Banco Santander, S.a. · BME:SAN
Banco Santander — 9M 2024 Earnings Presentation
55 slides from Banco Santander's earnings presentation, Oct 29, 2024
Slide 1: Earnings Presentation 9M'24
29 October 2024 Earnings Presentation 9M’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 9M’24 Highlights Group Final remarks Appendix Progress on our strategy review 4
Slide 5: Record 9M'24 results with all our global businesses contributing to our 2024 targets
Record 9M’24 results with all our global businesses contributing to our 2024 targets Q3’24 9M’24 attributable profit attributable profit Another record quarterly profit driving double-digit profit growth in 9M’24 with revenue up high-single digits €3.3bn +12% vs. Q3’23 €9.3bn +14% Efficiency RoTE St
Slide 6: Double-digit profit and net operating income growth YoY
Double-digit profit and net operating income growth YoY, supported by customer revenue and efficiency improvements P&L Current Constant € million 9M'24 9M'23 % % NII 34,682 32,139 8 9 Net fee income 9,666 9,222 5 6 Excellent business and commercial dynamics Other income 1,837 1,734 6 9 continued in
Slide 7: On track to deliver on our full-year 2024 targets
On track to deliver on our full-year 2024 targets, which we upgraded last quarter … 9M’24 2024 targets High-single Revenue1 +8% digit growth Efficiency 41.7% c.42% CoR 1.2% c.1.2% FL CET1 12.5% >12.0% after FL Basel III implementation RoTE 16.2% >16% (1) YoY change in constant euros, except Argentin
Slide 8: Backed by ONE Transformation, improving both revenue and costs
… backed by our execution of ONE Transformation, improving both revenue and costs… Global & Network Global Tech FY’22 ONE Transformation businesses capabilities & others 9M’24 45.8% -259bps -82bps -72bps 41.7% • Product simplification: 16% fewer • Multi-Nationals: +3% YoY • Global approach to techno
Slide 9: Five global businesses leveraging global scale to accelerate profitable growth
… and by our five global businesses, leveraging our global scale to accelerate profitable growth Revenue Contribution to 2025 RoTE C/I RoTE 9M’24 (€bn) Group revenue target 24.2 39.3% 18.5% Retail +9% 52% -4.2pp +3.6pp c.17% 9.6 40.7% 11.9% Consumer 20% -1.9pp +0.3pp >14% +5% CIB 6.3 44.4% 18.1% >20
Slide 10: Retail: global platform deployment driving 9% revenue growth
Retail: global platform deployment driving 9% revenue growth while holding costs flat Execution of the strategy 9M’24 financials Driving growth and efficiency on the back of our new model Loans Deposits CoR and proprietary technology €614bn €638bn 0.98% Customer Digital onboarding and simpler custom
Slide 11: Consumer: strong improvement in operational leverage and deposit cost-to-serve
Consumer: strong improvement in operational leverage and deposit cost-to-serve Execution of the strategy 9M’24 financials Transforming into a best-in-class, global business and Loans Deposits CoR operating model €210bn €123bn 2.12% Customer Fully-digital financing experience available for our auto p
Slide 12: CIB: US investments drove 15% fee growth and strong RoTE
CIB: US investments drove 15% fee growth and strong RoTE of 18% Execution of the strategy 9M’24 financials Playing to our strengths to better serve our corporate Loans Deposits CoR customers and institutions €137bn €127bn 0.21% Customer Upgraded product offering in US driving growth with global clie
Slide 13: Wealth: strong activity, collaboration fees up 13% and 81% RoTE
Wealth: strong activity, collaboration fees up 13% and 81% RoTE Execution of the strategy 9M’24 financials Accelerating our customers’ connectivity with our global Net new Net sales Gross written product platforms money (PB) (SAM) premiums €13.2bn €12.5bn €9.0bn Customer Enhanced customer experience
Slide 14: Payments: solid revenue increase and PagoNxt EBITDA margin of 23%
Payments: solid revenue increase and profitability, with PagoNxt EBITDA margin of 23% Execution of the strategy 9M’24 financials Seizing a growing opportunity by capturing scale through Loans TPV Turnover global platforms Getnet Cards €23bn €163bn €241bn Customer Click to Pay improved with new funct
Slide 15: Building capital organically and delivering double-digit value creation
Building capital organically and delivering double-digit value creation with higher shareholder remuneration FL CET1 TNAVps + Cash DPS Shareholder remuneration % € per share Cash DPS: €19.5 cents +0.2pp +14% Cash dividend in 2024 5.23 12.3 +1.36 12.5 +39% YoY -0.74 -0.42 5.04 Current share buyback 4
Slide 16: Index
Index 1 2 3 4 9M’24 Highlights Group Final remarks Appendix Progress on our strategy review 16
Slide 17: Double-digit profit and net operating income growth YoY
Double-digit profit and net operating income growth YoY, supported by customer revenue and efficiency improvements P&L Current Constant Attributable profit € million 9M'24 9M'23 % % € mn +12% NII 34,682 32,139 8 9 Net fee income 9,666 9,222 5 6 3,207 3,250 2,902 2,933 Other income 1,837 1,734 6 9 2,
Slide 18: High-single digit revenue growth underpinned by customer activity
