Banco Santander, S.a. · BME:SAN
Banco Santander — 9M 2024 Earnings Presentation
58 slides from Banco Santander's earnings presentation, Oct 29, 2024
Slide 1: Form 6-K Report of Foreign Issuer
FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of October, 2024 Commission File Number: 001-12518 Banco Santander, S.A. (Exact name of registrant as specified in its ch
Slide 2: Table of Contents
BANCO SANTANDER, S.A. ________________________ TABLE OF CONTENTS Item 1. January - September 2024 Earnings presentation
Slide 3: Earnings Presentation 9M'24
Earnings Presentation 9M’24 29 October 2024
Slide 4: Important information: Non-IFRS and alternative performance measures
2 Important information Non-IFRS and alternative performance measures This presentation contains financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as alternative performance measures (APMs) as
Slide 5: Important information: forward-looking statements
3 Important information While these forward-looking statements represent our judgement and future expectations concerning our business developments, results may differ materially from those anticipated, expected, projected or assumed in forward-looking statements. In particular, forward looking stat
Slide 6: Index
4 Index 1 9M’24 Highlights Progress on our strategy Group review 2 Final remarks 3 Appendix 4
Slide 7: Another record quarterly profit driving double-digit profit growth in 9M'24
5 FL CET1 Another record quarterly profit driving double-digit profit growth in 9M’24 with revenue up high-single digits Strong operating performance and profitable growth, with efficiency at record levels and RoTE above our 2024 target Delivering double-digit value creation and higher shareholder r
Slide 8: Double-digit profit and net operating income growth YoY
6 Double-digit profit and net operating income growth YoY, supported by customer revenue and efficiency improvements Excellent business and commercial dynamics continued in 9M’24 • Record NII, fees, total revenue, net operating income and profit • C/I and RoTE improvement • Outstanding EPS growth: +
Slide 9: On track to deliver on our full-year 2024 targets
7 On track to deliver on our full-year 2024 targets, which we upgraded last quarter … (1) YoY change in constant euros, except Argentina in current euros. Revenue1 Efficiency CoR FL CET1 RoTE 9M’24 2024 targets +8% 41.7% c.42% 1.2% c.1.2% 12.5% >12.0% 16.2% >16% High-single digit growth after FL Bas
Slide 10: Backed by our execution of ONE Transformation
8 … backed by our execution of ONE Transformation, improving both revenue and costs… • Multi-Nationals: +3% YoY revenue growth • Wealth: collaboration fees with CIB and Corporates reached €3.0bn (+13% vs. 9M’23) • Consumer: expansion of OEM agreements • Product simplification: 16% fewer products in
Slide 11: Our five global businesses accelerating profitable growth
9 39.3% 18.5% -4.2pp +3.6pp 40.7% 11.9% -1.9pp +0.3pp 44.4% 18.1% +3.6pp -2.3pp 34.2% 81.1% -2.1pp +3.9pp 46.3% 22.7% +1.3pp +3.1pp 41.7% 16.2% -2.3pp +1.3pp … and by our five global businesses, leveraging our global scale to accelerate profitable growth 52% 20% 13% 6% 9% Revenue (€bn) Contribution
Slide 12: Retail: global platform deployment driving revenue growth
10 2,941 3,024 3,102 3,064 3,040 3,021 3,060 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 Retail: global platform deployment driving 9% revenue growth while holding costs flat # of products1 (k) # of non-commercial FTEs1 per mn total customers Active customers (mn) Execution of the strategy Key drivers Driving growth
Slide 13: Consumer: strong improvement in operational leverage
11 +6%+5%+5% Consumer: strong improvement in operational leverage and deposit cost-to-serve Fully-digital financing experience available for our auto partners Expanding and consolidating partnerships across regions Customer experience Expanding Openbank to new markets to fuel asset growth Double-dig
Slide 14: CIB: serving corporate customers and institutions
12 82 83 2022 9M'24 Key drivers Playing to our strengths to better serve our corporate customers and institutions Fee growth (€ bn) % Total revenue / RWAs % customer related revenue 80% CIB: US investments drove 15% fee growth and strong RoTE of 18% Note: data and YoY changes in constant euros. Reve
Slide 15: Wealth: strong activity, collaboration fees up 13%
13 335 364 1,279 1,408 1,614 1,772 9M'23 9M'24 403 478 498 569 901 1,047 9M'23 9M'24 +16% Private Banking Revenue (including ceded fees, € mn) Wealth: strong activity, collaboration fees up 13% and 81% RoTE Key drivers Accelerating our customers’ connectivity with our global product platforms Santan
Slide 16: Payments: solid revenue increase and profitability
14 % growth exc. Q1’23 impact1 Key drivers Seizing a growing opportunity by capturing scale through global platforms Revenue (€ mn) PagoNxt Cards Note: data and YoY changes in constant euros. Transactions include merchant payments, cards and electronic A2A payments. (1) Excluding a one-time positive
Slide 17: Building capital organically and delivering higher shareholder remuneration
15 Note: our shareholder remuneration policy is c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividend and 50% in share buybacks. Implementation of shareholder remuneration policy is subject to future corporate and regulat
Slide 18: Index
16 Index 1 9M’24 Highlights Progress on our strategy Group review 2 Final remarks 3 Appendix 4
Slide 19: Double-digit profit and net operating income growth YoY
17 2,571 2,670 2,902 2,933 2,852 3,207 3,250 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 Double-digit profit and net operating income growth YoY, supported by customer revenue and efficiency improvements Attributable profit (Constant € mn) +12% Attributable profit Note: underlying P&L. € mn 2,582 2,642 2,862 2,890 2
Slide 20: High-single digit revenue growth underpinned by customer activity
18 46,185 42,683 +2,009 +489 +530 +309 +118 +46 9M'23 Retail Consumer CIB Wealth Payments CC 9M'24 13,942 14,131 14,610 14,306 15,137 15,536 15,512 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 High-single digit revenue growth underpinned by customer activity across our businesses • >95% of total revenue is customer r
Slide 21: NII and NIM up YoY
19 2.63% 2.73% 2.82% 2.76% 2.97% 2.89% 2.79% NII and NIM up YoY supported by volumes and margin management Note: NIM = NII / Average earning assets. Data and YoY % changes in constant euros. NIM Quarterly NII NIM 2.88% -0.16 -0.07 2.73% +0.27 +0.11 9M'23 Asset yields Asset volumes Liability costs Li
Slide 22: Net fee income growth shows value added from global businesses
20 9,666 9,083 +93 +219 +246 +147 -121 -2 9M'23 Retail Consumer CIB Wealth Payments CC 9M'24 3,034 3,004 3,045 2,772 3,181 3,205 3,279 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 Net fee income growth shows value added from our global businesses Note: data and YoY % changes in constant euros. +3% +25% +15% +16% -6%
Slide 23: ONE Transformation driving structural efficiency gains
21 ( in real terms1)-1% 19,262 -100 -8 18,793 +17 +424 +56 +81 9M'23 Retail Consumer CIB Wealth Payments CC 9M'24 6,143 6,271 6,379 6,376 6,463 6,314 6,485 Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 ONE Transformation is driving structural efficiency gains and positive jaws Note: data and YoY % changes in constant
Slide 24: Cost of risk improvement keeps us on track
22 Cost of risk improvement keeps us on track to meet our 2024 target Note: CoR - provisions to cover losses due to impairment of loans in the last 12 months / average customer loans and advances of the last 12 months. Stages in current euros. CoR 12 month LLPs Other credit quality metrics Sep-23 Ju
Slide 25: Strong capital generation with profitable front-book growth
23 Front book pricing RoRWA of new book Strong capital generation, with profitable front-book growth of 23% RoTE and significant RWA mobilization % (1) Shareholder remuneration accrued against profit earned in Q3 2024. Target payout defined as c.50% of Group reported profit (excluding non-cash, non-
Slide 26: Index
24 Index 1 9M’24 Highlights Progress on our strategy Group review 2 Final remarks 3 Appendix 4
Slide 27: Consistently delivering on our Investor Day targets
25 RoTE Profitability FL CET1 Strength RWAs with RoRWA > CoE Disciplined capital allocation Payout 50% Shareholder remuneration Note: target payout defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividend and 50%
Slide 28: ONE Transformation and global scale accelerating operational leverage
26 ONE Transformation and global scale keep accelerating operational leverage and profitable growth Efficiency at record levels, boosting RoTE to above our 2024 target Record quarterly and 9M profit. Well positioned to deliver sustained growth, increased profitability and shareholder value creation
Slide 29: Index
27 Index 1 9M’24 Highlights Progress on our strategy Group review 2 Final remarks 3 Appendix 4
Slide 30: Appendix
28 Appendix Investor Day Targets summary Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary The other information in the Appendix regularly provided each quarter can be found in the document entitled "Sup
Slide 31: Investor Day Targets summary
29 (1) Target payout defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividend and 50% in share buybacks. Execution of the shareholder remuneration policy is subject to future corporate and regulatory decisions and
Slide 32: Appendix
30 Appendix Investor Day Targets summary Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary
Slide 33: Group P&L and excluding Argentina
31 Group P&L and excluding Argentina ex. Argentina P&L Current Constant Current Constant € million 9M'24 9M'23 % % % % NII 34,682 32,139 8 9 8 9 Net fee income 9,666 9,222 5 6 7 8 Other income 1,837 1,734 6 9 6 8 Total revenue 46,185 43,095 7 8 8 9 Operating expenses -19,262 -18,961 2 2 3 4 Net oper
Slide 34: Appendix
32 Appendix Investor Day Targets summary Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary
Slide 35: Detail by global business
Detail by global business @ Santander
Slide 36: Retail & Commercial Banking
34 Loans Deposits Mutual Funds Efficiency CoR RoTE P&L Retail & Commercial Banking Highlights Underlying P&L* Q3'24 % Q2'24 9M'24 % 9M'23 % 9M'23¹ NII 6,803 2.3 20,817 9.5 9.0 Net fee income 1,149 2.6 3,514 2.7 0.9 Total revenue 7,945 0.0 24,219 9.0 8.3 Operating expenses -3,102 3.1 -9,525 -1.0 -2.2
Slide 37: Digital Consumer Bank
35 P&L Highlights Key data Digital Consumer Bank Underlying P&L* Q3'24 % Q2'24 9M'24 % 9M'23 % 9M'23¹ NII 2,614 0.4 7,978 5.2 4.7 Net fee income 373 -1.6 1,115 24.5 23.9 Total revenue 3,135 -2.1 9,584 5.4 4.8 Operating expenses -1,278 -0.7 -3,896 0.4 0.1 Net operating income 1,857 -3.0 5,688 9.1 8.4
Slide 38: Corporate & Investment Banking
36 Loans Deposits Efficiency CoR RoTE €137bn +6% €127bn -13% 44.4% +3.6pp 0.21% +6bps 18.1% -2.3pp Key data Corporate & Investment Banking Underlying P&L* Q3'24 % Q2'24 9M'24 % 9M'23 % 9M'23¹ NII 901 -2.5 2,932 16.5 14.7 Net fee income 612 0.3 1,892 15.0 14.0 Total revenue 2,072 2.8 6,261 9.2 7.5 Op
Slide 39: Wealth Management & Insurance
37 Wealth Management & Insurance Note: Sep-24 data (AuMs); 9M’24 data (net new money, net sales and GWPs). YoY changes in constant euros. (2) Considering annualized net new money as a % of total CAL and net sales as a % of SAM’s AuMs. (3) Including fees generated by asset management and insurance ce
Slide 40: Payments
38 Payments Note: Sep-24 data and YoY changes in constant euros. In PagoNxt, a negative growth rate in profit indicates a lower loss. Number of cards managed by Cards is 102 million, as it excludes those managed by Digital Consumer Bank including Openbank (3 million cards). (2) Excluding a one-time
Slide 41: Corporate Centre
39 Corporate Centre • NII slightly down as higher liquidity buffer remuneration was more than offset by higher interest expense related to TLAC/MREL issuances • Lower losses on financial transactions due to a smaller impact from foreign currency hedges • Cost reduction, driven by ongoing simplificat
Slide 42: Detail by region and country
40 Detail by region and country
Slide 43: Europe
41 Highlights Note: Sep-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Key data and P&L Europe Underlying P&L* Q3'24 % Q2'24 9M'24 % 9M'23 % 9M'23¹ NII 4,205 0.6 12,493 4.1 6.0 Net fee income 1,168 0.1 3,536 5.2 6.3 Total revenue 5,945 0.4 17,663 7.2 8.8 Operating expe
Slide 44: Spain and UK
42 Spain UK España and UK Note: Sep-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Loans Deposits Mutual Funds Efficiency CoR RoTE €230bn -1% €296bn -3% €89bn +19% 34.7% -5.5pp 0.52% -11bps 21.8% +7.1pp Loans Deposits Mutual Funds Efficiency CoR RoTE €238bn -4% €225bn
Slide 45: Portugal and Poland
43 Portugal and Polonia Portugal Poland Note: Sep-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Loans Deposits Mutual Funds Efficiency CoR RoTE Loans Deposits Mutual Funds Efficiency CoR RoTE €39bn +3% €38bn +7% €5bn +15% 24.6% -4.1pp 0.07% -10bps 26.8% +3.6pp €38bn +
Slide 46: Digital Consumer Bank Europe
44Note: Sep-24 data and YoY changes (new lending, loans and customer funds in constant euros). Digital Consumer Bank Europe Highlights Key data and P&L Underlying P&L* Q3'24 % Q2'24 9M'24 % 9M'23 % 9M'23¹ NII 1,069 -2.0 3,256 4.5 4.7 Net fee income 229 -0.8 680 12.3 12.6 Total revenue 1,398 -3.0 4,2
Slide 47: North America
45Note: Sep-24 data and YoY changes (loans, deposits and mutual funds in constant euros). North America Highlights Key data and P&L Underlying P&L* Q3'24 % Q2'24 9M'24 % 9M'23 % 9M'23¹ NII 2,527 2.0 7,774 3.3 3.2 Net fee income 641 3.9 1,941 18.5 18.6 Total revenue 3,367 0.8 10,406 6.2 6.1 Operating
Slide 48: US and Mexico
46Note: Sep-24 data and YoY changes (loans, deposits and mutual funds in constant euros). (2) Adjusted RoTE: adjusted based on Group’s deployed capital calculated as contribution of RWAs at 12%. Using tangible equity, RoTE is 8.1%. MexicoUS Loans Deposits Mutual Funds Efficiency CoR RoTE2 Loans Depo
Slide 49: South America
47 South America Note: Sep-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Highlights Key data and P&L Underlying P&L* Q3'24 % Q2'24 9M'24 % 9M'23 % 9M'23¹ NII 3,520 2.7 11,355 20.8 15.5 Net fee income 1,159 5.2 3,517 0.9 -3.9 Total revenue 4,678 1.7 14,468 11.4 6.1 Ope
Slide 50: Brazil and Chile
48Note: Sep-24 data and YoY changes (loans, deposits and mutual funds in constant euros). Brazil Chile Brasil and Chile Loans Deposits Mutual Funds Efficiency CoR RoTE Loans Deposits Mutual Funds Efficiency CoR RoTE €96bn +9% €83bn +7% €51bn +9% 32.0% -2.7pp 4.78% +11bps 16.8% +3.1pp €42bn +1% €29bn
Slide 51: Argentina, Uruguay, Peru and Colombia
49 157 9M'24 Note: Sep-24 data and YoY changes (profit, loans, deposits and mutual funds in constant euros). In Argentina, variations are in current euros. Argentina Argentina y Uruguay Uruguay, Peru and Colombia Uruguay Peru Colombia RoTEs € mn Attributable profit +24% +6%26 25.2% +1.7pp 25.1% +1.9
Slide 52: Appendix
50 Appendix Investor Day Targets summary Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary
Slide 53: Reconciliation of underlying results to statutory results
51 Reconciliation of underlying results to statutory results EUR mn (1) Includes exchange differences. Explanation of 9M’24 adjustments: • Temporary levy on revenue earned in Spain in the first quarter, totalling EUR 335 million, which was moved from total income to other gains (losses) and provisio
Slide 54: Appendix
52 Appendix Investor Day Targets summary and our last step towards ONE SANTANDER Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary
Slide 55: Glossary - Acronyms
53 Glossary - Acronyms • A2A: account to account • ALCO: Assets and Liabilities Committee • AM: Asset management • AuMs: Assets under Management • bn: Billion • BNPL: Buy now, pay later • bps: Basis points • c.: Circa • CAL: Customer assets and liabilities • CET1: Common equity tier 1 • CHF: Swiss f
Slide 56: Glossary - Definitions
54 Glossary - Definitions Notes: The averages for the RoTE and RoRWA denominators are calculated using the monthly average over the period, which we believe should not differ materially from using daily balances. The risk-weighted assets included in the denominator of the RoRWA metric are calculated
Slide 57: 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:
Slide 58: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Banco Santander, S.A. Date: 29 October 2024 By: /s/ José García Cantera Name: José García Cantera Title: