Banco Santander, S.a. · BME:SAN
Banco Santander — Merger or Acquisition (September 2010)
27 slides from Banco Santander's merger presentation, Sep 13, 2010
Slide 1: Offer to acquire BZ WBK in Poland
Offer to acquire BZ WBK in Poland ‘September 13th, 2010 ®& Santander
Slide 2: Disclaimer
Disclaimer This Investor Presentation contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward looking statements are found in var
Slide 3: Acquisition of 70.36% of BZ WBK's shares from AIB p.l.c.
Acquisition of 70.36 % of BZ WBK ´s shares from AIB p.l.c. Banco Santander has agreed to acquire 70.36% of Bank Zachodni WBK, from Allied Irish Bank for PLN 11.666 billion, equivalent to EUR 2.938 billion The acquisition will be carried out through a public offer for 100% of the capital of BZ WBK ad
Slide 4: Description of BZ WBK
Description of BZ WBK - - Total Assets 13.6 Balance Sheet - - Customer Loans 8.7 (1H 2010) - - Customer Deposits 10.5 (EUR bn) - - Shareholders’ Equity 1.6 - - 1H 2010 123 Net Income (EUR mn) - - 2009 225 - - Employees 9,453 - - Branches 512 Other - - Outlets 91 - - Retail Clients (mns) 2.5 Asset Ma
Slide 5: Description of the offer; Strategic rationale; Financial impact; Summary
Description of the offer Strategic rationale Financial impact Summary
Slide 6: Strong strategic rationale for Santander
Strong strategic rationale for Santander 7 1 Large market (40 million people... Large market (40 million people...40% of “New Europe”)... 40% of “New Europe”)...that we knowthat we know Poland is an 1 well well Poland is an attractiveattractive market... market... 2 ...with a stable and dynamic econ
Slide 7: Large market (ca. 40 million people, 40% of New Europe)
Large Largemarket market(ca. 40 million (ca. 40 millionpeople... people...40% of 40% of“New “NewEurope”)... Europe”)...
Slide 8: ...that we know well
... ...that thatwe weknow well know well Creation SCF acquires _____ SCF acquires PTF _____ of the leasing _____ Agreed merger of _____ Closing AIG Bank _____ and merges it with _____ company _____ our operations with Polska operation of America Poland _____ CC-Bank. Santander _____ AIG Polska Consu
Slide 9: ...with a stable and dynamic economy
...with ...witha stable a stableand anddynamic dynamiceconomy... economy...
Slide 10: ...with growth potential (low bancarisation)
... with growth potential (low bancarisation) ... with growth potential (low bancarisation)
Slide 11: Polish banking system is similar to Spain's in 1990
12 Polish banking system is similar to Spain’s in 1990 Polish banking system is similar to Spain’s in 1990 poland _____ Spain EUR bn 2009 1990 2005 LOANS 171 225 1,293 DEPOSITS 162 198 771 AUM 23 7 246 X 5-6x between X 5-6x between1990 1990 and and2005 2005 Loans / Deposits 106% 113% 168% GDP per ca
Slide 12: In summary, this acquisition adds a new core market
13 4 In summary, this acquisition adds a new “core market” In summary, this acquisition adds a new “core market“to ourto our 4 business portfolio... business portfolio... Operating profit split (H1 2010, proforma) Poland- proforma LatAm- rest Retail Spain (SAN + Chile BTO) Mexico Portugal High growt
Slide 13: A bank with a strong presence in its local market
A bank with a strong presence in its local market, which fits well 14 5 A bank with a strong presence in its local market, which fits well 5 our “vertical strategy”... our “vertical strategy”... Branches (Excluding Agency Outlets) Client Business Volume (EUR bn) Ranking by Players — 2009 Ranking by
Slide 14: A well managed bank, strong in business / mid-corp / affluent segments
... a well managed bank, with strong position in business / mid-corp 15 ... a well managed bank, with strong position in business / mid-corp / affluent / affluentsegments segments BZ WBK’s market share in 2009 BRANCHES (1) LOANS Household Loans Corp./SME Loans _____ Strong Strongmarket marketshare s
Slide 15: ...with a low risk profile
... ...with witha low a lowrisk riskprofile... profile... Gross Loans to Deposits — Ranking (2009) Core Capital Ranking — Latest Available Source: Company data and KNF report on the condition of Polish banks, National Bank of Poland. Note: Bank names ranked in order of total number of branches Note:
Slide 16: ...with growth opportunities to improve commercial performance
... ...with withgrowth growthopportunities opportunities/ potential / potentialto toimprove improveits its commercial commercialperformance in some performance in someareas... areas... Market shares (2009) Market share below its “natural level” in attractive segments such as household loans or deman
Slide 17: Growth opportunities to improve commercial performance
... with growth opportunities / potential to improve its commercial 18 ... with growth opportunities / potential to improve its commercial performance in some areas... performance in some areas... Improve business performance inImprove business performance in segments in which the bank hassegments i
Slide 18: Potential to improve operating efficiency
19 .... ...and with potential to improve its operating efficiency byand with potential to improve its operating efficiency by 88 leveraging Santander Group’s capabilities and best practices leveraging Santander Group’s capabilities and best practices Implement Santander’s technology ExpectedExpected
Slide 19: Commercial and efficiency initiatives bring BZ WBK closer to Santander standards
20 The combination of commercial and efficiency initiatives shouldThe combination of commercial and efficiency initiatives should bring BZ WBK closer to Santander Group’s standards bring BZ WBK closer to Santander Group’s standards Cost / Income ratio 50% 46% 41% 38% BZ WBK (2009) BZ WBK (2013E) BZ
Slide 20: Description of the offer; Strategic rationale; Financial impact; Summary
Description of the offer Strategic rationale Financial impact Summary
Slide 21: Profitable throughout the crisis; consensus EUR 396 mn net profit by 2013
Profitable throughout the crisis and consensus forecasts 22 EUR 396 mn net profit by 2013 Source: Company Data, Bloomberg and Factset as of September 7, 2010. Note: Exchange rate PLN / EUR 3.943
Slide 22: Financial Impact: The deal meets our financial criteria
Financial Impact: The deal meets our financial criteria 23 EUR mn 2011e 2012e 2013e BZ WBK Net profit (market consensus) 301 366 396 Net profit, Asset Management (50%) (1) 17 18 20 Synergies (after tax) 11 26 64 Revenue synergies 0 4 20 Cost synergies 112244 Total 329 410 480 EPS impact — 70.4% +1.5
Slide 23: Consideration paid is in line with franchise value of competitors
Consideration paid is in line with the franchise value (1) of BZ 24 WBK’s main competitors Offer _____ PKO _____ Pekao Franchise Value / 0.46x 0.41x 0.49x Loans Franchise Value / 0.40x 0.40x 0.42x Deposits Franchise Value / Branches (EUR 8.2 10.2 10.2 mn) Source: Company data and factset as of Septe
Slide 24: Core Tier rate in excess of 8% for FY 2011
We expect a core Tier 1 rate in excess of 8% for FY 2011, as a 25 result of our strong organic capital generation
Slide 25: Summary
Summary 27 The acquisition of BZ WBK has a strong strategic rationale... Increased critical mass in Poland, a very attractive market given its relevant size, macroeconomic situation and low banking penetration levels Acquisition of the top 3 financial institution by branches and profitability, in li
Slide 26: Summary
Summary Increased critical mass in Poland, a very attractive market given its relevant size, macroeconomic situation and low banking penetration levels Acquisition of the top 3 financial institution by branches and profitability, in line with our vertical strategy Significant opportunity for growth
Slide 27: 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: September 13 th , 2010 By: /s/ José Antonio Álvarez Name: José Antonio Álvar
Banco Santander — Merger or Acquisition (September 2010) on 6ix