRW2,061 million(excluding value-added taxes) for FY2020.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 5. Corporate Governance Board of Directors and committees of the Board of Directors As of the reporting date, our board of directors is comprised of one executive director, one non-executive directors and twelve outside directors. We currently have eight subcommittees that serve under the board:

- The Risk Management Committee; - The Audit Committee; - The Remuneration Committee; - The Committee for Recommending Candidates for Independent Directors and Members of Audit Committee; - The Committee for Recommending Candidates for CEO; - The Environment, Social and Governance (ESG) Strategy Committee; and - The Committee for Managing Subsidiary’s Business.

Each committee member is appointed by the board of directors, except for members of the Audit Committee, who are elected at the general meeting of shareholders.

Risk Management Committee The Committee oversees and makes determinations on all issues relating to our comprehensive risk management function. In order to ensure our stable financial condition and to maximize our profits, the committee monitors our overall risk exposure and reviews our compliance with risk policies and risk limits. In addition, the committee reviews risk and control strategies and policies, evaluates whether each risk is at an adequate level, establishes or abolishes risk management divisions, reviews risk-based capital allocations, and reviews the plans and evaluation of internal control. Audit Committee

The Committee oversees our financial reporting and approves the appointment of and interaction with our independent auditors and our internal audit-related officers. The Committee also reviews our financial information, audit examinations, key financial statement issues and the administration of our financial affairs by the Board of Directors. In connection with the general meetings of stockholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the Board of Directors for each general meeting of shareholders.

Remuneration Committee This Committee is responsible for reviewing and approving the management’s evaluation and remuneration programs. Committee for Recommending Candidates for Independent Directors and Members of Audit Committee Members of this Committee are appointed by our Board of Directors if and only to the extent necessary to recommend and nominate candidates for our Outside Director positions, audit committee members and related matters. However, when the procedure for final recommendation of outside director and audit committee member candidates commences, all outside directors are called to participate in the committee and in this case, all outside directors are deemed as enrolled. The committee meetings are called by the chair of this committee, who must be an outside director. This committee is responsible and authorized

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document for: (i) establishment, review and reinforcement of policies for outside director and audit committee member selection, (ii) recommendation of outside director and audit committee member candidates for approval at the general shareholders’ meeting and (iii) continual recruitment and screening of potential outside director candidates. Committee for Recommending Candidates for CEO This committee is responsible for matters concerning the recommendation of candidates for the CEO including establishing and reviewing our management succession plan and its operation, setting and evaluating the qualifications and criteria for the CEO and CEO candidate pool and other matters necessary for improving our overall corporate governance structure. The chair of the committee must be an outside director, and the incumbent CEO may be restricted from participating and voting on matters related to the CEO selection. Environmental, Social and Governance (ESG) Strategy Committee This committee is responsible for setting the corporate policy for sustainable management, corporate disclosure of sustainability report and discussing specific business agenda in relation to socially responsible management and other matters such as corporate strategy toward climate change. Committee for Managing Subsidiary’s Business This committee is responsible for matters concerning the evaluation of subsidiary management leadership. establishment of subsidiary CEO qualifications, verification and recommendation of subsidiary CEO candidates and other matters deemed necessary by the committee.

Major Shareholders1) of Shinhan Financial Group as of Jun. 30, 2021 No. of Common Shares Name Ownership%2) owned National Pension Service 50,377,210 9.75 BlackRock Fund 29,063,012 5.63 Advisors3) Employee Stock 25,549,923 4.95 Ownership Association 1) Shareholders who own beneficial ownership of 5% or more (common share basis). 2) Ownership is based on the total number of common shares issued, 516,599,554 shares. 3) Based on the large equity ownership discloser by BlackRock Fund Advisors with the Financial Supervisory Service on Sep. 27, 2018.

Share ownership of Employee Stock Ownership Association (Number of shares, %) Ending Beginning Ownership% Balance Balance Increase Decrease (Jun. 30, Share ownership (Jun. 30, (Jan. 1, 2021) 2021) 2021) Employee Stock 24,680,673 2,329,915 1,544,648 25,465,940 - Ownership ESOA account 107,466 29,934 53,417 83,983 - Total 24,788,139 2,359,849 1,598,065 25,549,923 4.95%

Common Shares Traded on the Korea Exchange (KRW, number of shares) Jan. 2021 Feb. 2021 Mar. 2021 Apr. 2021 May. 2021 Jun. 2021 High 34,200 34,100 37,450 40,000 42,750 43,000 Price per Low 30,650 31,350 33,250 36,350 39,050 39,800 share Average 32,825 32,547 35,423 37,620 41,274 41,686 Trading Volume 75,186,84442,831,13761,259,52036,700,02332,506,08729,729,198 Highest Daily Trading Volume 7,289,269 4,263,157 5,756,996 3,010,796 2,721,258 2,602,606 Lowest Daily Trading Volume 1,810,352 1,132,192 1,380,687 909,708 1,058,721 971,029

American Depositary Receipts traded on the New York Stock Exchange (USD, number of shares) Jan. 2021 Feb. 2021 Mar. 2021 Apr. 2021 May. 2021 Jun. 2021 High 31.43 30.18 33.54 35.76 38.14 39.07 Price per Low 27.67 28.06 29.57 32.94 34.74 35.64 share Avg. 30.09 29.26 31.31 33.79 36.66 37.24 Monthly Trading Volume 2,225,0161,853,5723,526,5062,569,4932,246,3213,035,486 Highest Daily Trading Volume 217,212 149,099 313,854 247,491 237,696 462,650 Lowest Daily Trading Volume 63,115 55,937 72,715 41,520 45,540 40,588 Note) 1 ADR = 1 Common Shares

Directors and Executive Officers

1) Executive Director (As of Jun. 30, 2021) Month and Name Year Position Service Term of Birth - CEO of Shinhan Financial Group - Chair of Committee for Cho Yong- Managing Subsidiary’s 6 years starting from March June 1957 byoung Business 23, 2017 - Member of Environmental, Social and Governance (ESG) Strategy Committee

2) Non-Executive Directors Currently, 13 non-executive directors are in office, 12 of which outside directors who are nominated by our Outside Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting. Our non-executive directors are as follows: (As of Jun. 30, 2021) Month and Year Outside Name Sub-Committees Service Term of Birth Director - Chair of Board of Directors - Member of Audit Committee - Member of ESG Strategy 3 years starting from March Lee Yoon-jae November 1950 O Committee - Member of Committee for 27, 2019 Recommending Candidates for CEO - Chair of ESG Strategy Committee 2 years starting from March Kwak Su Keun August 1953 O - Member of Audit Committee - Member of Committee for 25, 2021 Managing Subsidiary Business - Chair of Risk Management Committee - Member of Remuneration Committee 3 years starting from March Byeon Yang-ho July 1954 O - Member of Committee for Managing Subsidiary Business 27, 2019 - Member of Committee for Recommending Candidates for CEO - Chair of Committee for Recommending Candidates for Independent Directors and Members of Audit Committee 3 years starting from March Huh Yong-hak September 1958 O - Member of Risk Management Committee 27, 2019 - Member of Committee for Recommending Candidates for CEO - Chair of Committee for Recommending Candidates for CEO 3 years starting from March Sung Jae-ho March 1960 O - Member of Audit Committee 27, 2019 - Member of Remuneration Committee

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document - Member of Committee for Managing Subsidiary Business - Chair of Remuneration Committee - Member of Risk Management Committee 2 years starting from March Lee Yong Guk May 1964 O - Member of Committee for 25, 2021 Recommending Candidates for Independent Directors and Members of Audit Committee

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document - Member of Risk Management Committee - Member of ESG Strategy Committee 2 years starting from March Choi Jae Boong February 1965 O - Member of Committee for 25, 2021 Recommending Candidates for Independent Directors and Members of Audit Committee - Chair of Audit Committee - Member of ESG Strategy Committee 2 years starting from March Yoon Jaewon August 1970 O - Member of Committee for Recommending Candidates for 26, 2020 Independent Directors and Members of Audit Committee - Member of Committee for 5 years starting from March Park Ansoon January 1945 O Managing Subsidiary Business 23, 2017 - Member of Remuneration 2 years starting from March Bae Hoon March 1953 O Committee 25, 2021 - Member of Committee for 2 years starting from March Jin Hyun-duk September 1955 O Recommending Candidates for CEO 26, 2020 - Member of Committee for Recommending Candidates for CEO 4 years starting from March Choi Kyong-rok May 1966 O - Member of Committee for Recommending Candidates for 22, 2018 Independent Directors and Members of Audit Committee 4 years starting from March Jin Ok-dong February 1961 X - 27, 2019

3) Executive Officers In addition to the executive directors, we currently have the following executive officers: (As of Jun. 30, 2021) Month and Year Name Position In charge of of Birth Deputy President and Yi Sunny March 1962 - Digital Strategy Group Chief Digital Officer Deputy President and Heo Young August 1961 Chief Management - Business Management Team 1, 2, 3 Taeg Officer - Global Markets & Securities Jang Dong-ki January 1964 Deputy President Business Group Lee Byeong- January 1963 Deputy President - Pension Business Group cheol - Finance Management Team - Accounting Team Deputy President and Roh Yong-hoon March 1964 - Investor Relations Team Chief Financial Officer - Internal Control on Financial Reporting Team - Wealth Management Planning An Hyo-ryul May 1965 Deputy President Group Deputy President and Wang Ho-min March 1964 Chief Compliance - Compliance Team Officer Deputy President and - Shinhan Leadership Center Lee Een-kyoon April 1967 Chief Operation - Management Support Team Officer

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Deputy President and Chief Strategy & - Strategic Planning Team Park Sung-hyun November 1965 Sustainability - ESG Planning Team Officer Deputy President and Ahn Jun Sik November 1965 Chief Public Relations - Brand PR Division Officer - Global Investment Banking Jung Keun Soo April 1966 Deputy President Business Group Kim Soung Jo January 1967 Deputy President - Group Audit Kang Shin Tae April 1965 Deputy President - Global Business Management Group - Risk Management Team Bang Dong- Managing Director and February 1966 - Risk Model Validation Team kwon Chief Risk Officer - Credit Review Team Managing Director and Kim Hye Joo May 1970 - Group Bigdata Strategy Chief Bigdata Officer

Compensation to Directors 1) Total Amount Approved at the Meeting of Shareholders (As of Jun. 30, 2021) Total amount approved Total number of at shareholders’ meeting Notes persons (KRW millions) Directors (Outside 14(12) 3,500 - directors) Note) Represents the aggregate amount for all directors (including outside directors) excluding long-term incentives.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2) Total Amount Paid (As of Jun. 30, 2021) Average Total number Total compensation of compensation Notes per person Persons (KRW million) (KRW million) Excluding outside Registered Directors 2 426 173 directors, Audit committee members Excluding Audit Outside Directors 8 268 36 committee members Audit committee members or internal 4 147 42 auditor Notes : Represents the total number of applicable persons as of Jun. 30, 2021.

Compensation to Non-registered directors (As of Jun. 30, 2021) Average Total number of Total compensation Compensation Notes persons (KRW million) per person (KRW million) Non-registered 8 2,095 262 - directors

Stock Options (As of Jun. 30, 2021) No. of Exercised No. of Cancelled No. of Exercisable No. of Exercise Price Options Options Options Granted Options (A) (KRW) (B) (C) (D = A – B – C) Granted in 2008 50,187 7,024 14,025 29,138 49,053 Total 50,187 7,024 - 19,138 49,053 Notes : 1)The weighted-average exercise price of outstanding exercisable options as of Jun. 30, 2021 is KRW 49,053. 2)The closing price of our common stock was KRW 40,600 on Jun. 30, 2021.

Employees (As of Jun. 30, 2021) Total Salaries and wages Average Payment Number of Gender Average length of Service paid in 2021 per person Employees (KRW million) (KRW million) 2 yrs 10 mths Male 120 13,120 95 (15 yrs 3 mths) 1) 4 yrs Female 33 1,664 49 (10 yrs 7mths) 1) 3 yrs 1 mths Total 153 14,784 86 (14 yrs 4mths) 1) 1) Average length of service including services within group subsidiaries

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. Related Party Transactions Loans to Subsidiaries (KRW billion) Beginning Ending Origination Maturity Lending Balance Loans to Subsidiaries Type DecreaseIncreaseOthers1) Balance Date Date Rate (Jan. 1, (in KRW bil.) (Jun.30,2021) 2021) Loan 2016-01-26 2021-01-26 1.98% 150 150 - - - Loan 2016-02-24 2021-02-24 1.84% 150 150 - - - Loan 2017-03-22 2022-03-22 2.22% 150 - - - 150 Loan 2017-04-20 2022-04-20 2.21% 100 - - - 100 Loan 2017-05-12 2022-05-12 2.35% 50 - - - 50 Loan 2018-02-22 2023-02-22 2.90% 100 - - - 100 Loan 2019-04-18 2024-04-18 2.04% 100 - - - 100 Loan 2019-04-18 2026-04-18 2.09% 100 - - - 100

Shinhan Card Loan 2019-10-22 2024-10-22 1.76% 40 - - - 40 Loan 2019-10-22 2026-10-22 1.81% 60 - - - 60 Loan 2020-09-17 2025-09-17 1.48% 200 - - - 200 Loan 2020-10-29 2023-10-29 1.24% 150 - - - 150 Loan 2020-10-29 2025-10-29 1.46% 150 - - - 150 Loan 2019-11-19 2025-02-04 2.79% 435 - - 18 453 Loan 2021-02-18 2026-02-18 1.54% - - 150 - 150 Loan 2021-02-24 2026-02-24 1.62% - - 150 - 150 Loan 2021-05-26 2026-05-12 1.53% - - 34 - 34

Loan 2019-11-19 2025-02-04 2.79% 98 - - 4 102 Shinhan Investment Corp Loan 2020-08-20 2025-08-20 2.55% 541 - - 23 564 Financial assets at 2021-06-14 - 3.56% - - 300 3 303 FVPL Loan 2019-02-01 2024-02-01 2.23% 50 - - - 50 Loan 2019-05-24 2024-05-24 1.92% 20 - - - 20 Loan 2020-04-10 2025-04-10 1.75% 200 - - - 200 Shinhan Loan 2020-12-23 2025-12-23 1.57% 160 - - - 160 Capital Loan 2021-03-16 2026-03-16 1.83% - - 150 - 150 Financial assets at 2020-04-22 2050-04-22 3.56% 101 - - - 101 FVPL Loan 2020-03-16 2023-03-16 1.42% 38 - - - 38 Shinhan Alternative Investment Loan 2020-12-14 2021-03-12 0.99% 5 5 - - -

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loan 2016-06-172021-06-171.61% 50 - - - 50 Loan 2017-06-232022-06-232.27% 50 - - - 50 Shinhan Savings Bank Loan 2020-05-282025-05-281.52% 50 - - - 50 Loan 2021-04-262026-04-261.85% - - 50 - 50 Loan 2021-05-282026-05-281.99% - - 50 - 50 Shinhan DS Loan 2019-02-012022-02-012.15% 24 - - - 24 Loan 2021-02-082021-05-070.81% - - 7 - 7 Shinhan Venture Investment Loan 2021-05-072021-08-050.81% - - 7 - 7 Total 3,322 362 1,123 46 4,129 1) Due to foreign exchange translation

9. Material Information after the reporting period

(a) Merger between subsidiaries Shinhan Life Insurance Co., Ltd. and Orange Life Insurance Co., Ltd. were merged on July 1, 2021. After the merger, the name is Shinhan Life Insurance Co., Ltd.

(b) Decision of quarterly dividend On August 13, 2021, the Group decided to pay W 300 won per share on common stock and convertible preferred stock for quarterly dividend by resolutions of the Board of Directors. Therefore, the total dividend to be paid is W 160,223 million.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT INDEX Exhibit Description No. 99.1 Independent Auditors’ Review Report (Separate Financial Statements) of Shinhan Financial Group as of June 30, 2021 99.2 Independent Auditors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of June 30, 2021

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. (Registrant)

Date: August 19, 2021 By: /s/ Roh Yong-hoon

Name: Roh Yong-hoon Title: Chief Financial Officer

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 99.1 Independent Auditors’ Review Report (Separate Financial Statements) of Shinhan Financial Group as of June 30, 2021

SHINHAN FINANCIAL GROUP CO., LTD. Separate Interim Financial Statements

June 30, 2021 and 2020 (Unaudited)

Page

Report on Review of Interim Financial Statements 1

Separate Interim Statements of Financial Position 3

Separate Interim Statements of Comprehensive Income 4

Separate Interim Statements of Changes in Equity 5

Separate Interim Statements of Cash Flows 6

Notes to the Separate Interim Financial Statements 8

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Report on Review of Interim Financial Statements

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and Board of Directors of Shinhan Financial Group Co.,Ltd.

Reviewed Financial Statements We have reviewed the accompanying separate interim financial statements of Shinhan Financial Group Co., Ltd.(the Company). These financial statements consist of the separate interim statement of financial position of the Company as at June 30, 2021, and the related separate interim statements of comprehensive income for the three-month and six-month periods ended June 30, 2021 and 2020, and consolidated interim statements of changes in equity and cash flows for the six-month periods ended June 30, 2021 and 2020, and a summary of significant accounting policies and other explanatory notes, expressed in Korean won.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these separate interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of separate interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility Our responsibility is to issue a report on these separate interim financial statements based on our review.

We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion Based on our review, nothing has come to our attention that causes us to believe the accompanying separate interim financial statements are not presented fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.

Emphasis of Matter Without qualifying our conclusion, we draw attention to Note 26 of the financial statements. As explained in Note 26, the rapid spread of the COVID-19 has had a negative impact on the global economy, which can result in an increase in expected credit losses, potential impairment of assets, and negatively affecting the Company's ability to generate revenue. Other Matters We have audited the separate statement of financial position of the Company as at December 31, 2020, and the related separate statements of comprehensive income, changes in equity and cash flows for the year then ended, in accordance with Korean Standards on Auditing. We expressed an unqualified opinion on those financial statements, not presented herein, in our audit report dated March 3, 2021. The separate statement of financial position as at December 31, 2020, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2020.

Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.

August 17, 2021 Seoul, Korea

This report is effective as of August 17, 2021, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying separate interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Separate Interim Statements of Financial Position As of June 30, 2021 and December 31, 2020

(In millions of won) June 30, December 31, Note 2021 (Unaudited) 2020

Assets Due from banks at amortized cost 4, 5, 24 W 44 3 Financial assets at fair value through profit or loss 4, 6, 24 2,313,768 1,810,867 Derivative assets 4, 7 39,392 39,392 Financial assets at amortized cost 4, 8, 24 3,721,393 3,218,455 Property and equipment 24 4,788 4,755 Intangible assets 5,376 5,605 Investments in subsidiaries 9 30,335,041 29,955,184 Assets held for sale 15,385 15,385 Other assets 4, 8, 24 789,702 434,268 Total assets W 37,224,889 35,483,914

Liabilities Derivative liabilities 4, 7 W 22,133 22,133 Debt securities issued 4, 10, 24 9,724,312 9,920,059 Defined benefit liabilities 11 4,341 3,137 Deferred tax liabilities 4,187 1,777 Other liabilities 4, 24 627,840 479,711 Total liabilities 10,382,813 10,426,817

Equity 12 Capital stock 2,969,641 2,969,641 Hybrid bonds 3,334,531 2,179,934 Capital surplus 11,350,819 11,351,424 Capital adjustments (45,797) (45,718) Accumulated other comprehensive loss (6,818) (6,971) Retained earnings 9,239,700 8,608,787 Total equity 26,842,076 25,057,097

Total liabilities and equity W 37,224,889 35,483,914

The above separate interim statements of financial position should be read in conjunction with the accompanying notes.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Separate Interim Statements of Comprehensive Income For the three-month and six-month periods ended June 30, 2021 and 2020

(In millions of Korean won, except earnings per June 30, 2020 share data) Note June 30, 2021 (Unaudited) (Unaudited) Three- Six- Three- Six- month month month month Interest income 21, 24 W Financial assets at amortized cost 18,515 35,484 17,515 30,866 Interest expense 24 (52,814) (106,094) (59,513) (114,325) Net interest expense 13 (34,299) (70,610) (41,998) (83,459)

Fees and commission income 21, 24 15,266 30,522 19,022 31,465 Fees and commission expense 24 (2,008) (2,105) (148) (241) Net fees and commission income 14 13,258 28,417 18,874 31,224

Dividend income 15, 21, 24 200,973 1,571,216 685 1,385,748 Net gain on financial assets at fair value through profit 21 2,181 4,718 4,868 32,852 Net foreign currency transaction gain(loss) 21 5,109 9,259 (2,316) 4,983 Provision for credit loss allowance 16 (133) (495) (130) (773) General and administrative expenses 17, 24 (27,430) (53,477) (24,423) (46,994)

Operating income(loss) 159,659 1,489,028 (44,440) 1,323,581

Non-operating expense (587) (643) (103) (403)

Profit (loss) before income tax 159,072 1,488,385 (44,543) 1,323,178

Income tax expense (benefit) 19 1,083 2,347 (1,689) 1,055 Profit (loss) for the period 157,989 1,486,038 (42,854) 1,322,123

Other comprehensive income(loss) for the period, net of income tax Items that will not be classified to profit or loss Re-measurements of the defined benefit liability 153 153 (92) (92)

Total comprehensive income (loss) for the period W 158,142 1,486,191 (42,946) 1,322,031

Basic and diluted earnings (loss) per share in Korean won 20 W 259 2,686 (110) 2,587

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The above separate interim statements of financial position should be read in conjunction with the accompanying notes.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Separate Interim Statements of Changes in Equity For the six-month periods ended June 30, 2021 and 2020

Accumulated Capital other Capital Hybrid Capital adjust- comprehe- Retained Total stock bonds surplus ments nsive loss earnings Balance at January 1, 2020 W 2,732,463 1,731,235 10,155,223 (600,000) (7,420) 8,453,925 22,465,426 Total comprehensive income for the period: Profit for the period - - - - - 1,322,123 1,322,123 Other comprehensive loss - - - - (92) - (92) - - - - (92) 1,322,123 1,322,031 Transactions with owners: Dividends - - - - - (883,929) (883,929) Paid-in capital increase 41,164 - 286,498 - - - 327,662 Dividend to hybrid bonds - - - - - (40,894) (40,894) Acquisition of treasury stock - - - (150,448) - - (150,448) Disposition of treasury stock - 557,364 - - 557,364 Retirement of treasury stock - - - 150,300 - (150,325) (25) Changes in capital adjustments - - (73) 73 - - - 41,164 - 286,425 557,289 - (1,075,148) (190,270) Balance at June 30, 2020 (Unaudited) W 2,773,627 1,731,235 10,441,648 (42,711) (7,512) 8,700,900 23,597,187 Balance at January 1, 2021 W 2,969,641 2,179,934 11,351,424 (45,718) (6,971) 8,608,787 25,057,097 Total comprehensive income for the period: Profit for the period - - - - - 1,486,038 1,486,038 Other comprehensive income - - - - 153 - 153 - - - - 153 1,486,038 1,486,191 Transactions with owners: Dividends - - - - - (803,838) (803,838) Dividend to hybrid bonds - - - - - (51,287) (51,287) Issuance of hybrid bonds - 1,154,597 - - - - 1,154,597 Acquisition of treasury stock - - - (79) - - (79) Others - - (605) - - - (605) - 1,154,597 (605) (79) - (855,125) 298,788 Balance at June 30, 2021 (Unaudited) W 2,969,641 3,334,531 11,350,819 (45,797) (6,818) 9,239,700 26,842,076

The above separate interim statements of financial position should be read in conjunction with the accompanying notes.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Separate Interim Statements of Cash Flows For the six-month periods ended June 30, 2021 and 2020

Six-month periods ended June 30

(In millions of won) Note 2021 (Unaudited) 2020 (Unaudited)

Cash flows from operating activities Profit before income tax W 1,488,385 1,323,178 Adjustments for: Interest income 13 (35,484) (30,866) Interest expense 13 106,094 114,325 Dividend income 15 (1,571,216) (1,385,748) Net gain on financial instruments at fair value through profit or loss (1,385) (2,588) Net gain on derivative instruments - (26,538) Provision for credit loss allowance 16 495 773 Employee expenses 4,546 (465) Depreciation and amortization 17 1,494 1,407 Net foreign currency translation loss(gain) (8,887) 3,371 Non-operating expense 643 4 (1,503,700) (1,326,325) Changes in assets and liabilities: Financial instruments at fair value through profit or loss (193,833) (497,689) Other assets (201,437) 2 Defined benefit liabilities 1,325 (1,321) Other liabilities (6,184) 956 (400,129) (498,052)

Interest received 34,890 30,095 Interest paid (105,126) (115,745) Dividend received 1,568,798 1,385,063 Income tax paid (269) - Net cash inflow from operating activities 1,082,849 798,214

Cash flows from investing activities Acquisition of financial instruments at fair value through profit or loss (300,024) (100,000) Lending of loans at amortized cost (822,384) (808,000) Collection of loans at amortized cost 362,000 130,000 Acquisition of property and equipment (1,419) (483) Proceeds from disposal of property and equipment 45 - Proceeds from disposal of intangible assets 200 - Increase in other assets (315) - Acquisition of investments in subsidiaries (379,858) - Net cash outflow from investing activities (1,141,755) (778,483)

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Separate Interim Statements of Cash Flows (Continued) For the six-month periods ended June 30, 2021 and 2020

Six-month periods ended June 30 (In millions of won) Note 2021 (Unaudited) 2020 (Unaudited)

Cash flows from financing activities Issuance of hybrid bonds W 1,154,597 - Issuance of debt securities 884,000 1,159,000 Repayments of debt securities issued (1,122,000) (489,000) Debt securities issuance costs paid (1,413) (1,711) Stock issuance costs paid (605) (2,490) Net increase in borrowings - 390,000 Dividends paid (854,703) (924,383) Acquisition of treasury stock (79) (150,473) Repayments of leased liabilities (850) (834) Net cash inflow(outflow) from financing activities 58,947 (19,891)

Net increase(decrease) in cash and cash equivalents 41 (160)

Cash and cash equivalents at the beginning of the period 23 - 164

Cash and cash equivalents at the end of the period 23 W 41 4

The above separate interim statements of financial position should be read in conjunction with the accompanying notes.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Notes to the Separate Interim Financial Statements June 30, 2021 and 2020 (Unaudited), and December 31, 2020

1. Reporting entity

Shinhan Financial Group Co., Ltd. (hereinafter referred to as "the Company") was established on September 1, 2001 for the main business purposes such as control and management of companies operating in the financial industry, and financial support for subsidiaries. In addition, the stocks were listed on the Korea Exchange on September 10, 2001, and the Company was registered with the Securities and Exchange Commission (SEC) on September 16, 2003, and on the same date, ADS (American Depositary Shares) was listed on the New York Stock Exchange (NYSE).

2. Basis of preparation

(a)Statement of compliance

The Company maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (K-IFRS). The accompanying separate financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Company's financial position, financial performance or cash flows, is not presented in the accompanying separate financial statements.

These separate interim financial statements of the Company are prepared as part of the period covered by the Company’s K-IFRS annual financial statements. They are prepared under K-IFRS No.1034, ‘Interim Financial Reporting’, do not include all of the disclosures required for full annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the last annual separate financial statements as of and for the year ended December 31, 2020.

The separate interim financial statements of the Company are separate financial statements prepared in accordance with K-IFRS No. 1027 ‘Separate Financial Statements’ in which presented on the basis of direct equity investments, not on that the controlling company, equity interests in associates and joint ventures does not base the investment on the investee’s reported performance and net assets.

(b) Use of estimates and judgments

The preparation of the condensed separate interim 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. When estimates and assumptions based on management's judgment as of the end of the interim reporting period differ from the actual, actual results may differ from these estimates.

Estimates and underlying assumptions about estimates are continually reviewed, and changes in accounting estimates are recognized for the period in which the estimates are changed and the period to be affected in the future. Income tax expense in the interim period is measured by applying the expected annual income tax rate, i.e. the estimated average annual effective income tax rate.

In preparing these condensed separate interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are, except for the method of estimation used to determine the income tax expense for the interim period, the same as those that applied to the separate financial statements as of and for the year ended December 31, 2020.

3. Significant accounting policies

The Company applies the same accounting policies applied as when preparing the annual separate financial statements for the year ended December 31, 2020, except for the following amendments that has been applied for the first time since January 1, 2021 and as described in Note 2. (b).

(a) K-IFRS No.1109, ‘Financial Instruments’ and K-IFRS No.1039, ‘Financial Instruments: Recognition and Measurement’ and K-IFRS No.1107, ‘Financial Instruments: Disclosures’ Revision’ and K-IFRS No.1104, ‘Insurance Contracts’ K-IFRS No.1116, ‘Leases’ amended – Interest rate benchmark reform

The effective interest rate, not the carrying amount, is adjusted when replacing the interest rate index of a financial instrument measured at amortized cost in relation to the reform of the interest rate index. It includes exceptions, such as allowing hedge accounting to continue uninterrupted even if an interest rate indicator replacement occurs in a hedging relationship. The Company is determining whether there will be any impacts on the financial statements due to the amendments.

(b) Amendments to K-IFRS No.1116 ‘Lease’ - The practical expedient for the exemption, discount or deferral of rent related to COVID-19

The International Accounting Standards Board amended this Standard in March 2021. According to the amendment, the International Accounting Standards Board has extended the application of the practical expedient, a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification, by one year. A lessee shall apply the practical expedient consistently to eligible contracts with similar characteristics and in similar circumstances, irrespective of whether the contract became eligible for the practical expedient as a result of the lessee applying the practical expedient. However, no practical expedient under these amendments is provided to lessors. The practical expedient under this amendment applies only to rent concessions that meet all of the following conditions:

- The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; - Any reduction in lease payments affects only payments originally due on or before June 30, 2022; and - There is no substantive change to other terms and conditions of the lease.

The Company has applied that a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification.

4. Financial risk management

(a) Overview

As a financial services provider, Shinhan Financial Group Co., Ltd. and its subsidiaries (hereinafter referred to as the “Group”) are exposed to various risks that may occur in each business area, and the main risks are credit risk, market risk, interest rate risk and liquidity risk. These risks are recognized, measured, controlled and reported in accordance with the basic risk management policies established by the controlling company and each subsidiary. i) Risk management organization

The Group's basic policies and strategies for risk management are established by the Risk Management Committee (hereinafter referred to as the “Group Risk Management Committee”) within the board of directors of the parent company. The Group's Chief Risk Management Officer (CRO) assists the Group Risk Management Committee and discusses risk policies and strategies of the group and each subsidiary through the Group Risk Council, which consists of each subsidiary's Chief Risk Management Officer. Subsidiaries implement the group's risk policies and strategies through risk management committees, risk-related working committees, and risk management organizations for each company, and consistently establish and implement detailed risk policies and strategies for subsidiaries. The risk management team of the parent company performs the risk management and supervision work by assisting the group's chief risk manager.

Shinhan Financial Group has a hierarchical limit system to manage the group's risks at an appropriate level. The Group Risk Management Committee sets the risk limits that can be borne by the group and each subsidiary, and the risk management committees and management level risk groups of each subsidiary establish and manage detailed risk limits by risk type, department, desk, and product. ii) Risk management framework ii-1) Risk Capital Management

Risk capital refers to capital necessary to compensate for losses in case of a potential risk being realized, and risk capital management refers to the process of asset management based on considerations of risk exposure and risk appetite, which is a datum point on the level of risk burden compared to available capital. As part of the Group’s risk capital management, the Group has adopted and maintains various risk planning processes and reflects such risk planning in the Group’s business and financial planning. The Group also has adopted and maintains a risk limit management system to ensure that risks in the Group’s business do not exceed prescribed limits.

4. Financial risk management (continued)

(a) Overview (continued) ii) Risk management framework (continued) ii-2) Risk monitoring

The Group proactively, preemptively and periodically review risks that may impact our overall operations, through a multidimensional risk monitoring system. Currently, each of subsidiaries is required to report to the Company any factors that could have a material impact on the group-wide risk management, and the Company reports to the Group’s Chief Risk Officer and other members of the Group’s senior management the results of risk monitoring on a weekly, monthly and on an ad hoc basis as needed.

In addition, the Group performs preemptive risk management through a “risk dashboard system” under which the Group closely monitors any increase in asset size, risk levels and sensitivity to external factors with respect to the major asset portfolios of each of subsidiaries, and to the extent such monitoring yields any warning signals, the Group promptly analyze the causes and, if necessary, formulates and implements actions in response to these warning signals. ii-3) Risk review

The risk management departments of all subsidiaries are required to review in advance on matters relating to the adoption of new financial transactions, relating to the entry into new business concerning investment and capital increase, and relating to setting and changing limits. Through these reviews, risk factors are reviewed in advance, reckless promotion of business that may not easily detect risk factors are barred, and reasonable decision-making is supported.

The risk management departments of all subsidiaries are required to review all new businesses, products and services prior to their launch and closely monitor the development of any related risks following their launch, and in the case of any action that involves more than one subsidiary, the relevant risk management departments are required to consult with the risk management team at the controlling company level prior to making any independent risk reviews. ii-4) Crisis management

The Group maintains 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 Company 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 Company directly takes charge of the situation so that the Company manages it on a concerted group wide basis.

4. Financial risk management (continued)

(b) Credit risk

i) Credit risk management

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. The Company’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.

< Techniques, assumptions and input variables used to measure impairment> i-1) Determining significant increases in credit risk since initial recognition

At the end of each reporting period, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Company 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 Company 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 Company 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

Internal credit rate is a key input variable for determining term structure of probability of default. The Company 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 Company uses information obtained from external credit rating agencies when performing these analyses. The Company 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.

4. Financial risk management (continued)

(b) Credit risk (continued)

i) Credit risk management (continued) i-1-3) Significant increases in credit risk

The Company 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. i-2) Risk of default

The Company 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 Company judges that it is not possible to recover principal and interest without enforcing the collateral on a financial asset

The Company 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 Company, the number of days past due per payment obligation. However, in the case of a specific portfolio, the Company uses the number of days past due for each financial instrument) - internal data and external data

The definition of default applied by the Company 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. i-3) Reflection of forward-looking information

The Company 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 Company utilizes the economic outlook published by domestic and overseas research institutes or government and public agencies.

The Company 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. After that, the Company has reflected the forward-looking information through regression estimation.

Key macroeconomic variables Correlation with credit risk KOSPI Negative Private consumption index Negative Facility investment growth rate Negative

The predicted correlations between the macroeconomic variables and the risk of default, used by the Company, are derived based on data from the past ten years.

4. Financial risk management (continued)

(b) Credit risk (continued)

i) Credit risk management (continued) i-4) 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 Shinhan Bank 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 and considering the distribution of ratings so that the counterparty or exposure is not concentrated on a specific rating.

LGD refers to the expected loss if a borrower defaults. The Company 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 Company 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.

In measuring expected credit losses on financial assets, the Company uses the contractual maturity as the period subject to expected credit loss measurement. The contractual maturity is computed taking into account the extension right held by the borrower.

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 for classifying groups are periodically reviewed to maintain homogeneity of the group and adjusted if necessary. The Company uses external benchmark information to supplement internal information for a particular portfolio that did not have sufficient internal data accumulated from the past experience.

4. Financial risk management (continued)

(b) Credit risk (continued)

i) Credit risk management (continued) i-5) Write-off of financial assets

The Company writes off a portion of or entire loan or debt security for which the Company does not expect to receive its principal and interest. In general, the Company writes off the balance 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 Company and is carried out with the approval of Financial Supervisory Service, if necessary. The Company may continue to exercise its right of collection under its own recovery policy even after the write-off of financial assets. ii) The Company’s maximum exposure to credit risk without taking into account of any collateral held or other credit enhancements as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Banks W 44 3 Due from banks and loans at amortized Corporations 3,721,393 3,218,455 cost(*1): 3,721,437 3,218,458 Financial assets at fair value through profit or loss 1,908,894 1,709,421 Derivative assets 39,392 39,392 Other financial assets at amortized cost(*1)(*2) 789,098 434,067 W 6,458,821 5,401,338 (*1) The maximum exposure amounts for due from banks, loans and other financial assets are measured as net of allowances. (*2) Comprise accounts receivable, accrued income, guarantee deposits and etc.

4. Financial risk management (continued)

(b) Credit risk (continued) iii) Information of financial assets by credit risk

Financial assets by credit risk as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 12-months Lifetime Gross Allowance Total, net ECL ECL amount Due from banks and loans at amortized cost(*): Banks W 44 - 44 - 44 Corporations 3,724,211 - 3,724,211 (2,818) 3,721,393 3,724,255 - 3,724,255 (2,818) 3,721,437 Other financial assets at amortized cost 789,433 - 789,433 (335) 789,098 W 4,513,688 - 4,513,688 (3,153) 4,510,535

December 31, 2020 12 months Lifetime Gross Allowance Total, net ECL ECL amount Due from banks and loans at amortized cost(*): Banks W 3 - 3 - 3 Corporations 3,220,856 - 3,220,856 (2,401) 3,218,455 3,220,859 - 3,220,859 (2,401) 3,218,458 Other financial assets at amortized cost 434,324 - 434,324 (257) 434,067 W 3,655,183 - 3,655,183 (2,658) 3,652,525 (*) Credit quality of due from banks and loans is divided into Prime and Normal. Credit quality of due from banks and loans as of June 30, 2021 and December 31, 2020 was classified as Prime. 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+

4. Financial risk management (continued)

Liquidity risk refers to the risk of unexpected losses (such as the disposal of assets abnormal pricing, the procurement of high interest rates, etc.) or insolvency due to inconsistency in funding periods between assets and liabilities or a sudden outflow of funds.

