Banco Santander, S.a. · BME:SAN
Banco Santander — Q1 2012 Earnings Presentation
62 slides from Banco Santander's earnings presentation, Apr 27, 2012
Slide 1: Form 6-K Report of Foreign Issuer
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of April, 2012 Commission File Number: 001-12518 Banco Santander, S.A. (Exact name of registrant as specified in its char
Slide 2: Table of Contents
Banco Santander, S.A. TABLE OF CONTENTS Item 1 Webcast presentation 1st quarter results, 2012
Slide 3: Activity and Results First Quarter 2012
ACTIVITY AND RESULTS FIRST QUARTER 2012 26 April 2012 Santander
Slide 4: Important information
2 Important throughout judgment materially securities customers, States forward-looking which result including, merits necessary recommendation constitutes 1933, prohibition performance, profit forecast. of as of they ornew amended, America the markets, and or where from an obligors this are on info
Slide 5: Agenda
3 Agenda ?Group performance Q1’12 —Highlights —Results ?Business areas performance Q1’12 ?Conclusions ?Appendix
Slide 6: Highlights
4 Strongrevenues Strong franchisesbalance Increased generation sheet presence 10.10% Pre-provision in115% growth SANcountries profit betterAttributable than Diversification: Peers €profit 11,354 differential Q1’12 mill.Highlights +8%element € 6,280 Core vs.mill. competitors Capital +9%(BIS € 1,604 1
Slide 7: Solid profits generation
5 10,482 Solid profits 4,731generation 10,921 4,826 Q2’1110,722 Q3’114,909 Q1’1210,629 Q1’115,093 Q4’1111,354 5,074 Revenues and expenses Very good quarter in revenues with expenses under control … EUR million Gross income Expenses 1
Slide 8: Pre-provision profit
6 Pre-provision provision profit profit … Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 5,750 6,095 5,813 5,536 6,280 EUR million 1 Solid results generation +9% +13% … that maintained an excellent track-record in pre-
Slide 9: Accounting and attributable profit
7 Accounting 1,421 million 1,721 EUR1,666 million attributable 1,665 … and (*) profit Total enabled Q1’11 impact theQ2 “cyclically ofQ3 generic Q4 Q1’12 high” provisions 2,108 provisions is 1,393 eliminated, to 1,803 be absorbed 47both 1,604 thewhile Attributable onesmaintaining recorded profit in l
Slide 10: Diversification of attributable profit
8 (1) Over These provisions recurring operating 13% Mature results areas are markets attributable underpinned with stable profit by the provisions 4%Group’s 27% 13%31% diversification 6% Attributable 6% 10%and13% profit an 3% adequate Q1’12(1) 5% 12% geographic Portugal 1% USAbalance UK Germany Emer
Slide 11: Diversification and core markets
9 The strong profits operation by announced market local2positioning Diversification on February reached 2012 0% in 25% regarding core 50% markets 75% the merger 100% … Reaching C10 of BZC9WBK market C8 C7 with shares1 C6Kredyt C5 C4 ?10% Bank C3inC2most (3)Consumer C1 Grupo of our core SAN loans ma
Slide 12: Merger of BZ WBK with Kredyt Bank
10 2011A13% standalone 139118103113104100951001051101151201251301351401452006200720082009201020112012201320142015 7.1%-8.5% volumes Santander’s 2012E and 16.4% strategy 10% synergies 2013E KBC Higher and 2014E of business Increased EPS, which 2015E attractive SAN Diversification share 1,566 will inR
Slide 13: Strong balance sheet: capital
11 Core7.58% 6.25% capital8.61% ratio (BIS 8.80%II)10.02% consolidates 10.10%above … with 10%an …EBA Strong ratio balance of 9.11%, sheet: above Capital the 3required Note: Dec’06 one Core andcapital Dec’07 (BIS according II) evolution to BIS I Dec’06 Dec’07 Dec’08 Dec’09 Dec’10 Dec’11 Mar’12 5.91%
Slide 14: Strong balance sheet: liquidity
12 11.3 quarter Group’s D’09 D’10 in 5.5 high a D’11 3.9 highly issuance 2.8 M’12 demanding Strong capacity 150% balance 135% environment Q1’12. sheet: 117% EURLiquidity 117% Backed Bn. 115% Spain 3by (1)Including deleveraging Deposits1 M/L term maturities2 +retail M/L of the commercial term eurozon
Slide 15: Strong balance sheet: non-performing loan ratios
13 0.66Latin Mortgage Dec’07 Brazil Dec’08 1.03 Lenders America 1.41 Dec’09 1.41 (UK) ex-Brazil 1.42 Dec’10 0.641.46 1.95 % Sep’11 1.10 % 3.41 %1.88 Dec’11 (feb) 4.242.38 5.15 2.9Our 2.11 3.4 5.49 ratios 5.9 2.05 5.75 3.9 2.06 still 0.92 4.5compare Dec’07 4.8 3.37 3.55.08 Dec’08 3.8 very5.81 5.4 wel
Slide 16: Non-performance loans ratio by area
14 3.55 3.76 M’11 balance remained 3.22 J’11 3.61 sheet: stable 2.85 S’11 3.78 Non-performance 2.46 D’11 3.86 D’10 M’12 3.89 M’11 Continental 3.98J’11 loans Dec’10 S’11 ratio Europe Mar’11 D’11 Group M’12 %Jun’11 4.24 total Latin 4.57 The Sep’11 America Group’s 4.81Dec’11 5.15 % NPLs 5.49 4.91 Mar’1
Slide 17: Coverage ratio
15 46 D’11 49 62%, 73M’12 145 71p.p. 69Latin 46 improvement 66 61America D’10 M’11 62 Dec’10 J’11 in%the S’11 101 Mar’11 quarter 104 D’11Jun’11 102 USA M’12 100Sep’11 Spain 95 90SCF Dec’11 D’10101 M’11 Mar’12 98 J’11 103 %105 S’11 United 109 D’11 108 Kingdom M’12 D’10Brazil M’11 and USA Latam J’11 %
Slide 18: Agenda
16 ?Group performance Q1’12 —Highlights —Results ?Business areas performance Q1’12 ?Conclusions ?Appendix Agenda
Slide 19: Group results Q1'12
17 Netresults Operating Other expenses interest Grupo expenses and income Santander provisions -5,074 + feeResults. -343 -608 income +7.2 -15Q1’12 10,443 +4.4 +2.6 Net vs. +3.0 +851 Q1’11 operating Profit +8.9 Solid before +6.7 income P&L Trading taximpacted 6,280 2,545 gains +530 -547in 797 -17.7 t
Slide 20: Gross income
18 Gross +153 +7% +5% -97 income +19 (1)Basic Q1’12 Basic revenues: / Q4’11 revenues Q1’11 Netasinterest the Q2 main Q3income Q4 driver Q1’12 + of fees 9,633 profits + insurance 9,930 1 Group’s 9,939 activity gross 9,958(2)Dividends income 10,488EUR 664 +722 million equity 639 Basic accounted 474 79
Slide 21: Expenses
19 Q1’11 Q2Europe Continental Q3 Q4UK Q1’12 Latam 4,731 -524,826 US -33 4,909 +8 -7 5,093 Q1’12 5,074 / Q4’11 Expenses -0.4%Expenses growing at a slower pace Group’s expenses EUR million 2 Expenses Q1’12 / Q4’11: -EUR 19 mill.; -0.4% +7%
Slide 22: Net loan-loss provisions
20 Q1’11 evolution -356 -5 -74Q2 was -85 Q3 impacted +99 Q4+51% Q1’12 by (1) the 2,418 Including lower 2,549 use2,784 country-risk of generic 2,674ones 3,025 3 Net Q1’11 loan-loss Q2 Q3 provisions1 Q4 Q1’12 2,065 EUR 2,546 million 2,711 Specific 2,577provisions 3,127 Loan-loss EUR million provisions
Slide 23: Agenda
21 ?Group performance Q1’12 —Highlights —Results ?Business areas performance Q1’12 ?Conclusions ?Appendix Agenda
Slide 24: Continental Europe operating income
22 Continental operating 443 266 584 income Q1’11 Europe Net Q2op. Q1’12 Q3income Q4Good Q1’12 after revenues 3,023 provisions 3,391 performance Attributable 3,278 3,109 fuelled profit 3,262 the+8% +8% profit +10% +5%for +0% the +8%Attributable +2% +11% -1% -30% +5% profit -34% -36% EUR Attributable
Slide 25: Santander Branch Network
23 156 58 66 Santander 75 Q1’11 Generalised Q2 Branch Q3 profit Q4 Network Q1’12 improvement Banesto 101 67 22 Portugal over -59 the 41 Continental Q1’11 fourth quarter Q2 Q3Europe Q4 of 2011 Q1’12 Q1’12. 90Attributable 41 -2 45 33 profit Q1’11by Q2unit Q3 EUR Q4 Q1’12 million 183 SCF 186Poland 201
Slide 26: Banesto
24Net 2 +2% 130% Santander Var. interest 116% Mar’12 2Branch inc. 2 2 // Mar’11 ATAs Network Q1’11 Volumes Q1’12 Q1’12 evolution Year-on-year 2.77% 3.21% (1)Loan-to-deposit comparison Q1’11 Q2very Q3ratio Q4 affected (2)Including Q1’12by1,072 the non- retail 1,136 profit commercial 1,094 EUR 1,031 m
Slide 27: Spain: liquidity and deposits
