Banco Santander, S.a. · BME:SAN
Banco Santander — Q1 2020 Earnings Presentation
117 slides from Banco Santander's earnings presentation, Apr 28, 2020
Slide 1: Q1'20 Earnings Presentation
28 April 2020 Q1’20 Earnings Presentation Here to help you prosper
Slide 2: Important information
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 3: Important information
Important information Forward-looking statements speak only as of the date of this presentation and are based on the knowledge, information available and views taken on such date; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or r
Slide 4: Index
Index 1 2 3 4 Q1’20 Highlights Group & COVID-19 and Appendix Business Key takeaways areas review 4
Slide 5: Q1'20 Highlights
Q1’20 Highlights The COVID-19 outbreak has caused an unprecedented worldwide health crisis. Today’s financial system is more resilient and banks are part of the solution to the current economic situation COVID-19 We have implemented specific measures for each of our stakeholders to help protect
Slide 6: Resilient underlying performance supported by our geographic diversification
Resilient underlying performance supported by our geographic diversification… Loyal customers Loans Customer funds Underlying profit RoTE Q1’20 (vs. Q1’19) (mn) (EUR bn) (EUR bn) (EUR mn) (%) Europe 9.9 653 644 974 8% +2% +4% 0% -16% -167 bps North 3.6 132 120 522 15%1 America +21% +13% +15% +34% +1
Slide 7: Global Businesses driving network effects and contributing 30% of Group's earnings
…with Global Businesses driving network effects and contributing 30% of Group’s earnings SCIB Corporate & Investment Banking Wealth Management & Insurance WM&I Underlying profit EUR 491 mn +21% Underlying profit EUR 240 mn +21% RoRWA 2.0% +13 bps RoRWA 8.9% +1.4 pp Customer-centric providing Connect
Slide 8: Index
Index 1 2 3 4 Q1’20 Highlights Group & COVID-19 and Appendix Business Key takeaways areas review 8
Slide 9: Q1'20 underlying results continued to grow, marginally affected by the crisis
Q1’20 underlying results continued to grow, marginally affected by the crisis % vs. Q1’19 Underlying attributable profit EUR mn Q1’20 Euros Constant euros Constant EUR mn Net interest income 8,487 -2 3 Net fee income 2,853 -3 3 +8% Customer revenue 11,340 -2 3 Trading and other income 474 0 2 1,975
Slide 10: High quality revenue: customer revenue delivered 96% of the total
High quality revenue: customer revenue delivered 96% of the total and grew 3% YoY driven by the Americas and global businesses NII +3% Customer Revenue Customer +3% (NII + Fees) Revenue 96% NII growing in 7 markets. Volumes growth and cost of deposits decreased South America +10% Fees +3% North Amer
Slide 11: We are on track to meet our efficiency plan
We are on track to meet our efficiency plan YoY change in constant euros Nominal costs Costs in real terms -8% -3%1 Q1’20 efficiencies achieved: Europe -3.4% -4.6% -6% > EUR 100 mn -4% -4% North -1% Synergies as a region America 2.5% 0.0% 2% and joint investments South -2% Regional revenue America2
Slide 12: Credit quality maintained in Q1'20
Credit quality maintained in Q1’20. COVID-19 impacts have not yet been reflected Credit quality ratios Mar-19 Dec-19 Mar-20 NPL ratio 3.62% 3.32% 3.25% NPL ratio fell QoQ and YoY in most markets Coverage ratio 68% 68% 71% High level of allowances to total loans 0.97% 1.00% 1.00% Roughly stable cost
Slide 13: Non-recurring items significantly impacted CET1
Non-recurring items significantly impacted CET1, offsetting continued organic generation and dividend measures CET1 ratio YTD evolution +0.29 12.01% 11.65% +0.07 -0.09 -0.15 11.58% -0.19 Dec-19 Organic No complementary Mar-20 Market and Regulatory & Corporate Mar-20 generation dividend 2019 others m
Slide 14: Resilient underlying profitability in Q1'20
Resilient underlying profitability in Q1’20 TNAV per share Profitability ratios EUR Underlying RoTE1 Underlying RoRWA1 4.30 4.21 11.3% 11.1% 1.56% 1.52% Mar-19 Mar-20 Q1'19 Q1'20 Q1'19 Q1'20 TNAV per share + Dividend per share: +1.8% YoY (1) Statutory RoTE Q1’19 11.2% and Q1’20 8.8%. Statutory RoRWA
Slide 15: Business areas review
Business areas review 15
Slide 16: Delivered profit growth driven by the Americas and global businesses
Delivered profit growth driven by the Americas and global businesses Q1’20 Underlying attributable profit EUR mn and % change vs. Q1’19 in constant EUR 352 -1% 304 -5% Europe 188 -27% 41% 120 -11% Well balanced 38 Group profit -38% North 273 +46% 21% America 249 +22% by regions 694 +10% South Americ
Slide 17: Positive trend across regions and global businesses accelerating in March
Positive trend across regions and global businesses accelerating in March Mar-20 Loans and advances to customers Mar-20 Customer funds EUR bn and % change in constant EUR YoY EUR bn and % change in constant EUR YoY 192 -4% 294 -4% 103 7% 38 7% Europe 244 5% Europe 210 4% 37 2% 42 3% 30 9% 35 4% Nort
Slide 18: Spain
Spain Europe main markets KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 32 +2 pp NII 925 -0.9 -8.3 Net fee income 643 3.8 3.2 Digital customers (mn) 4.9 +6% Total income 1,789 -1.3 -3.7 NPL ratio (%) 6.88 -41 bps Operating expenses -944 -3.4 -7.8 Cost of credit (%) 0
Slide 19: SCF
SCF SCF Europe main markets KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 NII 979 2.5 5.2 Active customers (mn) 18.8 -3% Net fee income 187 -4.2 -12.5 NPL ratio (%) 2.43 +10 bps Total income 1,171 -0.7 1.2 Cost of credit (%) 0.52 +14 bps Operating expenses -514 3.4 2.1 LLPs -172 17.7 44.3 Effici
Slide 20: UK
UK Europe main markets KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 32 +1 pp NII 898 -6.4 -9.0 Net fee income 193 -14.4 -11.8 Digital customers (mn) 6.0 +6% Total income 1,098 -9.9 -10.1 NPL ratio (%) 0.96 -21 bps Operating expenses -714 0.4 -4.6 Cost of credit (%)
Slide 21: Brazil
Brazil South America main market KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 22 - NII 2,270 -3.8 5.6 Net fee income 869 -4.0 6.8 Digital customers (mn) 13.8 +13% Total income 3,137 -5.4 5.1 NPL ratio (%) 4.93 -33 bps Operating expenses -1,004 -12.9 2.0 Cost of cred
Slide 22: USA
USA North America KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 19 - NII 1,462 0.5 0.9 Net fee income 250 8.1 3.5 Digital customers (k) 1,019 +6% Total income 1,929 1.4 3.2 NPL ratio (%) 2.00 -41 bps Operating expenses -809 -7.4 1.3 Cost of credit (%) 2.81 -30 bps LL
Slide 23: Mexico
Mexico North America KEY DATA Q1'19 Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 34 +5 pp NII 798 0.5 4.7 Net fee income 211 10.2 3.6 Digital customers (mn) 4.4 +38% Total income 1,007 -1.9 7.7 NPL ratio (%) 2.07 -5 bps Operating expenses -415 -4.3 5.0 Cost of credit (%) 2.5
Slide 24: Corporate Centre
Corporate Centre P&L* Q1'20 Q4'19 Q1'19 NII -304 -333 -296 QoQ decrease helped by lower interest rates Gains/Losses on FT 14 -39 -79 FX hedging cost reflected in results from financial transactions Operating expenses -85 -89 -97 Operating expenses reflect the streamlining and LLPs and other provisio
Slide 25: Index
Index 1 2 3 4 Q1’20 Highlights Group & COVID-19 and Appendix Business Key takeaways areas review 25
Slide 26: COVID-19. How Santander is contributing to tackle this outbreak
COVID-19. How Santander is contributing to tackle this outbreak Since the beginning of the crisis we have been monitoring the situation As a responsible bank, we have and activated all of the protocols implemented specific measures to support our stakeholders A C Strong Group Governance has been Rob
Slide 27: Measures adopted across four dimensions in all our markets
A We have progressively adopted measures in all our markets across four dimensions Large scale telecommuting & branch closure strategy 112 k employees working from home Health & Contagion Prevention c.70% of branches opened and employees working in a rotation scheme Progress in contact centres ho
Slide 28: Taking care of society: EUR 100 mn dedicated to fight COVID-19
B We are also taking care of society as a whole: EUR 100 mn has been dedicated in the fight against COVID-19 Santander has pulled together EUR 54 mn to provide essential equipment and materials to support the global effort to fight the pandemic All Together Fund: support Resources come from senior
Slide 29: Robust Santander technology serving customers remotely
C Robust Santander technology, allowing us to continue running the Bank and serving our customers remotely Technology & Operations (T&O) is 38.3 mn (+13% YoY) Digital customers1 keeping the business up and running Improving our Supporting our Digital customers Digital sales2 T&O capacity remote work
Slide 30: Steps to protect and support customers: individuals and self-employed
C We have taken a number of steps to protect and support customers: individuals and self-employed Mortgage payment holidays Consumer payment holidays # Operations % of # Operations % of requested portfolio requested portfolio 45 k 8% 46 k 9% 171 k 2% 207 k 15% 409 k 14% SC USA 1.6 k 5% SBNA 506 k 5%
Slide 31: Steps supported by Government Guarantee Programmes
C We have taken a number of steps supported by Government Guarantee Programmes Government Guarantee Programmes Country Guarantee Example: Santander Spain EUR 100 bn 60 k transactions granted GBP 330 bn EUR 9.6 bn EUR 820 bn ICO financing EUR 2.6 bn EUR 7.0 bn EUR 750 bn facilities Large corp
Slide 32: Increased credit across all segments
D In the quarter we have supported our customers, having increased credit across all segments Mortgages 310 313 315 Consumer 183 186 186 (Stock of loans1) (Stock of loans1) 21 22 22 23 26 26 18 18 18 39 39 39 272 274 275 120 121 121 Dec-19 Feb-20 Mar-20 Dec-19 Feb-20 Mar-20 SMEs and Corporates CIB (
Slide 33: New retail lending affected by the crisis
D In recent weeks, new RETAIL lending has been affected by the crisis… New Mortgage lending1 (daily average, constant EUR mn) Applications: (Applications in the last few weeks compared to pre-crisis levels) April vs February 245 217 21 16 16 -80% -40% -80% 15 208 101 -60% 186 11 10 -65% -3% -12% 80
Slide 34: New credit to businesses and CIB has increased
D … while new credit to businesses and CIB has increased New SME and Corporates lending1 (daily average, constant EUR mn) In Europe, growth in corporate and SME new business was driven by 1,149 April vs February Spain and Portugal. In April, growth accelerated further due to ICO loans in Spain 212
Slide 35: Key takeaways
Key takeaways The best way to support our shareholders is to prioritise the health and safety of our employees, help our customers and communities, and ensure a profitable business continuity We are confident about our strengths and business model to ease the COVID-19 impact on our business: - Scale
Slide 36: Index
Index 1 2 3 4 Q1’20 Highlights Group & COVID-19 and Appendix Business Key takeaways areas review 36
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 37
Slide 38: Net capital gains and provisions
Net capital gains and provisions Q1’19 Capital gains Prisma (Argentina) +150 Restructuring costs (-66 UK; -12 Poland) -78 Q1’20 Property sales (Corporate Centre) -180 Group total -108 COVID-19 provisions overlay -1,600 (Corporate Centre) Q4’19 Restructuring costs and others -46 Custody sale (net) +6
Slide 39: 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 39
Slide 40: Europe
EUROPE KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 36 +1 pp NII 3,435 -2.5 -3.6 Digital customers (mn) 14.2 +6% Net fee income 1,315 -0.2 -1.1 Total income 4,974 -5.8 -4.9 NPL ratio (%) 3.19 -42 bps Operating expenses -2,712 -0.7 -3.4 Cost of credit (%) 0.29 +5 bps
Slide 41: North America
NORTH AMERICA KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 32 +4 pp NII 2,261 0.5 2.2 Net fee income 461 9.1 3.5 Digital customers (mn) 5.5 +30% Total income 2,936 0.2 4.7 NPL ratio (%) 2.02 -31 bps Operating expenses -1,224 -6.4 2.5 Cost of credit (%) 2.75 -22 bps
Slide 42: South America
SOUTH AMERICA KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 25 - NII 3,065 -3.7 10.8 Net fee income 1,074 -8.1 6.8 Digital customers (mn) 17.8 +12% Total income 4,163 -6.8 8.2 NPL ratio (%) 4.63 -20 bps Operating expenses -1,486 -11.6 6.6 Cost of credit (%) 2.94 +5 b
Slide 43: 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 43
Slide 44: Retail Banking
Retail Banking P&L* Q1'20 % Q4'19 % Q1'19 Activity EUR bn and % change YoY in constant euros NII 7,885 -1.9 2.2 Net fee income 2,024 -3.1 -1.3 760 Total income 9,972 -4.7 0.3 669 Operating expenses -4,526 -4.6 0.6 LLPs -2,289 -3.8 12.7 +4% +3% PBT 2,818 -2.7 -7.4 Underlying att. profit 1,637 -9.3 -3
Slide 45: Corporate & Investment Banking
SCIB Corporate & Investment Banking Total income (Constant EUR mn) P&L* Q1'20 % Q4'19 % Q1'19 1,300 +9% NII 671 -5.1 8.6 1,198 102 -6% Capital & Other 110 Net fee income 404 10.2 20.2 374 +3% Global Markets 361 Total income 1,300 -7.6 8.6 310 374 +21% Operating expenses -536 -11.0 -1.0 Global Debt F
Slide 46: Wealth Management & Insurance
Wealth Management & Insurance ACTIVITY EUR bn and % change in constant euros QoQ YoY P&L* Q1'20 % Q4'19 % Q1'19 Total AUM 345 -9% -2% NII 132 -8.9 -3.5 Funds and investments2 208 -8% -2% Net fee income 320 -1.3 20.2 - Asset Management (SAM) 171 -7% -1% Total income 586 1.2 15.4 - Private Banking 59
Slide 47: Santander Global Platform
SGP SGP continued deploying global payments solutions for SMEs and individuals Finalised the development of the platform with Getnet functionalities and new features (i.e. architecture cloud) Global Merchant Rolled-out in Mexico. In addition, acquisition of Elavon Mexico (currently 100% Santander) S
Slide 48: 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 48
Slide 49: Portugal
Portugal Europe other markets KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 46 +1 pp NII 202 -5.2 -6.4 Net fee income 101 3.4 3.1 Digital customers (k) 797 +5% Total income 350 5.6 -2.0 NPL ratio (%) 4.56 -121 bps Operating expenses -151 -3.3 -4.0 Cost of credit (%)
Slide 50: Poland
Poland Europe other markets KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 52 - NII 296 -2.9 5.8 Net fee income 116 0.0 3.1 Digital customers (k) 2,607 +9% Total income 365 -19.9 -2.8 NPL ratio (%) 4.29 -10 bps Operating expenses -172 2.2 -0.5 Cost of credit (%) 0.79
Slide 51: Chile
Chile South America other markets KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 44 -2 pp NII 448 2.8 19.1 Digital customers (k) 1,316 +21% Net fee income 92 -3.9 4.8 Total income 553 -7.7 7.8 NPL ratio (%) 4.63 -4 bps Operating expenses -230 -0.7 5.6 Cost of credit (
Slide 52: Argentina
Argentina South America other markets KEY DATA Q1'20 % Q1'19 P&L* Q1'20 % Q4'19 % Q1'19 Loyal / active customers (%) 46 -1 pp NII 241 -14.7 68.0 Net fee income 76 -43.3 -2.9 Digital customers (k) 2,249 +7% Total income 318 -21.3 42.7 NPL ratio (%) 3.97 +47 bps Operating expenses -186 -20.9 36.5 Cost
Slide 53: Uruguay and Andean region
South America Uruguay and Andean region other markets URUGUAY PERU COLOMBIA +14% +33% +247% 35 31 12 6 9 2 Q1'19 Q1'20 Q1'19 Q1'20 Q1'19 Q1'20 28% 19% 19% RoTE RoTE RoTE Increased volumes and activity reflected in profit growth and higher profitability Note: Underlying attributable profit in constan
Slide 54: 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 54
Slide 55: Highly liquid balance sheet with large contribution from 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, Mar-20 1,210 1,210 Ratio (LCR) Ratio (NSFR) Mar-201 Dec-19 Dec-19 Loans and Customer Spain
Slide 56: Group has issued EUR 17 bn of MLT debt YTD
In the year to date, the Group has issued EUR 17 bn1 of MLT debt and is able to cover its very manageable maturity profile Public market issuances in 2020 Maturity profile EUR bn, Mar-20 EUR bn, Mar-20 44.8 6.8 San S.A. 9.2 7.9 7.4 3.5 3.4 1.5 5.5 2020 2021 2022 2023 2024 2025+ 0.8 SCF 2.2 4.2 5.9 2
Slide 57: Issuances YTD against funding plan
Issuances YTD against funding plan 2020 Funding plan and issuances EUR bn, Mar-20 Covered Bonds + Senior Senior Non-Preferred Hybrids TOTAL Plan Issued Plan Issued Plan Issued Plan Issued Santander S.A 4-5 2.9 7-8 1.9 1-2 1.5 12-15 6.3 1 SCF 6-8 3.4 - 0.0 - 0.0 6-8 3.4 UK 6-8 4.8 2-3 0.8 - 0.0 8-11
Slide 58: Active management of 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 Mostly positive interest rate sensitivity in Europe ALCO portfolios reflect our geographic diversification Net interest income sensitivity to a +/-100 bp parallel shift Dis
Slide 59: Regulatory changes increased CET1 management buffer to 272 bps
Regulatory changes increased the Group’s CET1 management buffer by 83 bps to 272 bps SREP capital requirements (phased-in) CET1 management buffer2 Mar-20 Mar-20 15.09% +189 bps +272 bps 13.19% 13.02% 1.93% T2 T2 2.00% 1.58% AT1 Pre-COVID Post-COVID 2.38% measures measures AT1 1.50% CCyB1 0.19% 1.78%
Slide 60: TLAC ratios for the Resolution Group
TLAC ratios for the Resolution Group headed by Banco Santander, S.A. TLAC Ratio Breakdown of own funds and eligible liabilities EUR mn, 31 December 2019 EUR mn, 31 December 2019 Most subordinated Most senior Own Funds 91,294 1 3 4 5 6 7 Total of which: Common Equity Tier 1 (CET1) capital 75,683 1 De
Slide 61: 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 61
Slide 62: Yield on loans (%)
Yield on loans (%) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 EUROPE 2.77 2.75 2.70 2.68 2.66 Spain 2.05 2.08 2.02 2.02 1.99 Santander Consumer Finance 4.51 4.48 4.41 4.26 4.27 United Kingdom 2.72 2.67 2.63 2.59 2.52 Portugal 1.79 1.76 1.71 1.64 1.63 Poland 4.14 4.15 4.17 4.17 4.04 NORTH AMERICA 9.81 9.71 9.45 9
Slide 63: Cost of deposits (%)
Cost of deposits (%) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 EUROPE 0.42 0.42 0.41 0.41 0.39 Spain 0.14 0.14 0.13 0.13 0.06 Santander Consumer Finance 0.60 0.61 0.60 0.58 0.57 United Kingdom 0.67 0.70 0.70 0.69 0.69 Portugal 0.14 0.12 0.10 0.10 0.08 Poland 0.89 0.89 0.78 0.74 0.65 NORTH AMERICA 1.94 1.91 1.99
Slide 64: 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 64
Slide 65: Coverage ratio by stage
Coverage ratio by stage Exposure1 Coverage EUR bn Mar-20 Dec-19 Mar-20 Dec-19 Stage 1 891 898 0.6% 0.5% Stage 2 53 53 8.2% 8.7% Stage 3 33 34 40.8% 41.7% (1) Exposure subject to impairment. 65 Additionally, customer loans not subject to impairment recorded at mark to market with changes through P&L
Slide 66: NPL ratio (%)
NPL ratio (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 EUROPE 3.61 3.48 3.47 3.25 3.19 Spain 7.29 7.02 7.23 6.94 6.88 Santander Consumer Finance 2.33 2.24 2.25 2.30 2.43 United Kingdom 1.17 1.13 1.08 1.01 0.96 Portugal 5.77 5.00 4.90 4.83 4.56 Poland 4.39 4.21 4.35 4.31 4.29 NORTH AMERICA 2.33 2.29 2.21 2
Slide 67: Coverage ratio (%)
Coverage ratio (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 EUROPE 49.5 49.9 48.2 49.8 50.7 Spain 43.3 42.9 40.6 41.1 42.0 Santander Consumer Finance 105.3 105.9 104.2 106.1 103.8 United Kingdom 30.9 31.9 34.1 36.5 37.7 Portugal 50.7 52.9 51.5 52.8 54.8 Poland 67.6 69.7 69.0 66.8 66.2 NORTH AMERICA 153.4
Slide 68: Non-performing loans and loan-loss allowances by operating area
Non-performing loans and loan-loss allowances. Breakdown by operating areas. March 2020 Non-performing loans Loan-loss allowances Brazil, 11.9% Brazil, 17.7% Chile, 5.7% Spain, 28.7% Argentina, 0.6% Otros Sudamérica, 0.4% Chile, 4.6% Mexico, 2.2% Spain, 45.9% Argentina, 1.0% USA, 7.0% Otros Sudaméri
Slide 69: Cost of credit (%)
Cost of credit (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 EUROPE 0.24 0.24 0.25 0.28 0.29 Spain 0.40 0.41 0.41 0.43 0.44 Santander Consumer Finance 0.38 0.36 0.38 0.48 0.52 United Kingdom 0.07 0.06 0.08 0.10 0.09 Portugal 0.03 0.03 0.00 (0.02) 0.03 Poland 0.61 0.66 0.71 0.72 0.79 NORTH AMERICA 2.97 2.95
Slide 70: 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 70
Slide 71: We continue to do business in a more responsible and sustainable way
We continue to do business in a more responsible and sustainable way Culture Sustainability Engagement Women 40% Group Board EUR 19 bn EUR 1 bn 86% of employees Leader mobilised in Green finance Santander first green proud to work for Santander (+1pp vs 2018) 23% Group leadership bond issuance (+2pp
Slide 72: Santander Responsible Banking goals
Santander Responsible Banking goals We are building a more Responsible Bank aligned with our commitments 2018 2019 2020 2021 2025 Top 10 company to work for1 4 5 6 33% 33 40% Women on the Board 40%-60% Women in senior leadership positions2 20% 20 20% 23% 30% Equal pay gap3 3% 2% ~0% Financially empo
Slide 73: 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 73
Slide 74: Santander Group (EUR mn)
SANTANDER GROUP (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 8,682 8,954 8,806 8,841 8,487 Net fee income 2,931 2,932 2,955 2,961 2,853 Gains (losses) on financial transactions and other 472 465 705 790 474 Total income 12,085 12,351 12,466 12,592 11,814 Operating expenses (5,758) (5,8
Slide 75: Santander Group (Constant EUR mn)
SANTANDER GROUP (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 8,268 8,551 8,612 8,642 8,487 Net fee income 2,767 2,789 2,892 2,895 2,853 Gains (losses) on financial transactions and other 466 472 696 777 474 Total income 11,500 11,812 12,200 12,313 11,814 Operating expenses (5,
Slide 76: Europe (EUR mn)
EUROPE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 3,561 3,580 3,530 3,531 3,435 Net fee income 1,327 1,304 1,310 1,319 1,315 Gains (losses) on financial transactions and other 337 304 455 443 225 Total income 5,225 5,188 5,295 5,292 4,974 Operating expenses (2,802) (2,789) (2,719) (2
Slide 77: Europe (Constant EUR mn)
EUROPE (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 3,562 3,581 3,565 3,521 3,435 Net fee income 1,329 1,306 1,320 1,318 1,315 Gains (losses) on financial transactions and other 338 305 456 443 225 Total income 5,229 5,191 5,341 5,282 4,974 Operating expenses (2,807) (2,794) (
Slide 78: Spain (EUR mn)
Spain (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 1,009 1,009 967 934 925 Net fee income 623 624 614 620 643 Gains (losses) on financial transactions and other 224 216 408 258 220 Total income 1,857 1,849 1,989 1,811 1,789 Operating expenses (1,025) (1,020) (999) (977) (944) Net opera
Slide 79: Santander Consumer Finance (EUR mn)
Santander Consumer Finance (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 941 971 977 960 979 Net fee income 214 201 213 195 187 Gains (losses) on financial transactions and other 13 (18) 14 30 5 Total income 1,167 1,154 1,203 1,185 1,171 Operating expenses (508) (527) (504) (499) (514)
Slide 80: Santander Consumer Finance (Constant EUR mn)
Santander Consumer Finance (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 931 959 967 955 979 Net fee income 213 200 212 195 187 Gains (losses) on financial transactions and other 12 (18) 14 30 5 Total income 1,156 1,142 1,194 1,179 1,171 Operating expenses (504) (522) (501) (49
Slide 81: United Kingdom (EUR mn)
United Kingdom (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 975 944 908 961 898 Net fee income 216 207 217 226 193 Gains (losses) on financial transactions and other 15 32 (5) 33 6 Total income 1,206 1,183 1,119 1,220 1,098 Operating expenses (739) (703) (681) (712) (714) Net operating
Slide 82: United Kingdom (GBP mn)
United Kingdom (GBP mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 850 825 820 827 774 Net fee income 189 181 195 194 166 Gains (losses) on financial transactions and other 13 28 (4) 29 5 Total income 1,052 1,034 1,011 1,050 946 Operating expenses (644) (615) (615) (612) (615) Net operating i
Slide 83: Portugal (EUR mn)
Portugal (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 216 213 214 213 202 Net fee income 98 99 96 98 101 Gains (losses) on financial transactions and other 44 42 22 21 47 Total income 357 354 331 332 350 Operating expenses (157) (154) (155) (156) (151) Net operating income 200 200 176
Slide 84: Poland (EUR mn)
Poland (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 281 284 298 307 296 Net fee income 113 117 119 117 116 Gains (losses) on financial transactions and other (18) 39 24 34 (48) Total income 377 440 442 459 365 Operating expenses (173) (176) (175) (169) (172) Net operating income 204 26
Slide 85: Poland (PLN mn)
Poland (PLN mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 1,209 1,216 1,288 1,317 1,279 Net fee income 488 499 514 504 503 Gains (losses) on financial transactions and other (76) 168 104 147 (206) Total income 1,622 1,883 1,906 1,968 1,576 Operating expenses (745) (755) (754) (726) (742) Net
Slide 86: Other Europe (EUR mn)
Other Europe (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 139 159 166 155 134 Net fee income 62 56 52 63 74 Gains (losses) on financial transactions and other 60 (7) (8) 68 (6) Total income 261 209 211 286 202 Operating expenses (200) (208) (205) (219) (216) Net operating income 61 0 5
Slide 87: Other Europe (Constant EUR mn)
Other Europe (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 140 160 167 155 134 Net fee income 62 57 53 63 74 Gains (losses) on financial transactions and other 61 (7) (8) 68 (6) Total income 263 210 211 286 202 Operating expenses (201) (209) (206) (220) (216) Net operating inco
Slide 88: North America (EUR mn)
NORTH AMERICA (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 2,173 2,230 2,259 2,265 2,261 Net fee income 439 463 448 427 461 Gains (losses) on financial transactions and other 142 226 277 257 214 Total income 2,753 2,918 2,983 2,949 2,936 Operating expenses (1,172) (1,214) (1,267) (1,31
Slide 89: North America (Constant EUR mn)
NORTH AMERICA (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 2,212 2,244 2,259 2,249 2,261 Net fee income 445 464 447 422 461 Gains (losses) on financial transactions and other 147 231 280 257 214 Total income 2,804 2,938 2,986 2,929 2,936 Operating expenses (1,194) (1,222) (1,2
Slide 90: United States (EUR mn)
United States (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 1,407 1,453 1,460 1,449 1,462 Net fee income 234 244 238 230 250 Gains (losses) on financial transactions and other 174 222 278 215 217 Total income 1,815 1,920 1,977 1,894 1,929 Operating expenses (775) (805) (847) (869) (809)
Slide 91: United States (USD mn)
United States (USD mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 1,598 1,633 1,623 1,604 1,612 Net fee income 266 275 264 255 275 Gains (losses) on financial transactions and other 197 250 310 238 239 Total income 2,061 2,158 2,198 2,096 2,126 Operating expenses (881) (905) (942) (963) (892)
Slide 92: Mexico (EUR mn)
Mexico (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 766 777 798 816 798 Net fee income 204 218 210 197 211 Gains (losses) on financial transactions and other (32) 4 (1) 42 (2) Total income 939 999 1,007 1,054 1,007 Operating expenses (397) (409) (420) (445) (415) Net operating income 5
Slide 93: Mexico (MXN mn)
Mexico (MXN mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 16,703 16,694 17,231 17,393 17,484 Net fee income 4,455 4,695 4,535 4,188 4,617 Gains (losses) on financial transactions and other (687) 83 (31) 906 (51) Total income 20,471 21,471 21,735 22,487 22,049 Operating expenses (8,655) (8,78
Slide 94: South America (EUR mn)
SOUTH AMERICA (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 3,222 3,425 3,314 3,356 3,065 Net fee income 1,178 1,178 1,204 1,228 1,074 Gains (losses) on financial transactions and other 88 45 59 130 25 Total income 4,487 4,647 4,577 4,714 4,163 Operating expenses (1,645) (1,664) (1,586)
Slide 95: South America (Constant EUR mn)
SOUTH AMERICA (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 2,767 3,007 3,084 3,182 3,065 Net fee income 1,005 1,032 1,132 1,168 1,074 Gains (losses) on financial transactions and other 76 46 47 116 25 Total income 3,848 4,086 4,262 4,466 4,163 Operating expenses (1,394) (1,444
Slide 96: Brazil (EUR mn)
Brazil (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 2,459 2,520 2,560 2,534 2,270 Net fee income 931 924 970 974 869 Gains (losses) on financial transactions and other 21 9 (7) 57 (3) Total income 3,411 3,453 3,522 3,565 3,137 Operating expenses (1,125) (1,102) (1,137) (1,242) (1,004)
Slide 97: Brazil (BRL mn)
Brazil (BRL mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 10,516 11,095 11,272 11,534 11,100 Net fee income 3,980 4,070 4,271 4,429 4,250 Gains (losses) on financial transactions and other 91 41 (31) 254 (14) Total income 14,587 15,206 15,511 16,216 15,336 Operating expenses (4,810) (4,857)
Slide 98: Chile (EUR mn)
Chile (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 440 500 462 464 448 Net fee income 103 97 102 102 92 Gains (losses) on financial transactions and other 56 59 82 71 12 Total income 600 656 646 638 553 Operating expenses (255) (269) (260) (246) (230) Net operating income 344 387 386 3
Slide 99: Chile (CLP mn)
Chile (CLP mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 333,439 383,545 363,195 386,260 397,015 Net fee income 78,010 74,473 80,052 85,052 81,770 Gains (losses) on financial transactions and other 42,713 45,387 63,719 58,999 10,853 Total income 454,162 503,405 506,966 530,311 489,638 Operat
Slide 100: Argentina (EUR mn)
Argentina (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 213 298 180 250 241 Net fee income 116 125 88 118 76 Gains (losses) on financial transactions and other 2 (33) (31) (8) 1 Total income 331 389 237 359 318 Operating expenses (202) (229) (122) (209) (186) Net operating income 129 16
Slide 101: Argentina (ARS mn)
Argentina (ARS mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 10,117 14,548 18,638 19,924 16,991 Net fee income 5,486 6,131 8,976 9,403 5,327 Gains (losses) on financial transactions and other 102 (1,596) (2,372) (847) 89 Total income 15,704 19,083 25,243 28,480 22,407 Operating expenses (9,6
Slide 102: Other South America (EUR mn)
Other South America (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 109 108 112 108 106 Net fee income 29 32 44 34 37 Gains (losses) on financial transactions and other 8 9 16 10 14 Total income 146 149 172 153 157 Operating expenses (63) (64) (67) (64) (66) Net operating income 83 85 105
Slide 103: Other South America (Constant EUR mn)
Other South America (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 97 99 104 104 106 Net fee income 25 29 41 33 37 Gains (losses) on financial transactions and other 7 9 15 10 14 Total income 129 137 160 147 157 Operating expenses (56) (58) (62) (62) (66) Net operating income 74
Slide 104: Santander Global Platform primary segment (EUR mn)
SANTANDER GLOBAL PLATFORM primary segment (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 22 23 23 23 31 Net fee income 2 1 2 2 13 Gains (losses) on financial transactions and other (5) (4) (1) (7) 1 Total income 19 20 24 18 45 Operating expenses (41) (67) (60) (72) (71) Net operating inc
Slide 105: Corporate Centre (EUR mn)
CORPORATE CENTRE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income (296) (304) (319) (333) (304) Net fee income (14) (13) (9) (15) (9) Gains (losses) on financial transactions and other (90) (106) (85) (34) 9 Total income (399) (423) (413) (381) (304) Operating expenses (97) (96) (90) (89)
Slide 106: Retail Banking (EUR mn)
RETAIL BANKING (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 8,083 8,323 8,227 8,229 7,885 Net fee income 2,178 2,134 2,108 2,141 2,024 Gains (losses) on financial transactions and other 150 201 485 339 63 Total income 10,412 10,658 10,819 10,710 9,972 Operating expenses (4,694) (4,747)
Slide 107: Retail Banking (Constant EUR mn)
RETAIL BANKING (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 7,716 7,966 8,033 8,041 7,885 Net fee income 2,051 2,026 2,061 2,089 2,024 Gains (losses) on financial transactions and other 179 231 477 334 63 Total income 9,946 10,223 10,570 10,464 9,972 Operating expenses (4,501)
Slide 108: Corporate & Investment Banking (EUR mn)
CORPORATE & INVESTMENT BANKING (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 654 700 657 716 671 Net fee income 352 374 421 373 404 Gains (losses) on financial transactions and other 272 217 153 337 225 Total income 1,278 1,292 1,232 1,426 1,300 Operating expenses (561) (560) (552) (608
Slide 109: Corporate & Investment Banking (Constant EUR mn)
CORPORATE & INVESTMENT BANKING (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 618 662 659 707 671 Net fee income 336 359 412 367 404 Gains (losses) on financial transactions and other 244 200 156 333 225 Total income 1,198 1,221 1,227 1,407 1,300 Operating expenses (542) (543) (
Slide 110: Wealth Management & Insurance (EUR mn)
WEALTH MANAGEMENT & INSURANCE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 141 143 141 146 132 Net fee income 273 298 298 330 320 Gains (losses) on financial transactions and other 110 121 113 114 134 Total income 523 562 551 589 586 Operating expenses (242) (236) (234) (244) (244) Net
Slide 111: Wealth Management & Insurance (Constant EUR mn)
WEALTH MANAGEMENT & INSURANCE (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 137 140 144 145 132 Net fee income 266 291 294 324 320 Gains (losses) on financial transactions and other 105 116 109 110 134 Total income 508 546 547 579 586 Operating expenses (239) (232) (232) (242)
Slide 112: Santander Global Platform secondary segment (EUR mn)
SANTANDER GLOBAL PLATFORM secundary segment (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net interest income 100 92 100 83 103 Net fee income 142 139 137 132 115 Gains (losses) on financial transactions and other 30 32 40 34 43 Total income 271 263 277 249 260 Operating expenses (165) (191) (188) (202) (1
Slide 113: 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 Net interest income 92 87 96 81 103 Net fee income 127 127 134 130 115 Gains (losses) on financial transactions and other 28 30 39 34 43 Total income 248 244 269 244 260 Operating expenses (154) (182) (186) (
Slide 114: 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 114
Slide 115: Glossary - Acronyms
Glossary - Acronyms M/LT: Medium- and long-term RoRWA: Return on risk-weighted assets AFS: Available for sale mn: million RoTE: Return on tangible equity AuM: Assets under Management MXN: Mexican Pesos RWA: Risk-weighted assets BFG: Deposit Guarantee Fund in Poland n.a.: Not available SBNA: Santande
Slide 116: 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 assets E
Slide 117: 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: