Banco Santander, S.a. · BME:SAN
Banco Santander — FY2024 Earnings Presentation
61 slides from Banco Santander's earnings presentation, Feb 5, 2025
Slide 1: Earnings Presentation FY'24
5 February 2025 Earnings Presentation FY’24
Slide 2: Important information
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 de
Slide 3: Important information
Important information While these forward-looking statements represent our judgement and future expectations concerning our business developments, results may differ materially from those anticipated, expected, projected or assumed in forward-looking statements. In particular, forward looking statem
Slide 4: Index
Index 1 2 3 4 FY'24 Highlights Group Final remarks Appendix Progress on our strategy review 4
Slide 5: Record results for the third consecutive year, creating value for shareholders
Record results for the third consecutive year, creating value for shareholders Q4’24 FY’24 attributable profit attributable profit Record profit on the back of 8mn new customers YoY and strong revenue growth €3.3bn €12.6bn +11% +14% Efficiency RoTE A groundbreaking year in our transformation driving
Slide 6: All-time high profit boosted by customer revenue and efficiency improvements
All-time high profit boosted by customer revenue and efficiency improvements from our transformation P&L Current Constant € million 2024 2023 % % NII 46,668 43,261 8 10 Net fee income 13,010 12,057 8 11 Exceeding our upgraded 2024 Group targets Other income 2,533 2,329 9 12 • Double-digit revenue gr
Slide 7: We are a global Retail and Consumer powerhouse with 173mn customers
We are a global Retail and Consumer powerhouse with 173mn customers Strong results underpinned by growth across our 5 global businesses Revenue Contribution to Profit 2025 RoTE Efficiency RoTE FY'24 (€bn) Group revenue (€bn) ID target Retail 32.5 52% 39.7% 7.3 18.9% c.17% +11% -3.4pp +29% +3.7pp exc
Slide 8: Retail delivering operational leverage with a groundbreaking year in our transformation
Retail delivering operational leverage with a groundbreaking year in our transformation Customer experience Operational leverage Global platform Success from our transformation Products & services Global platform FY’24 vs. FY’23 Digital Operational leverage sales digitally available roll-out Revenue
Slide 9: Consumer: Openbank roll out demonstrates the benefits of our strategy
Consumer: Openbank roll out demonstrates the benefits of our strategy to deliver the best solutions to customers and transform our operating model Customer experience Operational leverage Global platform Success from our transformation Operational leverage Moving all units Revenue (€bn) Costs (€bn)
Slide 10: CIB, Wealth and Payments: driving fee growth and scale through global platforms
CIB, Wealth and Payments: driving fee growth and scale through global platforms Key strategic drivers Success from our transformation % customer Fee growth % Total revenue / Recurrency ratio related revenue (€bn) RWAs (% fees / costs) +21% CIB 84 2.5 +0.2pp 6.9 +4.0pp 67.0 Leveraging our strengths t
Slide 11: Strong performance drove higher organic capital generation and shareholder returns
Strong performance drove higher organic capital generation and shareholder returns FL CET1 TNAVps + Cash DPS Shareholder remuneration in 2024 % € per share Cash DPS: €19.5 cents +51bps +14% Cash dividend per share +2.09 5.44 paid in 2024 -1.00 12.8 +39% YoY 12.3 -0.59 5.24 4.76 Total shareholder rem
Slide 12: We are building the Santander of tomorrow
We are building the Santander of tomorrow Our Aim Customer Scale To be the best open financial services Diversification platform 12
Slide 13: Our global approach to technology drives innovation
Our global approach to technology drives innovation in a dynamic and fast-changing environment Santander’s open financial services platforms Channel Financing Insurance Payments Risk & Control Cards Back-end Gravity 13
Slide 14: Business model and transformation provided sustained earnings and stronger balance sheet
Our business model and transformation over the last 10 years have provided sustained earnings, a stronger balance sheet and enabled us to accelerate profitable growth Growth Capital discipline Profit (€bn) Customers (mn) FL CET1 RWA with RoRWA > CoE 2x Profit (€bn) +56 Customers (mn) 1.5x 3x 12.6 17
Slide 15: We enter the last year of our third strategic cycle well ahead of key targets
We enter the last year of our third strategic cycle well ahead in all our key Investor Day targets for 2025 2024 vs. ID targets for 2025 Strength Disciplined capital allocation FL CET1 RWAs with RoRWA > CoE 12.8% TNAVps + DPS 87% >12% c.85% +14% Double-digit growth average through-the-cycle Sharehol
Slide 16: Index
Index 1 2 3 4 FY'24 Highlights Group Final remarks Appendix Progress on our strategy review 16
Slide 17: Revenue up 10% YoY, above our target
Revenue up 10% YoY, above our target, underpinned by customer activity across businesses Total revenue Constant €mn YoY growth +15% +10% 16,338 +489 +434 62,211 15,432 15,405 +997 15,036 +3,217 +697 -237 14,516 14,205 13,854 14,039 56,614 +11% +6% +14% +15% +9% Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 Q4 2023 Ret
Slide 18: More than 80% of the Group's NII comes from Retail and Consumer
More than 80% of the Group’s NII comes from our Retail and Consumer businesses Net interest income Constant €mn YoY growth +10% +12% 12,215 46,668 +517 +123 +297 11,727 +2,768 +624 11,425 -268 11,301 42,607 10,992 10,878 10,580 10,157 +11% +6% +15% +8% +13% Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 Q4 2023 Retail
Slide 19: Excellent fee performance as we execute our strategy
Excellent fee performance as we execute our strategy to capture network effects across the Group Net fee income Constant €mn YoY growth +25% +11% 3,425 3,252 +240 +3 13,010 3,156 3,177 +449 +290 -42 3,008 2,978 3,018 +320 11,749 2,745 +7% +24% +21% +19% -1% Q1'23 Q2 Q3 Q4 Q1'24 Q2 Q3 Q4 2023 Retail
Slide 20: ONE Transformation is driving structural efficiency gains and positive jaws
ONE Transformation is driving structural efficiency gains and positive jaws Group Retail and Consumer businesses 43.0% Revenue Retail and Consumer represent Efficiency 39.8% Constant €mn 16,338 70% of the Group’s total costs 45,377 14,516 14,205 15,036 15,432 15,405 41,464 13,854 14,039 Total +9% re
Slide 21: Consistent execution of ONE Transformation is improving revenue and costs
Consistent execution of ONE Transformation, leveraging Santander’s network and scale, is improving both revenue and costs ahead of our plan Global & Network Global Tech FY’22 ONE Transformation businesses1 capabilities & others FY'24 45.8% -260bps -66bps -73bps 41.8% • Product simplification: 39% fe
Slide 22: Cost of risk improvement and sound credit quality
Cost of risk improvement and sound credit quality Credit quality metrics and LLPs CoR Other credit quality metrics 12 month 1.08% 1.13% 1.18% 1.20% 1.21% 1.18% 1.15% 1.05% Dec-23 Sep-24 Dec-24 NPL ratio 3.14% 3.06% 3.05% LLPs Constant €mn Coverage ratio 66% 64% 65% 3,154 3,293 3,209 3,016 3,051 3,05
Slide 23: Strong organic capital generation and significant RWA mobilization
Strong organic capital generation, with profitable front-book growth of 23% RoTE and significant RWA mobilization CET1 performance and capital productivity FL CET1 Maximize capital productivity % Dec-24 or estimates +0.82 12.8 Front book pricing 12.5 -0.26 -0.17 2.9% -0.09 RoRWA of new book Asset ro
Slide 24: A new phase of value creation driven by strong profitability
A new phase of value creation driven by strong profitability 2016-2022 2023-2024 USD as a natural hedge Value creation New phase of value creation for LatAm currencies 2016-2022 2023-2024 Foreign currency average average sensitivity2 Value creation 2023-2024 +15% 5.5 0 Value creation 5.0 0 +15% 2016
Slide 25: Index
Index 1 2 3 4 FY'24 Highlights Group Final remarks Appendix Progress on our strategy review 25
Slide 26: We are only scratching the surface of our potential as a group
We are only scratching the surface of our potential as a group with our strong performance in 2024 2024 initial 2024 targets 2024 targets upgraded in H1 achievements Record profit supported by an outstanding P&L from Mid-single High-single ✓ top to bottom Revenue1 digit growth digit growth +10% ONE
Slide 27: Confidence to aim higher for 2025 and beyond
Our consistent track record and the implementation of One Santander gives us the confidence to aim higher for 2025 and beyond Revenue Fees Cost base CoR CET1 RoTE Mid-high Down vs. c.€62bn single digit c.1.15% 13% c.16.5% post-AT1 2024 operating range: 12-13% >17% pre-AT1 growth in euros Return €10b
Slide 28: Index
Index 1 2 3 4 FY'24 Highlights Group Final remarks Appendix Progress on our strategy review 28
Slide 29: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Foreign currency risk Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary For more details, refer to the document entitled "Supplementary Information", published toget
Slide 30: We have consistently overdelivered on all our strategic plans
We have consistently overdelivered on all our strategic plans throughout the economic cycle On track 2023 – 2025 plan to exceed our targets 2019 – 2022 plan ✓ 2015 – 2018 plan ✓ ONE Santander Building global platforms and preparing Laying the foundations A new phase of value creation the path toward
Slide 31: ONE Transformation driving double-digit growth in value creation
ONE Transformation driving double-digit growth in value creation New 2025 2022 2023 2024 2025 ID targets guidance RoTE (%) 13.4 15.1 16.3 15-17 c.16.5% post-AT1 Profitability Payout (Cash + SBB)1 (%) 40 50 50 50 >17% pre-AT1 EPS Growth (%) 23 21.5 17.9 Double-digit Total customers (mn) 160 165 173 c
Slide 32: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Foreign currency risk Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 32
Slide 33: Group P&L and excluding Argentina
Group P&L and excluding Argentina ex. Argentina P&L Current Constant Current Constant € million 2024 2023 % % % % NII 46,668 43,261 8 10 6 7 Net fee income 13,010 12,057 8 11 6 9 Other income 2,533 2,329 9 12 17 19 Total revenue 62,211 57,647 8 10 6 8 Operating expenses -26,034 -25,425 2 4 1 3 Net o
Slide 34: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Foreign currency risk Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 34
Slide 35: Foreign currency risk
Foreign currency risk • The following table shows the sensitivity of the consolidated income statement profit and consolidated equity to percentage changes of ± 1% (appreciation/depreciation) of the euro against the foreign exchange rate positions arising from investments in Grupo Santander companie
Slide 36: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Foreign currency risk Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 36
Slide 37: Detail by global business
Detail by global business «> Santander
Slide 38: Retail & Commercial Banking
Retail & Commercial Banking Highlights Key data Loans Deposits Mutual Funds • Transformation efforts are reflected in the growth of our total customers €609bn -1% €650bn +3% €98bn +19% (+8mn YoY), efficiency improvement (-3pp to 39.7%) and higher profitability (RoTE +4pp to 18.9%) Efficiency CoR RoT
Slide 39: Retail Spain, Retail UK
Retail Spain Retail UK • Sustained customer growth YoY. Loans impacted by prepayments. • Loans down YoY as a result of our focus on profitability. Deposits Deposits up 4% YoY, both demand and time, mainly from commercial. and mutual funds impacted by a competitive environment Mutual funds rose doubl
Slide 40: Retail Mexico, Retail Brazil
Retail Mexico Retail Brazil • Loans increased YoY across business lines. Deposits also increased, • Loans and deposits increased YoY across segments and mutual funds especially demand deposits. Mutual funds rose double-digits rose, on the back of customer growth • PBT up 11% YoY supported by higher
Slide 41: Digital Consumer Bank
Digital Consumer Bank Highlights Key data • We continue expanding our leadership in consumer finance across our New lending Loans Deposits footprint, converging towards a more digital and global operating model €91.1bn +4% €215bn +4% €129bn +10% to become the most cost competitive player Efficiency
Slide 42: DCB Europe, Consumer US
DCB Europe Consumer US • Loans up 4% YoY, supported by new business growth, mainly new • Loans down 4% YoY as we continue to run-off our non-core portfolio. auto. Deposits up 18%, in line with our deposit gathering strategy Deposits up 2%, supported by Openbank launch in Q4 • Net operating income gr
Slide 43: Corporate & Investment Banking
Corporate & Investment Banking Highlights Key data Loans Deposits • We continue to make our centres of expertise more sophisticated, deepening client relationships, on the back of our Global Markets and €137bn 0% €137bn -10% US BBO initiatives, and actively managing capital Efficiency CoR RoTE • Str
Slide 44: Wealth Management & Insurance
Wealth Management & Insurance Highlights Key data AuMs Net new money (PB) Net sales (SAM) €498bn +13% €18.6bn 6% €15.8bn 7% • We continue to build the best Wealth and Insurance manager in Europe and of volumes2 of volumes2 the Americas, leveraging our leading global private banking platform and our
Slide 45: Payments, Cards
Payments Cards • TPV up 13% and number of transactions +5% YoY in Getnet, • 105 million cards managed across the Group driven by Europe, Mexico and Chile • Solid growth YoY in customer activity, driving an 11% • Revenue rose 14% with a widespread increase in business increase in the average balance
Slide 46: Corporate Centre
Corporate Centre Highlights P&L Underlying P&L* 2024 2023 • NII down as higher liquidity buffer remuneration was more than offset by higher interest expense related to TLAC/MREL issuances NII -308 -41 • Higher losses on financial transactions with impact from foreign Gains / losses on financial tran
Slide 47: Detail by region and country
Detail by region and country Note: DCB Europe is officially reported as a secondary segment. Nevertheless, 47 its detail is included in the ‘Detail by global business’ appendix within the Digital Consumer Bank explanation and in the Supplementary Information.
Slide 48: Europe
Europe Highlights Key data and P&L • We continue to accelerate our business transformation to achieve Loans Deposits Mutual Funds higher growth and a more efficient operating model €554bn -2% €627bn -1% €126bn +19% • Customers increased across the region (+527k YoY), mainly driven by Spain Efficienc
Slide 49: Spain, UK
Spain UK • Sustained customer growth YoY. Loans affected by SME • Loans and deposits declined as a result of our focus on profitability. amortizations. Deposit performance in line with our strategy to Mutual funds flat year-on-year reduce excess corporate deposits. Mutual funds up double-digits • Pr
Slide 50: Portugal, Poland
Portugal and Polonia Portugal Poland • Loans up supported by sound new business levels. Solid • Customer growth driving a strong increase in loans, mainly in Retail increases in deposits and mutual funds, in line with sustained and CIB. Deposit growth and outstanding rise in mutual funds customer gr
Slide 51: North America
North America Highlights Key data and P&L • Focus on transformation across the region, leveraging the strengths of our global businesses in the US and Mexico Loans Deposits Mutual Funds • Loans were flat YoY, as growth in Mexico was offset by decrease in the US, €162bn 0% €135bn -5% €34bn +23% in li
Slide 52: US, Mexico
US Mexico • Loans down 2%, as higher CIB activity and auto originations were • Successful customer acquisition campaigns and new commercial offset by capital-accretive transactions. Deposits fell in line with our agreements are boosting loans and deposits in most of our businesses CIB funding optimi
Slide 53: South America
South America Highlights Key data and P&L • We are focused on becoming the primary bank for our 80 million Loans Deposits Mutual Funds customers (+7mn YoY) and the most profitable in each of our countries, supported by our focus on service quality €154bn +9% €132bn +12% €69bn +14% Efficiency CoR RoT
Slide 54: Brazil, Chile
Brazil Chile • Strong YoY growth in loans, time deposits and mutual funds, with • Customer growth (+6% YoY). Loans rose across most global increases across all businesses, mainly Retail and Consumer businesses. Double-digit growth in deposits and mutual funds • Greater profit and profitability YoY,
Slide 55: Argentina
Argentina Argentina peso exchange rate considerations • We continue to focus on enhancing customer service, cost to serve and our operating model • In Q2 2024, given a significant divergence between the official • Profit up YoY and QoQ, backed by NII and fee growth in a context of exchange rate and
Slide 56: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Foreign currency risk Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 56
Slide 57: Reconciliation of underlying results to statutory results
Reconciliation of underlying results to statutory results EUR mn January-December 2024 January-December 2023 Statutory Underlying Statutory Underlying Adjustments Adjustments results results results results Net interest income 46,668 — 46,668 43,261 — 43,261 Net fee income 13,010 — 13,010 12,057 — 1
Slide 58: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Foreign currency risk Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 58
Slide 59: Glossary - Acronyms
Glossary - Acronyms • A2A: account to account • FL: Fully-loaded • Ps: Per share • AM: Asset management • FX: Foreign exchange • QoQ: Quarter-on-Quarter • AuMs: Assets under Management • FY: Full year • Repos: Repurchase agreements • bn: Billion • ID: Investor day • Retail: Retail & Commercial Banki
Slide 60: 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) • RoTE post-AT1: Return on tangible capital: Group attributable profit – cost of AT1s / a
Slide 61: 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: