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FIXED INCOME INVESTOR PRESENTATION

November 2009

Important information
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 include, without limitation, statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates, and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the Securities and Exchange Commission of the United States of America (the SEC), could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forwardlooking statements. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever. No offering of Securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000. Note: Statements as to historical performance, historical share price or financial accretion are not intended to mean that future performance, historical share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast.

Agenda

Santander at a glance
2009 Performance Appendix: markets financing Other appendixes

Grupo Santander at a glance


Today Santander is one of the largest financial groups worldwide

Market cap.: EUR 89,700 mill. # 6 worldwide


(# 12 in 2006)

# 1 in the Eurozone

2008 profit: EUR 8,876 mill. # 3 worldwide


(# 5 in 2007)

# 1 by international branch network: ~14,000 # 1 by number of shareholders: 3.1 million


Note: Data as of September 30, 2009. Market capitalisation as of October 30, 2009

Santanders Model Our strategy


1 Critical mass in our core markets 1.

2. 2 High diversification by geographies and businesses: focus on retail


banking

3. 3 Solid retail banking model. Commercial focus (expand the front),


continue efficiency improvement (reduce the back) and a prudent risk policy.

4 Balance sheet strength: a distinguishing mark of Santander Group 4.

5. 5 Active management of business portfolio: improving our


strategic positioning (In 2007: ABN AMRO; 2008: A&L, B&B; 2009: Sovereign)

Santanders model

1
Mexico
Ranking1: 3rd Mkt. share1: 15% Branches: 1,087 Customers: 8.6 mill.

Critical mass in our core markets


UK3
Ranking1: 6th Mkt. share1: 10% Branches: 1,331 Customers: 25 mill.

Brazil6
Ranking1: 3rd Mkt. share1: 10% Branches: 3,609 Customers: 21 mill.

Spain2
Ranking1: 1st Mkt. share1: 17% Branches: 4,773 Customers: 11.2 mill.

Chile
Ranking1: 1st Mkt. share1: 20% Branches: 502 Customers: 3.2 mill.

Portugal2
Ranking1: 4th (5) Mkt. share1: 10% Branches: 773 Customers: 2.4 mill.

Santander Consumer4
Branches: 308 Dealers: > 100,000 Customers: 13.0 mill.
Data as of 30/09/2009

(1) Loans + deposits (balance sheet funds) + mutual funds (2) Santander Consumer not included (in Spain: 3.6 million customers and 79 branches; Portugal: 0.3 million customers and 7 branches) (3) Including new acquisitions ( B&B and A&L). Ranking 3rd by deposits (4) Present in 17 countries. Loyalty cards not included under customers (5) Third largest private bank in Portugal and first by profit in 2008 (6) Excluding public-sector banks.

Santanders model

Strong geographic and business area diversification: retail banking focus


Continental Europe: Commercial Units
Attributable profit* 9M09

United Kingdom
Mill.

+49%

235

250 252

254

372

419 374

Mill.

1,013 1,029

911

875

+11% 1,036 995 1,014

Q1'08 Q2

Q3

Q4 Q1'09* Q2* Q3*

EUR Mill. and %

(*) Perimeter Q1: +60 mill.; Q2: +84 mill.; Q3: +75 mill.

Europe Commercial Units


Q1'08 Q2 Q3 Q4 Q1'09* Q2* Q3*
(*) Perimeter Q1: -1 mill.; Q2: +10 mill. Q3: +38 mill.

Brazil
UK
constant US$ Mill.

SAN Network+ Banesto

+42%

16%
Brazil

630 574

573

635 491

717

815

Continental Europe: GBM and other


Mill.

27%
SCF+Portugal

10%
+77%

20% 15%
Other Latam

Q1'08 Q2

Q3

Q4 Q1'09 Q2

Q3

361 197 104 178

253

373

314

12%
Global Europe

Other Latam
constant US$ Mill.
Venezuelas disposal

-20%

591 588

643

582 606

Q1'08 Q2

Q3

Q4 Q1'09 Q2

Q3

531

512

Q1'08 Q2

Q3

Q4 Q1'09 Q2

Q3

(*) Over 9M09 operating areas attributable profit excluding the negative EUR 29 million from Sovereign.

Santanders model 3
Efficiency as an objective: we believe in improving our efficiency, year after year
Group efficiency ratio*
In percentage

Efficiency ratio* Group total: 41.3% (-3.0 p.p.)


Change o/ 9M08

66.1 64.1 61.4 59.7 56.3 54.7 54.1 49.7

Abbeys entry B. Reals entry

Continental Europe

35.4%

-2.9 p.p.

United Kingdom

40.7%

-5.5 p.p.

SOV, A&L and GEs entry


45.4

44.6 41.3
40.0

Latin America

37.0%

-6.3 p.p.

Sovereign

62.8%
[74.5% in Q109]

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 9M'09
Perimeter

(*) Efficiency ratio with amortisations. Figures from 2004 on according to IFRS 2005 includes Abbeys incorporation (efficiency: 62.2%)

Santanders model 3
backed by our IT leadership and Operational and Technological Integration
IT Global (Partenon, Altair) Shared operating centres Global units

Local experiences Local resources


Local unit

Global unit

Global unit

Local unit

Local unit

Best local business


local tools

leveraging the Groups economies of scale

and taking full advantage of best practices


global tools

The Group is making each unit more efficient and competitive

Local unit

Santanders model

10

Balance sheet strength: credit quality

Foreseeable risk: balanced lending portfolio, good exposure Customer lending structure (%)
By country
LatAm 14%
Others Brazil 8% P. Rico 1% 1% Mexico 2% Chile 3% Other EU 7% Portugal 5% Spain 36%

By country-risk: ~ 90% AA or better


USA 5%

Non-investment grade countries 1%

A 3% AA 6%

BBB 9%

Rest 1%

Europe 81%

UK 32%

AA+/AAA 81%

and with a high collateral rate: 58% of lending in mortgages


Note: At September 2009

Santanders model

11

Balance sheet strength: a distinguishing feature of Santander

Against an adverse economic backdrop, Santander maintained good credit quality levels in all areas
NPLs and coverage. Grupo SAN
Sep.09 Percentages

NPLs
4.20% 2.98% 1,65%

1.24

1.43

1.71

2.04

2.49

2.82

3.03

Spain

UK

Latam

Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

134

Coverage ratios
120 105 91
Sep.09

103% 67% 48%

80

72

73

mar-08 jun-08 sep-08 dic-08 mar-09 jun-09 sep-09


Spain UK Latam

which will be strengthened with an additional EUR 1.4 billion of generic provisions in the Group and in Spain

Santanders model

12

Balance sheet strength: we offer better credit quality vs. peers and in the main markets where we operate
Group ratios (Jun.09)
NPLs
4.40% 2.82%

Spain
NPLs in %

Coverage
72% 58%

4.20 2.56

4.54

4.90
(August)

Banks + Savings banks 3.32


0.83 0.64
SAN European peers*

1.11 0.88

1.61 1.50 1.95 2.40 2.72

2.98

1.08

Grupo SAN

SAN

European peers*

Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Sep'09


Sector Source: Banco de Espaa

United Kingdom**
NPLs in %

Latin America**
NPLs in %

Sector
2.39 2.43 1.21 1.33 1.44 1.88

Sector
4.5% 4.6% 5.0% 5.4%

5.9%

1.10

4.3%

4.5% 4.0%

0.69

0.72

0.72

0.77

0.93

1.13

1.34

1.34
3.7%
Dec'07 Mar'08

5.0% 3.9%
Jun'08

5.2%

Grupo SAN

4.1%
Sep'08

4.5%

Grupo SAN
Mar'09 Jun'09

Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Sep'09


Sector Source: Council of Mortgage Lenders

Dec'08

Sector Source: Central Banks

(*) Average European banks included in our peer group (**) Data in local criteria, on a like-for-like basis with the sector sources. Latam series restructured because of Venezuelas disposal and estimate of regulatory changes in Chile

Santanders model

13

Balance sheet strength: credit quality in Spain and UK


Spanish portfolio UK portfolio
Better starting point: higher credit
quality ratios than the markets
NPLs (%)
NPL ratio Coverage ratio
2.43 1.34

Better starting point: higher credit


quality ratios than the markets
SAN Market* 2.98% 4.90%
67% 57%

Coverage (%) > 100


22 22
70

Initiatives to face the higher NPL ratios scenario


Mortgages SAN UK

Mortgage market*

Mortgages SAN UK

Mortgage market*

SAN UK UPLs

Market UPLs*

New NPL and recoveries management area as a business unit Acquisition of assets: risk cancellation, asset assessment done

Mortgages: higher portfolio quality than the markets


Self Cert Buy to let PIPs /portfolio

and release of generic provisions expected to last till 2011 Limited impact on results

SAN Market*

0% 4%

1% 12-13%

0.06% 0.19%

with a very solid origination criteria

Focus on LTV < 80%

(*) Markets figures are the latest available (Aug09 in Spain). UK ones (SAN and markets) as of Jun09 and under local criteria (CML: mortgages)

Santanders model
Balance 4 quarterly,sheet strength: strong generation of organic capital, 10/15 bp boosted by the latest operations bringing core capital to 8.4%*
Core capital performance
IPO Brazil: +60 bp Scrip dividend (e): approx.10 bp

14

High quality core capital


8.4%

Strict definition of core capital:


capital and reserves (including valuation adjustments) + retained profits + minority interests - own shares - goodwill

7.5%

7.3%

7.5%

7.7%

6.1%

6.3% 5.9%

Generic provisions (EUR 7.5 bill.) not included in core Without support from portfolios reclassification

2005

2006

2007

Dec'08 Mar'09 Jun'09 Sep'09

Sep'09 Proforma

Forex hedges included in core

Note: 2008 and 2009 according to BIS II, previous data according to BIS I

(*) Including capital increase in Brazil (before green shoe) and the capital increase for the payment of Santander Dividendo Eleccin, to be done in Q409.

Santanders model

15

Balance sheet strength: low liquidity risk


Loans: 63% of assets

Plain vanilla balance sheet and retail business

Retail loans: 90% of customer loans High collateral: 58% secured loans Deposits w/o Repos increase (excluding exchange rate impact): EUR 98 bill.

Balance sheet structurally liquid

Approx. 90% of loans without securitisations sold are financed by deposits excluding Repos + equity* > EUR 125 bn. central banks eligible assets

Comfortable liquidity position

Note: At September 2009 (*) And similar liabilities

Santanders model

16

Balance sheet strength: strong credit ratings


Long term Short term Financial strength Outlook Negative Stable Negative Stable
AAA/Aaa AA+/Aa1 + AA+/Aa1 = AA+/Aa1 AA/Aa2 + AA/Aa2 = AA/Aa2 AA-/Aa3 + AA-/Aa3 = AA-/Aa3 A+/A1 + A+/A1 = A+/A1 A/A2 + A/A2 = A/A2 Dec-06 Dec-07 Dec-08 Nov-09

S&P Fitch Moodys DBRS


AAA/Aaa AA+/Aa1 + AA+/Aa1 = AA+/Aa1 AA/Aa2 + AA/Aa2 = AA/Aa2 AA-/Aa3 + AA-/Aa3 = AA-/Aa3 A+/A1 + A+/A1 = A+/A1 A/A2 + A/A2 = A/A2 Dec-98 Dec-99

AA AA Aa2 AA

A1+ F1+ P1 R-1 (alto)

A/B B-

S&P

Fitch

Moody's

DBRS

Dec-00 Dec-01

Dec-02 Dec-03

Dec-04 Dec-05

Santanders model

17

Santander in 2008 has strengthened its business portfolio in core markets ... BRAZIL UNITED KINGDOM
Points of sale x2: 1,300 branches PFS market share: >10% TOP 3 by deposits Synergies*: 0.2 bill.

SC GERMANY
6 million customers 185 branches Leader in consumer business Synergies*: 0.1 bill.

Points of sale x2: 3,551 branches + PABs Market share: >10% TOP 3 private bank Synergies*: R$ 2.7bill.

Entering USAs Northeast with Sovereign (January 2009) Regions potential: SOV footprint = 80% of Spains deposits SOVs franchise potential: US$ 47 Bill. deposits, 747 branches, Synergies*: US$ 0.2 bill. ... offering us growth potential in results in the coming years (business + synergies)
(*) Estimated synergies by the third year

Santanders model In 9M09, synergies on-track even in Sovereigns first steps 5


Brazil synergies
Real million
12,390 +4% 12,886 1,163 11,723

18

Year 1 target: 800 mill.

2008* costs

2009 theoretical cost

Cost savings

9M09 cost annualised

(*) Incluye pro-forma Banco Real

Sovereign: operating expenses***


US$ million Year 1 target: 90 mill. approx.**

UK synergies (Abbey + A&L + B&B)


million
2,096 +1.6% 2,130 147 1,983

-108

3 Year target: 215 mill.

1,538
2008* costs 2009 theoretical cost Cost savings 9M09 cost annualised
2008

1,430

(*) Including A&L and B&B

2009(e)

Germany synergies
EUR million
570 +1% 2008* costs 2009 theoretical cost Cost savings 9M09 cost annualised 576 56 520

(*) With RBS proforma

(**) 70 mill. from A&L and approx. 25% B&B costs in direct distribution channels (***) Including contribution to deposit guarantee fund. Data under US GAAP

Agenda

19

Santander at a glance

2009 Performance
Appendix: markets financing Other appendixes

Santander, long track record of profit generation

20

Net operating income


EUR billion

Attributable profit*
17,7 14,8
EUR billion

8,9 8,1

CAGR: +20%
11,2 8,8 5,9 5,6 5,7 6,4 1,6 1,3

CAGR: +22%
5,2 3,6 2,3 2,5 2,6 2,2

6.6

4,7 2,9 3,5

'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08

'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Note.- Figures from 2004 on according to IFRS. (*) Attributable profit data without extraordinary capital gains and allowances

with high generation of recurring profits, with improved quarterly performance ...
Groups ordinary* attributable profit
EUR million

21

Groups ordinary* attributable profit


EUR million

-2.8%

6,935
+0.7%

6,740

2,524 2,206 2,205 1,941


-4.0% -5.0%

2,423 2,096

2,221

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

9M'08

9M'09

placing us on track to reach the targets announced for the whole year
(*) Excluding impact from the latest issues exchange operations, securitisations repurchase and Brazils IPO

The ordinary P&L highlights the resilience of the underlying business and the management focus for the year
Var. 9M09/9M08

22

Group ordinary* results


EUR Mill.

% excl. forex

9M09
19,478 6,828 3,065 29,371 -12,139 17,232 -7,200 10,032 6,740 0.7907

9M08
15,674 6,885 2,842 25,401 -11,242 14,159 -4,667 9,492 6,935 0.9695

and perimeter

Net interest income Fees Trading gains; other* Gross income Operating expenses Net operating income Loan-loss provisions Net op. income after loan-loss provisions Ordinary attrib. profit Basic EPS (in euro)

+24.3 -0.8 +7.8 +15.6 +8.0 +21.7 +54.3 +5.7 -2.8 -18.4

+17.6 -5.7 +16.2 +11.1 +0.0 +19.9 +44.6 +7.8 -1.6 n.s.

Soundness of most basic revenues

B C

Expenses management More LLPs but decelerating

with no impact from extraordinary capital gains, allocated to strengthening balance sheet
(*) Including dividends, equity method and other results. Trading gains change o/9M08: +21.6%

Capital gains with no impact on profits

A better recurring picture than in previous quarters

23

Sound basic revenues (Net int. inc. + Fees + Insurance)


% var. o/ same period previous year

+10.6

+11.3

+10.7

Q1 '09

H1 '09

9M '09

Management of expenses
% var. o/ same period previous year

Net operating income after loan-loss provisions


% var. o/ same period previous year

+1.8 +0.3
Q1 '09 H1 '09

+4.3 +0.0 -1.7


9M '09 Q1 '09 H1 '09

+7.8

9M '09

Loan-loss provisions decelerating


% var. o/ same period previous year

+67.8

+51.2

+44.6

Q1 '09

H1 '09

9M '09

Note: In all cases performance excluding forex and perimeter impact

The most commercial revenues remained solid in the quarter, mainly backed by net interest income
Net interest income + fees and insurance activity

24

EUR billion

7.3
Fees and insurance activity
2.4

7.6
2.3

7.9
2.4

7.5
2.2

8.3
2.1

9.1
2.2

9.2
Perimeter

2.1

Net interest income

4.9

5.3

5.5

5.3

5.4

5.9

6.1

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Continental Europe
Billion

United Kingdom
Million

Latam
Constant US$ Billion 5.1 5.2 4.9 4.7

3.9 3.2 3.3 3.4 3.5

4.0

3.8
1,038 1,097 731 621 625 674 1,133

5.4 5.1

5.5

Q1'08 Q2

Q3

Q4 Q1'09 Q2

Q3

Q1'08 Q2

Q3

Q4 Q1'09 Q2

Q3

Q1'08 Q2

Q3

Q4 Q1'09 Q2

Q3

Strict management of expenses and good evolution of the envisaged synergies resulted in
expenses virtually flat in all units while declining in Brazil and improved efficiency* ratios
Variation o/ 9M08

25

(excl. perimeter and forex)

Var. (%) o/ 9M08


+0.7% +0.4% +0.0% +1.2% +0.9% -4.0% +0.0% +0.7% +0.0%

Santander Network Banesto SCF Portugal United Kingdom (in ) Brazil (in reales) Mexico (in pesos) Chile (in pesos)

Continental Europe

35.4%

-2.9 p.p.

UK

40.7%

-5.5 p.p.

Latin America

37.0%

-6.3 p.p.

Sovereign

62.8% [74.5% in Q109]

Group

Group

41.3%

-3.0 p.p.

(*) Efficiency ratio with amortisations

Provisions continued increasing over 2008, partly impacted by perimeter


Specific provisions Group provisions*
EUR million

26

EUR million

+44%

2,209 1,599 1,281 1,787 1,934


1,967

2,417
2,111

2,574
2,256

1,346

1,631

2,000

2,682 2,694 2,637 2,833

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Generic provisions
EUR million

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3
-175

-96

-158 -408 -730 **

Perimeter impact
(*) Including country-risk

-193

-222

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

(**) Including release of EUR 380 mill. because of substandard

Capital gains with no impact on profits. They will be fully allocated to strengthening the balance sheet

27

Capital gains obtained in Q309 and Q409


EUR million (Estimate)

Projected allocation at the end of the year


EUR million (Estimate)

Exchange of convertible issues

724

Generic loan-loss provisions


(Fund: EUR 1,400 mill.)

