Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Presentation (November 2022)
59 slides from Banco Santander's investor presentation, November 2022
Slide 1: Institutional Presentation 9M'22
Strategic and Financial Analysis. Financial Division Institutional Presentation 9M’22
Slide 2: Index
Index 1 2 3 4 5 Our business Group structure 9M’22 results Final remarks Links to model and and businesses & activity public materials strategy 2
Slide 3: Our business model and strategy
1. Our business model and strategy
Slide 4: Santander, a leading financial group
Santander, a 9M'22 Highlights leading financial Total assets (€ bn) 1,816 group Customer loans (€ bn excluding reverse repos) 1,040 Customer deposits + mutual funds (€ bn; excluding repos) 1,129 Branches 9,134 9M'22 Net operating income (pre-provision profit) (€ mn) 21,034 Simple Personal Fair 9M'22
Slide 5: The Santander Way
The Santander Our purpose We create value for all Way To help people and businesses prosper. Our aim To be the best open financial services It is the bedrock on platform, by acting responsibly and earning which we are the lasting loyalty of our people, customers, shareholders and communities. buildi
Slide 6: Santander business model
1. Customer focus 2. Scale 3. Diversification1 Santander Deepening the relationships Local scale and global reach Our geographic and business business model with our customers through a simpler value proposition, diversification makes us more resilient under adverse superior customer experience circ
Slide 7: Customer focus
01. Customer focus 159 million customers Distribution by market, Sep-22 We have grown our Our aim is to further enhance our customers’ experience and satisfaction customer base over Digital Consumer Bank 12% the last seven years, Europe 30% Customer satisfaction in NPS1 with balanced growth by regio
Slide 8: Customer focus: loyal and digital customers
01. Customer focus 26.8 mn (+8%) 50.5 mn (+8%) Loyal customers Digital customers1 Tech investments to transform the business … We also increased €2 bn / year loyalty and helped a new generation of 24.7 mn (+9%) … help customers transact online Individuals customers with new ways to interact with the
Slide 9: Customer focus: traditional and digital banking
01. Traditional Digital Customer focus banking banking Internet, Branches, mobiles, ATMs, tablets, retail agents, … smartphones, smartwatches,… Traditional customer service and digital Customer support services: available anytime, anywhere, anyhow technology Collaborative spaces and increased digita
Slide 10: Scale: market shares
02. Market shares North America Scale 4% Auto lending 10% Loans 7% Europe Deposits Digital 2% Deposits Consumer Bank 18% 12% Loans Loans 13% 13% 11% Loans Deposits Deposits 12% South America #1 European Consumer Local scale and Deposit 17% Loans Bank 19% leadership based on 18% Loans 9% Loans Deposi
Slide 11: Diversification
03. Well balanced profit and volume distribution Diversification Contribution to 9M'22 underlying attributable profit1 Sep-22 Group’s contribution2 by primary segments Customer loans Customer funds 32% Our balanced profit 10% and volume 12% 57% 5% diversification 63% 17% remains a source of 32% 15%
Slide 12: Diversification by customer segment
03. Diversification Customer loans by business, Sep-22 Customer funds by business, Sep-22 Individual mortgages, 33% Individuals demand Business SCIB, 15% SCIB, 14% deposits, 35% diversification among customer segments Other individuals, 1 Corporates, 14% 6% Individuals time (individuals, SMEs, 1 Cor
Slide 13: In summary
More resilience and lower volatility of results In summary Differential Pre-provision profit / loans and Cost of credit EPS volatility calculated using quarterly data from Jan-99 to Q2’222 1.90% 1.89% 1.80% 1.60% 1.61% 1.65% 1.65% 1.80% 1.77% 12% 1.25% 1.21% Our strong model is US 39% 0.62% NL 40% r
Slide 14: Environmental, Social and Governance
Environmental, Social and Key green and sustainability metrics Social & Governance Governance Mobilized Green1 9M’22 Green loans 9M’22 Microfinance ~€79bn >€3bn >€670mn since 2019 from SCF >1.1mn microentrepreneurs Target: €120bn by 2025 >100k electric vehicles Supporting the green 8 Latam countries
Slide 15: ESG commitments
ESG commitments 2018 2019 2020 2021 9M'22 2025 / 2030 target • Electricity from renewable sources 43% 50% 57% 75% 100% 120bn by 2025 • Green finance raised and facilitated (€) 19bn 33.8bn 65.7bn 78.7bn 220bn by 2030 • AuMs in Socially Responsible Investments (€) 27bn 54bn 100bn by 2025 We continue t
Slide 16: Group structure and businesses
2. Group structure and businesses
Slide 17: Group organizational structure
One Santander (Europe, North America and South America). New operating model leveraging our global scale to deliver a better customer experience, supported by common culture and higher degrees of commonality, technology being one Digital Consumer Bank: our vision is to become the largest digital
Slide 18: Primary segments
«Santander Primary segments 18
Slide 19: Europe
EUROPE 'Accelerating our business transformation in One Europe to achieve superior growth with a more efficient operating model' 9M'22 Highlights Strategic priorities Branches 3,163 Employees 64,925 ▪ Grow our business by better serving our customers through regional Total customers (mn) 46.8 simpli
Slide 20: Spain
Spain 'The commitment to and collaboration with our customers demonstrates the full potential of Santander España' 9M'22 Highlights Strategic priorities Branches 1,914 ▪ Grow our customer base providing the best customer experience across all channels Employees 26,674 ▪ Deliver an innovative and tai
Slide 21: UK
UK 'Santander UK creates value by serving customers with tailored financial products and services' 9M'22 Highlights Strategic priorities Branches 449 Employees 20,818 ▪ Deliver growth through customer loyalty and outstanding customer experience Total customers (mn) 23.7 Digital customers (mn) 7.0 ▪
Slide 22: Portugal
Portugal 'A strategy focused on customer experience and digital solutions for sustained and profitable growth' 9M'22 Highlights Strategic priorities Branches 385 Employees 4,953 ▪ Consolidate the commercial and digital integration model Total customers (mn) 3.0 ▪ Grow organically in terms of profita
Slide 23: Poland
Poland 'One of the largest and most innovative financial institutions in Poland' 9M'22 Highlights Strategic priorities Branches 407 Employees 10,502 ▪ Improve customer satisfaction, remaining at least among the Top 3 in NPS Total customers (mn) 5.7 Digital customers (mn) 3.2 ▪ As part of our simplif
Slide 24: North America
NORTH AMERICA 'We provide a full range of financial services with particular focus on Retail, Private and Corporate Banking' 9M'22 Highlights Strategic priorities Branches 1,852 Employees 44,500 ▪ Strengthen One Santander in North America by unifying a common and regional approach to forge future gr
Slide 25: United States
United States 'Santander US combines a strong depositary base in the Northeast with its nationwide auto finance, wealth management and corporate banking capabilities' 9M'22 Highlights Strategic priorities Branches 484 Employees 14,705 ▪ Positioned to deliver above cost of capital returns across core
Slide 26: Mexico
Mexico 'Santander México, one of the leading financial groups in the country, focused on commercial transformation and innovation' 9M'22 Highlights Strategic priorities Branches 1,368 Employees 28,783 ▪ To become the leading bank in terms of customer experience, leveraging new tools and improved pro
Slide 27: South America
SOUTH AMERICA 'We remain focused on expanding, sharing best practices from each country and delivering profitable growth' 9M'22 Highlights Strategic priorities Branches 3,754 ▪ Strengthen connectivity and share best practices across countries, capturing new Employees 76,028 business opportunities To
Slide 28: Brazil
Brazil 'The best way to grow in a profitable, recurring and sustainable manner is by providing high quality services' 9M'22 Highlights Strategic priorities Branches 2,903 ▪ Expand our customer base and profitability, with robust new customer Employees 53,699 acquisition dynamics and steady loyalty g
Slide 29: Chile
Chile 'We are the leading bank in the country and we always have the customer at the centre of our strategy' 9M'22 Highlights Strategic priorities Branches 301 ▪ Maintain our leadership position in NPS through the continuous improvement of Employees 9,798 our service quality Total customers (mn) 4.0
Slide 30: Argentina
Argentina 'Working towards a more digital and agile model, with customer-centric decisions' 9M'22 Highlights Strategic priorities Branches 403 Employees 8,452 ▪ Increase our customer base and loyalty, and ensuring the best customer service through our multi-channel strategy Total customers (mn) 4.4
Slide 31: Uruguay, Peru, Colombia
Uruguay Peru Colombia 'Santander Uruguay is the country’s 'Activity focused on corporates, 'Focus on corporates and SCIB, leading privately-owned bank' the country’s large companies and and new alliances in auto finance' the Group’s global customers (SCIB)' 9M'22 Highlights 9M'22 Highlights 9M'22 Hi
Slide 32: Digital Consumer Bank
Digital Consumer Bank 'Europe’s consumer finance leader: solid business model, geographic diversification and leading market shares in auto/mobility finance and in personal finance/e-commerce' 9M'22 Highlights Strategic priorities Branches 365 ▪ To become the largest digital consumer bank leveraging
Slide 33: Secondary segments
«Santander Secondary segments 33
Slide 34: Corporate & Investment Banking
Corporate & Investment Banking 'Santander CIB supports corporate and institutional customers, offering tailored services and value-added wholesale products suited to their complexity and sophistication' 9M'22 Highlights Strategic priorities Total income (€ mn) 5,597 ▪ Continue the business transform
Slide 35: Wealth Management & Insurance
Wealth Management & Insurance 'We strive to become the best responsible wealth and insurance manager in Europe and the Americas' 9M'22 Highlights Strategic priorities Total assets under management1 (€ bn) 402 ▪ Continue to build our global platform Total fees generated as % of the Group’s total fees
Slide 36: PagoNxt: innovative payments solutions
'Innovative payments solutions for both Santander and non-Santander clients' 9M'22 Highlights PagoNxt revenue (€ mn) 655; +75% YoY We are a one-of-a-kind paytech business backed by Santander Merchants Helping our customers prosper and accelerate their growth through a one-stop shop, providing soluti
Slide 37: 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 37
Slide 38: Technology and Operations (T&O)
Technology and Operations (T&O) ‘The T&O mission is to enable the Group strategy by building customer- oriented, secure, efficient and innovative technology working with the business units in a flexible and agile way’ Global T&O capabilities are key for our commercial and digital transformation Comp
Slide 39: HR strategy: 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' The SPF culture is based on our 5 corporate behaviours Our corporate management evaluation model 203,376 Employees, Sep-22 98% 50% 40% workforce with a
Slide 40: Risk management and compliance
Risk management and compliance 'Our solid Risk & Compliance function is key to making sure we remain a robust, safe and sustainable bank that helps people and businesses prosper' We rely on: Advanced management tools to effectively manage and control all risks under a forward-looking approach Custom
Slide 41: Corporate governance and internal control
Corporate governance and internal control 'As a responsible bank, we have a clear and robust governance which is key for guaranteeing a sustainable business model over the long term' Composition of the board of directors, Sep-221 Board committees Executive Diversified and well-balanced shareholder b
Slide 42: 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 43: 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, 2021 As one of our most important strategic assets, our brand helps us connect wit
Slide 44: 9M'22 results & activity
@ 9M'22 results & activity «> Santander
Slide 45: Executing our strategy to drive growth, profitability and strength
Executing our strategy to drive greater growth, profitability and strength Activity remained robust supported by larger customer base (+8mn) Steady growth Volumes1 +6% in customers, Accelerating revenue growth. NII +5% QoQ volumes and revenue NII + Fee income1 +8% Favourable FX impact. In euros,
Slide 46: Steady customer growth and volume increases
Steady customer growth and commercial strategy reflected in volume increases in all regions, segments and products … Customers Loans Deposits Loan breakdown Mn customers and € bn volumes YoY % changes in constant euros YoY % changes in constant euros Europe 46.8 590 622 €406bn +6% +1% +5% +7% €346bn
Slide 47: Double-digit profit growth and diversification
… driving double-digit profit growth, and reflecting our geographic and business diversification and connectivity across the Group % change Contribution Underlying Constant RoTE2 € million 9M'22 9M'21 Euros to Group’s attributable profit euros underlying profit (€ mn) NII 28,460 24,654 15 8 Net fee
Slide 48: SCIB and WM&I; Payments; Cards
SCIB and WM&I Payments € million and YoY changes in constant euros € million and YoY changes in constant euros Underlying att. profit RoTE Revenue Total Payments Volume 2,364 655 24.8% €117bn SCIB +36% +75% +6.2pp +29% 818 Turnover 2,971 59.5% €223bn WM&I +7% Cards +25% +1.7pp +16% 48
Slide 49: Our strategy is paying off in revenue, costs and LLPs
Our strategy is paying off in revenue, costs and LLPs NII + Fees Costs CoR North America Europe + North America Europe + North America Europe + Digital Consumer Bank Digital Consumer Bank Digital Consumer Bank +5% +5% 1.1% +9% +1% 0.4% +9% +17% 3.1% South America* YoY % changes in constant euros Sou
Slide 50: Delivering shareholder value
Delivering shareholder value: enhanced profitability, TNAVps and dividend per share … € cents EPS Interim distribution1 in Nov-22 40.9 31.3 Cash dividend per share: €5.83 cents (+20%2) Total value c.€2.0bn 40% of H1’22 underlying profit Share buyback programme: 9M'21 9M'22 €979mn RoTE TNAV per share
Slide 51: Generating capital organically: CET1 ratio
… while continuing to generate capital organically Q3 fully-loaded CET1 ratio performance % +0.34 • Continued profit growth 12.10 – RoTE 13.6% (12.0% in FY’21) 12.05 -0.08 -0.06 -0.15 • Disciplined capital allocation strategy with: – RWAs rising below loan growth +1% < +7% (excluding FX impact) – 9M
Slide 52: Final remarks
e Final remarks «> Santander
Slide 53: Final remarks
Final remarks We expect to achieve our full-year target as total revenue is set to continue growing strongly: Revenue – Additional NII growth, benefitting from interest rate hikes and expected activity levels, accelerating in 2023 – Net fee income supported by commercial activity and growth in our
Slide 54: Investor Day London February 2023
«> Santander | NVESTOR 28 February 2023 DAY LONDON
Slide 55: Links to public materials
: la E «> Santander @ Links to public materials
Slide 56: Links to Grupo Santander public materials
Links to Grupo Santander public materials For additional information on the Group, please click on the images, icons or flags below 9M'22 financial results Other information Financial report Earnings presentation Series Shareholders report 2021 Digital Annual review (excel) (interactive) 2021 Annual
Slide 57: Important information
Important information Non-IFRS and alternative performance measures The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable accounting This presentation contains
Slide 58: Important information
Important information Forward looking statements are based on current expectations and future estimates about Santander’s and therefrom. Nothing contained in this presentation is intended to constitute an invitation or inducement to third-parties’ operations and businesses and address matters that a
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:
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