Shinhan Financial Group Successfully Raises Demand for 600 Billion KRW New Hybrid Capital Securities
Securing Diverse Growth Foundations in Non-Bank and Digital Sectors through Proactive Capital Expansion
Confirming Strong Investment Demand Based on Industry-Leading Net Profit and Creditworthiness
[Asia Economy Reporter Kwangho Lee] Shinhan Financial Group announced on the 10th that it successfully raised demand for 600 billion KRW worth of Basel 3 eligible write-off contingent capital securities from domestic institutional investors.
This issuance was conducted with call options of 5 and 10 years. The 5-year call option of 430 billion KRW was completed at an interest rate of 2.94%, and the 10-year call option of 170 billion KRW was completed at 3.30%.
Shinhan Financial Group decided to issue hybrid capital securities considering the market environment with increased interest rate volatility and to secure the group's growth potential through proactive capital expansion.
Despite recent market interest rate hikes and increased domestic and international uncertainties, based on the highest level of profits and creditworthiness in the financial sector, the issuance was decided at 600 billion KRW, 200 billion KRW more than the amount stated in the securities registration statement, attracting interest from various investors such as insurance companies, public foundations, and mutual aid associations.
Through this hybrid capital securities issuance, Shinhan Financial Group's financial indicators improved, maintaining stable capital adequacy. The group's total capital (BIS) ratio is expected to rise by 0.24 percentage points from the end of 2020 to 16.0%, and the leverage ratio is expected to improve by 2.70 percentage points to 115.1%.
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A Shinhan Financial Group official said, "This issuance is significant in terms of securing proactive growth potential and strengthening capital adequacy in preparation for an uncertain market environment, as well as diversifying investors and maturity portfolios." He added, "We will do our best to enhance corporate and shareholder value based on stable capital management going forward."
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