SHINHAN FINANCIAL GROUP CO., LTD
Table of Contents

 
 
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 March 2007
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 þ                    Form 40-F o
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 o                    No þ
If “Yes” is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-                    .
 
 

 

 

Summary of 2006 Annual Report
On March 30, 2007, Shinhan Financial Group (“SFG”) filed the 2006 Annual Business Report (the “Business Report”) with the Financial Supervisory Service of the Republic of Korea (“Korea”) pursuant to the Securities and Exchange Act of Korea. This is the summary of the Business Report translated into English. Non-material or previously disclosed information are omitted or abridged.
The financial information in this report has been prepared in accordance with accounting principles generally accepted in Korea.
Table of Contents
     
  Introduction of the Group
  Business Results
  Independent Accountant
  Directors, Executive Officers and Employees
  Activities of Board of Directors and Sub-committees
  Market Price Information of Our Common Shares and ADRs
  Related Party Transactions

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1.   Introduction of the Group
Company History in 2006 and 2007
  §   January 2006: Obtained pre-approval for M&A between Shinhan Bank and Chohung Bank
 
  §   April 2006: Launched the integrated Shinhan Bank and Shinhan Card
 
  §   August 2006: Shinhan Financial Group selected as preferred bidder for LG Card acquisition
 
  §   December 2006: Signed MOU (Memorandum of Understanding) for LG Card acquisition
 
  §   March 2007: LG Card joined Shinhan Financial Group as subsidiary
Principal Subsidiaries under Korean Law as of March 30, 2007
Direct Subsidiaries
         
Subsidiaries   Ownership by SFG
Shinhan Bank 1)
     100.0 %
LG Card 2)
     85.7 %
Good Morning Shinhan Securities
     100.0 %
Shinhan Life Insurance
     100.0 %
Shinhan Card
     100.0 %
Shinhan Capital
     100.0 %
Shinhan BNP Paribas ITMC
     50.0 %
Jeju Bank 3)
     62.4 %
SH&C Life Insurance
     50.0 %
Shinhan Macquarie Financial Advisory
     51.0 %
Shinhan Credit Information
     100.0 %
Shinhan Private Equity
     100.0 %
 
1)   On April 1, 2006, Chohung Bank merged with Shinhan Bank, and the name of the integrated bank is ‘Shinhan Bank.’
 
2)   LG Card joined Shinhan Financial Group as a subsidiary on March 23, 2007.
 
    Of total LG Card’s common shares, Shinhan Financial Group and Shinhan Bank own 78.6% and 7.1% respectively.
 
3)   Jeju Bank is currently listed on the Korea Exchange.

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Indirect subsidiaries held through direct subsidiaries
(As of December 31, 2006)
             
        Ownership by
Direct Subsidiaries   Indirect Subsidiaries   the Parent
Shinhan Bank
   Shinhan Data System     100.0 %
 
   Shinhan Finance Ltd.(Hong Kong) 1)     100.0 %
 
   SH Asset Management Co. Ltd 2)     79.8 %
 
   Shinhan Asia Limited 2)     100.0 %
 
   Shinhan Bank America 2)     100.0 %
 
   Shinhan Bank Europe GmbH 2)     100.0 %
 
   Shinhan Vina Bank 2)     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 Shinhan Securities
   Good Morning Shinhan Securities Europe     100.0 %
 
 Good Morning Shinhan Securities USA     100.0 %
Shinhan Private Equity
   Shinhan NPS Private Equity Fund 1st     5.0 % 3)
 
1)   On November 1, 2006, Shinhan Finance Limited, Shinhan Financial Group’s indirect subsidiary, was transferred to a branch of Shinhan Bank. The liquidation process is currently taking place and is expected to be finalized during the first half of 2007.
 
2)   Names of subsidiaries previously owned by Chohung Bank were changed accordingly after the integration with Shinhan Bank.
 
3)   Shinhan Financial Group and its subsidiaries currently own 36.7% of Shinhan NPS Private Equity Fund 1st.
Number of Shares by Type
The table below shows the number of issued and outstanding shares of the Group following the capital increase on January 25, 2007
         
Types of Shares   Number of Shares
Common Shares
     381,567,614  
Redeemable Preferred Shares
     68,757,169  
Redeemable Convertible Preferred Shares
     14,721,000  
 
        
Total
     465,045,783  

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Employee Stock Ownership Plan (ESOP)
(1) Contribution to ESOA (Employee Stock Ownership Association)
                 
