Slide 1: Form 6-K Report of Foreign Issuer
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, 2023 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 2023 Earnings presentation
Slide 3: Earnings Presentation 9M'23
Earnings Presentation — 9M’23 25 October 2023
Slide 4: Important information: Non-IFRS and alternative performance measures
2 Important information Non-IFRS and alternative performance measures This presentation contains financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as alternative performance measures (APMs) as
Slide 5: Important information: forward-looking statements
3 Important information The following important factors (and others described elsewhere in this presentation and other risk factors, uncertainties or contingencies detailed in our most recent Form 20-F and subsequent 6-Ks filed with, or furnished to, the SEC), as well as other unknown or unpredictab
Slide 6: Index
4 Index 9M'23 Highlights & progress on our strategy 1 Final remarks 3 Appendix 42 Group review
Slide 7: 9M'23 highlights
5 Strong 9M results with 9mn new customers YoY contributing to a double-digit revenue increase ONE TRANSFORMATION driving efficiency improvement and profitable growth Delivering double digit value creation and rising shareholder remuneration 9M'23 highlights Cash DPS Q3 Attributable Profit +20% vs.
Slide 8: Profit increased in 9M'23 supported by customer revenue and efficiency
6 Profit increased in 9M'23, supported by customer revenue and efficiency improvement, with double-digit growth in net operating income 2,543 2,351 2,422 2,289 2,571 2,670 2,902 Q1'22 Q2 Q3 Q4 Q1'23 Q2 Q3 € mn Attributable profit Attributable profit (Constant € mn) +9% QoQ +20% 2,613 2,285 2,331 2,2
Slide 9: On track to deliver on our 2023 financial targets
7 Revenue1 Efficiency ratio CoR FL CET1 RoTE 9M'232023 targets On track to deliver on our 2023 financial targets Double-digit growth 44-45% <1.2% >12% >15% +13% 44.0% 1.13% 12.3% 14.8% Note: targets market dependent. Based on macro assumptions aligned with international economic institutions. (1) Yo
Slide 10: Building up capital organically and higher shareholder remuneration
8 FL CET1 TNAVps + Cash DPS € per share 4.26 4.75 Dec-22 Sep-23 3 Interim distribution in Nov-23 Cash dividend per share of €8.10 cents +39% YoY Current share buyback programme4 €1,310mn Building up capital organically and delivering double-digit value creation with higher shareholder remuneration S
Slide 11: Improving efficiency through One Transformation and Global & Network businesses
9 Improving efficiency due to the execution of One Transformation and extracting value from our Global & Network businesses • Multi-Latin/Multi-European: +53% 9M’23 revenue YoY growth • WM&I: collaboration with CIB and Corporates $160mn YTD (+13%) • Auto: expansion of OEM agreements • Global approac
Slide 12: One Transformation driving simplification and reducing cost to serve
10 One Transformation driving simplification, reducing cost to serve and increasing transactionality 9M’23 data (or latest available). Changes in constant euros Process automation Best-in-class Tech PlatformSimplification Cost1 per active customer -2% Revenue per active customer YoY +11% YoY Transac
Slide 13: Global and Network businesses: revenue growing above Group
11 Global and Network businesses: revenue growing above Group 9M'23 data. Changes in constant euros ID Targets (CAGR 22-25) Total revenue €3.0bn +27% Network revenue SCIB c.10% WM&I PB network AuMs €52bn +12% c.10% Payments # Transactions 26bn +15% PagoNxt c.30% PagoNxt Auto Auto loans and leases €1
Slide 14: Progressing towards our 2025 profitability targets
12 Progressing towards our 2025 profitability targets Europe South America North America Digital Consumer Bank Group DCB 2025 Target9M'23 SCIB WM&I RoTERoTE EBITDA Margin 2025 Target9M'23 2025 Target9M'23 19.6% >30% 1 14.8% c.15% 10.4% c.15% 14.8% c.19% 11.3% c.15% 14.8% 15-17% 28.4% >20% 92.1% c.60
Slide 15: Index
13 Index 9M'23 Highlights & progress on our strategy 1 Final remarks 3 Appendix 42 Group review
Slide 16: Double-digit revenue growth backed by customer activity
14 43,095 -24337,997 +2,777 +1,115 +784 +151 +514 9M'22 Retail SCIB WM&I PagoNxt Auto CC 9M'23 Total revenue Double-digit revenue growth backed by good customer activity across businesses and regions Revenue trends • >95% of total revenue is customer related which drives the vast majority of total r
Slide 17: NII and NIM up YoY
15 8,976 9,232 9,577 10,062 10,090 10,647 11,402 Q1'22 Q2 Q3 Q4 Q1'23 Q2 Q3 2.45% 2.52% 2.56% 2.56% 2.63% 2.74% 2.82% NII and NIM up YoY, supported by volumes and margin improvement NII drivers • NII growth of 7% in the quarter • NII growing YoY in Europe and North America: - Europe (+32%) and Mexic
Slide 18: Net fee income grew driven by customer activity
16 2,849 2,949 2,898 2,931 3,027 3,036 3,160 Q1'22 Q2 Q3 Q4 Q1'23 Q2 Q3 Net fee income grew driven by customer activity and value-added products, with 42% of total fees from Global and Network businesses YoY % changes in constant euros Net fee income drivers Constant € mn Net fee income 9,222 -3 8,6
Slide 19: Focus on efficiency, resulting in positive jaws
17 5,553 5,719 5,902 6,294 6,101 6,298 6,563 Q1'22 Q2 Q3 Q4 Q1'23 Q2 Q3 45.0% 46.0% 45.6% 46.6% 44.1% 44.3% 43.6% 18,961 17,174 +425 +348 +857 +147 +11 9M'22 Europe North America South America DCB CC 9M'23 Focus on One Transformation and efficiency, resulting in positive jaws Costs and efficiency dr
Slide 20: Credit quality remains robust
18 2,184 2,601 2,695 3,000 2,892 2,888 3,257 Q1'22 Q2 Q3 Q4 Q1'23 Q2 Q3 0.77% 0.83% 0.86% 0.99% 1.05% 1.08% 1.13% Credit quality remains robust, on track to achieve Group 2023 CoR target Credit quality drivers Group NPL and stages • Credit quality remains robust supported by record low unemployment
Slide 21: Diversified commercial banking model funded with stable retail deposits
19 555 249 153 204 Customer funds 336 162 138 248 133 Customer loans Diversified commercial banking model funded with stable retail deposits SCIB SMEs & Corp Consumer & others Auto Individual mortgages Loan portfolio and customer funds Sep-23 SMEs, Corp & Other SCIB Mutual funds +5%€1,017bn €1,160bn
Slide 22: CET1 well above target of >12%
20 CET1 well above our target of >12%, driven by strong capital generation, with profitable front-book growth >15% RoTE % % RWAs with RoRWA > CoE Asset rotation and risk transfer activities RWAs mobilized vs. total RWAs 10% Q3’23 FL CET1 performance Maximize capital productivity Front book pricing R
Slide 23: Index
21 Index 9M'23 Highlights & progress on our strategy 1 Final remarks 3 Appendix 42 Group review
Slide 24: Well-positioned to create shareholder value
22(1) vs. 2022 interim cash dividend. Well-positioned to create shareholder value and deliver sustainable profitability 9M'23 >12% FL CET1 14.8 RoTE +17% EPS +12% TNAVps + DPS YTD Completed our changes to a simpler & more integrated model through ONE TRANSFORMATION that will accelerate efficiency an
Slide 25: Index
23 Index 9M'23 Highlights & progress on our strategy 1 Final remarks 3 Appendix 42 Group review
Slide 26: Appendix
24 Appendix Investor Day 2025 targets summary and our last step towards ONE SANTANDER Primary and Secondary segments Reconciliation of underlying results to statutory results Glossary The other information in the Appendix regularly provided each quarter can be found in the document entitled "Supplem
Slide 27: Investor Day 2025 targets summary
25 Profitability RoTE (%) 13.4 14.8 15-17 Payout (Cash + SBB)1 (%) 40 50 50 EPS Growth (% CAGR 22-25) 23 17 Double-digit Customer centric Total customers (mn) 160 166 c.200 Active customers (mn)2 99 101 c.125 Simplification & automation Efficiency ratio (%) 45.8 44.0 c.42 Network contribution Global
Slide 28: Last step towards ONE SANTANDER
26 We recently completed our last step towards ONE SANTANDER, creating a simpler, more efficient operating model PagoNxt & Cards, 2 global payments platforms Bring global merchants & SMEs (Getnet / OneTrade) into a single infrastructure DCB as a first step in personal finance Bring together our digi
Slide 29: Appendix
27 Appendix Investor Day Targets summary and our last step towards ONE SANTANDER Primary and Secondary segments Reconciliation of underlying results to statutory results Glossary The other information in the Appendix regularly provided each quarter can be found in the document entitled "Supplementar
Slide 30: Primary segments
28 Primary segments Detail by region and country
Slide 31: Europe
29 Europe Highlights Note: 9M'23 data and YoY changes (loans, deposits and mutual funds in constant euros). • On track to achieve our key transformation projects such as One App, tech commonality and shared services • Customer growth continued in the region (+970k YoY) • Loans affected by lower dema
Slide 32: Spain and UK
30 Spain UK España and UK Note: 9M'23 data and YoY changes (loans, deposits and mutual funds in constant euros). • Strong YoY growth in customers (+744k) and stable deposits. Loan volumes affected by prepayments and lower demand • Profit +68% driven by higher NII, boosted by active pricing managemen
Slide 33: Portugal and Poland
31 Portugal and Polonia Portugal PolandPoland Note: 9M'23 data and YoY changes (loans, deposits and mutual funds in constant euros). • Loan volumes under pressure from higher rates. Excellent liquidity management, with cost of deposits under control, in a context of early redemption of loans • Profi
Slide 34: North America
32 • Focus on the most profitable segments and on promoting Group network collaboration • Attracting new customers, supported by our enhanced customer experience through tailored products and services • Strong performance in loans and deposits in both countries • Revenue growing YoY driven by NII (i
Slide 35: USA and Mexico
33 •Successful customer attraction strategy reflected in strong YoY growth in customers (+708k), loans (+5%) and deposits (+17%) •Excellent profit and profitability performance supported by double-digit revenue growth, improved efficiency and low CoR •Positive revenue trends continued in Q3 • Stable
Slide 36: South America
34 South America Note: 9M'23 data and YoY changes (loans, deposits and mutual funds in constant euros). • We are focusing on increasing the value added to the Group and promoting synergies across our global and regional businesses • Customer growth (c.7.5mn YoY) and higher transactionality • Solid p
Slide 37: Brazil and Chile
35Note: 9M'23 data and YoY changes (loans, deposits and mutual funds in constant euros). Brazil • Growth in loans (individuals and SMEs) and deposits (time) • Profit down YoY affected by negative NII sensitivity, lower gains on financial transactions (lower market activity), inflation and higher pro
Slide 38: Argentina and Uruguay, Peru, Colombia
36Note: 9M'23 data and YoY changes (profit, loans, deposits and mutual funds in constant euros). Argentina • #1 NPS, with one of the best rated apps among local banks • Profit up YoY driven by strong revenue growth and efficiency improvement • Solid performance in Q3 across P&L lines Argentina y Uru
Slide 39: Digital Consumer Bank
37 • We continue to reinforce our leadership in mobility though new strategic alliances, our leasing & subscription businesses • Leasing contracts grew +17% YoY, consumer financing including BNPL grew 5%. New lending up 5% (+7% in auto) • Revenue up 6% YoY and 7% QoQ, driven by NII as we actively re
Slide 40: Corporate Centre
38 Corporate Centre • NII improved significantly driven by the higher liquidity buffer remuneration as a result of the rising interest rates • Lower negative FX hedging impact resulted in lower losses on financial transactions • Slight decrease in LLPs and other provisions Underlying P&L* 9M'23 9M'2
Slide 41: Secondary segments
39 Secondary segments Detail on CIB, WM&I, PagoNxt and Card businesses
Slide 42: Corporate & Investment Banking and Wealth Management & Insurance
40 Corporate & Investment Banking Note: 9M'23 data and YoY changes (revenue lines and commercial activity in constant euros). (2) It includes all fees generated by asset management and insurance businesses, even those ceded to the commercial network. Wealth Management & Insurance • Strong growth in
Slide 43: PagoNxt and Cards
41 6.8% 19.6% 9M'22 9M'23 668 820 9M'22 9M'23 Note: 9M'23 and YoY changes in constant euros. Cards does not include Digital Consumer Bank or PagoNxt. PagoNxt • Merchant Acquiring: strong TPV growth (+24% YoY) with market share gains in core markets • Payments Hub already one of the largest processor
Slide 44: Appendix
42 Appendix Investor Day Targets summary and our last step towards ONE SANTANDER Primary and Secondary segments Reconciliation of underlying results to statutory results Glossary
Slide 45: Reconciliation of underlying results to statutory results
43 Reconciliation of underlying results to statutory results (1) Includes exchange differences. Explanation of January-September 2023 adjustments: • Temporary levy on revenue in Spain in the first quarter, totalling EUR 224 million, which was moved from total income to other gains (losses) and provi
Slide 46: Appendix
44 Appendix Investor Day Targets summary and our last step towards ONE SANTANDER Primary and Secondary segments Reconciliation of underlying results to statutory results Glossary
Slide 47: Glossary - Acronyms
45 Glossary - Acronyms • ALCO: Assets and Liabilities Committee • AM: Asset management • AT1: Additional Tier 1 • AuMs: Assets under Management • BFG: Deposit Guarantee Fund in Poland • bn: Billion • BNPL: Buy now, pay later • bps: Basis points • c.: Circa • CAL: Customer assets and liabilities • CE
Slide 48: Glossary - Definitions
46 Glossary - Definitions Notes: The averages for the RoTE and RoRWA denominators are calculated using the monthly average over the period, which we believe should not differ materially from using daily balances. The risk-weighted assets included in the denominator of the RoRWA metric are calculated
Slide 49: 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 50: 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: 25 October 2023 By: /s/ José García Cantera Name: José García Cantera Title: