Banco Santander, S.a. · BME:SAN
Banco Santander — FY2016 Earnings Presentation
92 slides from Banco Santander's earnings presentation, Jan 25, 2017
Slide 1: 2016 Earnings Presentation
25th January 2017 2016 Earnings Presentation Ana Botín, Group Executive Chairman José Antonio Álvarez, CEO
Slide 2: Important information
Important information Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business developm
Slide 3: Agenda
Agenda Delivery of our 2016 commitments and progress in strategic priorities Group and business areas review 2017 Strategic priorities Concluding remarks 3
Slide 4: Santander delivered strong financial performance: underlying PBT +12% YoY
Santander delivered strong financial performance: underlying PBT +12%1 YoY 2016 results (change vs. 2015) €6,204 MM 10.55% Attributable profit FL CET1 (+4%) (+50 bps) €41,268 MM Underlying RoTE 11.1% Customer revenues (+4%1) €0.21 €798 Bn Dividend per share Loans (+5%) (+2%1) €4.22 €796 Bn TNAV/Shar
Slide 5: Underlying PBT +12% YoY and attributable profit +4% YoY
Underlying PBT +12%1 YoY and attributable profit +4% YoY % € million 2016 2015 ABS. % Constant euros Net interest income 31,089 32,189 -1,101 -3 +2 Net fees 10,180 10,033 147 +1 +8 Total customer revenues 41,268 42,222 -954 -2 +4 ROF and other 2,585 3,051 -466 -15 -12 Gross Income 43,853 45,272 -1,4
Slide 6: We again delivered on all our 2016 shareholder commitments
We again delivered on all our 2016 shareholder commitments… 4.07 4.22 TNAV/share 3.89 4.01 TNAV/share (€) (€) Cash 0.16 0.17 dividend per 0.09 TNAV/share 0.08 share (€) (€) 0.48 0.41 EPS 0.39 0.40 TNAV/share (€) (€) 10.05 10.55 9.311 9.651 FL CET1 TNAV/share (%) (€) 2013 2014 2015 2016 6 (1) Pro-for
Slide 7: Well-funded and highly liquid balance sheet
…and continued to reinforce our well-funded and highly liquid balance sheet Prudent balance sheet structure Improved credit quality and capital position % 2016 vs 2015 Cost of credit 1.18 -7bps 65% Deposits Net loans to 75% customers NPL ratio 3.93 -43bps 5% Securitisations Fixed assets 14% Funding
Slide 8: A differential business model
A differential business model 1 Serving 125 MM customers’ financial needs, with critical mass in 10 markets with c.1 Bn people drives profitable growth 2 Geographic diversification drives predictability of earnings = less capital 3 Subsidiary model with strong culture of working together drives effi
Slide 9: We are delivering on our unique opportunity
1 We are delivering on our unique opportunity… Loyal customers Digital customers Fee income growth1 Million Million % +10% 15.2 +26% c.2x 8.1 15.0 20.9 20.0 13.8 16.6 Increase 4.3 2015 2016 2016 2015 2016 2016 2015 2016 2016 target target target 9 (1) % change (constant euros)
Slide 10: Commercial transformation while maintaining best in class C/I
1 …as we invest in commercial transformation while maintaining best in class c.48% C/I and improving operational excellence We have TOP customer satisfaction in Best-in-class C/I: Top 2 among peers1 countries that represent c.80% of our PAT C/I, % (9M´16) Geographies within Top 3 customer satisfacti
Slide 11: Geographic diversification delivers predictable earnings
2 Our geographic diversification delivers predictable and growing earnings through the cycle… Well balanced profit generation Santander has the lowest volatility in earnings among peers… % of Group PAT1 Average volatility of quarterly reported EPS (%), 1999-9M’162 729 UK Brazil 135 122 20 21 95 79 6
Slide 12: Fund profitable growth, increase cash dividend and accumulate capital
2 …which allows us to consistently fund profitable growth, increase cash dividend per share and accumulate capital RoTE 9M´161 +8% +2%2 % cash DPS customer loans 14 Increase 13 Fund business cash dividends 11 growth per share 11 11 c.1/3 c.1/3 (2016 vs. 2015) 9 9 Top tier profitability 9 allows us t
Slide 13: Proven track record of value creation in mature investments
2 Proven track record of shareholders value creation in mature investments ROE higher/equal SAN RoE Avg. peers2 Years since than the cost of equity 9M´2016 (%) RoE (%) first investment 9 7 159 17 18 37 13 4 25 Mature 32 31 25 investments 14 15 24 13 20 24 15 10 24 10 5 12 More recent 1 5 6 11 invest
Slide 14: Delivering regulatory progress in the US: SBNA performance
Delivering regulatory progress in the US whilst progressing in improving 2 SBNA business performance… Improved cost efficiency SBNA underlying C/I -10pp 85% 75% 2015 2016 More transactional customers Improved funding costs vs peers SBNA net new checking customers (monthly average increase) SBNA gap
Slide 15: Setting the path to increase profitability
2 …setting the path to increase profitability Bank NA. CONSUMER USA Diversified Super-regional bank in the US •I Meet regulatory expectations RoE2 •II Simplify and increase • Reduce risk and IV Our priorities profitability improve operating 4% >10% conditions up to Group • Increase connectivity III
Slide 16: We add increasing value by working as a Group
3 We add increasing value by working as a Group… Collaboration between countries: Connectivity examples Number of companies International trade jointly targeted through c.500 revenues1 +46% collaboration (+2018 vs. 2016) Average increase in revenues UK international +38% 9x (2016) clients Global pro
Slide 17: Supporting our communities
…supporting our communities… Strong Simple | Personal | Fair culture S|P|F culture More than 3/4 of our employees support the new culture >9 pp vs. average of financial Commitment services employees Leadership, talent and +5 pp improvement in performance work-life balance 17 Source: Employee Engagem
Slide 18: Focus on Education and financial inclusion
… with focus on Education and financial inclusion / entrepreneurship c.€200 MM 1.5 MM c.6k NGO1 invested beneficiaries collaborations Santander Universities Contribution to society 250k micro-enterprise +35k scholarships projects financed c.1.2k universities supported c.60k employees in volunteering
Slide 19: Agenda
Agenda Delivery of our 2016 commitments and progress in strategic priorities Group and business areas review 2017 Strategic priorities Concluding remarks 19
Slide 20: Santander delivered strong financial performance: underlying PBT +12% YoY
Santander delivered strong financial performance: underlying PBT +12%1 YoY 2016 results (change vs. 2015) €6,204 MM 10.55% Attributable profit FL CET1 (+4%) (+50 bps) €41,268 MM Underlying RoTE 11.1% Customer revenues (+4%1) €0.21 €798 Bn Dividend per share Loans (+5%) (+2%1) €4.22 €796 Bn TNAV/Shar
Slide 21: Widespread growth, particularly in developing markets
Widespread growth, particularly in developing markets Loan portfolio Funds Dec’16 € Billion YoY var. Dec’16 € Billion YoY var. Spain 151 -4% Spain 225 +3% UK 243 +2% UK 211 +6% Mature Mature markets USA 90 -2% markets USA 74 +7% SCF 88 +14%1 SCF 35 +7% Portugal 29 -5% Portugal 31 +2% Poland 21 +8% P
Slide 22: Attributable profit up 4%
Attributable profit up 4% (+15% in constant euros) driven by higher customer revenues and lower cost of credit. 4Q’16 profit of €1,598 million1 € million 2016 2015 % /2015 % /2015 Constant euros Gross income 43,853 45,272 -3 +3 Higher customer revenues Operating expenses -21,088 -21,571 -2 +4 Net op
Slide 23: 2015 and 2016 profit hit by non-recurring items
2015 and 2016 profit hit by several non-recurring items 2015 2016 € million net of tax € million net of tax 1,718 -600 600 PPI1 1,118 Badwill 283 644 Restatement 435 Other items 32 SC USA (goodwill, other) 137 PPI1 -417 Net of the reversal of 835 Impairment of 227 provisions 683 Restructuring in Bra
Slide 24: Gross income rose in 8 of 10 core units
Gross income rose in 8 of 10 core units driven by net interest income and good performance of fee income Gross income evolution Gross income € million € million Net interest income 7,959 762 -366 43,853 7,756 42,768 689 7,286 +8% -12% +2% Fee income 2,592 2,397 +3% 2,335 Other income* 815 550 373 Ot
Slide 25: Active cost management enabled investment in transformation
Active cost management enabled the continuous investment in commercial transformation, while remaining as one of the most efficient banks Total operating expenses % change in seven units below inflation rate1 € million 2016 / 2015, % In real terms2 Nominal and excl. perimeter +3.5% Brazil 5.7 -3.3 2
Slide 26: All credit quality ratios improved
All credit quality ratios improved with cost of credit already achieving the Investor Day goals Total loan-loss provisions1 Ratios evolution € million D’15 D’16 -2% 9,722 9,518 NPL ratio 4.36% 3.93% Coverage ratio 73% 74% Cost of credit 1.25% 1.18% Cost of credit 0.90% 0.82% excl. SC USA 2015 2016 L
Slide 27: Progress on fully-loaded CET1 >11% in 2018
Consistent progress on reaching our target of fully-loaded CET1 >11% in 2018 Fully-loaded CET1 % December ’16 YoY var. +50 bps in 2016 10.55 10.47 Total capital ratio: 13.87% +82 bps 10.36 10.27 10.05 Leverage ratio: 5.0% +30 bps Underlying RoRWA : 1.36% +6 bps Dec’15 Mar’16 Jun’16 Sep’16 Dec’16 27
Slide 28: PBT rose in 9 of 10 core units
Despite challenging market conditions, PBT rose in 9 of 10 core units (Attributable profit impacted by higher and/or new taxes) Profit before taxes 2016 Attributable profit 2016 € million and % change / 2015 in constant euros € million and % change / 2015 in constant euros Brazil 2,772 +16% Brazil 1
Slide 29: Brazil
BRAZIL Strategy and highlights P&L € million 4Q’16 %/3Q’16* 2016 %/2015* 2015 2016 NII 2,269 5.3 8,062 1.8 Loyal customers (mill.) 3.2 3.7 Fee income 887 12.8 2,940 16.9 Digital customers (mill.) 4.4 6.4 Gross income 3,187 2.7 11,321 6.8 Biometrics 0.1 6.3 (million customers) Operating expenses -1,3
Slide 30: United Kingdom
UNITED KINGDOM Strategy and highlights P&L £ million 4Q’16 %/3Q’16 2016 %/2015 2015 2016 NII 928 4.5 3,599 0.4 Digital customers (mill.) 3.7 4.6 Fee income 205 -6.9 843 6.5 Corporate lending growth >5 pp = vs. market Gross income 1,234 5.2 4,752 2.7 Share of corporates / total 13.4% 13.7% Operating
Slide 31: Santander Consumer Finance
SANTANDER CONSUMER FINANCE Strategy and highlights P&L € million 4Q’16 %/3Q’16* 2016 %/2015* 2015 2016 NII 867 -1.8 3,391 10.7 Active customers1 (mill.) 16.8 17.9 Fee income 184 -15.9 862 -1.2 Countries incorporated (#) 5 11 Gross income 1,043 -6.0 4,262 8.5 (Banque PSA Finance agreement) Operating
Slide 32: Spain
SPAIN Strategy and highlights P&L € million 4Q’16 %/3Q’16 2016 %/2015 2015 2016 NII 747 2.5 3,077 -10.3 Digital customers (mill.) 2.4 2.7 Fee income 451 -1.2 1,781 5.5 Retail fee income -6% +6% Gross income 1,179 -15.7 5,608 -7.8 (y-o-y % change) Operating expenses -802 -2.7 -3,297 -4.0 Customer sat
Slide 33: Good performance of other units
ATTRIBUTABLE PROFIT (DETAIL BY UNITS IN THE APPENDIX) Good performance of other units: increased customer base, volumes and profits ■ Focus on commercial transformation: strong growth in volumes, digital customers Mexico €629 mill.; +18% (+46%) and loyal (+16%) ■ Profit boosted by customer revenues
Slide 34: Corporate Centre
CORPORATE CENTRE Progress on reducing the Corporate Centre's weight in the Group: Headquarters expenses down 18% in 2016 Corporate Centre / Total Group (%) P&L € million 2016 2015 Operating expenses Underlying attrib. profit % change 2016/2014 NII -739 -627 Gains / Losses on FT -243 150 23% 22% Oper
Slide 35: Agenda
Agenda Delivery of our 2016 commitments and progress in strategic priorities Group and business areas review 2017 Strategic priorities Concluding remarks 35
Slide 36: A bank that is Simple, Personal, Fair
Our purpose Our aim To be the best Retail and Commercial Bank, earning the lasting loyalty of our people, customers, shareholders and To help people communities and businesses prosper A bank that is… SIMPLE | PERSONAL | FAIR 36
Slide 37: We are delivering on our strategic plan
We are delivering on our strategic plan 1 People 2 Customers Earn the loyalty of our retail A strong internal culture: and corporate customers: Simple | Personal | Fair improve our franchise Operational and The best bank to digital work for To be the best retail and excellence commercial bank, earni
Slide 38: People and communities
People and communities: Continuing our progress towards a Simple | Personal | Fair culture and giving back to our communities is a requirement to succeed People Communities Employee engagement % of engaged employees Increase • +93k scholarships in 2017-2018 • c.80k entrepreneurs supported 78 in 2017
Slide 39: Customers: increase customer value, reach 17MM loyal customers
Customers: In 2016 we increased customer value and our target is to reach 17MM loyal customers in 2017 Customer loyalty value propositions… ...to further drive fee income growth Fee income growth1 8.1% Increase2 (c.10% CAGR by 2018) 1|2|3 World 4.3% Loyal customers, million 17,0 15,2 13,8 2015 2016
Slide 40: Customers: technology and collaboration for customer experience
Customers: Leveraging technology and active collaboration to deliver best customer experience and efficiency Digital transformation Examples 2016 2017 1 Digital customers 20.9 25 Business Digital account and Million transformation card for the unbanked Broadly 2 New digital platform launch in Q2 201
Slide 41: Shareholders: FL CET1 ahead of plan, reaffirm 2017 guidance
Shareholders: We delivered on FL CET1 ahead of plan and reaffirm 2017 guidance Fully loaded CET1 (%) 10bps ahead of plan +50bps 10.55 1 Committed to accumulate organically 10.05 c.40 bps CET1 per year after dividends and lending growth 2 Loans growth > RWA growth Profit growth > RWA growth 3 Capital
Slide 42: Reaffirm 2017 targets: grow EPS, DPS and TNAV per share
Shareholders: Reaffirm all our targets for 2017: grow EPS, DPS and TNAV per share EPS € DPS € 0.41 0.20 0.21 0.40 Increase Increase 2015 2016 2017 2015 2016 2017 target target TNAV/Share € 4.22 4.07 Increase 2015 2016 2017 target 42
Slide 43: Agenda
Agenda Delivery of our 2016 commitments and progress in strategic priorities Group and business areas review 2017 Strategic priorities Concluding remarks 43
Slide 44: We delivered on all our strategic goals in 2016
We delivered on all our strategic goals in 2016… 2015 2016 2016 targets Loyal customers (million) 13.8 15.2 15.0 Digital customers (million) 16.6 20.9 20.0 Fee income1 4.3% 8.1% Increase Cost of risk 1.25% 1.18% Improve Cost to income 47.6% 48.1% Broadly stable EPS (€) 0.40 0.41 Increase DPS (€) 0.2
Slide 45: On track to meet our 2017/18 targets
…and we are on track to meet our 2017/18 targets 2016 2017 targets 2018 targets Loyal customers (Million) 15.2 17 18.6 Digital customers (Million) 20.9 25 30 Fee income1 8.1% Increase c.10% CAGR 15-18 Cost of risk 1.18% Improve 1.2% avg. 15-18 Cost to income 48.1% Broadly stable 45-47% EPS (€) 0.41
Slide 46: Reaffirming our key shareholder metrics
Reaffirming our key shareholder metrics, increasing EPS in 16/17, reaching double digit by 2018, and growing DPS and TNAV per share ▪ Top 3 bank to work for in the majority of ▪ 17MM retail Loyal Customers our geographies ▪ 1.6MM loyal SMEs and Corporates ▪ Customer loans growth above peers ▪ All ge
Slide 47: The best retail bank in Europe and the Americas
The best retail bank in Europe and the Americas 1 During 2016 we have delivered ahead of plan on our strategic, financial and commercial targets 2 We reiterate our commitments for 2017 and 2018 3 Consistent delivery over the past 3 years: • Broadly stable C/I • Cash DPS +89% • 11.1% underlying RoTE
Slide 48: Appendix
Z “I APPENDIX L —!
Slide 49: Appendix contents
Appendix Other geographic units results Global segments results Group balance sheet Liquidity and funding NPL and coverage ratios, and cost of credit Quarterly income statements 49
Slide 50: Other geographic units results
Other geographic units results 50
Slide 51: Mexico
MEXICO Strategy and highlights P&L € million 4Q’16 %/3Q’16* 2016 %/2015* 2015 2016 NII 615 4.9 2,385 14.3 Digital customers (thousand) 876 1,282 Fee income 179 8.0 711 4.4 Payrolls (thousand) 3,076 3,400 Gross income 828 6.0 3,203 13.4 Demand deposits (YoY change) +18% +16% Operating expenses -325 6
Slide 52: Chile
CHILE Strategy and highlights P&L € million 4Q’16 %/3Q’16* 2016 %/2015* 2015 2016 NII 521 7.7 1,864 7.4 Loyal customers (thousand) 559 604 Fee income 91 0.1 353 1.2 Digital customers (thousand) 918 959 Gross income 672 6.2 2,422 7.0 Cost of credit 1.65% 1.43% Operating expenses -265 3.9 -986 1.5 NPL
Slide 53: Portugal
PORTUGAL Strategy and highlights P&L € million 4Q’16 %/3Q’16 2016 %/2015 2015 2016 NII 182 1.0 733 32.0 Loyal individuals (thousand) 505 603 Fee income 69 -13.6 314 19.1 Loyal companies (thousand) 23.0 33.2 Gross income 292 1.8 1,209 19.0 Digital customers (thousand) 381 502 Operating expenses -143
Slide 54: United States
UNITED STATES Strategy and highlights P&L US$ million 4Q’16 %/3Q’16 2016 %/2015 2015 2016 NII 1,561 -3.9 6,545 -3.5 Digital customers (thousand) 617 778 Fee income 276 -7.7 1,219 1.2 C&I loans ($Bn) 19 17 Gross income 1,945 -6.7 8,332 -3.6 Core deposits ($Bn) 43 45 Operating expenses -932 6.6 -3,538
Slide 55: Argentina
ARGENTINA Strategy and highlights P&L € million 4Q’16 %/3Q’16* 2016 %/2015* 2015 2016 NII 212 16.0 710 28.0 Loyal individuals (thousand) 961 1,016 Fee income 129 5.5 474 36.3 Loyal companies (thousand) 91 102 Gross income 378 6.6 1,377 42.0 Digital customers (thousand) 1,258 1,511 Operating expenses
Slide 56: Poland
POLAND Strategy and highlights P&L € million 4Q’16 %/3Q’16* 2016 %/2015* 2015 2016 NII 222 4.2 834 11.2 Digital customers (thousand) 1,885 1,979 Fee income 101 -3.8 400 -1.2 Loyal companies (thousand) 60 89 Gross income 329 0.7 1,314 7.4 Cost of credit 0.87% 0.70% Operating expenses -139 -5.8 -579 1
Slide 57: Other Latin American countries
OTHER LATIN AMERICAN COUNTRIES Attributable profit € million (constant euros) Uruguay Peru +32% 64 84 +21% 37 31 2015 2016 2015 2016 Focusing on loyalty, transactions and target segments Profit driven by customer revenues growth 57
Slide 58: Global segments results
i “T Global segments results
Slide 59: Retail Banking
RETAIL BANKING Activity P&L € billion (constant euros) € million 4Q’16 %/3Q’16* 2016 %/2015* Loans Funds NII 7,493 1.9 29,090 2.9 Fee income 2,279 0.3 8,745 8.9 +5%* +2%* 729 Gross income 9,960 -0.1 39,055 2.8 695 677 693 Operating expenses -4,827 4.0 -18,476 5.0 LLPs -2,299 -1.1 -8,693 -2.2 Underly
Slide 60: Global Corporate Banking
GLOBAL CORPORATE BANKING Gross income P&L € million (constant euros) € million 4Q’16 %/3Q’16* 2016 %/2015* +14%* 5,825 NII 801 10.0 2,781 -0.5 5,125 826 TOTAL +26% Fee income 372 5.7 1,465 4.6 655 Capital & Other Gross income 1,419 -7.0 5,825 13.7 1,753 1,451 +21% Global Markets Operating expenses -
Slide 61: Real Estate Activity Spain
REAL ESTATE ACTIVITY SPAIN Activity P&L € million Total Balance Coverage ratio 2016 2015 % 2015 € billion Dec'16 and var. / Dec'15 Gross income 39 137 -71.8 15,8 -1 p.p. +4 p.p. Operating expenses -211 -235 -10.3 2.4 11,0 5.0 Sareb and 56% 58% Provisions -288 -511 -43.6 2.7 Other 2,1 1.3 Metrovacesa
Slide 62: Group Balance sheet
i “T Group Balance sheet L —!
Slide 63: Retail balance sheet, low risk, liquid and well capitalised
BALANCE SHEET Retail balance sheet, appropriate for a low risk business model, liquid and well capitalised Balance sheet (Dec’16) € billion 1 Lending: 59% of balance sheet 1,339 1,339 Cash and credit 2 Credit 149 2 Cash, central banks and credit institutions: 13% institutions 171 institutions Deriva
Slide 64: Liquidity and funding
i “T Liquidity and funding L —!
Slide 65: Well-funded balance sheet with high structural liquidity surplus
LIQUIDITY AND FUNDING Well-funded balance sheet with high structural liquidity surplus Liquidity balance sheet (Dec’16) € billion Commercial Gap: €100 bill. Net loans to 691 Deposits customers 791 Structural liquidity1 surplus: €150 bill. (14% net liabilities) 57 Securitisations Fixed assets Funding
Slide 66: Lower recourse to wholesale funding
LIQUIDITY AND FUNDING Commercial activity evolution enabled a lower recourse to medium and long- term wholesale funding, without eroding the structural liquidity surplus Issuances 2016 Diversified issuances € billion Total 60.2 Sterling 44.4 area, 23% US$ area, M/L term issuance 45.8 35% 31.3 Euro a
Slide 67: NPL, coverage ratios and cost of credit
NPL, coverage ratios and cost of credit
Slide 68: NPL ratio
NPL ratio % 31.03.15 30.06.15 30.09.15 31.12.15 31.03.16 30.06.16 30.09.16 31.12.16 Continental Europe 8.52 8.15 7.89 7.27 7.08 6.84 6.43 5.92 Spain 7.25 6.91 6.61 6.53 6.36 6.06 5.82 5.41 Santander Consumer Finance 4.52 4.25 4.15 3.42 3.28 2.95 2.86 2.68 Poland 7.33 7.07 7.14 6.30 5.93 5.84 5.71 5.
Slide 69: Coverage ratio
Coverage ratio % 31.03.15 30.06.15 30.09.15 31.12.15 31.03.16 30.06.16 30.09.16 31.12.16 Continental Europe 58.6 58.9 60.4 64.2 65.4 61.3 61.3 60.0 Spain 46.6 46.8 47.8 48.1 50.2 47.6 47.6 48.3 Santander Consumer Finance 103.6 104.9 107.2 109.1 111.9 110.6 110.7 109.1 Poland 61.6 63.5 63.1 64.0 67.0
Slide 70: Non-performing loans and loan-loss allowances
Non-performing loans and loan-loss allowances. December 2016 Non-performing loans Loan-loss allowances 100%: €33,643 mill. 100%: €24,835 mill. Other, 12% Other, 11% Spain, 18% Spain, 28% USA, 6% USA, 18% Chile, 6% SCF*, 10% Mexico, 2% SCF*, 7% Chile, 5% Poland, 3% Brazil, 16% Mexico, 3% Poland, 4% P
Slide 71: Cost of credit
Cost of credit % 31.03.15 30.06.15 30.09.15 31.12.15 31.03.16 30.06.16 30.09.16 31.12.16 Continental Europe 0.95 0.86 0.77 0.68 0.60 0.51 0.46 0.44 Spain 0.97 0.84 0.71 0.62 0.54 0.45 0.41 0.37 Santander Consumer Finance 0.93 0.91 0.87 0.77 0.64 0.55 0.49 0.47 Poland 1.00 1.00 0.96 0.87 0.82 0.75 0.
Slide 72: Spain Real Estate Activity. Exposure and coverage ratios
Spain Real Estate Activity. Exposure and coverage ratios Coverage by borrowers' situation Total coverage (December 2016) (problematic assets + performing loans) € million Provisions / exposure (%) 57% Gross Coverage Net risk Fund risk Total real estate Non-performing 3,841 2,184 1,657 exposure Subst
Slide 73: Spain Real Estate Activity. Loans and foreclosures
Spain Real Estate Activity. Loans and foreclosures LOANS Foreclosed REAL ESTATE (Dec’16) € million € million Gross Net Dec’16 Dec’15 Var. amount Coverage amount Finished buildings 2,120 2,735 -615 Finished buildings 2,178 49% 1,104 Buildings under constr. 97 137 -40 Buildings under constr. 839 46% 4
Slide 74: Quarterly income statements
Quarterly income statements
Slide 75: Grupo Santander
Grupo Santander € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 10,563 10,867 10,457 10,336 10,021 10,119 10,395 10,734 42,222 41,268 Gross income 11,444 11,618 11,316 10,894 10,730 10,929 11,080 11,113 45,272 43,853 Operating expenses (5,377) (5,429) (5,342) (5,
Slide 76: Grupo Santander (constant euros)
Grupo Santander Constant € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 9,629 9,963 10,073 10,153 10,210 10,196 10,312 10,550 39,817 41,268 Gross income 10,479 10,674 10,914 10,702 10,915 11,013 11,001 10,924 42,768 43,853 Operating expenses (4,939) (5,007) (5,1
Slide 77: Spain
Spain € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 1,371 1,296 1,251 1,199 1,243 1,232 1,185 1,198 5,118 4,858 Gross income 1,749 1,522 1,571 1,238 1,543 1,489 1,398 1,179 6,080 5,608 Operating expenses (855) (856) (863) (860) (837) (834) (824) (802) (3,434) (
Slide 78: Santander Consumer Finance
Santander Consumer Finance € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 949 990 1,011 1,022 1,041 1,061 1,099 1,052 3,973 4,253 Gross income 959 991 1,018 998 1,045 1,068 1,106 1,043 3,965 4,262 Operating expenses (422) (442) (443) (467) (483) (468) (467) (486
Slide 79: Santander Consumer Finance (constant euros)
Santander Consumer Finance Constant € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 937 972 1,005 1,021 1,045 1,062 1,098 1,047 3,935 4,253 Gross income 946 973 1,012 997 1,050 1,069 1,105 1,039 3,928 4,262 Operating expenses (417) (435) (440) (467) (485) (468) (
Slide 80: Poland
Poland € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 291 301 300 311 292 298 321 323 1,204 1,233 Gross income 340 336 309 292 311 345 330 329 1,276 1,314 Operating expenses (151) (153) (146) (143) (145) (146) (149) (139) (594) (579) Net operating income 190 182
Slide 81: Poland (PLN)
Poland PLN million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 1,220 1,232 1,255 1,327 1,275 1,301 1,391 1,412 5,034 5,379 Gross income 1,427 1,371 1,293 1,247 1,357 1,507 1,430 1,440 5,338 5,733 Operating expenses (632) (626) (614) (611) (632) (638) (647) (609) (2,484
Slide 82: Portugal
Portugal € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 211 208 200 200 273 262 260 251 818 1,047 Gross income 238 234 226 318 337 293 287 292 1,016 1,209 Operating expenses (123) (122) (124) (125) (154) (149) (142) (143) (494) (589) Net operating income 115 112
Slide 83: United Kingdom
United Kingdom £ million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 1,100 1,110 1,092 1,076 1,105 1,096 1,108 1,133 4,377 4,442 Gross income 1,152 1,173 1,150 1,155 1,166 1,180 1,172 1,234 4,630 4,752 Operating expenses (612) (608) (605) (610) (611) (619) (599) (594)
Slide 84: Brazil
Brazil € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 2,962 2,869 2,598 2,534 2,365 2,583 2,899 3,155 10,963 11,002 Gross income 3,007 2,981 2,656 2,497 2,381 2,703 3,050 3,187 11,140 11,321 Operating expenses (1,187) (1,151) (1,056) (1,059) (947) (1,046) (1,177
Slide 85: Brazil (R$)
Brazil R$ million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 9,522 9,736 10,129 10,570 10,161 10,216 10,500 11,271 39,958 42,147 Gross income 9,666 10,109 10,362 10,468 10,227 10,708 11,067 11,364 40,605 43,366 Operating expenses (3,815) (3,904) (4,110) (4,396) (4,068
Slide 86: Mexico
Mexico € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 791 834 794 832 767 768 767 794 3,251 3,096 Gross income 819 854 794 850 792 786 796 828 3,317 3,203 Operating expenses (355) (353) (327) (334) (322) (317) (311) (325) (1,370) (1,274) Net operating income 463
Slide 87: Mexico (pesos)
Mexico Million pesos 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 13,300 14,117 14,479 15,219 15,253 15,690 16,028 16,922 57,115 63,893 Gross income 13,769 14,450 14,503 15,547 15,745 16,054 16,647 17,645 58,269 66,093 Operating expenses (5,973) (5,978) (5,978) (6,131)
Slide 88: Chile
Chile € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 485 593 554 519 509 534 561 613 2,151 2,216 Gross income 553 633 606 543 556 577 616 672 2,336 2,422 Operating expenses (238) (263) (243) (260) (235) (237) (249) (265) (1,004) (986) Net operating income 316 37
Slide 89: Chile (Ch$)
Chile Ch$ billion 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 341 406 414 397 393 409 414 441 1,557 1,657 Gross income 389 432 454 416 430 441 455 484 1,691 1,810 Operating expenses (167) (180) (182) (198) (182) (182) (184) (191) (727) (737) Net operating income 222 25
Slide 90: United States
United States $ million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income 1,940 2,011 2,019 2,014 2,018 1,983 1,925 1,838 7,984 7,764 Gross income 2,101 2,210 2,169 2,167 2,168 2,133 2,085 1,945 8,647 8,332 Operating expenses (783) (806) (858) (907) (856) (874) (875) (932) (
Slide 91: Corporate Centre
Corporate Centre € million 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 2015 2016 NII + Fee income (222) (138) (139) (142) (173) (192) (201) (204) (641) (771) Gross income (230) (177) (56) (32) (223) (244) (316) (282) (495) (1,066) Operating expenses (142) (150) (142) (112) (126) (120) (104) (99)
Slide 92: Thank you
Thank you Nuestra misión Our purpose eshelp is to contribuir peoplealand progreso de las personas y de las empresas. businesses prosper. Nuestra cultura Our culture se basa is based en la on the creencia belief that de que todo lo que hacemos everythingdebe we do sershould be