Shinhan Financial Group (055550) investor relations material

Executive summary

• Launched Shinhan Value Up 3.0 Plus, shifting from absolute shareholder return targets to a sustainable value enhancement framework aligning growth and returns, with a focus on capital efficiency and predictable policies.

• 1Q26 net income rose 9.0% YoY to KRW 1,622.6 billion, driven by strong non-interest income growth and improved profitability metrics.

• ROE reached 11.9% and ROTCE 13.4%, both up 0.5 percentage points year-on-year, reflecting enhanced core earnings.

• CET1 ratio remained stable at 13.19%, despite a 16bp decline from end-2025, supported by solid capital generation.

• Shareholder return policy emphasized sustainable and projectable returns, with a Q1 2026 dividend of KRW 741 per share and a KRW 700 billion share buyback program, with immediate retirement of repurchased shares.

Financial highlights

• Net interest income increased 5.9% year-on-year, while non-interest income surged 26.5% year-on-year, led by fee and commission growth.

• Cost-to-income ratio improved to 36.7% (down 0.6% YoY), and credit cost ratio rose 5bp YoY to 46bp.

• Group total assets grew 3.9% YTD to KRW 816.7tn, with loans up 2.9% and deposits up 3.2%.

• NPL ratio increased to 0.81% (up 9bp YoY), while NPL coverage ratio declined to 110%-113.6% due to increased substandard exposures.

• Operating profit before expense rose 11% year-on-year; NIM improved by 2 basis points quarter-on-quarter to 1.93% for 1Q26.

Outlook and guidance

• Targeting ROE of 10%-12% through 2028, with phased strengthening of non-banking competitiveness and capital efficiency.

• DPS expected to grow by more than 10% annually over the next three years; shareholder return ratio to remain above 50%.

• CET1 ratio to be maintained at 13%+, with excess capital returned to shareholders in principle.

• Full-year credit cost ratio targeted in the mid-40 basis points range.

• Board-led annual gap analysis to provide 3-year guidance, with flexibility to adjust based on market and regulatory conditions.