High-single digit revenue growth underpinned by customer activity across our businesses Total revenue Constant € mn Total +6% • >95% of total revenue is customer related which drove the vast revenue 14,610 15,137 15,536 15,512 majority of total revenue growth 13,942 14,131 14,306 • Strong revenue in
Slide 19: NII and NIM up YoY supported by volumes and margin management
NII and NIM up YoY supported by volumes and margin management Net interest income and NIM 2.82% 2.97% 2.89% • >80% of Group NII is from our Retail and Consumer businesses 2.76% 2.79% NIM 2.63% 2.73% Quarterly • Solid 9M NII increase YoY (+9%) across all businesses and regions − Retail continued grow
Slide 20: Net fee income growth shows value added from our global businesses
Net fee income growth shows value added from our global businesses Net fee income Constant € mn +8% • Good commercial dynamics and customer growth (+4% YoY), resulting in generalized fee growth across our footprint 3,181 3,205 3,279 Retail 3,034 3,004 3,045 • Fees boosted by higher activity in funds
Slide 21: ONE Transformation is 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% 41.9% • 9M’24 efficiency ratio improved by more than 2pp YoY to 41.7%, Quarterly 40.6% while we continued investing in our transformation • Transformation investm
Slide 22: Cost of risk improvement keeps us on track to meet our 2024 target
Cost of risk improvement keeps us on track to meet our 2024 target LLPs and credit quality 1.08% 1.13% 1.18% 1.20% 1.21% 1.18% CoR 1.05% • YTD CoR stood at 1.14%, even with the increase in CHF mortgage 12 month portfolio coverage in Q2 3,182 3,327 3,048 3,083 3,088 Credit • Better credit quality, ba
Slide 23: Strong capital generation with profitable front-book growth
Strong capital generation, with profitable front-book growth of 23% RoTE and significant RWA mobilization CET1 performance and capital productivity FL CET1 % Maximize capital productivity Sep-24 or estimates Front book pricing +0.43 RoRWA of new book 2.9% 12.5 +0.01 12.5 -0.26 -0.18 Asset rotation a
Slide 24: Index
Index 1 2 3 4 9M’24 Highlights Group Final remarks Appendix Progress on our strategy review 24
Slide 25: Consistently delivering on our Investor Day targets
Consistently delivering on our Investor Day targets, with double-digit value creation for our shareholders 9M’24 vs. 2025 ID targets Strength Disciplined capital allocation FL CET1 RWAs with RoRWA > CoE 12.5% TNAVps + DPS 86% >12% c.85% +14% Double-digit growth average through-the-cycle Shareholder
Slide 26: Record quarterly and 9M profit; positioned for sustained growth
Record quarterly and 9M profit. Well positioned to deliver sustained growth, increased profitability and shareholder value creation 9M’24 Record profit supported by an outstanding P&L from top to bottom RoTE EPS Excellent business dynamics: record NII, fees, revenue and net operating income ONE Tran
Slide 27: Index
Index 1 2 3 4 9M’24 Highlights Group Final remarks Appendix Progress on our strategy review 27
Slide 28: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina 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 "Supple
Slide 29: ONE Transformation driving double-digit growth in value creation
ONE Transformation driving double-digit growth in value creation 2022 2023 9M'24 2025 targets RoTE (%) 13.4 15.1 16.2 15-17 Profitability Payout (Cash + SBB) (%) 1 40 50 50 50 EPS Growth (%) 23 21.5 18.6 Double-digit Total customers (mn) 160 165 171 c.200 Customer centric Active customers (mn)2 99 1
Slide 30: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 30
Slide 31: Group P&L and excluding Argentina
Group P&L and excluding Argentina ex. Argentina P&L Current Constant Current Constant € million 9M'24 9M'23 % % % % NII 34,682 32,139 8 9 8 9 Net fee income 9,666 9,222 5 6 7 8 Other income 1,837 1,734 6 9 6 8 Total revenue 46,185 43,095 7 8 8 9 Operating expenses -19,262 -18,961 2 2 3 4 Net operati
Slide 32: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 32
Slide 33: Detail by global business
Detail by global business «> Santander
Slide 34: Retail & Commercial Banking
Retail & Commercial Banking Highlights Key data Loans Deposits Mutual Funds • Our transformation is reflected in a significant rise in total customers (+4% YoY), efficiency improvements (-4pp to 39.3%) and higher €614bn -1% €638bn +1% €95bn +16% profitability (+4pp to 18.5%) Efficiency CoR RoTE • Lo
Slide 35: Digital Consumer Bank
Digital Consumer Bank Highlights Key data New lending Loans Deposits • We continue expanding our leadership in consumer finance across our €68.9bn +5% €210bn +5% €123bn +12% footprint, converging towards a more digital global operating model and implementing the best solutions Efficiency CoR RoTE •
Slide 36: Corporate & Investment Banking
Corporate & Investment Banking Highlights Key data • We continue to make our centres of expertise more sophisticated, Loans Deposits deepening client relationships, with focus on our Global Markets Plan and US BBO initiatives, and actively managing capital €137bn +6% €127bn -13% • Strong activity Yo
Slide 37: Wealth Management & Insurance
Wealth Management & Insurance Highlights Key data AuMs Net new money (PB) Net sales (SAM) • We continue to build the best Wealth and Insurance manager in Europe €493bn +16% €13.2bn 5% €12.5bn 7% of volumes2 of volumes2 and the Americas, supported by our leading global private banking platform and ou
Slide 38: Payments: PagoNxt and Cards
Payments Cards • TPV up 12% and number of transactions +5% YoY in Getnet, • 105 million cards managed across the Group driven by Europe, Mexico and Chile • Solid YoY growth in customer activity, leading to a 7% increase • Revenue rose 12% with an overall increase in business activity in average bala
Slide 39: Corporate Centre
Corporate Centre Highlights P&L Underlying P&L* 9M'24 9M'23 • NII slightly down as higher liquidity buffer remuneration was more NII -195 -124 than offset by higher interest expense related to TLAC/MREL issuances Gains / losses on financial transactions -429 -473 • Lower losses on financial transact
Slide 40: Detail by region and country
Detail by region and country 40
Slide 41: Europe
Europe Highlights Key data and P&L Loans Deposits Mutual Funds • We continue to accelerate our business transformation to achieve €558bn -1% €613bn -1% €120bn +18% higher growth and a more efficient operating model Efficiency CoR RoTE • Customers increased across the region (+356k YoY), mainly drive
Slide 42: Spain and UK
España and UK Spain UK • Sustained customer growth YoY. Loans slightly affected by mortgage • Loans and deposits impacted by strict pricing policy. Mutual funds prepayments. Deposit performance in line with our strategy to reduce increased excess corporate deposits. Mutual funds up double-digits • P
Slide 43: Portugal and Poland
Portugal and Polonia Portugal Poland • Loans up, supported by sound new business levels, across segments, • Customer growth driving strong increase in loans mainly in Retail and solid increases in deposits and mutual funds on the back of (mortgages and personal loans) and CIB. Deposit growth (demand
Slide 44: Digital Consumer Bank Europe
Digital Consumer Bank Europe Highlights Key data and P&L • We are focused on strengthening our leadership in auto and non-auto New lending Loans Customer Funds through strategic alliances and better service based on new operational leasing and non-auto (Zinia) platforms €40bn +1% €138bn +5% €84bn +2
Slide 45: North America
North America Highlights Key data and P&L • Focus on transformation, leveraging the strengths of our global businesses in the US and Mexico and continuing our digital transformation Loans Deposits Mutual Funds • Loans up 3%, particularly in Retail in Mexico and CIB in the US, supported €156bn +3% €1
Slide 46: US and Mexico
US Mexico • Lending up 2%, driven by CIB activity and auto. Deposits declined, • Successful customer acquisition campaigns and new commercial mainly in CIB, in line with our funding optimization strategy agreements are boosting loans (most global business) and deposits • Profit up YoY, as revenue ro
Slide 47: South America
South America Highlights Key data and P&L Loans Deposits Mutual Funds • We are focused on becoming the primary bank for our 79 million €154bn +6% €131bn +6% €68bn +8% customers (+4mn YoY) and the most profitable bank in each of our countries, while enhancing service quality Efficiency CoR RoTE • Loa
Slide 48: Brazil and Chile
Brasil and Chile Brazil Chile • Strong YoY growth in loans, time deposits and mutual funds, with • Customer growth (+8% YoY). Loans rose in all our global businesses increases across global businesses, backed by a rise in 6% customers except in CIB. Double-digit growth in time deposits and mutual fu
Slide 49: Argentina, Uruguay, Peru and Colombia
Argentina y Uruguay Argentina Uruguay, Peru and Colombia • We continue working to improve our customer service and adapt our • Strong loan growth in Uruguay (+21% YoY) mainly in Retail and value offer to customer needs in a dynamic environment Consumer. Joint initiatives between CIB and Corporates i
Slide 50: Appendix
Appendix Investor Day Targets summary Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 50
Slide 51: Reconciliation of underlying results to statutory results
Reconciliation of underlying results to statutory results EUR mn January-September 2024 January-September 2023 Statutory Underlying Statutory Underlying Adjustments Adjustments results results results results Net interest income 34,682 — 34,682 32,139 — 32,139 Net fee income 9,666 — 9,666 9,222 — 9,
Slide 52: Appendix
Appendix Investor Day Targets summary and our last step towards ONE SANTANDER Group P&L and excluding Argentina Detail by global business, region and country Reconciliation of underlying results to statutory results Glossary 52
Slide 53: Glossary - Acronyms
Glossary - Acronyms • A2A: account to account • EV: Electric Vehicle • Ps: Per share • ALCO: Assets and Liabilities Committee • FL: Fully-loaded • QoQ: Quarter-on-Quarter • AM: Asset management • FTE: Full time employee • Repos: Repurchase agreements • AuMs: Assets under Management • FX: Foreign exc
Slide 54: 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 55: 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: