Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Day (April 2019)
43 slides from Banco Santander's investor day presentation, Apr 3, 2019
Slide 1: Santander Investor Day – Opening Presentation
3 April 2019 Santander Investor Day Ana Botín Group Executive Chairman OPENING PRESENTATION
Slide 2: Important Information
Important Information Non-IFRS and alternative performance measures In addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”), this presentation contains certain financial measures that constitute alternative performance measures (“APMs
Slide 3: Important Information
Important Information Forward-looking statements speak only as of the date of this presentation and are based on the knowledge, information available and views taken on such date; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or r
Slide 4: New team delivers 3-year plan, building on our foundations
01 02 03 New team delivers Looking ahead: Key takeaways 3-year plan, building Our three-pillar and medium-term on our foundations plan for increasing goals profitability 4
Slide 5: Our strategy: a relentless focus on earning customer loyalty
Our strategy: a relentless focus on earning customer loyalty… A more committed team… Our aim To be the best open …and supporting our 20 financial services 14 communities platform, by acting responsibly and 2015 2018 …earning earning the lasting Loyal customers customer loyalty (Mn) drives quality lo
Slide 6: Strong execution of our customer loyalty and digital strategy
Strong execution of our customer loyalty and digital strategy by our new team over the last 3 years Deliver all products and Earn lasting customer services through E2E digital channels in a fast and loyalty efficient way Be the bank of choice for our customers, Digitalise delivering superior our Cor
Slide 7: Growth: increase in loyal and digital customers
Growth Increase in loyal and digital customers has delivered sustained top line growth Loyal customers (Mn) Digital customers (Mn) Customer revenues (Constant €Bn2) +44% +93% +24% 45.8 19.9 32.0 37.0 13.8 16.6 2015 2018 2015 2018 3.4x higher revenues 2x higher revenues per 2015 2018 per customer1 vs
Slide 8: Significant improvement in profitability in most geographies
Profitability Significant improvement in profitability in most geographies over the last 3 years RoTE RoRWA 2015 2018 2015 2018 1.20% 1.55% Capital discipline in growth: c.40% of our c.90% of our Organic 0.93% 1.32% 2018 11.7% capital 1 with capital 1 with 2.01% 2.28% RoTE > CoE RoTE > CoE 2.40% 2.1
Slide 9: Strong progress in our capital allocation by segments/portfolios
Profitability Strong progress in our capital allocation by segments/portfolios… From (2015)… …To (2018) Potential for further profitability improvement c.60% of our RWAs c.30% of our generating RoRWA <1.2% RWAs generating RoRWA <1.2% RoRWA (%) % of cumulative RWAs % of cumulative RWAs …but still the
Slide 10: FL CET1 increased by 304bps as the Group accumulated €18Bn of capital
Strength FL CET1 increased by 304bps as the Group accumulated €18Bn of capital FL CET1 Capital generation between December 2014 and December 2018 (bps) 435 35 2018 11.30% 304 214 118 186 2014 8.27% Organic capital Perimeter exc. Dividends +AT1 Organic capital 2015 capital Total capital generation Po
Slide 11: Our GPS has delivered increases of 55% in EPS and 41% in TNAV
Our ‘GPS’ has delivered increases of 55% in EPS and 41% in TNAV per share + cumulative cash DPS, excluding FX EPS growth1 TNAVps + cum. Cash DPS1 TSR accumulated vs peers 2015-18 2015-18 since 2015 Investor Day2 +7% European banks index -12% + 22% + 27% (+55% (+41% ex. FX) ex. FX) (1) Statutory EPS
Slide 12: We have built on our strong foundations
We have built on our strong foundations Scale + Diversification Predictability & Growth Both Across Lowest volatility in-market 10 core markets among peers and global EPS quarter volatility 1,2 scale Europe Developing 9% vs c.140% Santander peers avg. and and Americas Mature Net income increase1,2 1
Slide 13: Group knowledge and scale add value to retail and commercial franchises
SCALE / DIVERSIFICATION Group knowledge and scale add increasing value to our retail and commercial franchises 20153 2018 Attributable profit Corporate and Investment Banking Existing global Wealth Management1 €4.0Bn €4.9Bn businesses Consumer Finance 2 Global Merchant Services Payment related Globa
Slide 14: Scale is increasingly a necessary competitive advantage
SCALE / DIVERSIFICATION Scale is increasingly a necessary competitive advantage “At-scale” banks who can invest in digital and technology and generate growth in customers and revenues have a disproportional advantage # Digital customers1 Digital & Technology expenditure per year Mn customers €Bn SAN
Slide 15: European franchise strongly positioned to improve profitability
Europe SCALE / DIVERSIFICATION European franchise strongly positioned to improve profitability Market share 2 CSAT % Ranking ranking4 Present in the Deliver customer most growth focusing on profitable superior experience 18% #1 #3 banking and best in class markets efficiency 18% #2 #3 Leveraging on
Slide 16: We are the LatAm bank, a unique structural growth opportunity
LatAm SCALE / DIVERSIFICATION We are the LatAm bank, giving us a unique structural growth opportunity Market share 4 CSAT % Ranking ranking6 Large economies c.600Mn total population1 9% #35 #1 with high growth c.3% prospects combined GDP CAGR2 13% #3 #3 Great c.200Mn growth 19% #1 #2 unbanked popula
Slide 17: The US is an attractive market with growing network effects
US SCALE / DIVERSIFICATION The US is an attractive market with increasingly strong and growing network effects with our European and LatAm businesses Largest banking pool 1/3 ($550Bn) c.3% with continued growth world‘s banking pool expected growth p.a. Consistent high 13%-15% Concentrated profitabil
Slide 18: US building blocks in place plus Group scale and customer base
US SCALE / DIVERSIFICATION Building blocks in place plus leveraging Group scale and customer base open strong opportunities SBNA positive evolution Most of the building blocks and increasing integration with Group Attributable Profit 10th by market share in NE Retail 65Mn people, $70,000 GDP per cap
Slide 19: Our existing global businesses make local banks more competitive
SCALE / DIVERSIFICATION Our existing 3 global businesses make our local banks more competitive, leveraging network effects Higher growth High growth, high profitability businesses Growing profitability prospects RoRWA5 RoRWA Medium-term goals ‘15 ‘18 revenue CAGR6 Corporate & Investment 42% of clien
Slide 20: Embedding a common culture and building a more responsible bank
Embedding a common culture and building a more responsible bank Building a Delivering profit with purpose Simple, Personal and Fair Bank Supporting our Percentage of employees who consider the Bank is: communities… 6.3Mn people supported1 63% 69% …promoting 63% 74% financial 273k microentepreneurs s
Slide 21: Attracting and retaining the best and most diverse talent
Attracting and retaining the best and most diverse talent is key to achieving our commercial goals Aim Enablers Priorities Strategic Culture & Engagement To be an 1 Workforce Planning employer of choice Attract & Recruit Chosen for our 2 HR Digital purpose, culture Transformation and the Retain & De
Slide 22: New team delivers 3-year plan, building on our foundations
01 02 03 New team delivers Looking ahead: Key takeaways 3-year plan, building Our three-pillar and medium-term on our foundations plan for increasing goals profitability 22
Slide 23: Our three-pillar plan: improving operating performance
Improving operating performance Our three-pillar plan for Accelerating digitisation: building an open financial increasing services platform profitability Continuing to improve capital allocation 23
Slide 24: Our three-pillar plan: improving operating performance
Improving operating performance Our three-pillar plan for Accelerating digitisation: building an open financial increasing services platform profitability Continuing to improve capital allocation 24
Slide 25: Further leveraging our diversification and scale
Further leveraging our diversification and scale US Europe Accelerating Building the leading growth with European bank in sustainable customer experience profitability and profitability, leveraging our scale & digital LatAm A region with structural growth and high and increasing profitability 25
Slide 26: LatAm: structural growth and high, increasing profitability
LatAm A region with structural growth and high and increasing profitability Medium-term RoTE, % 2018 goals Medium-term goal Market share1,2 12% Gain 20-22% RoTE Loyal/active 28% 31% 2018 customers1 Digital 19% customers1 18Mn c.26Mn +c.45% RoTE # of countries RWA 4 All top 3 in CSAT 1,3 C/I 38% 33-3
Slide 27: US: expected RoTE of 11-13%
US Growing on the back of Group operational leverage, with expected RoTE of 11-13% Medium-term Adjusted 2018 goals RoTE, %4 Medium-term goal Market share1,2 3% Gain 11-13% RoTE Loyal/active 19% 20% 2018 customers1 Digital 8% customers1 0.9Mn 1.1Mn +19% RoTE Customer Peer satisfaction #9 RWA avg rank
Slide 28: Europe: leading bank in profitability and customer experience
Europe Building the leading European bank in profitability and customer experience, leveraging scale & digital Medium-term RoTE, % 2018 goals Medium-term goal Market share1,2 12% Gain 12-14% RoTE Loyal/active 33% 40% 2018 customers1 Digital 11% 13Mn c.17Mn +27% RoTE customers1,3 # of countries RWA A
Slide 29: Our three-pillar plan: accelerating digitisation
Improving operating performance Our three-pillar plan for Accelerating digitisation: building an open financial increasing services platform profitability Continuing to improve capital allocation 29
Slide 30: Our twin-track approach to transformation
Our twin-track approach to transformation Accelerate Transform through high our Core banks growth ventures “Supertankers” “Speedboats” Fast experimentation to serve Be the best for our our banks with new solutions while customers and deliver competing in the profitable growth open market to attract
Slide 31: €20 billion investment in IT and digital
€20 billion investment in IT and digital - improving the customer experience while lowering the cost of delivery Digital & Technology expenditure per year €Bn SAN vs. US as % of 2018 Big Four revenue Peer 1 5.8 9.1% We plan to Peer 2 5.8 7.7% invest 9.9% c.5.0 >€20Bn Peer 3 9.2% 7.3 in the coming Pe
Slide 32: Santander Global Payments: cornerstone of our open platform
Supertankers Santander Global Payments will be the cornerstone of our open financial services platform and loyalty strategy Santander Group position (sector revenues c.9% CAGR1) worldwide in >4Mn SMEs top A10 acquiring volume2 >80Mn cards €500Bn in payments p.a.3 across customers Global Trade Global
Slide 33: Global Trade Services: one global platform
Supertankers A Global Trade Services: one global platform providing integrated best-in-class solutions >170k Our vision World trade growth 1.5x Number of SMEs faster than GDP growth trading internationally Deliver fast & efficient products for SMEs, Higher gross margin Market previously only per cus
Slide 34: Leveraging Getnet to build Global Merchant Services
Supertankers B Leveraging Getnet to build our Global Merchant services Top 10 global acquirers by turnover volume €Bn1 Global Merchant Services Transaction Market share2 in Brazil Specialist 1,500 growth1 (one of largest acquiring market in (Getnet vs market) the world by revenues) Bank Bank +16x 14
Slide 35: One Pay FX: a simple, fair and secure way to send money
Speedboats C One Pay FX: our simple, fair and secure way to send money abroad €90Bn Market revenues1 For our existing customers (One Pay FX) Open market solution (Pago FX) Simple (3-clicks), Fair (competitive pricing) Single global platform “at-scale”: the price and and Safe (Santander-backed) trans
Slide 36: Openbank: Europe's largest full service digital bank
Speedboats Openbank is Europe’s largest full service digital bank, with best in class UX, and a business model which should lead to 1 c.20% ROTE and 25%-35% C/I How will Openbank create value? Today Medium-term Attract, engage and retain customers without a branch network, best user experience and p
Slide 37: Superdigital: Banking without a bank
Speedboats Superdigital: ´Banking without a bank´ Superdigital targeting the 300Mn+ underbanked1 in LATAM Profitable, cost-effective service model for a traditionally unprofitable segment Possible because of Santander´s Easy: 3-step Profitable since local presence, products & services onboarding 201
Slide 38: Global capabilities benefit countries while building an open platform
Global capabilities provided by global procurements, digital, T&O… benefit countries while building an open platform Contributes today to …will deliver for future benefits to Group efficiencies… countries and global businesses €680Mn (2018) EUROPE1 REST TOTAL • €250Mn procurement IT & Ops c.€730Mn c
Slide 39: Our three-pillar plan: continuing to improve capital allocation
Improving operating performance Our three-pillar plan for Accelerating digitisation: building an open financial increasing services platform profitability Continuing to improve capital allocation 39
Slide 40: Levers to drive further improvement in profitability
We are executing the following levers to drive further improvement in profitability, aligned with our strategic plan Improved capital Capital Further alignment allocation: efficiency: Digitisation: of senior more capital to our minimum profitability driving higher revenue management most profitable
Slide 41: New team delivers 3-year plan, building on our foundations
01 02 03 New team delivers Looking ahead: Key takeaways 3-year plan, building Our three-pillar and medium-term on our foundations plan for increasing goals profitability 41
Slide 42: Our strategy will drive loyal customers, EPS and TNAV per share
We are confident our strategy will drive further loyal customers while increasing EPS and TNAV per share Medium-term goals RoTE1 FL CET1 13-15% 11-12% Dividend Efficiency pay-out ratio 42-45% 40-50% Growth Profitability Strength (1) Underlying. 42
Slide 43: 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: