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Shinhan Financial Group vs KB 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 Shinhan Financial Group
South Korea		 KB Financial Group
South Korea
IRB approachA-IRBA-IRB
Cost-to-income41.5%39.3%
Effective tax rate27.5%28.6%
Avg corporate PD1.60%1.50%
Avg LGD unsecured38.0%38.0%
Avg LGD secured20.0%20.0%
Funding spread (bp)17bp17bp
Corporate EADEUR 230000bnEUR 253260bn

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 Shinhan Financial Group KB 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)6.89%6.79%
Min spread for 12% RAROC265bp269bp
This is just one sample deal.

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FAQ: Shinhan Financial Group vs KB Financial Group

Which bank is cheaper on corporate credit: Shinhan Financial Group or KB 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 Shinhan Financial Group and KB Financial Group compare on corporate PD?
Shinhan Financial Group reports an EAD-weighted corporate PD of 1.60%, while KB Financial Group reports 1.50%. The gap reflects differences in obligor mix and geography rather than underwriting quality.
How do the two banks differ on IRB approach?
Shinhan Financial Group uses A-IRB and KB 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.