-987 -420

Securitisations purchase

99

Properties purchased
(Fund: EUR 600 mill.; 15% book value)

IPO Brazil

1,424

Other funds (restruct., early retirement, etc)


(Fund: EUR 1,200 mill.) -840

Contribution to net profit

2,247

Impact on net profit

-2,247

D with high loan-loss provisions, after allocation of capital

28

gains, boosted by EUR 7.5 billion of generic ones


Loan-loss provisions
EUR million

Spain: Generic funds

18,019 15,166 12,863


Total funds Specific

3,837

15,727 16,619
10,550 10,550

3,431

3,851 3,000 2,451

8,627 9,302
2,960 3,275

8,905 6,682

9,564

Dec'08 Mar'09 Jun'09 Sep'09 Proforma*

Proforma* Spain: Other Europe: America: 3,851 1,239 2,379

Generic

7,469 5,667 6,027 6,181 6,261 6,163 6,069


Dec 06 Dec 07 Dec 08 Mar 09 Jun 09 Sep 09 Proforma*

(*) Including allocation of capital gains from exchange operations and securitisations purchase in Q309 and from IPO in Brazil in October

D and the recurrent business maintaining the high capacity to absorb the larger provisions, placing ...
Grupo Santander performance
%

29

our operating results* among the best of our peer group


(*) (Net operating income provisions) / net loans. 2008 data (%)
C1

12,8 2.3 2.1 2.0 1.9 1.4 1.3 1.1 0.8 0.7 0.5 0.5 0.4 0.3 0.3 0.0

3.43 3.16
Net operating income / avg. loans

C2 SAN C3

2.70 2.30
2.05 2.05 2.01

C4 C5 C6 C7 C8

Operating results

C9 C10 C11

1.78

Provisions / avg. loans

1.11 0.52 2006 0.65 2007 2008

1.42

C12 C13 C14 C15

9M'09*

C16 C17 C18

Negative data

* Annualised data

C19

Note: Peers Group are 19 large banks that because of their size, charateristics and/or degree of competition are the reference group to surpass: Banco Ita, Bank of America, Barclays, BBVA, BNP Paribas, Citigroup, Credit Agricole, HSBC, Intesa Sanpaolo, JP Morgan, Lloyds, Mitsubishi, Nordea, Royal Bank of Canada, RBS, Societe Generale, UBS, Unicredito, Wells Fargo.

30

OPERATING AREAS RESULTS

Continental Europe 9M09


Higher profit due to: resilience of retail revenues and very good year of GBM, costs under control and active risk management
Attrib. profit: EUR 3,986 mill.
Var. 9M09 / 9M08 (%) EUR million

31

Net operating income


Total Global businesses
2,528 2,166 2,157 2,252
2,201 1,907 1,957 1,985 2,244

Excluding perimeter
+16.3%

2,605

2,769 2,620

Gross income

2,176

+10%
Retail 1,833 banking

Expenses Net operating income Net oper. inc. net of LLPs Attributable profit

+7.7%

0%

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Attributable profit
+21.6%

+16%

EUR million

1,210

1,133

1,089

1,236

1,289
1,290

1,368
1,358

1,329
1,291

+16.5%

+15%

+16.1%

+15%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Perimeter impact

Continental Europe main units 9M09


EUR Mill. and % o/ 9M08 The three large retail units and GBM increased their recurring profit. Consumer harder hit by environment and perimeter
Gross income: 12,382 mill.; +16.3%
SAN branch network Banesto Santander Consumer Finance Portugal

32

Net operating income: 7,994 mill.; +21.6%


2,496
+2.6%

Attributable profit: 3,986 mill.; +16.1%


1,541
+10.3%

4,074 +1.8%

1,948

+4.6% +10%

1,172

+7.6% +13%

609

+4.2% +3%

3,125

+30.2%

2,272

+31.6%

483

-13.9%

960

+4.7%

555

+7.5%

412

+0.3%

Other

1,490
GBM

2,275 +54.8%

1,125
GBM

1,499

+85.3%

820
GBM

941 +96.4%

United Kingdom 9M09


Excellent performance fuelled by Abbey and GBM; moreover, positive contribution from the new units. Of note in the quarter: retail banking
Attributable profit: 1,164 mill.
(EUR 1,314 mill.)
Var. 9M09 / 9M08 en (%)

33

Net operating income


Sterling million

Excluding perimeter

686
Total 374 Global businesses Retail
317 Q1'08

745

735

Gross income

+65.4%

+24%

392

422

501
571 595 630

322 Q2

354

373

Expenses Net operating income Net oper. inc. net of LLPs Attributable profit

+45.8%

+1%

Q3

Q4

Q1'09

Q2

Q3

Attributable profit
+82.3%
+45%
Sterling million Perimeter impact

372

419
335

374
299

+61.6%

+31%

235

250

252

254

312

+57.9%

+28%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Total Latin America


Performance in dollars very impacted by exchange rates. Excluding it, net operating income increased 28%, comfortably absorbing the larger provisions Attributable profit: US$ 3,816 mill.
(EUR 2,798 mill.)
Var. 9M09 / 9M08 in US$ (%)

34

Net operating income


Constant US$ million
3,604 3,680

3,874

Excluding forex
+15%

Gross income

-6.0%

Total 2,876 2,966 2,871 2,862 Global businesses Retail 2,372


2,398 2,256 2,273 2,736 2,796 3,095

Expenses Net operating income Net oper. inc. net of LLPs Attributable profit

-19.6%

-2%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

+4.4%

+28%

Attributable profit
Constant US$ million
1,221
1,142

-10.0%

+10%

1,162
1,074

1,217
1,141

1,240 1,073
1,136 851

1,249
1,243

1,326

-12.1%

+6%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Venezuela impact

Note: 2008 proforma with Banco Real

Latin America units 9M09


Constant US$ Mill. and % o/ 9M08
High growth rates in revenues and spreads in all countries except Mexico, as it was harder hit by recession Gross income: 17,718 mill.; +15%
Brazil

35

Net operating income: 11,158 mill.; +28%


7,273 +38%

Attributable profit: 3,816 mill.; +6%


2,167
+22%

11,516 +19%

Mexico

2,491

+1%

1,673

+2%

480

-25%

Chile

1,825

+9%

1,221

+13%

533

-1%

Other

1,886

+17%

991

+35%

527

+30%

Venezuela (discontinued operations)

108

-55%

Brazil 9M09
Higher profit for third straight quarter. Sound revenues and cost cuts offset the larger provisions Attributable profit: US$ 2,167 mill.
(EUR 1,589 mill.)
Var. 9M09 / 9M08 in constant US$ (%)

36

Net operating income


Constant US$ million

2,656 2,291 2,327

Gross income

+18.8%

Total 1,807 1,754 1,713 1,703 Global businesses


1,791 1,767

2,191

Retail 1,457 1,380

1,318

1,326

Expenses

-4.0%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*

Net operating income Net oper. inc. net of LLPs Attributable profit

Attributable profit
+37.9%
Constant US$ million

815 717 635 491

630

+13.0%

574

573

+22.0%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Note: 2008 proforma with Banco Real (*) Including capital gains from Visanet green shoe (US$131 mill.) offset with generic provisions

Sovereign: contribution to Grupo Santander results


Higher revenues, lower costs and provisions under control: moving toward the break-even point
Net operating income quarterly increase
US$ million

37

Gross income

501

+9%

544

+3% -3%

561

Expenses Net operating income

374

-11%

332

323
US$ million

Attributable profit

127
Q1'09*

+66%

212
Q2'09

+12%

238
Q3'09

already higher than provisions in the third quarter


Loan-loss provisions
US$ million

-10 -25
Q1'09 Q2'09

-4

Provisions / gross loans (%)


3.57

Q3'09

238 183

221
2.94 2.63

Q1'09*

Q2'09

Q3'09

Mar'09

Jun'09

Sep'09

Note: data under Group criteria (*) February-March data at a quarterly rate

In short:
Amid a difficult banking scenario, Santander was able to .
Maintain high profits
Quarterly recurring profit around EUR 2.2 billion Obtain value from diversification Obtain value from integrations and synergies

38

Strengthen balance sheet and capital


Capacity to allocate provisions: Net operating
income 2.4x provisions

Generate value for shareholders


Sustained increase of book value per share

Generation of free capital Reinforced due to application of extraordinary results

Maintain pay-out policy: high quarterly dividends

Generic provisions proforma: EUR 7.5 Bill. Core capital Sep.09 proforma: 8.4%

Surpassing peers and the market in profitability in the long-, medium- and short term

All of it while remaining on track to reach the targets announced for the whole year

Agenda

39

Santander at a glance 2009 Performance

Appendix: markets financing


Other appendixes

40

Financing Strategy
The Parent Bank does not supply subsidiaries with funding: there are very rare and limited exceptions like SCF Subsidiaries budget their liquidity needs, assessing the funding opportunities in their own retail and wholesale markets. In coordination with the Parent Bank, they plan their issuances and securitisations. Intergroup funding can be made either with deposits, loans, or by purchasing the securities issued, and always at market prices, according to the rating and the maturity. The availability of assets that are eligible for discount at the ECB are an additional liquidity resource that is available in case of crisis scenarios.

41

2009: main topics in funding and liquidity


We expect lower funding needs from our commercial activities Our recourse to short term has been historically lower than our peers Our conservative approach in managing liquidity allows significant room for growth in short term funding at attractive costs We have created a large liquidity buffer of eligible assets for discount at ECB and Fed in case of market disruptions Santanders securitisation policies provide increasing volumes of eligible assets to raise the liquidity buffer We continue to have access to medium and long term funding as shown by recent covered bond, euromarket and yankee market transactions.

42

Santanders capital markets funding is carried out through a diversified approach by markets, tenor and instruments
Short Term
ECP: EUR 25 Billion Programme USCP: USD 6 Billion Programme

Medium and Long Term


Euromarket: Senior and Subordinated transactions in all major currencies through a EUR 32 Billion EMTM Programme. Structured and private placements are also issued under the Programme. Stand-alone Yankee Fixed Rate and/or FRN Benchmarks. Covered Bonds and Securitisations supported by the Spanish residential mortgage portfolio and other assets. Capital Instruments such as preferred securities issued on a stand-alone basis

43

Groups medium and long term issues. Amount outstanding (Ex-Latam) EUR Million
31/12/2007 Preferred Shares Subordinated Debt Senior Debt Covered Bonds Other Total M & LTerm Issues Securitisations 7,507 25,306 70,057 49,025 12,944 164,839 99,760 31/12/2008 7,914 24,582 71,983 49,509 18,034 172,022 158,153 30/09/2009 9,054 23,864 60,064 53,124 24,307 170,413 155,442

Note: From Dec.08, includes Alliance & Leicester; From May.09 includes Sovereign

Diversified funding by products, markets and tenor Issues maturity (Ex-Latam)


30,000 25,000 20,000 15,000 10,000 5,000 0
4T'09 Q409 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 >2020

44

COVERED BONDS

PREFERRED SHARES

SENIOR

SUBORDINATED

STRUCTURED DEP.

Average maturity ~ 4 years

45

Appendix
Units

Continental Europe United Kingdom Latin America Secondary segments Sovereign

46

Continental Europe
Main units performance Spreads performance NPLs and coverage ratio performance

Santander Branch Network 9M09


Management drivers
Revenues: spreads vs. moderate growth
Volumes
Var. Sep09 / Sep08

47

Results
Gross income
Base 100: Q108

Efficiency ratio
% var. 9M09/9M08

Net interest inc. / ATAs


3.35%

+20%

2.86%

100 100
-0.4% Loans Deposits
9M'08 9M'09
Q1'08 Q2

103 103 104 99 97

39.2%

+1.8 +0.7
38.7%

Expenses: flat for 7 straight quarters Risks: significant improvement in recoveries


Net entries
Base 100: Q108

Q3

Q4

Q1'09

Q2

Q3 Revenues Expenses 9M'08

9M'09

Net operating income / Provisions


EUR million Net op. income Var.Q309/Q308

% recoveries / entries

324 208 212 100 248 159 134

814

815

69 59

75 78 74 66 62

804

867

859

864 773 -3.8%

Provisions Net op. 698 income net of LLPs

648

574

736

754

725

652 +13.5%

Q1 '08 Q2

Q3

Q4 Q1 '09 Q2

Q3

Q1 '08

Q2

Q3

Q4

Q1 '09

Q2

Q3

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Banesto 9M09
Management drivers
Revenues: spreads vs. lower growth
Volumes
Var. Sep09 / Sep08

48

Results
Gross income
Base 100: Q108

Efficiency ratio
% var. 9M09/9M08

Net interest inc. / ATAs*


103 103
3.01% 2.58%

108 107 104 101 100

41.5%

+4.6
39.8%

+1%

+0.4
-1%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Revenues Expenses

9M'08

9M'09

9M'08

9M'09

Loans

Deposits

*Retail Banking

Net operating income / Provisions


EUR million Var.Q309/Q308

Expenses: flat for seven straight quarters

Net op. income Provisions

355

369

366

353

378

401

394 +7.7%

Risks: improved trend of net entries

credit quality ratios: of the best among its peers

Net op. income net 293 of LLPs

299

292

259

297

308

299

+2.5%

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Santander Consumer Finance 9M09


Management drivers
Revenues: spreads and volume growth
Loans spreads
4.03 4.32 4.61 4.69

49

Results
Gross income
Base 100: Q108

Efficiency ratio
% var. 9M09/9M08

Volumes
Var. Sep09 / Sep08

3.78 3.76 3.85

+34% +6%
100 111
Depo sits*
Q1'08 Q2 Q3 Q4

142 142 144 118 125


+30.2

28.0%

+26.8 *
27.3%

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Lo ans *

(*) Excl. perimeter: -8%; +21%

Q1'09

Q2

Q3

Revenues Expenses

9M'08 9M'09

Expenses: flat on a like-for-like basis Risks: large provisions and NPLs as projected
87% 86% 89% 90% 92%

(*) Excl. perimeter: +14%; +0%

Net operating income / Provisions


EUR million Var.Q309/Q308
668 745 757

Coverage NPLs
3.87%
Sep'08

4.18%
Dec'08

4.64%
Mar'09

5.14%
Jun'09

5.46%

770 +24.8%*

Sep'09

Net op. income Provisions

594 516

617

Lower entries and absorption of net operating income stable


Net entries Provisions / Net op. inc.
83

Base 100: 4Q08

Net op. income net 248 of LLPs

307

253

196

244

253

264

+4.3%**

100

96

89

71%

67%

67%

66%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
(*) Excl. perimeter: +12% (**) Excl. perimeter: -9%

Q4'08

Q1'09

Q2

Q3

Q4'08

Q1'09

Q2

Q3

Portugal 9M09
Management drivers
Revenues: assets spreads, focus on deposits and SMEs growth
Volumes
Var. Sep09 / Sep08

50

Results
Gross income
Base 100: Q108

Efficiency ratio
% var. 9M09/9M08
43.7%

Net interest inc. / ATAs


1.72% 1.74%

107 100 100 99 97

+2%

+3%

103 103

+4.7
42.2%

+1.2
Loans Deposits
9M'08 9M'09
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Revenues Expenses

9M'08

9M'09

Loans: +2%
Var. Sep09 / Sep08

Savings: +5%
+25%

Net operating income / Provisions


EUR million Var.Q309/Q308
175 173 197 168 162 182 175

+1%

+7%

+1%

+3% -3%

Net op. income Provisions

Individuals

SMEs / Companies Deposits Businesses

Mutual + Insurance Pen. funds Savings-Inv.

+4.0%

Expenses: remained virtually flat Risks: reduced provisions with NPL ratio under control (2%)

Net op. 176 income net of LLPs

166

169

154

185

151

156

-7.7%

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

51

Continental Europe. Main units spreads


(%)
SAN Branch Network
3.82 2.44 3.87 2.48 3.95 2.52 3.86 2.16 2.21 1.38 Q1'08 1.39 Q2 1.43 Q3 Loans 1.70 1.19 Q1'09 2.26 0.89 Q2 Total 2.31 1.37 0.68 Q3 Q1'08 Q2 Q3 Loans Q4 1.42 1.45 1.53 0.79 Q1'09 0.57 Q2 Total 0.31 Q3 3.40 3.15 2.99 3.27 1.90

Banesto Retail Banking


3.43 2.01 3.35 1.90 3.17 1.64 1.90 1.94 1.96 2.69 2.51 2.27

Q4

Deposits

Deposits

Santander Consumer Lending


3.43
3.78 3.76 3.85 4.03 4.32 4.61 4.69

Portugal Retail Banking


3.33 1.94 3.27 1.90 3.05 2.35 1.57 1.48 1.61 1.70 0.74 Q1'09 0.45 Q2 Total 1.72 0.40 Q3 2.15 2.12 1.96

1.47

1.39

1.37

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Q1'08

Q2

Q3 Loans

Q4

Deposits

Continental Europe. NPLs and coverage


Banco Santander*
137% 96% 78% 2.35%
Mar'09

52

Banesto
63% 2.82%
Sep'09

69% 2.59%
Jun'09

146%

106% 1.64%
Dec'08

85% 1.96%
Mar'09

73% 2.32%
Jun'09

70% 2.62%
Sep'09

1.36% 1.93%
Sep'08 Dec'08

1.18%
Sep'08

NPLs

Coverage

NPLs

Coverage

Santander Consumer
87% 86% 89% 90% 5.14% 92% 5.46%

Portugal
82% 77% 71% 65% 68%

3.87%
Sep'08

4.18%
Dec'08

4.64%

1.65%
Mar'09 NPLs Jun'09 Coverage Sep'09

1.72%
Dec'08

1.87%
Mar'09

2.13%
Jun'09 Coverage

2.04%
Sep'09

Sep'08

NPLs

(*) Santander Branch Network NPL ratio was 3.86% and coverage 52%

53

United Kingdom
Business performance Spreads performance Non-performing loans and coverage ratio performance

United Kingdom 9M09


Sustained results due to spreads management, costs control and moderate provisions
Larger lending spreads
Percentage

54

produced strong gains in net operating income


Sterling million

1.67 1.44 1.13 0.66 Q108 0.70 Q2 0.77 Q3 0.88

Net operating income


745

+74.3% 686
Q4 Q1'09 Q2 Q3

735

501 374 392 422


+55.5%

Including A&L since Q109

and improved efficiency


Jaws
% var. 9M09/9M08

497

570

520

Efficiency ratio

314

334

334

345

+65.4 +45.8

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

46.2%

Net operating income net of provisions Provisions


40.7%

Revenues

Expenses

9M'08

9M'09

Net operating income more than triple provisions

United Kingdom 9M09


Business strategy underscoring the banks priorities
Mortgages stock
Balances in Bill. Balances in Bill.

55

Deposits stock*
+14%
18% market share in gross new mortgage loans

+2%

154.6

158.1
123.0

140.2

Sep'08

Sep'09

Sep'08

Sep'09

Corporate loans stock**


Balances in Bill.

Other
UPLs
Balances in Bill.

+1%

Securities portfolio
Balances in Bill.

23.9

24.1
-24%
6.1 4.6

15.0

-27%
11.0

Sep'08

Sep'09

Sep'08

Sep'09

Dec'08

Sep'09

Note: Data in local criteria. 2008 data including A&L (*) Including commercial, corporate and investments deposits (**) Performace impacted by Porterbrook disposal (balances: 2.1 bn)

56

United Kingdom. Spreads and NPL ratios


(%)

Spreads Retail Banking


2.00 1.34 1.95 1.25 2.01 1.24 2.02 1.14 2.04 1.13 0.91 Q1'09 2.22 1.44 2.25 1.67

NPLs and coverage ratios

57%

69%

56%

45% 1.54%
Jun'09 Coverage

48%(*)

0.66 Q1'08

0.70 Q2

0.77 Q3 Loans

0.88 Q4

0.78 Q2 Total

0.76%
0.58 Q3
Sep'08

1.04%
Dec'08

1.25%
Mar'09 NPLs

1.65%
Sep'09

Deposits

Note: Including A&L since Q109

Note: Including A&L since Dec08

(*) UPLs coverage >100%

57

Latin America
Main units performance Spreads performance Non-performing loans and coverage ratio performance

Exchange rates. Latin America 9M09


Strong depreciation of Latin American currencies against the dollar and euro AVERAGE RATES EUR / LOCAL CCY.
US DOLLAR BRAZILIAN REAL NEW MEXICAN PESO CHILEAN PESO

58

9M'09 1.364 2.826 18.610 779.144

9M'08 1.520 2.560 15.983 732.671

Var. 11% -9% -14% -6%

AVERAGE RATES US$ / LOCAL CCY.


9M'09 BRAZILIAN REAL NEW MEXICAN PESO CHILEAN PESO 2.072 13.646 571.305 9M'08 1.684 10.515 482.006 Var. -19% -23% -16%

(*) Positive sign: currency appreciation; negative sign: currency depreciation

Brazil 9M09
Management drivers
Revenues: spreads management in a lower growth
scenario of the countrys private-sector banks
Volumes
Var. Sep09 /Sep08 in local currency

59

Results
Gross income
Base 100: Q108

Efficiency ratio
% var. 9M09/9M08
45.6%

Net interest inc. / ATAs


7.70 7.48 7.22 7.19 7.24 7.50 7.82

125 114 115 100 99 99 100


36.8%
+18.8

+2%

+2%

Lo ans

Depo sits excl. Repo s

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*

Expenses: sharp fall backed by synergies


Expenses
Var. o/ same period previous year +3.0%

-4.0
Revenues* Expenses

9M'08

9M'09

Net operating income / Provisions


Var.Q309/Q308

-2.5% 2008 Q1 '09

-4.0% Q2

-5.3% Q3

Risks: larger provisions, with stable share o/net


operating income
Net entries
Base 100: Q408

Net op. income Provisions

2,291 2,327 1,807 1,754 1,713 1,703

2,656

+55.1%

Provisions / Net op. inc.


85

100

109 70
Q1'09 Q2

54%

Net op. income net 1,261 1,112 of LLPs

1.003 Q3

789 Q4

+30.6% 1,263 1,242 1,310

45%

47%

51%
Q1'08 Q2 Q1'09 Q2 Q3*

Q4'08

Q3

Q4'08

Q1'09

Q2

Q3

Note: Data in constant US$

Note: 2008 proforma with Banco Real (*) Including capital gains from Visanet green shoe (US$ 131 mill.) offset with generic provisions

Mexico 9M09
Management drivers
Revenues: Evolution conditioned by environment and decline in cards and consumer
Volumes
Var. Sep09/Sep08 in local currency

60

Results
Gross income
Base 100: Q108

Efficiency ratio
% var. 9M09/9M08

Net interest inc. / ATAs


4.80 4.61 4.52 4.54 3.67 3.84 4.32

-13%

+6%

111 100 95 97 103

107 100 +1.5


+0.0

33.3%

32.8%

Lo ans

Depo sits excl. Repo s

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Revenues

Expenses: Rigorous management of investments and expenses


Expenses
Var. o/ same period last year +1 % 0.1

Expenses 9M'08

9M'09

Net operating income / Provisions


Var.Q309/Q308
-2.9% Q3

+2.1 %

+0.9%

2008

Q1 '09

Q2

Net op. income Provisions

626 533 478 453

553

595 525 +9.9%

Risks: adjustment card business + focus on recoveries


Net entries
Base 100: Q408

Provisions / Net op. inc.


80
75% 54%

100

97

99

Net op. income net 367 of LLPs

378 186 Q3 114 Q4

254

283

290 +55.8% Q3

52%

45%

Q1'08 Q2
Q4'08 Q1'09 Q2 Q3

Q1'09 Q2

Q4'08

Q1'09

Q2

Q3

Note: Data in constant US$

Chile 9M09
Management drivers
Revenues: good performance with customers but sharp negative impact from UF deflation
Volumes
Var. Sep09/Sep08 in local currency

61

Results
Gross income
Base 100: Q108

Efficiency ratio
% var. 9M09/9M08

Net interest inc. / ATAs


4.41 4.88 5.55 5.13 3.49

132 132
4.74 4.38

127 128

-2% -6%
Lo ans Depo sits excl. Repo s

115 100

121
+8.6 +0.7

35.7%

33.1% 9M'08 9M'09

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Revenues Expenses

Expenses: already at zero growth


Expenses
Var. o/ same period last year +8.0% +4.2%

Net operating income / Provisions


Var.Q309/Q308
-1.0% Q3

-0.7% 2008 Q1 '09 Q2

434
Net op. income Provisions Net op. income net of LLPs

436

418

418

350 296

385 -11.3%

Risks: Impact from new recoveries unit


Net entries
Base 100: Q408

Provisions / Net op. inc.


44% 37% 33%

210 Q1'08

228

315

295

232

264

259 -17.8%

100

110

81

65

32%

Q2

Q3

Q4

Q1'09

Q2

Q3

Q4'08

Q1'09

Q2

Q3

Q4'08

Q1'09

Q2

Q3

Note: Data in constant US$

Spreads main countries Latin America


(%)
Brazil Retail Banking
16.76 15.51 16.44 15.20 16.29 15.00 16.87 15.59 17.01 15.94 17.43 16.39 16.68 15.81
14.71

62

Mexico Retail Banking


14.90 14.70 14.27 14.19 13.35 12.49

11.19 3.52 Q1'08

11.44 3.46 Q2

10.99 3.71 Q3 Loans

10.69 3.58 Q4

10.83 3.36 Q1'09

10.77 2.58 Q2 Total

10.40 2.09 Q3

1.25 Q1'08

1.24 Q2

1.29 Q3 Loans

1.28 Q4

1.07 Q1'09

1.04 Q2 Total

0.87 Q3

Deposits

Deposits

Chile Retail Banking


8.40 5.33 8.61 5.45 8.69 5.24 8.51 5.35 5.90 3.07 3.16 3.45 3.16 2.02 Q1'09 5.89 1.92 Q2 Total 5.61 1.87 Q3 7.92 7.81 7.48

Q1'08

Q2

Q3 Loans

Q4

Deposits

Latin America. NPL and coverage ratios


Brazil
109% 102% 107% 92% 95%
134% 132%

63

Mexico
128% 122% 3.04%
Jun'09 Coverage

221%

3.35%
Sep'08

3.58%

3.86%

4.75%

5.09%
Sep'09

2.06%
Sep'08

2.41%
Dec'08

2.80%
Mar'09 NPLs

2.45%
Sep'09

Dec'08 Mar'09 Jun'09 NPLs Coverage

Chile
111% 102% 95% 94% 3.30%
Jun'09 Coverage

94% 3.38%
Sep'09

2.45%
Sep'08

2.64%
Dec'08

3.05%
Mar'09 NPLs

64

CORPORATE ACTIVITIES

Corporate Activities
Performance o/9M08: lower earnings (equity method, gains on financial transactions and dividends), rentals and Metrovacesa provision Attributable profit Corporate Activities (9M09 vs. 9M08 difference )
Main impacts: Dividends and equity Metrovacesa charge Lower gains on financial transactions Expenses (higher rentals) Other items and taxes Total impact on profit:
EUR mill.

65

-169 -195 -312 -106 -250 -1,032

66

SECONDARY SEGMENTS

Retail Banking
Strong resilience of retail banking to the environment, maintaining results sustainability
Retail Banking
Var. 9M09 / 9M08 (%) in EUR EUR million

67

Net operating income


Excl. fx and perimeter +27% 5,403 4,822 5,142 4,153 4,224 4,251 4,056

Gross income

+16.6%

+10%

Expenses Net operating income Net oper. inc. net of LLPs Attributable profit

+9.9%

+0%

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Attributable profit
+21.7%
+18%
EUR million

+8%
1,844 1,843 1,643 1,828 1,752 1,986
+13%

1,981

+0.6%

+0%

-1.8%

-3%
Q1'08

Q2

Q3

Q4

Q1'09

Q2*

Q3

Venezuela impact registered under discontinued operations. In Q109; 81 mill. , Q209: 1 mill.; Q309: 0 mill.

Global Wholesale Banking (GBM)


Excellent business performance over 2008 backed by market share gains and spreads ...
Net operating income Attributable profit: EUR 2,185 mill.
EUR million Var. 9M09 / 9M08

68

1,152 951 975 983 715

Gross income

+35.6%

628

605

Expenses -12.3%
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Net operating income Net oper. inc. net of LLPs Attributable profit

+59.7%
EUR million

Attributable profit
879 672

+68.6%
533 394 379 435 634

+80.9%

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Global Wholesale Banking (GBM)


and the areas management capacities
Solid revenues generation
By customer revenues
Customer revenues (EUR mill.) Gross income (EUR mill.)

69

based on a diversified product portfolio

1,430 1,266
Total

3,538
1,275 147

1,264
116

168

+37%
714
TOTAL

954

1,041 933
134 61

169

Trading 149

2,584
631 150 757

+13% -42% +41%

87 1,069

Customers 805

980 799

1,097

1,148

1,262

1,128

Equities Investment banking Hedges of interest / exchange rates

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

in our core markets


Spain, Brazil and the UK generate around 80% of customer revenues

Corporate Banking*

+59%

1,668

1,046

9M'08

9M'09

(*) Including Global Transaction Banking and Credit

Global Wholesale Banking (GBM)


and the areas management capacities
Strict in costs
Effort made in reducing structures in 2008 and 2009 Further efficiency improvement, differentiating us from our competitors
Operating expenses (EUR mill.)

70

Strict commitment in risks and in capital consumption


High quality of credit portfolio Revenue growth without increasing risk and without further liquidity needs
Loans to GBM customers
EUR billion

-11%
325 328 327 315 290 278 292

GBM Risk-weighted assets


Sep08 = 100

100
69 69

86

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Sep'08

Sep'09

Sep'08

Sep'09

Excluding forex impact

Asset Management and Insurance


High contribution to the Group via revenues and profit

71

Generates revenues for retail networks (cross-selling)


In 9M09: EUR 2,709 mill. of gross income from mutual funds and insurance

Asset Management
Starting volumes recovery, still without impact on revenues
Managed assets (EUR billion) Expenses (EUR million)

= 9% of Groups revenues

131 101 100 105 111

139

-17%
115

maintaining sustained results


After costs and fees paid to the networks
D'07

D'08

M'09

J'09

S'09

9M'08

9M'09

Attributable profit (EUR mill.)

Insurance (PBT + fees)


EUR million

136 115
Asset Mgmt. 41

9M08 (const. EUR )


440 334 292 171 217 210 26

43

105
36

115
39

123 106
21 19

89
8

Brazil Spain Germany

+35% -39% +28% +42% +11% +1% n.s.

Insurance 74

93 67

76

85

104

81

UK Other Latam Other Europe

Potential from global management + incorporations

Q1'08

Q2

Q3

Q4

Q1'09

Q2

Q3

Sovereign

72

Sovereign
Spreads performance Non-performing loans and coverage ratio performance

73

Sovereign. Spreads and NPL and coverage ratios


(%)

Spreads
2.32 2.60 2.65

NPLs and Coverage

66%
1.88 1.91 0.69 Q2 Loans Deposits 1.86 0.79 Q3 Total

67%

68%

3.98%
Mar'09

4.34%
Jun'09 NPLs Coverage

4.82%
Sep'09

0.44 Q1'09

Relations with Investors and Analysts Ciudad Grupo Santander Edificio Pereda, 1 planta Avda de Cantabria, s/n 28660 Boadilla del Monte, Madrid (Espaa) Telfonos: 91 259 65 14 - 91 259 65 20 Fax: 91 257 02 45 e-mail: investor@gruposantander.com www.gruposantander.com

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