Slide 1: Important information
Important information 2 Banco Santander, S.A. (“Santander”) cautions that this presentation contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are found in various places throughout this presentation and
Slide 2: Agenda
Agenda 3 Group highlights Q1’11 Q1’11 Results - Group - Business areas 2011 Main trends Appendix
Slide 3: Highlights Q1'11
Highlights Q1’11 4 1 2 Solid profit generation Sharp increase in with improved capital ratios in the revenues: quarter: Attrib. profit: EUR 2,108 mill. Core capital: 9.66% 3 4 5 Group’s NPLs Better Further liquidity stabilising: strategic improvement : NPL ratio: 3.61% positioning: +EUR 20 billion S
Slide 4: Solid profit generation
1 Solid profit generation 5 In Q1’11 solid generation of RECURRING RESULTS is maintained with EUR 2,108 million of attributable profit ... Group’s quarterly attributable profit EUR million 2,215 2,230 2,101 2,108 1,635 Q1’10 Q2 Q3 Q4 Q1’11 EPS of EUR 0.2367 in Q1’11
Slide 5: Solid profit generation: diversification advantage
1 Solid profit generation 6 _____ .... underpinned by our diversification advantage which allows growth in a igh percentage of the Group Mature markets Emerging markets Continental Europe Brazil EUR million Constant US$ mill.; continued operations Q1’11 Attributable profit(1) 1,227 +15.7% 1,216 1,05
Slide 6: Solid profit generation. Higher revenues
1 Solid profit generation. Higher revenues 7 Higher activity with spreads recovering Higher basic revenues in the quarter ... % Y-o-y change in constant EUR Constant EUR million. Excluding perimeter and exchange rate impact Loans Deposits excl. Repos Net interest income + fee income + insurance +17
Slide 7: Solvency ratios
2 Solvency ratios 8 Very solid capital ratios, appropriate for our business model and risk profile Grupo Santander Corecapital +0.28 9.66 +0.38 -0.01 +0.21 8.80 Dec’10 Organic Lower RWA Convertible Others* M ar’11 generation bonds Brazil / Qatar (*) Incorporating SEB, disposal of Chile’s minority in
Slide 8: Credit quality
3 Credit quality 9 Lower NPL entries and risk premium in the Group and in the main units ... Net NPL entries(1). Total Group Risk premium(2). Total Group EUR billion % 5.3 2.2 2.1 3.4 3.1 1.5 Q1’09 Q1’10 Q1’11 Q1’09 Q1’10 Q1’11 Net NPL entries(1). Main units Risk premium(2). Main units Base 100: Q1’
Slide 9: Credit quality: NPL ratio stabilising
3 Credit quality 10 _____ .... reflecting an NPL RATIO stabilising at Group level and already lower in all large units, except Spain Group Total Continental Europe % % Spain SCF 5.12 5.23 5.13 3.34 3.37 3.42 3.55 3.61 4.95 4.57 4.63 4.24 3.88 3.59 3.71 Mar’10 Jun’10 Sep’10 Dec’10 Mar’11 M’10 J’10 S’
Slide 10: Credit quality: coverage ratios
3 Credit quality 11 In the last quarter COVERAGE RATIOS remained stable or improved in general terms Group Total Continental Europe % % Spain SCF 128 122 122 74 75 108 111 73 73 71 68 64 65 58 53 Mar’10 Jun’10 Sep’10 Dec’10 Mar’11 M’10 J’10 S’10 D’10 M’11 M’10 J’10 S’10 D’10 M’11 United Kingdom and
Slide 11: Liquidity
4 Liquidity 12 Comfortable liquidity position backed by prudent funds capturing policy Group total: funds capturing and allocation Group’s liquidity ratios EUR billion Loans / Deposits (%) Year 2010 Q1’11 147 20 +75 150 +20 135 72 117 115 0 Dec’08 Dec’09 Dec’10 Mar’11 Allocations Capturing Allocatio
Slide 12: Better strategic positioning
5 Better strategic positioning 13 Active management and enhancement of business portfolio Germany: Base for growth in retail banking beyond consumer business SEB retail 3 / 4 x2 points of sale (up to 400) business 1stconsolidation: 31 January 2011 Poland: IPO success: 95.67% of capital Bank Zachodni
Slide 13: Agenda
Agenda Group highlights Q1’11 Q1’11 Results - Group - Business areas 2011 Main trends Appendix
Slide 14: Grupo Santander Results. Q1'11
Grupo Santander Results. Q1’11 15 Var. / Q1’10 % excl. fx and EUR Mill. Q1’11 Amount % perimeter** Net interest income 7,514 +392 +5.5 -2.1 Fees 2,595 +269 +11.5 +3.5 Trading gains and other* 744 -68 -8.4 -11.9 Gross income 10,852 +592 +5.8 -1.6 1 Operating expenses -4,824 -561 +13.2 +6.5 2 Net oper
Slide 15: Grupo Santander Results: revenues and costs
Grupo Santander Results 16 Solid revenues and differentiated management of costs reflect the different momentum of the various countries 1 2 Gross income Costs by unit EUR million excl. perimeter and exchange rate impact +6% Var. (%) / Q1’10 Var. (%) / Q4’10 10,852 10,260 10,614 10,563 10,613 -0.7 -
Slide 16: Grupo Santander Results: lower provisions
Grupo Santander Results 17 3 Lower PROVISIONS at Group level due to fall in specific ones in all large units Specific provisions Net loan-loss provisions1 EUR million EUR million 2,811 -10% 2,597 2,935 2,436 2,483 2,404 2,188 -9% Q1’10 Q1’11 Q1’10 Q2 Q3* Q4 Q1’11 Use of generic provisions (*) Aplica
Slide 17: Agenda
Agenda Group highlights Q1’11 Q1’11 Results - Group - Business areas 2011 Main trends Appendix
Slide 18: Europe
EUROPE
Slide 19: Continental Europe main units. Q1'11 Results
Continental Europe main units. Q1’11 Results 20 EUR mill. and % / Q1’10 Networks impacted by environment and higher financing cost, but improved trend. Very positive trend of Santander Consumer Finance Gross income: Net operating income: Attributable profit: 3,810 mill.; -2.2% 2,260 mill.; -8.3% 1,0
Slide 20: Santander Branch Network. Q1'11
Santander Branch Network. Q1’11 21 In Q1’11, improved underlying business underpinned by higher gross income, lower costs and specific loan-loss provisions Activity Net operating income / provisions Var. Mar’11 / Mar’10 Net interest inc. / ATAs EUR million % Net operating 691 +7% income 576 588 497
Slide 21: Banesto. Q1'11
Banesto. Q1’11 22 Banesto shows the same underlying results than Santander Branch Network Activity Net operating income / provisions EUR million Var. Mar’11 / Mar’10 Net interest inc. / ATAs Net operating income 384 % 362 +15% 317 312 Provisions 1.44 273 1.31 1.21 1.13 1.05 302 270 Net operating -3%
Slide 22: Lending portfolio in Spain. Performance
Lending portfolio in Spain. Performance 23 Lending portfolio Real estate & constr. purpose. Balances EUR Billion EUR million TOTAL -3.6% Mar’11 Dec’10 Var. 245 236 -2.5% 230 Public sector 10 12 12 Finished buildings 12,680 12,709 -29 Household mortgages 64 61 60 Buildings under constr. 2,119 2,548 -
Slide 23: Foreclosed real estate assets
Foreclosed real estate assets 24 In Q1’11, limited increased in the net amount of foreclosed assets (EUR 156 mill.) and higher coverage (32%), mainly because of land Foreclosed real estate assets Stock structure EUR million EUR million Gross Net amount Coverage amount 7,882 Total 7,509 Finished buil
Slide 24: Portugal. Q1'11