25 Banesto interest -8% -8%inc. income Var. Q1’12 / ATAs3 Mar’12 return Year-on-year Basic /1.86% Mar’11 revenues 1.70% Q1’11 comparison Attributable 1.70% Q1’122.39% 3.04% very profit affected 3.61% 2.45% EUR 3.75% by M’11 million release Q1’11 M’12Q1’11 of Loans generic Q4’11 Q2Deposits Q1’12 Q3 p
Slide 28: Spain: loans
26 Spain1. continuous retail Network, commercial Banesto, Details improvement paper of GBMloans TOTAL in Spain, and liquidity deposits Santander Companies ratios March Consumer Demand w/o2012 realdeposits estate balances Finance purposes Time Spain Gross deposits and loans RealBanif estate Deposits
Slide 29: Real estate exposure in Spain
27 Spain1. 17.0 12M Other28.6 3M loans With 32.8 Customer to individuals real Dec’10 estate lending Dec’11 purpose (1) and Including Mar’12 NPLs Total%portfolio Santander Gross In lending, loans Spain Branch Dec’10 individual Other Network, Dec’11 portfolio customers Mar’12 Banesto, Household deleve
Slide 30: Real estate substandard exposure
28 Real mill.; Foreclosed Q1’12 -43% +373 estate REAL -8% +453 exposure. EUR +225 ESTATE million -7 Loans +37 (gross Q1’11 andamount) foreclosed Q2 Q3EURQ4real Q1’12 million estate -1,229 EUR LOANS -758 million with -978 Quarterly real -849estate -1,935 evolution purpose Quarterly EUR in 2011 evolut
Slide 31: Portugal
29 Real estateEUR Substandard exposure million in Balance* Spain. Coverage Coverage Coverage 3,852 600 is maintained Coverage: 16% following NPLsthe EUReffort million madeBalance at the end Coverage of 20117,047 Foreclosed 2,291 Coverage: real estate EUR 33% (*) million 100%Balance up-to-date Covera
Slide 32: Santander Consumer Finance
30 Activity process Q2 equivalent Q3 Q4continues to Q1’12 Already the maturities 273 Core meets 242 Tierthe 225 of I (%) 2012 the 219next ST 246 year-end Peers 3-10% years 2.9 capital +12% M/L 6.7 NPL term Attributable requirement (%) maturities ST Peers profit ST(EUR Peers 82 Q1’11 60 bn.) 11.1 Cov
Slide 33: Poland
31 Santander income/ Germany +5% EUR Attributable 223Provisions Italy mill.Consumer Nordic Loans profit* (%Deposits countries / ATAs) Finance Q1’11-1% 1.17% Q2 Spain Continental Q3 +5%0.96% Poland Q4 Q1’12 Europe 3.54% Other 18330 3.35% Q1’12 186 7 7 201 7Q1’11 Profit 3 496+1% 206 increased Q1’12 Va
Slide 34: United Kingdom
32 Poland Group 10,473 profit Individuals Results* Total (BZDeposits WBK) showed Companies +6% Q1’12 sharp +2% Data Individuals growth +8% in local over Basiccriteria. Q1’11 revenues Mar’11 Constant Provisions Mar’12 EURQ1’11 million 2,768 Q1’12 3,045 (*) 2011 5,527 197 proforma 210 6,475 +6%8,295 i
Slide 35: Brazil
33 United Q1’11 1,175 -0.30% +11% 1,154 +1% in-0.59% £Kingdom Gross -3% 1,044 Q1’11 £income Million -12% Q1’12 Q1’12 -10% Expenses SMEs Results Balances Attributable +21% affected Netand 2operating profit Var. by environment Mar’12 Q1’11 income/Q2 Mar’11 Net Q3 ofop. sluggish Q4Loans income Q1’12 ac
Slide 36: Latin America ex-Brazil
34 Brazil (1)Local Q1’11 -10% revenues Attributable Q1’12 currency Constant Q1’12 Provisions Higher (2)Excluding profit US$ million basic Constant Net interest revenues Q1’11 Repos. US$ income Q2 million fuelled Including Q34.65 Q4 Q1’11 by Q1’12 “letras 4.72 larger Q2Basic volumes 4,800 financeiras
Slide 37: Mexico
35 Basic growth 571 (1) Mar’12 Constant mill.) spurred / revenues Mar’11 Var. currency Q1’12 byQ1’11 Gross basic /(2) Q1’11 Q2 revenues income Excluding Q3inQ4 constant Expenses (double Q1’12 New US$ York digit 701 NetActivity1 727 operating branch. growth 648 in Deposits 697 NII/ income activity) 7
Slide 38: Chile
36 Mexico Net +8% US$ op. 388 million Attributable income mill. Q1’12 Constant (EUR after profit Profit provisions 296 US$Q1’11 growth mill.) million Q2 Activity1 Attributable spurred Q3 Excluding Q4by Volumes Q1’12 basic profit+21% perimeter 325 revenues Loans 300+15% Deposits 327 (double 291 +12%3
Slide 39: United States
37 Chile profit: Net Attributable interest op.US$ income Q1’12 174 profit Constant after In mill. Var. activity, provisions (EUR Mar’12 US$focus 133 million /Attributable mill.) Mar’11 on profitability Constant Activity1 +13%profit +9% US$ Loans and +13% million +8% customer Deposits +7% +9% Excludi
Slide 40: Corporate Activities
38 United SCUSA Deposits+5% +0% 220 146 +11% impacted 149 States -9% 158 +7%+1% Q1’12 123 by Volumes provisions (1)Local +9% Santander Var. 0.75% currency Q1’12 release US 0.49% includes / in Q1’11 NII/ Q1’11 3.32% Provisions in Sovereign (US$ US$ 2.94% Attributable 77 (o/ATAs) Q1’11 Bank mill.)Q1’1
Slide 41: Corporate Activities
39 Corporate Activities
Slide 42: Agenda
40 Corporate Main effects: Activities Net interest Larger income trading -2 Trading gains (losses gains +120 in valuation Other results of portfolios and taxes in -27 Q1’11) Impact and on lower profit: provisions, +91 offset the lower tax recovery EUR Mill. Attributable profit (Change Q1’12 vs. Q1’1
Slide 43: 2012 outlook
41 ?Group performance Q1’12 —Highlights —Results ?Business areas performance Q1’12 ?Conclusions ?Appendix Agenda
Slide 44: Agenda
42 Santander balance The markets plan, transformation aiming sheet with to sustained 2012 / liquidity outperform outlook process growth Environment peers Itowards n 2012 LatinaSantander America: still retailvery franchise good will demanding maintain growth with aon dynamics. full a provisions diffe
Slide 45: Group's balance sheet
43 ?Group performance Q1’12 —Highlights —Results ?Business areas performance Q1’12 ?Conclusions ?Appendix Agenda
Slide 46: Group's balance sheet at March 2012
44 Group’s balance sheet
Slide 47: Secondary segments results
45 Assets commercial and institutions well capitalised credit Liabilities746 institutions: Other* paper Balance AFS (*)15% Other Portfolio 100sheet Other 97assets: 222 atTrading (goodwill, March 59 Goodwill 651portfolio 2012 86fixed 37 EUR EUR 105 assets, Customer 25 billion 117 bn., accruals): 190
Slide 48: Retail Banking
46 Secondary segments results
Slide 49: Santander Consumer Finance
47 Basic revenues interest profit Q1’11 income revenues is not Q2feeding +Q3 fee Gross Q4income through Q1’12 income + 2,187 Insurance toExpenses profit 1,427because activity Net 1,727operating of 1,570 (2)larger Including 1,647 income provisions EUR retail Netmillion and commercial op. income minor
Slide 50: Global Banking and Markets
48 Santander 317 Countries loan mill. portfolio Continental 14 Agreements Consumer under management Europe Finance withUnited manufacturers Total. TopKingdom 31Q1’12 in 10for Aggregates countries USAcaptive 59 4Million financing 13 theContinental Continental euros 37 Note: inEurope deposits Europe,
Slide 51: Asset Management and Insurance
49 Q1’11 strong +15% +8% EUR Customer corporate Q2 million Q3 business revenues Q4 TOTAL Q1’12and +8% Trading 1,125 markets -1%1,043 Investment +1% recovery 997 Total 842banking Trading compared 1,214 197 Customers Corporate to140 Q4’11 81banking1 (1) 183 Gross Including 195income 1,322 Hedging Glob
Slide 52: Main units spreads and NPL ratios
50 Q1’11 operating Q1’12 312Q2 areas 310Q3Q1’11 total Q4 revenues Q1’12 Q1’12120 770 Group 129 76088 total -1% 97revenues 98 -1%Q1’11EUR Q2 Q3 million Q4 Q1’12 EUR million 243 250Attributable 234 231 229profit AssetInsurance Management Assetand Management Insurance High Grosscontribution income EUR
Slide 53: Continental Europe: spreads
51 Main units spreads and NPL ratios
Slide 54: Continental Europe: NPL and coverage ratios
52 Continental 0.12 Loans0.42 Deposits 0.36 0.41 Europe. Total1.67 4.83 Main 2.20 4.43 units 2.54 4.482.52 spreads 4.572.74 4.51 (%) Q1’11 Q1’11 1.90Q2 1.97 Q2Q3Q3 2.03 Q4Q42.01 Q1’12 Q1’12 2.19 Loans Loans 0.05Deposits 0.56 SAN0.65 Branch Total 0.531.96 Network 0.512.06 1.95Banesto 2.15 2.532.23 2.
Slide 55: Loans with real estate purpose in Spain
53 Continental Consumer Mar’11 8.90% and JunPortugal coverage SepEurope. Dec3.03% ratio Mar’12 NPL40% 3.25% and NPL ascoverage of 3.78% Coverage Mar’12 4.06% ratios 4.31% 4.59% Banco 4.54% 62% Santander1 4.69% 62% 53% 5.01% 4.68% 55% 5.07% 5.08% 58%52% Mar’11 5.63% 52%5.99% Jun 53%Sep 53% 6.33% Dec5
Slide 56: United Kingdom: spreads and NPL ratios
54 LOANS estate 4,073 land 268 4,737 in Spain 60%with -664 107 nFinished real Total Subestate Total 21,507 buildings purpose 8,590 23,442 48% 9,511 Foreclosed -1,935 4,442 10,154 nFinished REAL -643 nBuildings ESTATE buildingsEUR 3,659 under Million 34% constr. 2,408 Mar’12 1,555 nBuildings 1,985 De
Slide 57: Latin America: spreads
55 United 1.84% 1.82% Kingdom. 47% 43% Spreads 42% 40% and NPL 40%ratios Mar’11(%)Jun 2.40 Sep 2.40 Dec2.46 Mar’12 2.53 NPL 2.57 -0.32 Coverage -0.40Spreads -0.45 -0.50 Retail -0.59 Banking 2.08 2.00 NPL2.01 and coverage 2.03 1.98 Q1’11 Q2 Q3 Q4 Q1’12 Loans Deposits Total 1.73% 1.81% 1.86%
Slide 58: Latin America: NPL and coverage ratios
56 Spreads 8.36 Q3 Q48.69 Q1’12 2.09 main Loans 2.04 countries 1.99 Deposits 1.96 Latin 1.96 Total America 10.67 Retail10.44 (%) Banking 14.72 10.26 Brazil 15.05 10.32Retail 14.23 10.65Banking 14.44 Q1’1114.44 Q2Mexico Q3 1.12 Q4Retail 1.12 Q1’12 1.18 Banking Loans 1.00 0.73 Deposits Chile15.84Total
Slide 59: Sovereign: NPL and spreads
57 Latin Mexico1 Jun Sep Dec America. Chile Mar’12 1.58% NPLs Coverage 2.45% and coverage 1.78% NPL 1.82% ratios1.61% (1) GE234% included 165%since 176%June 176% 2011195% BrazilMar’11 4.85%Jun 5.05% Sep5.05% Dec Mar’12 5.38%Coverage 5.76% 104% NPL102% 3.80%100% 3.65% 95% 3.63% 90%3.85% Mar’11 4.52%
Slide 60: Sovereign: total NPLs and spreads
58 Sovereign. Total NPLs andSpreads coverage and4.15% NPL and 3.76% coverage 3.22%ratios 2.85%(%) 2.46% Spreads 82%Retail 85% 93% Banking 96%2.16 107%2.24 Mar’11 2.22 2.29 Jun Sep 2.36Dec 0.78Mar’12 0.66 0.40 NPL0.46 Coverage 0.46 2.94 2.90 2.62 2.75 2.82 Q1’11 Q2 Q3 Q4 Q1’12 Loans Deposits
Slide 61: Dow Jones Sustainability Index Member 2011/12
Dow Jones Sustainability indesex Member 2011/12
Slide 62: 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: April 26, 2012 By: /s/ José Antonio Álvarez Name:José Antonio Álvarez Title: