SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of August 2004
SHINHAN FINANCIAL GROUP CO., LTD.
(Translation of registrant's name into English)
120, 2-Ga, Taepyung-Ro, Jung-Gu, Seoul 100-102, Korea
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F _____
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): _______
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): _______
Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes____ No X
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_______.
SUMMARY OF 2004 1ST HALF BUSINESS REPORT
On August 13, 2004, Shinhan Financial Group ("SFG") filed the 2004 1st half
business report with the Financial Supervisory Service of the Republic of Korea
("Korea") pursuant to the Securities and Exchange Act of Korea (the "Business
Report"). This is the summary of the Business Report translated into English.
Non-material or previously disclosed information are omitted or abridged.
The financial information in this report has been prepared in accordance with
accounting principles generally accepted in Korea.
TABLE OF CONTENTS
1. Introduction of the Group
2. Business
3. Independent Accountant
4. Performance of Affiliated Companies
5. Market Price Information of Our Equity Securities
6. Directors, Executive Officers and Employees
Exhibit 1. Independent Accountant's Review Report (Non Consolidated Financial
Statements)
2
1. INTRODUCTION OF THE GROUP
COMPANY HISTORY
- May 2000 Establishment of the Shinhan Financial Group announced.
- Oct. 2000 Secretariat for the incorporation of SFG established
- Jun. 2001 BOD of Shinhan Bank, Shinhan Securities, Shinhan Capital and
Shinhan ITM approved a transition to the holding company
structure / Signed a strategic alliance MOU with BNP Paribas
- Jul. 2001 Preliminary license granted
- Aug. 2001 Shareholders' Meeting of Shinhan Bank, Shinhan Securities,
Shinhan Capital and Shinhan ITM approved stock transfer
- Aug. 2001 Official license granted
- Sep. 2001 Registered SFG incorporation (Capital stock: KRW 1.4617
trillion) / e-Shinhan and Shinhan Macquarie Financial Advisory
co. became subsidiaries of the SFG
- Dec. 2001 Signed the strategic alliance agreement with BNP Paribas
- Apr. 2002 Announced the acquisition of the Good Morning Securities /
Established an Integration Committee to coordinate the merger
between Shinhan Securities and Good Morning Securities
- May 2002 Jeju Bank included as SFG subsidiary
- Jun. 2002 Credit card division of Shinhan Bank was spun off and
established as a wholly-owned subsidiary, Shinhan Card.
- Jul. 2002 Incorporated Shinhan Credit Information Co.,Ltd
- Aug. 2002 Good Morning-Shinhan Securities launched and subsequently
included as SFG subsidiary
- Aug. 2002 Signed a strategic alliance agreement with BNP Paribas for
investment trust business
- Aug. 2002 Shinhan Credit Information included as SFG subsidiary
- Sep. 2002 Sold 50%-1 shares of Shinhan ITMC to BNP Paribas Asset
Management Group / Shinhan-BNP Paribas ITMC launched
- Oct. 2002 SH&C Life Insurance, a bancassurance joint venture
incorporated and included as the Group subsidiary
- Jun. 2003 Sold 49% equity share of Shinhan Credit Information to Lone
Star Fund
- Aug. 2003 Acquired 80.04% equity ownership of Chohung Bank(CHB) from the
Korea Deposit Insurance Corporation
3
- Sep. 2003 SFG's inclusion of CHB as its subsidiary officially granted
- Sep. 2003 Registered with the U.S. Securities Exchange Commission and
listed on the New York Stock Exchange
- Nov. 2003 Acquired a bank holding company license in the US market from
the Federal Reserve Board
- Dec. 2003 Additional Capital injection into CHB (KRW 200billion)
- Mar. 2004 Shinhan Bank sold out 29,873,359 common shares (Common Shares)
or 10.15% of Shinhan Financial Group through the block trading
before market opens (The Common Shares used to be recognized
as treasury shares in our consolidated financial statements)
- Apr. 2004 Decided to acquire the minority common shares (135,548,285 or
18.85% of total common shares) of CHB by the end of June 2004
through the small-scale share swap
* Exchange ratio: 1 SFG common share = 0.1354 CHB common
share
- Apr. 2004 Provided a tender offer for the 20% or 27,109,657 shares of
the Chohung minority shares before the share swap
* Tender offer price : KRW 3,500 per share
* Tender offer period: April 26, 2004 ~ May 17, 2004
- Apr. 2004 Terminated the joint venture in the credit information
business and bought back Lone Star's 49% ownership in Shinhan
Credit Information.
- Jun. 2004 Small-scale share swap with CHB completed
- July 2004 Delisting of CHB from the Korea Stock Exchange
PRINCIPAL SUBSIDIARIES UNDER KOREAN LAW AS OF JUNE 30, 2004
DIRECT SUBSIDIARIES
Subsidiaries Ownerships by SFG
------------ -----------------
Shinhan Bank 100.0%
Chohung Bank 100.0%
Good Morning Shinhan Securities 1) 59.02%2)
Shinhan Card 100.0%
Shinhan Capital 100.0%
Shinhan BNP Paribas ITMC 50.0%
Jeju Bank 1) 62.4%
SH&C life Insurance 50.0%
e-Shinhan 73.7%
Shinhan Macquarie 51.0%
Shinhan Credit Information 3) 100.0%
-----
4
1. Good Morning Shinhan Securities, and Jeju Bank are listed on the
Korea Stock Exchange.
2. Represents our ownership percentage of voting equity securities of
Good Morning Shinhan Securities. Currently, both common and
preferred stock of Good Morning Shinhan Securities have voting
rights. We own 60.5% of common stock of Good Morning Shinhan
Securities.
3. On April 29, 2004 we decided to buy back Lone Star's 49 % ownership
in Shinhan Credit Information. With this transaction our equity
ownership of Shinhan Credit Information increased to 100%.
INDIRECT SUBSIDIARIES HELD THROUGH DIRECT SUBSIDIARIES
Ownerships by
Direct Subsidiaries Indirect Subsidiaries the Parent
------------------- --------------------- -------------
Shinhan Bank Shinhan Data System 100.0%
Shinhan Finance 100.0%
Chohung Bank Chohung ITM 79.8%
Chohung Finance 100.0%
CHB America Bank 100.0%
Chohung Bank GmbH 100.0%
Chohung Vina Bank 50.0%
CHB Valuemeet 2001 year 1st Securitization 50.0%
CHB Valuemeet 2001 year 2nd Securitization 50.0%
CHB Valuemeet 2002 year 1st Securitization 50.0%
Good Morning Good Morning Shinhan Securities Europe 100.0%
Shinhan Securities Good Morning Shinhan Securities USA 100.0%
-----
CAPITALIZATION
The table below sets forth the changes to the number of issued and
outstanding shares of the Group since its incorporation on September 1, 2001.
Number of Subscription Total amount
Date of shares Par Value price per of capital
issuance Purpose of issuance Types of shares issued (KRW) share stock (KRW)
------------ ------------------- ---------------- ----------- --------- ------------ -----------------
2001.Sept.01 Incorporation Common Shares 292,344,192 5,000 11,761 1,461,720,960,000
2002.Jun. 06 Share Exchange (1) Common Shares 15,891 5,000 - 1,461,800,415,000
2002.Oct.01 Share Exchange (1) Common Shares 786 5,000 - 1,461,804,345,000
2002.Dec.31 Share Exchange (1) Common Shares 256 5,000 - 1,461,805,625,000
2003.Aug.19 Cash Subscription (2) Preferred Shares 6,000,000 5,000 150,000 1,491,805,625,000
2003.Aug.19 Share Exchange (3) Preferred Shares 46,583,961 5,000 18,086 1,724,725,430,000
2003.Aug.19 Share Exchange (4) Preferred Shares 44,720,603 5,000 18,086 1,948,328,445,000
2003.Sept.26 Cash Subscription (5) Common Shares 1,864,065 5,000 14,832 1,957,648,770,000
2003.Oct.01 Share Exchange (1) Common Shares 11,626 5,000 - 1,957,706,900,000
2003. Dec.31 Share Exchange (1) Common Shares 164,484 5,000 - 1,958,529,320,000
2004. Jun.22 Share Exchange (6) Common Shares 14,682,590 5,000 - 2,031,942,270,000
----------- ----- ------- -----------------
5
1. Issued in exchange for Shinhan Bank's common shares which were
issued as a result of an exercise of warrants by the holders of
bonds with warrants.
2. Redeemable preferred shares issued to a third party to raise cash
for the Group's purchase of Chohung Bank shares which were held by
Korean Deposit Insurance Corporation.
3. Redeemable preferred shares issued as consideration for the Group's
purchase of Chohung Bank shares which were held by Korea Deposit
Insurance Corporation.
4. Redeemable convertible preferred shares issued as consideration for
the Group's purchase of Chohung Bank shares which were held by Korea
Deposit Insurance Corporation.
5. BNP Paribas Luxembourg subscribed for 1,864,065 shares of the
Group's common stock to maintain its 4% equity ownership on a fully
diluted basis taking into account the full conversion of the
44,720,603 shares of redeemable convertible preferred shares issued
by the Group to Korea Deposit Insurance Corporation.
6. On July 22, 2004, we issued 14,682,590 of common shares in exchange
for Chohung Bank's 108,438,628 common shares. With the small-scale
share swap, our equity ownership in Chohung Bank increased from
84.95% to 100.00%.
NUMBER OF SHARES BY TYPE
The table below sets forth the number of the issued and outstanding shares of
the Group as of June 30, 2004.
Total amount of
Types of Shares Number of Shares par value
------------------------------------- ---------------- -----------------
Common Shares 309,083,890 1,545,419,450,000
Redeemable Preferred Shares 52,583,961 262,919,805,000
Redeemable Convertible Preferred Shares 44,720,603 223,603,015,000
--------------------------------------- ----------- -----------------
Total 406,388,454 2,031,942,270,000
--------------------------------------- ----------- -----------------
TREASURY STOCK
On June 22, 2004, during the small-scale share swap with Chohung Bank, 18,979
numbers of fractional shares were issued because the share swap ratio was
0.1354, which means that one common share of Chohung Bank was exchanged into
0.1354 common share of SFG. On July 7, 2004, we acquired all of the 18,979
fractional shares as treasury stock and paid KRW 17,000 per share to each
relevant shareholders of Chohung Bank. The share price was determined by the
closing price of July 2, 2004 when our newly issued shares were listed on the
Korea Stock
6
Exchange. We plan to reissue the treasury stock in the future with appropriate
timing and schedule considered.
STOCK OPTIONS
Number of Number of Number of Exercise
Name of the Granted Exercised Exercisable Price
Grant date Guarantee Option (1) option option (KRW) Positions held at
---------- --------------- ---------- --------- ----------- -------- -----------------------
22-May-02 Ra, Eung-Chan 94,416 - 94,416 18,910 Shinhan Financial Group
22-May-02 Choi, Young Hwi 47,208 - 47,208 18,910 Shinhan Financial Group
22-May-02 Shin, Sang Hoon 28,325 - 28,325 18,910 Shinhan Financial Group
22-May-02 Choi, Bhang-Gil 18,883 - 18,883 18,910 Shinhan Financial Group
22-May-02 Lee, In-Ho 32,162 - 32,162 18,910 Shinhan Bank
22-May-02 Moon, Hong Soon 17,426 - 17,426 18,910 Shinhan Bank
22-May-02 Lee, Jae Woo 18,873 - 18,873 18,910 Shinhan Bank
22-May-02 Huh, Joong Ok 15,564 - 15,564 18,910 Shinhan Bank
22-May-02 Kim, Sahng-Dae 18,873 - 18,873 18,910 Shinhan Bank
22-May-02 Youn, Gwang Lim 18,873 - 18,873 18,910 Shinhan Bank
22-May-02 Oh, Young-Kook 8,041 - 8,041 18,910 Shinhan Bank
22-May-02 Nam, Kee Do 8,041 - 8,041 18,910 Shinhan Bank
22-May-02 Jang, Myoung-Kee 14,918 - 14,918 18,910 Shinhan Bank
22-May-02 Shin, Christoper 11,673 - 11,673 18,910 Shinhan Bank
22-May-02 Lee, Dae Woon 11,673 - 11,673 18,910 Shinhan Bank
22-May-02 Lee, Dong Girl 26,953 - 26,953 18,910 Shinhan Capital
22-May-02 Jung, Yun Kang 7,409 - 7,409 18,910 Shinhan Capital
22-May-02 Son, Woong Man 3,828 - 3,828 18,910 Shinhan Capital
22-May-02 Hwang, Jung Hun 3,828 - 3,828 18,910 Shinhan Capital
Song, Byung Kuk
22-May-02 and other 6 officers 13,325 - 13,325 18,910 Shinhan Financial Group
22-May-02 Kim, Duk Jung and 449,929 - 449,929 18,910 -
other 329 officers
15-May-03 Ra, Eung-Chan 100,000 - 100,000 11,800 Shinhan Financial Group
15-May-03 Choi, Young Hwi 90,000 - 90,000 11,800 Shinhan Financial Group
15-May-03 Choi, Bhang-Gil 20,000 - 20,000 11,800 Shinhan Financial Group
15-May-03 Han, Min Ky 20,000 - 20,000 11,800 Shinhan Financial Group
15-May-03 Song, Youn Soo 20,000 - 20,000 11,800 Shinhan Financial Group
15-May-03 Shin, Sang Hoon 80,000 - 80,000 11,800 Shinhan Bank
15-May-03 Moon, Hong Soon 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Lee, Jae Woo 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Huh, Joong Ok 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Kim, Sahng-Dae 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Youn, Gwang Lim 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Cho, Woo Seop 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Kim, Hee Soo 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Han, Do Heui 20,000 - 20,000 11,800 Shinhan Bank
15-May-03 Shin, Christoper 15,000 - 15,000 11,800 Shinhan Bank
15-May-03 Lee, Dae Woon 15,000 - 15,000 11,800 Shinhan Bank
15-May-03 Hong Sung Kyun 30,000 - 30,000 11,800 Shinhan Card
15-May-03 Lee Tae Kyu 10,000 - 10,000 11,800 Shinhan Card
15-May-03 Kim Seong Won 10,000 - 10,000 11,800 Shinhan Card
15-May-03 Shim, Woo Yeob 10,000 - 10,000 11,800 Shinhan Card
