Banco Santander, S.a. · BME:SAN
Banco Santander — Q1 2024 Earnings Presentation
53 slides from Banco Santander's earnings presentation, Apr 30, 2024
Slide 1: Earnings Presentation Q1'24
30 April 2024 Earnings Presentation Q1’24
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 In particular, forward looking statements are based on current expectations and future estimates about Santander’s and third-parties’ operations and businesses and address matters that are uncertain to varying degrees and may change, including, but not limited to (a) expectatio
Slide 4: Index
Index 1 2 3 4 Q1'24 Highlights Group Final remarks Appendix Progress on review our strategy 4
Slide 5: Strong first quarter performance with all global businesses contributing
Strong first quarter performance with all our global businesses contributing to our 2024 targets Q1’24 Q1’24 attributable profit revenue Continued momentum in revenue growth driven by 5mn new customers YoY and good activity levels €2.9bn €15.4bn +11% +10% Efficiency RoTE Strong operating performance
Slide 6: Strong YoY profit increase, double-digit growth in net operating income
Strong YoY profit increase, with double-digit growth in net operating income, supported by customer revenue and efficiency improvements P&L Current Constant € million Q1'24 Q1'23 % % NII 11,983 10,185 18 16 Net fee income 3,240 3,043 6 5 2024 has started with Other income 157 707 -78 -78 excellent b
Slide 7: Strong start to the year, on track to deliver 2024 targets
Strong start to the year, which puts us on track to deliver our 2024 targets, or even overdeliver some of them… Q1’24 2024 targets Mid-single Revenue1 9% digit growth Efficiency 42.6% <43% CoR 1.20% c.1.2% FL CET1 12.3% >12.0% after Basel III implementation RoTE 16.2% 14.9% annualizing the 16% tempo
Slide 8: Backed by consistent execution of ONE Transformation
… backed by consistent execution of ONE Transformation… Global & Network Global Tech FY’22 ONE Transformation businesses capabilities & others Q1’24 45.8% -174bps -88bps -63bps 42.6% • Product simplification: 2% fewer • Multi-Nationals: +5% YoY • Global approach to technology: Efficiency products in
Slide 9: Value added by our five global businesses
… and value added by our five global businesses, which are accelerating the achievement of our ID targets Revenue Contribution to 2025 RoTE2 C/I RoTE2 Q1’24 (€bn) Group’s revenue1 target 8.0 41.1% 17.6% Retail +13% 52% -3.9pp +2.9pp c.17% 3.2 41.2% 11.9% Consumer 20% -1.9pp -0.3pp >14% +4% 2.1 42.0%
Slide 10: Retail: strong profit growth YoY with solid C/I
Retail: strong profit growth YoY with solid C/I driven by revenue and cost control Execution of the strategy Q1’24 financials Driving growth and efficiency on the back of our new model Loans Deposits CoR and proprietary technology €621bn €642bn 1.03% Customer New digital onboarding and products lead
Slide 11: Consumer: strong net operating income growth with deposit gathering
Consumer: strong net operating income growth with successful deposit gathering Execution of the strategy Q1’24 financials Transforming into a best-in-class, global business and Loans Deposits CoR operating model €208bn €119bn 2.12% Customer Providing global solutions integrated in our partners’ proc
Slide 12: CIB: all-time high revenue, profit down from record Q1'23
CIB: all-time high revenue. Profit down from a record Q1’23, impacted by investments Execution of the strategy Q1’24 financials Playing to our strengths to better serve our corporate Loans Deposits CoR customers and institutions €139bn €143bn 0.14% Customer Significant progress building new capabili
Slide 13: Wealth: double-digit growth across businesses
Wealth: double-digit growth across businesses with record commercial activity Execution of the strategy Q1’24 financials Accelerating our customers’ connectivity with our global Net new Net sales Gross written product platforms money (PB) (SAM) premiums €5.5bn €3.8bn €3.0bn Customer Named again Best
Slide 14: Payments: sound credit quality led to double-digit profit growth
Payments: sound credit quality led to double-digit profit growth Execution of the strategy Q1’24 financials Seizing a growing opportunity by capturing scale through TPV Active customers Turnover global platforms Getnet Ebury Cards €54bn 22k €78bn Customer New wallet agreements to offer customers alt
Slide 15: Outstanding profitability and value creation with 14% growth in TNAVps + Cash DPS
Outstanding profitability and value creation with 14% YoY growth in TNAVps + Cash DPS RoTE EPS TNAVps + Cash DPS % Annualizing the impact of the € cents € per share Cash DPS: €17.6 cents temporary levy +93bps +14% +14% 16.2 17.0 15.3 15.0 5.04 14.4 14.9 4.86 4.41 Q1'23 Q1'24 Q1'23 Q1'24 Mar-23 Mar-2
Slide 16: Index
Index 1 2 3 4 Q1'24 Highlights Group Final remarks Appendix Progress of our strategy review 16
Slide 17: Strong profit increase YoY, double-digit growth in net operating income
Strong profit increase YoY, with double-digit growth in net operating income, supported by customer revenue and efficiency improvements P&L Current Constant Attributable profit € million Q1'24 Q1'23 % % € mn NII 11,983 10,185 18 16 +11% Net fee income 3,240 3,043 6 5 +14% excluding temporary levy Ot
