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KB Financial Group vs Shinhan Financial Group

Side-by-side credit pricing comparison from Pillar 3 disclosures.

Last updated: March 2026 · Data source: public Pillar 3 disclosures
Verdict:

On a representative BBB+ EUR 25M 5-year term loan, Shinhan Financial Group is the cheaper lender by 4bp in minimum spread. For a EUR 25M facility, that's EUR 10,418 per year.

Bank profiles compared

Metric KB Financial Group
South Korea		 Shinhan Financial Group
South Korea
IRB approachA-IRBA-IRB
Cost-to-income39.3%41.5%
Effective tax rate28.6%27.5%
Avg corporate PD1.50%1.60%
Avg LGD unsecured38.0%38.0%
Avg LGD secured20.0%20.0%
Funding spread (bp)17bp17bp
Corporate EADEUR 253260bnEUR 230000bn

Sample RAROC: BBB+ EUR 25M 5Y term loan

Both banks priced on the exact same deal — 150bp spread, 20bp commitment fee, 60-month maturity. Higher RAROC means the bank earns more from this deal. Lower min-spread means the borrower gets a better rate.

Component KB Financial Group Shinhan Financial Group
Annual revenueEUR 385,000EUR 385,000
Operating costEUR 154,000EUR 154,000
Expected lossEUR 28,750EUR 28,750
Capital required (FPE)EUR 2,451,320EUR 2,451,320
RAROC (after tax)6.79%6.89%
Min spread for 12% RAROC269bp265bp
This is just one sample deal.

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FAQ: KB Financial Group vs Shinhan Financial Group

Which bank is cheaper on corporate credit: KB Financial Group or Shinhan Financial Group?
On a BBB+ EUR 25M 5-year term loan, Shinhan Financial Group requires a minimum spread of 265bp to reach a 12% RAROC hurdle, versus 269bp at the other bank — a difference of 4bp on the same deal.
How do KB Financial Group and Shinhan Financial Group compare on corporate PD?
KB Financial Group reports an EAD-weighted corporate PD of 1.50%, while Shinhan Financial Group reports 1.60%. The gap reflects differences in obligor mix and geography rather than underwriting quality.
How do the two banks differ on IRB approach?
KB Financial Group uses A-IRB and Shinhan Financial Group uses A-IRB. The IRB approach determines whether internal LGD models or supervisory LGDs apply, which materially affects capital required on every corporate facility.
What deal is used in this comparison?
A single standardised facility: BBB+ rated, EUR 25M drawn on a EUR 30M commitment, 5-year tenor, 150bp spread, 20bp commitment fee. Both banks are priced on this exact deal using their own disclosed Pillar 3 parameters.