Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Day (October 2017)
24 slides from Banco Santander's investor day presentation, Oct 10, 2017
Slide 1: Helping people and businesses prosper
Helping people and businesses prosper Scott Powell Country Head US
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 US market and outlook 1 Achievements & main priorities 2 Key takeaways 3
Slide 4: US market and outlook
3 US market and outlook 1
Slide 5: The US remains an attractive market
4 -5 0 5 10 15 20 2000 2002 2004 2006 2008 2010 2012 2014 2016 ( 1) Operating RoE . Based on consolidated financials of top 24 banks (2) Compustat ; Datastream ; Bloomberg; McKinsey Future of Banking model (3) Federal Reserve Northeast Rest of U.S. 54 46 Personal income per capita ($k) 33% 67% US Re
Slide 6: The macro outlook is positive
5 (1) Consensus projections (2 ) Growth rates aggregated KBW Bank Index; other financial statement ratios are median of the KBW Bank Index (3 ) CPI used car price based on NADA index …and the macro outlook is positive Macro Fed Funds Rates (%) Financial System 1.6 2.0 2.3 0.75 1.50 2.25 4.9 4.6 4.3
Slide 7: Santander's US Franchise
6 Loans $86Bn Deposits $63Bn Attributable Profit $264MM Clients 2.1MM Branches 673 ATMs 2,093 Loans market share 3.1% Deposits market share 2.7% Retail Auto l ending market share 3.9% Santander US Santander Bank (SBNA) Santander Consumer USA Assets $134Bn Santander’s US F ranchise 1H’17 Santander Ba
Slide 8: Achievements & main priorities
7 Achievements & main priorities 2
Slide 9: We are delivering on our commitments
8 Delivering on regulatory commitments Improving profitability at SBNA Operating Santander Consumer at bank standards 1 2 3 We are delivering on our commitments
Slide 10: We are achieving key regulatory milestones
9 1 We are achieving key regulatory milestones… Material progress in addressing regulatory deficiencies Capital distribution by SHUSA to the Group allowed by the Fed for the 1 st time since 2011 F ormation of the Intermediate Holding Company (IHC) in the US Passed CCAR and removed Written A greement
Slide 11: Keeping the highest capital ratio among peers
10 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 SBNA 10.7% 10.8% 10.9% 11.0% 11.0% 11.1% 11.5% 11.8% 12.1% 12.2% 12.5% 13.3% 15.0% 15.5% 17.6% …while keeping the highest capital ratio among peers SBNA 1 Capital ratio outperforming peers Note:
Slide 12: We are closing gaps to peers in meaningful ways
11 0.75% 0.56% 0.31% 0.39% 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 Significant improvement of yield on assets Substantial funding cost reduction Closing gap vs. peers in NIM Note: Sourced from regulatory filings in US GAAP. Peers included are Bank of the West, BB&T, BBVA Compass, Bank of Montreal, Citiz
Slide 13: Improving our costs and expenses structure
12 Targeting efficiency in 60s in the upcoming years 87% 78% 64% 61% 2Q'16 2Q'17 Catching up with peers in cost - to - income Peer Median Note: Peers included are Bank of the West, BB&T, BBVA Compass, Bank of Montreal , Citizens, Comerica, Fifth Third, Huntington, KeyBank, M&T, MUFG, Regions, SunTru
Slide 14: Enhancing customer experience and building loyalty at SBNA
13 1H'15 1H'17 164 289 …while also becoming more digital Earning the loyalty of our customers… 1H'15 1H'17 576 839 U.S Retail Banking satisfaction (points) Significant improvement in service quality 76% 46% Peer Median 735 780 791 812 Jan ‘15 Apr ‘17 +45 +21 Retail loyal customers (k) Digital custom
Slide 15: US business generates value across Santander's global network
14 The US’ place in Santander’s global network has increased cross - border revenue • Driving Banco Santander International collaborative revenue opportunities between Latin America and Europe • Global Corporate Banking ( GCB) and Commercial Banking US - Mexico and US - UK collaborations underway, w
Slide 16: Santander Consumer transitioning to a bank model
15 • Closer integration with SBNA • Growth in the prime segment • Better service to our dealers Transition from stand - alone consumer finance company to a bank model • More robust regulatory and compliance infrastructure • Improved risk management • Best in non - prime segment 2015 2017 From 2015 t
Slide 17: Santander Consumer has grown significantly since 2014
16 Santander Consumer has grown significantly since 2014 3 2014 2015 2016 1H'17 30.6 36.1 39.3 40.0 7.7 12.8 13.4 10.8 Market related funding mix Average managed loans CAGR X% 38.3 48.9 52.7 50.8 Serviced for Others Owned Assets ~11% ($ Bn ) ($ Bn ) CAGR X% 1 (1) Excluding shareholder equity and Ban
Slide 18: Santander Consumer: key priorities to realise full potential
17 • Focus on cost control and efficiency improvement • Active capital management • Continued focus on bank - level standards • Improve profitability for all segments o Grow non - prime volumes ensuring appropriate risk - return profile o Transition prime to deposit - funded model o Maintain profita
Slide 19: Key takeaways
18 K ey takeaways 3
Slide 20: Key strengths of our franchise
19 Key strengths of our franchise We are well positioned to deliver on the US… • Unique value proposition for global corporate customers • Operating across Europe, US, and Latam Globally connected Corporate & Commercial business At scale auto finance company • Long term relationship with Chrysler •
Slide 21: Execute on a consistent set of priorities
20 …and execute on a consistent set of priorities SAN US SBNA SC • Continue delivering on regulatory expectations • Focus on integration of US operations and cost savings to improve efficiency • From best - in - class in non - prime to full spectrum auto lender • Optimising our cost base • Improve d
Slide 22: We are delivering on our commitments
21 2016 1H’17 2018 Targets We are delivering on our commitments Employee engagement Attrition levels (SBNA) Below peers 24.1% N/A 22.1% Peers level Market rate People Customers Retail loyal customers in k (SBNA) Active customers in k (SBNA) Digital customers in k (SBNA) Customer service satisfaction
Slide 23: Key takeaways
22 • Continued delivery of regulatory progress • Delivery of consistent results to our customers and our shareholders • A clear roadmap to become a leading US regional bank whilst realising the full potential of the auto finance business • Significant enhancement of earnings recurrence and profitabi
Slide 24: Thank you
23 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