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Financial risk management | 12 Months Ended
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Dec. 31, 2025
Disclosure of financial risk management [Abstract] |
Financial risk management |
5. | Financial risk management
| (a) | Overview
Shinhan Financial Group Co., Ltd. (collectively the “Group”) manages various risks that may arise within 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 appetite.
| • |  | The controlling company shall present the Group Risk Management Model Standard, 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 fundamental policies for risk management of the Group are established by the Board of Directors of the controlling company, while the basic risk management strategies are established by the Risk Management Committee (the “Group Risk Management Committee”) within the controlling company’s Board of Directors. The Group’s Chief Risk Officer (CRO) assists the Group Risk Management Committee and consults the risk management policies and strategies of the group and each subsidiary through the Group Risk Council, which includes the Chief Risk Officer of each subsidiary. The subsidiary implements the risk management 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 management policies and strategies of the subsidiary. The risk management team of the controlling company assists the Group’s Chief Risk Officer for risk management and supervision. The 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 acceptable by the Group and each subsidiary, while the Risk Management Committee and the management-level risk Committees of each subsidiary set and manage detailed risk limits by risk, department, desk, and product types.
| ii-1) | Group Risk Management Committee
The Committee establishes the risk management framework for the controlling company and each of its subsidiaries and comprehensively manages Group-wide risk-related matters, including the establishment of the Group’s fundamental risk management policies and strategies and the approval of limits. The Committee consists of directors of the controlling company. 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 based approach 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
| • |  | Matters 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.
| ii-2) | Group Risk Management Council
In order to maintain the Group’s risk management policies and strategies consistently, the Group resolves matters necessary to discuss overall risk-related issues and to implement the policies set by the Group Risk Management Committee. The members are chaired by the Group’s chief risk officer and shall consist of the chief risk officers of major subsidiaries. iii) Group Risk Management System
| iii-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.
| iii-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 ad-hoc monitoring reports for Group management, including the CRO. In addition, the Risk Dashboard is operated to derive abnormal symptoms through three-dimensional monitoring of major portfolios, increased risks, and external environmental changes of assets for each subsidiary. If necessary, the Group takes preemptive risk management to establish and implement countermeasures.
| iii-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.
| iii-4) | Crisis Management
The Group maintains a group wide crisis 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 four levels of contingencies, namely, ‘cautious’, ‘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.
| (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 faces. 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 the balance sheet, 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 Chief Risk Officer (CRO), the Chief Credit Officer (CCO), the head of the business group, and the head of the risk management department. The Risk Policy Committee 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 is composed of chairman, the CCO, CRO and the head of the Group in charge of the credit-related business group, the head of the credit planning department, and the senior examination team to enhance the credit quality of the loan and profitability of operation. Shinhan Bank’s credit risk management includes processes such as credit evaluation, credit monitoring and supervision, 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 customer information from Shinhan 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 small office home office (“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 branch RM’s (Relationship Manager) and loan officers of each business division’s headquarters. In the case of a large or important credit, the credit is approved by the review council. In particular, the Credit Review Committee, the highest decision-making body for loan approvals, 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. Shinhan Bank operates a regular monitoring system for the regular management of individual loans. The loan officers and RM’s evaluate the adequacy of the result of the loan review by automatically searching for anticipated insolvent companies among business loan partners, and if necessary, the credit rating of the corporate is adjusted. In accordance with these procedures, corporate customers are classified either as an early warning company, an observation company, or a normal company, and then managed differently according to management guidelines for each risk classification, thereby mitigating the risk of insolvency of the loan at an early stage. The financial analysis support system affiliated with a professional credit rating agency supports credit screening and management, and the credit planning department calculates and manages industrial grades, and analyzes and provides industry trends and company information. 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 sector, 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 party, industry, country, etc. Shinhan Card Co., Ltd. ’s basic policy on credit risk is determined by the Risk Management Committee. The Risk Management Committee (RMC) consists of the Chief Risk Officer (CRO) as the chairperson, along with the heads of business and supporting groups, related department heads, and the Risk Management Manager. 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 Co., Ltd.’s credit rating system is divided into ASS (Application Scoring System) and BSS (Behavior Scoring System). Unless a customer falls under “rejection due to policy” (such circumstances include delinquency of other credit card companies) and his/her credit rating is above a certain rate, an application of ASS is approved. There is a separate screening criterion for credit card customers, who have maintained a long-term relationship with the Group and have a good credit history. In addition, the elements of credit ratings are used as the basis for setting limits when issuing cards. The BSS, which is recalculated monthly, predicts the delinquency probability of cardholders, and is utilized to monitor member and portfolio 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. 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. ② Measuring term structure of probability of default Internal credit risk ratings are the main variable input to determine the duration structure for the risk 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. 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 30 days |  | Continued past due more than 30 days |  | Continued past due more than 7 days (personal card)
Loan classification of precautionary or below |  | Loan classification of precautionary or below |  | Loan classification of precautionary or below
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 opinion |  | Collective loans for housing for which the constructors are insolvent |  |
Interest coverage ratio below 1 for a consecutive period of three years or negative cash flows from operating activities for a consecutive period of two years |  | Loans with identified indicators for significant increases in other credit risk |  |
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 card exposures 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 any grace period granted to the borrower. The Group regularly reviews the criteria for determining if there has been a significant increase 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.
| • |  | As a result of applying the judgment criteria, management would not expect frequent movement between the 12-month expected credit loss accumulation target and the entire period expected credit loss accumulation target.
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 occurred and the extent thereof may vary. 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 reflects future macroeconomic conditions anticipated from a neutral standpoint that is free from bias in measuring expected credit losses. Expected credit losses in this respect reflect conditions that are most likely to occur and are based on the same assumptions that the Group used in its business plan and management strategy. The Group analyzed data from its past experience, derived correlations between major macroeconomic variables and credit risks required for predicting credit risk and credit loss for each portfolio, and then reflected future forecast information through regression estimation. To reflect external and internal economic uncertainties, the Group has incorporated the final forward-looking information by reviewing an additional worst-case scenario along with the three existing scenarios of upside, central and downside. For the years ended December 31, 2024 and 2025, macroeconomic variables used by the Group are as follows for each scenario. <December 31, 2024> ① Upside scenario
Major variables (*1), (*2), (*3) |  | Correlation between credit risks |  | 2024.4Q |  |  | 2025 |
| 1Q |  |  | 2Q |  |  | 3Q |  |  | 4Q |
GDP growth rate (YoY %) |  | (-) |  |  | 2.1 |  |  |  | 1.5 |  |  |  | 2.4 |  |  |  | 3.2 |  |  |  | 2.8 |
Private consumption index (YoY %) |  | (-) |  |  | 1.2 |  |  |  | 1.6 |  |  |  | 2.5 |  |  |  | 2.6 |  |  |  | 2.5 |
Facility investment growth rate (YoY %) |  | (-) |  |  | 4.9 |  |  |  | 4.4 |  |  |  | 6.5 |  |  |  | 1.2 |  |  |  | 3.5 |
Consumer price index growth rate (%) |  | (+) |  |  | 1.6 |  |  |  | 2.2 |  |  |  | 2.4 |  |  |  | 2.4 |  |  |  | 2.3 |
Balance on current account (100 million dollars) |  | (-) |  |  | 220.0 |  |  |  | 210.0 |  |  |  | 190.0 |  |  |  | 180.0 |  |  |  | 200.0 |
Government bond 3y yields (%) |  | — |  |  | 2.8 |  |  |  | 3.1 |  |  |  | 3.2 |  |  |  | 3.2 |  |  |  | 3.2 |
② Central scenario
Major variables (*1), (*2), (*3) |  | Correlation between credit risks |  | 2024.4Q |  |  | 2025 |
| 1Q |  |  | 2Q |  |  | 3Q |  |  | 4Q |
GDP growth rate (YoY %) |  | (-) |  |  | 2.1 |  |  |  | 1.2 |  |  |  | 2.0 |  |  |  | 2.4 |  |  |  | 2.2 |
Private consumption index (YoY %) |  | (-) |  |  | 1.2 |  |  |  | 1.3 |  |  |  | 2.1 |  |  |  | 2.0 |  |  |  | 1.8 |
Facility investment growth rate (YoY %) |  | (-) |  |  | 4.9 |  |  |  | 4.0 |  |  |  | 5.8 |  |  |  | 0.8 |  |  |  | 2.5 |
Consumer price index growth rate (%) |  | (+) |  |  | 1.6 |  |  |  | 1.9 |  |  |  | 2.1 |  |  |  | 2.1 |  |  |  | 2.0 |
Balance on current account (100 million dollars) |  | (-) |  |  | 200.0 |  |  |  | 190.0 |  |  |  | 170.0 |  |  |  | 160.0 |  |  |  | 180.0 |
Government bond 3y yields (%) |  | — |  |  | 2.8 |  |  |  | 2.9 |  |  |  | 2.9 |  |  |  | 3.0 |  |  |  | 2.9 |
③ Downside scenario
Major variables (*1), (*2), (*3) |  | Correlation between credit risks |  | 2024.4Q |  |  | 2025 |
| 1Q |  |  | 2Q |  |  | 3Q |  |  | 4Q |
GDP growth rate (YoY %) |  | (-) |  |  | 2.1 |  |  |  | 0.8 |  |  |  | 1.4 |  |  |  | 1.7 |  |  |  | 1.0 |
Private consumption index (YoY %) |  | (-) |  |  | 1.2 |  |  |  | 0.9 |  |  |  | 1.5 |  |  |  | 1.1 |  |  |  | 0.6 |
Facility investment growth rate (YoY %) |  | (-) |  |  | 4.9 |  |  |  | 2.8 |  |  |  | 4.5 |  |  |  | 0.2 |  |  |  | 1.3 |
Consumer price index growth rate (%) |  | (+) |  |  | 1.6 |  |  |  | 1.6 |  |  |  | 1.8 |  |  |  | 1.8 |  |  |  | 1.7 |
Balance on current account (100 million dollars) |  | (-) |  |  | 170.0 |  |  |  | 160.0 |  |  |  | 140.0 |  |  |  | 120.0 |  |  |  | 130.0 |
Government bond 3y yields (%) |  | — |  |  | 2.8 |  |  |  | 2.8 |  |  |  | 2.7 |  |  |  | 2.4 |  |  |  | 2.2 |
④ Worst scenario
Major variables (*1), (*2), (*4) |  | Correlation between credit risks |  | Economic Crisis for 1 year |
GDP growth rate (YoY %) |  | (-) |  |  | (5.1 | )
Private consumption index (YoY %) |  | (-) |  |  | (11.9 | )
Facility investment growth rate (YoY %) |  | (-) |  |  | (38.6 | )
Consumer price index growth rate (%) |  | (+) |  |  | 7.5 |
Balance on current account (100 million dollars) |  | (-) |  |  | 401.1 |
Government bond 3y yields (%) |  | — |  |  | 6.2 |
| (*1) | As a result of examining the correlation between each variable, the Group applied key variables to reflect the final future economic outlook. Shinhan Bank applied key variables such as GDP growth rate, current account balance, and 3-year government bond yield, while Shinhan Card Co., Ltd. applied key variables such as GDP growth rate. In addition to the table above, the Group has selected macroeconomic indicators such as KOSPI index.
| (*2) | Considering the default forecast period, the Group reflected the future economic outlook.
| (*3) | The macroeconomic outlook figures are estimated by the Group for the purpose of calculating expected credit losses based on information from domestic and foreign research institutes. Therefore, it could be different from other institutions’ estimates.
| (*4) | Reflected considering the foreign exchange crisis.
<December 31, 2025> ① Upside scenario
Major variables (*1), (*2), (*3) |  | Correlation between credit risks |  |  | 2025.4Q |  |  | 2026 |
| 1Q |  |  | 2Q |  |  | 3Q |  |  | 4Q |
GDP growth rate (YoY %) |  |  | (-) |  |  |  | 1.5 |  |  |  | 2.9 |  |  |  | 2.8 |  |  |  | 2.0 |  |  |  | 2.0 |
Private consumption index (YoY %) |  |  | (-) |  |  |  | 1.9 |  |  |  | 3.2 |  |  |  | 3.3 |  |  |  | 2.2 |  |  |  | 2.0 |
Facility investment growth rate (YoY %) |  |  | (-) |  |  |  | (1.7 | ) |  |  | 1.9 |  |  |  | 4.6 |  |  |  | 2.2 |  |  |  | 1.7 |
Consumer price index growth rate (%) |  |  | (+) |  |  |  | 2.4 |  |  |  | 2.1 |  |  |  | 2.1 |  |  |  | 2.2 |  |  |  | 2.2 |
Balance on current account (100 million dollars) |  |  | (-) |  |  |  | 300.0 |  |  |  | 220.0 |  |  |  | 230.0 |  |  |  | 240.0 |  |  |  | 260.0 |
Government bond 3y yields (%) |  |  | — |  |  |  | 2.8 |  |  |  | 2.6 |  |  |  | 2.6 |  |  |  | 2.7 |  |  |  | 2.7 |
② Central scenario |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Major variables (*1), (*2), (*3) |  | Correlation between credit risks |  |  | 2025.4Q |  |  | 2026 |
| 1Q |  |  | 2Q |  |  | 3Q |  |  | 4Q |
GDP growth rate (YoY %) |  |  | (-) |  |  |  | 1.5 |  |  |  | 2.4 |  |  |  | 2.1 |  |  |  | 1.3 |  |  |  | 1.3 |
Private consumption index (YoY %) |  |  | (-) |  |  |  | 1.9 |  |  |  | 2.7 |  |  |  | 2.6 |  |  |  | 1.2 |  |  |  | 1.2 |
Facility investment growth rate (YoY %) |  |  | (-) |  |  |  | (1.7 | ) |  |  | 1.3 |  |  |  | 3.9 |  |  |  | 1.8 |  |  |  | 1.0 |
Consumer price index growth rate (%) |  |  | (+) |  |  |  | 2.4 |  |  |  | 1.6 |  |  |  | 1.8 |  |  |  | 2.0 |  |  |  | 2.0 |
Balance on current account (100 million dollars) |  |  | (-) |  |  |  | 300.0 |  |  |  | 210.0 |  |  |  | 220.0 |  |  |  | 230.0 |  |  |  | 250.0 |
Government bond 3y yields (%) |  |  | — |  |  |  | 2.8 |  |  |  | 2.3 |  |  |  | 2.4 |  |  |  | 2.4 |  |  |  | 2.5 |
③ Downside scenario
Major variables (*1), (*2), (*3) |  | Correlation between credit risks |  | 2025.4Q |  |  | 2026 |
| 1Q |  |  | 2Q |  |  | 3Q |  |  | 4Q |
GDP growth rate (YoY %) |  | (-) |  |  | 1.5 |  |  |  | 1.6 |  |  |  | 1.0 |  |  |  | 0.3 |  |  |  | 0.3 |
Private consumption index (YoY %) |  | (-) |  |  | 1.9 |  |  |  | 1.4 |  |  |  | 1.0 |  |  |  | 0.4 |  |  |  | 0.5 |
Facility investment growth rate (YoY %) |  | (-) |  |  | (1.7 | ) |  |  | (0.1 | ) |  |  | 2.4 |  |  |  | 1.2 |  |  |  | 0.4 |
Consumer price index growth rate (%) |  | (+) |  |  | 2.4 |  |  |  | 1.6 |  |  |  | 1.7 |  |  |  | 1.8 |  |  |  | 1.8 |
Balance on current account (100 million dollars) |  | (-) |  |  | 300.0 |  |  |  | 190.0 |  |  |  | 200.0 |  |  |  | 210.0 |  |  |  | 230.0 |
Government bond 3y yields (%) |  | — |  |  | 2.8 |  |  |  | 2.1 |  |  |  | 1.9 |  |  |  | 1.6 |  |  |  | 1.7 |
④ Worst scenario
Major variables (*1), (*2), (*4) |  | Correlation between credit risks |  | Economic Crisis for 1 year |
GDP growth rate (YoY %) |  | (-) |  |  | (5.1 | )
Private consumption index (YoY %) |  | (-) |  |  | (11.9 | )
Facility investment growth rate (YoY %) |  | (-) |  |  | (38.6 | )
Consumer price index growth rate (%) |  | (+) |  |  | 7.5 |
Balance on current account (100 million dollars) |  | (-) |  |  | 401.1 |
Government bond 3y yields (%) |  | — |  |  | 4.6 |
| (*1) | As a result of examining the correlation between each variable, the Group applied key variables to reflect the final future economic outlook. Shinhan Bank applied key variables such as GDP growth rate, current account balance, and 3-year government bond yield, while Shinhan Card Co., Ltd. applied key variables such as GDP growth rate. In addition to the table above, the Group has selected macroeconomic indicators such as unemployment rate.
| (*2) | Considering the default forecast period, the Group reflected the future economic outlook.
| (*3) | The macroeconomic outlook figures are estimated by the Group for the purpose of calculating expected credit losses based on information from domestic and foreign research institutes. Therefore, it could be different from other institutions’ estimates.
| (*4) | Reflected considering the foreign exchange crisis.
The predicted correlations between the macroeconomic variables and the risk of default, used by the Group, are derived based on long-term data over the past ten years. Since 2020, the Group has been implementing various policy support measures in response to the economic downturn caused by COVID-19. The Group manages the credit risk through classifying borrowers in moratorium of interest payments and moratorium of repayment that is one of the financial relief programs into Stage2 to reflect the impact of potential insolvency. In addition, credit risk is managed through additional expected loss assessments for non-retail and retail SOHO loans of borrowers holding the relevant loans, extended maturity loans and estimated loss loans from financial support programs. The Group has considered multiple economic scenarios in applying forward-looking information to measure the expected credit losses. Assuming a 100% weighting for each of the Upside, Central, Downside, and Worst scenarios, with all other assumptions held constant, the sensitivity of the Group’s provision for expected credit losses is not significant for the years ended December 31, 2024 and 2025. 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 additional information observed in the market is considered for some portfolios such as a group of large corporates. When a counterparty or exposure is concentrated in specific grades, the method of measuring PD for those grades is adjusted, and the PD for each rating grade is estimated by taking into account the contractual maturity of the exposure. LGD refers to the expected loss in the event of a default. 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 assets, 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 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 for each reporting period, and those of 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 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. 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. The decision to write off follows the internal regulations of the Group and, if necessary, is carried out after obtaining approval from external institutions. 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 related to due from banks, loans, investments in debt securities, derivative transactions, off-balance sheet items 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 deductible items such as provisions, is presented as the maximum amount that can be exposed by credit risk. The details of the maximum exposure to credit risk for financial instruments held as of December 31, 2024 and 2025 are as follows:
|  | 2024 |  |  | 2025 |
Due from banks and loans at amortized cost (*1), (*3): |  |  |  |  |  |  |  |
Banks |  | W | 14,058,051 |  |  |  | 12,658,709 |
Retail |  |  | 199,809,576 |  |  |  | 208,308,298 |
Government/Public sector/Central bank |  |  | 27,228,308 |  |  |  | 26,417,332 |
Corporations |  |  | 218,713,457 |  |  |  | 226,554,125 |
Card receivable |  |  | 27,714,596 |  |  |  | 27,695,043 |
|  |  | 487,523,988 |  |  |  | 501,633,507 |
Due from banks and loans at FVTPL (*3): |  |  |  |  |  |  |  |
Banks |  |  | 134,609 |  |  |  | 169,972 |
Corporations |  |  | 1,780,787 |  |  |  | 1,286,144 |
|  |  | 1,915,396 |  |  |  | 1,456,116 |
Securities at FVTPL |  |  | 67,134,121 |  |  |  | 71,727,860 |
Securities at FVOCI |  |  | 92,016,210 |  |  |  | 101,282,906 |
Securities at amortized cost (*1) |  |  | 33,315,999 |  |  |  | 31,944,368 |
Derivative assets |  |  | 10,279,257 |  |  |  | 7,153,950 |
Other financial assets (*1), (*2) |  |  | 23,116,960 |  |  |  | 43,323,340 |
Guarantee contracts |  |  | 22,509,195 |  |  |  | 26,221,968 |
Loan commitments and other credit liabilities |  |  | 218,980,794 |  |  |  | 220,317,053 |
|  | W | 956,791,920 |  |  |  | 1,005,061,068 |
| (*1) | The maximum exposure amounts for due from banks, loans, securities at amortized cost and other financial assets at amortized cost are the net carrying amount after deducting the allowance for credit losses.
| (*2) | Other financial assets mainly comprise of accounts receivable, accrued income, deposits, domestic exchange settlement debit and suspense payments.
| (*3) | Classified as similar credit risk group based on calculation of the BIS ratio under new Basel Capital Accord (Basel III).
iii) The maximum exposure to credit risk of loans among financial instruments held as of December 31, 2024 and 2025, by type of collateral is as follows:
|  | 2024 |
Classification |  | 12-month expected credit losses |  |  | Lifetime expected credit losses |  |  | Total |
| Non-impaired |  |  | Impaired |
Guarantee |  | W | 55,422,696 |  |  |  | 11,872,362 |  |  |  | 450,079 |  |  |  | 67,745,137 |
Deposits and Savings |  |  | 2,508,238 |  |  |  | 401,970 |  |  |  | 4,971 |  |  |  | 2,915,179 |
Property and equipment |  |  | 1,576,438 |  |  |  | 367,086 |  |  |  | 4,154 |  |  |  | 1,947,678 |
Real estate |  |  | 170,210,822 |  |  |  | 26,682,978 |  |  |  | 528,200 |  |  |  | 197,422,000 |
Securities |  |  | 1,846,531 |  |  |  | 155,761 |  |  |  | — |  |  |  | 2,002,292 |
Others |  |  | 7,687 |  |  |  | — |  |  |  | — |  |  |  | 7,687 |
Total |  | W | 231,572,412 |  |  |  | 39,480,157 |  |  |  | 987,404 |  |  |  | 272,039,973 |
|  | 2025 |
Classification |  | 12-month expected credit losses |  |  | Lifetime expected credit losses |  |  | Total |
| Non-impaired |  |  | Impaired |
Guarantee |  | W | 60,850,725 |  |  |  | 9,781,605 |  |  |  | 411,985 |  |  |  | 71,044,315 |
Deposits and Savings |  |  | 2,825,303 |  |  |  | 399,325 |  |  |  | 2,570 |  |  |  | 3,227,198 |
Property and equipment |  |  | 1,603,758 |  |  |  | 518,626 |  |  |  | 4,068 |  |  |  | 2,126,452 |
Real estate |  |  | 185,544,412 |  |  |  | 28,636,383 |  |  |  | 721,919 |  |  |  | 214,902,714 |
Securities |  |  | 2,363,043 |  |  |  | 78,110 |  |  |  | 34,083 |  |  |  | 2,475,236 |
Others |  |  | 12,414 |  |  |  | 2,000 |  |  |  | — |  |  |  | 14,414 |
Total |  | W | 253,199,655 |  |  |  | 39,416,049 |  |  |  | 1,174,625 |  |  |  | 293,790,329 |
iv) Impairment information by credit risk of financial assets Details of impaired financial assets due to credit risk as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | 12-month expected credit losses |  |  | Lifetime expected credit losses |  |  | Total |  |  | Allowances |  |  | Net |  |  | Mitigation of credit risk due to collateral |
|  | Grade 1 |  |  | Grade 2 |  |  | Grade 1 |  |  | Grade 2 |  |  | Impaired |
Due from banks and loans at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  | W | 11,740,875 |  |  |  | 2,027,427 |  |  |  | 254,625 |  |  |  | 60,114 |  |  |  | — |  |  |  | 14,083,041 |  |  |  | (24,990 | ) |  |  | 14,058,051 |  |  |  | 27,874 |
Retail |  |  | 177,166,099 |  |  |  | 6,397,386 |  |  |  | 11,714,193 |  |  |  | 4,387,929 |  |  |  | 1,198,594 |  |  |  | 200,864,201 |  |  |  | (1,054,625 | ) |  |  | 199,809,576 |  |  |  | 151,610,129 |
Government/Public sector/ Central bank |  |  | 25,118,226 |  |  |  | 2,030,126 |  |  |  | 83,783 |  |  |  | 49 |  |  |  | — |  |  |  | 27,232,184 |  |  |  | (3,876 | ) |  |  | 27,228,308 |  |  |  | 2,500 |
Corporations |  |  | 117,893,181 |  |  |  | 55,345,067 |  |  |  | 20,324,015 |  |  |  | 25,633,821 |  |  |  | 1,880,868 |  |  |  | 221,076,952 |  |  |  | (2,363,495 | ) |  |  | 218,713,457 |  |  |  | 117,575,757 |
Card receivable |  |  | 21,631,071 |  |  |  | 2,974,287 |  |  |  | 1,170,078 |  |  |  | 2,436,456 |  |  |  | 642,991 |  |  |  | 28,854,883 |  |  |  | (1,140,287 | ) |  |  | 27,714,596 |  |  |  | 18,881 |
|  |  | 353,549,452 |  |  |  | 68,774,293 |  |  |  | 33,546,694 |  |  |  | 32,518,369 |  |  |  | 3,722,453 |  |  |  | 492,111,261 |  |  |  | (4,587,273 | ) |  |  | 487,523,988 |  |  |  | 269,235,141 |
Securities at FVOCI (*) |  |  | 83,218,889 |  |  |  | 8,736,563 |  |  |  | 10,034 |  |  |  | 50,724 |  |  |  | — |  |  |  | 92,016,210 |  |  |  | — |  |  |  | 92,016,210 |  |  |  | — |
Securities at amortized cost |  |  | 31,103,200 |  |  |  | 2,219,343 |  |  |  | — |  |  |  | 3,644 |  |  |  | — |  |  |  | 33,326,187 |  |  |  | (10,188 | ) |  |  | 33,315,999 |  |  |  | — |
|  | W | 467,871,541 |  |  |  | 79,730,199 |  |  |  | 33,556,728 |  |  |  | 32,572,737 |  |  |  | 3,722,453 |  |  |  | 617,453,658 |  |  |  | (4,597,461 | ) |  |  | 612,856,197 |  |  |  | 269,235,141 |
|  | 2025 |
|  | 12-month expected credit losses |  |  | Lifetime expected credit losses |  |  | Total |  |  | Allowances |  |  | Net |  |  | Mitigation of credit risk due to collateral |
|  | Grade 1 |  |  | Grade 2 |  |  | Grade 1 |  |  | Grade 2 |  |  | Impaired |
Due from banks and loans at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  | W | 11,039,981 |  |  |  | 1,445,815 |  |  |  | 183,147 |  |  |  | 121 |  |  |  | — |  |  |  | 12,669,064 |  |  |  | (10,355 | ) |  |  | 12,658,709 |  |  |  | 171 |
Retail |  |  | 188,215,501 |  |  |  | 6,674,522 |  |  |  | 9,227,654 |  |  |  | 3,991,054 |  |  |  | 1,252,699 |  |  |  | 209,361,430 |  |  |  | (1,053,132 | ) |  |  | 208,308,298 |  |  |  | 162,423,106 |
Government/Public sector/ Central bank |  |  | 23,669,547 |  |  |  | 2,468,610 |  |  |  | 290,730 |  |  |  | 11 |  |  |  | — |  |  |  | 26,428,898 |  |  |  | (11,566 | ) |  |  | 26,417,332 |  |  |  | 2,597 |
Corporations |  |  | 121,819,093 |  |  |  | 56,460,975 |  |  |  | 22,692,064 |  |  |  | 25,790,138 |  |  |  | 2,091,404 |  |  |  | 228,853,674 |  |  |  | (2,299,549 | ) |  |  | 226,554,125 |  |  |  | 126,763,442 |
Card receivable |  |  | 20,649,246 |  |  |  | 4,449,746 |  |  |  | 1,060,430 |  |  |  | 1,976,109 |  |  |  | 481,682 |  |  |  | 28,617,213 |  |  |  | (922,170 | ) |  |  | 27,695,043 |  |  |  | 18,139 |
|  |  | 365,393,368 |  |  |  | 71,499,668 |  |  |  | 33,454,025 |  |  |  | 31,757,433 |  |  |  | 3,825,785 |  |  |  | 505,930,279 |  |  |  | (4,296,772 | ) |  |  | 501,633,507 |  |  |  | 289,207,455 |
Securities at FVOCI (*) |  |  | 90,408,440 |  |  |  | 10,847,635 |  |  |  | — |  |  |  | 26,831 |  |  |  | — |  |  |  | 101,282,906 |  |  |  | — |  |  |  | 101,282,906 |  |  |  | — |
Securities at amortized cost |  |  | 30,031,575 |  |  |  | 1,921,484 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 31,953,059 |  |  |  | (8,691 | ) |  |  | 31,944,368 |  |  |  | — |
|  | W | 485,833,383 |  |  |  | 84,268,787 |  |  |  | 33,454,025 |  |  |  | 31,784,264 |  |  |  | 3,825,785 |  |  |  | 639,166,244 |  |  |  | (4,305,463 | ) |  |  | 634,860,781 |  |  |  | 289,207,455 |
| (*) | Credit loss allowance recognized as other comprehensive income of securities at fair value through other comprehensive income amounted to W 38,346 million and W 60,301 million as of December 31, 2024 and 2025.
v) Credit risk exposures per credit grade of off-balance sheet items The credit risk exposure for off-balance sheet items such as guarantees, loan commitments, and other credit-related liabilities as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | Grade 1 |  |  | Grade 2 |  |  | Impaired |  |  | Total |
Guarantee contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
12-month expected credit losses |  | W | 19,212,434 |  |  |  | 2,786,804 |  |  |  | — |  |  |  | 21,999,238 |
Lifetime expected credit losses |  |  | 361,440 |  |  |  | 127,153 |  |  |  | — |  |  |  | 488,593 |
Impaired |  |  | — |  |  |  | — |  |  |  | 21,364 |  |  |  | 21,364 |
|  |  | 19,573,874 |  |  |  | 2,913,957 |  |  |  | 21,364 |  |  |  | 22,509,195 |
Loan commitment and other credit line: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
12-month expected credit losses |  |  | 183,928,715 |  |  |  | 21,687,932 |  |  |  | — |  |  |  | 205,616,647 |
Lifetime expected credit losses |  |  | 10,370,570 |  |  |  | 2,988,286 |  |  |  | — |  |  |  | 13,358,856 |
Impaired |  |  | — |  |  |  | — |  |  |  | 5,291 |  |  |  | 5,291 |
|  |  | 194,299,285 |  |  |  | 24,676,218 |  |  |  | 5,291 |  |  |  | 218,980,794 |
|  | W | 213,873,159 |  |  |  | 27,590,175 |  |  |  | 26,655 |  |  |  | 241,489,989 |
|  | 2025 |
|  | Grade 1 |  |  | Grade 2 |  |  | Impaired |  |  | Total |
Guarantee contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
12-month expected credit losses |  | W | 20,555,651 |  |  |  | 4,535,466 |  |  |  | — |  |  |  | 25,091,117 |
Lifetime expected credit losses |  |  | 964,695 |  |  |  | 154,378 |  |  |  | — |  |  |  | 1,119,073 |
Impaired |  |  | — |  |  |  | — |  |  |  | 11,778 |  |  |  | 11,778 |
|  |  | 21,520,346 |  |  |  | 4,689,844 |  |  |  | 11,778 |  |  |  | 26,221,968 |
Loan commitment and other credit line: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
12-month expected credit losses |  |  | 185,899,148 |  |  |  | 22,774,387 |  |  |  | — |  |  |  | 208,673,535 |
Lifetime expected credit losses |  |  | 8,896,231 |  |  |  | 2,642,174 |  |  |  | — |  |  |  | 11,538,405 |
Impaired |  |  | — |  |  |  | — |  |  |  | 105,113 |  |  |  | 105,113 |
|  |  | 194,795,379 |  |  |  | 25,416,561 |  |  |  | 105,113 |  |  |  | 220,317,053 |
|  | W | 216,315,725 |  |  |  | 30,106,405 |  |  |  | 116,891 |  |  |  | 246,539,021 |
vi) 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 pool |  | Probability of default 2.25% or above for each pool
Government/Public agency/Central bank |  | OECD sovereign credit rating of 6 or above |  | OECD sovereign credit rating of below 6
Banks and Corporations (Including card receivables) |  | Internal credit rating of BBB+ or above |  | Internal credit rating of below BBB+
Card receivables (Individuals) |  | Behavior scoring system of 7 grade or above |  | Behavior scoring system of below 7 grade
vii) Credit risk exposures per credit quality of derivative assets Credit risk exposures per credit quality of derivative assets as of December 31, 2024 and 2025 are as follows:
|  | 2024 |  |  | 2025 |
Grade 1 |  | W | 9,578,458 |  |  |  | 6,797,321 |
Grade 2 |  |  | 700,799 |  |  |  | 356,629 |
|  | W | 10,279,257 |  |  |  | 7,153,950 |
(*) | Credit quality of derivative assets is classified based on the internal credit ratings.
viii) Concentration by geographic location An analysis of concentration by geographic location for financial instruments, net of allowance, as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
Classification (*) |  | Korea |  |  | USA |  |  | UK |  |  | Japan |  |  | Germany |  |  | Vietnam |  |  | China |  |  | Other |  |  | Total |
Due from banks and loans at amortized cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  | W | 6,303,730 |  |  |  | 1,284,361 |  |  |  | 624,468 |  |  |  | 334,073 |  |  |  | 354,583 |  |  |  | 1,295,863 |  |  |  | 1,633,954 |  |  |  | 2,227,019 |  |  |  | 14,058,051 |
Retail |  |  | 185,102,271 |  |  |  | 506,525 |  |  |  | 7,064 |  |  |  | 5,165,687 |  |  |  | 3,399 |  |  |  | 4,391,692 |  |  |  | 2,002,467 |  |  |  | 2,630,471 |  |  |  | 199,809,576 |
Government/Public sector/Central bank |  |  | 21,716,534 |  |  |  | 1,018,284 |  |  |  | — |  |  |  | 1,914,100 |  |  |  | 197,042 |  |  |  | 334,366 |  |  |  | 360,451 |  |  |  | 1,687,531 |  |  |  | 27,228,308 |
Corporations |  |  | 189,219,966 |  |  |  | 5,203,409 |  |  |  | 789,820 |  |  |  | 7,075,869 |  |  |  | 218,422 |  |  |  | 4,533,648 |  |  |  | 3,125,771 |  |  |  | 8,546,552 |  |  |  | 218,713,457 |
Card receivable |  |  | 27,356,847 |  |  |  | 12,469 |  |  |  | 528 |  |  |  | 2,992 |  |  |  | 330 |  |  |  | 274,884 |  |  |  | 42,310 |  |  |  | 24,236 |  |  |  | 27,714,596 |
|  |  | 429,699,348 |  |  |  | 8,025,048 |  |  |  | 1,421,880 |  |  |  | 14,492,721 |  |  |  | 773,776 |  |  |  | 10,830,453 |  |  |  | 7,164,953 |  |  |  | 15,115,809 |  |  |  | 487,523,988 |
Deposits and loans at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  |  | 99,159 |  |  |  | 35,450 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 134,609 |
Corporations |  |  | 1,457,224 |  |  |  | 163,511 |  |  |  | — |  |  |  | 15,402 |  |  |  | — |  |  |  | 5,193 |  |  |  | — |  |  |  | 139,457 |  |  |  | 1,780,787 |
|  |  | 1,556,383 |  |  |  | 198,961 |  |  |  | — |  |  |  | 15,402 |  |  |  | — |  |  |  | 5,193 |  |  |  | — |  |  |  | 139,457 |  |  |  | 1,915,396 |
Securities at FVTPL |  |  | 61,955,771 |  |  |  | 3,321,700 |  |  |  | 377,462 |  |  |  | 135,194 |  |  |  | 2,564 |  |  |  | — |  |  |  | 7,144 |  |  |  | 1,334,286 |  |  |  | 67,134,121 |
Derivative assets |  |  | 8,199,726 |  |  |  | 687,950 |  |  |  | 41,218 |  |  |  | 152,555 |  |  |  | 274,786 |  |  |  | 3,201 |  |  |  | 1,613 |  |  |  | 918,208 |  |  |  | 10,279,257 |
Securities at FVOCI |  |  | 81,294,290 |  |  |  | 5,367,178 |  |  |  | 441,203 |  |  |  | 564,635 |  |  |  | 35,026 |  |  |  | 50,368 |  |  |  | 708,567 |  |  |  | 3,554,943 |  |  |  | 92,016,210 |
Securities at amortized cost |  |  | 31,113,242 |  |  |  | 207,817 |  |  |  | — |  |  |  | 499,988 |  |  |  | — |  |  |  | 761,386 |  |  |  | 116,944 |  |  |  | 616,622 |  |  |  | 33,315,999 |
|  |  | 613,818,760 |  |  |  | 17,808,654 |  |  |  | 2,281,763 |  |  |  | 15,860,495 |  |  |  | 1,086,152 |  |  |  | 11,650,601 |  |  |  | 7,999,221 |  |  |  | 21,679,325 |  |  |  | 692,184,971 |
Off-balance sheet items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guarantees |  |  | 20,517,889 |  |  |  | 579,426 |  |  |  | 250,938 |  |  |  | 44,186 |  |  |  | 9,663 |  |  |  | 199,535 |  |  |  | 511,891 |  |  |  | 395,667 |  |  |  | 22,509,195 |
Loan commitments and other liabilities related to credit |  |  | 206,833,657 |  |  |  | 1,873,831 |  |  |  | 290,909 |  |  |  | 352,256 |  |  |  | 87,212 |  |  |  | 2,187,736 |  |  |  | 2,158,798 |  |  |  | 5,196,395 |  |  |  | 218,980,794 |
|  | W | 227,351,546 |  |  |  | 2,453,257 |  |  |  | 541,847 |  |  |  | 396,442 |  |  |  | 96,875 |  |  |  | 2,387,271 |  |  |  | 2,670,689 |  |  |  | 5,592,062 |  |  |  | 241,489,989 |
|  | 2025 |
Classification (*) |  | Korea |  |  | USA |  |  | UK |  |  | Japan |  |  | Germany |  |  | Vietnam |  |  | China |  |  | Other |  |  | Total |
Due from banks and loans at amortized cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  | W | 4,934,110 |  |  |  | 1,409,928 |  |  |  | 479,051 |  |  |  | 278,851 |  |  |  | 363,081 |  |  |  | 933,820 |  |  |  | 1,078,467 |  |  |  | 3,181,401 |  |  |  | 12,658,709 |
Retail |  |  | 192,492,848 |  |  |  | 595,218 |  |  |  | 8,021 |  |  |  | 5,464,414 |  |  |  | 3,807 |  |  |  | 5,054,569 |  |  |  | 1,817,292 |  |  |  | 2,872,129 |  |  |  | 208,308,298 |
Government/Public sector/Central bank |  |  | 15,993,867 |  |  |  | 5,354,336 |  |  |  | — |  |  |  | 2,137,190 |  |  |  | 178,022 |  |  |  | 403,760 |  |  |  | 303,764 |  |  |  | 2,046,393 |  |  |  | 26,417,332 |
Corporations |  |  | 193,530,841 |  |  |  | 5,498,636 |  |  |  | 1,300,654 |  |  |  | 8,202,921 |  |  |  | 206,108 |  |  |  | 4,729,918 |  |  |  | 3,476,094 |  |  |  | 9,608,953 |  |  |  | 226,554,125 |
Card receivable |  |  | 27,359,956 |  |  |  | 13,936 |  |  |  | 477 |  |  |  | 3,273 |  |  |  | 339 |  |  |  | 237,884 |  |  |  | 50,429 |  |  |  | 28,749 |  |  |  | 27,695,043 |
|  |  | 434,311,622 |  |  |  | 12,872,054 |  |  |  | 1,788,203 |  |  |  | 16,086,649 |  |  |  | 751,357 |  |  |  | 11,359,951 |  |  |  | 6,726,046 |  |  |  | 17,737,625 |  |  |  | 501,633,507 |
Deposits and loans at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  |  | 129,110 |  |  |  | 40,862 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 169,972 |
Corporations |  |  | 1,135,383 |  |  |  | 83,254 |  |  |  | — |  |  |  | 14,424 |  |  |  | — |  |  |  | 4,133 |  |  |  | — |  |  |  | 48,950 |  |  |  | 1,286,144 |
|  |  | 1,264,493 |  |  |  | 124,116 |  |  |  | — |  |  |  | 14,424 |  |  |  | — |  |  |  | 4,133 |  |  |  | — |  |  |  | 48,950 |  |  |  | 1,456,116 |
Securities at FVTPL |  |  | 65,274,393 |  |  |  | 3,720,780 |  |  |  | 861,745 |  |  |  | 147,328 |  |  |  | 7,399 |  |  |  | 12,012 |  |  |  | 11,839 |  |  |  | 1,692,364 |  |  |  | 71,727,860 |
Derivative assets |  |  | 5,776,528 |  |  |  | 480,953 |  |  |  | 17,518 |  |  |  | 153,496 |  |  |  | 112,892 |  |  |  | 6,618 |  |  |  | 7,791 |  |  |  | 598,154 |  |  |  | 7,153,950 |
Securities at FVOCI |  |  | 87,212,394 |  |  |  | 7,104,105 |  |  |  | 788,292 |  |  |  | 771,151 |  |  |  | 116,116 |  |  |  | 42,978 |  |  |  | 779,447 |  |  |  | 4,468,423 |  |  |  | 101,282,906 |
Securities at amortized cost |  |  | 30,100,982 |  |  |  | 206,599 |  |  |  | — |  |  |  | 432,067 |  |  |  | — |  |  |  | 465,350 |  |  |  | 96,367 |  |  |  | 643,003 |  |  |  | 31,944,368 |
|  |  | 623,940,412 |  |  |  | 24,508,607 |  |  |  | 3,455,758 |  |  |  | 17,605,115 |  |  |  | 987,764 |  |  |  | 11,891,042 |  |  |  | 7,621,490 |  |  |  | 25,188,519 |  |  |  | 715,198,707 |
Off-balance sheet items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guarantees |  |  | 23,442,408 |  |  |  | 802,192 |  |  |  | 273,331 |  |  |  | 38,669 |  |  |  | 26,576 |  |  |  | 202,498 |  |  |  | 734,356 |  |  |  | 701,938 |  |  |  | 26,221,968 |
Loan commitments and other liabilities related to credit |  |  | 210,218,685 |  |  |  | 1,546,770 |  |  |  | 270,460 |  |  |  | 572,774 |  |  |  | 126,187 |  |  |  | 2,387,567 |  |  |  | 1,064,500 |  |  |  | 4,130,110 |  |  |  | 220,317,053 |
|  | W | 233,661,093 |  |  |  | 2,348,962 |  |  |  | 543,791 |  |  |  | 611,443 |  |  |  | 152,763 |  |  |  | 2,590,065 |  |  |  | 1,798,856 |  |  |  | 4,832,048 |  |  |  | 246,539,021 |
(*) | The amounts by geographic location are presented as the net carrying amount after deducting allowances for loan losses.
ix) Concentration by industry sector An analysis of concentration by industry sector of financial instruments, net of allowance, as of December 31, 2024 and 2025 is as follows:
|  | 2024 |
Classification (*) |  | Finance and insurance |  |  | Manufacturing |  |  | Retail and wholesale |  |  | Real estate and business |  |  | Construction service |  |  | Lodging and Restaurant |  |  | Other |  |  | Retail customers |  |  | Total |
Due from banks and loans at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  | W | 13,495,577 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 562,474 |  |  |  | — |  |  |  | 14,058,051 |
Retail |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 199,809,576 |  |  |  | 199,809,576 |
Government/Public sector/Central bank |  |  | 27,042,097 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 186,211 |  |  |  | — |  |  |  | 27,228,308 |
Corporations |  |  | 22,485,184 |  |  |  | 62,200,259 |  |  |  | 23,447,863 |  |  |  | 47,109,684 |  |  |  | 5,409,739 |  |  |  | 6,735,852 |  |  |  | 51,324,876 |  |  |  | — |  |  |  | 218,713,457 |
Card receivable |  |  | 81,613 |  |  |  | 323,992 |  |  |  | 288,452 |  |  |  | 65,256 |  |  |  | 51,107 |  |  |  | 20,277 |  |  |  | 1,189,255 |  |  |  | 25,694,644 |  |  |  | 27,714,596 |
|  |  | 63,104,471 |  |  |  | 62,524,251 |  |  |  | 23,736,315 |  |  |  | 47,174,940 |  |  |  | 5,460,846 |  |  |  | 6,756,129 |  |  |  | 53,262,816 |  |  |  | 225,504,220 |  |  |  | 487,523,988 |
Due from banks and loans at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  |  | 35,450 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 99,159 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 134,609 |
Corporations |  |  | 859,295 |  |  |  | 391,667 |  |  |  | 301,658 |  |  |  | 149,652 |  |  |  | 10,000 |  |  |  | — |  |  |  | 68,515 |  |  |  | — |  |  |  | 1,780,787 |
|  |  | 894,745 |  |  |  | 391,667 |  |  |  | 301,658 |  |  |  | 149,652 |  |  |  | 109,159 |  |  |  | — |  |  |  | 68,515 |  |  |  | — |  |  |  | 1,915,396 |
Securities at FVTPL |  |  | 34,194,979 |  |  |  | 3,634,273 |  |  |  | 1,286,997 |  |  |  | 2,149,229 |  |  |  | 304,020 |  |  |  | 136,364 |  |  |  | 25,428,259 |  |  |  | — |  |  |  | 67,134,121 |
Derivative assets |  |  | 8,305,868 |  |  |  | 1,263,951 |  |  |  | 26,101 |  |  |  | 39,698 |  |  |  | 6,003 |  |  |  | 1,616 |  |  |  | 634,051 |  |  |  | 1,969 |  |  |  | 10,279,257 |
Securities at FVOCI |  |  | 35,854,914 |  |  |  | 2,636,678 |  |  |  | 712,936 |  |  |  | 1,790,042 |  |  |  | 1,056,603 |  |  |  | 12,160 |  |  |  | 49,952,877 |  |  |  | — |  |  |  | 92,016,210 |
Securities at amortized cost |  |  | 9,761,249 |  |  |  | 19,984 |  |  |  | — |  |  |  | 539,416 |  |  |  | 260,379 |  |  |  | — |  |  |  | 22,734,971 |  |  |  | — |  |  |  | 33,315,999 |
|  |  | 152,116,226 |  |  |  | 70,470,804 |  |  |  | 26,064,007 |  |  |  | 51,842,977 |  |  |  | 7,197,010 |  |  |  | 6,906,269 |  |  |  | 152,081,489 |  |  |  | 225,506,189 |  |  |  | 692,184,971 |
Off-balance sheet items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guarantees |  |  | 3,733,957 |  |  |  | 11,712,348 |  |  |  | 3,548,909 |  |  |  | 92,172 |  |  |  | 179,255 |  |  |  | 115,827 |  |  |  | 3,113,748 |  |  |  | 12,979 |  |  |  | 22,509,195 |
Loan commitments and other liabilities related to credit |  |  | 18,218,204 |  |  |  | 34,199,306 |  |  |  | 10,324,128 |  |  |  | 4,325,044 |  |  |  | 2,408,759 |  |  |  | 531,832 |  |  |  | 20,644,317 |  |  |  | 128,329,204 |  |  |  | 218,980,794 |
|  | W | 21,952,161 |  |  |  | 45,911,654 |  |  |  | 13,873,037 |  |  |  | 4,417,216 |  |  |  | 2,588,014 |  |  |  | 647,659 |  |  |  | 23,758,065 |  |  |  | 128,342,183 |  |  |  | 241,489,989 |
|  | 2025 |
Classification (*) |  | Finance and insurance |  |  | Manufacturing |  |  | Retail and wholesale |  |  | Real estate and business |  |  | Construction service |  |  | Lodging and Restaurant |  |  | Other |  |  | Retail customers |  |  | Total |
Due from banks and loans at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  | W | 12,359,288 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 299,421 |  |  |  | — |  |  |  | 12,658,709 |
Retail |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 208,308,298 |  |  |  | 208,308,298 |
Government/Public sector/Central bank |  |  | 26,140,603 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 276,729 |  |  |  | — |  |  |  | 26,417,332 |
Corporations |  |  | 22,523,203 |  |  |  | 63,353,165 |  |  |  | 23,759,226 |  |  |  | 47,411,346 |  |  |  | 5,764,311 |  |  |  | 7,205,522 |  |  |  | 56,537,352 |  |  |  | — |  |  |  | 226,554,125 |
Card receivable |  |  | 78,300 |  |  |  | 330,944 |  |  |  | 274,289 |  |  |  | 75,757 |  |  |  | 48,900 |  |  |  | 28,196 |  |  |  | 1,329,882 |  |  |  | 25,528,775 |  |  |  | 27,695,043 |
|  |  | 61,101,394 |  |  |  | 63,684,109 |  |  |  | 24,033,515 |  |  |  | 47,487,103 |  |  |  | 5,813,211 |  |  |  | 7,233,718 |  |  |  | 58,443,384 |  |  |  | 233,837,073 |  |  |  | 501,633,507 |
Due from banks and loans at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks |  |  | 40,862 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 99,327 |  |  |  | — |  |  |  | 29,783 |  |  |  | — |  |  |  | 169,972 |
Corporations |  |  | 575,478 |  |  |  | 399,668 |  |  |  | 3,004 |  |  |  | 156,286 |  |  |  | — |  |  |  | — |  |  |  | 151,708 |  |  |  | — |  |  |  | 1,286,144 |
|  |  | 616,340 |  |  |  | 399,668 |  |  |  | 3,004 |  |  |  | 156,286 |  |  |  | 99,327 |  |  |  | — |  |  |  | 181,491 |  |  |  | — |  |  |  | 1,456,116 |
Securities at FVTPL |  |  | 35,054,770 |  |  |  | 3,090,284 |  |  |  | 1,399,374 |  |  |  | 3,087,667 |  |  |  | 242,695 |  |  |  | 29,279 |  |  |  | 28,823,791 |  |  |  | — |  |  |  | 71,727,860 |
Derivative assets |  |  | 6,068,491 |  |  |  | 829,304 |  |  |  | 13,573 |  |  |  | 19,948 |  |  |  | 2,272 |  |  |  | 329 |  |  |  | 219,516 |  |  |  | 517 |  |  |  | 7,153,950 |
Securities at FVOCI |  |  | 45,699,181 |  |  |  | 2,242,382 |  |  |  | 465,133 |  |  |  | 1,733,913 |  |  |  | 749,831 |  |  |  | 22,340 |  |  |  | 50,370,126 |  |  |  | — |  |  |  | 101,282,906 |
Securities at amortized cost |  |  | 7,108,253 |  |  |  | 9,985 |  |  |  | — |  |  |  | 843,938 |  |  |  | 280,851 |  |  |  | — |  |  |  | 23,701,341 |  |  |  | — |  |  |  | 31,944,368 |
|  |  | 155,648,429 |  |  |  | 70,255,732 |  |  |  | 25,914,599 |  |  |  | 53,328,855 |  |  |  | 7,188,187 |  |  |  | 7,285,666 |  |  |  | 161,739,649 |  |  |  | 233,837,590 |  |  |  | 715,198,707 |
Off-balance sheet items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guarantees |  |  | 5,659,966 |  |  |  | 12,554,311 |  |  |  | 3,633,251 |  |  |  | 290,565 |  |  |  | 214,178 |  |  |  | 60,372 |  |  |  | 3,808,447 |  |  |  | 878 |  |  |  | 26,221,968 |
Loan commitments and other liabilities related to credit |  |  | 18,227,705 |  |  |  | 31,211,151 |  |  |  | 10,863,979 |  |  |  | 6,914,971 |  |  |  | 2,269,120 |  |  |  | 444,003 |  |  |  | 20,103,475 |  |  |  | 130,282,649 |  |  |  | 220,317,053 |
|  | W | 23,887,671 |  |  |  | 43,765,462 |  |  |  | 14,497,230 |  |  |  | 7,205,536 |  |  |  | 2,483,298 |  |  |  | 504,375 |  |  |  | 23,911,922 |  |  |  | 130,283,527 |  |  |  | 246,539,021 |
(*) | The amounts by industry sector are presented as the net carrying amount after deducting allowances for loan losses.
| (c) | Market risk
i) Market risk management from trading positions
| i-1) | Concept of Market risk
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. Structural foreign exchange positions refer to foreign exchange positions that, with the approval of the Governor of the Financial Supervisory Service, are excluded from the calculation of market risk regulatory capital, relating to amounts invested in foreign currencies such as capital contributions to overseas branches and Capital A (Gap-gi-geum).
| 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 all transactions for holding purposes such as short-term resale, profit seeking through short-term price fluctuations, risk-free arbitrage, and risk hedging. 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 standardized approach market risk using the Group Market Risk Measurement System, and Shinhan Bank calculates the standardized approach market risk using its own model market risk calculation system. The Group and Shinhan Bank exclude structural foreign exchange positions, approved by the Governor of the Financial Supervisory Service, from the calculation of market risk under the standardized approach. Shinhan Securities Co., Ltd. uses its own market risk calculation system to calculate historical simulation VaR and the Group market risk system to calculate standardized approach market risk. 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 risk of trading account products by applying market risk standardized approach. The trading account calculates market risk if it is for holding purposes such as short-term resale, profit seeking through short-term price fluctuations, risk-free arbitrage, and risk hedging. The standardized approach is a risk calculation methodology proposed by the Basel Committee on Banking Supervision (BCBS) of the Bank for International Settlements (BIS). In Korea, the Basel III standards for market risk have been incorporated into the Detailed Regulations on Banking Supervision since 2023, and the Group complies with these regulations. Under the Basel III standardized approach, market risk is calculated by aggregating sensitivity risk, default risk, and residual risk. Sensitivity risk measures coverage of general interest rates, credit spreads, stocks, commodity, delta and vega of foreign exchange, and curvature. Delta refers to the change in product value due to changes in the price of the underlying asset, and vega refers to the change in product value due to changes in the volatility of the underlying asset. Curvature is defined as a loss that exceeds the delta risk in the event of an upward or downward shock to the underlying asset. Sensitivity risk is designed to measure both linear and non-linear risks of factors affecting value fluctuations regardless of the characteristics of the product. Default risk measures the discrete default risk of the underlying asset that cannot be captured in sensitivity risk. Complete offsetting between purchase and sale exposures of the same borrower is possible. Residual risk is a concept that calculates additional risk because sensitivity risk and default risk are not accurately measured when there is a special profit/loss structure or the underlying asset is special. Trading position data is automatically interfaced into management system, and the system conducts VaR measurement and manages the limit. In addition, Shinhan Bank sets loss limit, sensitivity limit, investment limit, stress limit, etc. for Trading Department and desks, and monitors daily. Shinhan Securities Co., Ltd. measures daily market risk by applying historical simulation VaR method of 99.9% confidence level-based VaR. It also measures market risk standardized approach to ensure consistent market risk management at the Group level. 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, Shinhan Securities Co., Ltd. sets and manages issuance and transaction limit, and stop-loss limit for each department. The Group’s market risk regulatory capital for trading positions under the Basel III revised standardized approach as of December 31, 2024 and 2025 is as follows:
|  | 2024 |  |  | 2025 |
Sensitivity risk |  |  |  |  |  |  |  |
GIRR (*1) |  | W | 257,705 |  |  |  | 219,512 |
CSR-Non-Securitized (*2) |  |  | 565,017 |  |  |  | 465,046 |
CSR-Securitized (Non-CTP) |  |  | 91,048 |  |  |  | 56,804 |
CSR-Non-Securitized (CTP) |  |  | 508 |  |  |  | 141 |
Stock |  |  | 210,850 |  |  |  | 92,207 |
Foreign (*3) |  |  | 389,673 |  |  |  | 435,255 |
Commodity |  |  | 2,829 |  |  |  | 4,293 |
|  |  | 1,517,630 |  |  |  | 1,273,258 |
Default risk |  |  |  |  |  |  |  |
Non-Securitized |  |  | — |  |  |  | 186,037 |
Securitized (Excluding CTP) |  |  | 121,146 |  |  |  | 103,363 |
Securitized (CTP) |  |  | 596 |  |  |  | 251 |
|  |  | 121,742 |  |  |  | 289,651 |
Residual risk |  |  | 9,547 |  |  |  | 8,508 |
|  | W | 1,648,919 |  |  |  | 1,571,417 |
| (*1) | GIRR (General Interest Rate Risk): General interest rate risk, a concept that measures the risk of loss due to changes in the risk-free interest rate. In general, if the maturity is long and the value changes fluctuates a lot due to interest rate changes, the risk value is calculated to be large.
| (*2) | CSR (Credit Spread Risk): Credit spread risk, a concept that measures the risk of value fluctuations as credit spreads fluctuate independently of the risk-free interest rate for products with inherent credit risk.
| (*3) | Calculated by excluding structural foreign exchange positions approved by the Governor of the Financial Supervisory Service.
i-3) Shinhan Bank Shinhan Bank’s market risk regulatory capital for trading positions under the Basel III revised standardized approach as of December 31, 2024 and 2025 is as follows:
|  | 2024 |  |  | 2025 |
Sensitivity risk |  |  |  |  |  |  |  |
GIRR (*1) |  | W | 116,501 |  |  |  | 126,382 |
CSR-Non-Securitized (*2) |  |  | 129,603 |  |  |  | 148,185 |
CSR-Securitized (Non-CTP) (*3) |  |  | 27,930 |  |  |  | 25,290 |
Stock |  |  | 28,582 |  |  |  | 25,676 |
Foreign (*4) |  |  | 368,999 |  |  |  | 454,808 |
Commodity |  |  | 199 |  |  |  | 287 |
|  |  | 671,814 |  |  |  | 780,628 |
Default risk |  |  |  |  |  |  |  |
Non-Securitized |  |  | 98,699 |  |  |  | 111,847 |
Securitized (Excluding CTP) |  |  | 60,866 |  |  |  | 58,280 |
|  |  | 159,565 |  |  |  | 170,127 |
Residual risk |  |  | 2,984 |  |  |  | 4,576 |
|  | W | 834,363 |  |  |  | 955,331 |
| (*1) | GIRR: General Interest Rate Risk
| (*2) | CSR: Credit Spread Risk
| (*3) | CTP: Correlation Trading Portfolio
| (*4) | Calculated by excluding structural foreign exchange positions approved by the Governor of the Financial Supervisory Service.
i-4) Shinhan Card Co., Ltd. Shinhan Card Co., Ltd.’s market risk regulatory capital for trading positions as of December 31, 2024 and 2025 under the standardized approach prescribed by the Financial Supervisory Service is as follows:
|  | 2024 |  |  | 2025 |
Interest rate risk (*) |  | W | 2,551 |  |  |  | 2,700 |
| (*) | Foreign subsidiaries are excluded from the calculation.
i-5) Shinhan Securities Co., Ltd. The VaR of Shinhan Securities Co., Ltd.’s trading positions as of December 31, 2024 and 2025 is as follows:
|  | 2024 |  |  | 2025 |
Interest rate risk |  | W | 15,662 |  |  |  | 14,058 |
Stock price risk |  |  | 14,321 |  |  |  | 33,180 |
Foreign exchange risk |  |  | 30,310 |  |  |  | 23,847 |
Option volatility risk |  |  | 42,703 |  |  |  | 9,381 |
Portfolio diversification effect |  |  | (41,549 | ) |  |  | (36,966 | )
|  | W | 61,447 |  |  |  | 43,500 |
i-6) Shinhan Life Insurance Co., Ltd. The VaR of Shinhan Life Insurance Co., Ltd.’s trading positions as of December 31, 2024 and 2025 is as follows:
|  | 2024 |  |  | 2025 |
Interest rate risk |  | W | 683 |  |  |  | 145 |
Stock price risk |  |  | 11,523 |  |  |  | 17,365 |
Foreign exchange risk |  |  | 55,467 |  |  |  | 69,913 |
Option volatility risk |  |  | 559 |  |  |  | 128 |
|  | W | 68,232 |  |  |  | 87,551 |
| (*) | The market risk exposure for performance dividend-type assets held is W 4,956,743 million and W 5,687,547 million as of December 31, 2024 and 2025 , respectively, and the minimum guaranteed risk amount that could result in an impact on the Group calculated using the internal shock scenario method as of the end of the reporting period is W 280,577 million and W 264,326 million as of December 31, 2024 and 2025 , respectively.
ii) Interest rate risk management from non-trading positions ii-1) Principle 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 changes in net interest income or 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 The 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 interest income calculation for the immediately following one-year period, in each case, as a result of negative movements in interest rates. Each subsidiary’s interest rate risk measurement method varies depending on industry-specific regulations. However, interest rate VaR and interest rate EaR are measured using internal methodologies or IRRBB (Interest Rate Risk in the Banking Book). Interest rate risk limits are set based on interest rate VaR and monitored accordingly. In accordance with the amendments to the Detailed Enforcement Rules of the Financial Holding Companies Supervisory Regulations, the Group measures its interest rate risk using the standardized approach of IRRBB under Basel III, which measures interest rate risk more precisely than the existing BIS standard framework by segmenting interest rate maturities, reflecting customer behavior 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 EaR 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 (e.g. (KRW) Parallel ± 225bp, Short Term ± 350bp, Long Term ± 225bp, (USD) Parallel ± 200bp, Short Term ± 300bp, Long Term ± 225bp). In the IRRBB method, the existing interest rate VaR and the interest rate EaR are expressed as Δ EVE (Economic Value of Equity) and Δ 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. ii-3) The details of interest rate VaR and EaR for major subsidiaries as of December 31, 2024 and 2025 are as follows: ① Shinhan Bank
|  | 2024 |  |  | 2025 |
ΔEVE (*1) |  | W | 1,508,514 |  |  |  | 1,399,226 |
ΔNII (*2) |  |  | 406,207 |  |  |  | 255,874 |
② Shinhan Card Co., Ltd.
|  | 2024 |  |  | 2025 |
ΔEVE (*1) |  | W | 990,898 |  |  |  | 824,951 |
ΔNII (*2) |  |  | 600,681 |  |  |  | 587,147 |
③ Shinhan Securities Co., Ltd.
|  | 2024 |  |  | 2025 |
ΔEVE (*1) |  | W | 252,625 |  |  |  | 202,411 |
ΔNII (*2) |  |  | 418,741 |  |  |  | 280,082 |
④ Shinhan Life Insurance Co., Ltd.
|  | 2024 |  |  | 2025 |
ΔEVE (*1) |  | W | 3,848,473 |  |  |  | 2,847,851 |
ΔNII (*2) |  |  | 44,525 |  |  |  | 30,124 |
| (*1) | ΔEVE is the change in economic value of equity capital that can arise from changes in interest rates that affect the present value of assets, liabilities and off-balance sheet items by using the Basel III standard based IRRBB method.
| (*2) | ΔNII is the change in net interest income that can occur over the next year due to changes in interest rates by using the Basel III standard based IRRBB method.
iii) Foreign exchange risk 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. The desks and dealers of this department manage the overall position of spot foreign exchange or foreign exchange derivatives within the established market risk and foreign exchange position limits. 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. Foreign currency denominated assets and liabilities as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | USD |  |  | JPY |  |  | EUR |  |  | CNY |  |  | Other |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks at amortized cost |  | W | 12,337,661 |  |  |  | 2,952,548 |  |  |  | 263,878 |  |  |  | 731,304 |  |  |  | 5,387,372 |  |  |  | 21,672,763 |
Due from banks at FVTPL |  |  | 35,450 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35,450 |
Loans at FVTPL |  |  | 275,434 |  |  |  | — |  |  |  | 28,229 |  |  |  | — |  |  |  | 19,899 |  |  |  | 323,562 |
Loan at amortized cost |  |  | 25,948,190 |  |  |  | 13,073,162 |  |  |  | 1,832,150 |  |  |  | 4,873,899 |  |  |  | 15,186,486 |  |  |  | 60,913,887 |
Securities at FVTPL |  |  | 6,687,351 |  |  |  | 133,864 |  |  |  | 852,382 |  |  |  | 4,124 |  |  |  | 726,565 |  |  |  | 8,404,286 |
Derivative assets |  |  | 1,568,025 |  |  |  | 4,578 |  |  |  | 232,197 |  |  |  | 1,987 |  |  |  | 98,297 |  |  |  | 1,905,084 |
Securities at FVOCI |  |  | 10,334,842 |  |  |  | 171,177 |  |  |  | 521,289 |  |  |  | 681,404 |  |  |  | 2,536,312 |  |  |  | 14,245,024 |
Securities at amortized cost |  |  | 340,153 |  |  |  | 500,269 |  |  |  | — |  |  |  | 117,008 |  |  |  | 1,381,765 |  |  |  | 2,339,195 |
Other financial assets |  |  | 5,471,934 |  |  |  | 1,264,209 |  |  |  | 197,766 |  |  |  | 355,004 |  |  |  | 830,886 |  |  |  | 8,119,799 |
|  | W | 62,999,040 |  |  |  | 18,099,807 |  |  |  | 3,927,891 |  |  |  | 6,764,730 |  |  |  | 26,167,582 |  |  |  | 117,959,050 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | W | 28,517,193 |  |  |  | 15,642,126 |  |  |  | 1,194,240 |  |  |  | 5,245,526 |  |  |  | 15,132,335 |  |  |  | 65,731,420 |
Financial liabilities at FVTPL |  |  | 3,117 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 597,058 |  |  |  | 600,175 |
Derivative liabilities |  |  | 1,513,732 |  |  |  | 5,297 |  |  |  | 50,101 |  |  |  | 1,964 |  |  |  | 55,052 |  |  |  | 1,626,146 |
Borrowings |  |  | 9,498,518 |  |  |  | 1,446,603 |  |  |  | 280,140 |  |  |  | 544 |  |  |  | 1,485,415 |  |  |  | 12,711,220 |
Debt securities issued |  |  | 15,926,430 |  |  |  | 168,566 |  |  |  | 764,365 |  |  |  | — |  |  |  | 1,865,788 |  |  |  | 18,725,149 |
Financial liabilities designated at FVTPL |  |  | 804,324 |  |  |  | 313 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 804,637 |
Other financial liabilities |  |  | 6,432,533 |  |  |  | 936,178 |  |  |  | 229,063 |  |  |  | 652,514 |  |  |  | 1,061,947 |  |  |  | 9,312,235 |
|  | W | 62,695,847 |  |  |  | 18,199,083 |  |  |  | 2,517,909 |  |  |  | 5,900,548 |  |  |  | 20,197,595 |  |  |  | 109,510,982 |
Net domestic and foreign currency exposure |  | W | 303,193 |  |  |  | (99,276 | ) |  |  | 1,409,982 |  |  |  | 864,182 |  |  |  | 5,969,987 |  |  |  | 8,448,068 |
Off-balance derivative exposure |  |  | 2,433,296 |  |  |  | 1,085,962 |  |  |  | (397,997 | ) |  |  | (379,652 | ) |  |  | (1,555,122 | ) |  |  | 1,186,487 |
Net foreign currency exposure |  | W | 2,736,489 |  |  |  | 986,686 |  |  |  | 1,011,985 |  |  |  | 484,530 |  |  |  | 4,414,865 |  |  |  | 9,634,555 |
|  | 2025 |
|  | USD |  |  | JPY |  |  | EUR |  |  | CNY |  |  | Other |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks at amortized cost |  | W | 14,268,193 |  |  |  | 3,024,755 |  |  |  | 193,635 |  |  |  | 615,220 |  |  |  | 5,969,361 |  |  |  | 24,071,164 |
Due from banks at FVTPL |  |  | 40,862 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 40,862 |
Loans at FVTPL |  |  | 108,450 |  |  |  | — |  |  |  | 9,635 |  |  |  | — |  |  |  | 4,133 |  |  |  | 122,218 |
Loan at amortized cost |  |  | 25,860,570 |  |  |  | 14,457,433 |  |  |  | 2,117,346 |  |  |  | 4,891,534 |  |  |  | 16,981,548 |  |  |  | 64,308,431 |
Securities at FVTPL |  |  | 8,324,763 |  |  |  | 137,035 |  |  |  | 1,012,815 |  |  |  | 2,750 |  |  |  | 1,251,785 |  |  |  | 10,729,148 |
Derivative assets |  |  | 815,479 |  |  |  | 2,217 |  |  |  | 304,637 |  |  |  | 881 |  |  |  | 84,524 |  |  |  | 1,207,738 |
Securities at FVOCI |  |  | 13,004,888 |  |  |  | 312,632 |  |  |  | 944,285 |  |  |  | 743,545 |  |  |  | 3,314,109 |  |  |  | 18,319,459 |
Securities at amortized cost |  |  | 368,841 |  |  |  | 432,333 |  |  |  | — |  |  |  | 96,420 |  |  |  | 1,140,009 |  |  |  | 2,037,603 |
Other financial assets |  |  | 9,806,303 |  |  |  | 2,707,262 |  |  |  | 1,785,518 |  |  |  | 201,174 |  |  |  | 1,736,885 |  |  |  | 16,237,142 |
|  | W | 72,598,349 |  |  |  | 21,073,667 |  |  |  | 6,367,871 |  |  |  | 6,551,524 |  |  |  | 30,482,354 |  |  |  | 137,073,765 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | W | 31,663,691 |  |  |  | 18,053,711 |  |  |  | 2,208,668 |  |  |  | 4,903,374 |  |  |  | 17,057,680 |  |  |  | 73,887,124 |
Financial liabilities at FVTPL |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,522,071 |  |  |  | 1,522,071 |
Derivative liabilities |  |  | 641,622 |  |  |  | 5,000 |  |  |  | 145,204 |  |  |  | 1,077 |  |  |  | 74,334 |  |  |  | 867,237 |
Borrowings |  |  | 11,990,792 |  |  |  | 1,253,386 |  |  |  | 459,326 |  |  |  | 6,388 |  |  |  | 2,240,724 |  |  |  | 15,950,616 |
Debt securities issued |  |  | 13,715,798 |  |  |  | 426,698 |  |  |  | 1,985,414 |  |  |  | — |  |  |  | 1,983,450 |  |  |  | 18,111,360 |
Financial liabilities designated at FVTPL |  |  | 790,960 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 790,960 |
Other financial liabilities |  |  | 11,593,718 |  |  |  | 861,743 |  |  |  | 911,334 |  |  |  | 786,180 |  |  |  | 1,805,791 |  |  |  | 15,958,766 |
|  | W | 70,396,581 |  |  |  | 20,600,538 |  |  |  | 5,709,946 |  |  |  | 5,697,019 |  |  |  | 24,684,050 |  |  |  | 127,088,134 |
Net domestic and foreign currency exposure |  | W | 2,201,768 |  |  |  | 473,129 |  |  |  | 657,925 |  |  |  | 854,505 |  |  |  | 5,798,304 |  |  |  | 9,985,631 |
Off-balance derivative exposure |  |  | 2,736,104 |  |  |  | 425,121 |  |  |  | 275,984 |  |  |  | (1,783 | ) |  |  | (2,754,376 | ) |  |  | 681,050 |
Net foreign currency exposure |  | W | 4,937,872 |  |  |  | 898,250 |  |  |  | 933,909 |  |  |  | 852,722 |  |  |  | 3,043,928 |  |  |  | 10,666,681 |
| (d) | Liquidity risk
Liquidity risk refers to the risk of unexpected losses (such as the disposal of assets at abnormal prices, high interest-rate financing, etc.) or insolvency due to inconsistency in funding periods between assets and liabilities or a sudden outflow of funds. 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 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 inherent crisis, crisis in the external market and a combination of internal and external crisis. Therefore, the Group is monitoring for any anomalies in terms of liquidity in preparation for potential crisis situations during normal times. In particular, after the bankruptcy of Silicon Valley Bank, the Group has been strengthening its capability to respond to liquidity crises by conducting crisis situation analysis applying bank run scenarios to the banks and savings bank subsidiaries. The Group has established and reviewed emergency funding plans, accordingly. 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 pre-emptively 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 to prepare for any potential liquidity crisis and establish and implement emergency plans in the event of a crisis; and
| • |  | Consider liquidity-related costs, benefits 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 Co., Ltd. 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 ‘cautious’, ‘alert’, ‘imminent crisis’, and ‘crisis’ and risk for the real liquidity gap ratio, liquidity buffer ratio, and ratio of ABS (asset backed securities) to borrowings which are major indicators related to liquidity risk. A contingency plan has been established to prepare for a crisis. The details of the composition of non-derivative financial instruments and derivative financial instruments by remaining period as of December 31, 2024 and 2025 are as follows:
|  | 2024 (*1) |
|  | Less than 1 month |  |  | 1~3 months |  |  | 3~6 months |  |  | 6 months ~ 1 year |  |  | 1~5 years |  |  | More than 5 years |  |  | Total |
Non-derivative financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks at amortized cost |  | W | 36,069,005 |  |  |  | 678,029 |  |  |  | 293,900 |  |  |  | 290,070 |  |  |  | 295,757 |  |  |  | 3,107,597 |  |  |  | 40,734,358 |
Due from banks at FVTPL |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35,450 |  |  |  | 35,450 |
Loans at FVTPL |  |  | 275,263 |  |  |  | 531,544 |  |  |  | 136,762 |  |  |  | 95 |  |  |  | 660,244 |  |  |  | 276,599 |  |  |  | 1,880,507 |