According to the Financial Holding Companies Act, the Company manages liquidity so that the total amount of assets with a residual maturity of less than one month exceeds the total amount of liabilities with a residual maturity of less than one month as of the end of each month.

Contractual maturities for financial instruments as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Less than 1 3 ~ 6 6 months ~ 1 ~ 5 More than month 1 ~ 3 months months 1 year years 5 years Total Non-derivatives Liabilities: Debt securities issued W 25,962 338,860 493,036 1,202,037 5,891,754 2,523,184 10,474,833 Other financial liabilities 24,773 11,262 4,785 23,544 62,324 - 126,688 W 50,735 350,122 497,821 1,225,581 5,954,078 2,523,184 10,601,521 Derivatives Net and total settlement (*) - - - 178,304 - - 178,304 (*) This is an option contract for the acquisition of the remaining stake in the Asia Trust Co., Ltd.

December 31, 2020 Less than 1 3 ~ 6 6 months ~ 1 ~ 5 More than month 1 ~ 3 months months 1 year years 5 years Total Non-derivatives Liabilities: Debt securities issued W 226,981 437,485 543,898 843,681 6,036,095 2,616,181 10,704,321 Other financial liabilities 26,007 19,171 19,232 590 51,698 - 116,698 W 252,988 456,656 563,130 844,271 6,087,793 2,616,181 10,821,019 Derivatives Net and total settlement (*) 199,500 - - - 178,304 - 377,804 (*) This is an option contract for the acquisition of the remaining stake in the Asia Trust Co., Ltd. and Shinhan Asset Management Co., Ltd.

4. Financial risk management (continued)

(d) Measurement for the fair value of financial instruments

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 Company 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 Company uses its judgement to select a variety of methods and make rational assumptions that are mainly based on market conditions existing at the end of each reporting period. The fair value of financial instruments is determined using valuation techniques; such as, a method of using recent transactions between independent parties with reasonable judgement and willingness to trade, a method of referring to the current fair value of other financial instruments that are substantially identical, discounted cash flow model and option pricing models.

The Company 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. i) Financial instruments measured at fair value i-1) The fair value hierarchy of financial assets which are presented at their fair value in the statements of financial position as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Level 1 Level 2 Level 3 Total Assets Financial assets measured at fair value through profit or loss W - 1,908,894 404,874 2,313,768 Derivative assets - - 39,392 39,392 - 1,908,894 444,266 2,353,160 Liabilities Derivative liabilities - - 22,133 22,133

December 31, 2020 Level 1 Level 2 Level 3 Total Assets Financial assets measured at fair value through profit or loss W - 1,709,421 101,446 1,810,867 Derivative assets - - 39,392 39,392 - 1,709,421 140,838 1,850,259 Liabilities Derivative liabilities - - 22,133 22,133

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Notes to the Separate Interim Financial Statements June 30, 2021 and 2020 (Unaudited), and December 31, 2020 (In millions of won)

4. Financial risk management (continued)

(d) Measurement for the fair value of financial instruments (continued) i) Financial instruments measured at fair value (continued) i-2) Changes in level 3 of the fair value hierarchy

- Changes in level 3 of the fair value hierarchy for the six-month periods ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Financial assets measured at FVTPL Net derivative instruments Beginning balance W 101,446 17,259 Recognized in profit or loss 3,404 - Purchases/issues 300,024 - Ending balance W 404,874 17,259

December 31, 2020 Financial assets measured at FVTPL Net derivative instruments Beginning balance W - 6,665 Recognized in profit or loss 1,446 10,594 Purchases/issues 100,000 - Ending balance W 101,446 17,259 i-3) Valuation techniques and input variables unobservable in markets i-3-1) The valuation techniques and the fair value measurement input variables of financial instruments classified as level 2 as of June 30, 2021 and December 31, 2020 are as follows:

Classification Valuation techniques Type Inputs Price of underlying assets such as Financial assets measured at 2021 Net asset valuation approach Beneficiary certificates stocks, bonds, etc. and exchange FVTPL rate. Price of underlying assets such as Financial assets measured at 2020 Net asset valuation approach Beneficiary certificates stocks, bonds, etc. and exchange FVTPL rate.

4. Financial risk management (continued)

(d) Measurement for the fair value of financial instruments (continued) i-3-2) Information about valuation techniques and significant unobservable inputs in measuring financial instruments categorized as level 3 as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Significant Range of estimates Valuation Type of financial unobservable for unobservable technique instrument Book value input input Financial assets Financial assets Volatility of measured Option model(*) Hybrid bonds W 404,874 21.86%~86.25% interest rate at FVTPL Derivative assets Binomial model Equity securities Volatility of 39,392 29.32% underlying assets 444,266 Financial liabilities Derivative Volatility of liabilities Binomial model Equity securities W 22,133 underlying assets 29.32%

(*) It is calculated by applying the Hull-White model method.

December 31, 2020 Significant Range of estimates Valuation Type of financial unobservable for unobservable technique instrument Book value input input Financial assets Financial assets Volatility of measured Option model(*) Hybrid bonds W 101,446 27.26%~41.76% interest rate at FVTPL Derivative assets Binomial model Equity securities Volatility of 39,392 29.32% underlying assets 140,838 Financial liabilities Derivative Volatility of liabilities Binomial model Equity securities W 22,133 underlying assets 29.32%

(*) It is calculated by applying the Hull-White model method.

4. Financial risk management (continued)

(d) Measurement for the fair value of financial instruments (continued) i) Financial instruments measured at fair value (continued) i-4) Sensitivity to changes in unobservable inputs

- For level 3 fair value measurement, changing one or more of the unobservable inputs used to reasonably possible alternative assumptions would have the following effect on profit (loss), and other comprehensive income (loss) as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Profit (loss) for the year Favorable Unfavorable Type of financial instrument change change Financial assets measured at Financial assets FVTPL(*) measured at FVTPL W - - Derivative assets 16,411 (14,738) 16,411 (14,738) Financial assets measured at Derivative liabilities FVTPL(*) 8,342 (10,012)

December 31, 2020 Profit (loss) for the year Favorable Unfavorable Type of financial instrument change change Financial assets measured at Financial assets FVTPL(*) measured at FVTPL W - - Derivative assets 16,411 (14,738) 16,411 (14,738) Financial assets measured at Derivative liabilities FVTPL(*) 8,342 (10,012) (*) Based on 10% of increase or decrease in volatility of underlying assets, and volatility of interest rate, which are major unobservable inputs. ii) The financial instruments measured at amortized cost ii-1) The methods of measuring the fair value of financial instruments measured at amortized cost are as follows: Type Measurement methods of fair value Due from banks at The carrying amount and the fair value for cash are identical and the most of deposits are floating amortized cost interest rate deposit or the next day deposit of a short-term instrument. For this reason, the carrying value approximates fair value. Loans at amortized cost The fair value of the loans is measured by discounting the expected cash flow at the market interest rate and credit risk of the borrower, etc. Borrowings and debt The fair value of borrowings and debt securities issued is based on the published price quotations in securities issued 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.

4. Financial risk management (continued)

(d) Measurement for the fair value of financial instruments (continued) ii) The financial instruments measured at amortized cost (continued) ii-2) The carrying value and fair value of the financial instruments measured at amortized cost as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Carrying value Fair value Carrying value Fair value Assets: Due from banks at amortized cost W 44 44 3 3 Loans at amortized cost 3,721,393 3,704,649 3,218,455 3,312,944 Other financial assets 789,098 789,098 434,067 434,067 W 4,510,535 4,493,791 3,652,525 3,747,014 Liabilities: Debt securities issued W 9,724,312 9,810,830 9,920,059 10,150,023 Other financial liabilities 163,745 163,745 154,215 154,215 W 9,888,057 9,974,575 10,074,274 10,304,238 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 disclosed with their fair values as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Level 1 Level 2 Level 3 Total Assets: Due from banks at amortized cost W - - 44 44 Loans at amortized cost - - 3,704,649 3,704,649 Other financial assets - - 789,098 789,098 W - - 4,493,791 4,493,791 Liabilities: Debt securities issued W - 9,810,830 - 9,810,830 Other financial liabilities - - 163,745 163,745 W - 9,810,830 163,745 9,974,575

December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Due from banks at amortized cost W - - 3 3 Loans at amortized cost - - 3,312,944 3,312,944 Other financial assets - - 434,067 434,067 W - - 3,747,014 3,747,014 Liabilities: Debt securities issued W - 10,150,023 - 10,150,023 Other financial liabilities - - 154,215 154,215 W - 10,150,023 154,215 10,304,238

4. Financial risk management (continued)

(e) Classification by categories of financial instruments

Financial assets and liabilities are measured at fair value or amortized cost. The carrying amounts of each category of financial assets and financial liabilities as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Financial Financial assets liabilities Financial measured at fair Financial assets measured at fair liabilities value through measured value through measured profit or loss at amortized cost profit or loss at amortized cost Assets: Cash and due from banks at amortized cost W - 44 - - Financial assets at fair value through profit or loss 2,313,768 - - - Derivative assets 39,392 - - - Loans at amortized cost - 3,721,393 - - Other financial assets at amortized cost - 789,098 - - W 2,353,160 4,510,535 - - Liabilities: Derivative liabilities W - - 22,133 - Debt securities issued - - - 9,724,312 Other financial liabilities - - - 163,745 W - - 22,133 9,888,057

December 31, 2020 Financial Financial assets liabilities Financial measured at fair Financial assets measured at fair liabilities value through measured value through measured profit or loss at amortized cost profit or loss at amortized cost Assets: Cash and due from banks at amortized cost W - 3 - - Financial assets at fair value through profit or loss 1,810,867 - - - Derivative assets 39,392 - - - Loans at amortized cost - 3,218,455 - - Other financial assets at amortized cost - 434,067 - - W 1,850,259 3,652,525 - - Liabilities: Derivative liabilities W - - 22,133 - Debt securities issued - - - 9,920,059 Other financial liabilities - - - 154,215 W - - 22,133 10,074,274

5. Restricted due from banks

Restricted guaranteed deposits on bank accounts as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Other financial institution deposits W 3 3

6. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Beneficiary certificates Beneficiary certificates in Korean won W 1,795,610 1,602,028 Beneficiary certificates in foreign currency 113,284 107,393 1,908,894 1,709,421 Hybrid Bonds Hybrid Bonds in Korean won 101,423 101,446 Hybrid Bonds in foreign currency 303,451 - 404,874 101,446 W 2,313,768 1,810,867

7. Derivatives

(a) Details of the outstanding contract amount of derivatives held as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Equity related: Over the counter: Equity options W 178,304 178,304 Equity forward - 199,500

(b) The notional amounts and fair values of derivatives as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Assets Liabilities Assets Liabilities

Equity related: Over the counter: Equity options W 39,392 22,133 39,392 22,133

8. Loans at amortized cost

(a) Loans at amortized cost as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Corporate loans W 3,724,211 3,220,856 Less: allowance (2,818) (2,401) W 3,721,393 3,218,455

(b) Changes in financial assets at amortized cost and other assets for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Loans at amortized cost Other assets(*1) 12 month Life time 12 month Life time expected expected Impaired expected expected Impaired credit loss credit loss financial asset credit loss credit loss financial asset Total

Beginning balance W 3,220,856 - - 434,327 - - 3,655,183 Transfer to 12 month expected credit loss ------Transfer to life time expected credit loss ------Transfer to impaired financial asset ------Origination 822,384 - - - - - 822,384 Collection (362,000) - - - - - (362,000) Disposal ------Others (*2) 42,971 - - 355,150 - - 398,121 Ending balance W 3,724,211 - - 789,477 - - 4,513,688 (*1) Includes total carrying amount of due from banks and other financial assets at amortized cost. (*2) Amounts due to changes in dividend receivables of subsidiaries, changes in consolidated tax receivables, increase in accrued income, exchange rate fluctuations and etc.

December 31, 2020 Loans at amortized cost Other assets(*1) 12 month Life time 12 month Life time expected expected Impaired expected expected Impaired credit loss credit loss financial asset credit loss credit loss financial asset Total

Beginning balance W 2,221,322 - - 580,696 - - 2,802,018 Transfer to 12 month expected credit loss ------Transfer to life time expected credit loss ------Transfer to impaired financial asset ------Origination 2,065,603 - - - - - 2,065,603 Collection (985,000) - - - - - (985,000) Others (*2) (81,069) - - (146,369) - - (227,438) Ending balance W 3,220,856 - - 434,327 - - 3,655,183 (*1) Includes total carrying amount of due from banks and other financial assets at amortized cost. (*2) Amounts due to changes in dividend receivables of subsidiaries, changes in consolidated tax receivables, increase in accrued income, exchange rate fluctuations and etc.

8. Loans at amortized cost (continued)

(c) Changes in allowances for financial assets at amortized cost and other assets for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Loans at amortized cost Other assets(*) 12 month Life time 12 month Life time expected expected Impaired expected expected Impaired credit loss credit loss financial asset credit loss credit loss financial asset Total

Beginning allowance W 2,401 - - 257 - - 2,658 Transfer to 12 month expected credit loss ------Transfer to life time expected credit loss ------Transfer to impaired financial asset ------Provision 417 - - 78 - - 495 Ending balance W 2,818 - - 335 - - 3,153 (*) Includes the allowances for due from banks and other financial assets at amortized cost.

December 31, 2020 Loans at amortized cost Other assets(*) 12 month Life time 12 month Life time expected expected Impaired expected expected Impaired credit loss credit loss financial asset credit loss credit loss financial asset Total

Beginning allowance W 1,624 - - 333 - - 1,957 Transfer to 12 month expected credit loss ------Transfer to life time expected credit loss ------Transfer to impaired financial asset ------Provision(Reversed) 777 - - (76) - - 701 Ending allowance W 2,401 - - 257 - - 2,658 (*) Includes the allowances for due from banks and other financial assets at amortized cost.

9. Investments in subsidiaries

Investments in subsidiaries as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Ownership Ownership percentage percentage Name of entity (%) Carrying value (%) Carrying value Shinhan Bank 100.0 W 13,617,579 100.0 W 13,617,579 Shinhan Card Co., Ltd 100.0 7,919,672 100.0 7,919,672 Shinhan Investment Corp 100.0 3,001,420 100.0 3,001,420 Shinhan Life Insurance Co., Ltd(*1) 100.0 982,775 100.0 982,775 Orange Life Insurance Co., Ltd(*1) 100.0 3,221,769 100.0 3,221,769 Shinhan Capital Co., Ltd 100.0 558,921 100.0 408,922 Jeju Bank 75.3 179,643 75.3 179,643 Shinhan Asset Management Co., Ltd(*2) 100.0 291,419 65.0 91,565 Shinhan Alternative Investment Management Inc 100.0 34,787 100.0 14,783 Shinhan Credit Information Co., Ltd(*3) 100.0 - 100.0 - SHC Management Co., Ltd 100.0 8,655 100.0 8,655 Shinhan DS 100.0 23,026 100.0 13,026 Shinhan Savings Bank 100.0 107,065 100.0 107,065 Shinhan AITAS Co., Ltd 99.8 50,092 99.8 50,092 Shinhan REITs Management Co., Ltd 100.0 30,000 100.0 30,000 Asia Trust Co. Ltd 60.0 190,378 60.0 190,378 Shinhan AI Co., Ltd 100.0 42,000 100.0 42,000 Shinhan Venture Investment Co, Ltd 100.0 75,840 100.0 75,840 W 30,335,041 W 29,955,184 (*1) Shinhan Life Insurance Co., Ltd. and Orange Life Insurance Co., Ltd. were merged on July 1, 2021. After the merger, the name is Shinhan Life Insurance Co., Ltd. (*2) For the six-month period ended June 30, 2021, the Company acquired the remaining stocks of Shinhan Asset Management Co., Ltd. and Shinhan Asset Management Co., Ltd. became a wholly owned subsidiary. (*3) For the year ended December 31, 2020, the Company has classified W15,385 million into assets held for sale.(Note 22)

10. Debt securities issued

Debt securities issued as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Interest Interest Amount Amount rate (%) rate (%) Debt securities issued in won: Debt securities issued 0.79 ~ 3.33 W 8,257,000 0.97 ~ 3.33 W 8,495,000 Subordinated debt securities issued 3.44 350,000 3.44 350,000 Discount (7,391) (7,454) 8,599,609 8,837,546

Debt securities issued in foreign currency : Debt securities issued 1.37 565,000 1.37 544,000 Subordinated debt securities issued 3.34 565,000 3.34 544,000 Discount (5,297) (5,487) 1,124,703 1,082,513 W 9,724,312 W 9,920,059

11. Defined benefit liabilities

(a) Defined benefit obligations and plan assets

Defined benefit obligations and plan assets as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Present value of defined benefit obligations W 21,252 20,382 Fair value of plan assets (16,911) (17,245) Recognized liabilities for defined benefit obligations W 4,341 3,137

(b) Net income(loss) relating to the defined benefit liabilities

Net income(loss) relating to defined benefit liabilities for the three-month and six-month periods ended June 30, 2021 and 2020 is as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Current service costs W 536 1,101 647 1,130 Net interest expense on the net defined benefit liabilities 11 45 42 68 W 547 1,146 689 1,198 (*) Profit or loss arising from defined benefit plan is included in general and administrative expenses.

12. Equity

(a) Equity as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Capital stock Common stock W 2,608,176 2,608,176 Preferred stock 361,465 361,465 2,969,641 2,969,641

Hybrid bonds 3,334,531 2,179,934

Capital surplus Share premium 11,350,819 11,351,424 Other - - 11,350,819 11,351,424

Capital adjustments (45,797) (45,718)

Accumulated other comprehensive loss (6,818) (6,971) Retained earnings Legal reserve(*) 2,432,039 2,304,595 Regulatory reserve for loan losses 15,552 11,988 Other legal reserves 2,000 2,000 Unappropriated retained earnings 6,790,109 6,290,204 9,239,700 8,608,787 W 26,842,076 25,057,097 (*) Legal reserve is restricted for the dividend to stockholders by law or legislation. According to the article 53 of the Financial Holding Companies Act, the Company is required to appropriate a legal reserve in an amount equal to at least 10% of cash dividends for each accounting period until the reserve equals 100% of stated capital. The legal reserve may only be used to reduce a deficit or to transfer capital.

12. Equity (continued)

(b) The details of preferred stock are as follows:

Contracted dividend The number of shares rate Conversion request period(*) 4.0% per year based on issue price Convertible preferred stock (non-cumulative, 17,482,000 participating) 2020.05.01~2023.04.30 (*) Preferred stocks that have not been converted for 4 years from the issuance date and until the expiration date of the period of existence are automatically converted to common stocks at the expiration date of the period of existence.

Hybrid bonds classified as other equity instruments as of June 30, 2021 and December 31, 2020 are as follows:

Interest rate Issue date Maturity date (%) June 30, 2021 December 31, 2020 June 25, 2015 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 Hybrid bonds in KRW August 29, 2018 - 4.15 398,679 398,679 June 28, 2019 - 3.27 199,476 199,476 September 17, 2020 - 3.12 448,699 448,699 March 16, 2021 - 2.94 429,009 - March 16, 2021 - 3.30 169,581 - August 13, 2018 - 5.88 559,526 559,526 Hybrid bonds in USD May 12, 2021 - 2.88 556,007 - W 3,334,531 2,179,934

(*) For the six-month period ended June 30, 2021, the deduction for capital related to hybrid bond issued is W4,953 million.

The Company can make early redemption for the above bonds, after 5 or 10 years from the issue date; and has the rights to extend the maturity under the same condition. In addition, if it is decided not to pay out dividends, the interest for the above bonds may also not be paid.

(d) Capital adjustments

Changes in accumulated capital adjustments for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Beginning balance W (45,718) (600,000) Acquisition of treasury stock (79) (150,448) Disposition of treasury stock - 554,430 Retirement of treasury stock - 150,300 Ending balance W (45,797) (45,718)

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Notes to the Separate Interim Financial Statements June 30, 2021 and 2020 (Unaudited), and December 31, 2020 (In millions of won)

12. Equity (continued)

(e) Changes in accumulated other comprehensive loss for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Beginning balance W (6,971) (7,420) Remeasurement of the defined benefit liabilities 211 619 Tax effect (58) (170) Ending balance W (6,818) (6,971)

(f) Regulatory reserve for loan losses

In accordance with Supervisory Regulations on Financial Holding Companies (the “Regulations”), the Company reserves the difference between allowance for credit losses under K-IFRS and that as required by the Regulations at the account of regulatory reserve for loan losses. i) Changes in regulatory reserve for loan losses as of June 30, 2021 and December 31, 2020 are as follows

June 30, 2021 December 31, 2020 Beginning balance W 15,552 11,988 Planned regulatory reserve for loan losses 3,796 3,564 Ending balance W 19,348 15,552 ii) Profit for the period and earnings per share after adjusted for regulatory reserve for the six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Profit for the period W 1,486,038 1,322,123 Provision for regulatory reserve for loan losses (3,796) (1,598) Profit for the period adjusted for regulatory reserve W 1,482,242 1,320,525 Basic and diluted earnings per share in won factoring in regulatory reserve(*) W 2,679 2,584 (*) Dividends for hybrid bonds are deducted.

12. Equity (continued)

(g) Treasury stock

The change in treasury stock for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Beginning balance Acquisition (*) Disposal Retirement Ending balance The number of shares 3,926 2,424 - - 6,350 Carrying value W 148 79 - - 227 (*) The Company reacquired the shares that occurred during the stock exchange with Shinhan Venture Investment Co., Ltd.

December 31, 2020 Beginning balance Acquisition (*) Disposal (*) Retirement Ending balance The number of shares 13,882,062 5,039,584 13,882,062 5,035,658 3,926 Carrying value W 600,000 150,448 600,000 150,300 148 (*) The Company disposed of treasury stocks when exchanging shares with Orange Life Insurance Co., Ltd. and re-acquired the shares that occurred during the exchange of shares.

(h) The details of dividends paid by the resolution of the 20th annual shareholders' meeting are as follows:

Amount Common stock (W1,500 per share) W 773,839 Convertible preferred stock (W1,716 per share) 29,999 W 803,838

13. Net interest expense

Net interest income for the three-month and six-month periods ended June 30, 2021 and 2020 is as follows:

June 30, 2021 June 30, 2020 Three- Three- Interest income: Six-month Six-month month month Due from banks at amortized cost W 8 30 16 64 Loans at amortized cost 18,478 35,394 17,448 30,701 Others 29 60 51 101 18,515 35,484 17,515 30,866 Interest expense: Borrowings - - (3,482) (3,746) Debt securities issued (52,807) (106,080) (56,022) (110,560) Others (7) (14) (9) (19) (52,814) (106,094) (59,513) (114,325) Net interest expense W (34,299) (70,610) (41,998) (83,459)

14. Net fees and commission income

Net fees and commission income for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Fees and commission income: Royalty W 15,262 30,517 19,018 31,457 Other 4 5 4 8 15,266 30,522 19,022 31,465 Fees and commission expense: Others (2,008) (2,105) (148) (241) Net fees and commission income W 13,258 28,417 18,874 31,224

15. Dividend income

Dividends income for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Three- Six- Six-month month month month Dividend from subsidiaries W 200,080 1,569,438 - 1,385,063 Interest income from hybrid bond 893 1,778 685 685 W 200,973 1,571,216 685 1,385,748

16. Provision for credit losses allowance

Provision for credit losses allowance for the three-month and six-month periods ended June 30, 2021 and 2020 is as follows:

June 30, 2021 June 30, 2020 Three- Three- Six- Six-month month month month Provision for credit losses allowance W 133 495 130 773

17. General and administrative expenses

General and administrative expenses for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Three- Six-month Six-month month month Salaries: Salary expenses and bonuses W 10,011 20,270 7,906 14,852 Severance benefits 547 1,146 689 1,198 Rent 227 466 218 480 Lease 45 785 54 110 Entertainment 507 1,018 464 952 Depreciation 743 1,465 693 1,378 Amortization 14 28 15 29 Taxes and dues 224 475 120 367 Advertising 9,719 17,499 9,210 15,675 Others 5,393 10,325 5,054 11,953 W 27,430 53,477 24,423 46,994

18. Share-based payments

(a) Stock options granted as of June 30, 2021 are as follows:

7th grant (*)

Type Cash payment

Grant date March 19, 2008

Exercise price in Korean won W49,053

Number of shares granted 808,700

Contractual exercise period September 17, 2021

Changes in number of shares granted: Balance at January 1, 2021 36,162 Exercised 7,024 Balance at June 30, 2021 29,138

W29 Fair value per option in Korean won (Expiration of contractual exercise period : Sep 17, 2021) (*) The equity instruments granted are fully vested as of June 30, 2021 and the weighted average exercise price in won for 29,138 stock options outstanding at June 30, 2021 is W49,053.

18. Share-based payments (continued)

(b) Performance shares granted as of June 30, 2021 are as follows:

Expired Not expired Type Cash-settled share-based payment

Performance conditions(*1) Relative stock price linked (20.0%), management index (80.0%)

4 years from the commencement date of the year to which the grant Exercising period date belongs

Estimated number of shares vested at June 30, 2021 129,120 1,980,208

W40,580, W44,222 and W33,122 for the expiration Fair value per share in Korean won (*2) W 40,600 of exercising period from 2018 to 2020 (* 1) Starting with the shares provided since 2020, Shinhan Financial Group and subsidiaries related to banking segment will apply relative stock price linked (20.0%), management index linked(60.0%), and prudential index linked(20.0%). (*2) Based on performance-based stock compensation, the reference stock price (the arithmetic average of the weighted average share price of transaction volume for the past two month, the previous one month, and the past one week) of four years (In the case of deferred quantity for after five years) after the commencement of the grant year is paid in cash, and the fair value of the reference stock to be paid in the future is assessed as the closing price of the reporting date.

18. Share-based payments (continued)

Based on the share-based payment arrangements held by the Company, the share-based compensation costs for the six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 Employees of Shinhan Financial Group Subsidiaries Total Stock options granted: 7th W - (1) (1) Performance shares 3,416 25,929 29,345 W 3,416 25,928 29,344

June 30, 2020 Employees of Shinhan Financial Group Subsidiaries Total Stock options granted: 6th W (1) (4) (5) 7th (7) (10) (17) Performance shares (1,655) (14,453) (16,108) W (1,663) (14,467) (16,130)

18. Share-based payments (continued)

(d) In accordance with the stock-based compensation agreements by the Company, the share-based payments as of June 30, 2021 and December 31, 2020 are as follows.

June 30, 2021 Accrued expense (*1) Shinhan Financial Group Subsidiaries(*2) Total Stock options granted: 7th W 1 - 1 Performance shares 9,728 75,528 85,256 W 9,729 75,528 85,257 (*1) The intrinsic value of share-based payments is W85,256 million as of June 30, 2021. For calculating, the quoted market price of W40,600 per share was used for stock options and the fair value was considered as intrinsic value for performance shares, respectively. (*2) The Company has granted the above share-based payment arrangements to its employees and those of its subsidiaries and the Company requires the subsidiaries to reimburse the compensation costs for their employees. As of June 30, 2021, the Company recognized the corresponding accounts receivable from the subsidiaries in the amount of W75,528 million.

December 31, 2020 Accrued expense (*1) Shinhan Financial Group Subsidiaries (*2) Total Stock options granted: 7th W 1 1 2 Performance shares 7,201 60,241 67,442 W 7,202 60,242 67,444 (*1) The intrinsic value of share-based payments is W 67,442 million as of December 31, 2020. For calculating, the quoted market price of W 32,050 per share is used for stock options and the fair value is considered as intrinsic value for performance shares, respectively. (*2) The Company has granted the above share-based payment arrangements to its employees and those of its subsidiaries and the Company requires the subsidiaries to reimburse the compensation costs for their employees. As of December 31, 2020, the Company recognized the corresponding accounts receivable from the subsidiaries in the amount of W 60,242 million.

19. Income tax

Income tax expense(income) for the three-month and six-month periods ended June 30, 2021 and 2020 is as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Current income tax expense W (114) (6) - - Temporary differences 1,255 2,411 (1,724) 1,020 Income tax recognized directly in equity (58) (58) 35 35 Income tax expense(income) W 1,083 2,347 (1,689) 1,055

20. Earnings per share

Basic and diluted earnings(losses) per share for the three-month and six-month periods ended June 30, 2021 and 2020 is as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Net profit (loss) for the period W 157,989 1,486,038 (42,854) 1,322,123 Less: Dividends to hybrid bonds 19,825 51,287 11,750 40,894 Net profit (loss) available for common stock W 138,164 1,434,751 (54,604) 1,281,229

Weighted average number of common stocks outstanding (*) 534,075,204 534,075,525 497,074,649 495,212,399 Basic and diluted earnings (loss) per share in Korean won W 259 2,686 (110) 2,587 (*) The number of common stocks issued is 516,599,554, and the above weighted average number of stocks are calculated by reflecting the changes in treasury stocks for the six-month period ended June 30, 2021 and 17,482,000 convertible preferred shares issued on May 1, 2019.

21. Operating revenue

Revenue for the three-month and six-month periods ended June 30, 2021 and 2020 is as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Dividend income W 200,973 1,571,216 685 1,385,748 Fees and commission income 15,266 30,522 19,022 31,465 Interest income 18,515 35,484 17,515 30,866 Gain on financial assets at fair value through profit or loss 3,669 6,391 4,478 6,314 Gain on financial derivatives - - - 26,538 Gain on foreign currency transaction 7,577 57,386 (10,109) 31,032 W 246,000 1,700,999 31,591 1,511,963

22. Commitments and contingencies

(a) Commitments

The Company entered into the share purchase agreement with the shareholder of Asia Trust Co., Ltd. to buy 60% stake of Asia Trust Co., Ltd., which also includes the right of the Company to buy additional 40% stake of Asia Trust Co., Ltd. and the right of the shareholder of Asia Trust Co., Ltd. to sell the additional 40% stake of Asia Trust Co., Ltd. Under the terms of the agreement, the Company reserves the right to purchase shares held by shareholders of Asian Trust Co., Ltd., and in response, shareholders of Asia Trust Co., Ltd. reserve the right to request that the Company purchase.

As of June 30, 2021, derivative assets and liabilities are recognized at W39,392 million and W22,133 million, respectively, according to the agreement. (Note 7)

(b) As of June 30, 2021, the Company has a borrowing limit agreement for W 100 billion with the Korea Development Bank, and there is no amount executed.

The Company classified investments in subsidiaries to assets held for sale, where the sale is expected to occur in short period of time, for W 15,385 million as of the June 30, 2021.

(d) Contingencies

As of June 30, 2021, there is one lawsuit (481 million won in litigation) pending as a defendant. The results of the lawsuit are not expected to have a significant impact on the financial statements, but additional losses may occur.

23. Statement of cash flows

(a) Cash and cash equivalents in the separate statements of cash flows as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Due from financial institutions with a maturity less than three months from date of acquisition W 41 -

23. Statement of cash flows (continued)

(c) Changes in liabilities arising from financing activities for the six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 Borrowings Debentures Lease liabilities Total Balance at January 1, 2021 W - 9,920,059 1,665 9,921,724 Changes from cash flows - (239,413) (850) (240,263) Changes from non-cash flows: Amortization of discount on debentures - 1,863 14 1,877 Foreign currency difference - 41,803 - 41,803 Changes from others: - - 928 928 Balance at June 30, 2021 W - 9,724,312 1,757 9,726,069

June 30, 2020 Borrowings Debentures Lease liabilities Total Balance at January 1, 2020 W - 9,147,640 2,256 9,149,896 Changes from cash flows 390,000 668,289 (834) 1,057,455 Changes from non-cash flows: Amortization of discount on debentures - 1,617 19 1,636 Foreign currency difference - 21,332 - 21,332 Changes from others: - - 154 154 Balance at June 30, 2020 W 390,000 9,838,878 1,595 10,230,473

24. Related party transactions

The Company defines subsidiaries, key managements, and their families as a range of related parties in accordance with K-IFRS No.1024, and discloses the amount of transactions between the Company and related parties and the balance of receivables and payables. For details of subsidiaries, refer to 'Note 9'.

(a) Significant transactions with the related parties for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

Related party Account June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Revenue: Shinhan Bank Interest income W 33 59 49 97 〃 Fees and commission income 9,609 19,218 11,143 19,218 〃 Dividend income - 770,000 - 890,000 〃 Reversal of credit losses 5 5 104 104 Shinhan Card Co., Ltd. Interest income 9,719 19,520 8,712 17,357 〃 Fees and commission income 3,063 6,127 4,058 6,127 〃 Dividend income - 394,287 - 330,724 Shinhan Investment Corp. Interest income 4,285 8,475 4,259 5,383 〃 Fees and commission income 1,118 2,237 1,084 2,237 〃 Dividend income - 7,391 - 7,391 Shinhan Life Insurance Co., Ltd. Fees and commission income 598 1,195 592 1,195 〃 Dividend income - 50,000 - 50,000 〃 Reversal of credit losses - - - 2 Shinhan Capital Co., Ltd. Interest income 3,006 5,002 3,683 6,578 〃 Fees and commission income 301 603 347 604 〃 Dividend income 892 25,836 684 19,583 Jeju Bank Fees and commission income 54 108 (54) 108 〃 Dividend income - 2,420 - 2,420 〃 Reversal of credit losses - - - 1 Shinhan Credit Information Fees and commission income Co., Ltd. 1 1 (4) 2

24. Related party transactions (continued)

(a) Significant transactions with the related parties for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows: (continued):

Related party Account June 30, 2021 June 30, 2020 Six- Three- Six- Three-month month month month Revenue(continued): Shinhan Alternative Investment Interest income Management Inc.. W 133 277 133 156 〃 Fees and commission income 7 15 12 15 〃 Reversal of credit losses - 10 - - Shinhan Asset Management Co., Ltd. Fees and commission income 70 134 43 70 〃 Dividend income - - - 13,585 〃 Reversal of credit losses - - (1) - Shinhan DS Interest income 129 258 128 258 〃 Fees and commission income 5 9 - 8 〃 Reversal of credit losses 90 90 (1) - Shinhan AITAS Co., Ltd. Fees and commission income 25 50 30 50 〃 Dividend income - 4,682 - 3,994 Shinhan Savings Bank Interest income 899 1,570 549 1,033 〃 Fees and commission income 75 150 103 152 〃 Dividend income - 5,000 - 5,000 Shinhan REITs Management Fees and commission income Co., Ltd 19 38 27 39 〃 Reversal of credit losses 1 1 2 2 Orange Life Insurance Co., Ltd Fees and commission income 248 497 1,373 1,373 Dividend income 200,080 311,600 - 63,050 Asian Trust Co., Ltd Fees and commission income 68 136 266 266 Interest income 14 22 - - Shinhan Venture Investment Co., Ltd. Fees and commission income 3 3 - - W 234,550 1,637,026 37,321 1,448,182

24. Related party transactions (continued)

(a) Significant transactions with the related parties for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows: (continued):

Related party Account June 30, 2021 June 30, 2020 Six- Three- Six- Three-month month month month Expense: Shinhan Bank Interest expenses W 2 5 3 7 General and administrative 〃 expenses 266 533 248 611 Provision for credit losses (40) - (11) - Shinhan Card Co., Ltd. Interest expenses - 1 - 1 General and administrative 〃 17 35 expenses 15 26 〃 Provision for credit losses 39 65 (16) 5 Shinhan Investment Corp. Interest expenses 40 95 56 112 Fee expenses (*) - - 1,800 1,800 General and 〃 administrative - - expenses 7 13 〃 Provision for credit losses (30) 53 (105) 292 Shinhan Life Insurance Co., Ltd. Interest expenses - - 1 3 General and administrative 〃 expenses - - 124 225 〃 Provision for credit losses (2) - - - Shinhan Capital Co., Ltd. Provision for credit losses 129 239 142 149 Shinhan Credit Information Provision for credit losses Co., Ltd. 1 1 - - Shinhan Alternative Investment Provision for credit losses Management Inc. - - 70 281 General and Shinhan DS administrative expenses 377 855 962 2,028 Provision for credit 〃 losses (8) - - - Provision for credit Shinhan Savings Bank losses 139 145 155 155 Shinhan REITs Management Provision for credit Co., Ltd. losses (1) - (1) - Orange Life Insurance, Ltd. Interest expenses 334 665 358 715 Provision for credit 〃 losses - 6 - - General and Shinhan AI Co., Ltd. administrative expenses 34 69 - - Provision for credit 〃 losses 1 2 1 1 Provision for credit Shinhan Venture Investment Co., Ltd. losses - 89 - - W 1,298 2,858 3,809 6,424 (*) Capital transaction costs are deducted directly from equity.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. Notes to the Separate Interim Financial Statements June 30, 2021 and 2020 (Unaudited), and December 31, 2020 (In millions of won)

24. Related party transactions (continued)

(b) Significant balances with the related parties as of June 30, 2021 and December 31, 2020 are as follows:

June 30, December 31, Creditor Debtor Account 2021 2020 Assets: Shinhan Financial Group Co., Ltd. Shinhan Bank Due from banks W 43 3 Property and 〃〃 equipment 517 1,035 〃〃 Other assets 248,380 258,536 〃 Shinhan Card Co.,Ltd. Loans 1,985,900 1,935,200 〃〃 Reserve for loan losses (890) (867) Property and 〃〃 equipment 116 149 〃〃 Other assets 146,424 48,001 Financial assets at fair Shinhan Investment Cop. value through profit or loss (*) 303,451 - 〃 Loans 663,310 638,656 〃〃 Reserve for loan losses (435) (418) 〃〃 Other assets 115,145 59,664 〃 Shinhan Life Insurance Co., Ltd. Other assets 6,554 5,714 〃 Orange Life Insurance Co., Ltd Other assets 214,090 5 Shinhan Capital Co.,Ltd. Financial assets at fair 〃 value through profit or loss (*) 101423 101,446 〃〃 Loans 806,000 430,000 〃〃 Reserve for loan losses (528) (282) 〃〃 Other assets 35,120 45,743 〃 Shinhan Asset Management Co., Ltd. Other assets 1,852 1,369 〃 Jeju Bank Other assets 2,230 1,806 〃 Shinhan Credit Information Co., Ltd. Other assets 1,050 458 Shinhan Alternative Investment 〃 Management Inc. Loans 38,000 43,000 〃〃 Reserve for loan losses (77) (87) 〃〃 Other assets 700 659 〃 Shinhan DS Loans 24,000 24,000 〃〃 Reserve for loan losses (206) (301) Property and 〃〃 equipment 536 548 〃 Other assets 3,017 1,740 〃 Shinhan AITAS Co., Ltd. Other assets 814 626 〃〃

24. Related party transactions (continued)

(b) Significant balances with the related parties as of June 30, 2021 and December 31, 2020 are as follows (continued):

June 30, December 31, Creditor Debtor Account 2021 2020 Assets: 〃 Shinhan Savings Bank Loans 200,000 150,000 〃 Reserve for loan losses (593) (445) 〃 Other assets 6,470 7,645 〃 Asia Trust Co., Ltd. Other assets 319 117 〃 Shinhan REITS management Other assets 1,009 1,541 〃 Shinhan AI Co., Ltd. Other assets 293 179 Shinhan Venture Investment 〃 Co, Ltd Loans 7000 - 〃〃 Reserve for loan losses (88) - 〃〃 Other assets 569 12 W 4,911,515 3,755,452 Liabilities: Shinhan Financial Group Shinhan Bank. Other liabilities Co., Ltd. W 10,337 987 Shinhan Card Co., Ltd. 〃 Other liabilities 1,137 430 Shinhan Investment Corp. 〃 Other liabilities 2,898 - Shinhan Life Insurance Co., Ltd. 〃 Other liabilities 12,155 18,917 Shinhan Capital Co., Ltd. 〃 Other liabilities 47 62 Shinhan Savings Bank 〃 Other liabilities 345 - Shinhan DS 〃 Other liabilities 11 436 Orange Life Insurance Co., Ltd. 〃 Loans 50,000 50,000 〃〃 Other liabilities 246 246 Shinhan AI Co., Ltd. 〃 Other liabilities 5 - W 77,181 71,078 (*) It is the carrying amount for the purchase of hybrid bond.