15-May-03 Lee, Dong Girl 30,000 - 30,000 11,800 Shinhan Capital
--------- -------------- ------ - ------ ------ ---------------
7
Number of Number of Number of Exercise
Name of the Granted Exercised Exercisable Price
Grant date Guarantee Option (1) option option (KRW) Positions held at
---------- --------------- ---------- --------- ----------- -------- -----------------------
15-May-03 Jung, Yun Kang 10,000 - 10,000 11,800 Shinhan Capital
15-May-03 Jang, Myoung-Kee 10,000 - 10,000 11,800 Shinhan Capital
15-May-03 Shim, Beom Seong 10,000 - 10,000 11,800 Shinhan Credit Information
15-May-03 Song, Byung Kuk and 14,600 - 14,600 11,800 Shinhan Financial Group
other 7 officers
15-May-03 Seo, Jin Won and 501,700 - 501,700 11,800 -
other 339 officers
25-Mar-04 Ra, Eung Chan 100,000 - 100,000 21,595 Shinhan Financial Group
25-Mar-04 Choi, Young Hwi 90,000 - 90,000 21,595 Shinhan Financial Group
25-Mar-04 Choi, Bhang Gil 30,000 - 30,000 21,595 Shinhan Financial Group
25-Mar-04 Hong, Chil Sun 20,000 - 20,000 21,595 Shinhan Financial Group
25-Mar-04 Kim, Hee Soo 20,000 - 20,000 21,595 Shinhan Financial Group
25-Mar-04 Cho, Byung Jae 20,000 - 20,000 21,595 Shinhan Financial Group
25-Mar-04 Lee, Baek Soon 20,000 - 20,000 21,595 Shinhan Financial Group
25-Mar-04 Shin, Sang Hoon 80,000 - 80,000 21,595 Shinhan Bank
25-Mar-04 Cho, Jae Ho 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Lee, Jae Woo 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Youn, Gwang Lim 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Cho, Woo Sup 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Han, Min Ky 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Song, Youn Soo 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Han, Do Heui 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Suh, Jin Won 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Yang, Shin Keun 20,000 - 20,000 21,595 Shinhan Bank
25-Mar-04 Oh, Sang Young 15,000 - 15,000 21,595 Shinhan Bank
25-Mar-04 Hong, Sung Kyun 30,000 - 30,000 21,595 Shinhan Card
25-Mar-04 Lee, Tae Gyu 10,000 - 10,000 21,595 Shinhan Card
25-Mar-04 Kim, Seong Won 10,000 - 10,000 21,595 Shinhan Card
25-Mar-04 Shim, Woo Yeop 10,000 - 10,000 21,595 Shinhan Card
25-Mar-04 Kim, Moon Han 10,000 - 10,000 21,595 Shinhan Card
25-Mar-04 Lee, Dong Girl 30,000 - 30,000 21,595 Shinhan Capital
25-Mar-04 Kim, Sahng Dae 10,000 - 10,000 21,595 Shinhan Capital
25-Mar-04 Oh, Seung Keun 10,000 - 10,000 21,595 Shinhan Capital
25-Mar-04 Shim, Beom Seong 10,000 - 10,000 21,595 Shinhan Credit Information
25-Mar-04 Song, Byung Kuk and
other 7 officers 13,900 - 13,900 21,595 Shinhan Financial Group
25-Mar-04 Kam, Hong Gon and 582,700 - 582,700 21,595 -
other 400 officer
--------- ----------------- --------- --- --------- ------ -------------------------
TOTAL 417 persons 3,328,121 - 3,328,121 - -
--------- ----------------- --------- --- --------- ------ -------------------------
1) Number of options granted on May 22, 2002 was adjusted to the current number
on May 21 2004 as terms of the exercise condition were finalized. For more
detailed information, please refer to our Form 6-Ks filed on May 24, 2004 and
June 4, 2004.
* The stock options granted in 2002 and 2003 are exercisable during the 4 year
period after the second anniversary from the grant date. The stock options
granted in 2004 are exercisable during 3 year period after the second
anniversary from the grant date.
8
EMPLOYEE STOCK OWNERSHIP ASSOCIATION
BEGINNING BALANCE ENDING BALANCE
TYPE OF STOCK (AS OF JANUARY 1ST 2004) INCREASE DECREASE (2) AS OF JULY 15, 2004 (1)
------------- ------------------------ -------- ------------ ------------------------
Common Stock 357,888 292,655 -241 650,302
1) Shinhan Capital participated in the employee stock ownership plan in
May 2004. Therefore, the ending balance as of July 15, 2004 consists
of as follows; 10,370 shares for Shinhan Financial Group, 633,085
shares for Shinhan Bank, and 6,847 shares for Shinhan Capital.
2) The decrease is due to the retirement of 2 employees of Shinhan Bank
under the age limit.
2. BUSINESS
SOURCE AND USE OF FUNDS
SOURCE OF FUNDS
(in millions of Korean Won)
--------------------------------------------------------------------------
2004 2003 2002
(Jan.1~Jun.30) (Jan.1~Dec.31) (Jan.1~Dec.31)
-------------------- -------------------- --------------------
Average Ratio Average Ratio Average Ratio
Balance (1) (%) Balance (1) (%) Balance (1) (%)
----------- ------ ----------- ------ ----------- ------
Stockholders' Equity 6,380,716 72.97 4,768,492 73.82 3,877,215 89.45
Capital Stock 1,983,000 22.68 1,660,319 25.70 1,461,770 33.72
Capital Surplus 3,390,233 38.77 2,512,502 38.89 1,976,637 45.60
Retained Earnings 893,120 10.21 692,409 10.72 379,170 8.75
Capital Adjustment 114,362 1.31 (96,738) (1.50) 59,638 1.38
Borrowings 2,363,857 27.03 1,691,375 26.18 457,359 10.55
Debentures 2,030,154 23.22 1,434,951 22.21 359,240 8.29
Other liabilities 333,702 3.82 256,424 3.97 98,119 2.26
--------- ------ --------- ------ --------- ------
Total 8,744,572 100.00 6,459,867 100.00 4,334,574 100.00
--------- ------ --------- ------ --------- ------
1. The Average Balance was calculated by averaging the ending balance of each
quarter.
9
USE OF FUNDS
(in millions of Korean Won)
------------------------------------------------------------------------
2004 2003 2002
(Jan.1~Jun.30) (Jan.1~Dec.31) (Jan.1~Dec.31)
-------------------- -------------------- --------------------
Average Ratio Average Ratio Average Ratio
Balance (1) (%) Balance (1) (%) Balance (1) (%)
----------- ------ ----------- ------ ----------- ------
Investments on equity stock 6,606,094 75.55 5,882,011 77.81 3,874,018 89.38
Shinhan Bank 3,517,304 40.22 3,139,126 41.53 3,134,106 72.30
Chohung Bank (2) 2,178,747 24.92 1,831,964 24.24 - -
Good Morning Shinhan 551,578 6.31 537,265 7.11 447,117 10.32
Securities (3)
Shinhan Card 160,363 1.83 191,094 2.53 149,800 3.46
Shinhan Capital 107,906 1.23 95,384 1.26 71,171 1.64
Shinhan BNP Paribas 22,389 0.26 22,109 0.29 39,010 0.90
E-Shinhan 2,641 0.03 3,331 0.04 4,281 0.10
Shinhan Macquarie 1,387 0.02 578 0.01 583 0.01
Jeju Bank 47,391 0.54 44,783 0.59 23,855 0.55
Shinhan Credit Information 3,263 0.04 2,392 0.03 1,169 0.03
SH&C Life Insurance 13,126 0.15 13,985 0.19 2,926 0.07
Investment on Bonds - 0.00 905 0.01 1,279 0.03
Loans 2,019,786 23.10 1,618,091 21.41 390,275 9.00
Fixed Assets 1,564 0.02 1,434 0.02 1,272 0.03
Intangible Assets 392 0.00 471 0.01 163 0.00
Cash Deposit in bank 76,806 0.88 25,326 0.34 57,241 1.32
Other Assets 39,930 0.46 30,808 0.41 10,325 0.24
--------- ------ --------- ------ --------- ------
Total 8,744,572 100.00 7,559,046 100.00 4,334,574 100.00
--------- ------ --------- ------ --------- ------
1. The Average Balance was calculated by averaging the ending balance of each
quarter.
2. The Average Balance of Good Morning Shinhan Securities for 2002 is the sum
of the pre-merger balances of Shinhan Securities and Good Morning
Securities.
10
OTHER FINANCIAL INFORMATION
REQUISITE CAPITAL RATIO
(in millions of Korean Won)
-----------------------------------------------
1st half of
2004 2003 (2) 2002
---------- --------- ---------
Aggregate Amount of Equity Capital (A) 10,256,581 8,847,673 4,842,795
Requisite Capital (B) 7,831,609 7,472,030 3,698,754
Requisite Capital Ratio (A/B) (1) 130.96% 118.41% 130.93%
---------- --------- ---------
1. Under the guidelines issued by the Financial Supervisory Commission
applicable to financial holding companies, we, at the holding company
level, are required to maintain a minimum requisite capital ratio of 100%.
2. The numbers for the 1st half of 2004 are provisional and are subject to
change.
WON LIQUIDITY RATIO
(in millions of Korean Won)
-----------------------------------------
1st half of
2004 2003 2002
---------- ------- ------
Won Assets due within 3 months (A) 253,038 16,687 14,945
Won Liabilities due within 3 months (B) 242,469 15,504 6,480
Won Liquidity Ratio (A/B) (1) 104.36% 107.63% 230.63%
------- ------ ------
1. Under the guidelines issued by the Financial Supervisory Commission, we,
at the holding company level, are required to maintain a Won liquidity
ratio of not less than 100%.
LIABILITIES TO EQUITY RATIO
(in millions of Korean Won)
----------------------------------------------
1st half of
2004 2003 2002
---------- -------- ---------
Liabilities (A) 2,380,977 2,176,875 774,759
Adjusted Equity (B) (1) 6,665,810 6,117,555 4,010,220
Liabilities to Equity Ratio (A/B) 35.72% 35.58% 19.32%
--------- --------- ---------
1. Adjusted Equity was calculated by subtracting the amount of intangible assets
from total net assets.
CAPITAL ADEQUACY RATIO AND OTHER RATIOS OF CERTAIN SUBSIDIARIES
1) Total Capital Adequacy Ratio (%)
11
1st half of 2004 2003 2002
Shinhan Bank 11.69 10.49 10.91
Chohung Bank 8.94 8.87 8.66
Jeju Bank 10.66 10.96 11.71
* The Total Capital Adequacy Ratios are computed in accordance with the
guidelines issued by the Financial Supervisory Commission for commercial
banks. Under these guidelines, commercial banks are required to maintain a
minimum capital adequacy ratio of 8%.
2) Net Capital Ratio
Jun.30 2004 Mar.31 2004 Mar.31 2003
Good Morning Shinhan Securities 464.5% 480.7% 412.6%
* Net Capital Ratio is computed in accordance with the guidelines issued by the
Financial Supervisory Service for securities investment trust businesses.
Under these guidelines, Good Morning Shinhan Securities is required to
maintain a minimum net capital ratio of 100%.
3) Adjusted Equity Capital Ratio
1st half of 2004 2003 2002
Shinhan Card 16.30% 13.78% 10.86%
* The Adjusted Equity Capital Ratio represents the ratio of total adjusted
shareholder's equity to total adjusted assets and is computed in accordance
with the guidelines issued by the Financial Supervisory Commission for credit
card companies. Under these guidelines, Shinhan Card is required to maintain
a minimum adjusted equity capital ratio of 8%.
4) Non Performing Loans
(in 100 millions of Korean Won)
----------------------------------------------------------------------------------
Dec.31. 2003 Dec.31. 2002
(March 31, 2004 for GMS (March 31, 2003 for GMS
Jun. 30. 2004 Securities) Securities)
------------------------- --------------------------- -------------------------
Balance of NPL to total Balance of NPL to total Balance of NPL to total
NPL Loans (%) NPL Loans (%) NPL Loans (%)
---------- ------------ ----------- ------------ ---------- ------------
Shinhan Bank 1) 4,581 0.88 3,985 0.82 2,983 0.69
Chohung Bank 1) 15,146 3.43 18,796 4.19 19,811 4.02
Jeju Bank 1) 568 4.41 298 2.27 238 1.86
G.MS Securities 2) 343 15.85 382 13.48 410 19
Shinhan Card 3) 553 5.40 747 6.34 714 2.82
1. Non-performing loans of banks are defined as those loans are past due more
than 90 days or those are placed on non-accrual status according to the
guidelines of the Financial Supervisory Service.
12
2. Under the guidelines of the Financial Supervisory Service, every securities
company shall classify its loans into five categories: "normal",
"precautionary", "substandard", "doubtful", and "estimated loss". Under the
Group's internal measures, non-performing loans of Good Morning Shinhan
Securities includes loans classified as "substandard", "doubtful", and
"estimated loss."
3. Under the guidelines of the Financial Supervisory Service, every credit card
company shall classify its loans into five categories: "normal",
"precautionary", "substandard", "doubtful", and "estimated loss. Under the
Group's internal measures, non-performing loans of Shinhan Card includes
loans classified as "substandard", "doubtful", and "estimated loss."
5) Loan Loss Allowances & Write-offs for the period
(in 100 millions of Korean Won)
------------------------------------------------
Jan.1,2004~ Jan. 1, 2003~ Jan.1,2002~
Jun.30, 2004 Dec.31, 2003 Dec.31, 2002
-------------------------------------------------------------------------------------------------
Shinhan Bank Loan Loss Domestic 8,291 8,664 4,925
Allowance Overseas 741 745 733
------ ------ ------
Total 9,032 9,409 5,658
------ ------ ------
Write-offs 1,704 715 1,375
----------------------------------------------------------------------------------------------
Chohung Loan Loss Domestic 14,456 16,026 16,988
Bank Allowance Overseas 620 563 563
------ ------ ------
Total 15,076 16,589 17,551
------ ------ ------
Write-offs 4,690 17,812 11,007
----------------------------------------------------------------------------------------------
Jeju Bank Loan Loss Domestic 429 345 273
Allowance Overseas - - -
------ ------ ------
Total 429 345 273
------ ------ ------
Write-offs 106 179 240
----------------------------------------------------------------------------------------------
GM Loan Loss Domestic 329 309 370
Shinhan Allowance Overseas - - -
------ ------ ------
Securities 1) Total 329 309 370
------ ------ ------
Write-offs 211 - 75
----------------------------------------------------------------------------------------------
Shinhan Card Loan Loss Domestic 696 946 961
2) Allowance Overseas - - -
------ ------ ------
Total 696 946 961
------ ------ ------
Write-offs 1,291 2,770 544
----------------------------------------------------------------------------------------------
1. The fiscal year of Good Morning Shinhan Securities ends on March 31 of each
year. Accordingly, the relevant periods for Good Morning Shinhan Securities
are adjusted as follows: (i) from April 1, 2004 to June 30, 2004, (ii) from
April 1, 2003 to March 31, 2004, and (iii) from April 1, 2002 to March 31
2003.
