Banco Santander, S.a. · BME:SAN
Banco Santander — Merger or Acquisition (April 2019)
19 slides from Banco Santander's merger presentation, Apr 12, 2019
Slide 1: Announcement to acquire minority interests in Santander Mexico
Announcement to acquire minority interests in Santander Mexico 12 April 2019
Slide 2: Disclaimer
2 Disclaimer IMPORTANT INFORMATION FOR INVESTORS ABOUT THE PROPOSED TRANSACTION If it determines to move forward with the proposed transaction, Banco Santander, S . A . (“Santander”) will file with the U . S . Securities and Exchange Commission (the “SEC”) a Registration Statement on Form F - 4 that
Slide 3: Proposed transaction
3 0 0 1 3 Proposed transaction Key t akeaways 2 Rationale of the transaction 4
Slide 4: Proposed transaction
4 Proposed transaction ▪ Voluntary offer to acquire Santander’s minority interest (c.25%) in Santander Mexico ‒ Santander Mexico shareholders to receive 0.337 shares of Santander Group for each Santander Mexico share , equivalent to MXN$32.376 per share (1 ) ‒ Offer represents a 14% implied premium
Slide 5: Indicative timetable
5 Indicative timetable 12 th April 2019 Transaction / Voluntary Offer Announcement Commencement Offer Offer Period Expires Approval by securities regulators in Mexico and the US Offer Settlement April - August 2019 Mid 3Q 2019 End 3Q 2019 End 3Q 2019
Slide 6: Rationale of the transaction
6 1 3 Proposed transaction Key takeaways 2 Rationale of the transaction 4 0 0
Slide 7: Rationale of the transaction
7 Rationale of the transaction Transaction is consistent with Santander Group strategy 1. Mexico has attractive fundamentals 2. Attractive for both Group and M exico shareholders 4. Santander : a leading bank in Mexico that remains key component of Santander’s growth story in LatAm 3.
Slide 8: Transaction is consistent with Santander Group strategy
8 Higher exposure to LatAm as a lever to increase profitability Building the leading European bank in customer experience and profitability, leveraging our scale & digital Accelerating growth with sustainable profitability A region with structural growth and high and increasing profitability US LatA
Slide 9: LatAm offers high structural growth and returns
9 42% 26% 18% 17% 14% 13% 16% 20% 20% 18% Brazil Mexico Chile Top - tier in most countries High potential to increase its contribution (loans market share) LatAm offers high structural growth & returns (RoTE 4 evolution 2018 vs. 2015; local currency) RWAs Loans Deposits Att. Profit 3,4 (as % of tota
Slide 10: LatAm: a high growth and profitability region
10 Key expected levers Medium - term goals Commercial (2018 > Medium - term) High structural growth: Loans to GDP at 49% Focus on customer experience & digitalisation High & sustainable revenue growth (double digit expected CAGR 4 ) Organically deploying more capital (>30% of RWAs in the medium - te
Slide 11: Mexico has attractive fundamentals
11 Source: EIU, OECD, CNBV and Wallstreet research. 2.9% 2.1% 2.0% 2.5% 2.8% 2.5% 3.9% 3.4% 3.3% 3.5% 4.2% 3.9% 2016A 2017A 2018A 2019E 2020E 2021E Real GDP Growth Unemployment Rate Population (mm) 16.5 9.3 8.9 6.9 6.8 49 32 209 131 18 Real GDP Growth and Unemployment (%) GDP Per Capita (US$’000) an
Slide 12: Santander Mexico: one of the leading banks in Mexico
12 21% 14% 14% 13% 8% 7% 4% 3% 2% 2% BBVA Bancomer Banorte Banamex HSBC Scotiabank Inbursa Banco del Bajío Banco Azteca Banregio 20% 14% 12% 11% 8% 7% 6% 5% 3% 3% BBVA Bancomer Banamex Banorte HSBC Inbursa Scotiabank Banco del Bajío Banregio Sabadell 22% 15% 13% 13% 7% 7% 5% 3% 2% 2% BBVA Bancomer B
Slide 13: A key component of our growth story in LatAm
13 13.2% 19.5% 19.5% 20.4% 2015 2016 2017 2018 Corporates 40% Mortgages 21% Public Sector 12% SMEs 11% Consumer 8% Credit Cards 8% 22.1 24.6 25.5 27.2 27.5 30.4 2013 2014 2015 2016 2017 2018 €30.4bn … and is a key component of our growth story in LatAm Total Gross Loans (Constant € bn ) (1) Signific
Slide 14: Santander Mexico delivers consistent profitable growth
14 Santander Mexico delivers consistent profitable growth Key Metrics (2018) +10.5% Net Loans ∆ 7% - 9% Results Target +11.0% Net Income ∆ 9% - 11% 3.18% CoR 3.2% - 3.4% +13.1% Opex ∆ 12% - 14% Investor Day Goals in Mexico 19 - 21% Underlying RoTE 20% 33% ∆ 9% - 11% 2018 Medium - term Goal Loyal/act
Slide 15: Attractive transaction for Santander Group shareholders
15 Slightly positive impact on Group CET1 ROI c.14.5 % EPS neutral Increase our presence in high growth markets Post - Deal (1) Pre - Deal 52% 59% 40% 29% 8% 12% 51% 59% 39% 29% 10% 12% Mexico Other Emerging Mature Markets Net Profit 2018 GDP Net Profit 2018 GDP 4. Attractive for both Group and Mexi
Slide 16: Attractive for Santander Mexico shareholders
16 Opportunity to monetize at a 1 4% premium for Santander Mexico shareholders (1) Implied 22% premium based on past 1 month volume weighted average price Santander offer price is higher than current consensus target price at MXN$30 per share (2) Gaining exposure to a global and well diversified lea
Slide 17: Key takeaways
17 0 0 1 Proposed transaction Key takeaways 2 Rationale of the transaction 3
Slide 18: Key takeaways
18 Key takeaways Expected Timetable Transaction is expected to be completed in the second half of the year. Launch of the offer and the offer itself subject to customary conditions, including regulatory authorizations, absence of any material adverse change in Santander Mexico and the approval at ou
Slide 19: 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: 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