Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Presentation (October 2017)
27 slides from Banco Santander's investor presentation, Oct 10, 2017
Slide 1: Helping people and businesses prosper
Helping people and businesses prosper Rami Aboukhair Country Head Spain
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 Spanish market and outlook 1 Delivering on our strategic targets ahead of plan 2 Popular: Sizing up our growth opportunities 3
Slide 4: Spanish market and outlook
3 Spanish market and outlook 1
Slide 5: Positive GDP growth momentum and economic outlook
4 2015 2016 2017E 2018E 1.1 1.9 2.1 1.6 Positive GDP growth momentum… Positive economic growth outlook… …with a strong employment creation R ecovery in property transactions… … aligned with growth in Real Estate prices 2015 2016 2017E 2018E 3.2 3.2 3.2 2.8 2015 2016 2017E 2018E 22.1 19.6 17.2 15.2 Y
Slide 6: Financial sector showing improving prospects
5 … and the financial sector showing improving prospects …and deposits growth Positive loans dynamics… Interest rates environment to improve YoY growth (%) 2015 2016 2017E 2018E 0.2 3.2 2.5 1.6 YoY Private sector growth (%) 2015 2016 2017E 2018E - 3.9 - 3.8 0.1 2.3 Interest rates (Euribor 12 months,
Slide 7: Delivering on our strategic targets ahead of plan
6 Delivering on our strategic targets ahead of plan 2
Slide 8: Our strategy already delivers tangible results in all our targets
7 Our strategy already delivers tangible results in all our targets Be the best bank for our employees by embedding our Simple | Personal | Fair People Customers Shareholders Communities Help people and businesses ’ prosper with a focus on education and entrepreneurship Advanced Risk Management Sust
Slide 9: Loyalty strategy supports strong results in retail customers
8 2015 1H'17 0.8 1.2 Loyalty strategy supports strong results in retail customers… 1l2l3 strategy improves loyalty and customer profile Market share gains in mortgages… Retail loyal customers (MM) 2015 1H'17 9.2% 11.5% UPLs new production market share Mortgages new production market share 2015 1H'17
Slide 10: Strengthening our position in SMEs and Corporates
9 International Business loans ( € Bn) …while strengthening our position in SMEs and Corporates Note: Figures excluding Popular. Average credit and deposits for SMEs and Corporates 1H'15 1H'17 4.6 5.9 2015 1H'17 10.2% 11.0% 2015 1H'17 217 335 Deepening customer loyalty Driving new loans growth in SM
Slide 11: Our strategy is providing solid results and outperformance
10 8% 14% Our strategy is providing solid results and outperformance 10% 17% Profit Before Taxes growth (1H’17, YoY) 0.68% 0.33% Spanish banking system Cost of credit risk (1H’17) Note: Figures excluding Popular. Peers including Caixabank, BBVA, Sabadell, Bankia and Bankinter (1) Spanish banking sys
Slide 12: Be the best bank to work for our people
11 Helping people and businesses Be the best bank to work for our people Strong commitment with employees and communities: Implementing our Simple | Personal | Fair culture Top Employer Spain 2017 Promoting female leadership >12,000 scholarships in 2017 Note: Figures excluding Popular 100 new busine
Slide 13: Popular: Sizing up our growth opportunities
12 3 Popular: Sizing up our growth opportunities
Slide 14: Popular: Transformational, right time in the cycle, consistent with targets
13 Popular: Transformational , right time in the cycle, consistent with targets… …and now, w orking hard on integration • Loyalty bonds: >50 % take up in two weeks • + € 10Bn (+ 19%) in deposits since announcement. Loans recovering • Popular teams are highly engaged Commercial action 2 • + € 7Bn wit
Slide 15: A unique domestic consolidation opportunity
14 …and entails a unique domestic consolidation opportunity 25% Share in SME 19% Share in loans and deposits 1 st Private Banking 1 st Global Corporate Banking Santander is the market leader… …with 4 core priorities that fit within our strategy Create shareholder value 1 Leverage on Santander Group
Slide 16: Creating shareholder value through in-market consolidation
15 Creating shareholder value through in - market consolidation 1 Strong and balanced footprint in all regions to increase shareholder value Improving profitability… Post transaction branch market shares 10% ~13% 2016 2020E with synergies RoTE Note: Figures including Popular ( 1) RoTE Spain public p
Slide 17: Combining best of both banks to strengthen SME franchise
16 2 Combining best of both banks to strengthen and enhance SME franchise Popular has an outstanding SME franchise that strongly fits Santander… …with solid best practices that will be reinforced and transferred to Santander ▪ SME culture widespread in the commercial network ▪ Strong loyalty with fa
Slide 18: Growth opportunity through Santander added-value products
17 Growth opportunity through Santander added - value products… 2 International business customers Reverse factoring volume Factoring volume Opportunity 2x Opportunity 16x Opportunity 7x Vehicles in renting Opportunity 4x Note: SME customers with > € 2MM - € 50MM turnover
Slide 19: Potential to enhance Retail customer loyalty in Popular
18 …and potential to enhance Retail customer loyalty in Popular 2 Product penetration in retail customers Payrolls Credit cards Life insurance Popular Santander % of customers holding the product 1.4 2.8 Average products held by retail customers Upside for customers loyalty Popular customers can ben
Slide 20: Leveraging on Santander Group strengths to foster growth
19 2015 1H'17 Leveraging on Santander Group strengths to foster growth 3 Santander >50% market share in trade corridor Unique value proposition • Seamless onboarding • Cross - country risk assessment SME and Corporate customers with GCB products Foreign exchange, Equity, Capital Markets and M&A, Str
Slide 21: Enhance digital transformation to boost efficiency and productivity
20 28% 40% Enhance digital transformation to boost efficiency and productivity… 4 Retail digital customers (%) + 12pp 3x more profitable Digital customer Growing digital customers to improve profitability… …as it leads to better customer experience and efficiency (1 ) Gross margin digital vs. non -
Slide 22: Solid breakthrough in digital banking
21 MOBILE SUPERNET WEB ATM SANTANDER PERSONAL CONTACT CENTER OFICINA BRANCH CUSTOMER …due to a solid breakthrough in digital banking 4 Leaders in mobile payments 60% Market share +45% Digital sales Seamless 3 clicks process +20pp customer satisfaction Best - in - class remote banking advisor New add
Slide 23: Key takeaways
22 Key takeaways 4
Slide 24: We are delivering ahead of plan on our commitments
23 We are delivering ahead of plan on our commitments People Best bank to work Individual career plans (k) 180º appraisals (k) Customers Total loyal customers (MM) Fee income (YoY) 1I2I3 customers (MM) Digital customers (MM) Best - in - class bank in customer experience Shareholders NPL ratio RoTE C
Slide 25: On track to deliver our 2020 commitments
24 Cost - to - income On track to deliver our 2020 commitments RoTE 2016 2020E with synergies 10% ~13% 59% 50% - 9pp ~ 3pp 2016 2020E with synergies (1) Public perimeter, c alculated with equity as 11% over RWA 1
Slide 26: Key takeaways: Banco Popular acquisition and targets
25 • Banco Popular acquisition is a unique opportunity to create additional shareholder value • We are ahead of plan to achieve our 2018 targets and our Popular acquisition 2020 targets: – Capture 500MM € synergies (ahead of plan) – Improve RoTE from ~10% to ~13% – Reduce cost - to - income from 59%
Slide 27: Thank you
26 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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