Shinhan Financial Group Resolves Third-Party Allocation Paid-in Capital Increase of KRW 1.1582 Trillion to Global Private Equity Funds

Resolution to Proceed with a Paid-in Capital Increase of Approximately 39.13 Million Shares at the Board Meeting on the 4th
Successful Investment Attraction from Hong Kong-based Global Private Equity Fund Affinity and Baring PEA
Expecting Various Partnership and Joint Investment Opportunities in Global and Capital Markets Sectors

[Asia Economy Reporter Kangwook Cho] Shinhan Financial Group announced on the 4th that it held a board meeting and resolved to proceed with a third-party allotment of common stock rights offering worth 1.1582 trillion KRW (approximately 39.13 million shares). The allotment targets are the Hong Kong-based private equity funds 'Affinity Equity Partners (AEP)' and 'Baring Private Equity Asia (BPEA)'.

'Affinity Equity Partners' is one of the largest private equity funds in the Asia-Pacific region, managing approximately USD 14 billion across 10 countries in the Asia-Pacific since its establishment in 1998. Notably, it operates the USD 6 billion 'Affinity Asia Pacific Fund V' and has invested domestically in Hyundai Card, OB Beer, and Hi-Mart, among others.

'Baring Private Equity Asia', also established in Hong Kong in 1997, is the largest fund in Asia managing about USD 20 billion. Earlier this year, it set up and is managing the USD 6.5 billion Asia Fund VII. Its representative domestic investments include Logen Delivery, Halla Cement, and Accuon Capital.

In particular, Shinhan Financial Group achieved consecutive successes in attracting investments from two global private equity firms, following last year's investment from IMM Private Equity (IMM PE), a major domestic private equity company.

Through this rights offering decision, Shinhan Financial Group has strengthened its loss absorption capacity in preparation for the prolonged impact of the novel coronavirus disease (COVID-19) pandemic and secured capital capacity to actively pursue the group's mid- to long-term growth strategy.

Additionally, based on cooperative relationships with global private equity firms, Shinhan Financial Group expects to have various opportunities for partnerships and joint investments in global and capital market sectors in the future. Especially, there are expected to be many areas for mutual collaboration between Shinhan Financial Group, which is highly interested in expanding global channels and investing in digital industries centered on Southeast Asia, and global private equity funds conducting diverse investments in financial and digital sectors based in the Asia-Pacific region.

At this board meeting, Shinhan Financial Group also discussed the group's mid- to long-term capital policy direction, including interim dividends, treasury stock acquisition and cancellation, and common stock ratio for internal management levels, which are planned to be implemented upon the easing of COVID-19.

A Shinhan Financial Group official stated, "Through this rights offering, we expect to proactively respond to uncertainties caused by COVID-19 and utilize the accumulated capital capacity during the economic recovery period to seize various growth opportunities. We plan to diversify the timing and methods of shareholder returns to improve profitability using the increased capital, thereby enhancing shareholder value. Furthermore, we will actively communicate with the market regarding our capital management direction."

This content was produced with the assistance of AI translation services.