2. 2
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 forward-
looking statements.
Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities or
any advice or recommendation with respect to such securities.
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.
Nothing contained in this presentation is an offer of securities for sale into the United States or in any other jurisdiction. 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. In making this presentation available, Santander makes no
recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever and you should neither
rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity.
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.
Important information
3. 3
Grupo Santander Management Drivers
Group Results 9M’09
Business Areas Results 9M’09
Conclusions
Appendix
Agenda
4. 4
Summary
(*) Excluding capital gains and extraordinary allowances
Management of the basic drivers
Support from operating areas
Countries / businesses diversification
Q3’09: € 2,221 mill.
9M’09: € 6,740 mill.
Ordinary
attributable
profit*
… generate high
recurring profit …
1
Issues exchange
Securitisations purchase
Positive impact from IPO Brazil
(**) After allocation of projected capital gains in Q3’09 and Q4’09
Generic provisions: € 7.5 Bill.
Core capital: 8.4%
Sep. 09 proforma**:
… strengthen balance
sheet and capital …
2
Against a complicated market backdrop, Santander was able to ...
… and maintain the dividend policy
3
5. 5
2,221
2,423
2,096
1,941
2,205
2,524
2,206
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
EUR million
Group’s ordinary* attributable profit
+0.7%
… placing us on track to reach the targets
announced for the whole year
6,935 6,740
9M'08 9M'09
EUR million
Group’s ordinary* attributable profit
-2.8%
High generation of recurring profits, with improved
quarterly performance ...
1
-5.0%
-4.0%
(*) Excluding impact from the latest issues exchange operations, securitisations
repurchase and Brazil’s IPO
6. 6
235 250 254
374
252
419
372
Q1'08 Q2 Q3 Q4 Q1'09* Q2* Q3*
United Kingdom
+49%
£ Mill.
(*) Perimeter Q1: +60 mill.; Q2: +84 mill.; Q3: +75 mill.
314
373
361
178
104
197 253
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Continental Europe:
GBM and other
€ Mill.
+77%
Attributable profit* 9M’09
EUR Mill. and %
Europe
Commercial
Units
1,014
995
875
911
1,029
1,013 1,036
Q1'08 Q2 Q3 Q4 Q1'09* Q2* Q3*
Continental Europe:
Commercial Units
+11%
€ Mill.
(*) Perimeter Q1: -1 mill.; Q2: +10 mill. Q3: +38 mill.
UK
(*) Over 9M’09 operating areas attributable profit excluding the negative EUR 29
million from Sovereign.
… backed by the operating areas diversification and high
resilience to the cycle
1
815
491
573
574
630 635 717
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Brazil
constant US$ Mill.
+42%
15%
16%
27%
SAN
Network+
Banesto
Global
Europe
SCF+Portugal
10% 20%
Other
Latam
Brazil
512
606
591 588 643 582
531
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Other Latam
-20%
Venezuela’s
disposal
constant US$ Mill.
12%
7. 7
Strengthening the balance sheet. Capital gains and
their projected allocation
Exchange of convertible issues 724
Securitisations purchase 99
IPO Brazil 1,424
Contribution to net profit 2,247
Capital gains
obtained in Q309 and Q409
No impact from capital gains on profits. They will be fully allocated to
strengthening the balance sheet
EUR million EUR million (Estimate)
Generic loan-loss provisions -987
(Fund: EUR 1,400 mill.)
Properties purchased -420
(Fund: EUR 600 mill.; 15% book value)
Other funds (restruct., early retirement, etc)
(Fund: EUR 1,200 mill.) -840
Impact on net profit -2,247
2
Projected allocation at the
end of the year
(Estimate)
8. 8
5,667 6,027 6,181 6,261 6,163 6,069
2,960
8,905
7,469
9,564
10,550
10,550
3,275
6,682
18,019
16,619
15,727
15,166
12,863
9,302
8,627
Dec 06 Dec 07 Dec 08 Mar 09 Jun 09 Sep 09
Specific
Generic
EUR million
Total
funds
Loan-loss provisions
(*) Including allocation of capital gains from exchange operations and securitisations
purchase in Q309 and from IPO in Brazil in October
Proforma*
Spain: 3,851
Other
Europe: 1,239
America: 2,379
3,837
3,431
3,000
2,451
3,851
Dec'08 Mar'09 Jun'09 Sep'09
Spain: Generic funds
Proforma*
Proforma*
High loan-loss provisions, after allocation of capital gains, boosted by
EUR 7.5 billion of generic ones
Strengthening the balance sheet. Loan-loss provisions
2
9. 9
6.1%
5.9%
6.3%
7.5%
7.3%
7.7%
7.5%
8.4%
2005 2006 2007 Dec'08 Mar'09 Jun'09 Sep'09 Sep'09
Proforma
IPO Brazil: +60 bp
Scrip dividend (e): approx.10 bp
Core Capital
Note: 2008 and 2009 according to BIS II, previous data according to BIS I
Strong generation of organic capital (10/15 bp quarterly), boosted by
the latest operations bringing core capital to 8.4%*
Strengthening the balance sheet. Capital ratios
2
(*) Including capital increase in Brazil (before green shoe) and the capital increase for the
payment of Santander Dividendo Elección, to be done in Q4’09.
10. 10
Generation of recurring profit and capital strength
enable Santander to…
3
846 865
2,099
1,003 1,000
1,103
1º 2º 3º 4º 1º 2*
Dividend paid (EUR million)
2008 2009
… maintain pay-out policy with
quarterly payment of dividends ...
… and offer a total shareholder return (TSR) well above that of the market and
of our peers in the long-, medium- and short-term
+7.6
+16.5
+29.7
+22.0
15 years 5 years 3 years 1 year
Difference with DJ Stoxx Banks
+4.0
+14.8
+37.5
+17.0
15 years 5 years 3 years 1 year
Ranking .. 1º
3º
2º
2º .…….. .…….. .……..
Note: “Peers Group” are 19 large banks that because of their size, charateristics and/or degree of direct
competition are the reference group to surpass: Banco Itaú, 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.
Difference with our peers
CAGR difference in p.p. Based on data obtained from Bloomberg
5.35
5.98
7.58
7.23
8.20
Dec 05 Dec 06 Dec 07 Dec 08 Sep 09
EUR per share
… increase book value*
per share ...
(*) Calculated as (capital + reserves + profit – own shares –
dividends) / (shares + Valores Santander)
(*) Santander Dividendo Elección
12. 12
The P&L highlights the resilience of the underlying
business and the management focus for the year …
(*) With no impact from extraordinary capital gains, allocated to strengthening balance sheet
(**) Including dividends, equity method and other results. Trading gains change o/9M’08: +21.6%
Basic EPS (in euro) 0.7907 0.9695 -18.4 n.s.
Var. 9M’09/9M’08
Group ordinary* results % excl. forex
EUR Mill. 9M’09 9M’08 % and perimeter
Soundness of
most basic
revenues
Expenses
management
More LLPs but
decelerating
A
B
C
Net interest income 19,478 15,674 +24.3 +17.6
Fees 6,828 6,885 -0.8 -5.7
Trading gains; other** 3,065 2,842 +7.8 +16.2
Gross income 29,371 25,401 +15.6 +11.1
Operating expenses -12,139 -11,242 +8.0 +0.0
Net operating income 17,232 14,159 +21.7 +19.9
Loan-loss provisions -7,200 -4,667 +54.3 +44.6
Net op. income after
loan-loss provisions 10,032 9,492 +5.7 +7.8
Ordinary* attrib. profit 6,740 6,935 -2.8 -1.6
13. 13
A better “recurring picture” than in previous quarters
+10.6 +11.3 +10.7
Q1
'09 H1
'09 9M '09
Sound basic revenues
(Net int. inc. + Fees + Insurance)
% var. o/ same period previous year
-1.7
+4.3
+7.8
Q1
'09 H1
'09 9M '09
Net operating income after
loan-loss provisions
+1.8
+0.3 +0.0
Q1
'09 H1
'09 9M '09
Management of expenses
A
+67.8
+51.2 +44.6
Q1
'09 H1
'09 9M '09
Loan-loss provisions
decelerating
B
C
Note: In all cases performance excluding forex and perimeter impact
% var. o/ same period previous year
% var. o/ same period previous year
% var. o/ same period previous year
14. 14
4.9 5.3 5.5 5.3
2.4 2.3 2.4 2.2 2.1
2.2 2.1
7.3 7.6 7.9 7.5
8.3
9.1 9.2
6.1
5.9
5.4
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
EUR billion
Fees and insurance
activity
Net interest income
Net interest income + fees and insurance activity
5.5
5.4
5.1
5.2
5.1
4.9
4.7
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Latam
Constant US$ Billion
3.2 3.3 3.4 3.5
3.9 4.0
3.8
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Continental Europe
€ Billion
621 625 674 731
1,133
1,097
1,038
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
United Kingdom
£ Million
The most commercial revenues remained solid in the
quarter, mainly backed by net interest income
Perimeter
A
15. 15
(*) Efficiency ratio with amortisations
Strict management of expenses and good evolution of
the envisaged synergies resulted in …
Santander Network
Banesto
SCF
Portugal
United Kingdom (in £)
Brazil (in reales)
Mexico (in pesos)
Chile (in pesos)
Group
… expenses virtually flat in all units
while declining in Brazil …
+0.7%
+0.0%
-4.0%
+0.9%
+1.2%
+0.0%
+0.4%
+0.7%
+0.0%
B
(excl. perimeter and forex)
Var. (%) o/ 9M’08
35.4%
37.0%
62.8%
41.3%
40.7%
… and improved
efficiency* ratios
Variation
o/ 9M’08
-2.9 p.p.
-5.5 p.p.
-6.3 p.p.
[74.5% in
Q1’09]
Continental
Europe
UK
Latin America
Sovereign
Group -3.0 p.p.
16. 16
-175 -96 -158
-730
-408
-193 -222
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
1,346
1,631
2,000
2,833
2,682 2,694 2,637
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
2,256
1,967
2,111
1,281
1,599
1,787
1,934
2,417
2,574
2,209
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
EUR million
+44%
Group provisions*
Specific provisions
Generic provisions
EUR million
EUR million
Provisions continued increasing over 2008, partly
impacted by perimeter
C
Perimeter impact
**
(**) Including release of EUR 380 mill. because of substandard
(*) Including country-risk
17. 17
The release of generic provisions, particularly in Spain,
continues as projected
C
Europe 3,420 1,748 +1,672 -1,035 9 -1,044
UK 687 306 +381 -37 -49 +12
LatAm 3,687 2,870 +817 148 -470 +618
Other 369 53 +316 101 81 +20
Total 8,163 4,977 +3,186 -823 -429 -394
Loan-loss provisions*
Specific**
9M’09 9M’08 Change
Generic
9M’09 9M’08 Change
EUR million
SAN +Banesto: +860
SCF: +536
Brazil: +649
Mexico: +44
Chile: +78
SAN + Banesto: -947
SCF: +56
GBM: -124
Year-on-year change
Brazil: +646
Sovereign: +77
Sovereign: +348
A & L: +168
(*) Excluding country-risk. Positive data: provision; negative data: release.
(**) Specific loan-loss provisions are reduced by written-off assets recoveries
18. 18
Against an adverse economic backdrop, Santander maintained good
credit quality levels in all areas …
Credit quality
C
NPLs
Coverage ratios
Sep.’09
Sep.’09
1.24 1.43
1.71
2.04
2.49
2.82 3.03
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09
NPLs and coverage. Grupo SAN
Moro
134
120
105
91 80 72 73
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09
Percentages
48%
103%
67%
Spain UK Latam
4.20%
1,65%
2.98%
Spain UK Latam
… which will be strengthened with an additional EUR 1.4 billion of
generic provisions in the Group and in Spain
19. 19
3.7% 3.9% 4.1%
4.5%
5.0% 5.2%
4.3% 4.5% 4.6%
5.0%
5.9%
4.0%
5.4%
4.5%
Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09
0.64 0.88 1.08
1.50
1.95
2.40 2.72 2.98
0.83 1.11
3.32
4.20
4.54 4.90
1.61
2.56
Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Sep'09
4.40%
2.82%
SAN European peers*
0.69 0.72 0.72 0.77 0.93 1.13 1.34 1.34
1.10 1.21 1.33 1.44
1.88
2.39 2.43
Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Sep'09
72%
58%
SAN European peers*
Credit quality
C
(*) 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 Venezuela’s disposal and estimate of regulatory changes in Chile
Our ratios still compare very well with peers at Group level and in the
main markets where we operate
Group ratios (Jun.’09)
NPLs Coverage
Grupo SAN
Sector
Grupo SAN
Sector
Sector Source: Council of Mortgage Lenders Sector Source: Central Banks
NPLs in % NPLs in %
United Kingdom** Latin America**
Grupo SAN
Banks + Savings banks
NPLs in %
Sector Source: Banco de España
Spain
(August)
21. 21
1,210 1,133 1,089
1,236
1,329
1,368
1,289
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Continental Europe 9M’09
+7.7%
+16.3%
+16.1%
+16.5%
+21.6%
Attributable
profit
Net oper.
inc. net of
LLPs
Net
operating
income
Expenses
Gross
income
Attributable profit
Attrib. profit: EUR 3,986 mill.
EUR million
Higher profit due to: resilience of retail revenues and very good year
of GBM, costs under control and active risk management
2,166 2,157 2,252
2,528
1,957
1,985
2,176
2,201
1,907
1,833
2,244
2,769
2,605 2,620
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Net operating income
Total
Global
businesses
Retail
banking
EUR million
+10%
0%
+16%
+15%
+15%
Perimeter impact
Var. 9M’09 / 9M’08 (%)
1,290 1,358 1,291
Excluding
perimeter
23. 23
Revenues: spreads vs. moderate growth
Santander Branch Network 9M’09
Management drivers
+1.8
+0.7
Revenues Expenses
Base 100: Q1’08
Results
100 99
103 103 104
97
100
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
EUR million
% var. 9M’09/9M’08
39.2%
38.7%
9M'08 9M'09
+13.5%
-3.8%
698 648 574
736
814 815 804
867
652
725
754
864
773
859
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Var.Q309/Q308
2.86%
3.35%
9M'08 9M'09
Var. Sep’09 / Sep’08
Volumes Net interest inc. / ATAs
Expenses: flat for 7 straight quarters
Risks: significant improvement in recoveries
100
208 212
324
248
159
134
Q1
'08 Q2 Q3 Q4 Q1
'09 Q2 Q3
Base 100: Q1’08
% recoveries / entries
Net entries
59
66
62
75 78 74
69
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Gross income Efficiency ratio
Net operating income / Provisions
Net op.
income net
of LLPs
Provisions
Net op.
income
+20%
-0.4%
Loans Deposits
24. 24
Banesto 9M’09
+1%
-1%
Loans Deposits
+4.6
+0.4
Revenues Expenses
Base 100: Q1’08
EUR million
41.5%
39.8%
9M'08 9M'09
+2.5%
+7.7%
103 103
101
104
108 107
100
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
293 299 292 259
355 369 366 353
299
308
297
401 394
378
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Var.Q309/Q308
Revenues: spreads vs. lower growth
2.58%
3.01%
9M'08 9M'09
*Retail Banking
% var. 9M’09/9M’08
Var. Sep’09 / Sep’08
Expenses: flat for seven straight quarters
Risks: improved trend of net entries
– credit quality ratios: of the best among its
peers
Net op.
income net
of LLPs
Provisions
Net op.
income
Management drivers Results
Volumes Net interest inc. / ATAs*
Gross income Efficiency ratio
Net operating income / Provisions
25. 25
+34%
+6%
Loans * Deposits*
Santander Consumer Finance 9M’09
Var. Sep’09 / Sep’08
Volumes
(*) Excl. perimeter: -8%; +21%
EUR million
28.0%
27.3%
9M'08 9M'09
+4.3%**
+24.8%*
248 307 253 196
516
594 617
668
264
244 253
745 770
757
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
111
118
125
142 144
142
100
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
+30.2 +26.8
Revenues Expenses
Base 100: Q1’08
(*) Excl. perimeter: +14%; +0%
* *
(*) Excl. perimeter: +12% (**) Excl. perimeter: -9%
Var.Q309/Q308
Revenues: spreads and volume growth
Expenses: flat on a like-for-like basis
Risks: large provisions and NPLs as projected
Loans spreads
3.78 3.76 3.85 4.03
4.32
4.69
4.61
Q1'08Q2 Q3 Q4Q1'09Q2 Q3
3.87%
5.46%
5.14%
4.18% 4.64%
92%
90%
86%
87% 89%
Sep'08 Dec'08 Mar'09 Jun'09 Sep'09
% var. 9M’09/9M’08
Coverage
NPLs
Net entries Provisions / Net op. inc.
100 96 89 83
Q4'08 Q1'09 Q2 Q3
71% 67% 67% 66%
Q4'08 Q1'09 Q2 Q3
Base 100: 4Q’08
– Lower entries and absorption of net operating
income stable
Management drivers Results
Gross income Efficiency ratio
Net operating income / Provisions
Net op.
income net
of LLPs
Provisions
Net op.
income
26. 26
Portugal 9M’09
+1%
+7%
+1% +3%
+25%
-3%
Individuals SMEs /
Businesses
Companies Deposits Mutual +
Pen. funds
Insurance
Savings-Inv.
Management drivers
Savings: +5%
Loans: +2%
+3%
+2%
Loans Deposits
+4.7
+1.2
Revenues Expenses
Base 100: Q1’08
43.7%
42.2%
9M'08 9M'09
-7.7%
+4.0%
100 99 97
107
103 103
100
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Results
176 166 169 154
175 173 168 162
156
151
185
197
175
182
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Revenues: assets spreads, focus on deposits
and SMEs growth
Expenses: remained virtually flat
Risks: reduced provisions with NPL ratio
under control (2%)
EUR million
1.72% 1.74%
9M'08 9M'09
Var. Sep’09 / Sep’08
Var. Sep’09 / Sep’08
Var.Q309/Q308
% var. 9M’09/9M’08
Volumes Net interest inc. / ATAs
Gross income Efficiency ratio
Net operating income / Provisions
Net op.
income net
of LLPs
Provisions
Net op.
income
27. 27
235 250 252 254
372
419
374
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
+45.8%
+65.4%
+57.9%
+61.6%
+82.3%
Attributable
profit
Net oper.
inc. net of
LLPs
Net
operating
income
Expenses
Gross
income
354
374 392 422
501
373
630
571
322
317
595
745
686 735
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
United Kingdom 9M’09
Attributable profit
Attributable profit: £ 1,164 mill.
(EUR 1,314 mill.)
Var. 9M’09 / 9M’08 en £ (%)
Excellent performance fuelled by Abbey and GBM; moreover, positive
contribution from the new units. Of note in the quarter: retail banking
Net operating income
Total
Global
businesses
Retail
Excluding
perimeter
+24%
+1%
+45%
+31%
+28%
Perimeter impact
312 335
299
Sterling million
Sterling million
28. 28
United Kingdom 9M’09
Sustained results due to spreads management,
costs control and moderate provisions
314 334 334 345
374 392
422
501
520
570
497
745 735
686
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Net operating income
Sterling million
+55.5%
+74.3%
Net operating income net of provisions
Provisions
… produced strong gains in net
operating income
Larger lending spreads …
+65.4
+45.8
Revenues Expenses
“Jaws”
% var. 9M’09/9M’08
46.2%
40.7%
9M'08 9M'09
Percentage
0.66 0.70 0.77 0.88
1.67
1.13
1.44
Q108 Q2 Q3 Q4 Q1'09 Q2 Q3
… and improved efficiency …
Efficiency ratio
Including A&L since Q1’09
Net operating income more than
triple provisions
29. 29
24.1
23.9
Sep'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)
United Kingdom 9M’09
Business strategy underscoring the bank’s priorities
154.6 158.1
Sep'08 Sep'09
Corporate loans stock**
140.2
123.0
Sep'08 Sep'09
+14%
+1%
Mortgages stock Deposits stock*
4.6
6.1
Sep'08 Sep'09
-24%
Other
UPLs
Balances in Bill. £
15.0
11.0
Dec'08 Sep'09
Securities portfolio
-27%
Balances in Bill. £
Balances in Bill. £
Balances in Bill. £
Balances in Bill. £
+2%
18% market
share in gross
new mortgage
loans
30. 30
2,372 2,398 2,256 2,273
2,736
2,876 2,966 2,871 2,862
3,095
2,796
3,680
3,604
3,874
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
Total
Global
businesses
Retail
Constant US$ million
Note: 2008 proforma with Banco Real
1,221 1,162 1,217
1,073
851
1,141
1,074
1,142 1,243
1,136
1,326
1,240 1,249
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Constant US$ million
Venezuela impact
-12.1%
-10.0%
+4.4%
-19.6%
-6.0%
Attributable
profit
Net oper.
inc. net of
LLPs
Net
operating
income
Expenses
Gross
income
Attributable profit: US$ 3,816 mill.
(EUR 2,798 mill.)
Var. 9M’09 / 9M’08 in US$ (%)
Excluding
forex
+15%
-2%
+28%
+10%
+6%
Attributable profit
Net operating income
31. 31
Latin America units 9M’09
Constant US$ Mill. and % o/ 9M’08
1,886
1,825
2,491
11,516
Venezuela
(discontinued
operations)
Other
Chile
Mexico
Brazil
1,673
7,273
1,221
991
+2%
+13%
+35%
Gross income:
17,718 mill.; +15%
Net operating income:
11,158 mill.; +28%
Attributable profit:
3,816 mill.; +6%
+19%
+9%
+17%
480
2,167
533
527
108
-25%
-1%
+30%
-55%
+1%
+38% +22%
High growth rates in revenues and spreads in all countries except Mexico, as
it was harder hit by recession
32. 32
1,318
1,807 1,754 1,713 1,703
1,326
2,191
1,791
1,380
1,457
1,767
2,327
2,291
2,656
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*
+22.0%
+13.0%
+37.9%
-4.0%
+18.8%
Attributable
profit
Net oper.
inc. net of
LLPs
Net
operating
income
Expenses
Gross
income
815
717
491
573
574
630 635
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Attributable profit: US$ 2,167 mill.
(EUR 1,589 mill.)
Var. 9M’09 / 9M’08 in constant US$ (%)
Constant US$ million
Constant US$ million
Total
Global
businesses
Retail
Brazil 9M’09
Higher profit for third straight quarter. Sound revenues and cost cuts
offset the larger provisions
Note: 2008 proforma with Banco Real
(*) Including capital gains from Visanet green shoe (US$131 mill.) offset with generic
provisions
Attributable profit
Net operating income
33. 33
+3.0%
-4.0%
-2.5%
-5.3%
2008 Q1
'09 Q2 Q3
7.70
7.48
7.19 7.24
7.82
7.50
7.22
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
45.6%
36.8%
9M'08 9M'09
Results
Management drivers
+18.8
-4.0
Revenues* Expenses
Base 100: Q1’08
99 99 100
114 115
125
100
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*
+30.6%
+55.1%
Brazil 9M’09
1,261 1,112
789
1,807 1,754 1,713 1,703
1.003
1,310
1,242
1,263
2,327
2,656
2,291
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*
Note: Data in constant US$
+2% +2%
Loans Deposits excl.
Repos
Var. Sep’09 /Sep’08 in local currency
Volumes
Revenues: spreads management in a lower growth
scenario of the country’s private-sector banks
Var.Q309/Q308
% var. 9M’09/9M’08
Expenses: sharp fall backed by synergies
Var. o/ same period previous year
Risks: larger provisions, with stable share o/net
operating income
Net entries Provisions / Net op. inc.
100
70
109
85
Q4'08 Q1'09 Q2 Q3
54%
45% 47% 51%
Q4'08 Q1'09 Q2 Q3
Base 100: Q4’08
Expenses
Note: 2008 proforma with Banco Real
(*) Including capital gains from Visanet green shoe (US$ 131 mill.) offset with generic
provisions
Net interest inc. / ATAs
Gross income Efficiency ratio
Net operating income / Provisions
Net op.
income net
of LLPs
Provisions
Net op.
income
34. 34
+1
0.1
%
+2.1
% +0.9%
-2.9%
2008 Q1
'09 Q2 Q3
111
95 97
103
107
100
100
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Mexico 9M’09
Results
Management drivers
33.3%
32.8%
9M'08 9M'09
+1.5
+0.0
Revenues Expenses
Base 100: Q1’08
+55.8%
+9.9%
367 378
186 114
533
626
478 453
290
283
254
595
525
553
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Revenues: Evolution conditioned by environment
and decline in cards and consumer
Note: Data in constant US$
Expenses: Rigorous management of investments
and expenses
+6%
-13%
Loans Deposits excl.
Repos
4.80 4.61 4.54
3.67
4.32
4.52
3.84
Q1'08Q2 Q3 Q4Q1'09Q2 Q3
Var. Sep’09/Sep’08 in local currency
Var.Q309/Q308
% var. 9M’09/9M’08
Risks: adjustment card business + focus on recoveries
Base 100: Q4’08
75%
54% 52% 45%
Q4'08 Q1'09 Q2 Q3
100 97 99 80
Q4'08 Q1'09 Q2 Q3
Var. o/ same period last year
Net op.
income net
of LLPs
Provisions
Net op.
income
Volumes
Expenses
Net interest inc. / ATAs
Gross income Efficiency ratio
Net operating income / Provisions
Net entries Provisions / Net op. inc.
35. 35
115
132 132
127 128
121
100
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Chile 9M’09
Results
Management drivers
-6%
-2%
Loans Deposits excl.
Repos
35.7%
33.1%
9M'08 9M'09
+8.6
+0.7
Revenues Expenses
Base 100: Q1’08
-17.8%
-11.3%
210 228
315 295
296
350
434 436
259
264
232
418
385
418
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Revenues: good performance with customers
but sharp negative impact from UF deflation
4.41
4.88 5.13
3.49
4.38
5.55
4.74
Q1'08Q2 Q3 Q4Q1'09Q2 Q3
Note: Data in constant US$
Var. Sep’09/Sep’08 in local currency
Var.Q309/Q308
% var. 9M’09/9M’08
Expenses: already at “zero growth”
Risks: Impact from new recoveries unit
Base 100: Q4’08
32% 44% 37% 33%
Q4'08 Q1'09 Q2 Q3
100 110 81 65
Q4'08 Q1'09 Q2 Q3
+8.0%
+4.2%
-0.7% -1.0%
2008 Q1
'09 Q2 Q3
Var. o/ same period last year
Net op.
income net
of LLPs
Provisions
Net op.
income
Net entries Provisions / Net op. inc.
Volumes
Expenses
Net interest inc. / ATAs
Gross income Efficiency ratio
Net operating income / Provisions
36. 36
Corporate Activities
Performance o/9M’08: lower earnings (equity method, gains on financial
transactions and dividends), rentals and Metrovacesa provision
Attributable profit Corporate Activities
(9M’09 vs. 9M’08 difference )
EUR mill.
Main impacts:
Dividends and equity -169
Metrovacesa charge -195
Lower gains on financial transactions -312
Expenses (higher rentals) -106
Other items and taxes -250
Total impact on profit: -1,032
38. 38
1,981 1,844 1,843
1,643
1,828
1,986
1,752
Q1'08 Q2 Q3 Q4 Q1'09 Q2* Q3
Retail Banking
Strong resilience of retail banking to the environment,
maintaining results sustainability
Net operating income
4,153 4,224 4,251 4,056
5,142
5,403
4,822
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Attributable profit
EUR million
EUR million
-1.8%
+0.6%
+21.7%
+9.9%
+16.6%
Attributable
profit
Net oper.
inc. net of
LLPs
Net
operating
income
Expenses
Gross
income
Retail Banking
Var. 9M’09 / 9M’08 (%) in EUR
+10%
+0%
+18%
+0%
-3%
+27%
+8%
• Venezuela impact registered under discontinued operations.
In Q1’09; € 81 mill. , Q2’09: € 1 mill.; Q3’09: 0 mill.
+13%
Excl. fx and
perimeter
39. 39
628 605
715
951 983
1,152
975
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
394 379 435
533
672
879
634
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
-12.3%
+35.6%
+80.9%
+68.6%
+59.7%
Attributable
profit
Net oper.
inc. net of
LLPs
Net
operating
income
Expenses
Gross
income
Global Wholesale Banking (GBM)
Excellent business performance over 2008 backed by market share
gains and spreads ...
Attributable profit
Attributable profit: EUR 2,185 mill.
Var. 9M’09 / 9M’08
Net operating income
EUR million
EUR million
40. 40
805 799
980
1,097 1,128
149 134
61
169
168
147
1,262
1,148
116
954 933
1,041
1,266 1,264
1,430
1,275
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Global Wholesale Banking (GBM)
… and the area’s management capacities
Gross income (EUR mill.)
Solid revenues generation …
Total
Trading
Customers
By customer revenues
… in our core markets …
Spain, Brazil and the UK generate around
80% of customer revenues
1,046
1,668
757
1,069
150
87
631
714
2,584
3,538
9M'08 9M'09
+37%
+13%
TOTAL
Investment banking
Equities
+41%
+59%
Customer revenues (EUR mill.)
…based on a diversified product
portfolio …
(*) Including Global Transaction Banking and Credit
-42%
Corporate
Banking*
Hedges of interest /
exchange rates
41. 41
Global Wholesale Banking (GBM)
… and the area’s management capacities
Strict in costs
325 328 327 315
292
278
290
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
-11%
Effort made in reducing structures in
2008 and 2009
Further efficiency improvement,
differentiating us from our competitors
High quality of credit portfolio
Revenue growth without increasing risk …
… and without further liquidity needs
Strict commitment in risks and in
capital consumption
Sep’08 = 100
100
86
Sep'08 Sep'09
69 69
Sep'08 Sep'09
EUR billion
Excluding forex impact
Operating expenses (EUR mill.)
GBM Risk-weighted assets
Loans to GBM customers
42. 42
Asset Management and Insurance
High contribution to the Group via revenues and profit
Generates revenues for retail
networks (cross-selling) …
1
Attributable profit (EUR mill.)
Asset
Mgmt.
Insurance
… maintaining sustained results
2
In 9M’09: EUR 2,709 mill.
of gross income from
mutual funds and
insurance
= 9% of
Group’s
revenues
After costs and fees paid to the networks
74
93
67 76
41
43
39 21
85
104
81
19
36 8
115
136
105
115
106
123
89
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
440
334
292
171
217
210
26
U 9M’08 (const. EUR )
EUR million
Brazil
Spain
Germany
UK
Other Latam
Other Europe
Sovereign
+35%
-39%
+28%
+42%
+11%
+1%
n.s.
Potential from
global
management +
incorporations
139
115
9M'08 9M'09
Asset Management
Starting volumes recovery, still without impact
on revenues
Expenses (EUR million)
-17%
Managed assets (EUR billion)
131
101 100 105
111
D'07 D'08 M'09 J'09 S'09
Insurance (PBT + fees)
44. 44
127
212 238
374
332 323
501
544 561
Q1'09* Q2'09 Q3'09
221
238
183
Q1'09* Q2'09 Q3'09
Sovereign: contribution to Grupo Santander results
Note: data under Group criteria
(*) February-March data at a quarterly rate
Higher revenues, lower costs and provisions under control:
moving toward the break-even point
Net operating income quarterly increase …
+66%
US$ million
… already higher than provisions in the
third quarter
Gross income +9%
-11%
Loan-loss provisions
US$ million
-4
-10
-25
Q1'09 Q2'09 Q3'09
+12%
+3%
-3%
Attributable profit
Net operating
income
Expenses
US$ million
Provisions /
gross loans (%)
2.94
2.63
3.57
Mar'09 Jun'09 Sep'09
45. 45
27.7
28.3
27.2
25.8
Dec'08 Mar'09 Jun Sep
Sovereign: main business highlights
Note: data under US GAAP
(*) Commercial and Industrial
(**) Wholesale (demand and time deposits), government and repos
US$ billion
Gross loans
In loans: reducing of non-basic loans
In deposits: focus on reducing the financing cost
50.8
52.9
54.9
55.9
Dec'08 Mar'09 Jun Sep
18.5
21.0
23.3
22.6
Dec'08 Mar'09 Jun Sep
US$ billion
Deposits
Exiting non-basic segments:
• Auto: -29% o/Dec.08
• C&I and other (*): -15% o/Dec.08
Focus on core deposits
Exiting expensive deposits
Retail demand deposits
-9%
Retail time and others**
-18%
+7%
47. 47
Amid a difficult banking scenario, Santander was able to ….
Quarterly recurring
profit around EUR 2.2
billion
Obtain value from
diversification
Obtain value from
integrations and
synergies
Maintain high profits
All of it while remaining on track to reach the targets
announced for the whole year
Capacity to allocate
provisions: Net operating
income 2.4x provisions
Generation of free capital
Reinforced due to
application of
extraordinary results
Generic provisions
proforma: EUR 7.5 Bill.
Core capital Sep.09
proforma: 8.4%
Strengthen balance
sheet and capital
Sustained increase of
book value per share
Maintain pay-out policy:
high quarterly dividends
Surpassing peers and
the market in
profitability in the long-,
medium- and short term
Generate value for
shareholders
48. 48
Europe and the US: starting
moderate recovery
Latin America: area of largest
growth, starring Brazil …
Stable interest rates environment,
with an upward trend in zones of
faster recovery
Outlook for the coming quarters
Macroeconomic scenario
Revenues management
differentiated by countries:
spreads, balances, product mix and
fees
Strict management of expenses /
synergies
Management of integrations
Management of risks / recoveries
Efficient use of capital and liquidity
SAN management drivers
52. 52
0.77 0.88
1.24 1.14
2.00 1.95 2.01 2.02 2.04
2.22 2.25
1.67
1.44
0.70
0.66
1.13
0.58
0.78
1.25
1.34
0.91
Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3
Loans Deposits Total
United Kingdom. Spreads and NPL ratios
(%)
1.54% 1.65%
1.04% 1.25%
0.76%
45% 48%
69%
57% 56%
Sep'08 Dec'08 Mar'09 Jun'09 Sep'09
NPLs Coverage
Note: Including A&L since Q1’09 Note: Including A&L since Dec’08
(*)
(*) UPLs coverage >100%
Spreads Retail Banking NPLs and coverage ratios
53. 53
Exchange rates. Latin America 9M’09
Strong depreciation of Latin American currencies
against the dollar and euro
9M'09 9M'08 Var.
1.364 1.520 11%
2.826 2.560 -9%
18.610 15.983 -14%
779.144 732.671 -6%
9M'09 9M'08 Var.
2.072 1.684 -19%
13.646 10.515 -23%
571.305 482.006 -16%
US DOLLAR
BRAZILIAN REAL
NEW MEXICAN PESO
CHILEAN PESO
BRAZILIAN REAL
NEW MEXICAN PESO
CHILEAN PESO
AVERAGE RATES
EUR / LOCAL CCY.
AVERAGE RATES
US$ / LOCAL CCY.
(*) Positive sign: currency appreciation; negative sign: currency depreciation
