Shinhan Financial Group Co. Ltd. - ADR

**Losses from Derivatives Trading**: Shinhan Securities incurred significant trading losses of KRW135.7 billion in Q3 2024 due to issues related to exchange-traded funds (ETFs) and hedging operations. This incident is viewed seriously by the Group’s management, which has committed to improving internal controls and cooperating with regulatory investigations.

**Financial Performance**: For Q3 2024, net income was KRW1.24 trillion, down 10.1% QoQ. Non-interest income decreased by 25.6% QoQ, heavily impacted by the aforementioned trading losses. Interest income, however, rose by 1.2% QoQ due to a growing loan book, particularly in household loans, which increased by 6.3%. This contrasts with a decline in profitability due to lower market interest rates.

**Capital Ratios and Shareholder Returns**: The Common Equity Tier 1 (CET1) capital ratio is estimated at 13.13%. The Board approved a quarterly dividend of KRW541 per share and a share buyback and cancellation program totaling KRW400 billion, underscoring commitment to shareholder returns despite recent losses. This signals a proactive approach to enhancing shareholder value.