2. Shinhan Card was incorporated on July 1, 2002.
13
3. INDEPENDENT ACCOUNTANT
COMPENSATION TO THE INDEPENDENT AUDITOR FOR AUDIT AND REVIEW SERVICES
The following is a description of the fees for audit and review services
performed by our independent auditor for the last three years in connection with
our financial statements prepared in accordance with generally accepted
accounting principles in Korea.
Year Auditor Payment (KRW) Working hours
---- ------- ------------- -------------
2004 (1) KPMG Samjong Accounting Corp. 300,000,000 450.5 hours(1H)
370.5 hours(1Q)
2003 KPMG Samjong Accounting Corp. 210,000,000 1,560 hours
2002 KPMG Samjong Accounting Corp. 150,000,000 1,484 hours
----------------------------- ----------- ---------------
1) The payment for 2004 is an engagement amount, and therefore, it has not been
fully paid yet.
COMPENSATION FOR SERVICES OTHER THAN AUDIT AND REVIEW
The following is a description of the fees and commissions paid to our
independent auditor for the services set forth below for the last three years.
Year Month Service description Payment (KRW)
---- ----- ------------------- -------------
2004 (1) Jan. Consulting services for disclosure control and 1,375,000,000
procedure & Internal control system
2003 Sept. Due diligence on the Chohung Bank 904,000,000
July Valuation of common shares of Chohung Bank 100,000,000
2002 - - -
------ ---------------------------------------------- -------------
14
4. PERFORMANCE OF AFFILIATED COMPANIES
CONDENSED FINANCIAL STATEMENTS OF SUBSIDIARIES
1) Balance sheets
Condensed balance sheets of subsidiaries as of June 30, 2004 are as
follows:
(In millions of Korean Won)
-------------------------------------------------------
Total
stockholders'
Subsidiaries Total assets Total liabilities equity
------------------------------- ------------ ----------------- ------------
Shinhan Bank W 72,521,022 68,903,786 3,617,236
Chohung Bank 64,620,519 62,294,908 2,325,611
Good Morning Shinhan Securities 2,554,251 1,888,942 665,309
Shinhan Card 1,436,967 1,283,211 153,756
Shinhan Capital 1,348,949 1,240,385 108,564
Shinhan BNP Paribas ITMC 51,435 8,173 43,262
Jeju Bank 1,761,718 1,657,317 104,401
SH&C Life Insurance 188,844 162,073 26,771
e-Shinhan 3,993 672 3,321
Shinhan Macquarie 12,422 12,163 259
Shinhan Credit Information 8,605 2,387 6,218
------------- ----------- ---------
W 144,508,725 137,454,017 7,054,708
============= =========== =========
2) Statements of Earnings
Condensed statements of earnings of subsidiaries for the 6 months ended
June 30, 2004 are as follows:
(In millions of Korean Won)
----------------------------------------------------------------------------
Operating Operating Operating Ordinary Net earnings
Subsidiaries revenue expense income (loss) income (loss) (loss)
------------------------------- ----------- --------- ------------- ------------- ------------
SHINHAN BANK W 2,722,973 2,204,060 518,913 677,175 477,208
CHOHUNG BANK 2,810,913 2,645,046 165,867 129,118 127,508
GOOD MORNING SHINHAN SECURITIES 401,694 378,775 22,919 32,234 32,511
SHINHAN CARD 214,350 218,127 (3,777) (3,879) (3,879)
SHINHAN CAPITAL 98,098 78,586 19,512 19,009 13,267
SHINHAN BNP PARIBAS ITMC 6,624 3,446 3,178 3,183 2,209
JEJU BANK 65,663 65,144 519 1,223 1,223
SH&C LIFE INSURANCE 16,741 17,447 (706) (282) (282)
e-SHINHAN 1,300 1,694 (394) (378) (378)
SHINHAN MACQUARIE 7,817 7,618 199 324 90
SHINHAN CREDIT INFORMATION 19,078 19,506 (428) (269) 2,356
----------- --------- ------- ------- -------
W 6,365,251 5,639,449 725,802 857,458 651,833
=========== ========= ======= ======= =======
15
5. MARKET PRICE INFORMATION OF OUR EQUITY SECURITIES
COMMON SHARE TRADED IN KOREA STOCK EXCHANGE
(in Korean Won or number of shares)
---------------------------------------------------------------------------------
Feb. 2004 Mar. 2004 Apr. 2004 May. 2004 Jun. 2004 Jul. 2004
--------------------------------------------------------------------------------------------------------
Price per High 23,050 22,700 23,250 21,550 18,800 17,400
share Low 18,950 20,050 20,450 16,200 15,700 15,200
Trading Volume 27,301,403 67,106,149 21,938,659 27,771,913 32,986,317 27,090,639
---------- ---------- ---------- ---------- ---------- ----------
AMERICAN DEPOSITARY SHARES
Shinhan Financial Group listed its American Depositary Shares on the
New York Stock Exchange on September 16, 2003.
American Depositary Shares trade on the New York Stock Exchange
(in US Dollars or number of shares)
--------------------------------------------------------------------------------
Feb. 2004 Mar. 2004 Apr. 2004 May. 2004 Jun. 2004 Jul. 2004
---------------------------------------------------------------------------------------------------------
Price per High 39.63 38.50 40.80 37.27 32.00 30.23
share Low 32.80 34.05 35.15 27.60 27.76 26.50
Trading Volume 178,900 160,700 90,700 110,300 110,800 174,500
------- ------- ------ ------- ------- -------
6. CHANGES TO DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
DIRECTORS AND EXECUTIVE OFFICERS
1) Executive Directors
Our executive directors are as follows
Name Age Position
----------------------------------------------------------------------
Eung Chan Ra 65 Chairman of BOD
Chairman of the BOD Steering Committee
Young Hwi Choi 58 President & CEO
2) Non-Executive Directors
Currently, 13 non executive directors are in office, all of whom were
nominated by our BOD and appointed or reappointed pursuant to the approval of
general shareholders' meeting on March 25, 2004.
Our non-executive directors are as follows.
16
Name Age Position
------------------------------------------------------------------------
In Ho Lee 60 Non-Executive Directors
Young Seok Choi 75 Non-Executive Directors,
Audit Committee member,
Compensation Committee member
Yong Woong Yang 56 Non-Executive Directors
Pyung Joo Kim 65 Outside Director
BOD Steering Committee member
Chairman of Risk Management Committee
Il Sup Kim 58 Outside Director
Chairman of Audit Committee
Compensation Committee member
Sang Yoon Lee 61 Outside Director
Audit Committee member
Compensation Committee member
Yoon Soo Yoon 58 Outside Director
BOD Steering Committee member
Risk Management Committee member
Chairman of Compensation Committee
Sang Chul Lee 56 Outside Director
Compensation Committee member
Byung Hun Park 75 Outside Director
BOD Steering Committee member
Moon Pil Oh 73 Outside Director
Audit Committee member
Young Soo Lee 70 Outside Director
Dong Hyun Kwon 67 Outside Director
Audit Committee member
Philippe Reynieix 55 Outside Director
Risk Management Committee member
For the personal profiles of the directors, please refer to our Form 6-K
filed on March 8, 2004, in which we included the resume of director candidates.
3) Executive Officers
In addition to the executive directors who are also our executive officers,
we currently have the following executive officers
Name Age Position
----------------------------------------------------------------------------------------------------
Bhang Gil Choi 52 Senior Executive Vice President of Integration Coordination Team I and
II (taking charge of Chohung Bank related issues)
Chil Sun Hong 57 Senior Executive Vice President of Subsidiary Management Team II,
Public Relations Team, and Audit & Compliance Team
Hee Soo Kim 53 Senior Executive Vice President of Subsidiary Management Team I and
Integration Coordination Team I
Byung Jae Cho 53 Chief Financial Officer and Senior Executive Vice President of Planning
& Financial Management Team and Investor Relations Team
Baek Soon Lee 51 Senior Executive Vice President of General Service Team, Information &
Technology Planning Team and Integration Coordination Team II
17
EMPLOYEES
(As of July 31, 2004)
---------------------------------------------------------------------------------------------------------
Total Salaries and wages paid Average Payment per
Number of for 1st half 2004 person (in mil. of
Employees Average Tenure (in mil. of Korean Won) Korean Won)
---------------------------------------------------------------------------------------------------------
Male 62 1year & 7months 4,371 70
Female 15 1year & 8months 381 25
Total 77 1year & 7months 4,752 61
EXHIBIT 1.
The Independent Accountant's Review Report (under Korean GAAP) to the
Non-consolidated Financial Statements of Shinhan Financial Group as of and for
the 6 month period ended July 30, 2004.
Page
----
|-| Independent Accountant's Review Report F-1
|-| Shinhan Financial Group Non-Consolidated Balance Sheets F-4
|-| Shinhan Financial Group Non-Consolidated Statements of Earnings F-5
|-| Shinhan Financial Group Non-Consolidated Statements of Cash Flows F-6
|-| Notes to Non-Consolidated Financial Statements F-8
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SHINHAN FINANCIAL GROUP CO., LTD.
By /s/: Byung Jae Cho
-----------------------------------
Name: Byung Jae Cho
Title: Chief Financial Officer
Date : August 20, 2004
19