24. Related party transactions (continued)

(c) Right-of-use assets and lease liabilities recognised through lease transactions with related parties as of June 30, 2021 and December 31, 2020 are as follows:

Related parties June 30, 2021 December 31, 2020 Right-of-use assets Shinhan Bank. W 517 1,035 Shinhan Card Co., Ltd. 116 149 W 633 1,184

Lease liabilities Shinhan Bank. W 455 906 Shinhan Card Co., Ltd. 121 154 W 576 1,060

(d) Fund transaction Major fund transactions with related parties for the six-month periods ended the June 30, 2021 and 2020 are as follows:

June 30, 2021 Beginning Ending balance Lending Purchase Collection Others(*) balance Shinhan Card Co., Ltd. W 1,935,200 333,684 - 300,000 17,016 1,985,900 Shinhan Investment Corp. 638,656 - 300,024 - 28,081 966,761 Shinhan Capital Co., Ltd. 531,446 374,700 - - 1,277 907,423 Shinhan Alternative Investment Management Inc. 43,000 - - 5,000 - 38,000 Shinhan Savings Bank 150,000 100,000 - 50,000 - 200,000 Shinhan DS 24,000 - - - - 24,000 Shinhan Venture Investment Co., Ltd. - 14,000 - 7,000 - 7,000 W 3,322,302 822,384 300,024 362,000 46,374 4,129,084

June 30, 2020 Beginning Ending balance Lending Purchase Collection Others(*) balance Shinhan Card Co., Ltd. W 1,463,120 - - - 17,160 1,480,280 Shinhan Investment Corp. 104,202 520,000 - 130,000 3,861 498,063 Shinhan Capital Co., Ltd. 530,000 200,000 100,000 - 846 830,846 Shinhan Alternative Investment Management Inc. - 38,000 - - - 38,000 Shinhan Savings Bank 100,000 50,000 - - - 150,000 Shinhan DS 24,000 - - - - 24,000 W 2,221,322 808,000 100,000 130,000 21,867 3,021,189 (*) Other transactions are the amount due to financial asset evaluation and foreign currency conversion.

24. Related party transactions (continued)

(e) Compensation of key management personnel (executives) for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- month month month Six-month Salaries W 1,450 3,085 551 1,572 Severance benefits 23 45 13 25 Share-based payment expenses(*) 1,195 2,245 233 (569) W 2,668 5,375 797 1,028 (*) Expenses recognized during the vesting period under the agreement on share-based payments.

(f) Shinhan Investment Corp., the subsidiary, acquired bonds of W 315,000 million and W 40,000 million issued by the Company for the six-month periods ended June 30, 2020 and 2021 respectively.

(g) As of the June 30, 2021, the credit commitment amount provided by Shinhan Card Co., Ltd., a subsidiary company, is W 4,000 million.

25. Events after the reporting period

On August 13, 2021, the Company decided to pay W 300 won per share on common stock and convertible preferred stock for quarterly dividend by resolutions of the Board of Directors. Therefore, the total dividend to be paid is W 160,223 million.

26. Uncertainty due to changes in domestic and global economic conditions

The rapid spread of the COVID-19 is negatively affecting the global economy. The Company uses forward-looking information to estimate expected credit losses in accordance with Korean IFRS No.1109 ‘Financial Instruments’ and there have been significant changes in forward-looking information due to the spread of the COVID-19 virus for the year ended December 31, 2020. As of December 31, 2020, the forecast default rate is re-estimated using changed forward-looking information on KOSPI, private consumption index and facility investment growth rate which are major variables for calculating the default rate.

As of June 30, 2021, the economic has remained uncertain. Expected credit losses may change depending on the end of the COVID-19 and the pace of economic recovery. The Company will continue to monitor the impact of the COVID-19 on the economy.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 99.2 Independent Auditors’ Review Report (Consolidated Financial Statements) of Shinhan Financial Group as of June 30, 2021

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Consolidated Interim Financial Statements

June 30, 2021 and 2020

(Unaudited)

Page

Report on Review of Interim Financial Statements 1

Consolidated Interim Statements of Financial Position 3

Consolidated Interim Statements of Comprehensive Income 4

Consolidated Interim Statements of Changes in Equity 6

Consolidated Interim Statements of Cash Flows 8

Notes to the Consolidated Interim Financial Statements 10

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and Board of Directors of Shinhan Financial Group Co.,Ltd.

Reviewed Financial Statements We have reviewed the accompanying consolidated interim financial statements of Shinhan Financial Group Co.,Ltd. and its subsidiaries (collectively referred to as the “Group”). These financial statements consist of the consolidated interim statement of financial position of the Group as at June 30, 2021, and the related consolidated interim statements of comprehensive income for the three-month and six-month periods ended June 30, 2021 and 2020, and consolidated interim statements of changes in equity and cash flows for the six-month periods ended June 30, 2021 and 2020, and a summary of significant accounting policies and other explanatory notes, expressed in Korean won.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility Our responsibility is to issue a report on these consolidated interim financial statements based on our review.

Conclusion Based on our review, nothing has come to our attention that causes us to believe the accompanying consolidated interim financial statements are not presented fairly, in all material respects, in accordance with Korean IFRS No. 1034 Interim Financial Reporting.

Emphasis of Matter Without qualifying our conclusion, we draw attention to Note 33 of the financial statements. As explained in Note 33, the rapid spread of the COVID-19 has had a negative impact on the global economy, which can result in an increase in expected credit losses, potential impairment of assets, and negatively affecting the Group's ability to generate revenue.

Other Matters We have audited the consolidated statement of financial position of the Group as at December 31, 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, in accordance with Korean Standards on Auditing. We expressed an unqualified opinion on those financial

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document statements, not presented herein, in our audit report dated March 3, 2021. The consolidated statement of financial position as at December 31, 2020, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2020.

/s/ Samil PricewaterhouseCoopers

August 17, 2021 Seoul, Korea

This report is effective as of August 17, 2021, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Consolidated Interim Statements of Financial Position As of June 30, 2021 and December 31, 2020

June 30, December 31, (In millions of won) Note 2021 (Unaudited) 2020 Assets Cash and due from banks at amortized cost 4, 7 W 26,421,476 33,410,542 Financial assets at fair value through profit or loss 4, 8 61,373,647 59,091,403 Derivative assets 4, 9 3,359,919 5,633,915 Securities at fair value through other comprehensive income 4, 10 59,673,966 58,316,112 Securities at amortized cost 4, 10 48,236,153 47,282,623 Loans at amortized cost 4, 11 376,770,166 356,221,519 Property and equipment 3,989,233 3,989,697 Intangible assets 5,504,611 5,480,619 Investments in associates 12 2,625,248 2,657,768 Current tax receivable 16,769 51,894 Deferred tax assets 94,945 215,345 Investment property 608,650 615,235 Defined benefit assets 16 63,069 18,374 Other assets 4,11 37,260,404 32,194,666 Assets held for sale 44,792 54,392 Total assets W 626,043,048 605,234,104

Liabilities Deposits 4 W 344,952,178 326,416,868 Financial liabilities at fair value through profit or loss 4, 13 1,642,381 1,436,694 Financial liabilities designated at fair value through profit or loss 4, 14 7,769,151 8,455,724 Derivative liabilities 4, 9 2,600,961 5,016,567 Borrowings 4 41,989,952 41,594,064 Debt securities issued 4, 15 77,388,473 75,134,394 Defined benefit liabilities 16 76,157 62,514 Provisions 17 927,166 804,736 Current tax payable 515,105 389,586 Deferred tax liabilities 383,279 579,656 Liabilities under insurance contracts 18 53,867,977 53,460,230 Other liabilities 4 45,463,876 45,526,213 Total liabilities 577,576,656 558,877,246

Equity 19 Capital stock 2,969,641 2,969,641 Hybrid bonds 3,334,531 2,179,934 Capital surplus 12,095,043 12,234,939 Capital adjustments (664,763) (687,935) Accumulated other comprehensive loss (847,775) (404,181) Retained earnings 29,337,739 27,777,169 Total equity attributable to equity holders of Shinhan Financial Group Co., Ltd. 46,224,416 44,069,567 Non-controlling interests 2,241,976 2,287,291 Total equity 48,466,392 46,356,858

Total liabilities and equity W 626,043,048 605,234,104

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Consolidated Interim Statements of Comprehensive Income For the three-month and six-month periods ended June 30, 2021 and 2020

June 30, 2021 June 30, 2020 (In millions of Korean won) (Unaudited) (Unaudited) Three- Three- Six- Six-month Note month month month

Interest income Financial assets at fair value through other comprehensive income and at amortized cost W 3,425,504 6,776,381 3,538,842 7,169,207 Financial assets at fair value through profit or loss 177,612 349,421 216,588 447,560 3,603,116 7,125,802 3,755,430 7,616,767 Interest expense (928,644) (1,894,977) (1,309,314) (2,707,219) Net interest income 20 2,674,472 5,230,825 2,446,116 4,909,548

Fees and commission income 1,101,042 2,125,458 947,565 1,843,001 Fees and commission expense (378,413) (721,370) (349,187) (713,142) Net fees and commission income 21 722,629 1,404,088 598,378 1,129,859

Insurance income 1,635,895 3,333,517 1,799,463 3,567,146 Insurance expenses (1,810,817) (3,664,475) (1,914,439) (3,882,971) Net insurance expense 18 (174,922) (330,958) (114,976) (315,825)

Dividend income 50,957 86,230 34,506 64,588 Net gain (loss) on financial instruments at fair value through profit or loss 364,248 856,462 842,757 (529,663) Net gain (loss) on financial instruments at fair value through profit or loss (overlay approach) 8 (17,440) 50,481 (106,061) (71,361) Net gain (loss) on financial instruments designated at fair value through profit or loss (82,701) (260,379) (609,677) 797,729 Net foreign currency transaction gain 70,213 43,828 203,391 228,776 Net gain on disposal of financial asset at fair value through other comprehensive income 10 23,057 60,920 76,628 186,887 Net gain (loss) on disposal of securities at amortized cost 10 (119) (131) 38 30 Net provision for allowance for credit loss 22 (170,713) (350,767) (489,884) (773,798) General and administrative expenses 23 (1,356,912) (2,635,921) (1,271,317) (2,469,205) Other operating expenses, net (409,252) (778,782) (354,707) (644,982)

Operating income 1,693,517 3,375,896 1,255,192 2,512,583

Equity method income 12 53,498 66,137 48,893 66,200 Other non-operating loss, net (17,975) (67,661) (73,230) (71,346) Profit before income tax 1,729,040 3,374,372 1,230,855 2,507,437

Income tax expense 25 451,105 878,496 338,187 665,229 Profit for the period W 1,277,935 2,495,876 892,668 1,842,208

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Consolidated Interim Statements of Comprehensive Income (Continued) For the three-month and six-month periods ended June 30, 2021 and 2020

June 30, 2021 June 30, 2020 (In millions of won, except earnings per share) (Unaudited) (Unaudited) Six Six Three-month Three-month Note -month -month Other comprehensive income for the period, net of income tax 19 W (72,460) (472,556) 302,378 294,521 Items that are or may be reclassified to profit or loss: Gain(loss) on financial asset at fair value through other comprehensive income (151,086) (587,990) 214,072 226,332 Gain(loss) on financial instruments at fair value through profit or loss (overlay approach) 18,810 (28,745) 65,541 45,613 Equity in other comprehensive income (loss) of associates (1,683) 1,694 (2,477) (3,906) Foreign currency translation adjustments for foreign operations 1,826 86,232 23,844 82,615 Net change in unrealized fair value of cash flow hedges 6,833 14,756 (13,769) (33,032) Other comprehensive income(loss) of separate account (7,945) (21,030) 7,257 7,848 (133,245) (535,083) 294,468 325,470 Items that will not be reclassified to profit or loss: Remeasurements of the defined benefit liability 49,889 49,486 (9,488) (10,183) Equity in other comprehensive loss of associates - (2) (4) (14) Gain (loss) on valuation of financial asset at fair value through other comprehensive income 27,766 39,083 13,921 (20,456) Gain (loss) on disposal of financial asset at fair value through other comprehensive income (14,405) (23,881) 101 (3,664) Changes in own credit risk on financial liabilities designated at fair value through profit of loss (2,465) (2,159) 3,380 3,368 60,785 62,527 7,910 (30,949)

Total comprehensive income for the period W 1,205,475 2,023,320 1,195,046 2,136,729

Profit for the period attributable to: Equity holders of Shinhan Financial Group Co., Ltd. W 1,251,841 2,443,779 873,110 1,805,510 Non-controlling interests 26,094 52,097 19,558 36,698 W 1,277,935 2,495,876 892,668 1,842,208 Total comprehensive income attributable to: Equity holders of Shinhan Financial Group Co., Ltd. W 1,179,578 1,972,275 1,175,301 2,099,758 Non-controlling interests 25,897 51,045 19,745 36,971 W 1,205,475 2,023,320 1,195,046 2,136,729

Earnings per share: 26 Basic and diluted earnings per share in Korean won W 2,307 4,480 1,756 3,604

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Consolidated Interim Statements of Changes in Equity For the six-month period ended June 30, 2020

(In millions of Korean won) Equity attributable to equity holders of Shinhan Financial Group Co., Ltd. Accumulated other compre- Capital Hybrid Capital Capital hensive Retained Non- stock bonds surplus adjustments income earnings Sub-total controlling interests Total

Balance at January 1, 2020 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 Total comprehensive income for the period Profit for the period - - - - - 1,805,510 1,805,510 36,698 1,842,208 Other comprehensive income (loss), net of income tax: Gain on valuation and disposal of financial assets at fair value - - - - - through other comprehensive income 201,811 201,811 401 202,212 Gain on financial instruments at fair value through profit or loss (overlay approach) - - - - 45,613 - 45,613 - 45,613 Equity in other comprehensive loss of associates - - - - (3,920) - (3,920) - (3,920) Foreign currency translation adjustments - - - - 82,747 - 82,747 (132) 82,615 Net change in unrealized fair value of cash flow hedges - - - - (33,032) - (33,032) - (33,032) Other comprehensive income of separate account - - - - 7,848 - 7,848 - 7,848 Remeasurements of defined benefit liability - - - - (10,187) - (10,187) 4 (10,183) Changes in own credit risk on financial liabilities designated at fair value through profit or loss - - - - 3,368 - 3,368 - 3,368 Total other comprehensive income for the period - - - - 294,248 - 294,248 273 294,521 Total comprehensive income - - - - 294,248 1,805,510 2,099,758 36,971 2,136,729

Transactions with owners, etc. Dividends - - - - - (883,929) (883,929) - (883,929) Dividends to hybrid bonds - - - - - (40,894) (40,894) - (40,894) Paid-in capital increase(Note 19) 41,164 - 287,998 - - - 329,162 - 329,162 Acquisition of treasury stock(Note 19) - - - (150,448) - - (150,448) - (150,448) Disposal of treasury stock, etc.(Note 19) - - - 290,662 - - 290,662 - 290,662 Retirement of treasury stock(Note 19) - - - 150,000 - (150,025) (25) - (25) Change in other capital adjustments - - 471,812 (6,482) - (4,667) 460,663 - 460,663 Change in other non-controlling interests ------(1,114,929) (1,114,929) 41,164 - 759,810 283,732 - (1,079,515) 5,191 (1,114,929) (1,109,738) Reclassification between OCI and retained earnings - - - - 3,665 (3,665) - - - Balance at June 30, 2020(Unaudited) W 2,773,627 1,731,235 11,325,163 (833,038) 37,757 26,248,151 41,282,895 1,674,477 42,957,372

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Consolidated Interim Statements of Changes in Equity (Continued) For the six-month period ended June 30, 2021

(In millions of won) Equity attributable to equity holders of Shinhan Financial Group Co., Ltd. Accumulated other compre- Capital Hybrid Capital Capital hensive Retained Non- stock bonds surplus adjustments income earnings Sub-total controlling interests Total

Balance at January 1, 2021 W 2,969,641 2,179,934 12,234,939 (687,935) (404,181) 27,777,169 44,069,567 2,287,291 46,356,858 Total comprehensive income for the period Profit for the period - - - - - 2,443,779 2,443,779 52,097 2,495,876 Other comprehensive income (loss) for the period, net of income tax: Loss on valuation and disposal of financial assets at fair value through other comprehensive income - - - - (571,344) - (571,344) (1,444) (572,788) Loss on financial instruments at fair value through profit or loss (overlay approach) - - - - (28,745) - (28,745) - (28,745) Equity in other comprehensive income of associates - - - - 1,692 - 1,692 - 1,692 Foreign currency translation adjustments - - - - 86,211 - 86,211 21 86,232 Net change in unrealized fair value of cash flow hedges - - - - 14,756 - 14,756 - 14,756 Other comprehensive loss of separate account - - - - (21,030) - (21,030) - (21,030) Remeasurements of defined benefit liability - - - - 49,115 - 49,115 371 49,486 Changes in own credit risk on financial liabilities designated at fair value through profit or loss - - - - (2,159) - (2,159) - (2,159) Total other comprehensive income for the period - - - - (471,504) - (471,504) (1,052) (472,556) Total comprehensive income for the period - - - - (471,504) 2,443,779 1,972,275 51,045 2,023,320

Transactions with owners, etc. Dividends - - - - - (803,838) (803,838) - (803,838) Dividends to hybrid bonds - - - - - (51,287) (51,287) - (51,287) Issuance of hybrid bonds (Note 19) - 1,154,597 - - - - 1,154,597 - 1,154,597 Acquisition of treasury stock (Note 19) - - - (79) - - (79) - (79) Disposal of treasury stock (Note 19) - - - 23,589 - - 23,589 - 23,589 Change in other capital adjustments - - (105) (338) - (174) (617) - (617) Change in other non-controlling interests - - (139,791) - - - (139,791) (96,360) (236,151) - 1,154,597 (139,896) 23,172 - (855,299) 182,574 (96,360) 86,214 Reclassification between OCI and retained earnings - - - - 27,910 (27,910) - - - Balance at June 30, W 2021(Unaudited) 2,969,641 3,334,531 12,095,043 (664,763) (847,775) 29,337,739 46,224,416 2,241,976 48,466,392

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Consolidated Interim Statements of Cash Flows For the six-month periods ended June 30, 2021 and 2020

Six-month periods ended June 30 2021 2020 (In millions of Korean won) Note (Unaudited) (Unaudited)

Cash flows from operating activities Profit before income tax W 3,374,372 2,507,437 Adjustments for: Interest income 20 (7,125,802) (7,616,767) Interest expense 20 1,894,977 2,707,219 Dividend income (86,230) (64,588) Net fees and commission expense 103,134 96,190 Net insurance expense 667,863 680,991 Net loss (gain) on financial instruments at fair value through profit or loss (51,957) (147,624) Net loss (gain) on derivatives (188,315) 247,510 Net gain on financial instruments at fair value through profit or loss (overlay approach) (50,481) 71,361 Net foreign currency translation loss 89,513 31,953 Net gain on financial instruments designated at fair value through profit or loss (135,177) (827,594) Net gain on disposal of financial assets at fair value through other comprehensive income 10 (60,920) (186,887) Net loss (gain) on disposal of financial assets at amortized cost 10 131 (30) Net provision for allowance for credit loss 22 350,767 773,798 Employee benefits 111,030 69,842 Depreciation and amortization 23 429,570 374,646 Other operating income 205,921 136,825 Equity method income, net 12 (66,137) (66,200) Other non-operating (income)expense, net 48,904 (14,850) (3,863,209) (3,734,205)

Changes in assets and liabilities: Due from banks at amortized cost 8,979,421 (1,911,931) Securities at fair value through profit or loss (1,347,748) (3,966,753) Due from banks at fair value through profit or loss 30,000 808,891 Loans at fair value through profit or loss 303,233 (308,828) Financial instruments designated at fair value through profit or loss (551,395) 1,564,397 Derivative instruments (482,314) 250,687 Loans at amortized cost (18,561,433) (13,695,858) Other assets (6,356,519) (6,814,096) Deposits 18,033,674 15,492,877 Net defined benefit liability (53,694) (68,206) Provisions (3,691) (23,788) Other liabilities (371,415) 5,796,324 (381,881) (2,876,284)

Income tax paid (607,788) (677,791) Interest received 6,986,265 7,792,804 Interest paid (2,018,768) (2,806,418) Dividends received 72,204 78,652 Net cash inflow from operating activities W 3,561,195 284,195

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Six-month periods ended June 30 2021 2020 Note (In millions of Korean won) (Unaudited) (Unaudited) Cash flows from investing activities Decrease in financial instruments at fair value through profit or loss W 2,165,516 2,142,786 Increase in financial instruments at fair value through profit or loss (3,154,298) (2,825,398) Proceeds from disposal of securities at fair value through other comprehensive income 20,986,254 33,886,787 Acquisition of securities at fair value through other comprehensive income (23,077,901) (30,099,389) Proceeds from disposal of securities at amortized cost 2,731,801 3,595,304 Acquisition of securities at amortized cost (3,463,446) (3,988,373) Proceeds from disposal of property and equipment 12,960 17,565 Acquisition of property and equipment (109,778) (110,633) Proceeds from disposal of intangible assets 6,738 4,282 Acquisition of intangible assets (213,216) (159,367) Proceeds from disposal of investments in associates 181,847 90,143 Acquisition of investments in associates (303,992) (331,625) Proceeds from disposal of investments in associates 12 - Acquisition of investment property (1,300) (238,553) Disposition of assets held-for-sale 46,081 2,047 Increase in other assets (118,474) (65,691) Proceeds from settlement of hedging derivative financial instruments for financial assets 38,853 14,310 Payment of settlement of hedging derivative financial instruments for financial assets (11,568) (130,220) Net cash inflow (outflow) from investing activities W (4,283,911) 1,803,975

Cash flows from financing activities Issuance of hybrid bonds W 1,154,597 - Net increase in borrowings 413,885 2,916,160 Proceeds from debt securities issued 13,604,014 8,760,541 Repayments of debt securities issued (11,574,245) (10,983,004) Increase in other liabilities 28,904 762 Dividends paid (854,703) (924,383) Proceeds from settlement of hedging derivative financial instruments 703,200 656,755 Payment of settlement of hedging derivative financial instruments (689,811) (615,160) Increase(decrease) in non-controlling interests (162,543) 33,212 Acquisition of treasury stock (79) (150,473) Disposal of treasury stocks 23,589 - Redemption of lease liabilities (138,471) (130,867) Payment of stock issuance costs (105) (2,490) Net cash inflow (outflow) from financing activities 2,508,232 (438,947) Effect of exchange rate changes on cash and cash equivalents 45,641 42,867 Increase in cash and cash equivalents 1,831,157 1,692,090 Cash and cash equivalents at the beginning of the period 28 8,962,982 8,579,174 Cash and cash equivalents at the end of the period 28 W 10,794,139 10,271,264

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

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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” or the “Company”), the controlling company, is incorporated on September 1, 2001 for the main purposes of controlling, managing and funding Shinhan Bank, Shinhan Securities Co., Ltd., Shinhan Capital Co., Ltd. and Shinhan BNP Asset Management Co., Ltd. by way of share transfers. The total capital stock amounted to W1,461,721 million. Also, Shinhan Financial Group’s shares have been listed on the Korea Exchange since September 10, 2001 and Shinhan Financial Group’s American Depositary Shares have been listed on the New York Stock Exchange since September 16, 2003.

(b) Ownership of Shinhan Financial Group and its major consolidated subsidiaries as of June 30, 2021 and December 31, 2020 are as follows:

Ownership (%) Date of financial December 31, Investor Investee(*1) Location information June 30, 2021 2020 Shinhan Financial Group Shinhan Bank Korea June 30 100.0 100.0 Co., Ltd. 〃 Shinhan Card Co., Ltd. 〃〃 100.0 100.0 〃 Shinhan Investment Corp. 〃〃 100.0 100.0 〃 Insurance Co., Ltd. 〃〃 100.0 100.0 〃 Orange Life Insurance Co., Ltd. 〃〃 100.0 100.0 〃 Shinhan Capital Co., Ltd. 〃〃 100.0 100.0 〃 Jeju Bank 〃〃 75.3 75.3 〃 Shinhan Credit Information Co., Ltd. 〃〃 100.0 100.0 Shinhan Alternative Investment 〃〃〃 100.0 100.0 Management Inc. 〃 Shinhan Asset Management Co., Ltd.(*2) 〃〃 100.0 65.0 〃 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. 〃〃 60.0 60.0 〃 Shinhan AITAS Co., Ltd. 〃〃 99.8 99.8 〃 Shinhan REITs Management Co., Ltd. 〃〃 100.0 100.0 〃 Shinhan AI Co., Ltd. 〃〃 100.0 100.0 〃 Shinhan Venture Investment Co., Ltd.(*3) 〃〃 100.0 100.0 Shinhan Bank 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

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 〃 PT Bank Shinhan Indonesia Indonesia 〃 99.0 99.0 Shinhan Bank Japan SBJDNX Japan 〃 100.0 100.0 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 Co.,Ltd. Vietnam 〃 100.0 100.0

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1. Reporting entity (continued)

(b) Ownership of Shinhan Financial Group and its major consolidated subsidiaries as of June 30, 2021 and December 31, 2020 are as follows (continued):

Ownership (%) Date of financial December 31, Investor Investee(*1) Location information June 30, 2021 2020 Shinhan Investment Corp. Shinhan Investment Corp. USA Inc. USA June 30 100.0 100.0 〃 Shinhan Investment Corp. Asia Ltd. Hong Kong 〃 100.0 100.0 SHINHAN SECURITIES VIETNAM CO., 〃 Vietnam 〃 100.0 100.0 LTD. 〃 PT. Shinhan Sekuritas Indonesia Indonesia 〃 99.0 99.0 PT Shinhan Sekuritas PT. Shinhan Asset Management Indonesia 〃〃 75.0 75.0 Indonesia Shinhan Life Insurance Shinhan Financial Plus Co., Ltd. Korea 〃 100.0 100.0 Co., Ltd. Shinhan Life Insurance Vietnam Co., 〃 Vietnam 〃 100.0 - Ltd.(*4) Shinhan Asset Shinhan ASSET MGT HK Ltd.(*5) Hong Kong 〃 100.0 100.0 Management Co., Ltd. Shinhan DS SHINHAN DS VIETNAM CO., LTD. Vietnam 〃 100.0 100.0 (*1) Subsidiaries such as trust, beneficiary certificate, corporate restructuring fund and private equity fund which are not actually operating their own business are excluded. (*2) The Group acquired additional shares of Shinhan BNPP Asset Management Co., Ltd. for the six-month period ended June 30, 2021, and Shinhan BNPP Asset Management Co., Ltd. became a wholly owned subsidiary of the Group. The name is changed from Shinhan BNPP Asset Management Co., Ltd. to Shinhan Asset Management Co., Ltd. (*3) For the six-month period ended June 30, 2021, the name was changed from Neoplux Co., Ltd. to Shinhan Venture Investment Co., Ltd. (*4) Subject to consolidation as a newly invested subsidiary for the six-month period ended June 30, 2021. (*5) For the six-month period ended June 30, 2021, the name was changed from SHINHAN BNP ASSET MGT HK, LIMITED. to Shinhan ASSET MGT HK, Ltd..

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1. Reporting entity (continued)

Consolidated structured entities are as follows:

Consolidated structured Category entities Description

Trust Trusts managed by Shinhan A trust is consolidated when the Group as a trustee is exposed to Bank (including variable returns, if principle or interest amounts of the entrusted development trust) and 17 properties falls below guaranteed amount, the Group should others 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 210 others the Group has sole decision-making authority to dispose assets or change the conditions of the assets, and the Group is exposed to, or has rights to related variable returns by 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 the greatest 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 or Champ 2010-4 PEF and invests assets of the investment funds on behalf of other investors 126 others as a collective investor or a business executive, or has the ability to dismiss the manager of the investment funds, and is exposed to, or has rights to, the variable returns.

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1. Reporting entity (continued)

(d) Summarized financial information of the subsidiaries i) The summarized balance sheet of the controlling company and the Group’s major consolidated subsidiaries as of June 30, 2021 and December 31, 2020 are as follows:

Summarized balance June 30, 2021 December 31, 2020 sheet Total Total Total Total Total Total Name of entity(*1)(*2) assets liabilities equities assets liabilities equities Shinhan Financial Group (Separate) W 37,224,889 10,382,813 26,842,076 35,483,914 10,426,817 25,057,097 Shinhan Bank 445,870,981 417,736,241 28,134,740 427,675,103 400,009,589 27,665,514 Shinhan Card Co., Ltd. 36,661,659 30,235,013 6,426,646 34,885,223 28,465,675 6,419,548 Shinhan Investment Corp. 45,057,251 40,048,516 5,008,735 46,632,433 42,258,341 4,374,092 Shinhan Life Insurance Co., Ltd. 36,725,972 34,286,395 2,439,577 36,777,496 34,232,052 2,545,444 Orange Life Insurance Co., Ltd. 33,707,026 30,875,269 2,831,757 33,813,587 30,574,073 3,239,514 Shinhan Capital Co., Ltd. 10,241,067 8,797,206 1,443,861 8,901,349 7,710,010 1,191,339 Jeju Bank 6,650,781 6,135,867 514,914 6,531,838 6,022,397 509,441 Shinhan Credit Information Co., Ltd. 29,198 11,079 18,119 27,806 10,826 16,980 Shinhan Alternative Investment Management Inc. 104,456 66,478 37,978 87,053 71,591 15,462 Shinhan Asset Management Co., Ltd. 206,209 17,300 188,909 191,127 20,530 170,597 SHC Management Co., Ltd. 9,635 - 9,635 9,644 - 9,644 Shinhan DS 119,325 80,756 38,569 95,150 70,916 24,234 Shinhan Savings Bank 2,313,527 2,098,002 215,525 1,842,231 1,635,433 206,798 Asia Trust Co., Ltd. 296,900 87,280 209,620 259,899 85,274 174,625 Shinhan AITAS Co., Ltd. 83,181 7,937 75,244 87,378 12,159 75,219 Shinhan REITs Management Co., Ltd. 55,777 7,174 48,603 52,555 8,582 43,973 Shinhan AI Co., Ltd. 42,910 1,562 41,348 42,903 1,890 41,013 Shinhan Venture Investment Co., Ltd. 77,778 11,794 65,984 72,550 12,697 59,853 (*1) The summarized financial information of the subsidiaries are based on consolidated financial statements, if applicable. (*2) Trusts, beneficiary certificates, securitization-specialized limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded.

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1. Reporting entity (continued) ii) The summarized statement of comprehensive income of the controlling company and the Group’s major consolidated subsidiaries for the six-month periods ended June 30, 2021 and 2020 are as follows:

Statement of comprehensive income June 30, 2021 June 30, 2020 Total com- Total com- Net prehensive Net prehensive Name of entity(*1)(*2) income income income income Revenue (loss) (loss) Revenue (loss) (loss) Shinhan Financial Group (separate) W 1,700,999 1,486,038 1,486,191 1,511,963 1,322,123 1,322,031 Shinhan Bank 11,209,775 1,371,083 1,269,624 13,766,907 1,140,882 1,240,530 Shinhan Card Co., Ltd. 2,126,887 367,712 402,114 2,044,651 301,939 274,553 Shinhan Investment Corp. 4,185,166 322,809 344,179 6,087,080 56,933 87,252 Shinhan Life Insurance Co., Ltd. 2,632,214 92,225 (49,953) 2,774,558 91,614 208,738 Orange Life Insurance Co., Ltd. 2,112,353 216,826 (96,157) 2,163,892 137,456 137,611 Shinhan Capital Co., Ltd. 178,748 131,340 131,107 290,271 84,741 85,288 Jeju Bank 98,555 14,063 9,814 110,042 11,999 13,641 Shinhan Credit Information Co., Ltd. 21,337 1,132 1,172 21,612 1,040 1,149 Shinhan Alternative Investment Management Inc. 10,207 2,617 2,617 8,620 2,332 2,332 Shinhan Asset Management Co., Ltd. 54,710 18,427 18,459 42,412 11,361 11,467 SHC Management Co., Ltd. 25 (9) (9) 45 10 10 Shinhan DS 107,169 3,311 4,102 70,820 (737) (319) Shinhan Savings Bank 73,635 14,040 13,857 62,473 14,802 14,706 Asia Trust Co., Ltd. 68,690 35,011 34,995 42,663 19,288 19,295 Shinhan AITAS Co., Ltd. 25,996 4,761 4,761 29,437 7,655 7,655 Shinhan REITs Management Co., Ltd. 5,923 4,631 4,631 2,568 (1,284) (1,287) Shinhan AI Co., Ltd. 5,908 340 335 4,688 75 73 Shinhan Venture Investment Co., Ltd.(*3) 14,095 6,199 6,131 - - - (*1) The summarized financial information of the subsidiaries are based on consolidated financial statements, if applicable. (*2) Trusts, beneficiary certificates, securitization-specialized limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded. (*3) For the acquired company, the amount is from the consolidated statements of comprehensive income for the period after the acquisition point.

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2. Basis of preparation

(a) Statement of compliance

The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (K-IFRS). The accompanying consolidated financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Group's financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.

These consolidated interim financial statements of the Group are prepared as part of the period covered by the Group’s K-IFRS annual financial statements. They are prepared under K-IFRS No.1034, ‘Interim Financial Reporting’, do not include all of the disclosures required for full annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as of and for the year ended December 31, 2020.

(b) Use of estimates and judgments

The preparation of the consolidated interim 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. When estimates and assumptions based on management's judgment as of the end of the interim reporting period differ from the actual, actual results may differ from these estimates.

In preparing these consolidated interim financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were, except for the method of estimation used to determine the income tax expense for the interim period, the same as those that applied to the consolidated financial statements as of and for the year ended December 31, 2020.