        Contribution Amount        
Contributed to   Contribution Date   (KRW)   Contributor   Use of money
Employee Accounts
(Contributed by
relevant companies)		   Feb. 28, 2006   542,407,000   Shinhan Card   Stock Purchase
 
 Mar. 3, 2006   802,088,300   Shinhan Capital   Stock Purchase
 
 Mar. 6, 2006   10,641,000,000   Shinhan Bank   Stock Purchase
 
 Mar. 14, 2006   212,552,860   SFG   Stock Purchase
 
 Apr. 26, 2006   43,240,950   Shinhan Bank   Operational Expenses
 
 Aug. 9 ~ Sept. 4, 2006   19,297,881,928   Shinhan Bank   Stock Purchase
 
 Dec. 12 ~ Dec. 28, 2006   18,290,086,647   Shinhan Bank   Stock Purchase
Sub-total   49,829,257,685   —
Employee Accounts
(Contributed by
employees)		   Dec. 13~ Dec. 28, 2006   20,783,009,999   Employees   Stock Purchase
Sub-total   20,783,009,999   —
Total   70,612,267,684   —
(2) Changes in ESOA Share Ownership
(As of December 31, 2006, Unit: shares)
                                     
        Beginning                    
        Balance                   Ending Balance
    Share type   (Jan.1, 2006)   Increase 1)   Decrease 2)   (Dec. 31, 2006)
Association Accounts
   Common Shares     1,942,413       —       2,440       1,939,973  
Employee Accounts
   Common Shares     843,270       1,975,405       31,713       2,786,962  
Total
   —     2,785,683       1,975,405       34,153       4,726,935  
 
1)   The increase is attributable to the purchase of shares by subsidiaries and employees.
 
2)   The decrease is attributable to the retirement of employees.

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(3) ESOA Share Ownership per each company
(As of December 31, 2006, Unit: shares)
                         
Company   Association Accounts   Employee Accounts   Total Balance
Shinhan Financial Group
     36,672       18,489       55,161  
Shinhan Bank
     1,884,894       2,626,217       4,511,111  
Good Morning Shinhan Securities
     —       20,446       20,446  
Shinhan Capital
     18,407       22,997       41,404  
Shinhan Card
     —       37,891       37,891  
Shinhan Life Insurance
     —       55,689       55,689  
SH&C Life Insurance
     —       1,198       1,198  
Shinhan Credit Information
     —       1,074       1,074  
Shinhan Data System
     —       2,961       2,961  
Total
     1,939,973       2,786,962       4,726,935  
Preferred Shares
(As of March 30, 2007, Unit: shares)
                 
            Redeemable Convertible
Description   Redeemable Preferred Shares   Preferred Shares
Initially issued shares
     81,573,961       59,441,603  
Number of shares redeemed or converted
     12,816,792       44,720,603  
Outstanding shares
     68,757,169       14,721,000  
Dividends
                 
Description   2006   2005
Dividend per Share (Dividend Rate)
   KRW 900 (18%)   KRW 800 (16%)
Total Dividend Amount
   KRW 392,239 mil.   KRW 385,049 mil.
Dividend Payout Ratio
   21.40%   24.67%

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2. Business Results
Operational Results
(KRW million)
                         
    2006   2005   2004
    (Jan.1~Dec.31)   (Jan.1~Dec.31)   (Jan.1~Dec.31)
Operating Revenue
     1,997,914       1,715,499       1,224,147  
Gain using the equity method of accounting
     1,917,268       1,618,314       1,108,952  
Interest income
     79,151       95,812       114,264  
Other income
     1,495       1,373       931  
Operating Expense
     177,051       154,872       147,638  
Loss using the equity method of accounting
     —       —       212  
Operating Income
     1,820,863       1,560,627       1,076,509  
Source and Use of Funds
Source of Funds
(KRW million)
                                                 
    2006   2005   2004
    (Jan.1~Dec.31)   (Jan.1~Dec.31)   (Jan.1~Dec.31)
    Average   Ratio   Average   Ratio   Average   Ratio
    Balance 1)   (%)   Balance 1)   (%)   Balance 1)   (%)
Stockholders’ Equity
     10,376,235       76.70       8,463,137       77.36       6,770,562       74.00  
Capital Stock
     2,170,758       16.05       2,100,646       19.20       2,012,812       22.00  
Capital Surplus
     4,360,100       32.23       3,846,957       35.16       3,485,465       38.10  
Retained Earnings
     2,979,153       22.02       2,158,881       19.73       1,130,293       12.35  
Capital Adjustment
     866,224       6.40       356,653       3.26       141,992       1.55  
Borrowings
     3,152,497       23.30       2,477,425       22.64       2,378,244       26.00  
Debentures
     2,556,250       18.89       2,090,759       19.11       2,017,816       22.06  
Other liabilities
     596,247       4.41       386,666       3.53       360,428       3.94  
Total
     13,528,732       100.00       10,940,562       100.00       9,148,806       100.00  
 
1)   The Average Balance was calculated by averaging the ending balance of each quarter.

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Use of Funds
(KRW million)
                                                 
    2006   2005   2004
    (Jan.1~Dec.31)   (Jan.1~Dec.31)   (Jan.1~Dec.31)
    Average   Ratio   Average   Ratio   Average   Ratio
    Balance 1)   (%)   Balance 1)   (%)   Balance 1)   (%)
Investments on equity stock
     11,646,253       86.09       9,060,179       82.81       7,102,731       77.64  
Shinhan Bank
     1,771,480       13.09       4,198,207       38.37       3,709,669       40.55  
Chohung Bank
     7,226,085       53.41       3,393,190       31.01       2,411,868       26.36  
Good Morning Shinhan Securities
     943,203       6.97       867,403       7.93       610,171       6.67  
Shinhan Life Insurance
     768,599       5.68       147,558       1.35       0       0.00  
Shinhan Card
     639,038       4.72       197,754       1.81       162,378       1.77  
Shinhan Capital
     170,264       1.26       139,108       1.27       112,775       1.23  
Shinhan BNP Paribas ITMC
     24,152       0.18       23,139       0.21       22,435       0.25  
E-Shinhan
     —       0.00       2,197       0.02       2,617       0.03  
Shinhan Macquarie FA
     1,135       0.01       1,641       0.01       1,159       0.01  
Jeju Bank
     66,809       0.49       57,606       0.53       49,418       0.54  
Shinhan Credit Information
     9,179       0.07       8,198       0.07       4,628       0.05  
SH&C Life Insurance
     17,322       0.13       14,879       0.14       13,655       0.15  
Shinhan Private Equity
     8,987       0.07       9,300       0.09       1,958       0.02  
Loans
     1,299,633       9.61       1,667,537       15.24       1,953,788       21.36  
Fixed Assets
     959       0.01       1,296       0.01       1,508       0.00  
Intangible Assets
     987       0.01       1,030       0.01       477       0.00  
Cash Deposit in bank
     422,201       3.12       177,313       1.62       55,370       0.60  
Other Assets
     158,699       1.17       33,207       0.31       34,932       0.40  
Total
     13,528,732       100.00       10,940,562       100.00       9,148,806       100.00  
 
1)   The Average Balance was calculated by averaging the ending balances of each quarter.
Other Financial Information
Requisite Capital Ratio
(KRW million)
                         
    2006   2005   2004
Aggregate Amount of Equity Capital (A)
     14,184,052       11,434,001       9,867,854  
Requisite Capital (B)
     10,183,478       8,609,121       7,625,261  
Requisite Capital Ratio (A/B) 1)
     139.28 %     132.81 %     129.41 %
 
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%.

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Won Liquidity Ratio
(KRW million)
                         
    2006   2005   2004
Won Assets due within 3 months (A)
     605,415       341,547       221,335  
Won Liabilities due within 3 months (B)
     248,661       332,746       212,081  
Won Liquidity Ratio (A/B) 1)
     243.47 %     102.65 %     104.36 %
 
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
(KRW million)
                         
    2006   2005   2004
Liabilities (A)
     3,642,106       2,325,114       2,325,043  
Equity (B)
     11,361,526       10,137,017       7,747,609  
Liabilities to Equity Ratio (A/B)
     32.06 %     22.94 %     30.01 %
Capital Adequacy Ratio and Other Ratios of Certain Subsidiaries
  (1)   BIS Capital Adequacy Ratio (%) 1)
                         
    2006   2005   2004
Shinhan Bank 2)
     12.01       10.94       9.40  
Jeju Bank
     11.26       11.71       10.91  
 
1)   The BIS Capital Adequacy Ratio is 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)   The integrated Shinhan Bank was launched on April 1, 2006 and figures for 2004 and 2005 are of pre-merger Chohung Bank, the surviving entity.
  (2)   Net Capital Ratio (%)
                         
    Dec.31 2006   Mar.31 2006   Mar.31 2005
Good Morning Shinhan Securities
     584.40       558.60       629.22  
 
*   Net Capital Ratio is computed in accordance with the guidelines issued by the Financial Supervisory Commission for securities investment trust businesses. Under these guidelines, Good Morning Shinhan Securities is required to maintain a minimum net capital ratio of 100%.
  (3)   Solvency Margin Ratio (%)
                         
    Dec.31 2006   Mar.31 2006   Mar.31 2005
Shinhan Life Insurance
     232.6       230.8       204.9  
 
*   Shinhan Life Insurance joined Shinhan Financial Group as the Group’s subsidiary as of December 13, 2005. Under the guidelines issued by the Financial Supervisory Commission, Shinhan Life Insurance is required to maintain a minimum solvency margin ratio of 100%.

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  (4)   Adjusted Equity Capital Ratio (%)
                         
    2006   2005   2004
Shinhan Card
     17.47       17.68       16.48  
 
*   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%.
Non- Performing Loans of Certain Subsidiaries 1)
  (1)   Non- Performing Loans
(KRW million)
                                                 
        Dec.31. 2005   Dec.31. 2004
        (March 31, 2006 for GMS   (March 31, 2005 for GMS
    Dec.31.2006   Securities)   Securities)
     
            NPL to           NPL to           NPL to
    Balance of   total Loans   Balance of   total Loans   Balance of   total Loans
    NPL   (%)   NPL   (%)   NPL   (%)
     
Shinhan Bank 2)
     729,655       0.62       531,349       1.15       814,127       1.89  
Jeju Bank
     13,120       0.74       16,287       1.15       30,261       2.33  
GMS Securities 3)
     26,590       4.33       26,943       5.68       30,745       11.77  
Shinhan Card 4)
     111,770       3.50       33,420       2.71       37,502       4.46  
 
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 Commission.
 
2)   Figures for 2004 and 2005 are of pre-merger Chohung Bank, the surviving entity, and figures for 2006 are of the integrated Shinhan Bank.
 
3)   Under the guidelines of the Financial Supervisory Commission, every securities brokerage 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.”
 
4)   Under the guidelines of the Financial Supervisory Commission, 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.”

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  (2)   Loan Loss Allowances & Write-offs for the period
(KRW million)
                                         
                    Jan. 1, 2006~   Jan. 1, 2005~   Jan. 1, 2004~
                    Dec. 31, 2006   Dec. 31, 2005   Dec. 31, 2004
Shinhan Bank
   Loan Loss   Domestic     1,911,843       905,000       1,001,800  
 
   Allowance   Overseas     59,758       27,600       51,200  
 
           Total     1,971,601       932,600       1,053,000  
 
   Write-offs             160,636       571,500       1,400,200  
Jeju Bank
   Loan Loss   Domestic     26,313       25,329       32,299  
 
   Allowance   Overseas     —       —       —  
 
           Total     26,313       25,329       32,299  
 
   Write-offs             8,325       19,145       24,735  
GM Shinhan Securities1)
   Loan Loss   Domestic     29,510       28,900       30,900  
    Allowance   Overseas     —       —       —  
 
           Total     29,510       28,900       30,900  
 
   Write-offs             227       2,300       1,900  
Shinhan Card
   Loan Loss   Domestic     148,724       46,269       49,785  
 
   Allowance   Overseas     —       —       —  
 
           Total     148,724       46,269       49,785  
 
   Write-offs             179,351       117,583       233,178  
 
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, 2006 to December 31, 2006, (ii) from April 1, 2005 to March 31, 2006, and (iii) from April 1, 2004 to March 31, 2005.

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3. Independent Accountant
Audit Opinion for the last 3 years
             
    FY 2006   FY 2005   FY 2004
Audit Opinion
  Unqualified   Unqualified   Unqualified
Compensation to the Independent Auditor for Audit and Review Services
     The following is a description of the fees for audit and review services performed by our independent auditor for the last three years in connection with our financial statements prepared in accordance with generally accepted accounting principles in Korea.
                 
Year   Auditor   Payment (KRW mil.)     Working hours
2006
   KPMG Samjong Accounting Corp.     304     3,150 hours
2005
   KPMG Samjong Accounting Corp.     288     3,073 hours
2004
   KPMG Samjong Accounting Corp.     300     2,504 hours
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 other than audit and review during 2006.
             
Year   Date   Service description   Payment (KRW mil.)
2006
   2006.09.26   Audit of the Financial Statements based on US GAAP (2006)   2,079
 
   2006.09.26   Audit of disclosure control and procedure & Internal control system   1,150

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4. Directors, Executive Officers and Employees
Directors and Executive Officers
1)   Executive Directors
     Our executive directors are as follows as of March 30, 2007:
             
Name   Date of Birth   Position   Service Term
Eung Chan Ra
  Nov.25, 1938   Chairman of BOD
Board Steering Committee member 		  3 years starting from March 20, 2007
In Ho Lee
  Nov. 2, 1943   President & CEO
Board Steering Committee member 		  2 years starting from March 20, 2007
2)   Non-Executive Directors
     Currently, 13 non-executive directors are in office, of which 12 members are outside directors, nominated by our Outside Director Recommendation Committee and appointed pursuant to the approval of general shareholders’ meeting on March 20, 2007.
     Our non-executive directors are as follows:
                     
        Outside          
Name   Date of Birth   Director   Current Position   Service Term
Sang Hoon Shin
   July 1, 1948   X   —   1 year starting from March 20, 2007
Si Jong Kim
   Apr. 16, 1937   O   —   1 year starting from March 20, 2007
Young Woo Kim
   May 1, 1952   O   Audit Committee member   1 year starting from March 20, 2007
Byung Hun Park
   Sept. 10, 1928   O   Board Steering Committee member   1 year starting from March 20, 2007
Yong Woong Yang
   Aug. 4, 1948   O   —   1 year starting from March 20, 2007
Haeng Nam Chung
   Mar. 15.1941   O   —   1 year starting from March 20, 2007
Young Hoon Choi
   Nov. 8, 1928   O   —   1 year starting from March 20, 2007
Philippe Reynieix
   Jun. 24, 1949   O   Risk Management Committee member   1 year starting from March 20, 2007
 
           Board Steering Committee member        
Pyung Joo Kim
   Feb. 6, 1939   O   Risk Management Committee member   1 year starting from March 20, 2007
 
           Compensation Committee member        
 
           Board Steering Committee member        
Shee Yul Ryoo
   Sept. 5, 1938   O   Risk Management Committee member   1 year starting from March 20, 2007
 
           Compensation Committee member        
Yoon Soo Yoon
   Mar. 5, 1946   O   Audit Committee member
Compensation Committee member		   1 year starting from March 20, 2007
Sang Yoon Lee
   Sept. 13, 1942   O   Audit Committee member
Compensation Committee member		   1 year starting from March 20, 2007
Sung Bin Chun
   Jan. 21, 1953   O   Audit Committee member
Compensation Committee member		   1 year starting from March 20, 2007
For personal profiles of the outside directors, please refer to our Form 6-K filed on February 21, 2007.

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     3) Executive Officers
     In addition to the executive directors, we currently have the following executive officers:
             
Name   Date of Birth   Position   In charge of
Jae Woo Lee
  July 2, 1950   Chief Operating
Officer 		  General Affairs Team, Public Relations Team, and Human Resources Team
Byung Jae Cho
  Jan. 6, 1951   Chief Financial
Officer 		  Finance Planning Team, Risk Management Team, and Investor Relations Team
Jin Won Suh
  April 20, 1951   Chief Strategy
Officer 		  Strategic Planning Team, Future Strategy & Management Team, and Information & Technology Planning Team,
Jae Woon Yoon
  July 22, 1951   Group Synergy
Officer 		  Joint Procurement Team, Synergy Management Team, and Audit & Compliance Team
Stock Options ( as of March 21, 2007)
                                     
        Number of Changes    
                                No. of
        No. of   No. of Exercised   No. of Cancelled   Exercisable
Guarantee   Granted Options   Options   Options   Options
Granted in 2002
   Management, Head of Department     864,576       285,011       0       579,565  
Granted in 2003
   Management, Head of Department     1,020,206       314,548       11,390       694,268  
Granted in 2004
   Management, Head of Department     1,258,923       162,784       15,200       1,080,939  
Granted in 2005
   Management, Head of Department, Outside Directors     2,695,200       0       250,100       2,445,100  
Granted in 2006
   Management, Head of Department, Outside Directors     3,296,200       0       166,800       3,129,400  
Granted in 2007
   Management, Head of Department, Outside Directors     1,301,050       0       0       1,301,050  
 
   Total     9,571,579       477,332       443,490       8,650,757  
Employees
(As of December 31, 2006)
                         
    Number of
Employees		   Average length of
Service		   Total Salaries and wages paid
in 2006
(KRW million)		   Average Payment per
person
(KRW million)
Male
   80   2yrs 9mths     8,774       110  
Female
   19   3 yrs     946       50  
Total
   99   2yrs 9mths     9,721       98  

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5. Activities of Board of Directors and sub-committees for the period 2006 4Q~2007
1) Meetings of Board of Directors
         
Date   Agenda    
 
   1. Approval of financial support limit per subsidiary in 2007   Approved
 
   — Financial support limit per subsidiary set at KRW1.34tril. for 2007    
 
   2. Capital Injection into Good Morning Shinhan Securities   Approved
 
   — Approval of capital injection of up to KRW 500bil. into Good Morning Shinhan Securities and issuance of corporate bond for first round of injections (KRW300bil.)    
 
   3. Approval of LG Card acquisition agreement   Approved
 
   — Approval of LG Card acquisition agreement and purchase of LG Card shares through tender offer    
 
   4. Incorporation of LG Card as subsidiary of SFG   Approved
 
   — Incorporate of LG Card as a subsidiary of Shinhan Financial Group following acquisition    
 
   (Incorporation into Group scheduled in March 2007)    
 
   5. Issuance of preferred shares for LG Card acquisition   Approved
Dec. 18, 2006
   — Issuance of 43,711,100 preferred shares    
 
   6. Issuance of corporate bonds for LG Card acquisition by public offering   Approved
 
   — Issuance of 38th, 39th and 40th round of corporate bonds for LG    
 
   Card acquisition (KRW500bil. each, a total of KRW1.5tril.)    
 
   7. Issuance of corporate bonds by private placement and other funding requirements for LG Card acquisition   Approved
 
   — Issuance of corporate bonds by private placement (KRW500bil.) and CP (KRW380bil.) for LG Card acquisition    
 
   8. Appointment of Non-Director Management of Shinhan Financial Group   Approved
 
   — Appointment of non-director management following term expiry    
 
   9. Business plans and budget for 2007   Approved
 
   — Approval of business plans and budget for 2007    
Feb. 2, 2007
   1. Approval of FY2006 Financial Statements and Business Report   Approved
 
   2. Appointment of Outside Director Recommendation Committee members   Approved
 
   — Eung Chan Ra, Byung Hun Park, Shee Yul Ryoo, Sang Yoon Lee, Yoon Soo Yoon (5 persons)    
Feb. 15, 2007
   1. Convocation of General Shareholders’ Meeting for the 6th FY   Approved
 
   — General Shareholders’ Meeting for the 6th FY to be held on March 20, 2007    
 
   2. Approval of Director Remuneration Pool   Approved
 
   — Same as the previous year    
 
   3. Grant of Stock Options to Executives and Employees of the Company and Its Subsidiaries   Approved
 
   — Approval for stock option grant up to the limit of 1,459,550 shares    
 
   4. PU Assignment to Executives   Approved
 
   — To grant 168,200 units to 6 executives    
 
   * Value per one unit = KRW 54,560 on grant date (March 20, 2007)    
 
   5. Cancellation of Granted Stock Options   Approved
 
   — A total of 343,000 stock options cancelled (3 companies, 131 persons)    
 
   6. Corporate Bond Issuance   Approved
 
   — The 41st issuance of corporate bond (KRW 100bil.) scheduled to be issued in March 2007    
Mar. 20, 2007
   1. Appointment of Representative Directors   Approved
 
   — Eung Chan Ra as Chairman, In Ho Lee as President & CEO    
 
   2. Appointment of Sub-Committee Members   Approved
 
   — Appointment of committee members    
 
   3. Compensation for Directors   Approved
 
   — Same as the previous year    
 
   4. Fifth Amendment to the “Guidelines on Personal Credit Date Provision and Use”   Approved
 
   — Inclusion of LG Card in the list of companies to share company information    

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Date   Agenda    
 
   5. Incorporation of GM-Shinhan Securities’ Hong Kong Affiliate as Indirect Subsidiary   Approved
 
   — Establishment of Good Morning Shinhan Securities’ third local subsidiary    
 
   6. Issuance of Corporate Bonds   Approved
 
   — KRW100bil. for 41st issuance, KRW 200bil. for 42nd issuance    
2) Board Steering Committee
         
Date   Agenda    
Dec. 18, 2006
   1. Deliberation on candidate for non-director management   Approved
 
   — Managing Director — Jae Woo Lee    
Feb. 2, 2007
   1. Appointment of Outside Director Recommendation Committee   Approved
 
   — Eung Chan Ra, Byung Hun Park, Shee Yul Ryoo, Sang Yoon Lee, Yoon Soo Yoon (5 persons)    
Feb. 12, 2007
   1. Recommendation for directors who are not outside directors   Approved
 
   — Eung Chan Ra, In Ho Lee, Sang Hoon Shin (3 persons)    
 
   2. Recommendation of Audit Committee members   Approved
 
   — Sang Yoon Lee, Yoon Soo Yoon, Sung Bin Chun, Young Woo Kim (4 persons)    
 
   3. Deliberation on stock option grant to outside directors with professional expertise   Approved
 
   — 10,000 stock options per person, up to 50,000 stock options in total    
3) Risk Management Committee
         
Date   Agenda    
Dec. 18, 2006
   * Reporting Item: Status of the Group’s Capital Adequacy Ratios and Risk Limit Management by Risk Type during 3Q 2006   —
Feb. 12, 2007
   1. Group’s Minimum Equity Capital Ratios and Risk Limits for 2007   —
 
   * Reporting Item: Status of the Group’s Capital Adequacy Ratios and Risk Limit Management by Risk Type during 4Q 2006   Approved
4) Meetings of Audit Committee
         
Date   Agenda    
Dec. 18, 2006
   1. Non-audit Contracts of Shinhan Financial Group and subsidiaries   Approved
Feb. 15, 2007
   1. Audit Results for the 6th Fiscal Year   Approved
 		   — Confirmation of Audit Results for the 6th FY and Submission of Audit Report    
 
   2. Evaluation of the Internal Monitoring System   Approved
 
   3. Evaluation of the Operation Status of the Internal Accounting Control System for the Year 2006   Approved
 
   — The internal accounting control system has been efficiently planned and properly operated.    
 
   4. Evaluation of the Internal Monitoring System   Approved
 
   — The internal monitoring system is properly operated    
 
   5. Approval of audit plans for 2007   Approved
 
   — Approval of 2007 audit plans for Shinhan Financial Group and subsidiaries    
 
   6. Ratification of the Company and its Subsidiaries’ Non-audit Contracts   Approved
 
  
1) Tax consulting (Shinhan Financial Group-Samjung)
    
 
  
2) Internal auditing management system (SH&C Life Insurance-Samjung)
    
 
  
3) Income Tax Advisory, Tax Adjustment (5 companies including Good Morning Shinhan Securities — Samjung)
    
 
   7. Auditing Results of the 5th Annual Shareholders’ Meeting   Approved
 
   — Results found to be appropriate    

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5) Meetings of Outside Director Recommendation Committee
         
Date   Agenda    
Feb. 14, 2007
   1. Appointment of Outside Director Recommendation Committee head   Approved
 
   — Head: Byung Hun Park    
 
   2. Recommendation of outside director candidates   Approved
 
   — Outside Directors: Byung Hun Park, Si Jong Kim, Yong Woong    
 
   Yang, Haeng Nam Chung, Young Hoon Choi, Young Woo Kim, Reynieix    
 
   (7 persons)    
 
   — Outside Directors with professional expertise: Shee Yul Ryoo,    
 
   Yoon Soo Yoon, Sang Yoon Lee, Pyung Joo Kim, Sung Bin Chun (5 persons)    
6) Compensation Committee
         
Date   Agenda    
Feb. 14, 2007
   1. 2006 Evaluation and Compensation results for the Management   Approved
 
   2. 2007 Evaluation and Compensation Scheme for the Management   Approved
 
   3. Setting 2007 Group KPI Target and MBO of the Management   Approved
 
   4. 2007 Stock Options granted to the Management   Approved
 
   5. Grant of PU(Performance Unit) to management   Approved
6. Market Price Information of our Common Shares and ADRs
Common Share Traded on the Korea Exchange
(KRW, number of shares)
                                                         
            Sept. 2006   Oct. 2006   Nov. 2006   Dec. 2006   Jan. 2007   Feb. 2007
Price per share
   High     44,000       44,100       46,900       48,500       49,900       57,800  
 
   Low     42,100       41,450       43,100       44,000       45,450       51,500  
Trading Volume             22,816,559       24,500,981       26,887,343       22,774,048       23,229,216       48,203,956  
American Depositary Shares traded on the New York Stock Exchange
Shinhan Financial Group listed its American Depositary Shares on the New York Stock Exchange on September 16, 2003.
(USD, number of shares)
                                                         
            Sept. 2006   Oct. 2006   Nov. 2006   Dec. 2006   Jan. 2007   Feb. 2007
Price per share
   High     92.60       93.00       100.40       106.00       106.73       123.65  
 
   Low     88.95       86.56       90.25       95.80       96.75       110.25  
Trading Volume             362,500       313,900       418,500       505,200       575,100       896,200  

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Table of Contents

7. Related Party Transactions
Loans to Subsidiaries
(As of December 31, 2006, Unit: KRW 100 million)
                                                                 
    Origination     Maturity     Funding     Lending     Beginning
Balance		                     Ending
Balance		  
Loan Type   Date     Date     Rate     Rate     Jan. 1, 2006     Increase     Decrease     Dec. 31, 2006  
Loans in KRW
     2005-01-31       2010-07-31       4.59 %     5.25 %     700       —       —       700  
Privately Placed Bonds
     2001-12-21       2008-03-21       7.12 %     7.42 %     500       —       500       —  
Loans in KRW
     2003-01-24       2006-01-24       5.19 %     5.50 %     500       —       500       —  
Loans in KRW
     2003-02-26       2006-02-26       4.99 %     5.29 %     2,000       —       2,000       —  
Loans in KRW
     2003-04-23       2009-04-23       5.47 %     6.28 %     1,000       —       —       1,000  
Loans in KRW
     2003-05-23       2006-05-23       5.29 %     5.59 %     500       —       500       —  
Loans in KRW
     2003-06-24       2006-06-24       5.43 %     5.73 %     1,500       —       1,500       —  
Loans in KRW
     2003-10-24       2006-10-24       4.63 %     4.95 %     1,000       —       —       1,000  
Loans in KRW
     2005-03-18       2007-03-18       4.13 %     4.49 %     500       —       —       500  
Loans in KRW
     2005-03-18       2008-03-18       4.23 %     4.54 %     500       —       —       500  
Loans in KRW
     2002-03-29       2007-04-04       7.47 %     8.12 %     200       —       —       200  
Loans in KRW
     2002-07-29       2007-07-29       6.30 %     6.65 %     200       —       —       200  
Loans in KRW
     2002-11-21       2007-11-21       5.88 %     6.18 %     200       —       —       200  
Loans in KRW
     2002-12-16       2007-12-16       5.96 %     6.22 %     200       —       —       200  
Loans in KRW
     2003-01-24       2006-01-24       5.19 %     5.54 %     200       —       200       —  
Loans in KRW
     2003-05-23       2006-05-23       5.29 %     5.59 %     500       —       500       —  
Loans in KRW
     2003-06-24       2008-06-24       5.69 %     5.95 %     300       —       —       300  
Loans in KRW
     2003-07-24       2006-07-24       5.55 %     5.85 %     300       —       300       —  
Loans in KRW
     2003-07-24       2008-07-24       5.87 %     6.13 %     200       —       —       200  
Loans in KRW
     2004-03-24       2007-03-24       4.76 %     5.16 %     300       —       —       300  
Loans in KRW
     2004-03-24       2009-03-24       5.11 %     5.93 %     200       —       —       200  
Loans in KRW
     2004-06-25       2009-06-25       4.93 %     5.22 %     500       —       —       500  
Loans in KRW
     2005-01-31       2008-01-31       4.21 %     4.58 %     300       —       —       300  
Loans in KRW
     2005-03-18       2007-03-18       4.23 %     4.49 %     500       —       —       500  
Loans in KRW
     2005-05-09       2008-05-09       3.99 %     4.33 %     500       —       —       500  
Loans in KRW
     2005-12-16       2008-12-16       5.48 %     5.67 %     400       —       —       400  
Loans in KRW
     2005-12-28       2011-01-28       5.74 %     6.43 %     200       —       200       —  
Loans in foreign Currency
     2003-12-30       2006-12-30     3M Libor + 70bp   3M Libor + 90bp     304       —       20       284  
Loans in foreign Currency
     2004-07-15       2007-06-15     3M Libor + 70bp   3M Libor + 90bp     405       —       27       378  
Privately Placed Bonds
     2004-05-07       2007-03-30       6.26 %     —       31       —       31       —  
Privately Placed Bonds
     2002-05-20       2008-01-20       7.25 %     8.14 %     200       —       200       —  
Loans in KRW
     2006-01-24       2009-01-24       5.24 %     5.41 %     —       500       —       500  
Loans in KRW
     2006-01-24       2009-01-24       5.24 %     5.41 %     —       500       —       500  
Loans in KRW
     2006-02-27       2009-02-27       5.07 %     5.23 %     —       1,000       —       1,000  
Loans in KRW
     2006-04-24       2009-04-24       5.09 %     5.22 %     —       1,000       —       1,000  
Loans in KRW
     2006-07-31       2012-01-31       5.16 %     5.64 %     —       1,000       —       1,000  
Loans in KRW
     2006-09-26       2011-09-26       4.91 %     4.99 %     —       500       —       500  
 
     —       —       —       —       14,840       4,500       6,478       12,862  

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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 : March 30, 2007