Banco Santander, S.a. · BME:SAN
Banco Santander — Merger or Acquisition (February 2012)
34 slides from Banco Santander's merger presentation, Feb 28, 2012
Slide 1: Form 6-K Banco Santander, S.A.
Table of Contents FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of February, 2012 Commission File Number: 001-12518 Banco Santander, S.A. (Exact name of registrant as
Slide 2: Table of Contents
Table of Contents Banco Santander, S.A. TABLE OF CONTENTS Item 1 Power point presentation regarding the merger of bank Zachodni WBK and Kredyt Bank in Poland.
Slide 3: Merger of BZ WBK and Kredyt Bank, February 2012
Table of Contents Merger of Merger of BZ WBK and Kredyt Bank February 2012
Slide 4: Disclaimer
Table of Contents Disclaimer statements current looking political, Santander’s mean in person contained the securities etc.”) within not regulation compliance sale any be merger connection Investors this offered presentation. relevant other orthat of presentation Article subscription at will expecta
Slide 5: Description of the transaction, strategic rationale, financial impact, summary
Table of Contents Description of the transaction Strategic rationale Financial impact The New BZ is a very compelling story Summary
Slide 6: Description of the transaction
Table of Contents Merger PLN result abelow Santander Assumes maximum 20.8 of 10% ofthe 4,18 bn increases BZin of transaction, equivalent WBK the EUR/PLN 5%combined ofits and the stake to the Kredyt combined throughout EUR shareholding entity by no Bank 5 bn after more entity all The – the Descriptio
Slide 7: Merger agreements and governance considerations
Table of Contents Merger distribute KBC and ofSantander KBC BZ WBK TFI Funds includes and Kredyt In governance theBank context – Other of rights thisconsiderations/ granted agreement, to KBC Santander Agreements (amonghasothers also KBCagreed Supervisory will provide to acquire board funding KBC’s r
Slide 8: Overview of combined entity
Table of Contents Overview 16,729 Employees KB Balance of4,963 Kredyt Sheet 9,383 Bank (4Q 14,346 combined 2011)14,346 17,912—Customer with Other—Branches BZ WBK Combined Deposits 373 526 28,043 PLN899m46,829 899—Clients Kredyt74,872—Shareholders’ Bank 1.1m BZ WBK 2.4mCombined 3.5m 3,066 3.5mEUR—Tot
Slide 9: Expected timetable
Table of Contents Expected both approval timetable l 1Q 2 1Q 2012 2Q 2012 3Q 2012 4Q 2012 Signing of agreements Merger announcement Preparation of the merger plan together with all filing attachments, merger plan agreed by
Slide 10: Strategic rationale
Table of Contents Description of the transaction Strategic rationale Financial impact The New BZ is a very compelling story Summary
Slide 11: A strategically compelling transaction
Table of Contents A strategically grow close Significant networks to in 10% a (A) stable, cost ??The Net compelling and underpenetrated Loans new revenue to entity transaction Deposits. synergies, will and have 84% large Increased leveraging a adjusted strong market presence balance on that forSanta
Slide 12: Increased presence in Poland, an attractive market
Table of Contents 1 Increased 118 (A) Cyprus, GDP 113 Czech EU in presence US$ NewRep., atMember 2005 Estonia, in Poland prices. States Hungary, 10(B) (ex Poland EU Poland) Latvia, 15isincludes an(C) Lithuania, attractive 110Austria, 103market Slovakia, EU-15 Belgium, as Member itSlovenia. offers De
Slide 13: Increased presence in under-penetrated banking market
Table of Contents 1 Increased business assets… its Source:EIU private Indonesia sector 86% Bulgaria presence asRomania (% Hungary of of 24 Loans/GDP GDP). February inRepublic 73% Poland 15% 2012, for 11 Hungary Czech selected …and Worldbank, Rep. ranks Malaysia emerging 53% well Raiffeisen 56% Net i
Slide 14: Improved critical mass: market shares
Table of Contents 2 Improved TOTAL ING Enhancing strong Bank presence DEPOSITS 90 Bank critical Banks inBPH amass selected 6.2% Mortgages 50 12 Corporate 3.4% The number 2.7% 9.6% dealLoans of creates 5.8% Pekao core incl. 8.5% 209 markets the6.3% top Large Significantly 3Source:Company 2.0% bank Co
Slide 15: Improved critical mass: distribution network
Table of Contents 2 Improved on 1,000 Pomorskie Cz3stochowa7 Bank number Southwest 281 Gda3sk ofGDP branches 71 critical and 70 32 10 per Millennium 32 West, Lubelskie capita mass reported Large Kredyt 13 by 25Enhancing 92 region due 440 9 33 Bank 8 to 10 24 Sized SNL Handlow Combined 6Branches 92 d
Slide 16: Significant synergy potential: cost efficiency
Table of Contents 14 3 Significant 47% 41% 34% Getin synergy Noble potential: PKO BZ costs WBK High Pekao potential BREtoING improve Bank efficiency Handlowyleveraging Millennium onKredyt BZ WBKBank cost BPHmanagement Bank Source:Company expertise Costdata / Income Ratio (9M 2011) 66% 63% 60% 61% 58
Slide 17: Significant cost synergy potential
Table of Contents 15 3 practices: best 322m improve Significant (e.g. cost joint efficiencies improvements synergy potential: purchasing) base) before ??Apply costs taxSantander’s ??Optimization Key Cost Synergies cost of management combined Drivers branch best ??Potential practices network to by im
Slide 18: Revenue synergy potential: market shares
Table of Contents 16 32Significant 2011) 6% Mortgages .Market 3% 2.7% Consumer shares synergy 3% 2(1H SME . 7% potential: 2011) 2.4% Loans Net 2Corporate revenues .F&C . 4% Income 2 1.9% KB Leasing market ./ 7% Avg. Mutual 5%share Assets 2 7%Corporate below Net 8%Interest .“natural . . Banks 1 1 Inc
Slide 19: Significant revenue synergy potential
Table of Contents 17 3 Significant productivity Management improvement under-penetrated: business through synergy increase before potential: tax improvements in to KBrevenues increase revenueKey market ??Insurance base) Revenue ?share trading and & Synergies asset income pricing management Drivers l
Slide 20: Synergy potential: business volumes
Table of Contents Significant Business SynergiesVolume synergy (%) potential 2015E 2015E 18 3 After +75% synergies, 1.9% 3.48 there 2.0x would 1.1%still 1.66be1.09 roomKB forbefore improvement KB withdue Synergies to the “market BZ KB power” with Synergies of the combined BZ KB Pre- KBKB andPost- BZ
Slide 21: Financial impact
Table of Contents Description of the transaction Strategic rationale Financial impact The New BZ is a very compelling story Summary
Slide 22: Valuation
Table of Contents 20 Valuation Pekao KB): PLN15,75 12.7x PKO@ 15.6x BP underpinned PLN15,75 ING 14.1x Bank 13.5x with by BREsynergy syn. 12.8x Bank Source: 12.8x potential Citi Handlowy Bloomberg 12.4xFair 12.3x value Kredyt as10.9x of of27 transaction Bank 6.9x February Kredyt @ Millennium multiple
Slide 23: Financial impacts
Table of Contents Financial business entity Based income BZ on for 1,273 business impacts: WBK KB 1,477 including shareholders’ plan the1,741 deal elaborated synergies is 2,002 attractive EPS2,308 by (3%) Shareholders. by plan 3% all6% Kredyt financial accretion Assuming Bank metrics Santander net i
Slide 24: The New BZ is a very compelling story
Table of Contents Description of the transaction Strategic rationale Financial impact The New BZ is a very compelling story Summary
Slide 25: The new bank would reinforce its position in distribution network
Table of Contents 23 TheNoble Getin new bank Bankwould BPH BRE clearly Bank reinforce Citi Handlowy its position Large as Top Banks 3 inMedium-Sized terms of distribution Banksnetwork Note: Latest … 1,201 available 1,000data, x 2 899 excluding 440 439 agencies 303 287 281 149 PKO BP Bank Pekao Combi
Slide 26: Potential to improve commercial performance
Table of Contents .with its “natural potential level” to improve with sizeable its commercial gap and improvement performancepotential and accelerate (A) Excludes 24 revenue agencies growth (consumer loans,SME loans, leasing, among others) Market Shares Pro-forma (%) ¹ (A) Market share below
Slide 27: Proven track record of growth and profitability
Table of Contents We have growth 2005 quarters) shareholders 2006 and atoproven 2007 profitabiliy the (B)quarterly 2008 ROE track2009 for Net record average BZ income 2010 WBK of 2011 of efficiency (2004 equity for2005 2011 =calculated and 100) 2006 excluding profitability, ROE(A) 2007based 2008 one
Slide 28: Goal of 15-20% annual growth in net income
Table of Contents Our goal 1,566 2011A is to2012E deliver2013E annual2014E growth 2015E rates Source: of 15-20% Based overonthe business next four plan 26elaborated years Net Income by shareholders (PLN million) EUR 734 m 3,069 Synergies 18% CAGR KB Standalone 2,597 BZ Standalone 2,118 1,752
Slide 29: The new bank will trade at attractive valuations
Table of Contents The new upside 2012 (A) potential bank Basedwill on vs.trade proforma € 16.0m pro-forma 12.5x transaction 12.5x at attractive valuations top players 27 multiples (€5,0bn) 63% upside given and potential full itsrun growth rate vs. synergies and 11.2x upside top of players potential
Slide 30: Improved free-float and liquidity
Table of Contents With 364 16,873 it below PKO significantly 3,356 10%, BP Bank Medium-Sized and improved places Pekao the Combined free-float Banks remainder Market BRE and in the Bank liquidity cap. market ING Large 28Bank toBanks Free investors, Citi float Source: Get (PLN plus Bank Bankier.pl 9.
Slide 31: Summary
Table of Contents Description of the transaction Strategic rationale Financial impact The New BZ is a very compelling story Summary
Slide 32: Summary
Table of Contents Summary mass: balanced Kredyt neutral valuation creation The Bank diversified The combined bymerger ofeliminating thecommercial 3rd of entity BZ largest duplications will WBK Polish bank bewith a unique as bank Kredyt aand result and investment leveraging Bank positioning of Kredyt
Slide 33: Sustainability indexes
Table of Contents CQ Pei8hity indexes | H ustainabill indexes " ¥ >
Slide 34: Signature
Table of Contents 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: February 28, 2012 By: /s/ José Antonio Álvarez Name: José Antonio Ál
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