Loans at amortized cost |  |  | 37,868,875 |  |  |  | 54,775,441 |  |  |  | 69,211,593 |  |  |  | 99,131,674 |  |  |  | 145,027,757 |  |  |  | 123,300,327 |  |  |  | 529,315,667 |
Securities at FVTPL |  |  | 41,515,377 |  |  |  | 1,066,771 |  |  |  | 473,077 |  |  |  | 894,621 |  |  |  | 8,851,339 |  |  |  | 20,043,058 |  |  |  | 72,844,243 |
Securities at FVOCI |  |  | 45,714,502 |  |  |  | 997,618 |  |  |  | 825,089 |  |  |  | 2,680,515 |  |  |  | 10,809,850 |  |  |  | 32,861,952 |  |  |  | 93,889,526 |
Securities at amortized cost |  |  | 878,077 |  |  |  | 3,117,274 |  |  |  | 3,152,468 |  |  |  | 3,236,438 |  |  |  | 20,604,654 |  |  |  | 5,540,522 |  |  |  | 36,529,433 |
Other financial assets |  |  | 18,550,324 |  |  |  | 58,298 |  |  |  | 59,159 |  |  |  | 631,667 |  |  |  | 599,959 |  |  |  | 1,975,249 |  |  |  | 21,874,656 |
|  | W | 180,871,423 |  |  |  | 61,224,975 |  |  |  | 74,152,048 |  |  |  | 106,865,080 |  |  |  | 186,849,560 |  |  |  | 187,140,754 |  |  |  | 797,103,840 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits (*2) |  | W | 217,170,450 |  |  |  | 49,309,656 |  |  |  | 56,540,309 |  |  |  | 77,227,315 |  |  |  | 30,221,968 |  |  |  | 1,261,816 |  |  |  | 431,731,514 |
Financial liabilities at FVTPL |  |  | 954,899 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 954,899 |
Borrowings |  |  | 12,862,532 |  |  |  | 4,757,090 |  |  |  | 6,901,957 |  |  |  | 9,990,468 |  |  |  | 11,464,431 |  |  |  | 4,896,426 |  |  |  | 50,872,904 |
Debt securities issued |  |  | 4,859,511 |  |  |  | 8,927,081 |  |  |  | 9,122,810 |  |  |  | 17,273,392 |  |  |  | 56,429,636 |  |  |  | 4,046,575 |  |  |  | 100,659,005 |
Financial liabilities designated at FVTPL |  |  | 439,367 |  |  |  | 861,277 |  |  |  | 991,871 |  |  |  | 1,963,789 |  |  |  | 2,473,275 |  |  |  | 1,513,662 |  |  |  | 8,243,241 |
Investment contract liabilities |  |  | 106,106 |  |  |  | 105,788 |  |  |  | 248,954 |  |  |  | 375,300 |  |  |  | 328,874 |  |  |  | — |  |  |  | 1,165,022 |
Other financial liabilities |  |  | 32,314,670 |  |  |  | 174,388 |  |  |  | 257,115 |  |  |  | 587,834 |  |  |  | 1,351,145 |  |  |  | 140,254 |  |  |  | 34,825,406 |
|  | W | 268,707,535 |  |  |  | 64,135,280 |  |  |  | 74,063,016 |  |  |  | 107,418,098 |  |  |  | 102,269,329 |  |  |  | 11,858,733 |  |  |  | 628,451,991 |
Off-balance sheet items (*3): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guarantee contracts |  | W | 22,509,195 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22,509,195 |
Other liabilities related to loan commitments |  |  | 218,980,794 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 218,980,794 |
|  | W | 241,489,989 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 241,489,989 |
Derivatives |  | W | 453,751 |  |  |  | (12,670 | ) |  |  | (68,634 | ) |  |  | 6,511 |  |  |  | (1,847,862 | ) |  |  | (165,170 | ) |  |  | (1,634,074 | )
|  | 2025 (*1) |
|  | Less than 1 month |  |  | 1~3 months |  |  | 3~6 months |  |  | 6 months ~ 1 year |  |  | 1~5 years |  |  | More than 5 years |  |  | Total |
Non-derivative financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks at amortized cost |  | W | 37,051,022 |  |  |  | 746,364 |  |  |  | 68,711 |  |  |  | 19,990 |  |  |  | 264,095 |  |  |  | 1,842,716 |  |  |  | 39,992,898 |
Due from banks at FVTPL |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 40,862 |  |  |  | 40,862 |
Loans at FVTPL |  |  | 84,231 |  |  |  | 419,312 |  |  |  | 83 |  |  |  | 81,094 |  |  |  | 708,906 |  |  |  | 126,359 |  |  |  | 1,419,985 |
Loans at amortized cost |  |  | 37,915,506 |  |  |  | 55,304,875 |  |  |  | 66,984,277 |  |  |  | 103,607,758 |  |  |  | 149,981,848 |  |  |  | 135,798,359 |  |  |  | 549,592,623 |
Securities at FVTPL |  |  | 51,192,910 |  |  |  | 1,363,382 |  |  |  | 748,568 |  |  |  | 1,297,385 |  |  |  | 8,919,975 |  |  |  | 13,075,043 |  |  |  | 76,597,263 |
Securities at FVOCI |  |  | 54,888,016 |  |  |  | 1,564,045 |  |  |  | 551,147 |  |  |  | 1,592,027 |  |  |  | 13,096,314 |  |  |  | 31,737,573 |  |  |  | 103,429,122 |
Securities at amortized cost |  |  | 660,221 |  |  |  | 3,086,876 |  |  |  | 1,288,192 |  |  |  | 2,902,604 |  |  |  | 21,330,649 |  |  |  | 5,785,213 |  |  |  | 35,053,755 |
Other financial assets |  |  | 38,973,471 |  |  |  | 96,390 |  |  |  | 68,338 |  |  |  | 355,372 |  |  |  | 510,306 |  |  |  | 2,044,911 |  |  |  | 42,048,788 |
|  | W | 220,765,377 |  |  |  | 62,581,244 |  |  |  | 69,709,316 |  |  |  | 109,856,230 |  |  |  | 194,812,093 |  |  |  | 190,451,036 |  |  |  | 848,175,296 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits (*2) |  | W | 231,520,722 |  |  |  | 54,103,105 |  |  |  | 54,526,232 |  |  |  | 84,041,299 |  |  |  | 30,677,571 |  |  |  | 2,274,736 |  |  |  | 457,143,665 |
Financial liabilities at FVTPL |  |  | 2,212,215 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 100,272 |  |  |  | 2,312,487 |
Borrowings |  |  | 16,797,623 |  |  |  | 6,963,957 |  |  |  | 6,221,726 |  |  |  | 8,478,193 |  |  |  | 11,924,157 |  |  |  | 6,074,035 |  |  |  | 56,459,691 |
Debt securities issued |  |  | 6,230,564 |  |  |  | 8,486,174 |  |  |  | 9,202,855 |  |  |  | 15,052,890 |  |  |  | 56,411,740 |  |  |  | 3,889,537 |  |  |  | 99,273,760 |
Financial liabilities designated at FVTPL |  |  | 399,298 |  |  |  | 977,019 |  |  |  | 854,498 |  |  |  | 1,180,049 |  |  |  | 1,423,212 |  |  |  | 1,586,327 |  |  |  | 6,420,403 |
Investment contract liabilities |  |  | 189,704 |  |  |  | 10,554 |  |  |  | 91,041 |  |  |  | 159,182 |  |  |  | 1,085,912 |  |  |  | — |  |  |  | 1,536,393 |
Other financial liabilities |  |  | 51,214,836 |  |  |  | 162,838 |  |  |  | 74,360 |  |  |  | 602,583 |  |  |  | 1,318,935 |  |  |  | 225,282 |  |  |  | 53,598,834 |
|  | W | 308,564,962 |  |  |  | 70,703,647 |  |  |  | 70,970,712 |  |  |  | 109,514,196 |  |  |  | 102,841,527 |  |  |  | 14,150,189 |  |  |  | 676,745,233 |
Off-balance sheet items (*3): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guarantee contracts |  | W | 26,221,968 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 26,221,968 |
Other liabilities related to loan commitments |  |  | 220,317,053 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 220,317,053 |
|  | W | 246,539,021 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 246,539,021 |
Derivatives |  | W | 771,588 |  |  |  | (810,792 | ) |  |  | (29,804 | ) |  |  | (93,500 | ) |  |  | (2,117,259 | ) |  |  | (76,279 | ) |  |  | (2,356,046 | )
(*1) | These amounts include cash flows of principal and interest on financial assets and financial liabilities.
(*2) | Demand deposits amounting to W 160,031,760 million and W 172,840,771 million as of December 31, 2024 and 2025 are included in the ‘Less than 1 month’ category, respectively.
(*3) | Although guarantees, loan agreements, and other credit commitments provided by the Group have contractual maturities, they are classified into the earliest time bucket, as the Group is required to make payments immediately upon request by the counterparty.
| (e) | 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 by 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.
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 December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 (*3) |  |  | Total |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due from banks at FVTPL |  | W | — |  |  |  | 35,450 |  |  |  | — |  |  |  | 35,450 |
Loans at FVTPL (*1) |  |  | — |  |  |  | 745,412 |  |  |  | 1,134,534 |  |  |  | 1,879,946 |
Securities at FVTPL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities and other securities (*2) |  |  | 11,870,768 |  |  |  | 39,052,189 |  |  |  | 16,082,867 |  |  |  | 67,005,824 |
Equity securities |  |  | 1,618,125 |  |  |  | 64,277 |  |  |  | 1,414,926 |  |  |  | 3,097,328 |
Gold/silver deposits |  |  | 128,297 |  |  |  | — |  |  |  | — |  |  |  | 128,297 |
|  |  | 13,617,190 |  |  |  | 39,116,466 |  |  |  | 17,497,793 |  |  |  | 70,231,449 |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading |  |  | 85,439 |  |  |  | 8,772,280 |  |  |  | 719,177 |  |  |  | 9,576,896 |
Hedging |  |  | — |  |  |  | 702,361 |  |  |  | — |  |  |  | 702,361 |
|  |  | 85,439 |  |  |  | 9,474,641 |  |  |  | 719,177 |  |  |  | 10,279,257 |
Securities at FVOCI: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities |  |  | 35,984,894 |  |  |  | 56,031,316 |  |  |  | — |  |  |  | 92,016,210 |
Equity securities |  |  | 866,968 |  |  |  | — |  |  |  | 922,191 |  |  |  | 1,789,159 |
|  |  | 36,851,862 |  |  |  | 56,031,316 |  |  |  | 922,191 |  |  |  | 93,805,369 |
|  | W | 50,554,491 |  |  |  | 105,403,285 |  |  |  | 20,273,695 |  |  |  | 176,231,471 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial liabilities at FVTPL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities sold (*2) |  | W | 357,841 |  |  |  | — |  |  |  | — |  |  |  | 357,841 |
Gold/silver deposits |  |  | 597,058 |  |  |  | — |  |  |  | — |  |  |  | 597,058 |
|  |  | 954,899 |  |  |  | — |  |  |  | — |  |  |  | 954,899 |
Financial liabilities designated at FVTPL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives-combined securities (*2) |  |  | — |  |  |  | 819,919 |  |  |  | 7,139,257 |  |  |  | 7,959,176 |
Debt securities issued |  |  | — |  |  |  | 261,299 |  |  |  | — |  |  |  | 261,299 |
|  |  | — |  |  |  | 1,081,218 |  |  |  | 7,139,257 |  |  |  | 8,220,475 |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading |  |  | 22,721 |  |  |  | 8,476,885 |  |  |  | 536,855 |  |  |  | 9,036,461 |
Hedging |  |  | — |  |  |  | 814,374 |  |  |  | 207,697 |  |  |  | 1,022,071 |
|  |  | 22,721 |  |  |  | 9,291,259 |  |  |  | 744,552 |  |  |  | 10,058,532 |
|  | W | 977,620 |  |  |  | 10,372,477 |  |  |  | 7,883,809 |  |  |  | 19,233,906 |
(*1) | Of the Financial assets at FVTPL invested by the Group, P-note’s valuation of amount related to Lime Asset Management is W 40.8 billion. As of December 31, 2024, in this regard, international disputes are under
| way, the Group has estimated its fair value based on financial information within the recent audit report of underlying assets since it doesn’t have fair market value observable through active trading markets. Accounting estimates and assumptions used in preparing consolidated financial statements may lead to adjustment in response to changes in uncertainty, such as information and market conditions available in the future. In addition, the ultimate impact on the business, financial condition, performance, and liquidity of the Group is unpredictable.
(*2) | Financial instruments (Beneficiary certificates: W 175 billion and derivatives-combined securities: W 175 billion) related to GEN2 Partners asset management were delayed in repurchase for the year ended December 31, 2020. The Group estimated fair value using the net asset value based on the most recent data available for the repurchase suspension fund. Since then, it has an uncertainty in measuring fair value due to market conditions.
(*3) | Shinhan Securities Co., Ltd.’s level 3 over-the-counter derivatives are recognized W 86,279 million in financial assets measured at fair value through profit or loss, W 7,146,909 million in financial liabilities designated at fair value through profit or loss, W 718,788 million in derivative assets, and W 535,162 million in derivative liabilities. The fair value of over-the-counter derivatives classified as level 3 above is measured using Shinhan Securities Co., Ltd.’s internal valuation model .
|  | 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 (*3) |  |  | Total |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due from banks at FVTPL |  | W | — |  |  |  | 40,862 |  |  |  | — |  |  |  | 40,862 |
Loans at FVTPL (*1) |  |  | — |  |  |  | 506,781 |  |  |  | 908,473 |  |  |  | 1,415,254 |
Securities at FVTPL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities and other securities (*2) |  |  | 12,198,754 |  |  |  | 41,464,110 |  |  |  | 17,441,328 |  |  |  | 71,104,192 |
Equity securities |  |  | 2,900,162 |  |  |  | 461,978 |  |  |  | 1,507,261 |  |  |  | 4,869,401 |
Gold/silver deposits |  |  | 623,668 |  |  |  | — |  |  |  | — |  |  |  | 623,668 |
|  |  | 15,722,584 |  |  |  | 41,926,088 |  |  |  | 18,948,589 |  |  |  | 76,597,261 |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading |  |  | 63,896 |  |  |  | 5,876,734 |  |  |  | 596,229 |  |  |  | 6,536,859 |
Hedging |  |  | — |  |  |  | 617,091 |  |  |  | — |  |  |  | 617,091 |
|  |  | 63,896 |  |  |  | 6,493,825 |  |  |  | 596,229 |  |  |  | 7,153,950 |
Securities at FVOCI: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities |  |  | 37,077,188 |  |  |  | 64,196,579 |  |  |  | 9,139 |  |  |  | 101,282,906 |
Equity securities |  |  | 998,372 |  |  |  | — |  |  |  | 935,672 |  |  |  | 1,934,044 |
|  |  | 38,075,560 |  |  |  | 64,196,579 |  |  |  | 944,811 |  |  |  | 103,216,950 |
|  | W | 53,862,040 |  |  |  | 113,164,135 |  |  |  | 21,398,102 |  |  |  | 188,424,277 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial liabilities at FVTPL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities sold (*2) |  | W | 790,416 |  |  |  | — |  |  |  | — |  |  |  | 790,416 |
Gold/silver deposits |  |  | 1,522,071 |  |  |  | — |  |  |  | — |  |  |  | 1,522,071 |
|  |  | 2,312,487 |  |  |  | — |  |  |  | — |  |  |  | 2,312,487 |
Financial liabilities designated at FVTPL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives-combined securities (*2) |  |  | — |  |  |  | 255,532 |  |  |  | 5,834,683 |  |  |  | 6,090,215 |
Debt securities issued |  |  | — |  |  |  | 287,849 |  |  |  | — |  |  |  | 287,849 |
|  |  | — |  |  |  | 543,381 |  |  |  | 5,834,683 |  |  |  | 6,378,064 |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading |  |  | 38,222 |  |  |  | 5,540,526 |  |  |  | 293,655 |  |  |  | 5,872,403 |
Hedging |  |  | — |  |  |  | 994,626 |  |  |  | 153,817 |  |  |  | 1,148,443 |
|  |  | 38,222 |  |  |  | 6,535,152 |  |  |  | 447,472 |  |  |  | 7,020,846 |
|  | W | 2,350,709 |  |  |  | 7,078,533 |  |  |  | 6,282,155 |  |  |  | 15,711,397 |
(*1) | Of the Financial assets at FVTPL invested by the Group, P-note’s valuation of amount related to Lime Asset Management is W 27.0 billion. As of December 31, 2025, in this regard, international disputes are under way, the Group has estimated its fair value based on financial information within the recent audit report of underlying assets since it doesn’t have fair market value observable through active trading markets.
(*2) | Financial instruments (Beneficiary certificates: W 181.8 billion and derivatives-combined securities: W 181.8 billion) related to GEN2 Partners asset management were delayed in repurchase for the year ended
| December 31, 2020. The Group estimated fair value using the net asset value based on the most recent data available for the repurchase suspension fund. Since then, it has an uncertainty in measuring fair value due to market conditions.
(*3) | Using its internal valuation model, Shinhan Securities Co., Ltd.’s level 3 over-the-counter derivatives are recognized W 47,665 million in financial assets measured at fair value through profit or loss, W 5,834,683 million in financial liabilities designated at fair value through profit or loss, W 146,924 million in derivative assets, and W 284,145 million in derivative liabilities.
i-2) Classification of financial instruments as fair value level 3 The Group uses the 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 amounts of financial instruments classified as Level 3 for the years ended December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | Financial asset at FVTPL |  |  | Securities at FVOCI |  |  | Financial liabilities designated at FVTPL |  |  | Held for trading |  |  | Held for hedging |
|  | Derivative assets |  |  | Derivative liabilities |  |  | Derivative assets |  |  | Derivative liabilities |
Beginning balance |  | W | 17,327,888 |  |  |  | 949,183 |  |  |  | (6,725,252 | ) |  |  | 632,213 |  |  |  | (783,587 | ) |  |  | — |  |  |  | (224,195 | )
Recognized in total comprehensive income for the year: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recognized in profit or loss for the period (*1) |  |  | 355,895 |  |  |  | — |  |  |  | (74,680 | ) |  |  | 64,091 |  |  |  | (307,946 | ) |  |  | — |  |  |  | 16,498 |
Recognized in other comprehensive income (loss) for the year |  |  | 3,287 |  |  |  | (77,241 | ) |  |  | (8,614 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  |  | 359,182 |  |  |  | (77,241 | ) |  |  | (83,294 | ) |  |  | 64,091 |  |  |  | (307,946 | ) |  |  | — |  |  |  | 16,498 |
Purchase |  |  | 7,120,860 |  |  |  | 55,431 |  |  |  | — |  |  |  | 1,318,715 |  |  |  | (11,529 | ) |  |  | — |  |  |  | — |
Issue |  |  | — |  |  |  | — |  |  |  | (7,993,276 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Settlement |  |  | (5,798,938 | ) |  |  | (5,153 | ) |  |  | 7,662,565 |  |  |  | (1,299,773 | ) |  |  | 566,207 |  |  |  | — |  |  |  | — |
Transfer to level 3 (*2) |  |  | 17,407 |  |  |  | — |  |  |  | — |  |  |  | 3,931 |  |  |  | — |  |  |  | — |  |  |  | — |
Transfer out of level 3 (*2) |  |  | (394,072 | ) |  |  | (29 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Ending balance |  | W | 18,632,327 |  |  |  | 922,191 |  |  |  | (7,139,257 | ) |  |  | 719,177 |  |  |  | (536,855 | ) |  |  | — |  |  |  | (207,697 | )
|  | 2025 |
|  | Financial asset at FVTPL |  |  | Securities at FVOCI |  |  | Financial liabilities designated at FVTPL |  |  | Held for trading |  |  | Held for hedging |
|  | Derivative assets |  |  | Derivative liabilities |  |  | Derivative assets |  |  | Derivative liabilities |
Beginning balance |  | W | 18,632,327 |  |  |  | 922,191 |  |  |  | (7,139,257 | ) |  |  | 719,177 |  |  |  | (536,855 | ) |  |  | — |  |  |  | (207,697 | )
Recognized in total comprehensive income for the year: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recognized in profit or loss for the period (*1) |  |  | 8,721 |  |  |  | — |  |  |  | (225,030 | ) |  |  | 95,523 |  |  |  | 155,722 |  |  |  | — |  |  |  | 36,007 |
Recognized in other comprehensive income (loss) for the year |  |  | (531 | ) |  |  | 69,448 |  |  |  | (4,165 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  |  | 8,190 |  |  |  | 69,448 |  |  |  | (229,195 | ) |  |  | 95,523 |  |  |  | 155,722 |  |  |  | — |  |  |  | 36,007 |
Purchase |  |  | 5,875,977 |  |  |  | 6,324 |  |  |  | — |  |  |  | 87,869 |  |  |  | (30,005 | ) |  |  | — |  |  |  | (13,580 | )
Issue |  |  | — |  |  |  | — |  |  |  | (6,407,756 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Settlement |  |  | (4,667,721 | ) |  |  | (62,292 | ) |  |  | 7,941,525 |  |  |  | (306,359 | ) |  |  | 117,483 |  |  |  | — |  |  |  | 31,453 |
Transfer to level 3 (*2) |  |  | 65,173 |  |  |  | 9,140 |  |  |  | — |  |  |  | 23 |  |  |  | — |  |  |  | — |  |  |  | — |
Transfer out of level 3 (*2) |  |  | (56,884 | ) |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | — |
Ending balance |  | W | 19,857,062 |  |  |  | 944,811 |  |  |  | (5,834,683 | ) |  |  | 596,229 |  |  |  | (293,655 | ) |  |  | — |  |  |  | (153,817 | )
(*1) | Recognized profit or loss of the changes in carrying amount of financial instruments classified as Level 3 for the years ended December 31, 2024 and 2025 are included in the accounts of the consolidated statements of comprehensive income, of which the amounts and the related accounts are as follows:
|  | 2024 |
|  | Amounts recognized in profit or loss |  |  | Recognized profit or loss from the financial instruments held as of December 31 |
Net gain on financial assets at FVTPL |  | W | 112,040 |  |  |  | 443,935 |
Net gain (loss) on financial liabilities designated at FVTPL |  |  | (74,680 | ) |  |  | 102,961 |
Net other operating income |  |  | 16,498 |  |  |  | 16,497 |
|  | W | 53,858 |  |  |  | 563,393 |
|  | 2025 |
|  | Amounts recognized in profit or loss |  |  | Recognized profit or loss from the financial instruments held as of December 31 |
Net gain on financial assets at FVTPL |  | W | 259,966 |  |  |  | 250,113 |
Net gain (loss) on financial liabilities designated at FVTPL |  |  | (225,030 | ) |  |  | 2,884 |
Net other operating income |  |  | 36,007 |  |  |  | 36,007 |
|  | W | 70,943 |  |  |  | 289,004 |
(*2) | Transfers between levels result from changes in the availability of observable market data for the financial instruments. The Group recognizes such transfers at the end of the reporting period in which the change occurs.
i-3) Valuation techniques and significant inputs not observable in markets
| ① | Valuation techniques and inputs used in measuring the fair value of financial instruments classified as level 2 as of December 31, 2024 and 2025 are as follows:
|  | 2024
Type of financial instrument |  | Valuation technique |  |  | Carrying value |  |  | Significant inputs
Assets |  |  |  |  |  |  |  |  |  |
Financial assets at FVTPL |  |  |  |  |  |  |  |  |  |
Debt securities |  |  | DCF, NAV, Option model (*) |  |  | W | 39,833,051 |  |  | Discount rate, interest rate, stock price, etc.
Equity securities |  |  | NAV |  |  |  | 64,277 |  |  | Price of underlying assets such as stocks, bonds, etc.
|  |  |  |  |  |  | 39,897,328 |  |  |
Derivative assets |  |  |  |  |  |  |  |  |  |
Trading |  |  | Option model (*), Implied forward interest rate, DCF |  |  |  | 8,772,280 |  |  | Discount rate, foreign exchange rate, volatility, stock price, commodity index, etc.
Hedging |  |  |  |  |  |  | 702,361 |  |  |
|  |  |  |  |  |  | 9,474,641 |  |  |
Securities at FVOCI |  |  |  |  |  |  |  |  |  |
Debt securities |  |  | DCF, Option model (*) |  |  |  | 56,031,316 |  |  | Interest rate, discount rate, etc.
|  |  |  |  |  | W | 105,403,285 |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |
Financial liabilities designated at FVTPL |  |  |  |  |  |  |  |  |  |
Derivative-linked securities sold |  |  | Option model (*), NAV |  |  | W | 819,919 |  |  | Underlying asset price
Debt securities issued |  |  |  |  |  |  | 261,299 |  |  | Discount rate, volatility
|  |  |  |  |  |  | 1,081,218 |  |  |
Derivative liabilities |  |  |  |  |  |  |  |  |  |
Trading |  |  | Option model (*), Forward interest rate, DCF |  |  |  | 8,476,885 |  |  | Discount rate, foreign exchange rate, volatility, stock price, commodity index, etc.
Hedging |  |  |  |  |  |  | 814,374 |  |  |
|  |  |  |  |  |  | 9,291,259 |  |  |
|  |  |  |  |  | W | 10,372,477 |  |  |
|  | 2025
Type of financial instrument |  | Valuation technique |  | Carrying value |  |  | Significant inputs
Assets |  |  |  |  |  |  |  |
Financial assets at FVTPL |  |  |  |  |  |  |  |
Debt securities |  | DCF, NAV, Option model (*) |  | W | 42,011,753 |  |  | Discount rate, interest rate, stock price, etc.
Equity securities |  | NAV, Option model (*) |  |  | 461,978 |  |  | Price of underlying assets such as stocks, bonds, etc., dividend yield
|  |  |  |  | 42,473,731 |  |  |
Derivative assets |  |  |  |  |  |  |  |
Trading |  | Option model (*), Implied forward interest rate, DCF |  |  | 5,876,734 |  |  | Discount rate, foreign exchange rate, volatility, stock price, commodity index, etc.
Hedging |  |  |  |  | 617,091 |  |  |
|  |  |  |  | 6,493,825 |  |  |
Securities at FVOCI |  |  |  |  |  |  |  |
Debt securities |  | DCF, Option model (*) |  |  | 64,196,579 |  |  | Interest rate, discount rate, etc.
|  |  |  | W | 113,164,135 |  |  |
Liabilities |  |  |  |  |  |  |  |
Financial liabilities designated at FVTPL |  |  |  |  |  |  |  |
Derivative-linked securities sold |  | Option model (*), NAV |  | W | 255,532 |  |  | Underlying asset price
Debt securities issued |  |  | 287,849 |  |  | Discount rate, volatility
|  |  |  |  | 543,381 |  |  |
Derivative liabilities |  |  |  |  |  |  |  |
Trading |  | Option model (*), Forward interest rate, DCF |  |  | 5,540,526 |  |  | Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.
Hedging |  |  |  |  | 994,626 |  |  |
|  |  |  |  | 6,535,152 |  |  |
|  |  |  | W | 7,078,533 |  |  |
(*) | Option models applied to measure fair value include the Black-Scholes model, Hull-White model and methods such as Monte Carlo simulation are applied to some products depending on the product type.
| ② | Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
Type of financial instrument |  | Valuation technique |  | Carrying Value (*2) |  |  | Significant unobservable inputs |  |  | Range |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities, loans |  | DCF, NAV, Option model (*1), Income approach |  | W | 17,217,401 |  |  |  | The volatility of the underlying asset, Discount rate, Correlations, Growth rate, Liquidation Value |  |  |  | 0.56~81.72% 2.74~11.07% 4.74~82.57% 0.00% 0.00% |
Equity securities |  | DCF, NAV, Option model (*1), Comparable company analysis, Transaction case price, Dividend discount model (DDM), Cost method |  |  | 1,414,926 |  |  |  | The volatility of the underlying asset, Discount rate, Growth rate, Interest rate volatility |  |  |  | 25.58~53.67% 3.60~15.44% 0.00% 0.46~0.73% |
|  |  |  |  | 18,632,327 |  |  |  |  |  |  |  |  |
Derivative assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity and foreign exchange related |  | Option model (*1) |  |  | 125,445 |  |  |  | The volatility of the underlying asset, Correlations |  |  |  | 10.35~41.28% 41.60~73.24% |
Interest rates related |  |  |  |  | 85,141 |  |  |  | The volatility of the underlying asset, Correlations |  |  |  | 0.46~0.66% -38.28~69.59% |
Credit and commodity related |  |  |  |  | 508,591 |  |  |  | The volatility of the underlying asset, Correlations, Hazard Rate |  |  |  | 30.92~31.36% 99.88~99.96% 0.16~8.90% |
|  |  |  |  | 719,177 |  |  |  |  |  |  |  |  |
Securities at FVOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | DCF, NAV, Option model (*1), Comparable company analysis |  |  | 922,191 |  |  |  | The volatility of the underlying asset, Discount rate, Growth rate, Interest rate volatility |  |  |  | 22.95% 4.75~14.03% -1.00~1.00% 0.41~67.91% |
|  |  |  | W | 20,273,695 |  |  |  |  |  |  |  |  |
|  | 2024 |
Type of financial instrument |  | Valuation technique |  | Carrying Value (*2) |  |  | Significant unobservable inputs |  | Range |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
Financial liabilities designated at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Equity related |  | Option model (*1) |  | W | 7,139,257 |  |  | The volatility of the underlying asset, Correlations |  |  | 0.46~57.68% -46.56~83.10% |
Derivative liabilities |  |  |  |  |  |  |  |  |  |  |  |
Equity and foreign exchange related |  | Option model (*1) |  |  | 181,858 |  |  | The volatility of the underlying asset, Correlations |  |  | 7.86~57.68% -46.56~83.10% |
Interest rates related |  |  |  |  | 428,049 |  |  | The volatility of the underlying asset, Regression coefficient, Correlations |  |  | 0.46~1.09% 0.00~2.32% -38.28~90.34% |
Credit and commodity related |  |  |  |  | 134,645 |  |  | The volatility of the underlying asset, Correlations, Hazard Rate |  |  | 6.98% 0.00% 0.29~6.05% |
|  |  |  |  | 744,552 |  |  |  |  |  |  |
|  |  |  | W | 7,883,809 |  |  |  |  |  |  |
|  | 2025 |
Type of financial instrument |  | Valuation technique |  |  | Carrying Value (*2) |  |  | Significant unobservable inputs |  | Range |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities |  |  | DCF, NAV, Option model (*1), Income approach |  |  | W | 18,349,801 |  |  | The volatility of the underlying asset, Discount rate, Correlations, Growth rate, Interest rate volatility, Liquidation Value |  |  | 0.50~67.94% 4.04~17.95% 31.11~69.16% 0.00% 0.46~0.70% 0.00% |
Equity securities |  |  | DCF, NAV, Option model (*1), Comparable company analysis, Transaction case price, Dividend discount model (DDM), Cost method |  |  |  | 1,507,261 |  |  | The volatility of the underlying asset, Discount rate, Growth rate, Interest rate volatility, Liquidation Value |  |  | 0.00~68.67% 3.14~45.20% 0.00% 0.46~0.70% 0.00% |
|  |  |  |  |  |  | 19,857,062 |  |  |  |  |  |  |
Derivative assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity and foreign exchange related |  |  | Option model (*1) |  |  |  | 25,130 |  |  | The volatility of the underlying asset, Correlations |  |  | 10.63~61.54% 30.33~82.07% |
Interest rates related |  |  |  |  |  |  | 71,254 |  |  | The volatility of the underlying asset, Correlations |  |  | 0.48~1.51% -70.00~61.85% |
Credit and commodity related |  |  |  |  |  |  | 499,845 |  |  | The volatility of the underlying asset, Correlations, Hazard Rate |  |  | 30.76~31.08% 99.63% 0.08~9.29% |
|  |  |  |  |  |  | 596,229 |  |  |  |  |  |  |
|  | 2025 |
Type of financial instrument |  | Valuation technique |  |  | Carrying Value (*2) |  |  | Significant unobservable inputs |  | Range |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities at FVOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities |  |  | Option model (*1) |  |  | W | 9,139 |  |  | Discount rate, Interest rate volatility |  |  | 6.23% 7.92% |
Equity securities |  |  | DCF, NAV, Option model (*1), Comparable company analysis, Cost method |  |  |  | 935,672 |  |  | The volatility of the underlying asset, Discount rate, Growth rate, Interest rate volatility, Liquidation Value |  |  | 23.87% 4.23~16.33% 0.00% 0.46~0.70% 0.00% |
|  |  |  |  |  |  | 944,811 |  |  |  |  |  |  |
|  |  |  |  |  | W | 21,398,102 |  |  |  |  |  |  |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial liabilities designated at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity related |  |  | Option model (*1) |  |  | W | 5,834,683 |  |  | The volatility of the underlying asset, Correlations |  |  | 0.48~61.54% -70.00~82.07% |
Derivative liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity and foreign exchange related |  |  | Option model (*1) |  |  |  | 21,150 |  |  | The volatility of the underlying asset, Correlations |  |  | 8.20~61.54% 0.23~82.07% |
Interest rates related |  |  |  |  |  |  | 335,811 |  |  | The volatility of the underlying asset, Regression coefficient, Correlations |  |  | 0.48~1.51% 0.01~0.98% -70.00~90.34% |
Credit and commodity related |  |  |  |  |  |  | 90,511 |  |  | The volatility of the underlying asset, Correlations, Hazard Rate |  |  | 0.65~1.51% -70.00~61.85% 0.21~9.22% |
|  |  |  |  |  |  | 447,472 |  |  |  |  |  |  |
|  |  |  |  |  |  | W 6,282,155 |  |  |  |  |  |  |
(*1) | The option models used by the Group for valuation purposes include the Black-Scholes model, the Hull-White model, and Monte Carlo simulation, among others.
(*2) | Valuation techniques and input variables are not disclosed for items whose carrying amounts are considered to approximate fair value.
| i-4) | Sensitivity for changing in unobservable inputs
For level 3 fair value measurement, the effects of changes in one or more of the unobservable inputs on profit or loss, or other comprehensive income as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | Favorable changes |  |  | Unfavorable changes |
Financial assets: |  |  |  |  |  |  |  |
Effects on profit or loss for the period (*1), (*2): |  |  |  |  |  |  |  |
Financial assets at FVTPL |  | W | 38,489 |  |  |  | (33,351 | )
Derivative assets |  |  | 14,813 |  |  |  | (14,777 | )
Securities at FVOCI (*2) |  |  | 74,482 |  |  |  | (49,291 | )
|  | W | 127,784 |  |  |  | (97,419 | )
Financial liabilities: |  |  |  |  |  |  |  |
Effects on profit or loss for the period (*1): |  |  |  |  |  |  |  |
Financial liabilities designated at FVTPL |  | W | 19,782 |  |  |  | (20,339 | )
Derivative liabilities |  |  | 25,420 |  |  |  | (21,955 | )
|  | W | 45,202 |  |  |  | (42,294 | )
|  | 2025 |
|  | Favorable changes |  |  | Unfavorable changes |
Financial assets: |  |  |  |  |  |  |  |
Effects on profit or loss for the period (*1), (*2): |  |  |  |  |  |  |  |
Financial assets at FVTPL |  | W | 35,062 |  |  |  | (34,827 | )
Derivative assets |  |  | 15,446 |  |  |  | (14,723 | )
Securities at FVOCI (*2) |  |  | 60,531 |  |  |  | (42,863 | )
|  | W | 111,039 |  |  |  | (92,413 | )
Financial liabilities: |  |  |  |  |  |  |  |
Effects on profit or loss for the period (*1): |  |  |  |  |  |  |  |
Financial liabilities designated at FVTPL |  | W | 14,685 |  |  |  | (14,764 | )
Derivative liabilities |  |  | 6,889 |  |  |  | (7,538 | )
|  | W | 21,574 |  |  |  | (22,302 | )
(*1) | Fair value changes are calculated by increasing or decreasing the volatility of the underlying asset (-10~10%p) or correlations (-10~10%p), a significant unobservable input.
(*2) | Fair value changes are calculated by increasing or decreasing the growth rate and discount rate, which are a significant unobservable input, from -1% p to 1%p.
ii) Financial instruments at amortized cost
| ii-1) | The method of calculating the fair value of financial instruments measured at amortized cost is as follows:
Type |  | Measurement methods of fair value
Cash and due from banks |  | The carrying amount and the fair value for cash are identical and most of deposits are floating interest rate deposits or overnight deposits of a short-term instrument. For this reason, the book value is used as a proxy for fair value.
Loans |  | The fair value of the loans is measured by discounting the expected cash flow using a discount rate that reflects the market interest rate and the credit risk of the borrower.
Securities |  | An external professional evaluation agency is used to calculate the valuation amount using the market information. The agency calculates the fair value based on active market prices, and DCF model is used to calculate the fair value if there is no quoted price.
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 remaining liabilities and borrowings were calculated as fair value by discounting contractual cash flows at the market interest rate that reflects 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 reflects the residual risk.
Investment contract liabilities |  | The carrying amount of accumulated pension benefits of retirement pension contract holders, as defined under the Insurance Business Act and the Regulations on Supervision of Insurance Business, is used as a proxy for fair value as reliable estimates of expected future cash flows are not available.
Other financial assets and other financial liabilities |  | The carrying amount is measured at fair value for short-term and suspense accounts, such as 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 the market interest rate that reflects the residual risk.
| ii-2) | The carrying amount and the fair value of financial instruments measured at amortized cost as of December 31, 2024 and 2025 are as follows:
|  | 2024 |  |  | 2025 |
|  | Carrying amount |  |  | Fair value |  |  | Carrying amount |  |  | Fair value |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits at amortized cost (*) |  | W | 38,228,750 |  |  |  | 38,159,135 |  |  |  | 36,859,627 |  |  |  | 36,793,298 |
Loans at amortized cost |  |  | 449,295,238 |  |  |  | 452,724,752 |  |  |  | 464,773,880 |  |  |  | 466,291,620 |
Securities at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government bonds |  |  | 21,808,057 |  |  |  | 21,625,666 |  |  |  | 22,779,176 |  |  |  | 22,300,505 |
Financial institution bonds |  |  | 3,787,661 |  |  |  | 3,828,599 |  |  |  | 1,837,790 |  |  |  | 1,851,292 |
Corporation bonds |  |  | 7,720,281 |  |  |  | 7,694,086 |  |  |  | 7,327,402 |  |  |  | 7,239,123 |
|  |  | 33,315,999 |  |  |  | 33,148,351 |  |  |  | 31,944,368 |  |  |  | 31,390,920 |
Other financial assets |  |  | 23,116,960 |  |  |  | 23,469,322 |  |  |  | 43,323,340 |  |  |  | 43,674,984 |
|  | W | 543,956,947 |  |  |  | 547,501,560 |  |  |  | 576,901,215 |  |  |  | 578,150,822 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits |  | W | 160,031,759 |  |  |  | 160,031,759 |  |  |  | 172,840,773 |  |  |  | 172,840,773 |
Time deposits |  |  | 236,527,490 |  |  |  | 236,878,216 |  |  |  | 238,328,250 |  |  |  | 238,238,605 |
Certificate of deposit |  |  | 10,409,701 |  |  |  | 10,481,318 |  |  |  | 17,001,339 |  |  |  | 16,970,158 |
Issued bill deposit |  |  | 7,624,787 |  |  |  | 7,624,245 |  |  |  | 8,921,064 |  |  |  | 8,920,096 |
CMA deposits |  |  | 4,451,561 |  |  |  | 4,451,561 |  |  |  | 4,889,093 |  |  |  | 4,889,093 |
Others |  |  | 3,735,747 |  |  |  | 3,735,726 |  |  |  | 5,668,452 |  |  |  | 5,668,466 |
|  |  | 422,781,045 |  |  |  | 423,202,825 |  |  |  | 447,648,971 |  |  |  | 447,527,191 |
Borrowing debts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Call-money |  |  | 1,197,823 |  |  |  | 1,197,823 |  |  |  | 1,437,100 |  |  |  | 1,437,100 |
Bills sold |  |  | 8,872 |  |  |  | 8,831 |  |  |  | 11,887 |  |  |  | 11,846 |
Bonds sold under repurchase agreements |  |  | 11,542,956 |  |  |  | 11,542,956 |  |  |  | 14,988,698 |  |  |  | 14,988,698 |
Borrowings |  |  | 37,170,722 |  |  |  | 37,236,104 |  |  |  | 38,957,149 |  |  |  | 38,924,550 |
|  |  | 49,920,373 |  |  |  | 49,985,714 |  |  |  | 55,394,834 |  |  |  | 55,362,194 |
Debt securities issued: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings in Korean won |  |  | 75,106,885 |  |  |  | 75,610,971 |  |  |  | 74,937,216 |  |  |  | 74,697,509 |
Borrowings in foreign currency |  |  | 18,658,969 |  |  |  | 18,759,433 |  |  |  | 18,054,206 |  |  |  | 18,273,309 |
|  |  | 93,765,854 |  |  |  | 94,370,404 |  |  |  | 92,991,422 |  |  |  | 92,970,818 |
Investment contract liabilities |  |  | 1,165,022 |  |  |  | 1,165,022 |  |  |  | 1,536,393 |  |  |  | 1,536,393 |
Other financial liabilities |  |  | 39,472,400 |  |  |  | 39,429,575 |  |  |  | 57,890,911 |  |  |  | 57,832,606 |
|  | W | 607,104,694 |  |  |  | 608,153,540 |  |  |  | 655,462,531 |  |  |  | 655,229,202 |
(*) | Cash is not included.
| 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 value as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Deposits at amortized cost (*) |  | W | 537,760 |  |  |  | 37,621,375 |  |  |  | — |  |  |  | 38,159,135 |
Loans at amortized cost |  |  | — |  |  |  | 965,455 |  |  |  | 451,759,297 |  |  |  | 452,724,752 |
Securities at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government bonds |  |  | 11,292,066 |  |  |  | 10,333,600 |  |  |  | — |  |  |  | 21,625,666 |
Financial institution bonds |  |  | 331,421 |  |  |  | 3,497,178 |  |  |  | — |  |  |  | 3,828,599 |
Corporation bonds |  |  | — |  |  |  | 7,694,086 |  |  |  | — |  |  |  | 7,694,086 |
|  |  | 11,623,487 |  |  |  | 21,524,864 |  |  |  | — |  |  |  | 33,148,351 |
Other financial assets |  |  | — |  |  |  | 13,474,763 |  |  |  | 9,994,559 |  |  |  | 23,469,322 |
|  | W | 12,161,247 |  |  |  | 73,586,457 |  |  |  | 461,753,856 |  |  |  | 547,501,560 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits |  | W | — |  |  |  | 160,031,759 |  |  |  | — |  |  |  | 160,031,759 |
Time deposits |  |  | — |  |  |  | — |  |  |  | 236,878,216 |  |  |  | 236,878,216 |
Certificate of deposit |  |  | — |  |  |  | — |  |  |  | 10,481,318 |  |  |  | 10,481,318 |
Issued bill deposit |  |  | — |  |  |  | — |  |  |  | 7,624,245 |  |  |  | 7,624,245 |
CMA deposits |  |  | — |  |  |  | 4,451,561 |  |  |  | — |  |  |  | 4,451,561 |
Other |  |  | — |  |  |  | 3,694,921 |  |  |  | 40,805 |  |  |  | 3,735,726 |
|  |  | — |  |  |  | 168,178,241 |  |  |  | 255,024,584 |  |  |  | 423,202,825 |
Borrowing debts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Call-money |  |  | — |  |  |  | 1,197,823 |  |  |  | — |  |  |  | 1,197,823 |
Bills sold |  |  | — |  |  |  | — |  |  |  | 8,831 |  |  |  | 8,831 |
Bonds sold under repurchase agreements |  |  | — |  |  |  | — |  |  |  | 11,542,956 |  |  |  | 11,542,956 |
Borrowings |  |  | — |  |  |  | 19,922 |  |  |  | 37,216,182 |  |  |  | 37,236,104 |
|  |  | — |  |  |  | 1,217,745 |  |  |  | 48,767,969 |  |  |  | 49,985,714 |
Debt securities issued: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings in won |  |  | — |  |  |  | 43,460,315 |  |  |  | 32,150,656 |  |  |  | 75,610,971 |
Borrowings in foreign currency |  |  | — |  |  |  | 12,899,498 |  |  |  | 5,859,935 |  |  |  | 18,759,433 |
|  |  | — |  |  |  | 56,359,813 |  |  |  | 38,010,591 |  |  |  | 94,370,404 |
Investment contract liabilities |  |  | — |  |  |  | — |  |  |  | 1,165,022 |  |  |  | 1,165,022 |
Other financial liabilities |  |  | — |  |  |  | 10,428,026 |  |  |  | 29,001,549 |  |  |  | 39,429,575 |
|  | W | — |  |  |  | 236,183,825 |  |  |  | 371,969,715 |  |  |  | 608,153,540 |
|  | 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Deposits at amortized cost (*) |  | W | 269,329 |  |  |  | 36,523,969 |  |  |  | — |  |  |  | 36,793,298 |
Loans at amortized cost |  |  | — |  |  |  | 700,039 |  |  |  | 465,591,581 |  |  |  | 466,291,620 |
Securities at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government bonds |  |  | 10,815,330 |  |  |  | 11,485,175 |  |  |  | — |  |  |  | 22,300,505 |
Financial institution bonds |  |  | 80,367 |  |  |  | 1,770,925 |  |  |  | — |  |  |  | 1,851,292 |
Corporation bonds |  |  | — |  |  |  | 7,239,123 |  |  |  | — |  |  |  | 7,239,123 |
|  |  | 10,895,697 |  |  |  | 20,495,223 |  |  |  | — |  |  |  | 31,390,920 |
Other financial assets |  |  | — |  |  |  | 29,465,771 |  |  |  | 14,209,213 |  |  |  | 43,674,984 |
|  | W | 11,165,026 |  |  |  | 87,185,002 |  |  |  | 479,800,794 |  |  |  | 578,150,822 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits |  | W | — |  |  |  | 172,840,773 |  |  |  | — |  |  |  | 172,840,773 |
Time deposits |  |  | — |  |  |  | — |  |  |  | 238,238,605 |  |  |  | 238,238,605 |
Certificate of deposit |  |  | — |  |  |  | — |  |  |  | 16,970,158 |  |  |  | 16,970,158 |
Issued bill deposit |  |  | — |  |  |  | — |  |  |  | 8,920,096 |  |  |  | 8,920,096 |
CMA deposits |  |  | — |  |  |  | 4,889,093 |  |  |  | — |  |  |  | 4,889,093 |
Other |  |  | — |  |  |  | 5,625,593 |  |  |  | 42,873 |  |  |  | 5,668,466 |
|  |  | — |  |  |  | 183,355,459 |  |  |  | 264,171,732 |  |  |  | 447,527,191 |
Borrowing debts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Call-money |  |  | — |  |  |  | 1,437,100 |  |  |  | — |  |  |  | 1,437,100 |
Bills sold |  |  | — |  |  |  | — |  |  |  | 11,846 |  |  |  | 11,846 |
Bonds sold under repurchase agreements |  |  | — |  |  |  | — |  |  |  | 14,988,698 |  |  |  | 14,988,698 |
Borrowings |  |  | — |  |  |  | 108,795 |  |  |  | 38,815,755 |  |  |  | 38,924,550 |
|  |  | — |  |  |  | 1,545,895 |  |  |  | 53,816,299 |  |  |  | 55,362,194 |
Debt securities issued: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings in won |  |  | — |  |  |  | 40,127,224 |  |  |  | 34,570,285 |  |  |  | 74,697,509 |
Borrowings in foreign currency |  |  | — |  |  |  | 12,618,554 |  |  |  | 5,654,755 |  |  |  | 18,273,309 |
|  |  | — |  |  |  | 52,745,778 |  |  |  | 40,225,040 |  |  |  | 92,970,818 |
Investment contract liabilities |  |  | — |  |  |  | — |  |  |  | 1,536,393 |  |  |  | 1,536,393 |
Other financial liabilities |  |  | — |  |  |  | 22,535,595 |  |  |  | 35,297,011 |  |  |  | 57,832,606 |
|  | W | — |  |  |  | 260,182,727 |  |  |  | 395,046,475 |  |  |  | 655,229,202 |
(*) | Cash is not included.
| ii-4) | Valuation techniques and inputs used in the fair value measurements categorized within Level 2 and Level 3 for fair value disclosures, which are not recognized at fair value, as of December 31, 2024 and 2025, are as follows:
|  | 2024
|  | Fair value (*) |  |  | Valuation technique |  |  | Inputs
Financial instruments classified as level 2: |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Due from banks at amortized cost |  | W | 37,621,375 |  |  |  | DCF |  |  | Discount rate
Loans at amortized cost |  |  | 965,455 |  |  |  | DCF |  |  | Discount rate, Credit spread, Prepayment rate
Securities at amortized cost |  |  | 21,524,864 |  |  |  | DCF |  |  | Discount rate
Other financial assets |  |  | 13,474,763 |  |  |  | DCF |  |  | Discount rate
Financial instruments classified as level 3: |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Loans at amortized cost |  |  | 451,759,297 |  |  |  | DCF |  |  | Discount rate, Credit spread, Prepayment rate
Other financial assets |  |  | 9,994,559 |  |  |  | DCF |  |  | Discount rate
|  | W | 535,340,313 |  |  |  |  |  |  |
Financial instruments classified as level 2: |  |  |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |
Deposits |  | W | 168,178,241 |  |  |  | DCF |  |  | Discount rate
Borrowings |  |  | 1,217,745 |  |  |  | DCF |  |  | Discount rate
Debt securities issued |  |  | 56,359,813 |  |  |  | DCF |  |  | Discount rate
Other financial liabilities |  |  | 10,428,026 |  |  |  | DCF |  |  | Discount rate
Financial instruments classified as level 3: |  |  |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |
Deposits |  |  | 255,024,584 |  |  |  | DCF |  |  | Discount rate
Borrowings |  |  | 48,767,969 |  |  |  | DCF |  |  | Discount rate
Debt securities issued |  |  | 38,010,591 |  |  |  | DCF |  |  | Discount rate, Regression coefficient, Correlations
Investment contract liabilities |  |  | 1,165,022 |  |  |  | — |  |  | —
Other financial liabilities |  |  | 29,001,549 |  |  |  | DCF |  |  | Discount rate
|  | W | 608,153,540 |  |  |  |  |  |  |
|  | 2025
|  | Fair value (*) |  |  | Valuation technique |  |  | Inputs
Financial instruments classified as level 2: |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Due from banks at amortized cost |  | W | 36,523,969 |  |  |  | DCF |  |  | Discount rate
Loans at amortized cost |  |  | 700,039 |  |  |  | DCF |  |  | Discount rate, Credit spread, Prepayment rate
Securities at amortized cost |  |  | 20,495,223 |  |  |  | DCF |  |  | Discount rate
Other financial assets |  |  | 29,465,771 |  |  |  | DCF |  |  | Discount rate
Financial instruments classified as level 3: |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Loans at amortized cost |  |  | 465,591,581 |  |  |  | DCF |  |  | Discount rate, Credit spread, Prepayment rate
Other financial assets |  |  | 14,209,213 |  |  |  | DCF |  |  | Discount rate
|  | W | 566,985,796 |  |  |  |  |  |  |
Financial instruments classified as level 2: |  |  |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |
Deposits |  | W | 183,355,459 |  |  |  | DCF |  |  | Discount rate
Borrowings |  |  | 1,545,895 |  |  |  | DCF |  |  | Discount rate
Debt securities issued |  |  | 52,745,778 |  |  |  | DCF |  |  | Discount rate
Other financial liabilities |  |  | 22,535,595 |  |  |  | DCF |  |  | Discount rate
Financial instruments classified as level 3: |  |  |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |
Deposits |  |  | 264,171,732 |  |  |  | DCF |  |  | Discount rate
Borrowings |  |  | 53,816,299 |  |  |  | DCF |  |  | Discount rate
Debt securities issued |  |  | 40,225,040 |  |  |  | DCF |  |  | Discount rate, Regression coefficient, Correlations
Investment contract liabilities |  |  | 1,536,393 |  |  |  | — |  |  | —
Other financial liabilities |  |  | 35,297,011 |  |  |  | DCF |  |  | Discount rate
|  | W | 655,229,202 |  |  |  |  |  |  |
(*) | Valuation techniques and inputs are not disclosed when the carrying amount is a reasonable approximation of fair value.
iii) Changes in gains or losses on valuation at the transaction date for the years ended December 31, 2024 and 2025, are as follows:
|  | 2024 |  |  | 2025 |
Beginning balance |  | W | (81,747 | ) |  |  | (89,230) |
New transactions |  |  | (33,712 | ) |  |  | (40,646 | )
Recognized in profit for the year |  |  | 26,229 |  |  |  | 40,199 |
Ending balance |  | W | (89,230 | ) |  |  | (89,677 | )
(f) | 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 5. (e) Measurement of fair value. The carrying amounts of each category of financial assets and financial liabilities as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | Financial assets at FVTPL |  |  | Financial assets at FVOCI |  |  | Financial assets at amortized cost |  |  | Derivatives held for hedging |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks at amortized cost |  | W | — |  |  |  | — |  |  |  | 40,525,712 |  |  |  | — |  |  |  | 40,525,712 |
Due from banks at FVTPL |  |  | 35,450 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35,450 |
Securities at FVTPL |  |  | 70,231,449 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 70,231,449 |
Derivatives assets |  |  | 9,576,896 |  |  |  | — |  |  |  | — |  |  |  | 702,361 |  |  |  | 10,279,257 |
Loans at FVTPL |  |  | 1,879,946 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,879,946 |
Loans at amortized cost |  |  | — |  |  |  | — |  |  |  | 449,295,238 |  |  |  | — |  |  |  | 449,295,238 |
Securities at FVOCI |  |  | — |  |  |  | 93,805,369 |  |  |  | — |  |  |  | — |  |  |  | 93,805,369 |
Securities at amortized cost |  |  | — |  |  |  | — |  |  |  | 33,315,999 |  |  |  | — |  |  |  | 33,315,999 |
Others |  |  | — |  |  |  | — |  |  |  | 23,116,960 |  |  |  | — |  |  |  | 23,116,960 |
|  | W | 81,723,741 |  |  |  | 93,805,369 |  |  |  | 546,253,909 |  |  |  | 702,361 |  |  |  | 722,485,380 |
|  | 2024 |
|  | Financial liabilities at FVTPL |  |  | Financial liabilities designated at FVTPL |  |  | Financial liabilities at amortized cost |  |  | Derivatives held for hedging |  |  | Total |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | W | — |  |  |  | — |  |  |  | 422,781,045 |  |  |  | — |  |  |  | 422,781,045 |
Financial liabilities at FVTPL |  |  | 954,899 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 954,899 |
Financial liabilities designated at FVTPL |  |  | — |  |  |  | 8,220,475 |  |  |  | — |  |  |  | — |  |  |  | 8,220,475 |
Derivatives liabilities |  |  | 9,036,461 |  |  |  | — |  |  |  | — |  |  |  | 1,022,071 |  |  |  | 10,058,532 |
Borrowings |  |  | — |  |  |  | — |  |  |  | 49,920,373 |  |  |  | — |  |  |  | 49,920,373 |
Debt securities issued |  |  | — |  |  |  | — |  |  |  | 93,765,854 |  |  |  | — |  |  |  | 93,765,854 |
Investment contract liabilities |  |  | — |  |  |  | — |  |  |  | 1,165,022 |  |  |  | — |  |  |  | 1,165,022 |
Others |  |  | — |  |  |  | — |  |  |  | 39,472,400 |  |  |  | — |  |  |  | 39,472,400 |
|  | W | 9,991,360 |  |  |  | 8,220,475 |  |  |  | 607,104,694 |  |  |  | 1,022,071 |  |  |  | 626,338,600 |
|  | 2025 |
|  | Financial assets at FVTPL |  |  | Financial assets at FVOCI |  |  | Financial assets at amortized cost |  |  | Derivatives held for hedging |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks at amortized cost |  | W | — |  |  |  | — |  |  |  | 39,742,605 |  |  |  | — |  |  |  | 39,742,605 |
Due from banks at FVTPL |  |  | 40,862 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 40,862 |
Securities at FVTPL |  |  | 76,597,261 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 76,597,261 |
Derivatives assets |  |  | 6,536,859 |  |  |  | — |  |  |  | — |  |  |  | 617,091 |  |  |  | 7,153,950 |
Loans at FVTPL |  |  | 1,415,254 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,415,254 |
Loans at amortized cost |  |  | — |  |  |  | — |  |  |  | 464,773,880 |  |  |  | — |  |  |  | 464,773,880 |
Securities at FVOCI |  |  | — |  |  |  | 103,216,950 |  |  |  | — |  |  |  | — |  |  |  | 103,216,950 |
Securities at amortized cost |  |  | — |  |  |  | — |  |  |  | 31,944,368 |  |  |  | — |  |  |  | 31,944,368 |
Others |  |  | — |  |  |  | — |  |  |  | 43,323,340 |  |  |  | — |  |  |  | 43,323,340 |
|  | W | 84,590,236 |  |  |  | 103,216,950 |  |  |  | 579,784,193 |  |  |  | 617,091 |  |  |  | 768,208,470 |
|  | 2025 |
|  | Financial liabilities at FVTPL |  |  | Financial liabilities designated at FVTPL |  |  | Financial liabilities at amortized cost |  |  | Derivatives held for hedging |  |  | Total |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | W | — |  |  |  | — |  |  |  | 447,648,971 |  |  |  | — |  |  |  | 447,648,971 |
Financial liabilities at FVTPL |  |  | 2,312,487 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,312,487 |
Financial liabilities designated at FVTPL |  |  | — |  |  |  | 6,378,064 |  |  |  | — |  |  |  | — |  |  |  | 6,378,064 |
Derivatives liabilities |  |  | 5,872,403 |  |  |  | — |  |  |  | — |  |  |  | 1,148,443 |  |  |  | 7,020,846 |
Borrowings |  |  | — |  |  |  | — |  |  |  | 55,394,834 |  |  |  | — |  |  |  | 55,394,834 |
Debt securities issued |  |  | — |  |  |  | — |  |  |  | 92,991,422 |  |  |  | — |  |  |  | 92,991,422 |
Investment contract liabilities |  |  | — |  |  |  | — |  |  |  | 1,536,393 |  |  |  | — |  |  |  | 1,536,393 |
Others |  |  | — |  |  |  | — |  |  |  | 57,890,911 |  |  |  | — |  |  |  | 57,890,911 |
|  | W | 8,184,890 |  |  |  | 6,378,064 |  |  |  | 655,462,531 |  |  |  | 1,148,443 |  |  |  | 671,173,928 |
| (g) | Transfer of financial instruments
i) Transfers that do not qualify for derecognition i-1) Repurchase agreements (Repo) As of December 31, 2024 and 2025, the details of financial instruments that do not qualify for derecognition, as the Group sold securities with an obligation to repurchase them at a fixed price under repurchase agreements, are as follows:
|  | 2024 |  |  | 2025 |
Transferred asset: |  |  |  |  |  |  |  |
Securities at FVTPL |  | W | 10,141,306 |  |  |  | 7,687,437 |
Securities at FVOCI |  |  | 645,888 |  |  |  | 4,615,372 |
Securities at amortized cost |  |  | 199,261 |  |  |  | 87,569 |
Loans at amortized cost |  |  | 20,600 |  |  |  | 10,700 |
|  | W | 11,007,055 |  |  |  | 12,401,078 |
Related liabilities: |  |  |  |  |  |  |  |
Bonds sold under repurchase agreements (*) |  | W | 11,542,956 |  |  |  | 14,988,698 |
| (*) | As of December 31, 2024 and 2025, borrowed securities pledged as collateral in connection with repurchase agreements amounted to W 1,502,252 million and W 3,643,514 million, respectively.
i-2) Securities loaned If the securities owned by the Group are loaned, the ownership of the securities is transferred, but is required to be returned at the end of the loan period. Therefore, the Group continues to recognize the entire securities loaned as it holds most of the risks and compensation of the securities. Securities loaned as of December 31, 2024 and 2025 are as follows:
|  | 2024 |  |  | 2025 |  |  | Borrowers
Government bonds |  | W | 13,611,571 |  |  |  | 14,992,877 |  |  | Korea Securities Finance Corp., Korea Securities Depository, etc.
Financial institutions bonds |  |  | 607,175 |  |  |  | 408,766 |  |  | Korea Securities Finance Corp., Korea Securities Depository, etc.
Corporation bonds |  |  | 465,211 |  |  |  | 519,713 |  |  | BNP Paribas Securities Corp.
Equity securities |  |  | 15,826 |  |  |  | 40,277 |  |  | Korea Securities Depository, etc.
|  | W 14,699,783 |  |  | 15,961,633 |  |  |
i-3) Securitization of financial assets The Group uses the securitization of financial assets as a means of financing and to transfer risk. Generally, these securitization transactions result in the transfer of contractual cash flows to the debt securities holders issued from the financial asset portfolio. The Group recognizes debt securities issued without derecognition of assets under individual agreements, partially recognizes assets to the extent of the Group’s level of involvement in assets, or recognizes rights and obligations arising from the derecognition and transfer of assets as separate assets and liabilities. The Group derecognizes the entire asset only if it transfers contractual rights to the cash flows of financial assets or if it holds contractual rights but bears contractual obligations to pay cash flows to the other party without significant delays or reinvestment and transfers most of the risks and benefits of ownership (e.g., credit risk, interest rate risk, prepayment risk, etc.). As of December 31, 2024 and 2025, the carrying amount of financial assets related to securitization transactions that have neither been transferred nor derecognized are W 11,369,662 million and W 10,815,348 million, respectively; the carrying amounts of related liabilities are W 7,144,588 million and W 6,586,888 million, respectively. ii) Financial instruments qualified for derecognition and continued involvement There are no financial instruments which qualify for derecognition and in which the Group has continuing involvements as of December 31, 2024 and 2025.
| (h) | Offsetting financial assets and financial liabilities
Financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31, 2024 and 2025 are as follows:
|  | 2024 |
|  | Gross amounts of recognized financial assets/ liabilities |  |  | Gross amounts of recognized financial assets/ liabilities set off in the statement of financial position |  |  | Net amounts of financial assets/ liabilities presented in the statement of financial position |  |  | Related amounts not set off in the statement of financial position |  |  | Net amount |
| Financial instruments |  |  | Cash collateral received |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives (*1) |  | W | 10,560,214 |  |  |  | — |  |  |  | 10,560,214 |  |  |  | 13,744,859 |  |  |  | 522,860 |  |  |  | 5,592,302 |
Other financial instruments (*1) |  |  | 9,299,807 |  |  |  | — |  |  |  | 9,299,807 |
Securities repurchased under repurchase agreements and bonds purchased under repurchase agreements (*2) |  |  | 17,514,396 |  |  |  | — |  |  |  | 17,514,396 |  |  |  | 15,238,643 |  |  |  | — |  |  |  | 2,275,753 |
Securities loaned (*2) |  |  | 6,456,316 |  |  |  | — |  |  |  | 6,456,316 |  |  |  | 6,393,972 |  |  |  | — |  |  |  | 62,344 |
Domestic exchange settlement debit (*3) |  |  | 39,697,639 |  |  |  | 34,787,860 |  |  |  | 4,909,779 |  |  |  | — |  |  |  | — |  |  |  | 4,909,779 |
Receivables from disposal of securities (*4) |  |  | 4,879,073 |  |  |  | 2,199,610 |  |  |  | 2,679,463 |  |  |  | 1,925,615 |  |  |  | — |  |  |  | 753,848 |
|  | W | 88,407,445 |  |  |  | 36,987,470 |  |  |  | 51,419,975 |  |  |  | 37,303,089 |  |  |  | 522,860 |  |  |  | 13,594,026 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives (*1), (*5) |  | W | 18,245,590 |  |  |  | — |  |  |  | 18,245,590 |  |  |  | 14,692,837 |  |  |  | 1,000 |  |  |  | 11,767,096 |
Other financial instruments (*1) |  |  | 8,215,343 |  |  |  | — |  |  |  | 8,215,343 |
Bonds sold under repurchase agreements (*2) |  |  | 11,542,956 |  |  |  | — |  |  |  | 11,542,956 |  |  |  | 10,667,259 |  |  |  | — |  |  |  | 875,697 |
Securities borrowed (*2) |  |  | 357,842 |  |  |  | — |  |  |  | 357,842 |  |  |  | 357,842 |  |  |  | — |  |  |  | — |
Domestic exchange settlement pending (*3) |  |  | 36,593,966 |  |  |  | 34,787,860 |  |  |  | 1,806,106 |  |  |  | 1,735,983 |  |  |  | — |  |  |  | 70,123 |
Payable from purchase of securities (*4) |  |  | 4,868,572 |  |  |  | 2,199,610 |  |  |  | 2,668,962 |  |  |  | 1,926,038 |  |  |  | — |  |  |  | 742,924 |
|  | W | 79,824,269 |  |  |  | 36,987,470 |  |  |  | 42,836,799 |  |  |  | 29,379,959 |  |  |  | 1,000 |  |  |  | 13,455,840 |
(*1) | The Group has certain derivative transactions subject to the ISDA (International Swaps and Derivatives Association) agreement. According to the ISDA agreement, when credit events (e.g. default) of counterparties occur, all derivative agreements are terminated and set off. At the time of termination, the parties to the transaction will offset the amount of payment or payment to each other, and one party will pay the other party a single amount will be paid to the other party.
(*2) | Resale and repurchase agreements and securities borrowing and lending agreements are also similar to ISDA agreements with respect to legally enforceable netting arrangements.
| For securities lending transactions executed through intermediaries, such as the Korea Securities Depository and the Korea Securities Finance Corporation (i.e., competitive transactions), collateral is pledged in the name of the intermediary. Accordingly, direct netting agreements and the enforceability of collateral between the transaction counterparties do not apply.
| In this regard, the amount of securities lent for which a pledge has been established in the name of the intermediary amounted to W 5,186,364 million as of December 31, 2024.
(*3) | The Group has legally enforceable right to set off and settles financial assets and liabilities on a net basis under normal business terms. Therefore, domestic exchanges settlement receivables (payables) are recorded on a net basis in the consolidated statements of financial position.
(*4) | It is an account that deals with bonds and liabilities based on the settlement of listed stocks traded in the market. The Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis. Therefore, the net amount is presented in the consolidated statement of financial position. The offset amount of related bonds and liabilities based on the settlement of over-the-counter derivatives in-house payment by Central Clearing System is included.
(*5) | As of December 31, 2024, the total amount of financial liabilities includes W 7,966,828 million of ELS (equity-linked securities) products and of DLS (derivative linked securities) products. In the course of this transaction, the Group has provided collateral for some transactions. The financial instruments provided as collateral of W 586,768 million are included in the related instruments not offset in the statement of financial position.
|  | 2025 |
|  | Gross amounts of recognized financial assets/ liabilities |  |  | Gross amounts of recognized financial assets/ liabilities set off in the statement of financial position |  |  | Net amounts of financial assets/ liabilities presented in the statement of financial position |  |  | Related amounts not set off in the statement of financial position |  |  | Net amount |
| Financial instruments |  |  | Cash collateral received |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives (*1) |  | W | 7,215,469 |  |  |  | — |  |  |  | 7,215,469 |  |  |  | 22,362,966 |  |  |  | 425,193 |  |  |  | 2,546,676 |
Other financial instruments (*1) |  |  | 18,119,366 |  |  |  | — |  |  |  | 18,119,366 |
Securities repurchased under repurchase agreements and bonds purchased under repurchase agreements (*2) |  |  | 14,417,309 |  |  |  | — |  |  |  | 14,417,309 |  |  |  | 14,220,871 |  |  |  | — |  |  |  | 196,438 |
Securities loaned (*2) |  |  | 1,274,760 |  |  |  | — |  |  |  | 1,274,760 |  |  |  | 1,101,854 |  |  |  | — |  |  |  | 172,906 |
Domestic exchange settlement debit (*3) |  |  | 49,477,452 |  |  |  | 38,218,494 |  |  |  | 11,258,958 |  |  |  | — |  |  |  | — |  |  |  | 11,258,958 |
Receivables from disposal of securities (*4) |  |  | 14,771,529 |  |  |  | 7,247,688 |  |  |  | 7,523,841 |  |  |  | 6,110,092 |  |  |  | — |  |  |  | 1,413,749 |
|  | W | 105,275,885 |  |  |  | 45,466,182 |  |  |  | 59,809,703 |  |  |  | 43,795,783 |  |  |  | 425,193 |  |  |  | 15,588,727 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives (*1), (*5) |  | W | 13,236,855 |  |  |  | — |  |  |  | 13,236,855 |  |  |  | 22,987,953 |  |  |  | 1,000 |  |  |  | 8,021,031 |
Other financial instruments (*1) |  |  | 17,773,129 |  |  |  | — |  |  |  | 17,773,129 |
Bonds sold under repurchase agreements (*2) |  |  | 14,988,698 |  |  |  | — |  |  |  | 14,988,698 |  |  |  | 11,768,314 |  |  |  | — |  |  |  | 3,220,384 |
Securities borrowed (*2) |  |  | 790,416 |  |  |  | — |  |  |  | 790,416 |  |  |  | 790,416 |  |  |  | — |  |  |  | — |
Domestic exchange settlement pending (*3) |  |  | 42,413,447 |  |  |  | 38,218,494 |  |  |  | 4,194,953 |  |  |  | 4,097,860 |  |  |  | — |  |  |  | 97,093 |
Payable from purchase of securities (*4) |  |  | 14,808,991 |  |  |  | 7,247,688 |  |  |  | 7,561,303 |  |  |  | 6,110,113 |  |  |  | — |  |  |  | 1,451,190 |
|  | W | 104,011,536 |  |  |  | 45,466,182 |  |  |  | 58,545,354 |  |  |  | 45,754,656 |  |  |  | 1,000 |  |  |  | 12,789,698 |
(*1) | The Group has certain derivative transactions subject to the ISDA (International Swaps and Derivatives Association) agreement. According to the ISDA agreement, when credit events (e.g. default) of counterparties occur, all derivative agreements are terminated and set off. At the time of termination, the parties to the transaction will offset the amount of payment or payment to each other, and one party will pay the other party a single amount will be paid to the other party.
(*2) | Resale and repurchase agreements and securities borrowing and lending agreements are also similar to ISDA agreements with respect to legally enforceable netting arrangements.
(*3) | The Group has legally enforceable right to set off and settles financial assets and liabilities on a net basis under normal business terms. Therefore, domestic exchanges settlement receivables (payables) are recorded on a net basis in the consolidated statements of financial position.
(*4) | It is an account that deals with bonds and liabilities based on the settlement of listed stocks traded in the market. The Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis. Therefore, the net amount is presented in the consolidated statement of financial position. The offset amount of related bonds and liabilities based on the settlement of over-the-counter derivatives in-house payment by Central Clearing System is included.
(*5) | As of December 31, 2025, the total amount of financial liabilities includes W 6,090,215 million of ELS (equity-linked securities) products and of DLS (derivative linked securities) products. In the course of this transaction, the Group has provided collateral for some transactions. The financial instruments provided as collateral of W 156,351 million are included in the related instruments not offset in the statement of financial position.
| (i) | Capital risk management
The Group is required, in accordance with the Financial Holding Companies Act, to maintain a total capital ratio based on consolidated risk-weighted assets of at least 8 % (hereinafter referred to as the “Basel III capital ratio”). In addition, following the implementation of enhanced Basel III capital regulations from 2016, the required BIS capital ratio to be maintained in order to strengthen loss-absorbing capacity has been increased to a maximum of 14 %. This requirement reflects the minimum regulatory ratio plus the additional accumulation of a capital conservation buffer ( 2.5 %p), a domestic systemically important bank (“D-SIB”) buffer ( 1.0 %p), and a countercyclical capital buffer (2.5%p). The countercyclical capital buffer may be imposed up to a maximum of 2.5%p during periods of excessive credit growth. In Korea, the countercyclical capital buffer requirement was increased from 0%p to 1%p effective May 1, 2024. Accordingly, as of December 31, 2025, the BIS capital ratio additionally required to enhance loss-absorbing capacity is 12.5%, which reflects the application of the capital conservation buffer (2.5%p), the D-SIB buffer (1.0%p), and the countercyclical capital buffer (1.0%p). The Basel III capital ratio refers to an internationally harmonized standard for capital adequacy regulation established under the “International Convergence of Capital Measurement and Capital Standards” issued by the Basel Committee on Banking Supervision of the Bank for International Settlements (“BIS”). The ratio is calculated as: (Common Equity Tier 1 capital (net of regulatory deductions) + Additional Tier 1 capital + Tier 2 capital) ÷ Risk-weighted assets Common Equity Tier 1 capital is the first line of capital available to absorb losses of a financial holding company and ranks last in priority upon liquidation. It is not redeemable prior to liquidation and consists of capital stock, capital surplus, retained earnings, and other components. Additional Tier 1 capital consists of perpetual capital instruments that meet certain regulatory requirements. Tier 2 capital consists of capital instruments that are available to absorb losses upon liquidation, subject to specific regulatory criteria. Regulatory deduction items are assets or capital items held by the Group that do not contribute to loss-absorbing capacity and, unless otherwise specified, are deducted from Common Equity Tier 1 capital. The Basel III capital ratios of the Group as of December 31, 2024 and 2025 are as follows:
|  | 2024 |  |  | 2025 |
Capital: |  |  |  |  |  |  |  |
Common Equity Tier 1 capital |  | W | 44,562,500 |  |  |  | 47,115,338 |
Additional tier 1 capital |  |  | 5,824,082 |  |  |  | 5,890,967 |
Total Tier I capital |  |  | 50,386,582 |  |  |  | 53,006,305 |
Tier II capital |  |  | 3,516,787 |  |  |  | 3,254,292 |
Total capital (A) |  | W | 53,903,369 |  |  |  | 56,260,597 |
Total risk-weighted assets (B) |  | W | 342,375,264 |  |  |  | 352,907,638 |
Total capital ratio (A/B) |  |  | 15.74 | % |  |  | 15.94 | %
Tier 1 capital ratio |  |  | 14.72 | % |  |  | 15.02 | %
Common Equity Tier 1 capital ratio |  |  | 13.02 | % |  |  | 13.35 | %
(*) | As of December 31, 2025, the Group maintains an appropriate capital adequacy ratio in accordance with the BIS capital regulation system and the capital ratios as of that date are provisional.

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