Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Presentation (2024)
59 slides from Banco Santander's investor presentation, Sep 23, 2024
Slide 1: Institutional Presentation Q1'24
Strategic and Financial Analysis. Financial Division Institutional Presentation Q1’24
Slide 2: Index
INDEX Our business Group Q1’24 results Final Links to model and structure and & activity remarks public strategy businesses materials
Slide 3: Our business model and strategy
01 Our business model and strategy
Slide 4: Santander, a leading financial group
Santander, a Q1’24 Highlights leading financial group Total assets (€ bn) 1,800 Customer loans (€ bn excluding reverse repos) 1,020 Customer deposits + mutual funds (€ bn excluding repos) 1,184 Branches 8,405 Q1'24 Net operating income (pre-provision profit) (€ mn) 8,833 Q1'24 Attributable profit (€
Slide 5: The Santander Way
The Santander Way Who we are and what guides us 5
Slide 6: Santander business model
Santander business model Our business model Business based on unique Digital bank In-market Geographical competitive advantages with branches & Global is the foundation for Balance sheet generating value for our shareholders Second year of our phase of value creation 6
Slide 7: Customer focus
01 Customer focus Total customers Digital customers We have grown our customer base in 166 mn 55.3 mn recent years, with (+5 mn) (+7%) balanced growth by business and regions Active customers 100 mn +11% Transactions per active customer 58% Products/services digitally available (+0.8 mn) Note: YoY c
Slide 8: Customer focus
01 Traditional Digital Customer focus banking banking Internet, Branches, mobiles, ATMs, tablets, retail agents, … smartphones, smartwatches,… To bring all our customers to a common operating model, while converging to a Collaborative spaces and increased digital capabilities common technology Branc
Slide 9: Scale
02 Scale Retail Retail & Commercial Banking Consumer Digital Consumer Bank ONE Santander: Corporate & Investment Banking CIB ONE Santander Five global businesses Wealth Wealth Management & Insurance across our regions Payments Payments DCB North South Europe Europe America America 9
Slide 10: Scale
02 In-market scale Market shares Europe North America Scale 4% Auto lending 9% Loans 7% DCB 2% Deposits Deposits Europe 16% 12% Loans Loans 13% Loans South America 13% Deposits 11% Deposits 12% #1 European Deposits 17% Consumer Bank Our unique combination Loans 18% 9% 20% Loans Deposits of in-market
Slide 11: Diversification
03 Customer loans Customer deposits Diversification By product/business Other By product/business Other 4% 6% CIB 14% CIB Retail: 15% Retail: 32% 33% home individuals mortgages demand 21% Consumer 12% deposits Consumer 6% 8% 9% Retail: 16% Retail: 14% 10% other individuals Geographical Retail: indiv
Slide 12: Diversification
03 Simple, transparent and easy to analyse balance sheet Diversification Medium-low risk profile Strong liquidity ratios Strong solvency ratios well above requirements Focus on capital efficiency and asset rotation Rock-solid balance sheet with Stable and diversified Highly collateralized and conser
Slide 13: In summary
Reliable risk-return profile Lower volatility of results In summary Differential Pre-provision profit / loans and cost of risk EPS volatility2 Our results show that 2.70% our business model SAN 12% 1.90%1.89% 1.80% 1.80% 1.70% 1.85% 1.60% 1.61% 1.65%1.65% NL 39% works. It is based on 1.25% 1.21% 0.6
Slide 14: Our three tenets
Our three tenets Delivering double-digit value creation, on average Think Value through-the-cycle A new phase of profitability and growth underpinned Building a digital bank with branches with well targeted by three tenets Think Customer products and services to grow our customer base Best customer
Slide 15: Environmental, Social and Governance
Environmental, Social and Governance Green finance raised and facilitated Socially responsible investments (AuMs) Financial inclusion (# People) We continue to make progress on Q1’24 €118.5bn €72.8bn 2.3mn our ESG agenda 2025 targets €120bn €100bn 5mn More information available at www.santander.com/
Slide 16: Group structure and businesses
02 Group structure and businesses
Slide 17: Group organizational structure
Primary segments (Global Businesses) Group Retail Consumer CIB Wealth Payments organizational structure from January 2024 Secondary segments Europe DCB Europe North America South America Group functions and Corporate Centre activities General Talent & Investment Secretariat1 Technology Human Financi
Slide 18: Global Businesses
> Santander Global Businesses 18
Slide 19: Retail & Commercial Banking
Retail & Commercial Banking ‘A new global business integrating all our retail and commercial banking businesses globally to better serve our customers, improve efficiency and drive value creation’ Q1’24 Highlights Strategic priorities Customer loans (€ bn) 621 Customer deposits (€ bn) 642 ▪ Implemen
Slide 20: Digital Consumer Bank
Digital Consumer Bank ‘Global leader in auto financing and digital consumer activities’ Q1’24 Highlights Strategic priorities Customer loans (€ bn) 208 ▪ Expand our leadership in consumer lending across our footprint (e.g. #1 finance New business volumes (€ bn) 21.6 company in Europe and LatAm, top
Slide 21: Corporate & Investment Banking
Corporate & Investment Banking ‘Santander CIB supports corporate and institutional clients, delivering tailored services and value-added wholesale products suited to their complexity and sophistication’ Q1’24 Highlights Strategic priorities Customer loans (€ bn) 139 ▪ Our aim is to become a focused
Slide 22: Wealth Management & Insurance
Wealth Management & Insurance ‘We want to become the best wealth and insurance manager in Europe and the Americas’ Q1’24 Highlights Strategic priorities Total assets under management1(€ bn) 482 ▪ Continue building our global platform leveraging the connectivity of our teams Gross written premiums (€
Slide 23: Payments
Payments ‘One-of-a-kind paytech business that offers innovative payment solutions’ Q1’24 Highlights Strategic priorities ▪ We are a one-of-a-kind paytech business backed by Santander EBITDA margin 17.0% ▪ Helping our customers prosper and accelerate their growth through a one-stop shop, providing so
Slide 24: Cards Payments
Cards Payments ‘Provide exceptional payments experiences, fostering customer loyalty and leveraging transactional data to enhance profitability’ Q1’24 Highlights Strategic priorities # cards (mn) 102 ▪ Expand our business, in a profitable and sustainable way, developing credit and lending business,
Slide 25: Secondary segments
> Santander Secondary segments 25
Slide 26: Europe
Europe 'We continue to accelerate our business transformation to achieve higher growth and a more efficient operating model' Q1'24 Highlights Strategic priorities Branches 3,069 ▪ Grow the business, by acquiring new customers, increasing customer loyalty, and Employees 67,756 further developing fee
Slide 27: Digital Consumer Bank Europe
Digital Consumer Bank Europe ‘Europe’s consumer finance leader: solid business model, geographic diversification and leading market shares in auto/mobility finance and consumer’ Q1'24 Highlights Strategic priorities Branches 340 ▪ Secure leadership positions in global digital consumer lending, both
Slide 28: North America
North America 'We provide a full range of financial services with a particular focus on Retail, Private, Corporate and Investment Banking' Q1'24 Highlights Strategic priorities Branches 1,783 ▪ Leverage our local strengths and capabilities while promoting strong Group network contributions in Mexico
Slide 29: South America
South America 'Moving forward to become our customers’ main bank and the most profitable in each country in which we operate in the region while promoting synergies across our global and regional businesses' Q1'24 Highlights Strategic priorities Branches 3,213 ▪ In Retail, guarantee its success in t
Slide 30: Group functions and Corporate Centre activities
Group functions and Corporate Centre activities • Global T&O strategy • HR strategy • Risk management and compliance • Corporate governance and internal control • Our brand 30
Slide 31: Technology and Operations (T&O)
Technology and Operations (T&O) ‘The T&O mission is to help Santander Global Businesses in their digital transformation, enabling them with a state-of-the-art Global Platform, with innovative capabilities and zero back office’ Global T&O capabilities are key for our digital transformation Composed o
Slide 32: HR strategy: Our aim is to be an employer of choice
HR strategy: Our aim is to be an employer of choice 'Focus on employee engagement, leveraging our SPF culture to retain and attract the best talent' Our corporate management The SPF culture is based on our 5 corporate behaviours evaluation model 211,141 Employees (Q1’24) Continuous Employee Listenin
Slide 33: Risk, compliance & conduct management
Risk, compliance & conduct management 'Our risk, compliance & conduct management is an essential lever to help people and businesses prosper' A risk, compliance & conduct management model that relies on: Advanced management tools that help us carry out effective risk management Common Risk Principle
Slide 34: Corporate governance and internal control
Corporate governance and internal control ‘As a responsible bank, we have clear and robust governance to ensure a long-term sustainable business model’ Composition of the board of directors, Mar-24 Board committees Executive Diversified and well-balanced shareholder base 20.0% Audit Non-executive di
Slide 35: Corporate governance and internal control
Corporate governance and internal control 'Best practices on robust governance are channelled to all subsidiaries' Group-subsidiary governance model Group Subsidiary B The Group-subsidiary governance model enhances control and oversight through: Board of Directors Subsidiary A A Presence of the Grou
Slide 36: Santander brand
Santander brand 'Our brand embeds the essence of the Group's culture and identity' Santander is one of the most valued brands in the world 3 rd best global retail bank brand by Interbrand’s Best Global Brands Ranking, 2023 As one of our most important strategic assets, our brand helps us connect wit
Slide 37: Q1'24 results & activity
03 Q1'24 results & activity «> Santander
Slide 38: Strong first quarter performance across global businesses
Strong first quarter performance with all our global businesses contributing to our 2024 targets Q1’24 Q1’24 attributable profit revenue Continued momentum in revenue growth driven by 5mn new customers YoY and good activity levels €2.9bn €15.4bn +11% +10% Efficiency RoTE Strong operating performance
Slide 39: Strong YoY profit increase, double-digit net operating income growth
Strong YoY profit increase, with double-digit growth in net operating income, supported by customer revenue and efficiency improvements P&L Current Constant € million Q1'24 Q1'23 % % NII 11,983 10,185 18 16 Net fee income 3,240 3,043 6 5 2024 has started with Other income 157 707 -78 -78 excellent b
Slide 40: Strong start putting us on track for 2024 targets
Strong start to the year, which puts us on track to deliver our 2024 targets, or even overdeliver some of them… Q1’24 2024 targets Mid-single Revenue1 9% digit growth Efficiency 42.6% <43% CoR 1.20% c.1.2% FL CET1 12.3% >12.0% after Basel III implementation RoTE 16.2% 14.9% annualizing the 16% tempo
Slide 41: Backed by consistent execution of ONE Transformation
… backed by consistent execution of ONE Transformation… Global & Network Global Tech FY’22 ONE Transformation businesses capabilities & others Q1’24 45.8% -174bps -88bps -63bps 42.6% • Product simplification: 2% fewer • Multi-Nationals: +5% YoY • Global approach to technology: Efficiency products in
Slide 42: Value added by our five global businesses
… and value added by our five global businesses, which are accelerating the achievement of our ID targets Revenue Contribution to 2025 RoTE2 C/I RoTE2 Q1’24 (€bn) Group’s revenue1 target 8.0 41.1% 17.6% Retail +13% 52% -3.9pp +2.9pp c.17% 3.2 41.2% 11.9% Consumer 20% -1.9pp -0.3pp >14% +4% 2.1 42.0%
Slide 43: Retail: strong profit growth YoY
Retail: strong profit growth YoY with solid C/I driven by revenue and cost control Execution of the strategy Q1’24 financials Driving growth and efficiency on the back of our new model Loans Deposits CoR and proprietary technology €621bn €642bn 1.03% Customer New digital onboarding and products lead
Slide 44: Consumer: strong net operating income growth
Consumer: strong net operating income growth with successful deposit gathering Execution of the strategy Q1’24 financials Transforming into a best-in-class, global business and Loans Deposits CoR operating model €208bn €119bn 2.12% Customer Providing global solutions integrated in our partners’ proc
Slide 45: CIB: all-time high revenue
CIB: all-time high revenue. Profit down from a record Q1’23, impacted by investments Execution of the strategy Q1’24 financials Playing to our strengths to better serve our corporate Loans Deposits CoR customers and institutions €139bn €143bn 0.14% Customer Significant progress building new capabili
Slide 46: Wealth: double-digit growth across businesses
Wealth: double-digit growth across businesses with record commercial activity Execution of the strategy Q1’24 financials Accelerating our customers’ connectivity with our global Net new Net sales Gross written product platforms money (PB) (SAM) premiums €5.5bn €3.8bn €3.0bn Customer Named again Best
Slide 47: Payments: double-digit profit growth
Payments: sound credit quality led to double-digit profit growth Execution of the strategy Q1’24 financials Seizing a growing opportunity by capturing scale through TPV Active customers Turnover global platforms Getnet Ebury Cards €54bn 22k €78bn Customer New wallet agreements to offer customers alt
Slide 48: Profitability and value creation with 14% TNAVps + Cash DPS growth
Outstanding profitability and value creation with 14% YoY growth in TNAVps + Cash DPS RoTE EPS TNAVps + Cash DPS % Annualizing the impact of the € cents € per share Cash DPS: €17.6 cents temporary levy +93bps +14% +14% 16.2 17.0 15.3 15.0 5.04 14.4 14.9 4.86 4.41 Q1'23 Q1'24 Q1'23 Q1'24 Mar-23 Mar-2
Slide 49: Final remarks
04 Final ce remarks «> Santander
Slide 50: Progress towards our ID target in new phase of value creation
Making progress towards our ID target in our new phase of value creation for our shareholders Q1’24 vs. 2025 ID targets Strength Disciplined capital allocation FL CET1 RWAs with RoRWA > CoE 12.3% TNAVps + DPS 83% >12% c.85% +14% Double-digit growth average through-the-cycle Shareholder remuneration
Slide 51: 2024 has begun with excellent business and commercial dynamics
2024 has begun with excellent business and commercial dynamics Outstanding customer revenue performance backed by all global businesses €15.4bn 42.6% €2.9bn Structural efficiency gains and profitable growth driven by strategy execution Revenue Efficiency Profit ONE Transformation and value-added by
Slide 52: Links to public materials
05 Links to public materials «> Santander
Slide 53: Links to Grupo Santander public materials
Links to Grupo Santander public materials For additional information on the Group, please click on the images or icons below Q1’24 financial results Other information Financial report Earnings presentation Series Shareholders report 2023 Digital annual review Global business Press release Fixed inco
Slide 54: Glossary
Glossary «> Santander
Slide 55: Glossary - Acronyms
Glossary - Acronyms • A2A: account to account • EV: Electric Vehicle • QoQ: Quarter-on-Quarter • ALCO: Assets and Liabilities Committee • FL: Fully-loaded • Repos: Repurchase agreements • AM: Asset management • FTE: Full time employee • Retail: Retail & Commercial Banking • AuMs: Assets under Manage
Slide 56: Glossary - Definitions
Glossary - Definitions PROFITABILITY AND EFFICIENCY • RoTE: Return on tangible capital: Group attributable profit / average of: net equity (excluding minority interests) – intangible assets (including goodwill) • RoRWA: Return on risk-weighted assets: consolidated profit / average risk-weighted asse
Slide 57: Important information
Important information Non-IFRS and alternative performance measures Non-financial information This presentation contains financial information prepared according to International Financial Reporting This presentation contains, in addition to financial information, non-financial information (NFI), St
Slide 58: Important information
Important information In particular, forward looking statements are based on current expectations and future estimates about Not a securities offer Santander’s and third-parties’ operations and businesses and address matters that are uncertain to This presentation and the information it contains doe
Slide 59: Thank You.
Thank You. Our purpose is to help people and businesses prosper. Our culture is based on believing that everything we do should be: