Banco Santander, S.a. · BME:SAN
Banco Santander — 9M 2020 Earnings Presentation
119 slides from Banco Santander's earnings presentation, Oct 27, 2020
Slide 1: Form 6-K cover page
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, 2020 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 2020 Earnings presentation
Slide 3: 9M'20 Earnings Presentation
27 October 2020 9M’20 Earnings Presentation All. Together. Now.
Slide 4: Important information: Non-IFRS and alternative performance measures
Important information Non-IFRS and alternative performance measures In addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) and derived from our financial statements, this presentation contains certain financial measures that constitu
Slide 5: Important information: forward-looking statements
Important information Numerous factors could affect the future results of Santander and could result in those results deviating materially from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in th
Slide 6: Index
Index 1 2 3 4 Group Business Key Appendix performance areas review takeaways 4
Slide 7: Highlights
Highlights Signs of recovery in activity in some markets and segments (mortgage and consumer new business lending increasing from minimums in April to pre-COVID levels in September; SMEs and corporates continued towards pre-COVID levels) Growth Stock continued to grow YoY: +5% in loans, +9% in d
Slide 8: Resilient 9M net operating income, with strong earnings recovery in Q3
Resilient 9M net operating income (ex-FX), with strong earnings recovery in Q3 … % change Underlying attributable profit Constant Constant EUR mn EUR mn 9M'20 9M'19 Euros Euros +18% Net interest income 23,975 26,442 -9 0 vs.Q2’20 1,829 1,915 1,865 1,836 Net fee income 7,559 8,818 -14 -5 1,709 1,553
Slide 9: Supported by revenue growth, controlled costs and lower LLPs
… supported by 7% growth in revenue, controlled costs and lower LLPs … QoQ evolution in core P&L lines Net operating income Constant EUR mn Constant EUR mn +4% +4% Net interest 8,093 8,112 8,173 vs.Q3’19 7,799 8,053 7,978 7,823 income +9% +11% 2,606 2,623 2,711 2,711 2,684 vs.Q2’20 2,332 2,542 Net f
Slide 10: All the regions delivering a strong performance
… with all the regions delivering a strong performance Europe North America South America P&L % Q2'20% Q3'19 P&L % Q2'20% Q3'19 P&L % Q2'20% Q3'19 NII 6.2 1.3 NII 4.2 1.0 NII 2.6 2.0 Net fee income 6.0 -10.9 Net fee income 5.5 1.3 Net fee income 14.8 -5.2 Operating expenses 1.1 -6.0 Operating expens
Slide 11: Strong quarterly organic capital generation; dividend accrual
Strong quarterly organic capital generation. Continuing dividend accrual CET1 ratio quarterly evolution +0.40 +0.10 11.98 -0.13 11.84 Group CET1 -0.15 -0.08 at c.12%, already at the top of our 11%-12% target Jun-20 Organic Dividend Regulatory & One-offs & Markets & Sep-20 generation accrual Models c
Slide 12: Recovery of KPIs in Q3
Recovery of KPIs in Q3 Efficiency ratio Underlying RoTE1 TNAV per share EUR 11.8% 4.36 47.0% 47.3% 46.8% 4.00 3.98 7.1% 5.4% 2019 H1'20 9M'20 2019 H1'20 9M'20 Dec-19 Jun-20 Sep-20 (1) Statutory RoTE 2019 11.4%, H1’20 1.7% and 9M’20 3.3%. Notes: The averages for the 9M RoTE denominators are calculate
Slide 13: Group Performance: Group business activity
Group Performance Group business activity 11
Slide 14: New lending in Q3 similar to pre-COVID levels
New lending in Q3 similar pre-COVID levels Average daily new lending1 Constant EUR mn 1,698 1,607 ▪ Strong recovery in mortgage lending, 1,383 1,422 1,267 particularly in the UK 1,173 1,134 1,159 ▪ New consumer lending in line with pre- COVID levels ▪ SME & Corporate new lending more normalised, fol
Slide 15: Rebound in mortgage and consumer lending volumes
Rebound in mortgage and consumer lending volumes New Mortgage lending1 New Consumer lending1 (daily average, constant EUR mn) (daily average, constant EUR mn) 343 339 331 333 320 222 232 296 306 208 47 267 44 50 44 194 202 23 42 20 49 51 15 15 17 17 15 161 15 71 96 88 96 15 12 80 88 13 75 107 111 11
Slide 16: SME and corporate lending continues towards pre-crisis levels
SME and corporate lending, which was supported by government guarantees, continue towards pre-crisis levels New SME and Corporates lending1 CIB change stock of loans (daily average, constant EUR mn) (L&A to customers excluding reverse repos, constant EUR billion) 1,052 984 +18.4 113 103 -2.8 511 -5.
Slide 17: Digital sales 44% of total in 9M
Digital sales represented 44% of total in 9M. Increasing digital adoption (mobile customers +5.9 mn YoY) 41.4 mn (+14% YoY) Steady growth in digital customers: +4.5 mn in 9M’20 vs. Digital customers1 +4.2 mn in 9M’19 Strong engagement and digital sales: 44% in 9M’20 +27% YoY +25% YoY (36% in 2019) 3
Slide 18: Group Performance: Group P&L details
Group Performance Group P&L details 16
Slide 19: Strong quarterly recovery of NII and fees
Strong quarterly recovery of NII and fees… NII evolution Net fee income - breakdown by global business Constant EUR mn As % of total Group1 9M’20 Q3’20 +1,507 vs. 9M’19 vs. Q2’20 23,945 23,975 Retail Banking -11% +18% -904 -420 -154 15% WM&I +1% +4% +3% 54% vs. 9M’19 31% SCIB +12% -8% Total Group -5
Slide 20: Cost efficiencies well ahead of schedule
… and cost efficiencies well ahead of schedule YoY change Nominal costs Costs adjusted for inflation Accelerating -10% cost reduction -4% Europe -5.9% -6.6% -6% in most markets -10% -6% North -6% Achieved c. EUR 500 mn in -2.3% -4.3% America 0% efficiencies in Europe in 9M’20 (above the FY2020 targe
Slide 21: Expected cost of credit for FY2020 improved to c.1.3%
Expected cost of credit for FY2020 improved to c.1.3% vs 1.4-1.5% previously Loan-loss provisions Credit quality ratios Constant EUR bn Sep-19 Jun-20 Sep-20 2 2 Cost of credit1 1.00% 1.26% 1.27% 2.7 9.6 +58% YoY 3.2 NPL ratio 3.47% 3.26% 3.15% 3.7 Coverage ratio 67% 72% 76% Q1'20 Q2'20 Q3'20 9M'20 N
Slide 22: 66% of loans subject to moratoria have expired
66% of loans subject to moratoria have expired, with 2% in Stage 3 Expired Total Expired as % EUR bn, 30-Sep-20 moratoria % loan booko/w: expired of Total % Stage 1% Stage 2% Stage 3 Total Group 114 13% 75 66%82%16%2% Mortgages 69 23% 45 65%86%13%2% Consumer 21 9% 18 84%79%17%4% SMEs & Corporates 24
Slide 23: Over 60% of active moratoria loans are mortgages
Over 60% of the active loans under moratoria are mortgages Distribution of loans subject to moratoria Main units Active moratoria as of 30 September 20, EUR bn Active moratoria as of 30 September 20, EUR bn Mortgages 17 6 0 24 72% 9 79% 7 Consumer 2 1 3 93% 6 SMEs & 89% 8 6 2 3 Corporates 12 Secured
Slide 24: Index
Index 1 2 3 4 Group Business Key Appendix performance areas review takeaways 22
Slide 25: Geographical and business diversification adds value
Our geographical and business diversification continues to add value Customer Customer Net operating Underlying Contribution to Group’s loans funds income att. profit Underlying profit 9M’20 (vs. 9M’19) (EUR bn) (EUR bn) (EUR mn) (EUR mn) 648 682 6,927 2,022 39% Europe +3% +4% -6% -44% North 123 117
Slide 26: Europe: Spain
Europe Spain main markets KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 33 +2 pp NII 1,034 11.1 2,890 -3.2 Net fee income 562 5.1 1,740 -6.5 Digital customers (mn) 5.1 +10% Total income 1,800 15.3 5,150 -9.6 NPL ratio (%) 5.98 -125 bps Operating expenses -893 -
Slide 27: Europe: Santander Consumer Finance
Europe SCF SCF main markets KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 NII 945 -0.8 2,871 1.1 Active customers (mn) 18.1 -6% Net fee income 205 29.1 551 -11.8 NPL ratio (%) 2.50 +25 bps Total income 1,196 8.7 3,462 -0.3 Cost of credit (%) 0.84 +46 bps Operating expenses -483 2.6 -1,467
Slide 28: Europe: United Kingdom
Europe UK main markets KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 31 - NII 976 14.1 2,745 -2.7 Net fee income 117 23.2 407 -36.3 Digital customers (mn) 6.2 +7% Total income 1,117 16.0 3,193 -8.8 NPL ratio (%) 1.30 +22 bps Operating expenses -646 0.5 -2,016 -
Slide 29: South America: Brazil
South America Brazil main market KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 22 +1 pp NII 1,756 3.2 5,840 0.0 Net fee income 664 13.3 2,148 -1.8 Digital customers (mn) 15.2 +13% Total income 2,534 2.2 8,322 3.5 NPL ratio (%) 4.64 -69 bps Operating expenses -8
Slide 30: North America: USA
USA North America KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 22 +4 pp NII 1,406 4.5 4,297 -0.5 1 Net fee income 218 7.7 682 -4.7 Digital customers (k) 997 +5% Total income 1,830 7.9 5,559 -2.6 NPL ratio (%) 1.85 -33 bps Operating expenses -722 -1.0 -2,307 -4
Slide 31: North America: Mexico
Mexico North America KEY DATA 9M'19 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 37 +5 pp NII 669 3.6 2,118 1.7 Net fee income 189 3.2 584 3.8 Digital customers (mn) 4.7 +24% Total income 848 -4.8 2,760 5.4 NPL ratio (%) 2.33 +3 bps Operating expenses -375 10.3 -1,130
Slide 32: Corporate Centre
Corporate Centre P&L* 9M'209M'19 NII -1,029 -919 NII impacted by the increased liquidity buffer Gains/Losses on FT 182 -257 Positive impact of FX hedging cost reflected in results Operating expenses -248 -283 from financial transactions LLPs and other provisions -430 -214 Operating expenses down -12
Slide 33: Index
Index 1 2 3 4 Group Business Key Appendix performance areas review takeaways 31
Slide 34: Quarterly results reinforce the strength of our model
Our quarterly results reinforce the strength of our model CET1 ratio of c.12% including 19 bps of dividend accrual over Q2 and Q3 in order to pay a EUR 0.10 cash per share to Strong be paid in 20211 capital position Expect to maintain c.12% CET1 ratio in Q4 Net operating income was up 3% YoY d
Slide 35: 2021 outlook
2021 outlook1 We expect positive trends in revenue2: Resilient – NII expected to grow as higher lending volumes (mainly the Americas), positive asset repricing and lower funding costs revenues and should offset lower rates accelerating – CIB and insurance to remain as key growth drivers for fee in
Slide 36: Index
Index 1 2 3 4 Group Business Key Appendix performance areas review takeaways 34
Slide 37: Appendix
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 35
Slide 38: Net capital gains and provisions
Net capital gains and provisions 9M’19 9M’20 Capital gains Prisma (Argentina) +130 Goodwill impairment -10,100 Restructuring costs -724 • UK: -6,101 • Spain: -600 • US: -2,330 • UK: -104 • Poland: -1,192 • Poland: -20 • SCF (Nordics and others): -477 Property sales (Corporate Centre) -180 Deferred t
Slide 39: Appendix: Primary segments
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 37
Slide 40: Europe
Europe KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 36 +1 pp NII 3,549 6.2 10,336 -2.4 Net fee income 1,162 6.0 3,575 -9.0 Digital customers (mn) 14.9 +9% Total income 5,155 12.9 14,706 -5.8 NPL ratio (%) 3.13 -34 bps Operating expenses -2,542 1.1 -7,779 -5.9
Slide 41: North America
North America KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 35 +5 pp NII 2,075 4.2 6,415 0.2 Net fee income 406 5.5 1,267 -1.0 Digital customers (mn) 5.7 +19% Total income 2,678 3.4 8,319 -0.1 NPL ratio (%) 1.96 -25 bps Operating expenses -1,097 2.7 -3,438 -2.3
Slide 42: South America
South America KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 26 - NII 2,486 2.6 8,157 4.6 Net fee income 841 14.8 2,688 -2.8 Digital customers (mn) 19.8 +15% Total income 3,477 1.4 11,331 5.5 NPL ratio (%) 4.40 -41 bps Operating expenses -1,238 4.6 -3,998 4.5 Co
Slide 43: Appendix: Secondary segments
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 41
Slide 44: Retail Banking
Retail Banking P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Activity NII 7,148 3.6 22,173 -0.9 EUR bn and % change YoY in constant euros Net fee income 1,671 14.6 5,189 -9.8 755 Total income 9,226 7.6 28,056 -3.5 691 Operating expenses -4,058 2.4 -12,669 -2.8 Net operating income 5,168 12.1 15,388 -4.0 +4% +6%
Slide 45: SCIB Corporate & Investment Banking
SCIB Corporate & Investment Banking Q3'20 % Q2'20 9M'20 % 9M'19 Total income (Constant EUR mn) P&L* NII 788 14.7 2,172 18.9 4,123 +20% Net fee income 361 -8.4 1,172 11.8 3,437 253 -4% Capital & Other Total income 1,397 2.4 4,123 20.0 1,404 +47% Global Markets Operating expenses -496 0.7 -1,539 -1.9
Slide 46: Wealth Management & Insurance
Wealth Management & Insurance ACTIVITY EUR bn and % change in constant euros QoQ YoY P&L* Q3'20 % Q2'20 9M'20 % 9M'19 NII 104 5.1 340 -15.8 Total AUM 353 +2% -1% 2 Net fee income 290 6.2 888 8.3 Funds and investments 218 +3% +2% Total income 498 5.9 1,566 1.9 - Asset Management (SAM) 177 +3% +2% Ope
Slide 47: Appendix: Other countries detail
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 45
Slide 48: Europe: Portugal
Europe Portugal other markets KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 47 +2 pp NII 193 -2.4 592 -7.9 Net fee income 94 4.6 285 -2.5 Digital customers (k) 903 +17% Total income 312 -1.7 979 -6.1 NPL ratio (%) 4.25 -65 bps Operating expenses -146 0.7 -442 -
Slide 49: Europe: Poland
Europe Poland other markets KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 54 +1 pp NII 246 -3.5 794 -5.5 Net fee income 112 6.7 332 -2.2 Digital customers (k) 2,704 +10% Total income 394 3.1 1,136 -7.2 NPL ratio (%) 4.58 +23 bps Operating expenses -161 10.6 -47
Slide 50: South America: Chile
South America Chile other markets KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 44 -3 pp NII 420 -0.2 1,293 7.8 Net fee income 74 0.4 240 -7.0 Digital customers (k) 1,489 +23% Total income 532 -8.0 1,669 2.6 NPL ratio (%) 4.76 +28 bps Operating expenses -223 -1
Slide 51: South America: Argentina
South America Argentina other markets KEY DATA 9M'20 % 9M'19 P&L* Q3'20 % Q2'20 9M'20 % 9M'19 Loyal / active customers (%) 43 -4 pp NII 218 7.9 721 48.9 Net fee income 70 48.3 202 -12.3 Digital customers (k) 2,690 +24% Total income 274 12.9 902 34.4 NPL ratio (%) 2.88 -76 bps Operating expenses -152
Slide 52: South America: Uruguay and Andean region
South America Uruguay and Andean region other markets Underlying attributable profit URUGUAY PERU COLOMBIA +11% +23% 0% 101 91 37 15 15 30 28% 20% 14% RoTE RoTE RoTE 9M'19 9M'20 9M'19 9M'20 9M'19 9M'20 Double-digit volume growth in all countries, both in loans and customer funds Strong profit growth
Slide 53: Appendix: Balance sheet and capital management
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 51
Slide 54: Highly liquid balance sheet with large customer deposits
Santander has a highly liquid balance sheet with a large contribution from customer deposits and diversified MLT wholesale debt instruments Liquidity Balance Sheet Liquidity Coverage Net Stable Funding EUR bn, Sep-20 1,198 1,198 Ratio (LCR) Ratio (NSFR) 1 Sep-20 Dec-19 Jun-20 Loans and Customer Spai
Slide 55: MLT debt issued and maturity profile
In the year to date, the Group has issued EUR 27 bn1 of MLT debt and is able to cover its very manageable maturity profile Public market issuances in 2020 Maturity profile EUR bn, Sep-20 EUR bn, Sep-20 49.3 San S.A. 9.1 7.7 7.3 12.4 0.3 3.3 1.5 SCF 6.0 1.3 4.4 2.5 3.9 3.1 6.5 6.9 2020 2021 2022 2023
Slide 56: Interest rate risk and ALCO portfolios
We actively manage interest rate risk and our ALCO portfolios to optimise results while maintaining an appropriate risk profile Positive interest rate sensitivity in Europe ALCO portfolios reflect our geographic diversification Net interest income sensitivity to a +/-100 bp parallel shift Distributi
Slide 57: Issuances YTD against funding plan
Issuances YTD against funding plan Covered Bonds + Senior Senior Non-Preferred Hybrids TOTAL EUR bn, Sep-20 PlanIssuedPlanIssuedPlanIssuedPlanIssued Santander S.A 4-53.07-86.91-21.5 1 12-1511.4 SCF 6-83.7-0.0 -0.0 6-83.7 UK 6-84.82-31.6 -0.0 8-116.5 SHUSA - - 1-21.3 -0.0 1-21.3 TOTAL 16-2111.510-139
Slide 58: CET1 management buffer increased to 312 bps
Regulatory changes in Q1 and increased capital levels, increased the Group’s CET1 management buffer to 312 bps SREP capital requirements (phased-in) CET1 management buffer2 Sep-20 15.61% 1.98% 13.19% 13.02% T2 T2 1.65% AT1 2.00% 2.38% 1 AT1 1.50% CCyB +189 bps +312 bps 1.78% G-SIB buffer 0.19% 1.00%
Slide 59: TLAC ratios for the Resolution Group
TLAC ratios for the Resolution Group headed by Banco Santander, S.A. TLAC Ratio EUR mn Dec-19 Mar-20 Jun-20 Sep-20 (e) Own Funds 91,294 91,550 86,335 86,191 of which: Common Equity Tier 1 (CET1) capital 75,683 75,821 70,746 70,829 of which: Additional Tier 1 (AT1) capital 7,742 7,829 7,794 7,740 of
Slide 60: Appendix: Yield on loans and cost of deposits
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 58
Slide 61: Yield on loans
Yield on loans (%) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 EUROPE 2.77 2.75 2.70 2.68 2.66 2.47 2.40 Spain 2.05 2.08 2.02 2.02 1.99 1.86 1.82 Santander Consumer Finance 4.51 4.48 4.41 4.26 4.27 4.17 4.08 United Kingdom 2.72 2.67 2.63 2.59 2.52 2.37 2.35 Portugal 1.79 1.76 1.71 1.64 1.63 1.56 1.57
Slide 62: Cost of deposits
Cost of deposits (%) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 EUROPE 0.42 0.42 0.41 0.41 0.39 0.28 0.16 Spain 0.14 0.14 0.13 0.13 0.06 0.04 0.04 Santander Consumer Finance 0.60 0.61 0.60 0.58 0.57 0.53 0.48 United Kingdom 0.67 0.70 0.70 0.69 0.69 0.52 0.29 Portugal 0.14 0.12 0.10 0.10 0.08 0.06 0.0
Slide 63: Appendix: NPL and coverage ratios
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 61
Slide 64: IMF GDP growth projections revised upwards
The IMF’s GDP growth projections in its October World Economic Outlook report were revised upwards across Santander’s main countries October WEO June WEO update Difference GDP growth 2020 (e) 2021 (e) 2020 (e) 2021 (e) 2020 (e) 2021 (e) Euro Area -8.3% 5.2% -10.2% 6.0% 1.9 pp -0.8 pp Spain -12.8% 7.
Slide 65: Breakdown of moratoria by segment and country
Breakdown of moratoria by segment and country: Credit quality of expired moratoria remains solid Expired Total Expired as % EUR bn, 30-Sep-20 moratoria % loan booko/w: expired of Total % Stage 1% Stage 2% Stage 3 Total Group 114 13% 75 66%82%16%2% Detail by segments Mortgages 69 23% 45 65%86%13%2% C
Slide 66: Stage coverage
Stage coverage Exposure ¹ Coverage Sep-20 Jun-20 Mar-20 Sep-20 Jun-20 Mar-20 Stage 1 862 878 891 0.6% 0.6% 0.6% Stage 2 60 61 53 8.8% 7.7% 8.2% Stage 3 31 33 33 43.3% 41.1% 40.8% (1) Exposure subject to impairment in EUR bn. Additionally, customer loans not subject to impairment recorded at mark to
Slide 67: NPL ratio
NPL ratio (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 EUROPE 3.61 3.48 3.47 3.25 3.19 3.24 3.13 Spain 7.29 7.02 7.23 6.94 6.88 6.55 5.98 Santander Consumer Finance 2.33 2.24 2.25 2.30 2.43 2.52 2.50 United Kingdom 1.17 1.13 1.08 1.01 0.96 1.08 1.30 Portugal 5.77 5.00 4.90 4.83 4.56 4.43 4.2
Slide 68: Coverage ratio
Coverage ratio (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 EUROPE 49.5 49.9 48.2 49.8 54.1 53.4 55.8 Spain 43.3 42.9 40.6 41.1 44.6 43.3 46.0 Santander Consumer Finance 105.3 105.9 104.2 106.1 109.6 106.1 108.2 United Kingdom 30.9 31.9 34.1 36.5 43.0 46.0 44.5 Portugal 50.7 52.9 51.5 52.8 5
Slide 69: Non-performing loans and loan-loss allowances by operating area
Non-performing loans and loan-loss allowances. Breakdown by operating areas. September 2020 Non-performing loans Loan-loss allowances Brasil, 10.6% Brasil, 16.1% Chile, 6.5% España, 26.2% Argentina, 0.4% Otros Sudamérica, 0.3% Chile, 5.1% México, 2.4% España, 43.0% Argentina, 1.1% EE.UU., 6.1% Otros
Slide 70: Cost of credit
Cost of credit (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 EUROPE 0.24 0.24 0.25 0.28 0.40 0.47 0.53 Spain 0.40 0.41 0.41 0.43 0.64 0.68 0.80 Santander Consumer Finance 0.38 0.36 0.38 0.48 0.66 0.78 0.84 United Kingdom 0.07 0.06 0.08 0.10 0.14 0.23 0.27 Portugal 0.03 0.03 0.00 (0.02) 0.23 0
Slide 71: Appendix: Responsible Banking
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 69
Slide 72: Doing business in a more responsible and sustainable way
We continue to do business in a more responsible and sustainable way Culture Women Green finance & Env. footprint Engagement 40% Group Board >EUR 22 bn 66% Electricity used from of employees 86% 23% women in senior mobilised in Green renewable energy sources proud to work for Santander leadership po
Slide 73: Santander Responsible Banking goals
Santander Responsible Banking goals We are building a more Responsible Bank aligned with our commitments 2018 2019 H1‘20* 2020 2021 2025 Top 10 company to work for1 4 5 6 33% Women on the Board 33 40% 40% 40%-60% Women in senior leadership positions2 20%20 23% 30% 3 Equal pay gap 3% 2% ~0% Financial
Slide 74: Appendix: Quarterly income statements
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 72
Slide 75: Santander Group (EUR mn)
SANTANDER GROUP (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 8,682 8,954 8,806 8,841 8,487 7,715 7,773 26,442 23,975 Net fee income 2,931 2,932 2,955 2,961 2,853 2,283 2,423 8,818 7,559 Gains (losses) on financial transactions and other 472 465 705 790 474 706 8
Slide 76: Santander Group (Constant EUR mn)
SANTANDER GROUP (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 7,799 8,053 8,093 8,112 7,978 7,823 8,173 23,945 23,975 Net fee income 2,606 2,623 2,711 2,711 2,684 2,332 2,542 7,940 7,559 Gains (losses) on financial transactions and other 461 467 696 760
Slide 77: Europe (EUR mn)
EUROPE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 3,561 3,580 3,530 3,531 3,435 3,352 3,549 10,671 10,336 Net fee income 1,327 1,304 1,310 1,319 1,315 1,098 1,162 3,941 3,575 Gains (losses) on financial transactions and other 337 304 455 443 225 126 444 1,097
Slide 78: Europe (Constant EUR mn)
EUROPE (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 3,524 3,543 3,527 3,483 3,398 3,365 3,573 10,594 10,336 Net fee income 1,320 1,297 1,311 1,308 1,306 1,102 1,167 3,927 3,575 Gains (losses) on financial transactions and other 338 303 455 441 225 125 4
Slide 79: Spain (EUR mn)
Spain (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 1,009 1,009 967 934 925 931 1,034 2,985 2,890 Net fee income 623 624 614 620 643 535 562 1,861 1,740 Gains (losses) on financial transactions and other 224 216 408 258 220 96 204 849 520 Total income 1,857 1,849
Slide 80: Santander Consumer Finance (EUR mn)
Santander Consumer Finance (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 941 971 977 960 979 947 945 2,888 2,871 Net fee income 214 201 213 195 187 159 205 627 551 Gains (losses) on financial transactions and other 13 (18) 14 30 5 (11) 45 9 40 Total income 1,167
Slide 81: Santander Consumer Finance (Constant EUR mn)
Santander Consumer Finance (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 924 953 961 949 972 953 945 2,839 2,871 Net fee income 213 200 212 194 186 159 205 625 551 Gains (losses) on financial transactions and other 12 (18) 14 29 6 (11) 46 9 40 Total inco
Slide 82: United Kingdom (EUR mn)
United Kingdom (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 975 944 908 961 898 871 976 2,827 2,745 Net fee income 216 207 217 226 193 96 117 640 407 Gains (losses) on financial transactions and other 15 32 (5) 33 6 12 23 41 41 Total income 1,206 1,183 1,119 1,2
Slide 83: United Kingdom (GBP mn)
United Kingdom (GBP mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 850 825 820 827 774 773 881 2,496 2,428 Net fee income 189 181 195 194 166 87 107 565 360 Gains (losses) on financial transactions and other 13 28 (4) 29 5 10 21 36 37 Total income 1,052 1,034 1,011 1,0
Slide 84: Portugal (EUR mn)
Portugal (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 216 213 214 213 202 197 193 643 592 Net fee income 98 99 96 98 101 90 94 292 285 Gains (losses) on financial transactions and other 44 42 22 21 47 30 25 108 102 Total income 357 354 331 332 350 317 312 1,043
Slide 85: Poland (EUR mn)
Poland (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 281 284 298 307 296 251 246 863 794 Net fee income 113 117 119 117 116 104 112 349 332 Gains (losses) on financial transactions and other (18) 39 24 34 (48) 23 35 46 10 Total income 377 440 442 459 365 377 394
Slide 86: Poland (PLN mn)
Poland (PLN mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 1,209 1,216 1,288 1,317 1,279 1,134 1,095 3,713 3,508 Net fee income 488 499 514 504 503 467 498 1,502 1,468 Gains (losses) on financial transactions and other (76) 168 104 147 (206) 95 156 196 45 Total income
Slide 87: Other Europe (EUR mn)
Other Europe (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 139 159 166 155 134 155 155 465 444 Net fee income 62 56 52 63 74 115 71 171 260 Gains (losses) on financial transactions and other 60 (7) (8) 68 (6) (23) 110 45 81 Total income 261 209 211 286 202 246 33
Slide 88: Other Europe (Constant EUR mn)
Other Europe (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 139 159 166 155 134 154 156 465 444 Net fee income 62 56 52 63 74 114 72 171 260 Gains (losses) on financial transactions and other 60 (7) (8) 67 (7) (23) 111 45 81 Total income 261 209 210 285 2
Slide 89: North America (EUR mn)
NORTH AMERICA (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 2,173 2,230 2,259 2,265 2,261 2,079 2,075 6,661 6,415 Net fee income 439 463 448 427 461 400 406 1,349 1,267 Gains (losses) on financial transactions and other 142 226 277 257 214 228 196 645 638 Total i
Slide 90: North America (Constant EUR mn)
NORTH AMERICA (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 2,108 2,139 2,153 2,142 2,153 2,087 2,175 6,401 6,415 Net fee income 420 438 421 399 435 405 427 1,279 1,267 Gains (losses) on financial transactions and other 147 226 275 249 211 222 205 648 63
Slide 91: United States (EUR mn)
United States (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 1,407 1,453 1,460 1,449 1,462 1,429 1,406 4,320 4,297 Net fee income 234 244 238 230 250 215 218 716 682 Gains (losses) on financial transactions and other 174 222 278 215 217 157 206 674 580 Total incom
Slide 92: United States (USD mn)
United States (USD mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 1,598 1,633 1,623 1,604 1,612 1,573 1,644 4,854 4,829 Net fee income 266 275 264 255 275 237 255 805 767 Gains (losses) on financial transactions and other 197 250 310 238 239 173 240 758 652 Total incom
Slide 93: Mexico (EUR mn)
Mexico (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 766 777 798 816 798 650 669 2,341 2,118 Net fee income 204 218 210 197 211 185 189 633 584 Gains (losses) on financial transactions and other (32) 4 (1) 42 (2) 70 (10) (29) 58 Total income 939 999 1,007 1,054 1
Slide 94: Mexico (MXN mn)
Mexico (MXN mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 16,703 16,694 17,231 17,393 17,484 16,706 17,310 50,628 51,500 Net fee income 4,455 4,695 4,535 4,188 4,617 4,719 4,868 13,684 14,203 Gains (losses) on financial transactions and other (687) 83 (31) 906 (51) 1,
Slide 95: South America (EUR mn)
SOUTH AMERICA (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 3,222 3,425 3,314 3,356 3,065 2,606 2,486 9,960 8,157 Net fee income 1,178 1,178 1,204 1,228 1,074 774 841 3,559 2,688 Gains (losses) on financial transactions and other 88 45 59 130 25 311 150 192 486 T
Slide 96: South America (Constant EUR mn)
SOUTH AMERICA (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 2,441 2,651 2,710 2,797 2,700 2,693 2,764 7,802 8,157 Net fee income 878 901 986 1,017 939 814 935 2,765 2,688 Gains (losses) on financial transactions and other 72 48 53 111 24 300 162 173 486
Slide 97: Brazil (EUR mn)
Brazil (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 2,459 2,520 2,560 2,534 2,270 1,813 1,756 7,539 5,840 Net fee income 931 924 970 974 869 614 664 2,825 2,148 Gains (losses) on financial transactions and other 21 9 (7) 57 (3) 224 114 23 335 Total income 3,411
Slide 98: Brazil (BRL mn)
Brazil (BRL mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 10,516 11,095 11,272 11,534 11,100 10,725 11,066 32,883 32,891 Net fee income 3,980 4,070 4,271 4,429 4,250 3,679 4,167 12,321 12,096 Gains (losses) on financial transactions and other 91 41 (31) 254 (14) 1,196
Slide 99: Chile (EUR mn)
Chile (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 440 500 462 464 448 425 420 1,402 1,293 Net fee income 103 97 102 102 92 74 74 302 240 Gains (losses) on financial transactions and other 56 59 82 71 12 85 38 197 136 Total income 600 656 646 638 553 584 532 1,9
Slide 100: Chile (CLP mn)
Chile (CLP mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 333,439 383,545 363,195 386,260 397,015 384,057 383,394 1,080,180 1,164,466 Net fee income 78,010 74,473 80,052 85,052 81,770 67,170 67,421 232,535 216,362 Gains (losses) on financial transactions and other 42,7
Slide 101: Argentina (EUR mn)
Argentina (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 213 298 180 250 241 261 218 690 721 Net fee income 116 125 88 118 76 56 70 328 202 Gains (losses) on financial transactions and other 2 (33) (31) (8) 1 (8) (14) (62) (21) Total income 331 389 237 359 318 310
Slide 102: Argentina (ARS mn)
Argentina (ARS mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 10,117 14,548 18,638 19,924 16,991 22,846 24,646 43,303 64,484 Net fee income 5,486 6,131 8,976 9,403 5,327 5,132 7,611 20,593 18,070 Gains (losses) on financial transactions and other 102 (1,596) (2,372) (8
Slide 103: Other South America (EUR mn)
Other South America (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 109 108 112 108 106 107 91 329 304 Net fee income 29 32 44 34 37 29 33 104 99 Gains (losses) on financial transactions and other 8 9 16 10 14 9 13 33 36 Total income 146 149 172 153 157 145 137 466
Slide 104: Other South America (Constant EUR mn)
Other South America (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 90 93 97 98 99 107 98 280 304 Net fee income 24 27 38 31 34 29 35 89 99 Gains (losses) on financial transactions and other 7 8 14 9 13 10 13 29 36 Total income 121 128 150 138 146 146 146
Slide 105: Santander Global Platform primary segment (EUR mn)
SANTANDER GLOBAL PLATFORM primary segment (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 22 23 23 23 31 32 33 69 97 Net fee income 2 1 2 2 13 18 24 4 55 Gains (losses) on financial transactions and other (5) (4) (1) (7) 1 (6) (9) (11) (14) Total income 19 20 24 18
Slide 106: Corporate Centre (EUR mn)
CORPORATE CENTRE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income (296) (304) (319) (333) (304) (354) (371) (919) (1,029) Net fee income (14) (13) (9) (15) (9) (6) (11) (35) (26) Gains (losses) on financial transactions and other (90) (106) (85) (34) 9 47 110 (281)
Slide 107: Retail Banking (EUR mn)
RETAIL BANKING (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 8,083 8,323 8,227 8,229 7,885 7,141 7,148 24,633 22,173 Net fee income 2,178 2,134 2,108 2,141 2,024 1,495 1,671 6,420 5,189 Gains (losses) on financial transactions and other 150 201 485 339 63 224 407
Slide 108: Retail Banking (Constant EUR mn)
RETAIL BANKING (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 7,293 7,517 7,564 7,564 7,428 7,242 7,503 22,375 22,173 Net fee income 1,927 1,900 1,927 1,948 1,895 1,535 1,759 5,755 5,189 Gains (losses) on financial transactions and other 196 245 495 345 8
Slide 109: Corporate & Investment Banking (EUR mn)
CORPORATE & INVESTMENT BANKING (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 654 700 657 716 671 713 788 2,012 2,172 Net fee income 352 374 421 373 404 406 361 1,147 1,172 Gains (losses) on financial transactions and other 272 217 153 337 225 307 248 642 780 Tota
Slide 110: Corporate & Investment Banking (Constant EUR mn)
CORPORATE & INVESTMENT BANKING (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 583 624 621 664 631 718 823 1,828 2,172 Net fee income 320 340 388 349 384 411 377 1,048 1,172 Gains (losses) on financial transactions and other 228 188 145 314 205 305 269 561
Slide 111: Wealth Management & Insurance (EUR mn)
WEALTH MANAGEMENT & INSURANCE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 141 143 141 146 132 104 104 424 340 Net fee income 273 298 298 330 320 279 290 869 888 Gains (losses) on financial transactions and other 110 121 113 114 134 100 104 343 337 Total income
Slide 112: Wealth Management & Insurance (Constant EUR mn)
WEALTH MANAGEMENT & INSURANCE (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 132 134 138 139 127 104 109 404 340 Net fee income 257 280 283 311 309 281 299 821 888 Gains (losses) on financial transactions and other 100 110 103 103 127 102 108 312 337 Tota
Slide 113: Santander Global Platform secondary segment (EUR mn)
SANTANDER GLOBAL PLATFORM secondary segment (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 100 92 100 83 103 112 104 292 318 Net fee income 142 139 137 132 115 109 111 417 335 Gains (losses) on financial transactions and other 30 32 40 34 43 29 23 102 94 Total inc
Slide 114: Santander Global Platform secondary segment (Constant EUR mn)
SANTANDER GLOBAL PLATFORM secondary segment (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 9M'19 9M'20 Net interest income 87 82 90 77 97 113 109 258 318 Net fee income 116 115 121 117 106 111 118 352 335 Gains (losses) on financial transactions and other 27 29 38 33 42 29 23 95 94 Tota
Slide 115: Appendix: Glossary
Appendix Net capital gains and provisions Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 113
Slide 116: Glossary - Acronyms
Glossary - Acronyms ❑ AFS: Available for sale ❑ LLPs: Loan-loss provisions ❑ RoRWA: Return on risk-weighted assets ❑ AuM: Assets under Management ❑ M/LT: Medium- and long-term ❑ RoTE: Return on tangible equity ❑ BFG: Deposit Guarantee Fund in Poland ❑ mn: million ❑ RWA: Risk-weighted assets ❑ bn: Bi
Slide 117: Glossary - Definitions
Glossary - Definitions PROFITABILITY AND EFFICIENCY ✓ RoTE: Return on tangible capital: Group attributable profit / average of: net equity (excluding minority interests) – intangible assets (including goodwill) ✓ RoRWA: Return on risk-weighted assets: consolidated profit / average risk-weighted asse
Slide 118: 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 119: 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: 27 October 2020 By: /s/ José García Cantera Name:José García Cantera Title: