SHINHAN FINANCIAL GROUP CO LTD | CIK:0001263043 |

Filed: 4/30/2018

Entity registrant name: SHINHAN FINANCIAL GROUP CO LTD (CIK: 0001263043)

Generator: Fujitsu

SEC filing page: http://www.sec.gov/Archives/edgar/data/1263043/000119312518141173/0001193125-18-141173-index.htm

XBRL Instance: http://www.sec.gov/Archives/edgar/data/1263043/000119312518141173/shg-20171231.xml

XBRL Cloud Viewer: Click to open XBRL Cloud Viewer

EDGAR Dashboard: https://edgardashboard.xbrlcloud.com/edgar-dashboard/?cik=0001263043

Open this page in separate window: Click

ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory

11.

Derivatives

(a)

The notional amounts of derivatives as of December 31, 2016 and 2017 are as follows:


	2016		2017
Foreign currency related:
Over the counter:
Currency forwards	W	92,309,997		100,806,648
Currency swaps		27,460,485		30,269,510
Currency options		1,210,658		1,178,047

		120,981,140		132,254,205
Exchange traded:
Currency futures		739,186		1,179,986

		121,720,326		133,434,191

Interest rates related:
Over the counter:
Interest rate swaps		37,545,356		30,269,249
Interest rate options		1,014,000		310,000

		38,559,356		30,579,249
Exchange traded:
Interest rate futures		2,099,017		1,545,905
Interest rate swaps(*)		44,300,555		53,625,962

		46,399,572		55,171,867

		84,958,928		85,751,116

Credit related:
Over the counter:
Credit swaps		1,244,502		2,443,609

Equity related:
Over the counter:
Equity swaps and forwards		12,187,176		4,223,096
Equity options		1,228,114		1,230,635

		13,415,290		5,453,731
Exchange traded:
Equity futures		492,562		526,913
Equity options		2,213,162		3,238,049

		2,705,724		3,764,962

		16,121,014		9,218,693

Commodity related:
Over the counter:
Commodity swaps and forwards		892,003		931,644
Commodity options		11,876		4,880

		903,879		936,524
Exchange traded:
Commodity futures		114,927		122,394

		1,018,806		1,058,918


	2016		2017
Hedge:
Currency forwards	W	2,036,187		1,227,354
Currency swaps		2,765,653		3,866,015
Interest rate swaps		7,631,505		8,088,422

		12,433,345		13,181,791

	W	237,496,921		245,088,318

(*)

The notional amount of derivatives which is settled in the ‘Central Counter Party (CCP)’ system.

(b) Fair values of derivative instruments as of December 31, 2016 and 2017 are as follows:


	2016				2017
	Assets		Liabilities		Assets		Liabilities
Foreign currency related:
Over the counter:
Currency forwards	W	1,722,096		1,623,325		1,895,225		1,636,715
Currency swaps		698,220		766,252		854,892		865,551
Currency options		12,347		9,422		12,023		12,070

		2,432,663		2,398,999		2,762,140		2,514,336
Exchange traded:
Currency futures		—		4		415		553

		2,432,663		2,399,003		2,762,555		2,514,889

Interest rates related:
Over the counter:
Interest rate swaps		290,074		340,409		204,449		208,901
Interest rate options		7,807		8,367		—		1,893

		297,881		348,776		204,449		210,794
Exchange traded:
Interest rate futures		1,439		212		1,771		544

		299,320		348,988		206,220		211,338

Credit related:
Over the counter:
Credit swaps		13,365		6,095		63,359		10,617
Equity related:
Over the counter:
Equity swap and forwards		25,378		250,879		112,282		13,502
Equity options		38,156		6,212		91,040		12,177

		63,534		257,091		203,322		25,679


	2016				2017
	Assets		Liabilities		Assets		Liabilities
Exchange traded:
Equity futures		683		57		72		805
Equity options		13,084		12,215		23,562		18,521

		13,767		12,272		23,634		19,326

		77,301		269,363		226,956		45,005

Commodity related:
Over the counter:
Commodity swaps and forwards		1,778		49,702		15,576		22,593
Commodity options		105		22		72		77

		1,883		49,724		15,648		22,670
Exchange traded:
Commodity futures		2,110		1,641		6,037		315

		3,993		51,365		21,685		22,985

Hedge:
Currency forwards	W	5,646		81,829		50,492		1,567
Currency swaps		155,386		36,077		59,399		161,896
Interest rate swaps		15,185		335,524		9,512		519,364

		176,217		453,430		119,403		682,827

	W	3,002,859		3,528,244		3,400,178		3,487,661

(c)

Gain or loss on valuation of derivatives for the years ended December 31, 2015, 2016 and 2017 are as follows:


	2015			2016			2017
Foreign currency related
Over the counter
Currency forwards	W	142,086			(80,907	)		85,498
Currency swaps		(132,226	)		7,193			91,410
Currency options		10,540			9,704			5,422

		20,400			(64,010	)		182,330
Exchange traded
Currency futures		(272	)		(33	)		(137	)

		20,128			(64,043	)		182,193

Interest rates related
Over the counter
Interest rate swaps		(65,444	)		(68,490	)		(17,805	)
Interest rate options		(185	)		1,116			413

		(65,629	)		(67,374	)		(17,392	)
Exchange traded
Interest rate futures		144			3,849			6,950

		(65,485	)		(63,525	)		(10,442	)


	2015			2016			2017
Credit related
Over the counter
Credit swaps		748			10,761			46,593
Equity related
Over the counter
Equity swap and forwards		(653,231	)		111,723			73,490
Equity options		5,470			11,639			36,662

		(647,761	)		123,362			110,152

Exchange traded
Equity futures		613			626			(733	)
Equity options		(2,218	)		3,420			22,315

		(1,605	)		4,046			21,582

		(649,366	)		127,408			131,734

Commodity related
Over the counter
Commodity swaps and forwards		(106,976	)		(8,988	)		13,435
Commodity options		(457	)		(44	)		(10	)

		(107,433	)		(9,032	)		13,425
Exchange traded
Commodity futures		(2,582	)		98			5,722

		(110,015	)		(8,934	)		19,147

Hedge
Currency forwards		(27,339	)		(80,958	)		48,050
Currency swaps		97,576			19,366			(143,737	)
Interest rate swaps		(120,396	)		(239,596	)		(191,233	)

		(50,159	)		(301,188	)		(286,920	)

	W	(854,149	)		(299,521	)		82,305

(d)

Gain or loss on fair value hedges for the years ended December 31, 2015, 2016 and 2017 are as follows:


	2015			2016			2017
Hedged item	W	211,951			332,197			(87,292	)
Hedging instruments		(206,925	)		(340,041	)		66,620

	W	5,026			(7,844	)		(20,672	)

In order to hedge changes in the fair value of investments in debt securities, structured deposits, etc. from interest rate changes, the Group designates interest swap contracts as hedging items. Additionally, the Group holds forward exchange contracts and currency swaps to hedge changes in the fair value of foreign currency deposits and investments in foreign currency debt securities from exchange rate changes.

(e)

Hedge of net investment in foreign operations

Hedge accounting is applied for a portion of net investments in foreign operations. Foreign currency translation adjustments for foreign operation by each hedging instrument for the years ended December 31, 2016 and 2017 are as follows:


	2016			2017
Borrowings in foreign currency	W	(23,441	)		82,565
Debt securities issued in foreign currency		(35,727	)		8,162
Currency forwards		4,775			6,626

	W	(54,393	)		97,353