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3. Significant accounting policies

(a) The Group applies the same accounting policies applied as when preparing the annual consolidated financial statements for the year ended December 31, 2020, except for the following amendments that has been applied for the first time since January 1, 2021 and as described in Note 2. (b). i) K-IFRS No.1109, ‘Financial Instruments’ and K-IFRS No.1039, ‘Financial Instruments: Recognition and Measurement’ and K- IFRS No.1107, ‘Financial Instruments: Disclosures’ Revision’ and K-IFRS No.1104, ‘Insurance Contracts’ K-IFRS No.1116, ‘Leases’ amended – Interest rate benchmark reform

The effective interest rate, not the carrying amount, is adjusted when replacing the interest rate benchmark of a financial instrument measured at amortized cost in relation to the reform of the interest rate benchmark. It includes exceptions, such as allowing hedge accounting to continue uninterrupted even if an interest rate benchmark replacement occurs in a hedging relationship. The Group is determining whether there will be any impacts on the consolidated financial statements due to the amendments. ii) Amendments to K-IFRS No.1116 ‘Lease’ - The practical expedient for the exemption, discount or deferral of rent related to COVID-19

The Group has applied that a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification. The amount recognized in profit or loss is W 24,418 million to reflect the change in lease payments arising from the same lease discount for the six-month period ended June 30, 2021 as a result of the amendment to the K-IFRS No.1116 ‘Lease’.

(b) The following new accounting standards and interpretations have been published that are not mandatory for June 30, 2021 reporting periods and have not been early adopted by the Group. i) K-IFRS No.1117 ‘Insurance Contracts’

K-IFRS No. 1117 ‘Insurance Contracts’ enacted on April 23, 2021 will be applied for annual periods beginning on or after January 1, 2023. The standard will replace K-IFRS No. 1104 ‘Insurance Contracts’ which is the current standard.

The main features of K-IFRS No. 1117 are the measurement of the current value of insurance liabilities, the recognition of insurance revenue due to an accrual basis, and the separation of insurance gains and losses on investment. K-IFRS No. 1104 has measured the insurance liabilities by using historical information (e.g., interest rates at sale, etc.). In addition, when the insurance company receives the insurance premium, it recognizes the received premium as insurance revenue according to a cash basis and there is no obligation to present insurance financial income or expense and the investment income or expense separately. On the contrary, K-IFRS No. 1117 measures the insurance liabilities at their present value by using discount rates that reflect assumptions and risks at the present point (reporting point). The insurance revenue is recognized on an accrual basis, reflecting the services provided to the policyholder by the insurance company for each fiscal year. Moreover, insurance financial income or expense and the investment income or expense will be presented separately.

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3. Significant accounting policies (Continued)

If the Group applies K-IFRS No. 1117 to prepare the financial statements, it is expected to cause significant differences from the current financial statements as follows. These differences do not include all future differences and may be changed depending on further analysis results in the future.

① Evaluation of insurance liabilities According to K-IFRS No. 1117, the Group estimates all cash flows under the insurance contract and measure insurance liabilities by using discount rates that reflect assumptions and risks at the reporting point.

Specifically, the Group identifies a portfolio of insurance contract that comprises contracts subject to similar risks and managed together, and then, classifies groups of insurance contracts within a portfolio by contracts with similar profitability. The Group measures a group of insurance contracts at the total of estimates of future cash flows (reflecting cash flows related to insurance contracts and the time value of money), risk adjustment and contractual service margin. With the application of K-IFRS No. 1117, contractual service margin account has been newly introduced. The contractual service margin presents the unearned profit the Group will recognize as it provides services in the future.

Meanwhile, a reinsurance contract means an insurance contract issued by a reinsurance company to compensate another insurance company for claims arising from an underlying contract issued by that another insurance company. The Group uses consistent assumptions to measure the estimates of the present value of the future cash flows for the group of reinsurance contract held and the estimates of the present value of the future cash flows for the group of underlying insurance contracts.

② Recognition and measurement of financial performance According to K-IFRS No. 1117, insurance revenue is recognized on an accrual basis including services(insurance coverage) provided to the policyholder for each fiscal year. Investment components (such as refunds due to termination/maturity) repaid to a policyholder even if an insured event does not occur, are excluded from insurance revenue, and insurance financial income or expense and the investment income or expense are presented separately to enable users of the information to understand the sources of income or expenses.

The Group includes in insurance finance income or expense the group of insurance contracts related time value of money and financial risk, and the effect of changes in the time value of money and financial risk. The Group makes an accounting policy choice as to whether to disaggregate insurance finance income or expenses for the period between profit or loss and other comprehensive income.

③ Accounting policies related to conversion According to K-IFRS No. 1117, the Group shall adjust the existing cost-based valuation to the current valuation by applying a fully retroactive approach, modified retroactive approach or fair value approach on groups of insurance contracts issued before the transition date (January 1, 2022, the beginning of the annual reporting period immediately preceding the date of initial application).

In principle, the Group shall identify, recognize, and measure each group of insurance contracts as if K-IFRS No. 1117 has always applied, but if this approach is impracticable, the Group may choose to apply either the modified retroactive approach or fair value approach. However, the fair value approach may be applied for groups of insurance contracts with direct participation features that meet certain requirements even if the fully retroactive method is applicable.

Meanwhile, the modified retroactive approach is an approach to achieve the closest outcome to retrospective application possible using reasonable and supportable information available without undue cost or effort. The fair value approach is an approach of assessing a group of insurance contracts using fair value assessments, etc. in accordance with K-IFRS No. 1113 ‘Fair Value Measurement’. To apply the fair value approach, the Group shall determine the contractual service margin or loss component of the liability for remaining coverage at the transition date as the difference between the fair value of a group of insurance contracts at that date and the fulfilment cash flows measured at that date.

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3. Significant accounting policies (Continued)

④ Preparation status for introduction With respect to the smooth application of K-IFRS No. 1117, the Group is planning to organize a TF team, establish a financial close system, train employees, and analyze financial impact. First of all, the stability of the financial close system and the consistency of system output values should be secured for appropriateness of liability adequacy test. Also, accounting policies, actuarial assumptions, etc. should be reasonably established and applied consistently for each period. To do this, the Group plans to continuously verify the system and establish several internal controls. In particular, the Group plans to establish and comply with an internal accounting management system suitable for the changed accounting environment so that reliable accounting information can be prepared and disclosed after the implementation of the new accounting standard.

The application of K-IFRS No. 1117 will not only change accounting standards, but will also affect insurance product development, sales strategies and long-term management strategies. Therefore, the Group will produce various insurance service, re-establish various management strategies, etc., and continuously provide education to related employees, etc. after implementing K-IFRS No. 1117.

⑤ Financial impact assessment As the implementation of K-IFRS No. 1117 changes the valuation method of liabilities, revenue recognition method, etc., the Group believes that the impact of this standard on the financial statements will be significant. The Group is determining impacts on the consolidated financial statements due to the application of the standard, and impact levels of each insurance company within the Group are as follows.

Shinhan Life Insurance As of June 30, 2021, the Group has liabilities under insurance contract (excluding policyholders’ equity adjustment) amounting W 30,145,347 million (W 28,363,032 million in general account, and W 1,782,315 million in special account). The savings insurance accounts represent 32% (W 613,696 million) of total premium income.

Orange Life Insurance As of June 30, 2021, the Group has liabilities under insurance contract (excluding policyholders’ equity adjustment) amounting W 30,876,489 million (W 25,481,903 million in general account, and W 5,394,586 million in special account). The savings insurance accounts represent 37% (W 620,111 million) of total premium income.

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4. Financial risk management

(a) Overview

Shinhan Financial Group Co., Ltd. (collectively the “Group”) manages various risks that may be arisen by each business sector and the major risks to which the Group is exposed include credit risk, market risk, interest rate risk, and liquidity risk. These risks are recognized, measured, controlled and reported in accordance with risk management guidelines established at the controlling company level and at the subsidiary level. i) Risk management principles

The risk management principles of the Group are as follows:

- All business activities take into account the balance of risks and profits within a predetermined risk trend. - The controlling company shall present the Group Risk Management Model Standards and supervise their compliance, and have responsibility and authority for group-level monitoring. - Operate a risk-related decision-making system that enhances management's involvement. - Organize and operate risk management organizations independent of the business sector. - Operate a performance management system that clearly considers risks when making business decisions. - Aim for preemptive and practical risk management functions. - Share a cautious view to prepare for possible deterioration of the situation. ii) Risk management organization

The basic policies and strategies for risk management of the Group are established by the Risk Management Committee (collectively the "Group Risk Management Committee") within the controlling company's Board of Directors. The Group's Chief Risk Management Officer (CRO) assists the Group Risk Management Committee and consults the risk policies and strategies of the group and each subsidiary through the Group Risk Council, which includes the Chief Risk Management Officer of each subsidiary. The subsidiary implements the risk policies and strategies of the Group through each company's risk management committee, risk-related committee, and risk management organization, and consistently establishes and implements the detailed risk policies and strategies of the subsidiary. The risk management team of the controlling company assists the Group's chief risk management officer for risk management and supervision.

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 manage detailed risk limits by risk, department, desk and product types.

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4. Financial risk management (continued)

(a) Overview (continued) ii) Risk management organization (continued)

① Group Risk Management Committee

The Group established the risk management system for the Group and each of its subsidiaries, and comprehensively manages 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 - Approve appropriate investment limit or loss allowance limit - Enact and amend 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 - Make 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. 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 realized. 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 capital at an appropriate level. The Group and subsidiaries establish and operate a risk planning process to reflect 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.

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4. Financial risk management (continued)

(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 takes 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 to 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. In case of matters that are linked or jointly promoted with other subsidiaries, the risk reviews are carried out after prior-consultation with the risk management department of the Group.

④ Risk Management

The Group maintains a group wide risk management system to detect the signals of any risk crisis preemptively 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.

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4. Financial risk management (continued)

(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 is 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.

Shinhan Bank's basic policy on credit risk management is determined by the Risk Policy Committee. The Risk Policy Committee consists of the chairman of the CRO, the Chief Credit Officer (CCO), the head of the business group, and the head of the risk management department, and decides the credit risk management plan and the direction of the loan policy for the entire bank. Apart from the Risk Policy Committee, the Credit Review Committee is established to separate credit monitoring, such as large loans and limit approval, and the CCO is composed of the chairman, the head of the group in charge of the credit-related business group, the head of the credit planning department to enhance the soundness of the loan and profitability of operation.

Shinhan Bank's credit risk management includes processes such as credit evaluation, credit monitoring, and credit supervision, and credit risk measurement of counterparties and limit management processes and credit risk measurements for portfolios. All loan customers of Shinhan Bank are evaluated and managed with credit ratings. Retail customers are evaluated by summing up the information of the bank's internal information and external credit information, and the corporate customers are evaluated by considering financial and non-financial items such as industrial risk, operating risk, and management risk. The evaluated credit rating is used for credit approval, limit management, pricing, credit loss provisioning, etc., and is the basis for credit risk management. The credit evaluation system is divided into an evaluation system for retail customers, a SOHO evaluation system, and an evaluation system for corporate customers. It is subdivided and refined by each model to reflect the Basel III requirements. The corporate credit decision is based on a collective decision-making system, making objective and prudent decisions. In the case of a general credit of loans, the credit is approved based on the consultation between the credit officer of the branch and the headquarters’ Review Committee. In the case of a large or important credit, the credit is approved by the review council. In particular, the Credit Deliberation Committee, the highest decision-making body of the loan, reviews for important loans such as large loans. Credits for retail customers are monitored by an automated credit scoring systems (CSS) based on objective statistical methods and bank credit policies.

Credits for corporate customers are performed by the loan officers and reviewers of branch offices by automatically searching for anticipated insolvent companies among business loan partners, and the credit department independent of the business sector evaluates the adequacy of the result of the loan review and, if necessary, the credit rating of the corporate is requested of an adjustment. In accordance with these procedures, the corporate customers are classified as an early warning company, an observation company, and a normal company, and then are managed differently according to the management guidelines for each risk stage, thereby preventing the insolvency of the loan at an early stage. In order to control the credit risk for the credit portfolio to an appropriate level, credit VaR limits are set and managed for each business and business group, and to prepare for the credit risk caused by biased exposure to specific sectors, the Group sets and manages exposure limits for each sector by the party, industry, country, etc.

Shinhan Card's basic policy on credit risk is determined by the Risk Management Committee. The Risk Management Committee consists of the Risk Management Officer (CRO) as the chairperson, and is composed of the heads of each business group and supporting group, and the heads of related departments. Apart from the RMC, a credit committee in charge of monitoring corporate credits and other important credits over a certain amount has been established to separate credit policy decisions from credit monitoring.

Shinhan Card's credit scoring system is divided into ASS (Application Scoring System) and BSS (Behavior Scoring System). For applications that meet the eligibility criteria for card issuance, the card will be issued only if the AS credit rating is above the standard. The company's internal information, CB company's external information, and personal information on the application are used to calculate the AS credit rating. The BS, which is recalculated monthly, predicts the delinquency probability of cardholders, and utilizes it to monitor members and monitor portfolio risk.

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4. Financial risk management (continued)

(b) Credit risk i) Techniques, assumptions and input variables used to measure impairment i-1) Determining significant increases in credit risk since initial recognition

At the end of each reporting period, 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 the 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 considers reasonable and supportable information, that is available without undue cost or effort, and is indicative of significant increases in credit risk since initial recognition. Information includes the default experience data held by the Group and analysis by an internal credit rating expert. 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

Internal credit risk rating is a key variable input to determine the 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.

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4. Financial risk management (continued)

(b) Credit risk (continued) i) Techniques, assumptions and input variables used to measure impairment (continued) 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 7 Continued past due more than 30 days Continued past due more than 30 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 signals Borrower with early warning signals Specific pool segment Negative net assets Specific pool segment Adverse audit opinion or disclaimer of Collective loans for housing for which the opinion constructors are insolvent Interest coverage ratio below 1 for a Loans with identified indicators for consecutive period of three years or significant increases in other credit negative cash flows from operating risk activities for a consecutive period of two years Loans with identified indicators for significant increases in other credit risk

The Group assumes that the credit risk of the financial instrument has been increased significantly since initial recognition if a specific exposure is past due more than 30 days (except, 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 fails to fully receive the contractual payments from the borrower, and does not take into account 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.

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4. Financial risk management (continued)

(b) Credit risk (continued) i) Techniques, assumptions and input variables used to measure impairment (continued) i-2) Modified financial assets

If the contractual cash flows on a financial asset have been modified through renegotiation and the financial asset is 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 are 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-month 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 contractual 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 observation 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.

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4. Financial risk management (continued)

(b) Credit risk (continued) i) Techniques, assumptions and input variables used to measure impairment (continued) i-4) Reflection of forward-looking information

The Group reflects future forward-looking information presented by a group of internal experts based on various information when measuring expected credit losses. The Group utilizes economic forecasts disclosed by domestic and foreign research institutes, governments, and public institutions to predict forward-looking information.

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

GDP growth rate Negative Private consumption index Negative Facility investment growth rate Negative Consumer price index growth rate Negative Current account of South Korea Negative

The predicted correlations between the macroeconomic variables and the risk of default, used by the Group, are derived based on data from the past ten years.

The Group uses forward-looking information to estimate expected credit loss in accordance with K-IFRS No. 1109 'Financial Instruments'. The default rate forecast applied in estimating allowance for expected credit loss for the year ended December 31, 2020 was re-estimated using changed forward-looking information on GDP growth rate and private consumption index, which were major variables for calculating the default rate.

As of June 30, 2021, the economic environment has remained uncertain. Expected credit losses may change depending on the end of the COVID-19 and the pace of economic recovery. The Group will continue to monitor the economic effects of the COVID-19.

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4. Financial risk management (continued)

(b) Credit risk (continued) i) Techniques, assumptions and input variables used to measure impairment (continued) 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 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 used amount previously withdrawn and amount expected to be used in the future.

In measuring expected credit losses on financial assets, the Group uses the contractual maturity as the period subject to expected credit loss measurement. The contractual maturity is computed taking into account the extension right held by the borrower.

Risk factors of PD, LGD and EAD are collectively estimated according to the following criteria:

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.

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4. Financial risk management (continued)

(b) Credit risk (continued) i) Techniques, assumptions and input variables used to measure impairment (continued) 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 are classified into government, bank, corporation or retail based on the exposure classification criteria of BASEL III credit risk weights, and the net carrying amount, excluding provisions, is presented as the maximum amount that can be exposed by credit risk.

The Group’s maximum exposure to credit risk as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Due from banks and loans at amortized cost (*1)(*3): Banks W 17,963,900 17,016,263 Retail 175,838,430 170,314,316 Government/Public sector/Central bank 18,410,937 24,778,332 Corporations 164,717,830 152,895,324 Card receivable 23,631,064 22,822,546 400,562,161 387,826,781

Due from banks and loans at fair value through profit or loss(*3): Banks 112,552 93,109 Government/Public sector/Central bank 19,976 - Corporations 1,627,537 1,986,804 1,760,065 2,079,913

Securities at fair value through profit or loss 57,743,461 55,275,031 Securities at fair value through other comprehensive income 58,708,175 57,409,433 Securities at amortized cost(*1) 48,236,153 47,282,623 Derivative assets 3,359,919 5,633,915 Other financial assets(*1)(*2) 24,181,983 20,341,191 Financial guarantee contracts 5,158,674 4,481,506 Loan commitments and other credit liabilities 190,357,044 187,067,821 W 790,067,635 767,398,214 (*1) The maximum exposure amounts for due from banks, loans, securities at amortized cost and other financial assets at amortized cost are recorded as net of allowances. (*2) Other financial assets mainly comprise of receivables, accrued income, secured key money deposits, prepayment, and domestic exchange settlement debit settled in a day. (*3) Classified as similar credit risk group based on calculation of the BIS ratio under new Basel Capital Accord (Basel III).

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4. Financial risk management (continued)

(b) Credit risk (continued) iii) Impairment information by credit risk of financial assets

Details of impaired financial assets due to credit risk as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 12-month expected loss Lifetime expected loss Mitigation of credit risk due to Grade 1 Grade 2 Grade 1 Grade 2 Impaired Total Allowances Net collateral Due from banks and loans at amortized cost: Banks W 14,748,625 3,089,745 140,622 153 - 17,979,145 (15,245) 17,963,900 156,944 Retail 159,341,241 6,101,033 8,302,886 2,068,666 577,058 176,390,884 (552,454) 175,838,430 117,965,098 Government/ Public sector /Central bank 17,566,224 808,966 33,533 8,835 - 18,417,558 (6,621) 18,410,937 9,000 Corporations 96,076,114 42,640,475 10,233,976 16,371,194 929,819 166,251,578 (1,533,748) 164,717,830 89,382,339 Card receivable 17,558,472 2,364,680 1,816,337 2,331,381 426,748 24,497,618 (866,554) 23,631,064 7,270 305,290,676 55,004,899 20,527,354 20,780,229 1,933,625 403,536,783 (2,974,622) 400,562,161 207,520,651 Securities at fair value through other comprehensive income(*) 52,574,566 5,988,107 1,133 144,369 - 58,708,175 - 58,708,175 - Securities at amortized cost 46,683,755 1,564,102 - - - 48,247,857 (11,704) 48,236,153 - W 404,548,997 62,557,108 20,528,487 20,924,598 1,933,625 510,492,815 (2,986,326) 507,506,489 207,520,651

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4. Financial risk management (continued)

(b) Credit risk (continued) iii) Impairment information by credit risk of financial assets (continued)

Details of impaired financial assets due to credit risk as of June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 12-month expected loss Lifetime expected loss Mitigation of credit risk due to Grade 1 Grade 2 Grade 1 Grade 2 Impaired Total Allowances Net collateral Due from banks and loans at amortized cost: Banks W 14,935,722 1,996,948 87,084 10,027 - 17,029,781 (13,518) 17,016,263 29,994 Retail 152,159,976 8,385,069 6,062,587 3,686,863 574,354 170,868,849 (554,533) 170,314,316 91,711,254 Government/ Public sector /Central bank 23,849,701 834,912 96,183 1,748 - 24,782,544 (4,212) 24,778,332 9,000 Corporations 93,740,349 34,637,533 11,391,410 13,758,332 982,037 154,509,661 (1,614,337) 152,895,324 83,580,715 Card receivable 16,995,332 2,304,536 1,754,723 2,197,877 454,451 23,706,919 (884,373) 22,822,546 6,845 301,681,080 48,158,998 19,391,987 19,654,847 2,010,842 390,897,754 (3,070,973) 387,826,781 175,337,808 Securities at fair value through other comprehensive income(*) 48,506,057 8,636,241 - 267,135 - 57,409,433 - 57,409,433 - Securities at amortized cost 45,888,769 1,404,340 - - - 47,293,109 (10,486) 47,282,623 - W 396,075,906 58,199,579 19,391,987 19,921,982 2,010,842 495,600,296 (3,081,459) 492,518,837 175,337,808 (*) Credit loss allowance recognized as other comprehensive income of securities at fair value through other comprehensive income amounted to W 20,809 million and W 23,171 million as of June 30, 2021 and December 31, 2020.

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4. Financial risk management (continued)

(b) Credit risk (continued) iv) Credit risk exposures per credit grade of off-balance items

Credit risk exposures per credit grade of off-balance items as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Grade 1 Grade 2 Impaired Total Financial guarantee: 12-month expected credit loss W 3,254,328 1,265,617 - 4,519,945 Lifetime expected credit loss 326,146 312,338 - 638,484 Impaired financial asset - - 245 245 3,580,474 1,577,955 245 5,158,674 Loan commitment and other credit line 12-month expected credit loss 151,702,041 28,527,892 - 180,229,933 Lifetime expected credit loss 7,505,863 2,615,411 - 10,121,274 Impaired financial asset - - 5,837 5,837 159,207,904 31,143,303 5,837 190,357,044 W 162,788,378 32,721,258 6,082 195,515,718

December 31, 2020 Grade 1 Grade 2 Impaired Total Financial guarantee: 12-month expected credit loss W 2,884,641 1,110,945 - 3,995,586 Lifetime expected credit loss 308,785 176,977 - 485,762 Impaired financial asset - - 158 158 3,193,426 1,287,922 158 4,481,506 Loan commitment and other credit line 12-month expected credit loss 156,787,448 20,715,236 - 177,502,684 Lifetime expected credit loss 6,738,016 2,822,003 - 9,560,019 Impaired financial asset - - 5,118 5,118 163,525,464 23,537,239 5,118 187,067,821 W 166,718,890 24,825,161 5,276 191,549,327 v) Credit qualities are classified based on the internal credit rating as follows:

Type of Borrower Grade 1 Grade 2 Individuals Probability of default below 2.25% for each Probability of default 2.25% or above for each pool pool Government/Public sector/Central OECD sovereign credit rating of 6 or above OECD sovereign credit rating of below 6 bank Banks and Corporations Internal credit rating of BBB+ or above Internal credit rating of below BBB+ (Card receivables included) Card receivables (Individuals) Behavior scoring system of 7 grade or above Behavior scoring system of below 7 grade

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4. Financial risk management (continued)

(b) Credit risk (continued) vi) Concentration by industry sector

An analysis of concentration by industry sector of financial instrument, net of allowance, as of June 30, 2021 and December 31, 2020 are as follows: June 30, 2021 Finance Real Lodging Retail and Construction Retail and Manufacturing estate and and Total wholesale service customers insurance business Restaurant Other Due from banks and loans at amortized cost: Banks W 17,605,945 - - - - - 357,955 - 17,963,900 Retail ------175,838,430 175,838,430 Government/ Public sector/ Central bank 18,365,812 - - 1,796 - - 43,329 - 18,410,937 Corporations 12,453,940 51,403,655 20,175,238 38,561,283 3,684,307 6,673,933 31,765,474 - 164,717,830 Card receivable 43,122 212,283 241,634 39,101 40,833 29,873 1,625,134 21,399,084 23,631,064 48,468,819 51,615,938 20,416,872 38,602,180 3,725,140 6,703,806 33,791,892 197,237,514 400,562,161 Due from banks and loans at FVTPL Banks 32,722 - - - - - 79,830 - 112,552 Government/ Public sector/ Central bank 19,976 ------19,976 Corporations 848,872 544,345 17,370 140,644 4,995 - 71,311 - 1,627,537 901,570 544,345 17,370 140,644 4,995 - 151,141 - 1,760,065 Securities at fair value through profit or loss 33,937,881 2,817,646 1,357,718 818,454 419,777 87,821 18,304,164 - 57,743,461 Securities at fair value through other comprehensive income 25,220,170 3,151,788 546,207 806,184 1,021,931 9,939 27,951,956 - 58,708,175 Securities at amortized cost 10,188,413 22,590 - 1,069,178 1,250,291 - 35,705,681 - 48,236,153 W118,716,853 58,152,307 22,338,167 41,436,640 6,422,134 6,801,566 115,904,834 197,237,514 567,010,015 (*)The composition details by industry are net book value less allowances.

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4. Financial risk management (continued)

(b) Credit risk (continued) vi) Concentration by industry sector (continued)

An analysis of concentration by industry sector of financial instrument, net of allowance, as of June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 Finance Real Lodging Retail and Construction Retail and Manufacturing estate and and Total wholesale service customers insurance business Restaurant Other Due from banks and loans at amortized cost: Banks W 16,656,030 - - - - - 360,233 - 17,016,263 Retail ------170,314,316 170,314,316 Government/ Public sector/ Central bank 24,671,308 - - 1,796 - - 105,228 - 24,778,332 Corporations 10,403,261 48,430,680 18,679,397 35,920,334 3,521,216 6,479,253 29,461,183 - 152,895,324 Card receivable 44,980 169,900 252,537 36,372 38,456 23,150 1,685,293 20,571,858 22,822,546 51,775,579 48,600,580 18,931,934 35,958,502 3,559,672 6,502,403 31,611,937 190,886,174 387,826,781 Due from banks and loans at FVTPL: Banks 63,112 - - 29,997 - - - - 93,109 Corporations 1,114,789 641,554 19,210 51,008 3,000 - 157,243 - 1,986,804 1,177,901 641,554 19,210 81,005 3,000 - 157,243 - 2,079,913 Securities at fair value through profit or loss 34,294,362 2,978,991 1,223,958 574,547 248,399 46,177 15,908,597 - 55,275,031 Securities at fair value through other comprehensive income 26,528,743 3,448,765 577,781 830,988 974,333 22,643 25,026,180 - 57,409,433 Securities at amortized cost 10,361,913 21,750 - 1,053,779 963,348 - 34,881,833 - 47,282,623 W124,138,498 55,691,640 20,752,883 38,498,821 5,748,752 6,571,223 107,585,790 190,886,174 549,873,781 (*)The composition details by industry are net book value less allowances.

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4. Financial risk management (continued)

Market risk is defined as the risk of loss of trading account position of financial institutions due to changes on 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 risk within a certain level. To this end, the Group sets and operates VaR limits, investment limits, position limits, sensitivity limits, and loss limits from the portfolio to individual desks. These limits are managed daily by the department in charge of risk management, independent from the operating department.

Trading positions refer to securities, foreign exchange positions, and derivative financial instruments held for the purpose of obtaining short-term trading gains. As a method of measuring market risk, VaR (Value at Risk) is typical, and it is a statistical measurement of the potential maximum loss that can occur due to changes in market conditions. VaR calculates the standard method market risk using the Group Market Risk Measurement System (TRMS), and Shinhan Bank and Shinhan Financial Investment use their own internal model market risk calculation system.

Stress tests are conducted to supplement risk measurement by statistical methods 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, and stop-loss limit for each department.

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4. Financial risk management (continued)

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. The Group manages net interest income or changes in net asset value that occur due to changes in interest rates by early predicting the factors of interest rate risk fluctuation related to the Group's net interest income and net asset value through the interest rate risk management. 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, 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. In accordance with the amendments in Regulations for Supervision of Financial Holding Companies, the Group measures the interest rate risk using the Basel III based IRRBB, which 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 is 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 differentiated 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 ALM (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 NPV (Net Present Value) and NII (Net Interest Income) simulations, and monitors on a monthly basis its interest rate VaR limits, interest rate EaR (Earnings at Risk) limits and interest rate gap ratio limits.

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4. Financial risk management (continued)

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 S&T Center. Dealers in the S&T Center 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 (USD), Japanese yen (JPY), Euros (EUR) and Chinese yuan (CNY) are set in order to minimize exposures from the other foreign exchange trading.

(d) Liquidity risk

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. Therefore, the Group is checking the liquidity side for abnormalities in preparation for the usual crisis.

In addition, in order to pre-emptively and comprehensively manage liquidity risk, the Group measures and monitors 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.

Shinhan Card sets and operates a level that can withstand a 3-month credit crunch for end-of-month liquidity. The Group defines and manages the level of caution, anxiety and risk for the real-life liquidity gap ratio, liquidity buffer ratio, and ABS weight compared to borrowings. A contingency plan has been established to prepare for a crisis.

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4. Financial risk management (continued)

(d) Liquidity risk (continued)

The details of the composition of non-derivative financial instruments and derivative financial instruments by remaining period are as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Less than 1~3 3~6 6 months 1~5 More than 1 month months months ~ 1 year years 5 years Total Non-derivative financial instruments: Liabilities: Deposits(*2) W 203,275,094 34,390,984 39,644,074 51,260,785 16,516,874 2,176,703 347,264,514 Financial liabilities at FVTPL 1,620,111 756 1,201 2,104 20,613 - 1,644,785 Borrowings 14,200,199 3,538,254 4,807,154 4,277,921 10,895,666 4,554,889 42,274,083 Debt securities issued 5,292,493 5,087,286 6,348,685 13,389,419 44,453,805 6,398,805 80,970,493 Financial liabilities designated at FVTPL 320,075 168,419 1,029,206 803,109 4,160,169 1,288,173 7,769,151 Other financial liabilities 32,522,440 14,945 167,490 364,976 709,922 86,968 33,866,741 W 257,230,412 43,200,644 51,997,810 70,098,314 76,757,049 14,505,538 513,789,767 Off balance(*3): Finance guarantee contracts W 5,158,673 - - - - - 5,158,673 Loan commitments and other credit liabilities 190,357,044 - - - - - 190,357,044 W 195,515,717 - - - - - 195,515,717

Derivatives: Derivatives W 794,641 55,851 63,783 98,744 374,644 163,632 1,551,295

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4. Financial risk management (continued)

(d) Liquidity risk (continued)

The details of the composition of non-derivative financial instruments and derivative financial instruments by remaining period are as of June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 Less than 1~3 3~6 6 months 1~5 More than 5 1 month months months ~ 1 year years years Total Non-derivative financial instruments: Liabilities: Deposits(*2) W 187,299,944 28,357,521 36,578,825 59,863,780 14,894,480 2,355,459 329,350,009 Financial liabilities at fair value through profit or loss 1,409,608 794 7,042 2,785 18,870 - 1,439,099 Borrowings 14,670,192 3,783,621 2,920,338 5,463,070 10,692,374 4,392,815 41,922,410 Debt securities issued 5,872,508 6,261,775 5,039,503 11,457,246 43,712,609 6,454,265 78,797,906 Financial liabilities designated at fair value through profit or loss 596,675 221,857 336,784 1,277,802 5,043,549 979,057 8,455,724 Other financial liabilities 29,128,836 97,138 151,655 542,221 643,043 75,813 30,638,706 W 238,977,763 38,722,706 45,034,147 78,606,904 75,004,925 14,257,409 490,603,854 Off balance(*3): Finance guarantee contracts W 4,481,506 - - - - - 4,481,506 Loan commitments and other credit liabilities 187,536,416 - - 19,900 - - 187,556,316 W 192,017,922 - - 19,900 - - 192,037,822

Derivatives: Derivatives W 419,951 29,829 75,483 149,274 103,770 101,072 879,379 (*1) These amounts include cash flows of principal and interest on financial instruments. (*2) Demand deposits amounting to W166,304,230 million and W148,725,197 million as of June 30, 2021 and December 31, 2020 are included in the ‘Less than 1 month’ category, respectively. (*3) Financial guarantees such as financial guarantee contracts and loan commitments and other credit contributions 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.

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4. Financial risk management (continued)

(e) Capital risk management

The criteria for capital adequacy to be complied with by the Group are 8.0%. In addition, the minimum regulatory BIS capital ratio, which should be maintained additionally to increase the ability to absorb losses, has been raised to up to 14% as the capital regulation based on the Basel III standard is enforced from 2016. This is based on the addition of capital conservation capital (2.5%p) and Domestic- Systemically Important Banks(D-SIB) capital (1.0%p) and economic response capital (2.5%p) to the existing lowest common equity capital ratio, and economic response capital can be charged up to 2.5%p during credit expansion period. As of June 30, 2021, the minimum regulatory BIS capital ratio to be observed is 11.5%, which is the standard for applying capital conservation capital (2.5%p), D-SIB capital (1.0%p), and economic response capital (0%p).

Basel III capital ratio is the concept of 'International Agreement on the Measurement and Standards of Equity Capital' of the Basel Bank Supervisory Commission of BIS (International Settlement Bank). It is calculated as '(common stock capital (after deduction of deductions) + other basic capital + supplementary capital) ÷ risk weighted assets'.

The capital of common stock can be the first to make up for the loss of the financial holding company. The capital of common stock consists of capital stock, capital reserve, retained earnings and other, which will not be redeemed until the liquidation and will be redeemed at the last during the liquidation. Other basic capital consists of capital securities that meet certain requirements as capital of permanent nature. Complementary capital is capital that can compensate for losses of financial holding companies during liquidation, and consists of capital securities, etc. that meet certain requirements. The deduction items are those held by the Group as assets or capital items, but do not contribute to the ability to absorb losses. Unless otherwise noted, it will be deducted from common stock capital.

As of the end of the current quarter, the Group maintains an appropriate capital adequacy ratio in accordance with the BIS Equity Capital Regulation System.

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4. Financial risk management (continued)

(f) 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 its judgment to select a variety of methods and make rational assumptions that are mainly based on market conditions existing at the end of each reporting period. The fair value of financial instruments is determined using valuation techniques; a method of using recent transactions between independent parties with reasonable judgment and willingness to trade, a method of referring to the current fair value of other financial instruments that are substantially identical, discounted cash flow model and option pricing models. For example, the fair value of an interest rate swap is calculated as the present value of the expected future cash flows, and the fair value of foreign exchange forwarding contract is calculated by applying the public forward exchange rate at the end of the reporting period.

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.

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4. Financial risk management (continued)

(f) 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 June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Level 1 Level 2 Level 3 Total Financial assets Due from banks measured at FVTPL W - - 32,722 32,722 Loan receivables measured at FVTPL - 718,336 1,009,007 1,727,343 Financial assets at FVTPL: Debt securities and other securities 6,512,988 41,999,892 9,139,627 57,652,507 Equity securities 705,682 108,681 1,055,758 1,870,121 Gold/silver deposits 90,954 - - 90,954 7,309,624 42,108,573 10,195,385 59,613,582 Derivative assets: Trading 120,418 2,409,165 544,324 3,073,907 Hedging - 286,012 - 286,012 120,418 2,695,177 544,324 3,359,919 Securities measured at FVOCI: Debt securities 22,441,743 36,266,432 - 58,708,175 Equity securities 204,273 48,914 712,604 965,791 22,646,016 36,315,346 712,604 59,673,966 W 30,076,058 81,837,432 12,494,042 124,407,532 Financial liabilities: Financial liabilities measured at FVTPL: Securities sold W 1,087,104 - - 1,087,104 Gold/silver deposits 555,277 - - 555,277 1,642,381 - - 1,642,381 Financial liabilities designated at fair value through profit or loss: Derivatives-combined securities - 348,909 7,420,242 7,769,151 Derivative liabilities: Trading 129,973 2,089,297 85,528 2,304,798 Hedging - 184,176 111,987 296,163 129,973 2,273,473 197,515 2,600,961 W 1,772,354 2,622,382 7,617,757 12,012,493

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-1) The fair value hierarchy of financial instruments presented at their fair values in the statements of financial position as of June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 Level 1 Level 2 Level 3 Total Financial assets Due from banks measured at FVTPL W - - 63,112 63,112 Loan receivables measured at FVTPL - 708,111 1,308,690 2,016,801 Financial assets at FVTPL: Debt securities and other securities 7,029,453 39,335,739 8,721,500 55,086,692 Equity securities 693,816 210,230 832,413 1,736,459 Gold/silver deposits 188,339 - - 188,339 7,911,608 39,545,969 9,553,913 57,011,490 Derivative assets: Trading 125,339 4,623,218 408,855 5,157,412 Hedging - 475,708 795 476,503 125,339 5,098,926 409,650 5,633,915 Securities measured at FVOCI: Debt securities 17,515,390 39,861,238 32,805 57,409,433 Equity securities 172,403 49,673 684,603 906,679 17,687,793 39,910,911 717,408 58,316,112 W 25,724,740 85,263,917 12,052,773 123,041,430 Financial liabilities: Financial liabilities measured at FVTPL: Securities sold W 897,129 - - 897,129 Gold/silver deposits 539,565 - - 539,565 1,436,694 - - 1,436,694 Financial liabilities designated at fair value through profit or loss: Derivatives-combined securities - 314,220 8,141,504 8,455,724 Derivative liabilities: Trading 161,628 4,431,080 87,356 4,680,064 Hedging - 233,684 102,819 336,503 161,628 4,664,764 190,175 5,016,567 W 1,598,322 4,978,984 8,331,679 14,908,985

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-2) Financial instruments classified as Level 3 The Group uses the evaluation value from evaluators who are qualified and external independent to determine the fair value for Group’s assets at the end of each reporting period. Changes in carrying values of financial instruments classified as Level 3 for the six-month period ended June 30, 2021 and the year ended December 31, 2020 are as follows:

June 30, 2021 Financial Securities asset at fair value through other Financial liabilities at fair value comprehensive profit or designated at fair value Derivative assets and through profit or loss loss through profit or loss liabilities, net Beginning balance W 10,925,715 717,408 (8,141,504) 219,475 Recognized in total comprehensive income for the period : Recognized in profit (loss) for the period (*1) 85,424 1,069 (196,649) 98,089 Recognized in other comprehensive income (loss) for the period 21,242 12,770 (1,450) - 106,666 13,839 (198,099) 98,089 Purchase 1,960,375 19,902 - 90,998 Issue - - (4,802,723) - Settlement (1,861,286) (38,545) 5,722,084 (62,155) Reclassification(*3) (9,641) - - - Transfer to level3(*2) 144,477 - - 1,247 Transfer from level3(*2) (29,192) - - (845) Ending balance W 11,237,114 712,604 (7,420,242) 346,809

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-2) Financial instruments classified as Level 3 (continued) The Group uses the evaluation value from evaluators who are qualified and external independent to determine the fair value for Group’s assets at the end of each reporting period. Changes in carrying values of financial instruments classified as Level 3 for the six-month period ended June 30, 2021 and the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Financial Securities asset at fair value through other Financial liabilities at fair value comprehensive profit or designated at fair value Derivative assets and through profit or loss loss through profit or loss liabilities, net Beginning balance W 11,762,259 660,118 (8,511,489) 155,856 Recognized in total comprehensive income for the period : Recognized in profit (loss) for the period (*1) (59,931) (2,094) (196,743) 136,386 Recognized in other comprehensive income (loss) for the period 69,819 (2,521) (9,689) - 9,888 (4,615) (206,432) 136,386 Purchase 4,461,802 61,919 - 1,171 Issue - - (9,043,503) - Settlement (5,231,666) (14) 9,928,472 (74,584) Reclassification(*3) (377,641) - - - Transfer to level3(*2) 358,123 - (308,552) 625 Transfer from level3(*2) (57,513) - - 21 Business combination (Note 31) 463 - - - Ending balance W 10,925,715 717,408 (8,141,504) 219,475 (*1) Recognized profit or loss of the changes in carrying value of financial instruments classified as Level 3 for the six-month periods ended June 30, 2021 and 2020 are included in the accounts of the statements of comprehensive income, of which the amounts and the related accounts are as follows:

June 30, 2021 Recognized profit or loss from the financial Amounts recognized in instruments held as of profit or loss June 30 Net gain on financial assets at fair value through profit or loss W 189,995 19,123 Net gain (loss) on financial liabilities designated at fair value through profit or loss (196,649) 163,590 Net gain on securities at fair value through other comprehensive income 1,069 - Other operating expenses (6,482) (11,227) W (12,067) 171,486

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-2) Financial instruments classified as Level 3 (continued) The Group uses the evaluated values obtained by the external independent and qualified evaluators or internal evaluation models to determine the fair value of assets of the Group at the end of each reporting period. Changes in carrying values of financial instruments classified as Level 3 for the six-month period ended June 30, 2021 and the year ended December 31, 2020 are as follows (continued):

(*1) Recognized profit or loss of the changes in carrying value of financial instruments classified as Level 3 for the six-month periods ended June 30, 2021 and 2020 are included in the accounts of the statements of comprehensive income, of which the amounts and the related accounts are as follows (continued):

June 30, 2020 Recognized profit or loss from the financial Amounts recognized in instruments held as of profit or loss June 30 Net loss on financial assets at fair value through profit or loss W (312,882) (379,780) Net gain on financial liabilities designated at fair value through profit or loss 362,574 470,058 Net gain on securities at fair value through other comprehensive income 1,287 178 Other operating expenses 62,033 62,077 W 113,012 152,533 (*2) The investment securities transferred to Level 3 as the availability of observable market data changed due to reasons such as suspension of trading, and the derivative instruments transferred to Level 3 as the availability of observable market data changed due to reasons such as changes in the valuation. . (*3) It has been replaced by investment in associates.

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) 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 June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Valuation Carrying Type of financial instrument technique Value Significant inputs Assets Financial asset at fair value through profit or loss Discount rate, interest rate, stock price, and Debt securities DCF, NAV W 42,718,228 etc. Price of underlying assets such as stocks, Equity securities NAV 108,681 bonds, etc. 42,826,909 Derivative assets Trading Option model, 2,409,165 Discount rate, foreign exchange rate, volatility, Hedging DCF 286,012 stock price, and commodity index, etc. 2,695,177 Securities at fair value through other comprehensive income Debt securities DCF 36,266,432 Discount rate, interest rate and price of Equity securities NAV 48,914 underlying assets such as stock, bonds, etc. 36,315,346 W 81,837,432 Liabilities Financial liabilities designated at fair value through profit or loss Complex financial instruments DCF W 348,909 Discount rate Derivative liabilities Trading Option model, 2,089,297 Discount rate, foreign exchange rate, volatility, Hedging DCF 184,176 stock price, and commodity index, etc. 2,273,473 W 2,622,382

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) 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 June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 Valuation Carrying Type of financial instrument technique Value Significant inputs Assets Financial asset at fair value through profit or loss Discount rate, interest rate, stock price, Debt securities DCF W 40,043,850 and etc. Price of underlying assets such as stocks, Equity securities NAV 210,230 bonds, etc. 40,254,080 Derivative assets Trading 4,623,218 Discount rate, foreign exchange rate, Option model, volatility, stock price, and commodity Hedging DCF 475,708 index, etc. 5,098,926 Securities at fair value through other comprehensive income Debt securities DCF 39,861,238 Discount rate and price of underlying Equity securities NAV 49,673 assets such as stock, bonds, etc. 39,910,911 W 85,263,917 Liabilities Financial liabilities designated at fair value through profit or loss Complex financial instruments DCF W 314,220 Discount rate Derivative liabilities Trading 4,431,080 Discount rate, foreign exchange rate, Option model, volatility, stock price, and commodity Hedging DCF 233,684 index, etc. 4,664,764 W 4,978,984

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-3) Valuation techniques and significant inputs not observable in markets (continued) 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 June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 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, NAV, Option The volatility of the underlying asset, 7.00%~58.00% model(*1), Discount rate, 1.08%~27.19% Debt securities W 10,181,356 Comparable Correlations, and 12.18%~100.00% company Growth rate 1.00% analysis DCF, NAV, Option The volatility of the underlying asset, 19.00%~33.00% model(*1), Discount rate, 6.50%~15.74% Equity securities 1,055,758 Comparable Correlations, and 00.00%~55.00% company Growth rate 1.00% analysis 11,237,114 Derivative assets Equity and foreign exchange Option The volatility of the underlying asset, and 2.14%~43.00% 124,596 related model(*1) Correlations 3.00%~91.00% The volatility of the underlying asset, 0.50%~0.70% Interest rates related Option 9,981 Discount rate, and 1.69%~9.06% model(*1) Correlations 81.00%~83.00% Option The volatility of the underlying asset, and 0.70%~17.00% Credit and commodity related 409,747 model(*1) Correlations 0.00%~81.20% 544,324

Securities at fair value through other comprehensive income DCF, NAV, Debt securities Option - The volatility of the underlying asset, 25.85% model(*1), Discount rate, and 9.53%~21.09% Comparable Growth rate 0.00%~2.00% Equity securities company 712,604 analysis 712,604 W 12,494,042

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-3) Valuation techniques and significant inputs not observable in markets (continued) 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 June 30, 2021 and December 31, 2020 are as follows (continued):

June 30, 2021 Valuation Carrying Type of financial instrument technique value(*2) Significant unobservable inputs Range Financial liabilities Financial liabilities designated at fair value through profit or loss Option The volatility of the underlying asset, and 0.00%~98.50% Equity related W 7,420,242 model(*1) Correlations -43.00%~83.00% Derivative liabilities Equity and foreign Option The volatility of the underlying asset, and 2.14%~51.00% exchange related model(*1) 13,162 Correlations -5.00%~91.00% The volatility of the underlying asset, 0.44%~0.69% Option Interest rates related Regression coefficient, and 0.01%~0.27% model(*1) 152,184 Correlations 0.00%~90.34% Credit and commodity Option The volatility of the underlying asset 1.80%~98.50% related model(*1) 32,169 197,515 W 7,617,757 (*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.

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-3) Valuation techniques and significant inputs not observable in markets (continued) 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 June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 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, Option model(*1), The volatility of the underlying asset, 5.06%~61.32% Debt securities Comparable W 10,093,302 Discount rate, and 0.35%~27.17% company Correlations 0.00%~100.00% analysis DCF, NAV, Option The volatility of the underlying asset, 21.00%~40.00% model(*1), Discount rate, and Equity securities 832,413 5.83%~16.87% Comparable Correlations 20.00%~79.00% company analysis 10,925,715 Derivative assets Equity and foreign exchange Option The volatility of the underlying asset, and 4.30%~127.00% 113,496 related model(*1) Correlations -3.00%~82.00% The volatility of the underlying asset, 0.47%~1.00% Interest rates related Option 23,112 Regression coefficient, and 0.30%~0.58% model(*1) Correlations 26.00%~90.45% Option The volatility of the underlying asset, and 1.00%~40.00% Credit and commodity related 273,042 model(*1) Correlations -43.00%~92.00% 409,650

Securities at fair value through other comprehensive income DCF, NAV, Debt securities Option 32,805 The volatility of the underlying asset, 22.11% model(*1), Discount rate, and 0.05%~19.05% Comparable Growth rate 0.00%~2.00% Equity securities company 684,603 analysis 717,408 W 12,052,773

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-3) Valuation techniques and significant inputs not observable in markets (continued) 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 June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 Valuation Carrying Type of financial instrument technique value(*2) Significant unobservable inputs Range Financial liabilities Financial liabilities designated at fair value through profit or loss Option The volatility of the underlying asset, and 1.00%~127.00% Equity related W 8,141,504 model(*1) Correlations -43.00%~92.00% Derivative liabilities Equity and foreign Option The volatility of the underlying asset, and 4.30%~61.00% 25,525 exchange related model(*1) Correlations -3.00%~82.00% The volatility of the underlying asset, 0.47%~40.00% Option Interest rates related 134,759 Regression coefficient, and 0.30%~0.63% model(*1) Correlations 20.13%~90.34% Credit and commodity Option The volatility of the underlying asset, and 1.00%~102.00% 29,891 related model(*1) Correlations -43.00%~92.00% 190,175 W 8,331,679 (*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.

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) i) Financial instruments measured at fair value (continued) i-4) Sensitivity for changing in unobservable inputs

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 June 30, 2021 and December 31, 2020.

June 30, 2021 Favorable Unfavorable changes changes Financial assets: Effects on profit or loss for the period(*1)(*2): Financial asset at fair value through profit or loss W 38,675 (37,565) Derivative assets 13,445 (13,165) Securities at fair value through other comprehensive income(*2) 37,591 (31,966) W 89,711 (82,696) Financial liabilities: Effects on profit or loss for the period(*1): Financial liabilities designated at fair value through profit or loss W 29,248 (30,854) Derivative liabilities 13,272 (15,844) W 42,520 (46,698)

December 31, 2020 Favorable Unfavorable changes changes Financial assets: Effects on profit or loss for the period(*1)(*2): Financial asset at fair value through profit or loss W 53,821 (48,547) Derivative assets 23,011 (21,532) Securities at fair value through other comprehensive income(*2) 26,817 (21,044) W 103,649 (91,123) Financial liabilities: Effects on profit or loss for the period(*1): Financial liabilities designated at fair value through profit or loss W 72,042 (71,690) Derivative liabilities 17,976 (18,368) W 90,018 (90,058) (*1) Fair value changes are calculated by increasing or decreasing the volatility of the underlying asset 10%p or correlations 10%p, which is a major unobservable input. (*2) The fair value change is calculated by applying the growth rate, a major unobservable input, to (0%–1%) and increasing or decreasing the discount rate by (-1%p~1%p) over the existing discount rate.

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) 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 floating due from banks 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 of the borrower. Securities measured at The minimum price between the Korea Asset Pricing’s valuation, and KIS Pricing’s is used as a fair amortized cost 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. Other financial assets and The carrying amounts are measured at fair value for short-term and suspense accounts, such as other financial liabilities spot exchange, inter-bank fund transfer, and domestic exchange of payments, and for the remaining financial instruments, the present value is calculated by discounting the contractual cash flows at a discount rate which considered residual risk at the market interest rate.

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) 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 June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Carrying value Fair value Carrying value Fair value Assets:

Deposits measured at amortized cost W 23,791,995 23,786,665 31,605,262 31,607,122

Loans measured at amortized cost Retails 150,432,079 150,608,361 146,843,366 147,634,589 Corporations 192,417,459 192,376,363 177,046,416 178,420,230 Public and other funding loans 4,124,835 4,124,126 4,021,926 4,048,167 Loans between banks 6,163,330 6,160,163 5,487,147 5,495,236 Credit card 23,632,463 24,014,650 22,822,664 23,220,987 376,770,166 377,283,663 356,221,519 358,819,209 Securities measured at amortized cost Government bonds 33,006,309 33,231,495 31,816,320 33,391,597 Financial institution bonds 3,532,152 3,611,709 3,835,577 3,987,172 Corporation bonds 11,697,692 11,807,750 11,630,726 12,075,175 48,236,153 48,650,954 47,282,623 49,453,944 Other financial assets 24,181,983 24,194,748 20,341,191 20,359,778 W 472,980,297 473,916,030 455,450,595 460,240,053 Deposit liabilities: Demand deposits W 166,304,230 166,304,230 148,725,197 148,725,197 Time deposits 151,592,716 151,609,769 157,833,891 157,936,969 Certificate of deposit 12,503,865 12,511,413 5,946,704 5,965,139 Issued bill deposit 6,993,547 6,993,454 6,226,937 6,226,855 CMA deposits 3,878,066 3,878,066 4,006,319 4,006,319 Other 3,679,754 3,679,912 3,677,820 3,678,316 344,952,178 344,976,844 326,416,868 326,538,795 Borrowing debts: Call-money 1,505,397 1,505,397 1,760,042 1,760,042 Bills sold 10,572 10,566 10,706 10,696 Bonds sold under repurchase agreements 10,920,340 10,920,340 11,065,584 11,065,584 Borrowings 29,553,643 29,269,735 28,757,732 28,863,015 41,989,952 41,706,038 41,594,064 41,699,337 Debts: Borrowings in Korean won 66,286,581 66,567,212 64,083,920 64,842,258 Borrowings in foreign currency 11,101,892 11,333,615 11,050,474 11,262,332 77,388,473 77,900,827 75,134,394 76,104,590 Other financial liabilities 34,049,847 34,017,405 34,129,626 34,136,128 W 498,380,450 498,601,114 477,274,952 478,478,850

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4. Financial risk management (continued)

(f) Measurement of fair value (continued) ii) Financial instruments measured at amortized cost (continued) 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 June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Level 1 Level 2 Level 3 Total Assets: Deposits measured at amortized cost W 2,274,931 20,984,560 527,174 23,786,665

Loans measured at amortized cost Retails - - 150,608,361 150,608,361 Corporations - - 192,376,363 192,376,363 Public and other funding loans - - 4,124,126 4,124,126 Loans between banks - 3,548,603 2,611,560 6,160,163 Credit card - - 24,014,650 24,014,650 - 3,548,603 373,735,060 377,283,663 Securities measured at amortized cost: Government bonds 21,515,882 11,715,613 - 33,231,495 Financial institution bonds 697,748 2,913,961 - 3,611,709 Debentures - 11,724,351 83,399 11,807,750 22,213,630 26,353,925 83,399 48,650,954

Other financial assets - 14,553,335 9,641,413 24,194,748 W 24,488,561 65,440,423 383,987,046 473,916,030 Deposit liabilities: Demand deposits W - 166,304,230 - 166,304,230 Time deposits - - 151,609,769 151,609,769 Certificate of deposit - - 12,511,413 12,511,413 Issued bill deposit - - 6,993,454 6,993,454 CMA deposits - 3,878,066 - 3,878,066 Other - 3,570,485 109,427 3,679,912 - 173,752,781 171,224,063 344,976,844 Borrowing debts: Call-money - 1,505,397 - 1,505,397 Bills sold - - 10,566 10,566 Bonds sold under repurchase agreements 107,300 - 10,813,040 10,920,340 Borrowings - 7,000 29,262,735 29,269,735 107,300 1,512,397 40,086,341 41,706,038 Debts: Borrowings in won - 43,629,076 22,938,136 66,567,212 Borrowings in foreign currency - 8,227,677 3,105,938 11,333,615 - 51,856,753 26,044,074 77,900,827

Other financial liabilities - 11,130,748 22,886,657 34,017,405 W 107,300 238,252,679 260,241,135 498,601,114

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4. Financial risk management (continued)

December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Deposits measured at amortized cost W 779,759 29,957,444 869,919 31,607,122

Loans measured at amortized cost Retails - - 147,634,589 147,634,589 Corporations - - 178,420,230 178,420,230 Public and other funding loans - - 4,048,167 4,048,167 Loans between banks - 2,187,270 3,307,966 5,495,236 Credit card - - 23,220,987 23,220,987 - 2,187,270 356,631,939 358,819,209 Securities measured at amortized cost: Government bonds 22,130,487 11,261,110 - 33,391,597 Financial institution bonds 1,070,220 2,916,952 - 3,987,172 Debentures - 11,994,724 80,451 12,075,175 23,200,707 26,172,786 80,451 49,453,944

Other financial assets - 8,661,345 11,698,433 20,359,778 W 23,980,466 66,978,845 369,280,742 460,240,053 Deposit liabilities: Demand deposits W - 148,725,197 - 148,725,197 Time deposits - - 157,936,969 157,936,969 Certificate of deposit - - 5,965,139 5,965,139 Issued bill deposit - - 6,226,855 6,226,855 CMA deposits - 4,006,319 - 4,006,319 Other - 3,534,696 143,620 3,678,316 - 156,266,212 170,272,583 326,538,795 Borrowing debts: Call-money - 1,760,042 - 1,760,042 Bills sold - - 10,696 10,696 Bonds sold under repurchase agreements 95,400 - 10,970,184 11,065,584 Borrowings - 8,500 28,854,515 28,863,015 95,400 1,768,542 39,835,395 41,699,337 Debts: Borrowings in won - 35,740,750 29,101,508 64,842,258 Borrowings in foreign currency - 7,944,242 3,318,090 11,262,332 - 43,684,992 32,419,598 76,104,590

Other financial liabilities - 10,383,020 23,753,108 34,136,128 W 95,400 212,102,766 266,280,684 478,478,850

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4. Financial risk management (continued)

(g) 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.(f) Measurement of fair value.

The carrying amounts of each category of financial assets and financial liabilities as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Derivatives held for FVTPL FVOCI Amortized cost hedging Total Assets: Cash and due from banks at amortized cost W - - 26,421,476 - 26,421,476 Due from banks at fair value through profit or loss 32,722 - - - 32,722 Securities at fair value through profit or loss 59,613,582 - - - 59,613,582 Derivatives assets 3,073,907 - - 286,012 3,359,919 Loans at fair value through profit or loss 1,727,343 - - - 1,727,343 Loans at amortized cost - - 376,770,166 - 376,770,166 Securities at fair value through other comprehensive income - 59,673,966 - - 59,673,966 Securities at amortized cost - - 48,236,153 - 48,236,153 Other - - 24,181,983 - 24,181,983 W 64,447,554 59,673,966 475,609,778 286,012 600,017,310

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4. Financial risk management (continued)

(g) Classification by categories of financial instruments (continued)

The carrying amounts of each category of financial assets and financial liabilities as of June 30, 2021 and December 31, 2020 are as follows (continued):

June 30, 2021 Financial liabilities FVTPL measured at Derivatives held for FVTPL liabilities designated amortized cost hedging Total Liabilities: Deposits W - - 344,952,178 - 344,952,178 Financial liabilities at fair value through profit or loss 1,642,381 - - - 1,642,381 Financial liabilities designated at FVTPL - 7,769,151 - - 7,769,151 Derivatives liabilities 2,304,798 - - 296,163 2,600,961 Borrowings - - 41,989,952 - 41,989,952 Debt securities issued - - 77,388,473 - 77,388,473 Other - - 34,049,847 - 34,049,847 W 3,947,179 7,769,151 498,380,450 296,163 510,392,943

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4. Financial risk management (continued)

(g) Classification by categories of financial instruments (continued)

The carrying amounts of each category of financial assets and financial liabilities as of June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 Derivatives held for FVTPL FVOCI Amortized cost hedging Total Assets: Cash and due from banks at amortized cost W - - 33,410,542 - 33,410,542 Due from banks at fair value through profit or loss 63,112 - - - 63,112 Securities at fair value through profit or loss 57,011,490 - - - 57,011,490 Derivatives assets 5,157,412 - - 476,503 5,633,915 Loans at fair value through profit or loss 2,016,801 - - - 2,016,801 Loans at amortized cost - - 356,221,519 - 356,221,519 Securities at fair value through other comprehensive income - 58,316,112 - - 58,316,112 Securities at amortized cost - - 47,282,623 - 47,282,623 Other - - 20,341,191 - 20,341,191 W 64,248,815 58,316,112 457,255,875 476,503 580,297,305

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4. Financial risk management (continued)

(g) Classification by categories of financial instruments (continued)

The carrying amounts of each category of financial assets and financial liabilities as of June 30, 2021 and December 31, 2020 are as follows (continued):

December 31, 2020 Financial liabilities FVTPL measured at Derivatives held for FVTPL liabilities designated amortized cost hedging Total Liabilities: Deposits W - - 326,416,868 - 326,416,868 Financial liabilities at fair value through profit or loss 1,436,694 - - - 1,436,694 Financial liabilities designated at FVTPL - 8,455,724 - - 8,455,724 Derivatives liabilities 4,680,064 - - 336,503 5,016,567 Borrowings - - 41,594,064 - 41,594,064 Debt securities issued - - 75,134,394 - 75,134,394 Other - - 34,129,626 - 34,129,626 W 6,116,758 8,455,724 477,274,952 336,503 492,183,937

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5. Change in subsidiaries

(a) Change in consolidated subsidiaries for the six-month period ended June 30, 2021 are as follows:

Company Description Included Shinhan Life Insurance Vietnam Co., Ltd. Newly invested subsidiary (*) Trusts, beneficiary certificates, securitization-specialized limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded.

(b) Change in consolidated subsidiaries for the year ended December 31, 2020 are as follows:

Company Description Included Shinhan Venture Investment Co., Ltd. Newly acquired subsidiary Included SBJDNX Newly invested subsidiary Included Shinhan Financial Plus Newly invested subsidiary Excluded Shinhan Asia Ltd. Liquidation (*) Trusts, beneficiary certificates, securitization-specialized limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded.

6. Operating segments

(a) Segment information

The general descriptions by operating segments as of June 30, 2021 are as follows:

Segment Description

Banking Credit to customers, lending to and receiving deposits from customers, and their accompanying work Credit card Sales of credit cards, cash services, card loan services, installment financing, lease, etc and their accompanying work Securities Securities trading, consignment trading, underwriting and their accompanying work Life insurance Life insurance business and its accompanying work Others Business segments that do not belong to the above segments, such as real estate trust, investment advisory services, venture business and other remaining business

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6. Operating segments (continued)

(b) The following tables provide information of operating income(expense) and net profit(loss) for each operating segment for the six- month periods ended June 30, 2021 and 2020.

June 30, 2021 Consolidation Banking Credit card Securities Life insurance Others adjustment Total Net interest income W 3,226,390 896,925 279,105 798,054 126,510 (96,159) 5,230,825 Net fees and commission income 416,269 312,876 316,232 145,267 212,016 1,428 1,404,088 Reversal of (provision for) credit loss allowance (124,975) (210,726) 7,643 (3,241) (21,372) 1,904 (350,767) General and administrative expenses (1,575,261) (358,399) (342,379) (236,717) (196,081) 72,916 (2,635,921) Other income (expense) (121,304) (87,179) 140,752 (277,196) 181,784 (109,186) (272,329) Operating income(loss) 1,821,119 553,497 401,353 426,167 302,857 (129,097) 3,375,896 Equity method income (loss) 15,850 (275) 33,339 (491) 19,930 (2,216) 66,137 Income tax expense(income) 446,411 147,343 102,895 105,678 80,539 (4,370) 878,496 Profit(loss) for the period W 1,338,372 414,486 322,809 309,051 240,559 (129,401) 2,495,876 Controlling interest W 1,338,172 413,958 322,879 309,051 240,558 (180,839) 2,443,779 Non-controlling interests 200 528 (70) - 1 51,438 52,097

June 30, 2020 Consolidation Banking Credit card Securities Life insurance Others adjustment Total Net interest income W 3,004,978 880,199 253,812 805,855 76,226 (111,522) 4,909,548 Net fees and commission 412,413 242,452 223,671 83,237 168,668 (582) 1,129,859 income Reversal of (provision for) (391,920) (265,439) (91,295) (6,891) (19,086) 833 (773,798) credit loss allowance General and administrative (1,525,645) (348,320) (266,587) (214,941) (170,338) 56,626 (2,469,205) expenses Other income (expense) (31,787) (39,149) 13,853 (349,506) 98,767 24,001 (283,821) Operating income(loss) 1,468,039 469,743 133,454 317,754 154,237 (30,644) 2,512,583 Equity method income (loss) (2,585) - 18,359 (738) 12,609 38,555 66,200 Income tax expense 373,878 121,062 20,505 81,836 46,927 21,021 665,229 Profit(loss) for the period W 1,103,999 350,821 56,933 229,070 118,494 (17,109) 1,842,208 Controlling interest W 1,103,811 351,425 57,093 229,070 118,495 (54,384) 1,805,510 Non-controlling interests 188 (604) (160) - (1) 37,275 36,698

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6. Operating segments (continued)

(c) The following tables provide information of interest gains and losses from segment external customers and cross-sector interest gains and losses for the six-month periods ended June 30, 2021 and 2020.

June 30, 2021 Life Consolidation Banking Credit card Securities insurance Others adjustment(*) Total Net interest income from: External customers (*) W 3,226,876 923,581 287,468 797,155 98,596 (102,851) 5,230,825 Cross-sector transactions (486) (26,656) (8,363) 899 27,914 6,692 - W 3,226,390 896,925 279,105 798,054 126,510 (96,159) 5,230,825 (*) Consolidated adjustment to net interest income(loss) from external customers is from the securities and others which were measured at fair values as a part of business combination accounting.

June 30, 2020 Life Consolidation Banking Credit card Securities insurance Others adjustment(*) Total Net interest income from: External customers (*) W 3,006,376 902,163 254,844 803,740 54,435 (112,010) 4,909,548 Cross-sector transactions (1,398) (21,964) (1,032) 2,115 21,791 488 - W 3,004,978 880,199 253,812 805,855 76,226 (111,522) 4,909,548 (*) Consolidated adjustment to net interest income(loss) from external customers is from the securities and others which were measured at fair values as a part of business combination accounting.

(d) The following tables provide information commission gains and losses from segment external customers and cross-sector commission gains and losses for the six-month periods ended June 30, 2021 and 2020.

June 30, 2021 Life Consolidation Banking Credit card Securities insurance Others adjustment Total Net fees and commission income from: External customers W 437,922 336,459 322,834 150,637 156,236 - 1,404,088 Cross-sector transactions (21,653) (23,583) (6,602) (5,370) 55,780 1,428 - W 416,269 312,876 316,232 145,267 212,016 1,428 1,404,088

June 30, 2020 Life Consolidation Banking Credit card Securities insurance Others adjustment Total Net fees and commission income from: External customers W 430,526 263,940 227,140 89,313 118,940 - 1,129,859 Cross-sector transactions (18,113) (21,488) (3,469) (6,076) 49,728 (582) - W 412,413 242,452 223,671 83,237 168,668 (582) 1,129,859

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7. Cash and due from banks at amortized cost

Restricted due from banks in accordance with Related Regulations or Acts as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Related Regulations or Acts Due from banks denominated in Korean won: Reserve deposits W 10,840,688 16,957,521 Article 55 of the Bank of Korea Act Article 28 and 70 of the Bank of Korea Act, Other 738,819 2,390,761 Article 74 of the Capital Markets and Financial Investment Business Act, etc. 11,579,507 19,348,282

Articles of the Bank of Korea Act, Due from banks denominated 2,234,458 2,621,129 New York State Banking Act, derivatives, in foreign currency etc. W 13,813,965 21,969,411

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8. Financial assets at fair value through profit or loss

(a) Financial assets at fair value through profit or loss as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Debt instruments: Governments W 4,094,978 4,248,448 Financial institutions 12,062,697 13,997,922 Corporations 11,163,272 9,356,842 Stocks with put option 628,180 583,590 Equity investment with put option 2,128,574 1,860,195 Beneficiary certificates 14,156,266 12,451,709 Commercial papers 7,067,305 6,369,854 CMA 3,006,403 2,806,485 Others(*) 3,344,832 3,411,647 57,652,507 55,086,692

Equity instruments: Stocks 1,755,110 1,627,020 Equity investment 9,037 1,697 Others 105,974 107,742 1,870,121 1,736,459 59,522,628 56,823,151 Other: Loans at fair value 1,727,343 2,016,801 Due from banks at fair value 32,722 63,112 Gold/silver deposits 90,954 188,339 W 61,373,647 59,091,403 (*) As of June 30, 2021 and December 31, 2020, restricted reserve for claims of customers’ deposits (trusts) are W1,932,086 million and W1,907,210 million respectively.

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8. Financial assets at fair value through profit or loss (continued)

(b) Among financial assets at fair value through profit or loss, financial assets to which overlay approach are applied in accordance with K-IFRS No. 1109 ‘Financial Instruments’ and K-IFRS No. 1104 ‘Insurance Contracts’ as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020

Due from banks at fair value through profit or loss W 32,722 63,112 Securities at fair value through profit or loss 4,576,562 4,865,908 W 4,609,284 4,929,020

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 designated for the overlay approach if it is 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 for the six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 Reclassification into other Profit or loss comprehensive income(*) By K-IFRS 1109 By K-IFRS 1039 Amount Tax effect Net gain (loss) on evaluation of financial assets at fair value through profit or loss W 20,646 (1,268) 21,914 (5,986) Net gain (loss) on disposal of financial assets at fair value through profit or loss 5,397 77,768 (72,371) 25,439 Net gain (loss) on foreign currency conversion of financial assets at fair value through profit or loss (14) - (14) 4 Net gain (loss) on foreign currency transaction of financial assets at fair value through profit or loss (10) - (10) 3 W 26,019 76,500 (50,481) 19,460 (*) The amount of the policyholders’ equity adjustment for the reclassification of other comprehensive income is W 2,276 million.

June 30, 2020 Reclassification into other Profit or loss comprehensive income(*) By K-IFRS 1109 By K-IFRS 1039 Amount Tax effect Net gain (loss) on evaluation of financial assets at fair value through profit or loss W 70,490 (2,480) 72,970 (21,697) Net gain (loss) on disposal of financial assets at fair value through profit or loss 22,069 23,680 (1,611) 740 W 92,559 21,200 71,359 (20,957) (*) The amount of the policyholders’ equity adjustment for the reclassification of other comprehensive income is W (4,789) million.

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9. Derivatives

(a) The notional amounts of derivatives outstanding as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Foreign currency related: Over the counter: Currency forwards W 146,454,067 117,566,233 Currency swaps 35,443,305 33,562,251 Currency options 2,402,719 2,501,983 184,300,091 153,630,467 Exchange traded: Currency futures 1,134,334 1,102,534 185,434,425 154,733,001 Interest rates related: Over the counter: Interest rate forwards and swaps 72,561,802 36,205,843 Interest rate options 413,382 324,238 72,975,184 36,530,081 Exchange traded: Interest rate futures 2,910,070 2,465,374 Interest rate options 14,562 - Interest rate swaps(*) 31,471,450 68,475,400 34,396,082 70,940,774 107,371,266 107,470,855 Credit related: Over the counter: Credit swaps 4,562,462 4,536,626

Equity related: Over the counter: Equity swaps and forwards 2,076,750 2,628,661 Equity options 422,001 508,686 2,498,751 3,137,347 Exchange traded: Equity futures 2,013,511 1,638,126 Equity options 2,826,214 4,277,882 4,839,725 5,916,008 7,338,476 9,053,355 Commodity related: Over the counter: Commodity swaps and forwards 576,712 537,351 Commodity options 11,500 - 588,212 537,351 Exchange traded: Commodity futures and options 219,377 263,460 807,589 800,811 Hedge: Currency forwards 1,359,966 1,281,945 Currency swaps 4,066,470 4,328,333

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Interest rate forwards and swaps 8,070,461 7,844,392 13,496,897 13,454,670 W 319,011,115 290,049,318 (*) The notional amounts of derivatives outstanding that will be settled in the ‘Central Counter Party (CCP)’ system.

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(b) Fair values of derivative instruments as of June 30, 2021 and December 31, 2020 are as follows: June 30, 2021 December 31, 2020 Assets Liabilities Assets Liabilities Foreign currency related: Over the counter: Currency forwards W 1,600,567 1,288,450 3,135,319 3,021,258 Currency swaps 583,992 496,012 1,145,619 979,022 Currency options 11,786 12,434 33,253 31,871 2,196,345 1,796,896 4,314,191 4,032,151 Exchange traded: Currency futures 372 116 90 186 2,196,717 1,797,012 4,314,281 4,032,337 Interest rates related: Over the counter: Interest rate swaps and forwards 196,819 290,704 311,403 363,297 Interest rate options 3,270 2,566 2,148 2,217 200,089 293,270 313,551 365,514 Exchange traded: Interest rate futures 402 2,802 900 422 Interest rate options 89 - - - 491 2,802 900 422 200,580 296,072 314,451 365,936 Credit related: Over the counter: Credit swaps 409,747 32,168 273,578 29,682 Equity related: Over the counter: Equity swap and forwards 124,452 12,152 122,034 48,218 Equity options 3,456 3,935 2,750 9,840 127,908 16,087 124,784 58,058 Exchange traded: Equity futures 38,024 23,186 34,816 7,711 Equity options 78,038 100,471 77,973 153,461 116,062 123,657 112,789 161,172 243,970 139,744 237,573 219,230 Commodity related: Over the counter: Commodity swaps and forwards 19,217 32,451 5,949 32,693 Commodity options - 3,518 - - 19,217 35,969 5,949 32,693 Exchange traded: Commodity futures and options 3,676 3,833 11,580 186 22,893 39,802 17,529 32,879 Hedge: Currency forwards 27,297 6,885 91,747 10,507 Currency swaps 34,574 126,593 65,256 186,150 Interest rate forwards and swaps 224,141 162,685 319,500 139,846 286,012 296,163 476,503 336,503 W 3,359,919 2,600,961 5,633,915 5,016,567

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9. Derivatives (continued)

(c) Gain or loss on valuation of derivatives for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Foreign currency related: Over the counter: Currency forwards W (40,899) 184,667 (88,397) 122,838 Currency swaps 8,460 (103,020) 40,139 (7,027) Currency options 978 1,146 850 3,391 (31,461) 82,793 (47,408) 119,202 Exchange traded: Currency futures (596) 255 (1) (1) (32,057) 83,048 (47,409) 119,201 Interest rates related: Over the counter: Interest rate forwards and swaps (16,972) (86,027) (10,966) (94,414) Interest rate options 129 626 519 (1,403) (16,843) (85,401) (10,447) (95,817) Exchange traded: Interest rate futures, etc. (3,876) (2,537) (1,603) 303 (20,719) (87,938) (12,050) (95,514) Credit related: Over the counter: Credit swaps 97,002 133,321 26,515 40,469 Equity related: Over the counter: Equity swap and forwards (34,409) (16,741) 376,548 (332,754) Equity options 2,160 5,010 (1,435) (5,594) (32,249) (11,731) 375,113 (338,348) Exchange traded: Equity futures 2,299 723 43,687 11,828 Equity options (100,901) 60,085 287,186 36,772 (98,602) 60,808 330,873 48,600 (130,851) 49,077 705,986 (289,748) Commodity related: Over the counter: Commodity swaps and forwards 14,545 11,032 42,460 (25,655) Commodity options (68) (68) - - 14,477 10,964 42,460 (25,655) Exchange traded: Commodity futures and options 12,738 (157) 40,476 3,737 27,215 10,807 82,936 (21,918) Hedge: 14,603 (119,152) 84,979 265,670 W (44,807) 69,163 840,957 18,160

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9. Derivatives (continued)

(d) Nominal amounts and average hedge ratio for hedging instruments as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Less than 1~2 2~3 3~4 4~5 More than 5 1 year years years years years years Total Interest risk: Nominal values: W 1,150,170 587,290 976,845 407,028 738,461 4,210,667 8,070,461 Average price condition(*1): 1.15% 1.63% 1.21% 0.78% 1.41% 0.43% 0.82% Average hedge ratio: 100% 100% 100% 100% 100% 100% 100%

Exchange risk:(*2) Nominal values: 2,745,794 1,161,908 1,293,513 446,686 885,474 110,826 6,644,201 Average hedge ratio: 100% 100% 100% 100% 100% 100% 100% (*1) The basic interest rate of the interest rate swaps consist of 3M CD, 3M USD Libor, 3M Euribor, and 3M AUD Bond. (*2) The average exchange rates conditions of hedging instruments are USD/KRW 1,155.14, JPY/KRW 10.61, EUR/KRW 1,295.40, GBP/KRW 1,482.39, AUD/KRW 817.92, CAD/KRW 868.95, SGD/KRW 859.87, CNY/KRW 174.40, SEK/KRW 124.95.

December 31, 2020 Less than 1~2 2~3 3~4 4~5 More than 5 1 year years years years years years Total Interest risk: Nominal values: W 657,656 640,992 1,217,588 456,688 247,244 4,624,224 7,844,392 Average price condition(*1): 1.12% 0.88% 1.30% 0.98% 0.67% 0.38% 0.67% Average hedge ratio: 100% 100% 100% 100% 100% 100% 100%

Exchange risk:(*2) Nominal values: 2,340,409 1,448,787 1,734,593 457,199 575,527 250,014 6,806,529 Average hedge ratio: 100% 100% 100% 100% 100% 100% 100% (*1) The basic interest rate of the interest rate swaps consist of 3M CD, 3M USD Libor, 3M Euribor, and 3M AUD Bond. (*2) The average exchange rates conditions of hedging instruments are USD/KRW 1,154.76, JPY/KRW 10.61, EUR/KRW 1,287.16, GBP/KRW 1,480.30, AUD/KRW 800.67, CAD/KRW 895.95, SGD/KRW 847.09, CNY/KRW 168.84, SEK/KRW 124.60.

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9. Derivatives (continued)

(e) Hedge relationships affected by an interest rate benchmark reform

The revised Standard requires exceptions to the analysis of future information in relation to the application of hedge accounting, while uncertainty exists due to movements of the interest rate benchmark reform. The exception assumes that when assessing whether the expected cash flows that comply with existing interest rate benchmarks are highly probable, whether there is an economic relationship between the hedged item and the hedging instrument, and whether there is a high hedge effectiveness between the hedged item and the hedging instrument, the interest rate benchmarks that are based on the hedged item do not change due to the effect of the interest rate benchmark reform. The carrying amount of hedged item and the nominal amount of the hedging instrument related to the interest rate benchmark exposed to the hedging relationship due to the Group's reform of the interest rate benchmark as of June 30, 2021 is as follows:

Carrying amount of hedged Carrying amount of hedged Nominal amount of hedging Interest rate benchmark item, Assets item, Liabilities instrument(*2) KRW 3M CD (*1) W - 2,713,446 2,780,000 USD 1M LIBOR - 1,047,236 1,049,770 USD 3M LIBOR (*1) 344,702 4,120,690 4,499,210 EUR 1M LIBOR - 265,454 265,671 EUR 3M LIBOR - 268,131 268,884 W 344,702 8,414,957 8,863,535 (*1) Include nominal amount of the hedging instrument related to the Constant Maturity Swap (CMS) calculated based on the CD and LIBOR rate. (*2) Include the nominal amount of the hedging instrument that matures before the publication of LIBOR ceases.

The USD LIBOR interest rate will be replaced by a Secured Overnight Financing Rate (SOFR) based on actual transactions, and the EUR LIBOR interest rate will be replaced by the next day’s unsecured rate, Euro Short-Term Rate (ESTER). In South Korea, RP interest rates on government bond and monetary stabilization bond are finally selected as the Risk-Free Reference Rate (RFR). The Group has assumed that in this hedging relationship, the spread changed on the basis of SOFR, ESTER and RFR would be similar to the spread included in the interest rate swap and interest rate forward used as the hedging instrument after LIBOR rate is suspended. The Group does not assume any changes in other conditions.

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10. Securities at fair value through other comprehensive income and securities at amortized cost

(a) Details of securities at fair value through other comprehensive income and securities at amortized cost as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Securities at fair value through other comprehensive income: Debt securities: Government bonds W 22,887,470 19,370,393 Financial institutions bonds 18,224,900 20,053,716 Corporate bonds and others 17,595,805 17,985,324 58,708,175 57,409,433 Equity securities(*): Stocks 847,256 777,901 Equity investments 4,280 4,445 Others 114,255 124,333 965,791 906,679 59,673,966 58,316,112 Securities at amortized cost: Debt securities: Government bonds 33,006,309 31,816,320 Financial institutions bonds 3,532,152 3,835,577 Corporate bonds and others 11,697,692 11,630,726 48,236,153 47,282,623 W 107,910,119 105,598,735 (*) Equity securities in the above table are classified as equity securities designated as other comprehensive income through fair value items, and other comprehensive income - fair value options were exercised for the purpose of holding as required by the policy.

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10. 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 six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

Beginning balance W 57,142,298 267,135 57,409,433 47,293,109 - 47,293,109 Transfer to (from) 12-month expected credit loss 88,575 (88,575) - - - - Transfer to (from) lifetime expected credit loss (13,100) 13,100 - - - - Transfer to impaired financial asset ------Net increase and decrease(*) 1,344,900 (46,158) 1,298,742 954,748 - 954,748 Ending balance W 58,562,673 145,502 58,708,175 48,247,857 - 48,247,857 (*) The amount is due to purchase, disposal, repayment, change in exchange rate, amortization of fair value adjustments recognized through business combination accountings, etc.

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10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

December 31, 2020 Securities at fair value through other comprehensive income Securities at amortized cost 12-month Lifetime 12-month expected expected expected Lifetime expected credit loss credit loss Total credit loss credit loss Total

Beginning allowance W 58,334,000 239,094 58,573,094 45,568,563 23,272 45,591,835 Transfer to (from) 12-month expected credit loss 30,233 (30,233) - - - - Transfer to (from) lifetime expected credit loss (83,132) 83,132 - - - - Transfer to impaired financial asset ------Net increase and decrease(*) (1,138,803) (24,858) (1,163,661) 1,724,546 (23,272) 1,701,274 Ending balance W 57,142,298 267,135 57,409,433 47,293,109 - 47,293,109 (*) The amount is due to purchase, disposal, repayment, change in exchange rate, amortization of fair value adjustments recognized through business combination accountings, etc.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Interim Financial Statements June 30, 2021 and 2020(Unaudited), and December 31, 2020 (In millions of won)

10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

(c) Changes in allowance for credit loss of debt securities at fair value through other comprehensive income and debt securities at amortized cost for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Securities at fair value through other comprehensive income Securities at amortized cost Lifetime 12-month expected Lifetime expected 12-month expected expected credit credit loss credit loss Total credit loss loss Total Beginning allowance W 22,493 678 23,171 10,486 - 10,486 Transfer to (from) 12-month expected credit loss 372 (372) - - - - Transfer to lifetime expected credit loss (6) 6 - - - - Transfer to impaired financial asset ------Provision (reversal) 1,815 187 2,002 927 - 927 Disposal and others(*) (4,365) 1 (4,364) 291 - 291 Ending allowance W 20,309 500 20,809 11,704 - 11,704 (*) Include the effects from changes in foreign exchange rate, debt restructuring, debt-equity swap, etc.

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10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

December 31, 2020 Securities at fair value through other comprehensive income Securities at amortized cost 12-month Lifetime expected expected 12-month expected Lifetime expected credit loss credit loss Total credit loss credit loss Total Beginning allowance W 27,581 655 28,236 9,759 11 9,770 Transfer to (from) 12-months expected credit loss 22 (22) - - - - Transfer to (from) lifetime expected credit loss (193) 193 - - - - Transfer to impaired financial asset ------Provision (reversal) 3,480 349 3,829 1,086 (11) 1,075 Disposal and others(*) (8,397) (497) (8,894) (359) - (359) Ending allowance W 22,493 678 23,171 10,486 - 10,486 (*) Include the effects from changes in foreign exchange rate, debt restructuring, debt-equity swap, etc.

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10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

(d) Gain or loss on disposal of securities at fair value through other comprehensive income(FVOCI) and securities at amortized cost for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Six- Six- Three-month Three-month month month Gain on disposal of securities at FVOCI W 30,696 85,329 82,627 203,838 Loss on disposal of securities at FVOCI (7,639) (24,409) (5,999) (16,951) Gain on disposal of securities at amortized cost (*) 5 8 39 42 Loss on disposal of securities at amortized cost (*) (124) (139) (1) (12) 22,938 60,789 76,666 186,917 (*) The issuers of those securities have exercised the early redemption options.

(e) Gain or loss on equity securities at fair value through other comprehensive income.

The Group recognizes dividends, amounting to W 19,848 million and W 15,129 million, related to equity securities at fair value through other comprehensive income for the six-month periods ended June 30, 2021 and 2020, respectively.

In addition, the details of disposal of equity securities at fair value through other comprehensive income for the six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020

Fair value at the date of disposal W 47,506 18,612 Cumulative net gain(loss) at the time of disposal (34,131) (5,055)

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11. Loans at amortized cost and other financial assets

(a) Loans at amortized cost for configuration by customer as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Household loans W 150,368,622 146,789,916 Corporate loans 194,474,414 179,011,251 Public and other loans 3,659,470 3,734,629 Loans to banks 6,190,887 5,492,400 Credit card 24,551,447 23,759,422 379,244,840 358,787,618 Discount (23,857) (21,948) Deferred loan origination costs 509,241 516,815 379,730,224 359,282,485 Less: Allowance for credit loss (2,960,058) (3,060,966) W 376,770,166 356,221,519

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Interim Financial Statements June 30, 2021 and 2020(Unaudited), and December 31, 2020

11. Loans at amortized cost and other financial assets (continued)

(b) Changes in carrying value of loans at amortized cost and other financial assets Changes in carrying value of loans at amortized cost and other financial assets for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Loans at amortized cost Other financial assets (*1) 12-month Lifetime Impaired 12-month Lifetime expected credit expected financial expected credit expected credit Impaired loss credit loss asset loss loss financial asset Total

Beginning balance W 318,229,085 39,042,439 2,010,961 51,881,798 99,899 57,658 411,321,840 Transfer to (from) 12-month expected credit loss 8,894,102 (8,812,641) (81,461) 12,101 (12,065) (36) - Transfer to (from) lifetime expected credit loss (11,404,712) 11,442,059 (37,347) (24,254) 24,269 (15) - Transfer to (from) impaired financial asset (310,422) (613,236) 923,658 (1,767) (11,201) 12,968 - Net increase and decrease(*2) 21,111,206 246,720 (235,153) (3,946,449) 1,136 7,051 17,184,511 Charge off(*3) - - (575,746) - - (15,857) (591,603) Disposal (27,611) (510) (71,167) - - (203) (99,491) Ending balance W 336,491,648 41,304,831 1,933,745 47,921,429 102,038 61,566 427,815,257 (*1) Include total carrying amount of due from banks measured at amortized cost and other financial assets. (*2) The amount is due to execution, collection, debt restructuring, debt-equity swap, change in exchange rate, etc. (*3) The amount of uncollected loans that have been written-off but are currently in recovery (principal and interest) is W10,476,215 million as of June 30, 2021.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Interim Financial Statements June 30, 2021 and 2020(Unaudited), and December 31, 2020

11. Loans at amortized cost and other financial assets (continued)

(b) Changes in carrying value of loans at amortized cost and other financial assets (continued)

Changes in carrying value of loans at amortized cost and other financial assets for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Loans at amortized cost Other financial assets (*1) 12-month Lifetime Impaired 12-month Lifetime expected credit expected financial expected expected credit Impaired loss credit loss asset credit loss loss financial asset Total

Beginning balance W 286,765,223 37,286,614 1,877,977 43,245,002 106,517 45,965 369,327,298 Transfer to (from) 12-month expected credit loss 9,268,318 (9,258,662) (9,656) 15,157 (15,123) (34) - Transfer to (from) lifetime expected credit loss (13,589,348) 13,629,758 (40,410) (25,839) 25,848 (9) - Transfer to (from) impaired financial asset (503,896) (791,420) 1,295,316 (1,628) (7,342) 8,970 - Net increase and decrease(*2) 37,332,939 (1,822,954) 390,384 8,633,124 (10,001) 30,490 44,553,982 Charge off(*3) - - (1,146,776) - - (26,814) (1,173,590) Disposal (1,044,151) (897) (355,874) - - (910) (1,401,832) Business combination (Note 31) - - - 15,982 - - 15,982 Ending balance W 318,229,085 39,042,439 2,010,961 51,881,798 99,899 57,658 411,321,840 (*1) Include total carrying amount of due from banks measured at amortized cost and other financial assets. (*2) The amount is due to execution, collection, debt restructuring, debt-equity swap, change in exchange rate, etc. (*3) The amount of uncollected loans that have been written-off but are currently in recovery (principal and interest) is W10,436,407 million as of December 31, 2020.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Interim Financial Statements June 30, 2021 and 2020(Unaudited), and December 31, 2020

11. Loans at amortized cost and other financial assets (continued)

Changes in allowances for credit loss of loans at amortized cost and other financial assets for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Loans at amortized cost Other financial assets (*1) 12-month Lifetime 12-month Lifetime expected expected Impaired expected credit expected credit Impaired credit loss credit loss financial asset loss loss financial asset Total

Beginning allowance W 932,990 1,135,185 992,791 35,691 8,281 48,930 3,153,868 Transfer to (from) 12-month expected credit loss 122,423 (116,597) (5,826) 183 (168) (15) - Transfer to (from) lifetime expected credit loss (78,733) 88,495 (9,762) (127) 131 (4) - Transfer to (from) impaired financial asset (5,405) (66,195) 71,600 (40) (1,974) 2,014 - Provision(reversal) (40,937) 119,920 245,336 2,648 1,979 19,316 348,262 Charge off - - (575,746) - - (15,857) (591,603) Amortization of discount - - (10,782) - - - (10,782) Disposal (6) (1) (19,001) - - (36) (19,044) Collection - - 183,250 - - 906 184,156 Others (*2) (14,984) (92,726) 104,769 10,816 37 (1,656) 6,256 Ending allowance W 915,348 1,068,081 976,629 49,171 8,286 53,598 3,071,113 (*1) Include allowance for due from banks measured at amortized cost and other financial assets. (*2) The amount is due to debt restructuring, debt-equity swap, and foreign exchange rate change, etc.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Interim Financial Statements June 30, 2021 and 2020(Unaudited), and December 31, 2020

11. Loans at amortized cost and other financial assets (continued)

Changes in allowances for credit loss of loans at amortized cost and other financial assets for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Loans at amortized cost Other financial assets (*1) 12-month Lifetime 12-month Lifetime expected expected Impaired expected credit expected credit Impaired credit loss credit loss financial asset loss loss financial asset Total

Beginning allowance W 734,549 995,040 955,246 33,987 7,272 37,590 2,763,684 Transfer (from) to 12-month expected credit loss 109,984 (108,019) (1,965) 286 (273) (13) - Transfer (from) to lifetime expected credit loss (70,614) 86,360 (15,746) (259) 264 (5) - Transfer (from) to impaired financial asset (5,751) (63,443) 69,194 (256) (1,492) 1,748 - Provision(reversal) 262,634 418,662 609,399 (2,143) 2,650 33,278 1,324,480 Charge off - - (1,146,776) - - (26,814) (1,173,590) Amortization of discount - - (28,588) - - - (28,588) Disposal (1,069) (8) (43,260) (2) - (32) (44,371) Collection - - 350,009 - - 2,166 352,175 Others (*2) (96,743) (193,407) 245,278 4,078 (140) 1,012 (39,922) Ending allowance W 932,990 1,135,185 992,791 35,691 8,281 48,930 3,153,868 (*1) Include allowance for due from banks measured at amortized cost and other financial assets. (*2) The amount is due to debt restructuring, debt-equity swap, and foreign exchange rate change, etc.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Interim Financial Statements June 30, 2021 and 2020(Unaudited), and December 31, 2020

12. Investments in associates

(a) Investments in associates as of June 30, 2021 and December 31, 2020 are as follows:

Ownership (%) Reporting December 31, Investees Country date June 30, 2021 2020 BNP Paribas Cardif Life Insurance (*1)(*2) Korea March 31 14.99 14.99 Songrim Partners (*3)(*4) Korea December 31 35.34 35.34 Partners 4th Growth Investment Fund (*1) Korea March 31 25.00 25.00 KTB Newlake Global Healthcare PEF (*1) Korea March 31 30.00 30.00 Daekwang Semiconductor Co., Ltd. (*1)(*3) Korea March 31 20.94 20.94 Shinhan-Neoplux Energy Newbiz Fund Korea June 30 31.66 31.66 Shinhan-Albatross tech investment Fund(*5) Korea June 30 50.00 49.97 Meritz AI-SingA330-A Investment Type Private Placement Special Korea June 30 23.89 23.89 Asset Fund Meritz AI-SingA330-B Investment Type Private Placement Special Korea June 30 20.16 20.16 Asset Fund VOGO Debt Strategy Qualified IV Private Korea June 30 20.00 20.00 Shinhan-Midas Donga Secondary Fund(*6) Korea June 30 50.00 50.00 ShinHan – Soo Young Entrepreneur Investment Fund No.1 Korea June 30 24.00 24.00 Shinhan Praxis K-Growth Global Private Equity Fund(*9) Korea June 30 18.87 18.87 Credian Healthcare Private Equity Fund II(*7) Korea - - 34.07 Kiwoom Milestone Professional Private Real Estate Trust 19 Korea June 30 50.00 50.00 AIP EURO Green Private Real Estate Trust No.3 Korea June 30 21.28 21.28 Shinhan Global Healthcare Fund 1(*9) Korea June 30 4.41 4.41 JB Power TL Investment Type Private Placement Special Asset Fund Korea - - 33.33 7(*7) KB NA Hickory Private Special Asset Fund Korea June 30 37.50 37.50 Koramco Europe Core Private Placement Real Estate Fund No.2-2 Korea June 30 44.02 44.02 BNP Paribas Cardif General Insurance(*1)(*9) Korea March 31 7.46 7.46 Hermes Private Investment Equity Fund Korea June 30 29.17 29.17 Shinhan-Nvestor Liquidity Solution Fund Korea June 30 24.92 24.92 Shinhan AIM FoF Fund 1a Korea June 30 25.00 25.00 IGIS Global Credit Fund 150-1 Korea June 30 25.00 25.00 Partner One Value up I Private Equity Fund Korea June 30 27.91 27.91 Genesis No.1 Private Equity Fund Korea June 30 22.80 22.80 Korea Omega Project Fund III Korea June 30 23.53 23.53 Soo Commerce Platform Growth Fund Korea June 30 30.00 30.00 Genesis North America Power Company No.1 PEF Korea June 30 39.96 39.96 Hyungje art printing(*7) Korea - - 31.54 SHBNPP MAIN Professional Investment Type Private Mixed Asset Korea June 30 23.33 23.33 Investment Trust No.3 Korea Finance Security (*1)(*9) Korea March 31 14.91 14.91 Multimedia Tech Co.Ltd.(*7) Korea - - 21.06 MIEL CO.,LTD.(*3)(*4) Korea December 31 28.77 28.77 AIP Transportation Specialized Privately Placed Fund Trust #1 Korea June 30 35.73 35.73 DB Epic Convertiblebond Private Trust No.2(*7) Korea - - 50.98 E&Healthcare Investment Fund No.6 Korea June 30 21.05 21.05 One Shinhan Global Fund 1(*5) Korea June 30 19.96 19.96 Kiwoom-Shinhan Innovation Fund I(*6) Korea June 30 50.00 50.00

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12. Investments in associates (continued)

(a) Investments in associates as of June 30, 2021 and December 31, 2020 are as follows (continued):

Ownership (%) Reporting June 30, December 31, Investees Country date 2021 2020 Daishin-K&T New Technology Investment Fund Korea June 30 31.25 31.25 Midas Asset Global CRE Debt Private Fund No.6 Korea June 30 41.16 41.16 Richmond Private Investment Trust No.82(*6) Korea June 30 60.00 60.00 Tiger Alternative Real Estate Professional Private5 Korea June 30 48.71 48.71 Samchully Midstream Private Placement Special Asset Fund 5-4 Korea June 30 42.92 42.92 SHBNPP Senior Loan Professional Investment Type Private Mixed Asset Korea June 30 20.00 20.00 Investment Trust No.3 NH-Amundi Global Infrastructure Trust 14 Korea June 30 30.00 30.00 Jarvis Memorial Private Investment Trust 1(*6) Korea June 30 99.01 99.01 Mastern Private Private Investment Trust 68(*6) Korea June 30 53.76 53.76 Vestas Qualified Investors Private Real Estate Fund Investment Trust Korea June 30 60.00 60.00 No.37(*8) Milestone Private Real Estate Fund 3 Korea June 30 32.06 32.06 IGIS Private Real Estate Investment Trust 286 Korea June 30 41.56 41.44 Nomura-Rifa Private Real Estate Investment Trust 31 Korea June 30 31.31 31.31 SHBNPP Senior Loan Professional Investment Type Private Mixed Asset Korea June 30 21.27 21.27 Investment Trust No.2 Hana Semiconductor New Technology Fund Korea June 30 24.30 24.30 J&Magnet Startup Venture Specialized Private Equity Fund Korea June 30 24.39 24.39 Cape IT Fund No.3 Korea June 30 32.89 32.89 FuturePlay-Shinhan TechInnovation Fund 1(*6) Korea June 30 50.00 50.00 Stonebridge Corporate 1st Fund Korea June 30 44.12 44.12 Vogo Realty Partners Private Real Estate Fund V Korea June 30 21.64 21.64 Korea Credit Bureau(*1)(*9) Korea March 31 9.00 9.00 Goduck Gangil1 PFV Co., Ltd.(*1)(*9) Korea March 31 1.04 1.04 SBC PFV Co., Ltd.(*1)(*10) Korea March 31 25.00 25.00 NH-amundi global infra private fund 16 Korea June 30 49.55 50.00 IMM Global Private Equity Fund Korea June 30 33.00 33.00 HANA Alternative Estate Professional Private122(*8) Korea June 30 74.02 75.19 Hanwha-Incus Plus New Technology Fund No.1 Korea June 30 42.64 42.64 SHBNPP Corporate Professional Investment Type Private Security Korea June 30 45.96 45.96 Investment Trust No.7 SHBNPP BNCT Professional Investment Type Private Special Asset Korea June 30 72.39 72.39 Investment Trust(*11) PSA EMP Private Equity Fund Korea June 30 28.99 28.99 Deutsche Global Professional Investment Type Private Real Estate Korea June 30 52.28 52.28 Investment Trust No. 24(*8) BRAIN DO PROFESSIONALE PRIVATE No. 27 Korea June 30 29.13 29.13 UI Venture Fund 7th(*7) Korea - - 24.39 Sparklabs-Shinhan Opportunity Fund 1 Korea June 30 49.50 49.50 BNW Tech-Innovation Private Equity Fund Korea June 30 29.85 29.85 IGIS Real-estate Private Investment Trust No.33 Korea June 30 40.86 40.86 Findvalue PreIPO 6th Professional Investment Type Private Investment Korea June 30 31.58 31.58 Trust WWG Global Real Estate Investment Trust no.4 Korea June 30 29.55 29.55 Goduck Gangil10 PFV Co., Ltd(*1)(*9) Korea March 31 19.90 19.90 Fidelis Global Private Real Estate Trust No.2(*8) Korea June 30 78.26 78.26 IGIS PRIVATE REAL ESTATE TRUST NO.331(*7) Korea - - 30.77 AIP EURO PRIVATE REAL ESTATE TRUST No. 12 Korea June 30 28.70 28.70 Pebblestone CGV Private Real Estate Trust No.1 Korea June 30 48.53 48.53

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(a) Investments in associates as of June 30, 2021 and December 31, 2020 are as follows (continued):

Ownership (%) Reporting June 30, December 31, Investees Country date 2021 2020 Shinhan AIM Real Estate Fund No.2 Korea June 30 30.00 30.00 Shinhan AIM Real Estate Fund No.1 Korea June 30 21.01 21.01 SHBNPP Daegu Green Power Cogeneration System Professional Korea June 30 22.02 22.02 Investment Type Private Special Asset Investment Trust SHBNPP Sangju YC Expressway Professional Investment Type Private Korea June 30 29.19 29.19 Special Asset Investment Trust SHBNPP Global Infrastructure Professional Investment Type Private Korea June 30 71.43 71.43 Special Asset Investment Trust No.7-2(USD)(*8) SHBNPP Japan Photovoltaic Private Special Asset Investment Trust No.1 Korea - - 30.00 (*7) Korea Omega-Shinhan Project Fund I(*6) Korea June 30 50.00 50.00 ST-Bonanja Food tech Korea June 30 38.83 38.83 New Green Shinhan Mezzanine Fund Korea June 30 39.22 39.22 KORAMKO-Daum Professional Private Investment Trust No.12(*7) Korea - - 33.33 Samsung SRA Real Estate Professional Private 45 Korea June 30 25.00 25.00 IBK Global New Renewable Energy Special Asset Professional Private2 Korea June 30 28.98 28.98 VS Cornerstone Fund Korea June 30 41.18 41.18 Aone Mezzanine Opportunity Professional Private (*8) Korea June 30 66.09 66.12 KiwoomUnicorn3 New Technology Business Investment Fund(*7) Korea - - 21.28 Multi Asset The United States Thortons Professional Private1 Korea June 30 25.06 25.00 Kiwoom Milestone US Real Estate Professional Private20(*7) Korea - - 75.27 NH-Amundi US Infrastructure Private Fund2 Korea June 30 25.91 25.91 KB Distribution Private Real Estate1(*8) Korea June 30 62.00 62.00 SHBNPP Jigae Namsan BTO professional Investment Type Private Korea June 30 28.93 28.93 Special Asset Investment Trust SHBNPP Japan Photovoltaic Private Special Asset Investment Trust No.2 Korea June 30 30.00 30.00 Kakao-Shinhan 1st TNYT Fund Korea June 30 48.62 48.62 IMM Special Situation 1-2 PRIVATE EQUITY FUND Korea June 30 20.02 20.02 Pacific Private Placement Real Estate Fund No.40 Korea June 30 24.73 24.73 Mastern Private Real Estate Loan Fund No.2 Korea June 30 33.57 33.57 LB Scotland Amazon Fulfillment Center Fund 29(*8) Korea June 30 70.14 70.14 JR AMC Hungary Budapest Office Fund 16 Korea June 30 32.57 32.57 IGIS 372 Real Estate Professional Private(*7) Korea - - 28.39 KoFC-Neoplux R&D-Biz Creation 2013-1 Venture Capital Fund(*5) Korea June 30 19.00 19.00 Future-Creation Neoplux Venture Capital Fund(*5) Korea June 30 16.25 16.25 Gyeonggi-Neoplux Superman Fund Korea June 30 21.76 21.76 NewWave 6th Fund Korea June 30 30.00 30.00 KTC-NP Growth Champ 2011-2 Private Equity Fund(*5) Korea June 30 5.56 5.56 Neoplux No.3 Private Equity Fund(*5) Korea June 30 10.00 10.00 PCC Amberstone Private Equity Fund I Korea June 30 21.67 21.67 KIAMCO POWERLOAN TRUST 4TH Korea June 30 47.37 47.37 Mastern Opportunity Seeking Real Estate Fund II Korea June 30 20.00 20.00 AION ELFIS PROFESSIONAL PRIVATE 1 Korea June 30 20.00 20.00 T&F 2020 SS Private Equity Fund Specializing in Start-up and Venture Korea June 30 29.68 29.68 Business Neoplux Market-Frontier Secondary Fund(*5) Korea June 30 19.74 19.74

12. Investments in associates (continued)

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12. Investments in associates (continued)

(a) Investments in associates as of June 30, 2021 and December 31, 2020 are as follows (continued):

Ownership (%) Reporting June 30, December 31, Investees Country date 2021 2020 Harvest Private Equity Fund II Korea June 30 22.06 22.06 Synergy Green New Deal 1st New Technology Business Investment Fund Korea June 30 28.17 28.17 KAIM Real-estate Private Investment Trust 20 Korea June 30 38.46 38.46 KIAMCO Vietnam Solar Special Asset Private Investment Trust(*6) Korea June 30 50.00 50.00 Daishin New Technology Investment Fund 5th Korea June 30 23.44 23.44 CSQUARE SNIPER PROFESSIONAL PRIVATE 10(*8) Korea June 30 62.50 62.50 Acurus Hyundai Investment Partners New Technology Korea June 30 26.79 26.79 IGIS GLIP Professional Investment Private Real Estate Investment Trust Korea June 30 97.85 97.85 No. 1-1(*8) IGIS GLIP Professional Investment Private Real Estate Investment Trust Korea June 30 97.85 97.85 No. 1-2(*8) Pacific Sunny Professional Investors Private Placement Real Estate Korea June 30 25.00 25.00 Investment Company No.45 IGIS Professional Investors Private Investment Real Estate Investment Korea - - 58.82 LLC No.395(*7) SHINHAN-NEO Core Industrial Technology Fund Korea June 30 49.75 49.75 SHBNPP Green New Deal Energy Professional Investment Type Private Korea June 30 30.00 30.00 Special Asset Investment Trust No.2 Eum Private Equity Fund No.7 Korea June 30 21.00 21.00 Kiwoom Private Equity Ant-Man Startup Venture Specialized Private Korea June 30 25.00 25.00 Equity Fund Kiwoom Hero No.4 Private Equity Fund Korea June 30 21.05 21.05 Vogo Canister Professional Trust Private Fund I Korea June 30 36.59 36.68 SW-S Fund Korea June 30 30.30 - CL Buyout 1st PEF Korea June 30 21.43 - Timefolio The Venture-V second Korea June 30 20.73 - Newlake Growth Capital Partners2 PEF Korea June 30 29.91 - Shinhan Smilegate Global PEF I(*9) Korea June 30 14.21 - Fount Professional Investors Private Investment Trust No.3 Korea June 30 49.98 - Genesis Eco No.1 PEF Korea June 30 31.40 - SHINHAN-NEO Market-Frontier 2nd Fund Korea June 30 42.70 - NH-Synergy Core Industrial New Technology Fund Korea June 30 36.93 - J& Moorim Jade Investment Fund Korea June 30 24.89 - Ulmus SHC innovation investment fund Korea June 30 24.04 - Mirae Asset Partners X Private Equity Fund Korea June 30 35.71 - T Core Industrial Technology 1st Venture PEF Korea June 30 31.47 - Curious Finale Corporate Recovery Private Equity Fund Korea June 30 27.78 - TI First Property Private Investment Trust 1 Korea June 30 40.00 - BILLIONFOLD BILLIONBEAT-RV PROFESSIONAL PRIVATE Korea June 30 48.61 - IBKC Global Contents Investment Fund Korea June 30 24.39 - Nautic Smart No.6 Private Equity Fund Korea June 30 37.74 - AIP Semiconductor-M3X Venture Fund No.1 Korea June 30 24.00 - Premier Luminous Private Equity Fund Korea June 30 37.74 - Hanyang-Meritz 1 Fund Korea June 30 22.58 -

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12. Investments in associates (continued)

(a) Investments in associates as of June 30, 2021 and December 31, 2020 are as follows (continued):

(*1) The financial statements of March 31, 2021 are used for the equity method since the financial statements as of June 30, 2021 are not available. Significant trades and events occurred within the period are properly reflected. (*2) The Group applies the equity method accounting as the Group has a significant influence on the investees through important business transactions. (*3) As a part of the rehabilitation process, the Group acquired shares through the conversion of equity investments, and 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 are completed and now the Group can normally exercise its voting rights to the investees. (*4) The latest financial statements are used for the equity method since the financial statements as of June 30, 2021 are not available. Significant trades and events occurred within the period are properly reflected. (*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 percentages are 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 are 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 rate of Group’s voting rights is 4.65%. (*11) Although the Group has a significant influence with ownership percentage more than 50%, the contribution was classified as investments in associates as the Group is not exposed to variable returns due to the payment guarantee for the entire investment amount.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Interim Financial Statements June 30, 2021 and 2020(Unaudited), and December 31, 2020

12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance BNP Paribas Cardif Life Insurance W 50,600 - (167) (2,934) - 47,499 Songrim Partners (*1) ------Partners 4th Growth Investment Fund 11,958 (9,257) 10,078 3,818 - 16,597 KTB Newlake Global Healthcare PEF 9,404 - (11) - - 9,393 Daekwang Semiconductor Co., Ltd. 3,631 - 113 (47) - 3,697 Shinhan-Neoplux Energy Newbiz Fund 14,470 1,900 (147) - - 16,223 Shinhan-Albatross tech investment Fund 13,322 (1,500) (101) - - 11,721 Meritz AI-SingA330-A Investment Type Private Placement Special Asset Fund (*1) ------Meritz AI-SingA330-B Investment Type Private Placement Special Asset Fund (*1) ------VOGO Debt Strategy Qualified IV Private 8,702 (998) (220) - - 7,484 Shinhan-Midas Donga Secondary Fund 4,752 - (505) - - 4,247 ShinHan – Soo Young Entrepreneur Investment Fund No.1 9,968 (4,290) (885) - - 4,793 Shinhan Praxis K-Growth Global Private Equity Fund 9,945 50 (24) - - 9,971 Credian Healthcare Private Equity Fund II 5,835 (5,835) - - - - Kiwoom Milestone Professional Private Real Estate Trust 19 9,918 (66) (267) - - 9,585 AIP EURO Green Private Real Estate Trust No.3 21,021 (675) 924 - - 21,270 Shinhan Global Healthcare Fund 1 (*1) ------JB Power TL Investment Type Private Placement Special Asset Fund 7 16,186 (15,947) (239) - - - KB NA Hickory Private Special Asset Fund 34,938 (2,415) 1,253 - - 33,776 Koramco Europe Core Private Placement Real Estate Fund No.2-2 18,618 (608) 1,080 - - 19,090 BNP Paribas Cardif General Insurance 3,895 - (491) (1) - 3,403 Hermes Private Investment Equity Fund 6,099 - (315) - - 5,784 Shinhan-Nvestor Liquidity Solution Fund 4,493 (640) 601 - - 4,454 Shinhan AIM FoF Fund 1a 8,760 (320) 383 - - 8,823 IGIS Global Credit Fund 150-1 7,282 (676) 539 - - 7,145 Partner One Value up I Private Equity Fund 11,779 (20) 1,192 - - 12,951

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

June 30, 2021 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance Genesis No.1 Private Equity Fund W 80,113 194 (16,074) - - 64,233 Korea Omega Project Fund III 3,563 - 246 - - 3,809 Soo Commerce Platform Growth Fund 4,068 - 134 - - 4,202 Genesis North America Power Company No.1 PEF 16,983 (1,374) (3,387) - - 12,222 Hyungje art printing(*3) ------SHBNPP MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3 10,582 11,760 1,989 - - 24,331 Korea Finance Security 3,055 - (15) - - 3,040 Multimedia Tech Co.Ltd.(*3) ------MIEL CO.,LTD. (*1) ------AIP Transportation Specialized Privately Placed Fund Trust #1 32,993 (1,561) 620 - - 32,052 DB Epic Convertiblebond Private Trust No.2 5,785 (5,538) (247) - - - E&Healthcare Investment Fund No.6 15,163 - (4,858) - - 10,305 One Shinhan Global Fund 1 4,029 - 114 - - 4,143 Kiwoom-Shinhan Innovation Fund I 15,969 (1,150) 1,096 - - 15,915 Daishin-K&T New Technology Investment Fund 7,000 - 1,451 - - 8,451 Midas Asset Global CRE Debt Private Fund No.6 47,389 (2,329) 2,018 - - 47,078 Richmond Private Investment Trust No.82 15,049 (424) 426 - - 15,051 Tiger Alternative Real Estate Professional Private5 18,499 (729) 2,349 - - 20,119 Samchully Midstream Private Placement Special Asset Fund 5-4 28,818 (843) (189) - - 27,786 SHBNPP Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3 65,616 (31,668) 767 - - 34,715 NH-Amundi Global Infrastructure Trust 14 18,819 (902) 553 - - 18,470 Jarvis Memorial Private Investment Trust 1 10,043 (349) 412 - - 10,106 Mastern Private Private Investment Trust 68 10,010 (227) 229 - - 10,012 Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37 35,641 (3,301) 1,272 - - 33,612 Milestone Private Real Estate Fund 3 18,528 (471) 963 - - 19,020

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

June 30, 2021 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance IGIS Private Real Estate Investment Trust 286 W 8,844 (440) 202 - - 8,606 Nomura-Rifa Private Real Estate Investment 8,407 (366) 112 - - 8,153 Trust 31 SHBNPP Senior Loan Professional Investment 13,323 (3,265) 210 - - 10,268 Type Private Mixed Asset Investment Trust No.2 Hana Semiconductor New Technology Fund 24,131 1 1,998 - - 26,130 J&Magnet Startup Venture Specialized Private 5,935 (3,634) 632 - - 2,933 Equity Fund Cape IT Fund No.3 10,649 - (285) - - 10,364 FuturePlay-Shinhan TechInnovation Fund 1 4,295 3,025 (57) - - 7,263 Stonebridge Corporate 1st Fund 3,239 - (236) - - 3,003 Vogo Realty Partners Private Real Estate Fund V 10,827 (335) 336 - - 10,828 Korea Credit Bureau 6,976 (90) (211) - - 6,675 Goduck Gangil1 PFV Co., Ltd. (*1) ------SBC PFV Co., Ltd. 18,208 4,999 (595) - - 22,612 NH-amundi global infra private fund 16 43,839 347 7,540 - - 51,726 IMM Global Private Equity Fund 120,855 (13,595) 5,094 - - 112,354 HANA Alternative Estate Professional 29,631 (642) 1,625 - - 30,614 Private122 Hanwha-Incus Plus New Technology Fund No.1 11,026 - (2,742) - - 8,284 SHBNPP Corporate Professional Investment 51,210 (1,518) 111 - - 49,803 Type Private Security Investment Trust No.7 SHBNPP BNCT Professional Investment Type 286,531 (7,207) 2,961 - - 282,285 Private Special Asset Investment Trust PSA EMP Private Equity Fund 9,814 - (59) - - 9,755 Deutsche Global Professional Investment Type 29,401 (3,234) 635 - - 26,802 Private Real Estate Investment Trust No. 24 BRAIN DO PROFESSIONALE PRIVATE 3,441 - 586 - - 4,027 No. 27 UI Venture Fund 7th 3,279 (3,269) (10) - - - Sparklabs-Shinhan Opportunity Fund 1 4,832 - (51) - - 4,781 BNW Tech-Innovation Private Equity Fund 5,942 - (30) - - 5,912 IGIS Real-estate Private Investment Trust No.33 14,099 (360) 69 - - 13,808

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

June 30, 2021 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance Findvalue PreIPO 6th Professional Investment Type Private Investment Trust W 3,002 (187) 264 - - 3,079 WWG Global Real Estate Investment Trust no.4 17,752 (7,387) 427 - - 10,792 Goduck Gangil10 PFV Co., Ltd (*1) 32 - (32) - - - Fidelis Global Private Real Estate Trust No.2 19,485 (519) 754 - - 19,720 IGIS PRIVATE REAL ESTATE TRUST NO.331 3,765 (3,765) - - - - AIP EURO PRIVATE REAL ESTATE TRUST No. 12 48,344 (2,689) 7,304 - - 52,959 Pebblestone CGV Private Real Estate Trust No.1 13,346 (388) 533 - - 13,491 Shinhan AIM Real Estate Fund No.2 22,464 - (1,111) - - 21,353 Shinhan AIM Real Estate Fund No.1 46,945 (3,318) 795 - - 44,422 SHBNPP Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust 32,944 (455) 453 - - 32,942 SHBNPP Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust 20,902 - (12) - - 20,890 SHBNPP Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2(USD) 6,692 3,818 (502) - - 10,008 SHBNPP Japan Photovoltaic Private Special Asset Investment Trust No.1 4,845 (4,845) - - - - Korea Omega-Shinhan Project Fund I 5,931 - (115) - - 5,816 ST-Bonanja Food tech 1,993 - 1,416 - - 3,409 New Green Shinhan Mezzanine Fund 4,916 (2,800) 677 - - 2,793 KORAMKO-Daum Professional Private Investment Trust No.12 7,528 (7,756) 228 - - - Samsung SRA Real Estate Professional Private 45 10,666 2,167 (342) - - 12,491 IBK Global New Renewable Energy Special Asset Professional Private2 32,349 (947) (2,528) - - 28,874 VS Cornerstone Fund 3,464 - (27) - - 3,437 Aone Mezzanine Opportunity Professional Private 9,580 (28) 902 - - 10,454 KiwoomUnicorn3 New Technology Business Investment Fund 4,283 (3,633) (650) - - - Multi Asset The United States Thortons Professional Private1 41,440 (81) 167 - - 41,526 Kiwoom Milestone US Real Estate Professional Private20 51,512 (51,512) - - - - NH-Amundi US Infrastructure Private Fund2 25,430 (290) 1,013 - - 26,153

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

June 30, 2021 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance KB Distribution Private Real Estate1 W 30,698 (715) 704 - - 30,687 SHBNPP Jigae Namsan BTO professional Investment Type Private Special Asset Investment Trust 20,712 2,084 808 - - 23,604 SHBNPP Japan Photovoltaic Private Special Asset Investment Trust No.2 29,149 (15,177) 656 - - 14,628 Kakao-Shinhan 1st TNYT Fund 5,681 3,000 2 - - 8,683 IMM Special Situation 1-2 PRIVATE EQUITY FUND 10,870 (160) 259 - - 10,969 Pacific Private Placement Real Estate Fund No.40 11,647 (370) 348 - - 11,625 Mastern Private Real Estate Loan Fund No.2 5,692 1,429 368 - - 7,489 LB Scotland Amazon Fulfillment Center Fund 29 31,182 (673) 624 - - 31,133 JR AMC Hungary Budapest Office Fund 16 12,204 (407) 669 - - 12,466 IGIS 372 Real Estate Professional Private 56,835 (56,835) - - - - KoFC-Neoplux R&D-Biz Creation 2013-1 Venture Capital Fund 3,830 (3,895) 3,646 - - 3,581 Future-Creation Neoplux Venture Capital Fund 3,796 (995) 57 - - 2,858 Gyeonggi-Neoplux Superman Fund 6,399 (518) 697 - - 6,578 NewWave 6th Fund 6,150 4,500 267 - - 10,917 KTC-NP Growth Champ 2011-2 Private Equity Fund 2,853 - 1,327 - - 4,180 Neoplux No.3 Private Equity Fund 10,295 4,958 (494) - - 14,759 PCC Amberstone Private Equity Fund I 22,480 (1,270) 1,554 - - 22,764 KIAMCO POWERLOAN TRUST 4TH 43,955 589 738 - - 45,282 Mastern Opportunity Seeking Real Estate Fund II 19,799 (295) 887 - - 20,391 AION ELFIS PROFESSIONAL PRIVATE 1 5,528 - (504) - - 5,024 T&F 2020 SS Private Equity Fund Specializing in Start-up and Venture Business 4,453 - (47) - - 4,406 Neoplux Market-Frontier Secondary Fund 11,545 - (184) - - 11,361 Harvest Private Equity Fund II 2,982 - 1,185 - - 4,167 Synergy Green New Deal 1st New Technology Business Investment Fund 10,008 (173) 466 - - 10,301 KAIM Real-estate Private Investment Trust 20 5,098 (174) 138 - - 5,062

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

June 30, 2021 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance KIAMCO Vietnam Solar Special Asset Private Investment Trust W 7,948 - 160 - - 8,108 Daishin New Technology Investment Fund 5th 2,850 - 408 - - 3,258 CSQUARE SNIPER PROFESSIONAL PRIVATE 10 3,125 - 963 - - 4,088 Acurus Hyundai Investment Partners New Technology 2,927 - 360 - - 3,287 IGIS GLIP Professional Investment Private Real Estate Investment Trust No. 1-1 44,594 5,137 8,854 2,120 - 60,705 IGIS GLIP Professional Investment Private Real Estate Investment Trust No. 1-2 44,594 5,137 8,854 2,120 - 60,705 Pacific Sunny Professional Investors Private Placement Real Estate Investment Company No.45 15,855 - (550) - - 15,305 IGIS Professional Investors Private Investment Real Estate Investment LLC No.395 29,644 (29,644) - - - - SHINHAN-NEO Core Industrial Technology Fund 1,979 1,980 (125) - - 3,834 SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2 21,142 8,015 298 - - 29,455 Eum Private Equity Fund No.7 7,872 121 (59) - - 7,934 Kiwoom Private Equity Ant-Man Startup Venture Specialized Private Equity Fund 5,034 - (30) - - 5,004 Kiwoom Hero No.4 Private Equity Fund 4,707 - (255) - - 4,452 Vogo Canister Professional Trust Private Fund I 43,975 (1,229) 920 - - 43,666 SW-S Fund - 7,000 (353) - - 6,647 CL Buyout 1st PEF - 13,875 (201) - - 13,674 Timefolio The Venture-V second - 4,000 17 - - 4,017 Newlake Growth Capital Partners2 PEF - 13,000 (26) - - 12,974 Shinhan Smilegate Global PEF I - 3,376 (23) - - 3,353 Fount Professional Investors Private Investment Trust No.3 - 5,000 75 - - 5,075 Genesis Eco No.1 PEF - 11,869 (177) - - 11,692 SHINHAN-NEO Market-Frontier 2nd Fund(*2) - 17,080 (664) - - 16,416 NH-Synergy Core Industrial New Technology Fund - 6,500 (62) - - 6,438 J& Moorim Jade Investment Fund - 5,500 8 - - 5,508

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

June 30, 2021 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance Ulmus SHC innovation investment fund W - 5,000 (18) - - 4,982 Mirae Asset Partners X Private Equity Fund - 8,000 (116) - - 7,884 T Core Industrial Technology 1st Venture PEF - 4,500 - - - 4,500 Curious Finale Corporate Recovery Private Equity Fund - 3,500 (17) - - 3,483 TI First Property Private Investment Trust 1 - 2,981 35 - - 3,016 BILLIONFOLD BILLIONBEAT-RV PROFESSIONAL PRIVATE - 2,682 589 - - 3,271 IBKC Global Contents Investment Fund - 5,000 (19) - - 4,981 Nautic Smart No.6 Private Equity Fund - 4,000 - - - 4,000 AIP Semiconductor-M3X Venture Fund No.1 - 6,000 (4) - - 5,996 Premier Luminous Private Equity Fund - 7,095 - - - 7,095 Hanyang-Meritz 1 Fund - 3,500 - - - 3,500 Others 126,046 26,796 3,015 - - 155,857 W 2,657,768 (103,733) 66,137 5,076 - 2,625,248 (*1) The Group has stopped recognizing its equity method income or loss due to the carrying amount of ‘0’ resulting from the investees’ cumulative loss. (*2) It does not involve cash flows due to the acquisition amount caused by account reclassification. (*3) Excluded from the associates due to retirement of shares.

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance BNP Paribas Cardif Life Insurance W 52,586 - (928) (1,058) - 50,600 Songrim Partners(*1) ------Neoplux Technology Valuation Investment Fund (*3) 16,384 (16,171) (213) - - - Partners 4th Growth Investment Fund 14,917 (4,474) 1,515 - - 11,958 KTB Newlake Global Healthcare PEF 11,280 (1,950) 74 - - 9,404 Daekwang Semiconductor Co., Ltd. 3,388 - 243 - - 3,631 Shinhan-Neoplux Energy Newbiz Fund(*4) 7,880 5,887 703 - - 14,470 Shinhan-Albatross tech investment Fund 8,734 4,650 (62) - - 13,322 Plutus-SG Private Equity Fund 4,231 (5,230) 999 - - - Eum Private Equity Fund No.3 3,574 (5,621) 2,050 - - 3 KTB Confidence Private Placement 6,067 (6,063) (4) - - - Meritz AI-SingA330-A Investment Type Private Placement Special Asset Fund 4,256 (772) (3,484) - - - Meritz AI-SingA330-B Investment Type Private Placement Special Asset Fund 8,916 (48) (8,868) - - - VOGO Debt Strategy Qualified IV Private 9,930 (1,700) 472 - - 8,702 Shinhan-Midas Donga Secondary Fund 3,486 1,150 116 - - 4,752 ShinHan – Soo Young Entrepreneur Investment Fund No.1 4,549 1,495 3,924 - - 9,968 Synergy-Shinhan Mezzanine New Technology Investment Fund 3,912 (4,406) 494 - - - Shinhan Praxis K-Growth Global Private Equity Fund 10,302 78 (435) - - 9,945 Credian Healthcare Private Equity Fund II 2,377 (4,937) 8,395 - - 5,835 Kiwoom Milestone Professional Private Real Estate Trust 19 10,407 (265) (224) - - 9,918 AIP EURO Green Private Real Estate Trust No.3 20,884 (1,189) 1,326 - - 21,021 Hanhwa US Equity Strategy Private Real Estate Fund No.1 25,964 (26,907) 3,220 - - 2,277 Shinhan Global Healthcare Fund 1 3,209 - 128 - (3,337) - JB Power TL Investment Type Private Placement Special Asset Fund 7 16,800 (1,359) 745 - - 16,186 IBK AONE convertible 1 6,077 (6,048) (29) - - - Rico synergy collabo Multi-Mezzanine 3 3,217 (3,221) 4 - - - KB NA Hickory Private Special Asset Fund 35,930 (2,609) 1,617 - - 34,938 Koramco Europe Core Private Placement Real Estate Fund No.2-2 19,562 (1,330) 386 - - 18,618 BNP Paribas Cardif General Insurance 2,113 3,066 (1,244) (40) - 3,895 Axis Global Growth New Technology Investment Association 3,205 (2,920) (285) - - - Hermes Private Investment Equity Fund 6,376 - (277) - - 6,099 SHC ULMUS Fund No.1 3,149 (3,289) 140 - - - Shinhan-Nvestor Liquidity Solution Fund 4,865 (1,004) 632 - - 4,493 Shinhan AIM FoF Fund 1a 7,242 1,324 194 - - 8,760 IGIS Global Credit Fund 150-1 9,718 (4,002) 1,566 - - 7,282

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance GX Shinhan Intervest 1st Private Equity Fund W 33,166 (54,515) 21,349 - - - Soo Commerce Platform Growth Fund 6,343 (8,474) 3,278 - - 1,147 Partner One Value up I Private Equity Fund 11,891 (20) (92) - - 11,779 Genesis No.1 Private Equity Fund 51,150 388 28,575 - - 80,113 GMB ICT New Technology Investment Fund 7,854 (7,853) (1) - - - Korea Omega Project Fund III 3,016 - 547 - - 3,563 Soo Delivery Platform Growth Fund 8,922 (7,929) 3,075 - - 4,068 Genesis North America Power Company No.1 PEF 18,275 (3,869) 2,577 - - 16,983 Hyungje art printing (*1) ------SHBNPP MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3 20,712 (10,794) 664 - - 10,582 Shinhan-Rhinos 1 Fund 3,029 (1,004) 574 - - 2,599 Pacific Private Investment Trust No.20 4,076 (1,289) 212 - - 2,999 Susung Mezzanine project P1 Private Investment Trust 5,128 (3,613) (170) - - 1,345 Korea Finance Security 3,235 - (180) - - 3,055 Multimedia Tech Co.Ltd. (*1) 19 - (19) - - - MIEL CO.,LTD. (*1) ------AIP Transportation Specialized Privately Placed Fund Trust #1 31,580 1,366 47 - - 32,993 DB Epic Convertiblebond Private Trust No.2 5,063 202 520 - - 5,785 PCC S/W 2nd Fund 3,001 (3,328) 327 - - - E&Healthcare Investment Fund No.6 7,776 - 7,387 - - 15,163 One Shinhan Global Fund1 4,441 - (412) - - 4,029 Kiwoom-Shinhan Innovation Fund I 7,284 7,500 1,185 - - 15,969 Daishin-K&T New Technology Investment Fund 7,057 - (57) - - 7,000 Midas Asset Global CRE Debt Private Fund No.6 23,731 21,537 2,121 - - 47,389 Richmond Private Investment Trust No.82 15,120 (855) 784 - - 15,049 Tiger Alternative Real Estate Professional Private5 19,820 (1,376) 55 - - 18,499 Samchully Midstream Private Placement Special Asset Fund 5-4 30,742 (968) (956) - - 28,818 SHBNPP Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3 53,831 9,253 2,532 - - 65,616 AUCTUS FITRIN Corporate Recovery Private Equity Fund 14,358 (14,484) 126 - - - NH-Amundi Global Infrastructure Trust 14 18,497 (460) 782 - - 18,819

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued): December 31, 2020 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance Pacific Private Real Estate Fund Investment Trust No.30 (*3) W 14,816 (15,374) 558 - - - Jarvis Memorial Private Investment Trust 1 10,166 (763) 640 - - 10,043 Mastern Private Private Invetstment Trust 68 9,999 (460) 471 - - 10,010 Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37 4,397 30,510 734 - - 35,641 Milestone Private Real Estate Fund 3 17,186 (838) 2,180 - - 18,528 IGIS Private Real Estate Investment Trust 286 9,768 (1,361) 437 - - 8,844 Nomura-Rifa Private Real Estate Investment Trust 31 8,914 (932) 425 - - 8,407 Lime Pricing Private Equity Fund 8,300 (8,217) (83) - - - SHBNPP Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2 41,991 (29,980) 1,312 - - 13,323 DS Solid.II Hedge Fund 4,123 (6,397) 2,274 - - - Hana Semiconductor New Technology Fund 12,856 (2,557) 13,832 - - 24,131 J&Magnet Startup Venture Specialized Private Equity Fund 5,979 (2,151) 2,107 - - 5,935 Cape IT Fund No.3 9,967 (580) 1,262 - - 10,649 FuturePlay-Shinhan TechInnovation Fund 1 868 3,661 (234) - - 4,295 Stonebridge Corporate 1st Fund 2,981 - 258 - - 3,239 Vogo Realty Partners Private Real Estate Fund V 10,376 (566) 1,017 - - 10,827 IL GU FARM CO.,LTD. (*1) ------Korea Credit Bureau 6,812 (90) 254 - - 6,976 Goduck Gangil1 PFV Co., Ltd. (*1) 48 - (48) - - - SBC PFV Co., Ltd. 20,000 - (1,792) - - 18,208 Sprott Global Renewable Private Equity Fund II 19,016 (18,909) (107) - - - NH-amundi global infra private fund 16 48,158 (1,236) (3,083) - - 43,839 IMM Global Private Equity Fund 28,925 90,776 1,154 - - 120,855 HANA Alternative Estate Professional Private122 26,205 (644) 4,070 - - 29,631 Hanwha-Incus Plus New Technology Fund No.1 5,499 - 5,527 - - 11,026 SHBNPP Corporate Professional Investment Type Private Security Investment Trust No.7 51,293 (1,613) 1,530 - - 51,210 SHBNPP BNCT Professional Investment Type Private Special Asset Investment Trust 150,317 127,753 8,461 - - 286,531 PSA EMP Private Equity Fund 9,927 (278) 165 - - 9,814 Deutsche Global Professional Investment Type Private Real Estate Investment Trust No. 24 29,463 (239) 177 - - 29,401 SHBNPP Peace of Mind TDF 2035 Security Investment Trust 5,727 (5,727) - - - -

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance SHBNPP Peace of Mind TDF 2040 Security Investment Trust W 5,729 (5,729) - - - - BRAIN DO PROFESSIONALE PRIVATE No. 27 3,065 - 376 - - 3,441 VISION US Muni US Local Debt Opportunities Professional Private1(*3) 9,869 (10,032) 163 - - - UI Venture Fund 7th - 3,000 279 - - 3,279 Sparklabs-Shinhan Opportunity Fund 1 - 4,999 (167) - - 4,832 BNW Tech-Innovation Private Equity Fund - 6,000 (58) - - 5,942 IGIS Real-estate Private Investment Trust No.33 - 13,945 154 - - 14,099 Findvalue PreIPO 6th Professional

Investment Type Private Investment Trust. - 3,000 2 - - 3,002 WWG Global Real Estate Investment Trust no.4 - 16,874 878 - - 17,752 Fidelis Global Private Real Estate Trust No.2 - 18,582 903 - - 19,485 IGIS PRIVATE REAL ESTATE TRUST NO.331 - 3,932 (167) - - 3,765 AIP EURO PRIVATE REAL ESTATE TRUST No. 12 - 45,082 3,262 - - 48,344 Pebblestone CGV Private Real Estate Trust

No.1 - 12,793 553 - - 13,346 Shinhan AIM Real Estate Fund No.2(*2) - 36,186 (7,652) - (6,070) 22,464 Shinhan AIM Real Estate Fund No.1(*2) - 45,415 1,530 - - 46,945 SHBNPP Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust(*2) - 32,258 686 - - 32,944 SHBNPP Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust(*2) - 22,003 (1,101) - - 20,902 SHBNPP Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2(USD) - 7,273 (581) - - 6,692 SHBNPP Japan Photovoltaic Private Special Asset Investment Trust No.1(*2) - 4,859 (14) - - 4,845 Korea Omega-Shinhan Project Fund I - 6,000 (69) - - 5,931 New Green Shinhan Mezzanine Fund - 4,000 916 - - 4,916 KORAMKO-Daum Professional Private Investment Trust No.12 - 6,930 598 - - 7,528 Samsung SRA Real Estate Professional Private 45 - 10,701 (35) - - 10,666 IBK Global New Renewable Energy Special Asset Professional Private2 - 29,177 3,172 - - 32,349 VS Cornerstone Fund - 3,500 (36) - - 3,464 Aone Mezzanine Opportunity Professional Private - 8,000 1,580 - - 9,580 KiwoomUnicorn3New Technology Business Investment Fund - 3,000 1,283 - - 4,283

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance Multi Asset The United States Thortons Professional Private1(*2) W - 44,202 (2,762) - - 41,440 Kiwoom Milestone US Real Estate Professional Private20 - 49,791 1,721 - - 51,512 NH-Amundi US Infrastructure Private Fund2(*2) - 24,647 783 - - 25,430 KB Distribution Private Real Estate1(*2) - 29,984 714 - - 30,698 SHBNPP Jigae Namsan BTO professional Investment Type Private Special Asset Investment Trust(*2) - 19,968 744 - - 20,712 SHBNPP Japan Photovoltaic Private Special Asset Investment Trust No.2(*2) - 28,251 898 - - 29,149 Kakao-Shinhan 1st TNYT Fund - 6,000 (319) - - 5,681 IMM Special Situation 1-2 PRIVATE EQUITY FUND - 10,000 870 - - 10,870 Pacific Private Placement Real Estate Fund No.40 - 11,273 374 - - 11,647 Mastern Private Real Estate Loan Fund No.2 - 5,740 (48) - - 5,692 LB Scotland Amazon Fulfillment Center Fund 29 - 30,753 429 - - 31,182 JR AMC Hungary Budapest Office Fund 16 - 11,380 824 - - 12,204 IGIS 372 Real Estate Professional Private - 58,200 (1,365) - - 56,835 KoFC-Neoplux R&D-Biz Creation 2013-1 Venture Capital Fund(*4) - 4,058 (228) - - 3,830 Future-Creation Neoplux Venture Capital Fund(*4) - 4,204 (408) - - 3,796 Gyeonggi-Neoplux Superman Fund(*4) - 7,665 (1,266) - - 6,399 NewWave 6th Fund(*4) - 6,242 (92) - - 6,150 Neoplux No.3 Private Equity Fund(*4) - 10,825 (530) - - 10,295 PCC Amberstone Private Equity Fund I(*2) - 22,066 414 - - 22,480 KIAMCO POWERLOAN TRUST 4TH - 43,390 565 - - 43,955 Mastern Opportunity Seeking Real Estate Fund II - 19,508 291 - - 19,799 AION ELFIS PROFESSIONAL PRIVATE 1 - 5,000 528 - - 5,528 T&F 2020 SS Private Equity Fund Specializing in Start-up and Venture Business - 4,500 (47) - - 4,453 Neoplux Market-Frontier Secondary

Fund(*4) - 10,974 571 - - 11,545 Synergy Green New Deal 1st New Technology Business Investment Fund - 10,000 8 - - 10,008 KAIM Real-estate Private Investment Trust 20 - 5,000 98 - - 5,098 KIAMCO Vietnam Solar Special Asset Private Investment Trust - 8,150 (202) - - 7,948 CSQUARE SNIPER PROFESSIONAL PRIVATE 10 - 3,125 - - - 3,125 IGIS GLIP Professional Investment Private Real Estate Investment Trust No. 1-1 - 44,780 (9) (177) - 44,594

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12. Investments in associates (continued)

(b) Changes in investments in associates for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Acquisition Equity Change in (Disposal) method other Beginning and income comprehensive Impairment Ending Investees balance dividend (loss) income (loss) loss balance IGIS GLIP Professional Investment Private Real Estate Investment Trust No. 1-2 W - 44,780 (9) (177) - 44,594 Pacific Sunny Professional Investors Private Placement Real Estate Investment Company No.45 - 16,000 (145) - - 15,855 IGIS Professional Investors Private Investment Real Estate Investment LLC No.395 - 30,000 (356) - - 29,644 SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2 - 21,142 - - - 21,142 Eum Private Equity Fund No.7 - 7,872 - - - 7,872 Kiwoom Private Equity Ant-Man Startup Venture Specialized Private Equity Fund - 5,034 - - - 5,034 Kiwoom Hero No.4 Private Equity Fund - 4,707 - - - 4,707 Vogo Canister Professional Trust Private Fund I(*2) - 43,975 - - - 43,975 Others 85,517 25,966 19,814 (5) - 131,292 W 1,452,861 1,056,238 159,533 (1,457) (9,407) 2,657,768 (*1) The Group has stopped recognizing its equity method income or loss due to the carrying amount of ‘0’resulting from the investees’ cumulative loss. (*2) It does not involve cash flows due to the acquisition amount caused by account reclassification. (*3) For the year ended December 31, 2020, it is incorporated into the consolidation target as the Group held control due to increased equity ratio. (*4) For the year ended December 31, 2020, it is incorporated into the investments in associates as Shinhan Venture Investment Co., Ltd.is incorporated into the consolidation target.

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13. Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Securities sold: Stocks W 386,839 387,857 Government/Local government bonds 690,604 503,920 Others 9,661 5,352 1,087,104 897,129 Gold/silver deposits 555,277 539,565 W 1,642,381 1,436,694

14. Financial liabilities designated at fair value through profit or loss

Financial liabilities designated at fair value through profit or loss as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Reason for designation Equity-linked securities sold W 5,687,475 6,556,288 Combined financial Other securities sold with embedded derivatives 2,081,676 1,899,436 instrument W 7,769,151 8,455,724 (*) 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 W7,769,151 million as of June 30, 2021. Decrease in values of the liability due to credit risk changes is W1,450 million for the six-month period ended June 30, 2021 and the accumulated changes in values are W(-)4,554 million as of June 30, 2021.

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15. Debt securities issued

Debt securities issued as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Interest Interest rate (%) Amount rate (%) Amount Debt securities issued in Korean won: Debt securities issued 0.70~8.00 W 61,641,028 0.67~8.00 W 59,816,756 Subordinated debt securities issued 2.20~4.60 4,770,125 2.20~4.60 4,370,125 Gain on fair value hedges - (83,617) - (63,652) Discount on debt securities issued - (40,955) - (39,309) 66,286,581 64,083,920 Debt securities issued in foreign currencies: Debt securities issued 0.25~7.59 7,206,949 0.25~7.59 7,182,619 Subordinated debt securities issued 3.34~5.10 3,729,544 3.34~5.10 3,598,624 Loss on fair value hedges - 211,421 - 309,880 Discount on debt securities issued - (46,022) - (40,649) 11,101,892 11,050,474 W 77,388,473 W 75,134,394

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16. Defined benefit assets and liabilities

(a) Defined benefit obligations and plan assets

The Group has operated a defined benefit plan and calculates defined benefit obligations based on the employee's pension compensation benefits and service period.

Defined benefit obligations and plan assets as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Present value of defined benefit obligations W 2,147,197 2,182,464 Fair value of plan assets (2,134,109) (2,138,324) Recognized liabilities for defined benefit obligations(*) W 13,088 44,140 (*) The net defined benefit obligation of W13,088 million as of June 30, 2021 is the net defined benefit liability of W76,157 million less the net plan assets of W63,069 million. In addition, the net defined benefit obligation of W44,140 million as of December 31, 2020 is the net defined benefit liability of W62,514 million less the net plan assets of W18,374 million.

(b) Expenses recognized in profit or loss for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Six- Three- Six- Three-month month month month Current service costs W 43,055 88,611 44,365 89,635 Net interest expense 50 215 784 1,176 Past service cost 282 282 - - W 43,387 89,108 45,149 90,811

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17. Provisions

(a) Provisions as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Asset retirement obligations W 67,271 65,659 Expected loss related to litigation 14,307 12,468 Unused credit commitments 305,171 305,719 Guarantee contracts issued 95,582 83,851 Financial guarantee contracts issued 71,570 61,895 Non-financial guarantee contracts issued 24,012 21,956 Others 444,835 337,039 W 927,166 804,736

(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the six-month period ended June 30, 2021 and the year ended December 31, 2020 are as follows:

June 30, 2021 Unused credit commitments Financial guarantee contracts issued 12-month Lifetime 12-month Lifetime Impaired expected expected Impaired expected expected financial credit loss credit loss financial asset credit loss credit loss asset Total

Beginning balance W 164,147 140,137 1,435 54,550 7,335 10 367,614 Transfer to (from) 12-month expected credit loss 49,523 (49,473) (50) 4,028 (4,028) - - Transfer to (from) lifetime expected credit loss (12,033) 12,064 (31) (4,218) 4,218 - - Transfer to (from) impaired financial asset (162) (824) 986 - - - - Provision(reversal) (48,157) 47,925 (768) (3,021) 3,593 4 (424) Foreign exchange rate change (23) 431 - 834 225 - 1,467 Others(*) (336) 380 - 8,980 (941) 1 8,084 Ending balance W 152,959 150,640 1,572 61,153 10,402 15 376,741 (*) 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.

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17. Provisions (continued)

(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the six-month period ended June 30, 2021 and the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Unused credit commitments Financial guarantee contracts issued 12-months Lifetime 12-month Lifetime Impaired expected expected Impaired expected expected financial credit loss credit loss financial asset credit loss credit loss asset Total

Beginning balance W 132,028 119,839 11,885 68,467 5,569 811 338,599 Transfer to (from) 12-month expected credit loss 63,818 (55,295) (8,523) 2,059 (2,059) - - Transfer to (from) lifetime expected credit loss (9,883) 11,365 (1,482) (3,951) 3,951 - - Transfer to (from) impaired financial asset (244) (875) 1,119 - - - - Provision(reversal) (20,377) 65,455 (1,564) 8,258 1,845 (822) 52,795 Foreign exchange rate change (1,195) (352) - (1,335) (223) (49) (3,154) OtOthers(*) - - - (18,948) (1,748) 70 (20,626) Ending balance W 164,147 140,137 1,435 54,550 7,335 10 367,614 (*) 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.

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18. Liabilities under insurance contracts

(a) Insurance liabilities as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Policy reserve W 53,844,935 53,391,401 Policyholder’s equity adjustment 23,042 68,829 W 53,867,977 53,460,230

(b) Income or expenses on insurance contracts for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Six- Six- Three-month Three-month month month Insurance income Premium income W 1,582,947 3,222,363 1,746,440 3,459,135 Reinsurance income 36,456 73,412 39,962 78,707 Separate account income 16,492 37,742 13,061 29,304 1,635,895 3,333,517 1,799,463 3,567,146 Insurance expenses Claims paid 1,277,461 2,730,224 1,360,011 2,912,035 Reinsurance premium expenses 42,980 85,672 46,772 91,622 Provision for policy reserves(*) 301,838 452,600 309,543 478,650 Separate account expenses 16,493 37,742 13,060 29,303 Discount charge 215 404 389 544 Acquisition costs 161,264 340,298 190,739 403,035 Collection expenses 4,692 9,394 4,695 9,483 Deferred acquisition costs (97,916) (207,122) (114,858) (244,042) Amortization of deferred acquisition costs 103,790 215,263 104,088 202,341 1,810,817 3,664,475 1,914,439 3,882,971

Net income(expense) on insurance W (174,922) (330,958) (114,976) (315,825) (*) Interest expenses on savings insurance contracts are included. (W931,110 million and W956,275 million for the six-month periods ended June 30, 2021 and 2020, respectively).

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19. Equity

(a) Equity as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Capital stock: Common stock W 2,608,176 2,608,176 Preferred stock 361,465 361,465 2,969,641 2,969,641

Hybrid bond 3,334,531 2,179,934

Capital surplus: Share premium 11,352,819 11,352,924 Others 742,224 882,015 12,095,043 12,234,939

Capital adjustments (664,763) (687,935)

Accumulated other comprehensive income, net of tax: Gain (loss) on financial assets at fair value through other comprehensive income (320,652) 226,811 Gain on financial assets at fair value through profit or loss (Overlay approach) 133,174 161,919 Equity in other comprehensive income of associates 6,541 4,849 Foreign currency translation adjustments for foreign operations (290,850) (377,061) Net loss on valuation from cash flow hedges (33,415) (48,171) Other comprehensive income(loss) of separate account (2,607) 18,423 Remeasurements of defined benefit plans (336,665) (385,780) Gain (loss) on financial liabilities measured at FVTPL attributable to changes in credit risk (3,301) (5,171) (847,775) (404,181)

Retained earnings 29,337,739 27,777,169

Non-controlling interest(*) 2,241,976 2,287,291 W 48,466,392 46,356,858 (*) The non-controlling interests of W59,709 million decreased during the six-month period ended June 30, 2021 due to the acquisition of the remaining shares of Shinhan Asset Management Co., Ltd.

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19. Equity (continued)

(b) The details of preferred stock are as follows:

Contracted dividend The number of shares rate Conversion request period(*) 4.0% per year based on issue price Convertible preferred stock 17,482,000 2020.05.01~2023.04.30 (non-cumulative participating) (*) Preferred stocks that have not been converted for 4 years from the issuance date and until the expiration date of the period of existence are automatically converted to common stocks at the expiration date of the period of existence.

Hybrid bonds classified as other equity instruments of June 30, 2021 and December 31, 2020 are as follows:

Interest rate June 30, December 31, Issue date Currency Maturity date (%) 2021 2020 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 〃 - 3.27 199,476 199,476 September 17, 2020 〃 - 3.12 448,699 448,699 March 16, 2021 〃 - 2.94 429,009 - March 16, 2021 〃 - 3.30 169,581 - August 13, 2018 USD - 5.88 559,526 559,526 May 12, 2021 〃 - 2.88 556,007 - W 3,334,531 2,179,934 (*) For the six-month period ended June 30, 2021, the deduction for capital related to hybrid bonds issued is W4,953 million.

The hybrid bonds above can be repaid early after 5 or 10 years from the date of issuance, and the controlling company has an unconditional right to extend the maturity under the same condition. In addition, if no dividend is to be paid for common stocks, the agreed interest is also not paid.

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19. Equity (continued)

(d) Accumulated other comprehensive income

Changes in accumulated other comprehensive income for the six-month period ended June 30, 2021 and the year ended December 31, 2020 are as follows:

June 30, 2021 Items that are or may be reclassified to profit or loss Items that will not be reclassified to profit or loss Gain (loss) on Gain (loss) on financial Gain (loss) on valuation of Foreign Other Gain (loss) on Liabilities financial asset financial currency comprehen- Remeasure financial asset at measured at at fair value asset measured Equity in other translation Net gain (loss) sive -ments of Equity in other fair value FVTPL through other at FVTPL comprehensive adjustments from cash income(loss) the defined comprehensive through other attributable to comprehensive (overlay income of for foreign flow of separate benefit income of comprehensive changes in income approach) associates operations hedges account plans associates income credit risk Total Beginning balance W 146,829 161,919 4,875 (377,061) (48,171) 18,423 (385,780) (26) 79,982 (5,171) (404,181) Change due to fair value (730,922) (48,182) 5,079 - - (28,562) - (3) 32,634 (1,450) (771,406) Reclassification: Profit or loss included in profit or loss reclassification adjustment (84,860) ------(84,860) Effect of hedge accounting - - - - (92,213) - - - - - (92,213) Hedging 3,099 - - (24,458) 113,364 - - - - - 92,005 Effects from changes in foreign exchange rate - (23) - 114,106 - - - - (21) - 114,062 Remeasurements of the defined benefit plans ------68,096 - - - 68,096 Deferred income tax 224,693 19,460 (3,385) (3,416) (6,395) 7,532 (18,610) 1 (17,411) (709) 201,760 Transfer to other account ------23,881 4,029 27,910 Non-controlling interests 1,444 - - (21) - - (371) - - - 1,052 Ending balance W (439,717) 133,174 6,569 (290,850) (33,415) (2,607) (336,665) (28) 119,065 (3,301) (847,775)

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19. Equity (continued)

(d) Accumulated other comprehensive income (continued)

Changes in accumulated other comprehensive income for the six-month period ended June 30, 2021 and the year ended December 31, 2020 are as follows (continued):

December 31, 2020 Items that are or may be reclassified to profit or loss Items that will not be reclassified to profit or loss Gain (loss) on Gain (loss) on financial Gain (loss) on valuation of Foreign Other Gain (loss) on Liabilities financial asset financial currency comprehen- Remeasure financial asset at measured at at fair value asset measured Equity in other translation Net gain (loss) sive -ments of Equity in other fair value FVTPL through other at FVTPL comprehensive adjustments from cash income(loss) the defined comprehensive through other attributable to comprehensive (overlay income of for foreign flow of separate benefit income of comprehensive changes in income approach) associates operations hedges account plans associates income credit risk Total Beginning balance W 233,328 71,621 8,193 (217,465) (33,711) 14,539 (401,532) (16) 73,142 (8,255) (260,156) Change due to fair value (3,601) 125,298 (1,080) - - 5,358 - (15) (19,133) (9,689) 97,138 Reclassification: Profit or loss included in profit or loss reclassification adjustment (105,274) - - 5,858 - - - - - 13,942 (85,474) Effect of hedge accounting - - - - 144,750 - - - - - 144,750 Hedging (4,395) - - 45,083 (164,708) - - - - - (124,020) Effects from changes in foreign exchange rate - 74 (355) (219,306) - - - - 721 - (218,866) Remeasurements of the defined benefit plans ------21,422 - - - 21,422 Deferred income tax 26,486 (35,074) (1,883) 7,000 5,498 (1,474) (5,610) 5 (2,573) (1,169) (8,794) Transfer to other account ------27,825 - 27,825 Non-controlling interests 285 - - 1,769 - - (60) - - - 1,994 Ending balance W 146,829 161,919 4,875 (377,061) (48,171) 18,423 (385,780) (26) 79,982 (5,171) (404,181)

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19. Equity (continued)

(e) 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 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 as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Beginning balance W 3,329,899 3,161,170 Planned regulatory reserve of loan losses 189,071 168,729 Ending balance W 3,518,970 3,329,899 ii) Profit for the period and earnings per share after adjusted for regulatory reserve for loan losses for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three-month Six- month month month Profit attributable to equity holders of Shinhan Financial Group W 1,251,841 2,443,779 873,110 1,805,510 Adjustment for regulatory reserve for loan losses (71,846) (188,794) 106,415 34,036 Profit attributable to equity holders of Shinhan Financial Group adjusted for regulatory reserve W 1,179,995 2,254,985 979,525 1,839,546 Basic and diluted earnings per share adjusted for regulatory reserve in Korean won(*) W 2,172 4,127 1,973 3,673 (*) Dividends for hybrid bonds are deducted.

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19. Equity (continued)

(f) Treasury stock

The changes in treasury stock during the six-month period ended June 30, 2021 and for the year ended December 31, 2020 is as follows:

June 30, 2021 December 31, 2020 (*) The number of share Carrying value The number of share Carrying value Beginning balance 704,796 W 28,215 13,882,062 W 600,000 Acquisition 2,424 79 5,049,594 150,467 Disposal 700,870 (28,067) 13,191,202 (572,252) Retirement - - 5,035,658 (150,000) Ending balance 6,350 W 227 704,796 W 28,215 (*) Changes in equity shares due to the exchange of shares with Orange Life Insurance Co., Ltd. and Shinhan Venture Investment Co., Ltd. are included in the acquisition and disposal for treasury stock. Shares of Shinhan Financial Group Co., Ltd. owned by Orange Life Insurance Co., Ltd. and Shinhan Venture Investment Co., Ltd. are included in treasury stocks.

(g) Dividends

Dividends declared and paid by the controlling company for the six-month period ended June 30, 2021 are as follows:

June 30, 2021 Common stock (W1,500 per share) W 773,839 Convertible preferred stock (W1,716 per share) 29,999 W 803,838

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20. Net interest income

Net interest income for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Six- Six- Three-month Three-month month month Interest income: Cash and due from banks at amortized cost W 21,730 44,819 35,752 79,568 Due from banks at fair value through profit or loss 307 657 4,922 12,018 Securities at fair value through profit or loss 172,637 331,075 194,692 399,414 Securities at fair value through other comprehensive income 215,122 429,381 254,111 509,211 Securities at amortized cost 270,489 535,615 268,686 535,744 Loans at amortized cost 2,900,898 5,730,809 2,958,329 6,001,564 Loans at fair value through profit or loss 4,667 17,689 16,975 36,129 Others 17,266 35,757 21,963 43,119 3,603,116 7,125,802 3,755,430 7,616,767 Interest expense: Deposits 506,065 1,034,157 770,710 1,596,564 Borrowings 68,631 145,910 124,716 256,623 Debt securities issued 341,078 687,733 398,632 814,524 Others 12,870 27,177 15,256 39,508 928,644 1,894,977 1,309,314 2,707,219

Net interest income W 2,674,472 5,230,825 2,446,116 4,909,548

21. Net fees and commission income

Net fees and commission income for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Fees and commission income: Credit placement fees W 21,317 42,246 24,547 54,190 Commission received as electronic charge receipt 38,309 75,699 34,709 70,888 Brokerage fees 146,423 323,957 135,646 242,393 Commission received as agency 37,269 74,992 36,568 73,692 Investment banking fees 49,914 77,161 31,285 56,663 Commission received in foreign exchange activities 67,757 130,810 55,377 113,139 Asset management fees 78,048 154,139 52,365 120,353 Credit card fees 325,879 589,902 330,886 606,324 Operating lease fees 86,947 167,758 57,163 106,165 Others 249,179 488,794 189,019 399,194 1,101,042 2,125,458 947,565 1,843,001 Fees and commission expense: Credit-related fee 7,852 18,245 10,089 21,851 Credit card fees 210,858 408,349 209,096 433,146 Others 159,703 294,776 130,002 258,145 378,413 721,370 349,187 713,142

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22. Provision(reversal) for allowance for credit loss

Provision(reversal) for credit loss allowance on financial assets for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Six- Six- Three-month Three-month month month Allowance provided: Loans at amortized cost W (165,663) (324,319) (379,633) (627,732) Other financial assets at amortized cost (6,388) (23,943) (83,457) (93,766) Securities at fair value through other comprehensive income (1,277) (2,002) (1,067) (3,187) Unused credit commitment and financial guarantee 3,178 - (24,894) (47,688) Securities at amortized cost (927) (927) (833) (1,425) (171,077) (351,191) (489,884) (773,798) Allowance reversed: Securities at amortized cost (60) - - - Unused credit commitment and financial guarantee 424 424 - - 364 424 - - W (170,713) (350,767) (489,884) (773,798)

23. General and administrative expenses

General and administrative expenses for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three-month Six-month Three-month Six-month Employee benefits: Salaries W 770,694 1,568,974 736,234 1,444,577 Severance benefits: 51,064 105,783 52,411 106,656 Defined contribution 9,232 19,648 8,704 18,632 Defined benefit 41,832 86,135 43,707 88,024 Termination benefits 65,186 65,825 222 1,329 886,944 1,740,582 788,867 1,552,562

Entertainment 7,918 16,412 6,521 14,632 Depreciation 118,523 238,374 120,034 244,813 Amortization 35,368 75,890 30,992 60,194 Taxes and dues 57,327 106,997 63,176 105,337 Advertising 54,497 89,172 58,066 95,068 Research 5,827 11,590 5,035 9,884 Others 190,508 356,904 198,626 386,715 W 1,356,912 2,635,921 1,271,317 2,469,205

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24. Share-based payments

The share-based payments held by the Group as of June 30, 2021 are as follows:

(a) Stock options granted as of June 30, 2021 are as follows:

7th grant(*)

Type Cash-settled share-based payment

Grant date March 19, 2008

Exercise price in won W49,053

Number of shares granted 808,700

Options’ expiry dates September 17, 2021

Changes in number of shares granted: Beginning balance 36,162 Exercised and cancelled 7,024 Ending balance 29,138

Fair value per share in won W29 (Expiration of contractual exercise period Sep 17, 2021) (*) All of stock options have vested as of June 30, 2021, and the weighted average exercise price for 29,138 stock options outstanding as of June 30, 2021 is W49,053.

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24. Share-based payments (continued)

(b) Performance shares granted as of June 30, 2021 are as follows:

Expired Not expired

Type Cash-settled share-based payment

Relative stock price linked (20.0%), management index Performance conditions(*1) (80.0%)

4 years from the commencement date of the year to Exercising period which the grant date belongs

Estimated number of shares vested at June 30, 2021 129,120 1,980,208

W40,580, W44,222, W33,122 for the expiration Fair value per share in won(*2) W40,600 of exercising period from 2018 to 2020 (*1) Starting with the shares provided since 2020, Shinhan Financial Group and subsidiaries related to banking segment will apply relative stock price linked (20.0%), management index (60.0%) and prudential index (20.0%). (*2) Based on performance-based stock compensation, the reference stock price (the arithmetic average of the weighted average share price of transaction volume for the past two months, the previous one month, and the past one week) of four years (In the case of deferred quantity for after five years) after the commencement of the grant year is paid in cash, and the fair value of the reference stock to be paid in the future is assessed as the closing price of the settlement.

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24. Share-based payments (continued)

June 30, 2021 Employees of The controlling company The subsidiaries Total Stock options granted: 7th W - (1) (1) Performance share 3,416 25,929 29,345 W 3,416 25,928 29,344

June 30, 2020 Employees of The controlling company The subsidiaries Total Stock options granted: 6th W (1) (4) (5) 7th (7) (10) (17) Performance share (1,655) (14,453) (16,108) W (1,663) (14,467) (16,130)

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24. Share-based payments (continued)

(d) Accrued expenses and the intrinsic value as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Accrued expenses(*) The controlling company The subsidiaries Total Stock options granted: 7th W 1 - 1 Performance share 9,728 75,528 85,256 W 9,729 75,528 85,257 (*) The intrinsic value of share-based payments is W85,256 million as of June 30, 2021. For calculating, the quoted market price W40,600 per share is used for stock options and the fair value was considered as intrinsic value for performance shares, respectively.

December 31, 2020 Accrued expenses(*) The controlling company The subsidiaries Total Stock options granted: 7th W 1 1 2 Performance share 7,201 60,241 67,442 W 7,202 60,242 67,444 (*) The intrinsic value of share-based payments is W67,442 million as of December 31, 2020. For calculating, the quoted market price W32,050 per share is used for stock options and the fair value was considered as intrinsic value for performance shares, respectively.

25. Income tax expense

Income tax expense for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three-month Six- Three- Six- month month month Current income tax expense W 386,106 765,596 330,016 522,517 Deferred income tax due to origination 31,662 (76,515) 129,958 238,658 Income tax recognized in other comprehensive income 33,337 189,415 (121,787) (95,946) Income tax expenses W 451,105 878,496 338,187 665,229

Effective tax rate % 26.09 26.03 27.48 26.53

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26. Earnings per share

Basic and diluted earnings per share for the three-month six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three-month Six- month month month Profit attributable to equity holders of Shinhan W Financial Group 1,251,841 2,443,779 873,110 1,805,510 Less: Dividends to hybrid bond (19,825) (51,287) (11,750) (40,894) Net profit available for common stock W 1,232,016 2,392,492 861,360 1,764,616

Weighted average number of common stocks outstanding (*) 534,075,204 534,024,273 490,578,647 489,680,176

Basic and diluted earnings per share in Korean won W 2,307 4,480 1,756 3,604 (*) The number of basic ordinary shares outstanding is 516,599,554 shares and the above weighted- average stocks are calculated by reflecting the changes in treasury stocks for the six-month period ended June 30, 2021 and 17,482,000 shares of convertible preferred shares issued on May 1, 2019.

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27. Commitments and contingencies

(a) Guarantees, acceptances and credit commitments as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Guarantees: Outstanding guarantees W 10,407,532 10,249,827 Contingent guarantees 4,762,191 3,433,953 15,169,723 13,683,780 Commitments to extend credit: Loan commitments in won 82,284,475 80,598,639 Loan commitments in foreign currency 18,689,311 19,319,903 ABS and ABCP commitments 1,471,853 1,604,958 Others 89,383,258 87,718,227 191,828,897 189,241,727 Endorsed bills: Secured endorsed bills 2,744 1,650 Unsecured endorsed bills 10,901,020 7,324,559 10,903,764 7,326,209

W 217,902,384 210,251,716

(b) Legal contingencies

As of June 30, 2021, the Group is involved with 590 pending lawsuits as a defendant with total litigation fee of W357,094 million.

As of the June 30, 2021, the Group has calculated W14,307 million and W3,354 million in substantial amount of litigation value for lawsuits determined to be lost in the first trial, respectively, as other provisions and payment reserves. Other than litigation calculated as provisions, 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. to acquire remaining stake (60% of its total shares) 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) As a Prime Brokerage Service operator, the Group entered into a total return swap agreement (TRS, derivatives that exchange profits and losses from underlying assets such as stocks, bonds and funds) with a fund operated by Lime Asset Management ("Lime Fund"). Through TRS with the Group, the Lime Fund invested approximately $200 million in IIG Global Trade Finance Fund, IIG Trade Finance Fund, and IIG Trade Finance Fund-FX Hedged ("IIG Fund") from May 2017 to September 2017. The Group invested the IIG Fund in LAM Enhanced Finance III L.P. ("LAM III Fund") in kind and acquired the LAM III Fund's beneficiary certificates in accordance with the management instructions of Lime Asset Management in 2019. The recoverable value of the LAM III Fund beneficiary certificates is affected by the recoverable value of the IIG Fund invested in kind. Meanwhile, IIG Fund received cancellation of registration and asset freeze from the US Securities and Exchange Commission in November 2019. The Financial Supervisory Service (FSS) announced in its interim inspection of Lime Fund in February 2020 that the Group is charged of being involved in poor concealment and fraud of Lime Fund while operating TRSs with Lime Fund, and a related prosecution investigation has been under way since then. Regarding the Lime Trade Financial Fund and etc, the Financial Supervisory Service Sanctions Review Committee or the Financial Services Commission Securities Futures Commission has voted on or is deliberating on institutional sanctions for the Group.

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27. Commitments and contingencies (continued)

The prosecution arrested and indicted the former director of Prime Brokerage Services for fraud charges and violation of the Capital Market and Financial Investment Services Act. In addition, the courts of first and second trials have both convicted. The former director of Prime Brokerage Services submitted an appeal and is currently pending in the Supreme Court. The prosecution indicted the Group and the former director of Prime Brokerage Services on January 22, 2021 for violating ‘Financial Investment Services and Capital Markets Act’. It is expected that the criminal trial will determine whether the Group is legally responsible or not. The Group has determined the present obligation that the Group may liable for the charge of involvement in the fraud is not significant. As of June 30, 2021, there is a dispute between companies over some beneficiary certificates acquired under the management order of Lime Asset Management.

Considering the board resolutions and the results of the Financial Supervisory Service's dispute settlement committee, the Group conducted the compensation and liquidity supply for some of the Lime Fund sales. (e) The Group sold approximately W390.7 billion of German Heritage DLS trust products from May 2017 to December 2018. As of June 30, 2021, the repayment of W379.9 billion has been delayed. Accordingly, the supervisory authorities are conducting an inspection on the incomplete sale of trust products. On October 6, 2020, the Financial Supervisory Service has notified advance notice that is a result of the inspection to the Group. In addition, the Financial Supervisory Service Sanctions Review Committee and the Financial Services Commission Securities Futures Commission reviewed and voted on the sanctions of staffs and institutions on November 10, 2021. However, employees and institutional sanctions against the Group will be finalized by the Financial Services Commission in the future. (f) The Group has sold Gen2 related trust instruments from May 2014 to November 2019. As of June 30, 2021, approximately W373.8 billion, expired amount, of W420.0 billion, outstanding balance, is suspended from redemption and delayed in repayment. (g) The Group is responsible for the completion guarantee when the contractor fails for the completion guarantee. The Group bears the obligation to compensate the loan financial institution for damages when when the Group fails for the completion guarantee. Now, Completion Guarantee Management Type Land Trust Project is currently underway. (105 cases other than the new residential and commercial apartment project in Samseong-dong, Gangnam-gu, Seoul (excluding completed business establishments)) As of June 30, 2021, the total PF loan amount of PF loan financial institutions invested in the Completion Guarantee Management Type Land Trust Project is W 3.3967 trillion. The amount of compensation for the Group will be decided after determining whether it is a damage caused by the Group that fails the completion guarantee. As of June 30, 2021, due to the progress of the ongoing project, the risk that the Group will bear the obligation for completion guarantee is not significant. In addition, it is not reflected in the financial statements because the amount of loss cannot be measured reliably as of June 30, 2021. The Group has a plan to continuously monitor the progress of each business site. 28. Statement of cash flows Cash and cash equivalents in the consolidated statements of cash flows as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Cash and due from banks at amortized cost W 26,436,040 33,420,549 Adjustments: Due from financial institutions with a maturity over three months from date of acquisition (1,827,936) (2,488,156) Restricted due from banks (13,813,965) (21,969,411) (15,641,901) (24,457,567) W 10,794,139 8,962,982

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29. Related parties

Intra-group balances, and income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. In accordance with K-IFRS No.1024, the Group defines the retirement benefit plans of the associates, key management and their families, the consolidation group and related parties as the scope of related parties. The amount of profit and loss, bond and debt balance between the Group and the related parties are disclosed. For details of the associates and joint ventures, refer to ‘Note 12’ (a) Balances with the related parties as of June 30, 2021 and December 31, 2020 are as follows:

June 30, December 31, Related party Account 2021 2020 Investments in associates: BNP Paribas Cardif Life Insurance Other assets W 67 76 〃 Credit card loans 108 81 〃 Deposits 10,271 13,941 Partners 4th Growth Investment Fund Deposits 9,234 2,802 BNP Paribas Cardif General Insurance Credit card loans 26 21 〃 Other provisions 1 - 〃 Deposits 964 41 Dream High Fund Ⅲ Deposits 4 4 Credian Healthcare Private Equity Fund II(*) Deposits - 2 Midas Dong-A Snowball Venture Fund 2 Deposits 214 1,739 Eum Private Equity Fund No.3(*) Deposits - 20 Incorporated association Finance Saving Information Center Deposits 20 7 Nomura investment property trust No.19 Loans - 11,976 〃 Other assets - 44 SHBNPP MAIN Professional Investment Type Private Mixed Asset Other assets Investment Trust No.3 222 1,160 Korea Finance Security Deposits 618 568 SHINHAN-CORE TREND GLOBAL FUND 1 Unearned revenue 71 16 Hermes Private Investment Equity Fund Deposits 364 352 Korea Credit Bureau Deposits 7 2,088 Goduck Gangil1 PFV Co., Ltd. Loans 15,750 24,000 〃 ACL (47) (71) SBC PFV Co., Ltd. Deposits 10,538 8,011 Sprott Global Renewable Private Equity Fund I Deposits 216 258 IMM Global Private Equity Fund Loans 800 800 〃 ACL (2) (2) 〃 Deposits 4,689 10,820 Goduck Gangil10 PFV Co., Ltd. Loans 9,600 9,400 〃 ACL (20) (19) 〃 Deposits 2,167 2,718 Shinhan Global Healthcare Fund 2 Deposits 1 1 One Shinhan Global Fund 1 Unearned revenue - 122 IGIS PRIVATE REAL ESTATE TRUST NO.331(*) Loans - 9,919 〃 Accrued income - 121 〃 Unearned revenue - 22 COSPEC BIM tech Loans - 151 〃 ACL - (95) 〃 Deposits 1 1

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29. Related parties

(a) Balances with the related parties as of June 30, 2021 and December 31, 2020 are as follows (continued):

June 30, December 31, Related party Account 2021 2020 Investments in associates (continued): IMM Special Situation 1-2 PRIVATE EQUITY FUND Deposits W 150 117 EDNCENTRAL Co.,Ltd. Loans 19,658 19,450 〃 Accrued income 6 9 〃 Unearned revenue 311 578 KoFC-Neoplux R&D-Biz Creation 2013-1 Investment Account receivables 116 2,823 Future-Creation Neoplux Venture Capital Fund Account receivables 3,772 4,137 Neoplux Market-Frontier Secondary Fund Account receivables 484 1,630 Gyeonggi-Neoplux Superman Fund Account receivables 295 186 Shinhan-Neoplux Energy Newbiz Fund Account receivables 498 25 SHINHAN-NEO Core Industrial Technology Fund Account receivables - 3 KTC-NP Growth Champ 2011-2 Private Equity Fund Account receivables 4,769 4,528 Neoplux No.3 Private Equity Fund Account receivables 764 748 NV Station Private Equity Fund Deposits 47 100 Pacific Sunny Professional Investors Private Placement Real Estate Unearned revenue Investment Company No.45 30 76 IGIS Private Real Estate Investment Trust 286 Other loans - 436 Genesis North America Power Company No.1 PEF Other loans - 2,171 Korea Digital Asset Custody Deposits 797 - SW-N Fund Deposits 115 - Shinhan Smilegate Global PEF I Unearned revenue 172 - WaveTechnology co.Ltd Deposits 340 - SHINHAN-NEO Market-Frontier 2nd Fund Account receivables 513 - Key management personnel and their immediate Loans relatives: 4,678 5,144 Assets 62,058 98,852 Liabilities W 41,341 44,404 (*) Excluded from the associates due to disposal and liquidation for the six-month period ended June 30, 2021.

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29. Related parties (continued)

(b) Transactions with the related parties for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Related party Account month month month Six-month Investments in associates BNP Paribas Cardif Life Insurance Fees and commission income W 832 1,532 749 1,732 〃 Reversal of allowance for credit losses - - - 4 〃 Interest expense (3) (7) - - General and administrative 〃 expenses - (1) (1) (2) Shinhan Praxis K-Growth Global Fees and commission income Private Equity Fund 89 180 180 180 BNP Paribas Cardif General Insurance Fees and commission income 2 5 2 4 〃 Other operating income - - 140 239 SM New Technology Business Fees and commission income Investment Fund I (*1) 163 187 - - Partners 4th Growth Investment Fund Interest expense (2) (5) - (2) Shinhan-Albatross Technology Fees and commission income Investment Fund - 129 - 54 Synergy-Shinhan Mezzanine New Fees and commission income Technology Investment Fund (*2) - - 7 46 Shinhan-Midas Dong-A Secondary Fees and commission income Venture Fund - 62 62 62 GX Shinhan interest 1st Private Equity Fees and commission income Fund (*2) - - 78 252 Shinhan-Nvestor Liquidity Solution Fund Fees and commission income 91 181 90 180 SHC ULMUS Fund No.1(*2) Fees and commission income - - 19 38 Shinhan-PS Investment Fund No.1 Fees and commission income 5 10 5 10 Nomura investment property trust No.19 Interest income - - 131 261 BNPMAIN investment trust No.3 Fees and commission income 222 333 671 1,342 KOREA FINANCE SECURITY Fees and commission income 2 5 2 5 ShinHan – Soo Young Entrepreneur Fees and commission income Investment Fund - 67 69 138 Shinhan-Rhinos 1 Fund Fees and commission income - 47 - 64 SHINHAN-CORE TREND GLOBAL Fees and commission income FUND1 27 52 27 46 Kiwoom-Shinhan Innovation Fund I Fees and commission income 59 119 61 121 One Shinhan Global Fund1 Fees and commission income - 74 247 354 FuturePlay-Shinhan TechInnovation Fund 1 Fees and commission income 113 127 51 107 Korea Credit Bureau Fees and commission income 3 6 3 7 〃 Interest expense (4) (9) (1) (1) Goduck Gangil1 PFV Co., Ltd Interest income 232 459 227 454 SBC PFV Co., Ltd Interest expense (3) (4) (2) (3) IMM Global Private Equity Fund Interest income 6 12 7 13 〃 Interest expense (4) (9) (3) (9) Goduck Gangil10 PFV Co., Ltd Interest income 72 141 81 157 〃 Fees and commission income - - - 1,435 〃 Interest expense (1) (1) (2) (3) Reversal of allowance for credit losses 〃 (Allowance for credit losses) 24 24 42 (21)

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29. Related parties (continued)

(b) Transactions with the related parties for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows (continued):

June 30, 2021 June 30, 2020 Three- Three- Related party Account month Six-month month Six-month Investments in associates IGIS PRIVATE REAL ESTATE TRUST NO.331(*1) Interest income W - - 123 123 COSPEC BIM tech Interest income - 41 - - Reversal of allowance for credit losses 〃 (Allowance for credit losses) - 95 (20) (20) Korea Omega Project Fund III Fees and commission income 45 89 40 40 New Green Shinhan Mezzanine Fund Fees and commission income 20 20 40 40 Sparklabs-Shinhan Opportunity Fund 1 Fees and commission income 100 100 72 72 EDNCENTRAL Co.,Ltd. Interest income 279 555 - - 〃 Fees and commission income 134 267 - - Kakao-Shinhan 1st TNYT Fund Fees and commission income 193 193 - - KoFC-Neoplux R&D-Biz Creation 2013-1 Venture Capital Fund Interest income 1 1 - - 〃 Fees and commission income 52 116 - - Future-Creation Neoplux Venture Capital Fund Interest income 13 14 - - 〃 Fees and commission income 57 153 - - Neoplux Market-Frontier Secondary Fund Fees and commission income 238 484 - - Gyeonggi-Neoplux Superman Fund Fees and commission income 146 296 - - Shinhan-Neoplux Energy Newbiz Fund Fees and commission income 257 498 - - NewWave 6th Fund Fees and commission income 302 605 - - SHINHAN-NEO Core Industrial Technology Fund Fees and commission income 125 249 - - KTC-NP Growth Champ 2011-2 Private Equity Interest income Fund 8 12 - - Neoplux No.3 Private Equity Fund Fees and commission income 765 1,511 - - Pacific Sunny Professional Investors Private Placement Real Estate Investment Company Fees and commission income No.45 23 46 - - Shinhan Smilegate Global PEF I Fees and commission income 61 66 - - SHINHAN-NEO Market-Frontier 2nd Fund Fees and commission income 512 1,001 - - Korea Digital Asset Custody Interest expense (1) (1) - - SWK-Shinhan New Technology Investment Fund Fees and commission income 1st 11 11 - - Ulmus SHC innovation investment fund Fees and commission income 16 16 - - Key management personnel and their immediate relatives - Interest income 26 56 17 67 W 5,308 10,210 3,214 7,586 (*1) Excluded from the associates due to disposal and liquidation for the year ended June 30, 2021. (*2) Excluded from the associates due to disposal and liquidation for the year ended December 31, 2020.

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29. Related parties (continued)

Key management personnel compensation for the three-month and six-month periods ended June 30, 2021 and 2020 are as follows:

June 30, 2021 June 30, 2020 Three- Six- Three- Six- month month month month Short-term employee benefits W 4,688 10,386 3,857 8,478 Severance benefits 105 354 142 294 Share-based payment transactions(*) 4,834 9,680 1,496 (1,546) W 9,627 20,420 5,495 7,226 (*) The expenses of share-based payment transactions are the remuneration expenses during the vesting period.

(d) The guarantees and purchase agreement provided between the related parties as of June 30, 2021 and December 31, 2020 are as follows:

Amount of guarantees Guarantor Guaranteed Parties June 30, 2021 December 31, 2020 Account BNP Paribas Cardif Life Insurance W 10,000 10,000 Unused loan limit Shinhan Bank Goduck Gangil10 PFV Co., Ltd. 400 - Unused loan limit Shinhan Card BNP Paribas Cardif Life Insurance 892 919 Unused credit line 〃 BNP Paribas Cardif General Insurance 224 229 Unused credit line Shinhan Financial Group Co.,Ltd. and Structured entities 119,581 135,459 Purchase agreement Subsidiaries 131,097 146,607

(e) Details of collaterals provided by the related parties as of June 30, 2021 and December 31, 2020 are as follows:

Provided to Provided by Pledged assets June 30, 2021 December 31, 2020 BNP Paribas Cardif Life Government Shinhan Bank Insurance bonds W 12,000 12,000 Hyungje art printing Properties - 120 Goduck Gangil1 PFV Co., Collateral trust Ltd. - 28,800 Goduck Gangil10 PFV Co., Collateral trust Ltd. - 13,000 MSTEEL co.Ltd Real estate 5,419 - Total W 17,419 53,920

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29. Related parties (continued)

(f) Details of significant loan transactions with related parties for the six-month period ended June 30, 2021 and for the year ended December 31, 2020 are as follows:

June 30, 2021 Classification Company Beginning Execution Collection Others(*) Ending Nomura investment property W trust No.19 11,973 - - 3 11,976 IGIS PRIVATE REAL ESTATE TRUST NO.331 9,688 - (9,769) 81 - EDNCENTRAL Co.,Ltd. 19,381 - - 277 19,658 Investments in Goduck Gangil1 PFV Co., associates Ltd. 24,000 - (8,250) - 15,750 Goduck Gangil10 PFV Co., Ltd. 9,400 200 - - 9,600 IMM Global Private Equity Fund 800 - - - 800 COSPEC BIM tech 151 - - (151) - Total W 75,393 200 (18,019) 210 57,784 (*) The effect of changes in credit loss allowance is included.

December 31, 2020 Classification Company Beginning Execution Collection Others(*1) Ending Nomura investment property W trust No.19 11,973 - - - 11,973 IGIS PRIVATE REAL ESTATE TRUST NO.331 - 10,000 - (312) 9,688 EDNCENTRAL Co.,Ltd. - 20,000 - (619) 19,381 Investments in Goduck Gangil1 PFV Co., associates Ltd. 24,000 - - - 24,000 Goduck Gangil10 PFV Co., Ltd. - 28,200 (18,800) - 9,400 IMM Global Private Equity Fund 800 - - - 800 COSPEC BIM tech(*2) - - - 151 151 Total W 36,773 58,200 (18,800) (780) 75,393 (*1) The effect on changes in allowance for credit loss is included. (*2) For the year ended December 31, 2020, it is incorporated as a related party, and the balance as of December 31, 2020 has been marked.

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30. 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 Securitization vehicles are established to buy assets from originators and issue asset-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 June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 December 31, 2020 Total assets: Asset-backed securitization W 281,005,120 253,958,036 Structured financing 248,528,796 257,475,395 Investment fund 263,524,636 203,863,889 W 793,058,552 715,297,320

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30. 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 June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Assets-backed Structured Investment securitization financing fund Total Assets: Loans measured at fair value through profit or loss W 3,000 107,336 - 110,336 Loan at amortized cost 544,512 12,791,065 69,814 13,405,391 Securities at fair value through profit or loss 4,409,277 271,136 14,360,898 19,041,311 Derivative assets 5,029 15,767 - 20,796 Securities at fair value through other comprehensive income 2,120,916 134,324 - 2,255,240 Securities at amortized cost 6,480,582 - - 6,480,582 Other assets 1,301 24,823 2,958 29,082 W 13,564,617 13,344,451 14,433,670 41,342,738 Liabilities: Derivate liabilities W 769 1 - 770 Other liabilities 1,541 15,453 - 16,994 W 2,310 15,454 - 17,764

December 31, 2020 Assets-backed Structured Investment securitization financing fund Total Assets: Loans measured at fair value through profit or loss W 10,007 396,006 - 406,013 Loan at amortized cost 882,708 11,631,322 80,166 12,594,196 Securities at fair value through profit or loss 4,703,527 200,966 9,403,611 14,308,104 Derivate assets 10,353 1,050 - 11,403 Securities at fair value through other comprehensive income 2,105,239 122,664 - 2,227,903 Securities at amortized cost 6,294,228 - - 6,294,228 Other assets 2,019 59,980 4,936 66,935 W 14,008,081 12,411,988 9,488,713 35,908,782 Liabilities: Derivative assets W 582 - - 582 Other liabilities 2,610 21,421 - 24,031 W 3,192 21,421 - 24,613

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30. Interests in unconsolidated structured entities (continued)

(b) Nature of risks (continued) ii) Exposure to risk relating to its interests in unconsolidated structured entities as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021 Assets-backed Structured Investment securitization financing fund Total Assets held W 13,564,617 13,344,451 14,433,670 41,342,738 ABS and ABCP commitments 897,821 2,300 1,184,190 2,084,311 Loan commitments 590,962 1,157,343 - 1,748,305 Guarantees 61,100 6,300 - 67,400 Others - 88,852 - 88,852 W 15,114,500 14,599,246 15,617,860 45,331,606

December 31, 2020 Assets-backed Structured Investment securitization financing fund Total Assets held W 14,008,081 12,411,988 9,488,713 35,908,782 ABS and ABCP 2,300 1,923,035 commitments 932,113 2,857,448 Loan commitments 618,030 707,860 - 1,325,890 Guarantees 87,293 - - 87,293 Others - 123,210 5,887 129,097 W 15,645,517 13,245,358 11,417,635 40,308,510

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31. Business combination

(a) Shinhan Venture Investment Co., Ltd. i) General information

As of September 29, 2020, the Group gained control of Neoplux Co., Ltd. as a subsidiary by acquiring a 96.77% (97.08% stake of voting rights) stake and reporting to the Financial Services Commission about the transfer of subsidiary. As of December 30, 2020, the Group acquired the remaining shares, and Neoplux Co., Ltd. became a wholly owned subsidiary of the Group. Also, the name is changed from Neoplux Co., Ltd. to Shinhan Venture Investment Co., Ltd. The main reason for business combination is to promote investment financing and secure new business opportunities in the investment banking sector. 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 179 Investment assets in the long-term 463 Venture capital investment assets 38,800 Private equity investment company investment assets 12,230 Property and equipment 835 Intangible assets(*2) 1,254 Other assets(*3) 18,911 72,672 Liabilities: Borrowings 9,000 Other liabilities 4,804 13,804 Fair value of the identifiable net assets W 58,868 (*1) The accounting for the acquisition of Shinhan Venture Investment Co., Ltd. has determined using the identifiable assets and liabilities recognized by Shinhan Venture Investment Co., Ltd. at the time of business combination. (*2) The contract balance recognized as a business combination includes W 793 million. The contract balance that Shinhan Venture Investment Co., Ltd. has is considered an important asset that can generate additional revenue in the future. Therefore, it is assessed at fair value through the Multi-period Excess Earning Method. (*3) During the business combination, the Group has acquired receivables that are fair value of W 15,803 million, and the total contract amount is W 15,803 million. There is no contractual cash flow that is not expected to be recovered from the receivables.

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31. Business combination (continued)

(a) Shinhan Venture Investment Co., Ltd. (continued) iii) Goodwill

Goodwill recognized as a result of business combination is as follows:

Amount Consideration paid in cash W 71,128 Fair value of identifiable net assets (58,868) Non-controlling interests(*) 1,718 Goodwill W 13,978 (*) For the year ended December 31, 2020, the non-controlling interests for Shinhan Venture Investment Co., Ltd. are measured at proportionate shares of non-controlling interests in the acquiree's identifiable net assets for Shinhan Venture Investment Co., Ltd. At the business combination, the goodwill is generated because the transfer price includes the premium of corporate control paid to acquire Shinhan Venture Investment Co., Ltd. The transfer price for the business combination includes expected synergies, future market growth, and the amount related to human resources. These benefits are not recognized separately from goodwill because it does not meet the recognition requirements for identifiable intangible assets. iv) If Has Shinhan Venture Investment Co., Ltd. been consolidated as of January 1, 2020, the consolidated operating loss and net loss for the six-month period ended June 30, 2020 of the Group, which would have been included in the consolidated statement of comprehensive income, were W 201 million and W 147 million, respectively.

(b) Business Acquisition of Leaders Financial Sales Co., Ltd. According to the resolutions of the Board of Directors on November 25, 2020 and December 23, 2020, Shinhan Financial Plus has acquired its GF and IMGA business department of Leaders Financial Sales Co., Ltd. The Group paid W 14,851 million for Leaders Financial Sales Co., Ltd., including a conditional price.

As of June 30, 2021, the fair value assessment of identifiable assets and liabilities acquired in a business acquisitionis in progress. The goodwill may vary depending on the results of the fair value assessment of the identifiable assets and liabilities for the conditional price.

32. Events after the reporting period

(a) Merger between subsidiaries Shinhan Life Insurance Co., Ltd. and Orange Life Insurance Co., Ltd. were merged on July 1, 2021. After the merger, the name is Shinhan Life Insurance Co., Ltd.

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33. Uncertainty due to changes in domestic and global economic conditions

The rapid spread of the COVID-19 is negatively affecting the global economy. The Group uses forward-looking information to estimate expected credit losses in accordance with IFRS No.1109 ‘Financial Instruments’. Accordingly, the default rate applied in estimating allowance for expected credit loss for the year ended December 31, 2020 was re-estimated using changed forward-looking information on GDP growth rate and private consumption index, which were major variables for calculating the default rate. As of June 30, 2021, the economic environment has remained uncertain. Expected credit losses may change depending on the end of the COVID-19 and the pace of economic recovery. The Group will continue to monitor the economic effects of the COVID-19.

Risk exposures by major consolidated subsidiaries due to COVID-19 are as follows:

(a) Shinhan Bank

June 30, 2021 Oil/ Airlift petroleum Art- Movie Clothing passenger Lodging refinery related theater manufacturing Travel Total Loans at amortized cost W 150,644 3,490,834 673,970 226,451 81,659 1,954,665 98,843 6,677,066 Securities at fair value through profit or loss - - 1,731 - 720 1,554 2,421 6,426 Securities at fair value through other comprehensive income 35,019 9,939 196,797 - 6,790 10,177 - 258,722 Off-balance accounts 380,314 272,420 2,923,935 12,903 113,739 1,014,577 38,696 4,756,584 W 565,977 3,773,193 3,796,433 239,354 202,908 2,980,973 139,960 11,698,798

(b) Shinhan Card Co., Ltd.

June 30, 2021 Retails Short term card Long term card Credit sales Total loan loan Loans at amortized cost W 382,841 156,535 417,233 956,609 Total limit 867,969 - 867,969

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33. Uncertainty due to changes in domestic and global economic conditions (continued)

Risk exposures by major consolidated subsidiaries due to COVID-19 are as follows: (continued)

June 30, 2021 Public Airlift Movie Chartered bath passenger Lodging Art-related theater Travel bus business house Total Loans at amortized cost W - 217,416 3,200 596 25,762 7,086 17,442 271,502 Off-balance accounts 3 3,870 116 4 825 270 335 5,423 W 3 221,286 3,316 600 26,587 7,356 17,777 276,925

As of June 30, 2021, the exposure of the borrowers who applied for moratorium of interest payments and moratorium of repayment in installments is as follows:

(a) Shinhan Bank Exposure Moratorium of interest payments W 209,912 Moratorium of repayment in installments 1,295,362 Moratorium of interest payments and moratorium of repayment in installments 69,073 W 1,574,347

(b) Jeju Bank Exposure Moratorium of interest payments W 648 Moratorium of repayment in installments 258,712 Moratorium of interest payments and moratorium of repayment in installments 3,915 W 263,275

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