Banco Santander, S.A. · BME:SAN
Banco Santander — Investor Presentation (September 2024)
59 slides from Banco Santander's investor presentation, September 2024
Slide 1: Institutional Presentation H1'24
Strategic and Financial Analysis. Financial Division Institutional Presentation H1’24
Slide 2: Index
INDEX Our business Group H1’24 results Final Links to model and structure and & activity remarks public strategy businesses materials
Slide 3: Our business model and strategy
01 Our business model and strategy
Slide 4: Santander, a leading financial group
Santander, a H1’24 Highlights leading financial group Total assets (€ bn) 1,786 Customer loans (€ bn excluding reverse repos) 1,027 Customer deposits + mutual funds (€ bn excluding repos) 1,171 Branches 8,285 H1'24 Net operating income (pre-provision profit) (€ mn) 18,137 H1'24 Attributable profit (
Slide 5: The Santander Way
The Santander Way Who we are and what guides us 5
Slide 6: Santander business model
Santander business model Our business model Business based on unique Digital bank In-market Geographical competitive advantages with branches & Global is the foundation for Balance sheet generating value for our shareholders Second year of our phase of value creation 6
Slide 7: Customer focus
01 Customer focus Total customers Digital customers We have grown our customer base in 168 mn 57.0 mn recent years, with (+4 mn) (+9%) balanced growth by business and regions Active customers 101 mn +9% Transactions per active customer 59% Products/services digitally available (+2 mn) Note: YoY chan
Slide 8: Customer focus
01 Traditional Digital Customer focus banking banking Internet, Branches, mobiles, ATMs, tablets, retail agents, … smartphones, smartwatches,… To bring all our customers to a common operating model, while converging to a Collaborative spaces and increased digital capabilities common technology Branc
Slide 9: Scale
02 Scale Retail Retail & Commercial Banking Consumer Digital Consumer Bank ONE Santander: Corporate & Investment Banking CIB ONE Santander Five global businesses Wealth Wealth Management & Insurance across our regions Payments Payments DCB North South Europe Europe America America 9
Slide 10: Scale
02 In-market scale Market shares Europe North America Scale 4% Auto lending 9% Loans 7% DCB 2% Deposits Deposits Europe 17% 12% Loans Loans 13% Loans South America 13% Deposits 9% Deposits 12% #1 European Deposits 17% Consumer Loans Bank Our unique combination 18% 9% Loans 20% Deposits of in-market
Slide 11: Diversification
03 Customer loans Customer deposits Diversification By product/business Other By product/business Other 5% 6% CIB CIB 14% Retail: 14% Retail: 32% home 33% individuals mortgages demand Consumer 13% deposits 21% Consumer 6% 8% 8% Retail: 16% Retail: 14% 10% other individuals Geographical Retail: indiv
Slide 12: Diversification
03 Simple, transparent and easy to analyse balance sheet Diversification Medium-low risk profile Strong liquidity ratios Strong solvency ratios well above requirements Focus on capital efficiency and asset rotation Rock-solid balance sheet with Stable and diversified Highly collateralized and conser
Slide 13: In summary
Reliable risk-return profile Lower volatility of results In summary Differential Pre-provision profit / loans and cost of risk EPS volatility2 Our results show that our business model SAN 12% 1.90%1.89% 1.80% 1.80% 1.70% 1.85% 1.91% 1.60% 1.61% 1.65%1.65% works. It is based on NL 39% 1.25% 1.21% 0.6
Slide 14: Our three tenets
Our three tenets Delivering double-digit value creation, on average Think Value through-the-cycle A new phase of profitability and growth underpinned Building a digital bank with branches with well targeted by three tenets Think Customer products and services to grow our customer base Best customer
Slide 15: Environmental, Social and Governance
Environmental, Social and Governance Green finance raised and facilitated Socially responsible investments (AuMs) Financial inclusion (# People) We continue to make progress on H1’24 €123.4bn €74.0bn 2.8mn our ESG agenda 2025 targets €120bn €100bn 5mn More information available at www.santander.com/
Slide 16: Group structure and businesses
02 Group structure and businesses
Slide 17: Group organizational structure
Primary segments (Global Businesses) Group Retail Consumer CIB Wealth Payments organizational structure from January 2024 Secondary segments Europe DCB Europe North America South America Group functions and Corporate Centre activities General Talent & Investment Secretariat1 Technology Human Financi
Slide 18: Global Businesses
@ Santander Global Businesses 18
Slide 19: Retail & Commercial Banking
Retail & Commercial Banking ‘A new global business integrating all our retail and commercial banking businesses globally to better serve our customers, improve efficiency and drive value creation’ H1’24 Highlights Strategic priorities Customer loans (€ bn) 619 Customer deposits (€ bn) 637 ▪ Implemen
Slide 20: Digital Consumer Bank
Digital Consumer Bank ‘Global leader in auto financing and digital consumer activities’ H1’24 Highlights Strategic priorities Customer loans (€ bn) 213 ▪ Expand our leadership in consumer lending across our footprint (e.g. #1 finance New business volumes (€ bn) 46.7 company in Europe and LatAm, top
Slide 21: Corporate & Investment Banking
Corporate & Investment Banking ‘Santander CIB supports corporate and institutional clients, delivering tailored services and value-added wholesale products suited to their complexity and sophistication’ H1’24 Highlights Strategic priorities Customer loans (€ bn) 144 ▪ Our aim is to become a focused
Slide 22: Wealth Management & Insurance
Wealth Management & Insurance ‘We want to become the best wealth and insurance manager in Europe and the Americas’ H1’24 Highlights Strategic priorities Total assets under management (€ bn) 480 1 ▪ Continue building our global platform leveraging the connectivity of our teams Gross written premiums
Slide 23: Payments
Payments ‘One-of-a-kind paytech business that offers innovative payment solutions’ H1’24 Highlights Strategic priorities EBITDA margin 20.1% ▪ We are a one-of-a-kind paytech business backed by Santander ▪ Helping our customers prosper and accelerate their growth through a one-stop shop, providing so
Slide 24: Cards Payments
Cards Payments ‘Provide exceptional payments experiences, fostering customer loyalty and leveraging transactional data to enhance profitability’ H1’24 Highlights Strategic priorities # cards (mn) 104 ▪ Expand our business, in a profitable and sustainable way, developing credit and lending business,
Slide 25: Secondary segments
@ Santander Secondary segments 25
Slide 26: Europe
Europe 'We continue to accelerate our business transformation to achieve higher growth and a more efficient operating model' H1'24 Highlights Strategic priorities Branches 3,033 ▪ Grow the business, by acquiring new customers, increasing customer loyalty and Employees 67,633 further developing fee g
Slide 27: Digital Consumer Bank Europe
Digital Consumer Bank Europe ‘Europe’s consumer finance leader: solid business model, geographic diversification and leading market shares in auto/mobility finance and consumer’ H1'24 Highlights Strategic priorities Branches 327 ▪ Secure leadership positions in global digital consumer lending, both
Slide 28: North America
North America 'We provide a full range of financial services with a particular focus on Retail, Private, Corporate and Investment Banking' H1'24 Highlights Strategic priorities Branches 1,765 ▪ Remain focused on executing the transformation of our Retail and Consumer businesses in both countries. Th
Slide 29: South America
South America 'Moving forward to become the primary bank for our customers and the most profitable franchise in each country in which we operate in the region. while promoting synergies across our global and regional businesses' H1'24 Highlights Strategic priorities Branches 3,160 ▪ In Retail, we co
Slide 30: Group functions and Corporate Centre activities
Group functions and Corporate Centre activities • Global T&O strategy • HR strategy • Risk management and compliance • Corporate governance and internal control • Our brand 30
Slide 31: Technology and Operations (T&O)
Technology and Operations (T&O) ‘The T&O mission is to help Santander Global Businesses in their digital transformation, enabling them with a state-of-the-art Global Platform, with innovative capabilities and zero back office’ Global T&O capabilities are key for our digital transformation Composed o
Slide 32: HR strategy: Our aim is to be an employer of choice
HR strategy: Our aim is to be an employer of choice 'Focus on employee engagement, leveraging our SPF culture to retain and attract the best talent' Our corporate management The SPF culture is based on our 5 corporate behaviours evaluation model 209,553 Employees (Jun-24) Continuous Employee Listeni
Slide 33: Risk, Compliance & Conduct management
Risk, Compliance & Conduct management Proactive management, customer-centric, with the goal of maintaining our medium-low risk profile A Risk, Compliance & Conduct management model that relies on: Common Risk Principles, A 3 lines of defence model with Advanced management tools that help us carry ou
Slide 34: Corporate governance and internal control
Corporate governance and internal control ‘As a responsible bank, we have clear and robust governance to ensure a long-term sustainable business model’ Composition of the board of directors, Jun-24 Board committees Executive Diversified and well-balanced shareholder base 20.0% Audit Non-executive di
Slide 35: Corporate governance and internal control
Corporate governance and internal control 'Best practices on robust governance are channelled to all subsidiaries' Group-subsidiary governance model Group Subsidiary B The Group-subsidiary governance model enhances control and oversight through: Board of Directors Subsidiary A A Presence of the Grou
Slide 36: Santander brand
Santander brand 'Our brand embeds the essence of the Group's culture and identity' Santander is one of the most valued brands in the world 3 rd best global retail bank brand by Interbrand’s Best Global Brands Ranking, 2023 As one of our most important strategic assets, our brand helps us connect wit
Slide 37: H1'24 results & activity
03 H1'24 results & activity «> Santander
Slide 38: Record H1'24 results with all global businesses contributing
Record H1’24 results with all our global businesses contributing to our 2024 targets Q2’24 H1’24 attributable profit attributable profit Another record quarterly profit, including €0.5bn net one-time charges; recurring Q2 profit of €3.7bn €3.2bn €6.1bn +20% +16% Efficiency RoTE Strong operating perf
Slide 39: Double-digit YoY profit increase driven by net operating income
Double-digit YoY profit increase driven by strong growth in net operating income, supported by customer revenue and efficiency improvements ex. Argentina P&L Current Constant Current Constant € million H1'24 H1'23 % % % % NII 23,457 20,920 12 11 11 10 Net fee income 6,477 6,103 6 6 8 7 Excellent bus
Slide 40: A record H1'24 puts us on track to exceed our 2024 targets
A record H1’24 puts us on track to exceed our 2024 targets … Upgraded H1’24 2024 targets 2024 targets Mid-single High-single Revenue1 +9% digit growth digit growth UPGRADED Efficiency 41.6% <43% c.42% UPGRADED CoR 1.2% c.1.2% CONFIRMED FL CET1 12.5% >12.0% after Basel III implementation CONFIRMED 16
Slide 41: Backed by execution of ONE Transformation
… backed by execution of ONE Transformation, improving both revenue and costs … Global & Network Global Tech FY’22 ONE Transformation businesses capabilities & others H1’24 45.8% -266bps -87bps -71bps 41.6% • Product simplification: 6% fewer • Multi-Nationals: +3% YoY • Global approach to technology
Slide 42: Five global businesses leveraging global scale
… and by our five global businesses, leveraging our global scale to accelerate profitable growth Revenue Contribution to 2025 RoTE C/I RoTE H1’24 (€bn) Group revenue target 16.3 39.5% 18.1% Retail +12% 52% -4.8pp +4.3pp c.17% 6.4 40.6% 13.0% Consumer 20% -2.7pp +0.4pp >14% +7% 4.2 43.4% 19.1% CIB 13
Slide 43: Retail: 12% revenue growth with costs flat
Retail: delivering 12% revenue growth with costs flat, by deploying global platforms Execution of the strategy H1’24 financials Driving growth and efficiency on the back of our new model Loans Deposits CoR and proprietary technology €619bn €637bn 1.03% Customer New digital onboarding and simplified
Slide 44: Consumer: strong improvement in operational leverage
Consumer: strong improvement in operational leverage and better deposit cost-to-serve Execution of the strategy H1’24 financials Transforming into a best-in-class, global business and Loans Deposits CoR operating model €213bn €122bn 2.17% Customer Fully-digital financing experience available for our
Slide 45: CIB: US investments drove 12% fee growth
CIB: US investments drove 12% fee growth and strong RoTE of 19% Execution of the strategy H1’24 financials Playing to our strengths to better serve our corporate Loans Deposits CoR customers and institutions €144bn €130bn 0.15% Customer Significant progress broadening our product offering in the US
Slide 46: Wealth: network collaboration fees up 12%
Wealth: network collaboration fees up 12% and profitability over 80% Execution of the strategy H1’24 financials Accelerating our customers’ connectivity with our global Net new Net sales Gross written product platforms money (PB) (SAM) premiums €11.9bn €8.9bn €6.1bn Customer Improved customer relati
Slide 47: Payments: PagoNxt open market revenue above 22%
Payments: PagoNxt open market revenue above 22% and EBITDA margin over 20% Execution of the strategy H1’24 financials Seizing a growing opportunity by capturing scale through TPV Active customers Turnover global platforms Getnet Ebury Cards €108bn 23k €159bn Customer Invisible Payments providing the
Slide 48: Revenue growth and buybacks drove EPS up 19%
c.10% revenue growth and share buybacks drove EPS up 19% and a 12% increase in TNAVps + Cash DPS RoTE EPS TNAVps + Cash DPS % Annualizing the impact of the € cents € per share Cash DPS: €17.6 cents temporary levy +134bps +19% +12% 16.3 36.7 5.11 15.0 30.8 15.9 4.94 14.5 4.57 H1'23 H1'24 H1'23 H1'24
Slide 49: Final remarks
04 Final ce remarks «> Santander
Slide 50: Progress towards our 2025 targets
Making progress towards our ID targets in our new phase of value creation for our shareholders H1’24 vs. 2025 ID targets Strength Disciplined capital allocation FL CET1 RWAs with RoRWA > CoE 12.5% TNAVps + DPS 84% >12% c.85% +12% Double-digit growth average through-the-cycle Shareholder remuneration
Slide 51: All-time high profit, upgrade of 2024 targets
All-time high quarterly and half-year profit, driving an upgrade of our 2024 targets Upgraded H1’24 2024 targets Record profit supported by an outstanding P&L from top to bottom High-single Excellent business dynamics: record NII, fees, revenue and net operating income Revenue1 +9% digit growth ONE
Slide 52: Links to public materials
05 Links to public materials «> Santander
Slide 53: Links to Grupo Santander public materials
Links to Grupo Santander public materials For additional information on the Group, please click on the images or icons below H1’24 financial results Other information Financial report Earnings presentation Series Shareholders report 2023 Digital annual review Global business Press release Fixed inco
Slide 54: Glossary
Glossary «> Santander
Slide 55: Glossary - Acronyms
Glossary - Acronyms • A2A: account to account • ESG: Environmental, social and governance • pp: Percentage points • ALCO: Assets and Liabilities Committee • EV: Electric Vehicle • Ps: Per share • AM: Asset management • FL: Fully-loaded • QoQ: Quarter-on-Quarter • AuMs: Assets under Management • FTE:
Slide 56: 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 57: 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 58: 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 59: 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:
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