Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Presentation (October 2017)
25 slides from Banco Santander's investor presentation, Oct 10, 2017
Slide 1: Helping people and businesses prosper
Helping people and businesses prosper Nathan Bostock Country Head UK
Slide 2: Forward-looking statements disclaimer
1 Banco Santander, S . A . ("Santander") cautions that this presentation contains statements that constitute “forward - looking statements” within the meaning of the U . S . Private Securities Litigation Reform Act of 1995 . Forward - looking statements may be identified by words such as “expect”, “
Slide 3: Contents
2 Contents Key takeaways 4 UK market and outlook 1 Delivering on our strategic targets ahead of plan 2 Positioned to capture further growth opportunities 3
Slide 4: UK market and outlook
3 UK market and outlook 1
Slide 5: The UK macroeconomic outlook is broadly stable but uncertainty remains
4 2015 2016 2017E 2018E 2.3 1.8 1.6 1.4 The UK macroeconomic outlook is broadly stable but uncertainty remains 2015 2016 2017E 2018E 0.5 0.25 0.25 0.5 GDP (%, annual average) Bank Rate (%, year end) Stable GDP growth Low interest rates Source: HMT consensus (September 2017 ) Unemployment (%, 4Q) Sta
Slide 6: UK Banking market is expected to continue to grow
5 2015 2016 2017E 2018E 1.29 1.32 1.37 1.40 2015 2016 2017E 2018E 0.37 0.37 0.38 0.39 £trn Positive retail mortgage loans growth… …and commercial loans positive trend YoY 0.9% 3.2% 2.4% 2.6% £trn YoY 2.8% 3.0% 3.2% 2.8% Source: Bank of England Bankstats (2015 - 2016 data); Oxford Economics (2017 - 2
Slide 7: Delivering on our strategic targets ahead of plan
6 Delivering on our strategic targets ahead of plan 2
Slide 8: We have a unique position in the UK market
7 14MM retail active customers …challenging incumbents to increase competition and customer choice Full - service franchise with meaningful scale… Omni - channel Winning market share £200Bn customer loans, # 3 in mortgages £174Bn customer liability, #4 in retail deposits Leading international propos
Slide 9: Delivering on our 2015-18 strategy
8 Live the Santander Way through our behaviours Grow customer loyalty and market share Deliver operational and digital excellence People Customers Shareholders Communities Support communities through skills, knowledge and innovation Achieve consistent, growing profitability and a strong balance shee
Slide 10: Building valuable and lasting customer relationships
9 Building valuable and lasting customer relationships 2015 1H'17 4.6 5.2 2015 1H'17 266 300 Retail SME / Corporate Asset (£Bn) Income (£MM) +12% +5% Deposits per customer (index) Income per customer ( index) +7% 105 100 177 24 26 886 1,052 100 Liability (£Bn) +16% 18 23 ▪ Adaptable to market condit
Slide 11: Digitalising the bank to improve customer experience and efficiency
10 Increasingly digital interactions Improving efficiency 2015 2016 1H'17 53% 51% 49% 2015 1H'17 3.9 4.8 +14% Note: Data at 1H’17 Digitalising the bank to improve customer experience and efficiency Digital customers (MM) Cost - to - income ratio x% CAGR >30% sales >40% mortgage retentions >90% touch
Slide 12: Growing profitability while continuing to strengthen the balance sheet
11 1,029 11.8% 11.1% 10.6% RoTE (1H) Banking NIM 1.83% 1.91% 1.79% CET1 FL 11.6% 12.1% 11.6% 121% 116% 114% 120% 133% Liquidity coverage ratio (LCR) Loan to deposit ratio (LDR) +8% 1,860 2,004 Growing profitability while continuing to strengthen the balance sheet Fee growth (YoY) +6% +7% - 4 % 2015
Slide 13: Maintaining the highest levels of resilience
12 Most resilient UK bank Improving credit quality 3,150 3,069 2,718 2016 BoE stress tests (CET1 drawdown, bps) 170 250 280 310 700 880 Peers Maintaining the highest levels of resilience Delinquency % (2016) 0.7% 3.2% 0.6% 3.3% 1.7% 4% Commercial Real Estate exposure Unsecured lending exposure 6% Mo
Slide 14: Engaging teams and supporting communities
13 Engaging teams 72% +6pp v s. FS norm 12k 291k people supported students supported Note: Data at 1H'17 (1) Korn Ferry (2016), % favourable responses (2) UK Financial Services norm Supporting communities Doing things The Santander Way Engagement 1 2
Slide 15: Positioned to capture further growth opportunities
14 Positioned to capture further growth opportunities 3
Slide 16: We are well positioned to capture further growth opportunities
15 Growing retail revenues by… d eveloping high potential segments We are well positioned to capture further growth opportunities i ncreasing customer loyalty A1 B C D Building corporate primacy for increased returns Leveraging digitalisation to deliver excellent customer experience Maintaining best
Slide 17: Growing retail revenues through increased loyalty
16 Growing r etail revenues through increased loyalty… A1 26 28 43 More loyal customers… …enabling deeper relationships Opportunity 1.5x SAN UK SAN Group top loyalty franchises SAN UK (1) Argentina , Chile, Poland and Portugal 12 4 7 16 43 63 100 Primary current a/cs Savings Credit cards Mortgages I
Slide 18: Developing high potential segments: SME and business banking
17 • Scale challenger with established and robust infrastructure • Customer - centric operating model • Innovative and differentiated propositions Strong momentum for change in SME market We are uniquely placed to capitalise Supporting transparency, switching, capabilities and innovation … A2 …and r
Slide 19: Building corporate primacy to increase returns
18 Primacy • Challenger status • Global reach and international expertise • Local network and unique credit partner model • Event driven approach to finance solutions • Completion of core banking proposition • Asset finance + International proposition Group - wide collaboration (1) International cus
Slide 20: Delivering excellent customer experiences through digitalisation
19 Customer - centricity Omni - channel choice Frictionless experience New ways of working Innovation & FinTech • Agile organisation • Increased connectivity • Skills evolution Our customer - centric approach • Full service mobile • New role of branch Collaboration and sharing best practice (e.g. pa
Slide 21: Maintaining best-in-class efficiency
20 Simplifying and digitalising our organisation and processes Optimising our distribution with leading digital tools Leveraging Group scale through shared capabilities £ 100MM reduction in operational costs while absorbing inflation and investing in growing the business (1) Ongoing costs excluding
Slide 22: Key takeaways
21 Key takeaways 4
Slide 23: We are delivering ahead of plan and with an improved RoTE
22 People Communities Group view Retail loyal customers (MM) SME/Corp. loyal customers (k) Digital customers (MM) Retail customer experience Fee income growth (% YoY) RoTE Cost - to - income ratio CET1 ratio (stat) Non performing loan ratio Dividend pay - out ratio (yearly) Colleague engagement Numb
Slide 24: Key takeaways
23 • We are successfully delivering ahead of plan on our commitments , building valuable customer relationships and growing profitability • Maintaining the highest levels of resilience and well positioned to capture further growth opportunities by: – Increasing loyalty and primacy – Improving custom
Slide 25: Thank you
24 Thank you Our purpose is to help people and businesses prosper. Our culture is based on the belief that everything we do should be 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 undersigne
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