Portugal. Q1’11 25 Active and prudent management amid a sharp business slowdown Activity Net operating income after provisions Var. Mar’11 / Mar’10 EUR million Net interest inc. / ATAs +32% Net operating 192 188 income Provisions 151 1.49 138 132 1.40 1.37 1.39 1.38 Net operating income after 176 pr
Slide 25: Portugal. Macroeconomic environment
Portugal. Macroeconomic environment 26 Economy growing slowly over the Latest events last 10 years H2’10: additional measures to 2010 budget GDP: latest full cycle vs. current crisis 3 / 4 Tax rises (VAT, tax on individuals & legal entities) in June and review of social expenditure in Q4’10 Expected
Slide 26: Portugal: Q1'11
Portugal: Q1’11 27 Portugal accounts for 3-4% of the Group Liquidity position Balance sheet Mar’11 Profit Q1’11 Loans / Deposits + M-L term Deposits (%) financing / Loans (%) 216 101 98 139 136 87 4% 3% Lending portfolio: EUR 30 billion Dec’09 Dec’10 Mar’11 Dec’09 Dec’10 Mar’11 Construction and Expe
Slide 27: Lending portfolio in Portugal. Performance
Lending portfolio in Portugal. Performance 28 Portfolio performance Mortgages Bn. euros First residence -6.4% -1.3% TOTAL 32.8 30.7 30.3 Public sector 0.3 0.3 0.3 93% 7% Second residence Household mortgages 16.2 and other 16.4 16.4 Other loans to Average LTV: 59% individuals 2.3 2.3 2.2 Companies w/
Slide 28: Santander Consumer Finance Q1'11
Santander Consumer Finance Q1’11 29 Sharp profit increase underpinned by the main units Activity Results Volumes Net interest income / Net operating income / provisions provisions (% / ATAs) Var. Mar’11 / Mar’10 EUR million 5.25 Net +37% 4.94 interest 890 920 income Net 825 860 operating 786 2.05 in
Slide 29: United Kingdom
UNITED KINGDOM @& Santander
Slide 30: United Kingdom Q1'11
United Kingdom Q1’11 31 Lower year-on-year revenues and profits very impacted by regulatory changes Attributable profit: £ 419 mill. Net operating income (EUR 491 mill.) £ million Var. Q1’11 / Q1’10 in £ (%) Excl. regulatory impacts* 830 Total 825 805 741 729 Global Gross businesses -6.5% +0.7% inco
Slide 31: United Kingdom Q1'11 Activity and Results
United Kingdom Q1’11 32 Activity Results Mortgages Loans to compan. Deposits(1) Gross income Bill. £ Bill. £ Bill. £ £ million 162 165 1,375 1,380 1,348 153 1,284 1,285 +2% 25 27 147 +6% 5 4 +4% 20 23 +13%(2) Mar’10 Mar’11 Mar’10 Mar’11 Mar’10 Mar’11 Q1’10 Q2 Q3 Q4 Q1’11 Core Non core Net operating
Slide 32: Brazil
BRAZIL @& Santander
Slide 33: Brazil Q1'11
Brazil Q1’11 34 Sharp profit increase spurred by faster growth of activity and basic revenues. Very good performance of retail banking Attributable profit: US$1,001 mill. Net operating income (EUR 732 mill.) Constant US$ million % change in constant US$3,305 3,385 Total 3,067 3,040 3,158 Global busi
Slide 34: Brazil Q1'11 Activity and Results
Brazil Q1’11 35 Activity (1) Results Total loans Mar’11 / Mar’10 Basic revenues Y-o-y % change Constant US$ million Y-o-y % change +28% +18% +22% 5,192 +12.9% +16% +12% 4,927 +8% 4,748 4,676 4,600 +5.9% -5% Individual Consumer Businesses Corporate + Dec’09 Dec’10 Mar’11 customers finance + companies
Slide 35: LATAM ex-Brazil
LATAM ex-BRAZIL @& Santander
Slide 36: Latin America ex-Brazil. Q1'11
Latin America ex-Brazil. Q1’11 37 Sharp profit increase spurred by retail banking: faster growth of activity, improved basic revenues and lower cost of credit Attributable profit: US$ 735 mill. Attributable profit by country (EUR 537 million) % change in constant US$ Constant US$ million Basic reven
Slide 37: Latin America ex-Brazil. Q1'11 Activity and Results
Latin America ex-Brazil. Q1’11 38 Activity (1) Results Total loans Mar’11 / Mar’10 Basic revenues Y-o-y % change Constant US$ million Y-o-y % change +22% +32% +14% +19% +20% +15% 2,104 2,088 +12% 2,059 2,041 +6.2% 1,966 +3.7% -6% -13% Dec’09 Dec’10 Mar’11 M ortgag. Consumer Cards Companies GBM Cards
Slide 38: Mexico. Q1'11
Mexico. Q1’11 39 Change of trend in revenues and lower provisions needs pushed up profit. Furthermore, positive impact from minority interests Attributable profit: US$350 mill. Activity and profitability(1)(EUR 256 mill.) Loans Deposits Net interest inc. / Q1’11 / Q1’10 change in constant US$ provis
Slide 39: Chile Q1'11
Chile Q1’11 40 Similar trends to those in Mexico enable net operating income and profit to grow at a faster pace Attributable profit: US$222 mill. Activity and profitability(1)(EUR 162 mill.) Loans Deposits Net interest inc. / Q1’11 / Q1’10 change in constant US$ provisions (% s/ATAs) +18% 4.32 +14%
Slide 40: Sovereign
SOVEREIGN @& Santander
Slide 41: Sovereign Q1'11
Sovereign Q1’11 42 The franchise profitability was consolidated: improved revenues, commercial activity and credit quality Attributable profit: US$176 mill. Activity and profitability (EUR 128 mill.) Loans Deposits Net interest inc. / Var. Q1’11 / Q1’10 in US$ provisions (% / ATAs) +12% 3.24 3.32 Gr
Slide 42: Corporate Activities
CORPORATE ACTIVITIES @& Santander
Slide 43: Corporate Activities
Corporate Activities 44 More negative contribution because of funding costs and higher coverage of foreclosed real estate assets Attributable profit (Q1’11 vs. Q1’10) Main impacts: EUR million Net interest income -118 Gains on financial transactions -19 Other results and provisions -127 Other items
Slide 44: Agenda
Agenda 45 Group highlights Q1’11 Q1’11 Results - Group - Business areas 2011 Main trends Appendix
Slide 45: Main trends for the coming quarters
Main trends for the coming quarters 46 Better revenues performance Spain NPLs close to the peak and lower specific provisions Moderate impact on commercial revenues and non-performing Portugal loans from the country’s situation SCF Very solid trend for 2011: growth rates between 20%-30% Solid evolut
Slide 46: Agenda
Agenda 47 Group highlights Q1’11 Q1’11 Results - Group - Business areas 2011 Main trends Appendix
Slide 47: Appendix
48 Appendix Group balance sheet Secondary segments results Main units spreads, NPL and coverage ratios
Slide 48: Group Balance Sheet
Group Balance Sheet ander
Slide 49: Main trends of the Group's balance sheet
Main trends of the Group’s balance sheet 50 Retail balance sheet, appropriate for the business nature, of low risk, liquid and well capitalised Balance sheet at March 2011 1 Lending: 59% of balance sheet EUR billion 1,209 1,209 2 Cash, Central Banks and credit Credit institutions: 16% Cash and credi
Slide 50: Secondary segments results
51 Secondary segments results
Slide 51: Retail Banking
Retail Banking 52 Improved trend in gross income and net operating income backed by lower provisions Retail Banking Net operating income Var. Q1’11 / Q1’10 in euros (%) EUR million Excl. fx and perimeter +4% Gross 5,448 5,640 5,621 5,685 +7.9% +0% 5,380 income +6% Expenses +13.2% +6% Q1’10 Q2 Q3 Q4
Slide 52: Global Wholesale Banking (GBM)
Global Wholesale Banking (GBM) 53 Recurring model focused on customers and with a low risk profile Solid revenues generation ... ... based on a diversified product portfolio By customer revenues Gross income (mill. € ) Gross income (mill. € ) -2% 1,364 1,364 Total 1,303 1,337 TOTAL 1,337 1,230 1,252
Slide 53: Global Wholesale Banking (GBM)
Global Wholesale Banking (GBM) 54 Higher profit than in the three previous quarters, thanks to faster growth of customer revenues Net operating income Attributable profit EUR million EUR million -8% +9% -10% 1,023 922 943 +10% 865 714 848 641 586 584 548 Q1’10 Q2 Q3 Q4 Q1’11 Q1’10 Q2 Q3 Q4 Q1’11
Slide 54: Asset Management and Insurance
Asset Management and Insurance 55 High contribution to the Group via revenues and profits: 10% revenues of the Group’s operating areas (+20% / Q1’10) Asset Management Insurance Total PBT+ paid fees to networks: EUR 773 mill. Total revenues / Managed assets Assets (*) Var. / Q1’10 (const. € ) EUR bil
Slide 55: Main units spreads and NPL ratios
56 Main units spreads and NPL ratios
Slide 56: Continental Europe. Main units spreads
Continental Europe. Main units spreads 57 (%) SAN Branch Network Banesto Retail Banking 2.60 2.04 1.87 1.89 1.95 2.20 2.00 1.92 1.99 2.03 2.10 1.90 2.02 1.94 1.83 1.83 1.65 1.67 1.41 1.47 0.50 0.10 0.04 0.06 0.05 0.18 -0.35 -0.51 -0.52 -0.36 Q1’10 Q2 Q3 Q4 Q1’11 Q1’10 Q2 Q3 Q4 Q1’11 Loans Deposits T
Slide 57: Continental Europe. NPLs and coverage ratios
Continental Europe. NPLs and coverage ratios 58 Banco Santander* Banesto 66% 61% 61% 54% 49% 61% 58% 60% 54% 52% 3.61% 3.65% 3.79% 4.24% 4.68% 3.13% 3.49% 3.83% 4.11% 4.31% Mar’10 Jun Sep Dec Mar’11 Mar’10 Jun Sep Dec Mar’11 NPLs Coverage NPLs Coverage Santander Consumer Portugal 108% 111% 122% 128%
Slide 58: United Kingdom. Spreads and NPL ratios
United Kingdom. Spreads and NPL ratios 59 (%) Spreads Retail Banking NPLs and coverage 2.20 2.28 2.34 2.05 2.13 (*) 1.99 1.99 2.03 2.03 2.04 46% 46% 48% 46% 45% -0.06 -0.14 -0.17 -0.25 -0.30 1.88% 1.85% 1.77% 1.76% 1.75% Q1’10 Q2 Q3 Q4 Q1’11 Mar’10 Jun Sep Dec Mar’11 Loans Deposits Total NPLs Covera
Slide 59: Spreads main countries Latin America
Spreads main countries Latin America 60 (%) Retail Banking Brazil Retail Banking Mexico 16.13 16.23 15.81 15.42 15.84 12.08 11.42 11.23 10.98 10.67 15.26 15.29 14.73 14.29 14.72 10.03 9.50 9.20 8.93 8.58 0.87 0.94 1.08 1.13 1.12 2.05 1.92 2.03 2.05 2.09 Q1’10 Q2 Q3 Q4 Q1’11 Q1’10 Q2 Q3 Q4 Q1’11 Loan
Slide 60: Latin America. NPLs and coverage ratios
Latin America. NPLs and coverage ratios 61 Brazil Mexico 100% 98% 98% 101% 104% 268% 257% 199% 215% 234% 5.04% 5.01% 4.97% 4.91% 4.85% 1.86% 1.77% 2.20% 1.84% 1.58% Mar’10 Jun Sep Dec Mar’11 Mar’10 Jun Sep Dec Mar’11 NPLs Coverage NPLs Coverage Chile 99% 97% 94% 89% 89% 3.36% 3.31% 3.58% 3.74% 3.80%
Slide 61: Sovereign. Spreads and NPL and coverage ratios
Sovereign. Spreads and NPL and coverage ratios 62 (%) Spreads NPLs and coverage 2.88 2.95 2.94 2.66 2.61 67% 72% 75% 82% 64% 2.04 2.08 2.16 1.94 1.96 0.94 0.99 0.62 0.78 5.14% 5.11% 4.80% 4.61% 4.15% 0.53 Q1’10 Q2 Q3 Q4 Q1’11 Mar’10 Jun Sep Dec Mar’11 Loans Deposits Total NPLs Coverage
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 29, 2011 By: /s/ José Antonio Álvarez Name: José Antonio Álvarez Title