Slide 18: High-single digit revenue growth backed by customer activity
High-single digit revenue growth backed by customer activity across businesses Total revenue Total +9% revenue 15,380 14,157 14,355 14,839 14,546 • >95% of total revenue is customer related which drove the Other income vast majority of total revenue growth Group • Strong revenue increase YoY reflect
Slide 19: NII and NIM up YoY
NII and NIM up YoY, supported by volumes and margin improvement Net interest income and NIM 2.97% 2.73% 2.82% 2.76% • >80% of Group’s NII is from Retail and Consumer businesses 2.63% NIM • Growth YoY across all business and regions Quarterly − Retail in Europe and North America supported by active +
Slide 20: Net fee income growth from business diversification
Net fee income growth, demonstrating the value added from our business diversification Net fee income • Good commercial dynamics in most countries, with all regions +5% growing Retail • Fee income boosted by higher transactionality mainly in Brazil, 3,240 Mexico and Poland 3,092 3,063 3,105 2,832 •
Slide 21: ONE Transformation driving structural efficiency gains and positive jaws
ONE Transformation is driving structural efficiency gains and positive jaws Efficiency and costs Efficiency 44.1% 44.3% 43.6% 44.4% 42.6% • Transformation towards simpler and more integrated models Quarterly continues to drive efficiency gains • Efficiency improved to 42.6% (-1.5 pp YoY; Retail -3.9
Slide 22: Credit quality remains robust
Credit quality remains robust LLPs and credit quality 1.05% 1.08% 1.13% 1.18% 1.20% CoR • Credit quality remains robust, backed by overall good economic 3,416 Credit performance and record low unemployment in most countries 3,254 3,125 2,922 2,919 quality • NPL ratio stood at 3.10% (3.14% Dec-23) wi
Slide 23: Strong capital generation and RWA mobilization
Strong capital generation, profitable front-book growth >15% RoTE and significant RWA mobilization CET1 performance and capital productivity FL CET1 Maximize capital productivity % Mar-24 or estimates Front book pricing RoRWA of new book 2.8% +0.32 12.3 +0.14 12.3 -0.22 -0.24 Asset rotation and risk
Slide 24: Index
Index 1 2 3 4 Q1'24 Highlights Group Final remarks Appendix Progress of our strategy review 24
Slide 25: Progress towards our ID target in new phase of value creation
Making progress towards our ID target in our new phase of value creation for our shareholders Q1’24 vs. 2025 ID targets Strength Disciplined capital allocation FL CET1 RWAs with RoRWA > CoE 12.3% TNAVps + DPS 83% >12% c.85% +14% Double-digit growth average through-the-cycle Shareholder remuneration
Slide 26: 2024 has begun with excellent business and commercial dynamics
2024 has begun with excellent business and commercial dynamics Outstanding customer revenue performance backed by all global businesses €15.4bn 42.6% €2.9bn Structural efficiency gains and profitable growth driven by strategy execution Revenue Efficiency Profit ONE Transformation and value-added by
Slide 27: Index
Index 1 2 3 4 Q1'24 Highlights Group Final remarks Appendix Progress of our strategy review 27
Slide 28: Appendix
Appendix Investor Day Targets summary Detail by global business, region and country 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 "Supplementary Information", published to
Slide 29: ONE Transformation driving double-digit growth in value creation
ONE Transformation driving double-digit growth in value creation 2022 2023 Q1'24 2025 targets RoTE (%) 13.4 15.1 14.9 15-17 Profitability Payout (Cash + SBB)1 (%) 40 50 50 50 EPS Growth (%) 23 21.5 13.7 Double-digit Total customers (mn) 160 165 166 c.200 Customer centric Active customers (mn)2 99 10
Slide 30: Appendix
Appendix Investor Day Targets summary Detail by global business, region and country 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 "Supplementary Information", published to
Slide 31: Detail by global business
Detail by global business @ Santander
Slide 32: Retail & Commercial Banking
Retail & Commercial Banking Highlights Key data Loans Deposits Mutual Funds • Convergence towards a common business and operating model, our transformation and disciplined capital allocation are reflected in significant €621bn -2% €642bn +2% €89bn +13% total customer growth, and improvements in effi
Slide 33: Digital Consumer Bank
Digital Consumer Bank Highlights Key data New lending Loans Deposits • We continue expanding our leadership in consumer finance across our footprint, while we focus on converging towards a more digital global €21.6bn +7% €208bn +4% €119bn +13% operating model, using common platforms and with a globa
Slide 34: Corporate & Investment Banking
Corporate & Investment Banking Highlights Key data • We continue making our centres of expertise more sophisticated, Loans Deposits deepening client relationships with a particular focus on the US build-out €139bn -1% €143bn +1% to complement our capabilities, and actively managing capital Efficienc
Slide 35: Wealth Management & Insurance
Wealth Management & Insurance Highlights Key data AuMs Net new money (PB) Net sales (SAM) • We continue building the best Wealth and Insurance manager in Europe €482bn +14% €5.5bn 7% €3.8bn 7% and the Americas, supported by our leading global PB platform and best- of volumes2 of volumes2 in-class fu
Slide 36: Payments and Cards
Payments Cards • Getnet: TPV increased 14% YoY and the number of transactions rose 13% YoY • Group total number of cards rose to 102 million, continuing the positive trends in previous quarters • Ebury: 22k active customers (+20% YoY) • Solid growth in customer activity (€78bn turnover, +6% YoY) • P
Slide 37: Corporate Centre
Corporate Centre Highlights Income statement Underlying P&L* Q1'24 Q1'23 • NII improved driven by higher liquidity buffer remuneration NII -31 -52 • Lower gains on financial transactions due to higher negative FX Gains / losses on financial transactions -162 -54 hedging impacts Operating expenses -8
Slide 38: Detail by region and country
Detail by region and country 38
Slide 39: Europe
Europe Highlights Key data and P&L • We remain focused on growing our business while transforming our Loans Deposits Mutual Funds operating model to increase efficiency and boost customer experience €553bn -4% €614bn +1% €111bn +17% • Customers up (+666k YoY) in all countries, mainly driven by consi
Slide 40: Spain and UK
España and UK Spain UK • Sustained strong growth in customers. Drop in loans (mortgage • Loan volumes drop in a context of higher rates in line with our prepayments, ICO maturities and CIB). Migration to time deposits deleveraging strategy. Strong migration from demand to time deposits trend continu
Slide 41: Portugal and Poland
Portugal and Polonia Portugal Poland Poland • Loans: moderate decline as new business recovered, offsetting last • Loans rose mainly driven by Retail (lifetime record mortgage and year’s deleverage. Cost of deposits under control, affecting deposit personal loans sales) and CIB. Significant growth i
Slide 42: Digital Consumer Bank Europe
Digital Consumer Bank Europe Highlights Key data and P&L New lending Loans Customer Funds • We are focused on strengthening our leadership in auto and non-auto through strategic alliances and better service through new operational €13bn -1% €135bn +6% €77bn +21% leasing and non-auto BNPL platforms E
Slide 43: North America
North America Highlights Key data and P&L • Focus on transformation, leveraging the strengths of our businesses in the US and Mexico and enhancing our regional operating model in T&O Loans Deposits Mutual Funds €167bn +3% €144bn +1% €32bn +5% • Solid loan growth, particularly in Mexico. Deposits are
Slide 44: US and Mexico
US Mexico • Lending slightly up, mainly driven by CIB activity. Deposits declined • Successful customer acquisition campaigns driving up loan volumes slightly with time growing at the expense of lower demand deposits (Consumer and corporate loans) and time deposits • Good revenue performance YoY. Ho
Slide 45: South America
South America Highlights Key data and P&L Loans Deposits Mutual Funds • We are focused on being the primary bank for our 75 million customers, on becoming the most profitable in each of our countries and on €161bn +5% €133bn +6% €71bn +14% enhancing service quality Efficiency CoR RoTE • Loans grew b
Slide 46: Brazil and Chile
Brasil and Chile Brazil Chile • Growth in loans across all businesses except CIB (impacted by a more • Loans increased mainly due to mortgages, CIB and Payments. competitive market), in time deposits and in mutual funds Double-digit growth in time deposits and mutual funds • Profit increased strongl
Slide 47: Argentina; Uruguay, Peru and Colombia
Argentina y Uruguay Argentina Uruguay, Peru and Colombia • We are working to integrate our recent inorganic acquisitions • Strong loan growth in Uruguay and on joint initiatives between CIB and Corporates in Peru and Colombia • Profit YoY affected by hyperinflation adjustment and non-credit related
Slide 48: Appendix
Appendix Investor Day Targets summary Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 48
Slide 49: Reconciliation of underlying results to statutory results
Reconciliation of underlying results to statutory results January-March 2024 January-March 2023 Statutory Underlying Statutory Underlying Adjustments Adjustments results results results results Net interest income 11,983 — 11,983 10,396 (211) 10,185 Net fee income 3,240 — 3,240 3,043 — 3,043 Gains (
Slide 50: Appendix
Appendix Investor Day Targets summary and our last step towards ONE SANTANDER Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 50
Slide 51: Glossary - Acronyms
Glossary - Acronyms • A2A: account to account • ESG: Environmental, social and governance • pp: Percentage points • ALCO: Assets and Liabilities Committee • EV: Electric Vehicle • Ps: Per share • AM: Asset management • FL: Fully-loaded • QoQ: Quarter-on-Quarter • AuMs: Assets under Management • FTE:
Slide 52: 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 asse
Slide 53: 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: