Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Banco Santander Activity and results 3Q12

Banco Santander Activity and results 3Q12Banco Santander

  • Login to see the comments

  • Be the first to like this

Banco Santander Activity and results 3Q12

  1. 1. 125 October 2012
  2. 2. 2Important informationBanco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements. These forward-lookingstatements are found in various places throughout this presentation and include, without limitation, statements concerning our futurebusiness development and economic performance. While these forward-looking statements represent our judgment and futureexpectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actualdevelopments 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 andinterest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness ofour customers, obligors and counterparties. The risk factors that we have inDecated in our past and future filings and reports, includingthose with the Securities and Exchange Commission of the United States of America (the “SEC”) could adversely affect our business andfinancial performance. Other unknown or unpreDectable factors could cause actual results to differ materially from those in the forward-looking statements.Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available andviews taken on the date on which they are made; such knowledge, information and views may change at any time. Santander does notundertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events orotherwise.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 soonly on the basis of such persons own judgment as to the merits or the suitability of the securities for its purpose and only on suchinformation as is contained in such public information having taken all such professional or other advice as it considers necessary orappropriate 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 orinvestments whatsoever.Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy anysecurities. 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 toengage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act2000.Note: Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or futureearnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentationshould be construed as a profit forecast.
  3. 3. 3 Agenda■ Group performance Jan-Sep 2012 — Highlights — Results■ Business areas performance Jan-Sep 2012■ Conclusions■ Appendix
  4. 4. Highlights January – September 2012 4 1 2 Sustained results generation Effort in provisions in Spain Real estate provisions: Groups Pre-provision profit: EUR 5.0 bn. EUR 18,184 mill.; +3% R.D.L. Total NPLs coverage approx. 90% 65% (+19 p.p. / Sep’11) 3 4 Capital strength Liquidity. in adverse scenarios Focus on capturing in Spain Core Capital (BIS II): 10.4% Loan to deposit ratio* Oliver Wyman stress test: surplus of EUR 25,297 mill. 108% Recurring attributable profit January-September: EUR 4,250 mill. Attributable profit after provisions: EUR 1,804 mill.(*) Loans / (deposits + retail commercial paper)R.D.L.: Royal Decree Law 2/2012 and 18/2012
  5. 5. 1 Sustained results generation 5 Maintaining our capacity to generate sustained results underpinned by basic revenues Basic revenues EUR billion 29.5 +5% 30.9 Pre-provision profit EUR billion +3% 18.2 17.7 Jan-Sep11 Jan-Sep12 Expenses EUR billion +5% 15.1 14.5 Jan-Sep11 Jan-Sep12 Jan-Sep11 Jan-Sep12
  6. 6. 2 Effort on real estate provisioning 6 The effort in real estate provisioning in Spain continued in Q312 (EUR 2,230 mill.; EUR 1,552 mill. net of tax), bringing attributable profit to EUR 100 mill. Impact on attributable profit in Q312EUR million +410 1,652 1,242 -1,552 100 Q312 Capital gains TOTAL Provisions Q312 ordinary net of tax* net of tax accounting attributable attributable profit profit(*) Mainly Iberia insurance (EUR 330 million)
  7. 7. 2 Effort on real estate provisioning 7 At September, the year-to-date real estate provisions amounted to EUR 5,010 mill. (EUR 3,475 mill. net of tax), bringing the attributable profit to EUR 1,804 mill. Impact on attributable profit in Jan-Sep 2012 EUR million +1,029 5,279 4,250 -3,475 1,804 Jan-Sep12 Capital gains TOTAL Provisions Jan-Sep12 ordinary net of tax* net of tax accounting attributable attributable profit profit(*) Mainly Colombia and Iberia insurance
  8. 8. 3 Capital strength 8 These provisions are absorbed while maintaining our capital strength ... Core capital (BIS II) above 10% 10.4% 10.0% 10.1% 8.6% 8.8% … as underscored 7.6% by the latest stress test on 6.3% Spanish banks 5.9% (Oliver Wyman) Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Jun12 Sep12Note: Dec’06 and Dec’07 under BIS I
  9. 9. 3 Capital strength 9 Under the adverse scenario considered in the stress test Santander shows … … lower ... the only entity … and the only one to EXPECTED LOSS to increase GENERATE CAPITAL than the sector, … COMMON EQUITY TIER I …o/ assets EUR billion 17.4% 10.8% SAN 2.6 15.6% C1 -0.5 C2 -1.2 9.7% C3 -2.2 C4 -3.2 C5 -3.5 C6 -3.8 C7 -3.9 SAN Sector 2011 2014 C8 -4.1 C9 -5.3 C10 -8.2 Surplus of C11 -9.3 EUR 25,297 mill. C12 -12.5 in 2014 C13 -26.3Source: Oliver Wyman Report
  10. 10. 4 Liquidity 10 In a highly demanding environment, the Group maintains a solid liquidity position due to … ... deleveraging in Spain + Portugal Loan to deposit1 ratio. Total GroupVar. Sep12/Dec11 in EUR bn. 150% +5bn. 135% Gap 117% 117% 117% reduction: -20 Bn -15 bn. Loans Deposits 1 D08 D09 D10 D11 S12 ... the Groups high issuing capacity Deposits1 + M/L term financing / loansJan-Sep’12 in EUR bn. 35.0 9.0 M/L term 115% 113% 113% 10.0 24.4 issues 104% 106% 16.0 10.6 Securitisations 2 Q1’12 Q2’12 Q312 Total2 D08 D09 D10 D11 S12(1) Including retail commercial paper(2) Placed in the market and including structure financing
  11. 11. 4 Non-performing loans ratio 11 Our ratios still compare very well in the main markets where we operate Spain United Kindgom% 10.51 (Aug.) % 9.65 8.37 2.40 7.84 2.16 2.00 1.96 1.94 1.88 5.81 5.08 3.37 5.98 6.38 1.08 5.49 5.75 1.57 1.41 1.41 1.46 1.50 4.24 0.92 3.41 1.03 0.64 1.95 0.66Dec07 Dec08 Dec09 Dec10 Dec11 Mar12 Jun12 Sep12 Dec07 Dec08 Dec09 Dec10 Dec11 Mar12 Jun12 Brazil Latin America ex-Brazil% 5.9 % 4.6 5.2 5.2 (Aug.) 4.9 5.0 3.6 5.4 3.2 3.1 3.3 3.2 5.1 4.9 2.3 4.0 3.8 4.5 4.5 2.7 2.6 2.5 2.4 2.4 3.5 2.1 Private Banks 3.9 1.6 3.4 Santander2.9 Dec07 Dec08 Dec09 Dec10 Dec11 Mar12 Jun12 Sep12 Dec07 Dec08 Dec09 Dec10 Dec11 Mar12 Jun12Data in local criteria. Latest available data for the sector by central banks and CouncilMortgage Lenders (UK)
  12. 12. 4 Non-performing loans ratio 12 The Groups NPLs continue sliding upwards because of Spain and Brazil Groups Total Continental Europe% % Spain SCF 6.38 4.33 5.98 3.98 4.11 5.49 5.75 3.78 3.86 3.89 5.15 5.25 4.99 3.55 3.61 4.57 4.81 4.74 4.50 4.24 3.97 4.05 3.88 3.96 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 D10M11 J11 S11 D11M12 J12 S12 D10 M11 J11 S11 D11 M12 J12 S12 United Kingdom and USA Latin America% % UK USA Brazil Latam Ex-Brazil 4.61 6.51 6.79 4.15 5.76 3.76 5.38 4.91 4.85 5.05 5.05 3.22 3.41 3.50 3.07 2.94 3.08 2.91 2.89 3.24 2.851.74 1.73 1.81 1.86 1.84 1.82 1.83 1.94 2.46 2.27 2.31D10M11 J11 S11 D11M12 J12 S12 D10M11 J11 S11 D11M12 J12 S12 D10M11 J11 S11 D11M12 J12 S12 D10M11 J11 S11 D11M12 J12 S12
  13. 13. 4 Coverage 13 Higher coverage in the Group because of sharp increase in Spain (for the third straight quarter) and increased in Brazil and the UK Groups Total Continental Europe% % Spain SCF 73 71 70 69 66 65 65 109 108 111 110 61 62 58 53 53 103 105 49 101 46 45 46 98 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 D10M11 J11 S11 D11M12 J12 S12 D10M11 J11 S11 D11M12 J12 S12 United Kingdom and USA Latin America% % UK USA Brazil Latam Ex-Brazil 113 110 107 96 110 114 110 109 93 101 104 102 100 95 102 95 90 90 92 88 85 82 85 7548 47 43 47 42 40 40 40D10M11 J11 S11 D11M12 J12 S12 D10M11 J11 S11 D11M12 J12 S12 D10M11 J11 S11 D11M12 J12 S12 D10M11 J11 S11 D11M12 J12 S12
  14. 14. 14 Agenda■ Group performance Jan-Sep 2012 — Highlights — Results■ Business areas performance Jan-Sep 2012■ Conclusions■ Appendix
  15. 15. Grupo Santander Results Jan-Sep12 vs. Jan-Sep11 15Los resultados muestran un crecimiento del 3% en beneficio antes de profit The results underscored the soundness of the pre-provision provisiones and the impact of the effort made in provisions Var. / Jan-Sep11 % excl. fx EUR mill. Jan-Sep12 Amount % and perimeter Gross income 33,324 +1,200 +3.7 +4.8 Operating expenses -15,141 -675 +4.7 +4.1 Net operating income 18,184 +525 +3.0 +5.4 Loan-loss provisions -9,533 -2,211 +30.2 +33.2 Other results -1,714 +750 -30.4 -29.5 Profit before tax 6,936 -937 -11.9 -9.5 Tax and minority interests -2,684 -136 +5.3 -0.2 Profit before real estate provisions 4,250 -1,054 -19.9 -13.7 Net capital gains and real estate provisions -2,446 -2,446 n.m. n.m. Accounting attributable profit 1,804 -3,500 -66.0 -59.9
  16. 16. Gross income 16 Basic revenues as the main driver of profits Basic revenues Groups gross income Q312 / Q311:Constant EUR million +EUR 200 mill.; +2.0% 11,192 11,309Total 10,944 10,741 10,821 10,823 10,359 Q312 / Q311Other2 Latam +622 9,931 9,943 10,126 10,326 10,415 10,143 Continental Europe +34 9,500 Basic UK -295 revenues1 USA -66 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Corporate Centre -95 (1) Basic revenues: Net interest income + fee income + insurance activities (2) Trading gains + dividends + equity accounted income + other operating results
  17. 17. Operating Expenses 17 Stable in recent quarters. Rose in the third quarter due to Brazils salary agreement (+7.5%) Expenses Groups expenses Q312 / Q311:Constant EUR million +EUR 173 mill.: +3.5% Q312 / Q311 5,179 4,931 5,025 5,012 5,104 4,692 4,846 Latam +126 Continental Europe -7 UK -1 Q111 Q2 Q3 Q4 Q112 Q2 Q3 USA +27
  18. 18. Provisions 18 Higher provisions in recent quarters because of real estate provisions in Spain. In the third quarter over the second, lower loan-loss provisions ProvisionsConstant EUR million 6,225 5,261 4,420 2,780 2,230 1,812 3,057 Around 90% of 2,505 2,674 requirements in 2,011 Royal Decree Laws 3,445 2,608 3,031 are already met Q111 Q2 Q3 Q4 Q112 Q2 Q3 Net loan-loss provisions Real estate provisions in Spain
  19. 19. Provisions 19 These provisions, coupled with significant stock reduction, increased real estate coverage sharply in Spain1 Coverage by borrowers situation Total coverage (September 2012) (problem loans + outstanding risk)EUR million provisions / exposure (%) Risk Fund Coverage Non-performing 7,784 3,483 45% 41% Substandard2 2,443 1,048 43% 32% Foreclosed real estate 8,277 4,102 50% 22% Total problem loans 18,504 8,633 47% Performing 7,951 2,110 27% Real estate exposure 26,455 10,743 41% Dec11 Jun12 Sep12(1) Including Santander Branch Network, Banesto, GBM Spain, SCF Spain and Banif(2) 100% up-to-date with payments
  20. 20. 20 Agenda■ Group performance Jan-Sep 2012 — Highlights — Results■ Business areas performance Jan-Sep 2012■ Conclusions■ Appendix
  21. 21. Business areas Jan-Sep12 21 High geographic diversification in profits generation Recurring attributable profit by geographic segment in Jan-Sep12(1) Portugal, 1% Poland, 5% Spain, 16% Germany, 4% Brazil, 26% Other Europe, 2% United Kingdom, 13% Mexico, 13% USA, 9% Other Chile, 5% LatAm, 6%(1) Over operating areas recurring attributable profit
  22. 22. Continental Europe Jan-Sep12 22 Recovery in revenues and profits in recent quarters. Year-on-year comparison affected by the larger provisions made Attributable profit: Basic revenues EUR 1,813 mill. EUR millionVar. Jan-Sep12 / Jan-Sep11 +1% Excl. perimeter 3,391 3,278 3,109 3,262 3,444 3,312 3,023 Basic revenues +3% +1% Gross income +4% +2% Q111 Q2 Q3 Q4 Q112 Q2 Q3 Expenses +2% -1% Attributable profit EUR millionNet operating income +6% +5% 878 Net op. income after 700 -12% -14% 584 627 602 provisions 443 266 Attributable profit -10% -12% Q111 Q2 Q3 Q4 Q112 Q2 Q3
  23. 23. Santander Branch Network Jan-Sep12 23 Better liquidity position with improved trend in revenues and profits in recent quarters Activity Basic revenues EUR million Volumes Balances (€ bn.) and LDR1 ratio +8% Var. Sep’12 / Sep’11 129% +16% 104% 1,136 1,116 1,219 1,178 1,072 1,094 1,031 105 99 95 81 -6% Loans Deposits 2 Loans Dep. Loans Dep. 2 Sep11 Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Return on net interest income Attributable profit Return / Cost Net interest inc. / ATAs EUR million 3.66% 3.74% 3.68%3.04% Return 3.43% 274 266 226 2.96% 173 Cost2 101 58 751.30% 1.36% 1.46% 1.44%Q111 Q411 Q212 Q312 Jan-Sep11 Jan-Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3(1) Loan-to-deposit ratio(2) Including retail commercial paper
  24. 24. Banesto Jan-Sep12 24 Similar trends to those of previous quarters: reduced commercial gap and stable revenues and profits Activity Basic revenues Volumes Balances (€ bn.) and LDR1 ratio EUR million -1% Var. Sep’12 / Sep’11 135% +1% 122% 489 525 516 486 514 530 511 69 63 51 52 -9% Loans Deposits 2 Loans Dep. Loans Dep.2 Sep11 Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Return on net interest income Attributable profit Return / Cost Net interest inc. / ATAs3 EUR million 3.61% 3.70% 3.66%3.04% 2.43% Return 2.36% 101 Cost2 67 41 41 321.86% 1.70% 1.70% 1.67% 22 -59Q111 Q411 Q212 Q312 Jan-Sep11 Jan-Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3(1) Loan-to-deposit ratio(2) Including retail commercial paper(3) Retail Banking
  25. 25. Spain1. Loans and Deposits 25 In short, in a deleveraging market, improvement of commercial gap, gaining market share in deposits (approx. +124 b.p. in 2012) Appropiate loan-to-deposit structure Reduced commercial gap in 2012 EUR billion Var. Sep12/Dec11 in EUR bn. +5 bn. Gap reduction: TOTAL 210 -18 bn. Public sector 18 185 TOTAL 12 Retail commercial -13 bn. Household paper mortgages 56 Loans Deposits 2 Other loans 18 Time deposits to individuals 93 / other Improved loan to deposit2 ratioCompanies w/o real estate 100 178% purposes 149% 80 Demand deposits 119% 118% Real estate 108% purpose 18 Gross loans Deposits D08 D09 D10 D11 S12 (1) Including Santander Branch Network, Banesto, GBM Spain, Santander Consumer Spain and Banif (2) Including retail commercial paper
  26. 26. Spain1. Customer lending and NPLs 26 The trend to reduce real estate lending and deleveraging in individuals continues. Total NPLs increased mainly because of real estate and reduced lending Gross loans NPL ratio EUR billion % With real 42.8 estate 39.4 purpose TOTAL 230 219 217 Public sector 12 210 12 28.6 18 Household 18 mortgages 61 59 17.0 57 56 Other loans 6.4 24 6.0 to individuals 20 5.5 Total 18 18 4.2Companies w/o Total w/o real estate real estate purposes 105 3.6 purpose 105 104 100 3.3 3.3 2.9 Dec10 Dec11 Jun12 Sep12 Real estate 27 purpose 23 20 -9% 18 2.2 2.7 2.5 2.7 Home Dec10 Dec11 Jun12 Sep12 mortgages 3.1 3.5 3.5 3.9 Rest of portfolio(1) Including SAN Branch Network, Banesto, GBM Spain, Santander Consumer Spain and Banif
  27. 27. Spain1. Evolution of NPLs other than real estate 27 In other than real estate loans, stable NPLs entries in individual customers and companies in recent quarters Companies: NPL entries >90 days Individuals-mortgages: NPL entries >90 days Base 100: Q108 Base 100: Q108 420 373 195 365 348 352 176 336 349 302 315 327 292 142 144 251 255 264 258 118 100 106 107 104 103 103 104 112 109 103 100 188 197 90 93 90 168 100 Q108 Q3 Q109 Q3 Q110 Q3 Q111 Q3 Q112 Q3 Q108 Q3 Q109 Q3 Q110 Q3 Q111 Q3 Q112 Q3 Individuals-consumer: NPL entries >90 days Individuals-cards: NPL entries >90 days Base 100: Q108 Base 100: Q108 202 185187 173 159 151 126 129 128 124 100 99 91 100108 95 87 81 78 73 76 66 75 64 62 66 61 66 58 55 54 50 50 48 53 48 50 56 Q108 Q3 Q109 Q3 Q110 Q3 Q111 Q3 Q112 Q3 Q108 Q3 Q109 Q3 Q110 Q3 Q111 Q3 Q112 Q3(1) Data Santander Branch Network + Banesto. Gross entries of NPL > 90 days past-due
  28. 28. Spain1. Evolution of real estate exposure 28 Real estate exposure has been reduced by 38% since the onset of the crisis … Total real estate exposureEUR billion 42.5 -EUR 16,000 mill. Foreclosed 4.8 real estate 32.0 28.3 26.5 8.6 8.4 8.3 37.7 Loans 23.4 19.9 18.2 Dec08 Dec11 Jun12 Sep12(1) Including Santander Branch Network, Banesto, GBM Spain, Santander Consumer Spain and Banif
  29. 29. Spain1. Evolution of foreclosed real estate 29 The change of trend in foreclosed real estate was consolidated, registering a reduction of stock in the year, setting us apart from the sector Gross amount (EUR million ) 8,552 8,590 8,388 8,277 7,509 Quarterly evolution 2011 and 2012 6,521 EUR million +453 4,765 +373 +225 -7 +37 -111 -202 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Dec08 Dec09 Dec10 Dec11 Mar12 Jun12 Sep12
  30. 30. Portugal Jan-Sep12 30 SantanderTotta continued its deleveraging, with resilient revenues and profit, in an environment of strong adjustments Activity Basic revenues Volumes EUR million Balances (€ bn.) and LDR1 ratio 0% Var. Sep12 /Sep11 127% 112% +5% 273 242 246 258 225 219 225 29 27 23 24 -8% Loans Deposits Loans Dep. Loans Dep. Sep11 Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Return on net interest income Attributable profit EUR million Return / Cost Net interest inc. / ATAs 3.98% Return 3.68%3.30% 3.40% 1.32% 1.35% 90 41 45 38 2.51% 33 27 2.37% 2.32%1.58% Cost -2Q111 Q411 Q212 Q312 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Jan-Sep11 Jan-Sep12(1) Loan-to-deposit ratio
  31. 31. Santander Consumer Finance Continental Europe Jan-Sep12 31 High recurring profit fuelled by solid revenues and less provisions needs Activity Basic revenues EUR million Volumes Net interest income / Provisions (% /ATAs) -4% Var. Sep12 /Sep11 3.48% 1% 3.24% 828 Net interest 792 825 777 815 778 790 income 2.27 2.24 -3% Provisions 1.21% 1.00% Jan-Sep11 Jan-Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Loans Deposits Gross loans: EUR 59 bn. New loans Attributable profit*% / total % Jan-Sep12/Jan-Sep11 EUR million Other 206 Germany Germany +7% 183 186 201 181 Poland 176 5 6 Nordic countries +7%Italy 12 96 Poland +13% 12 52 Spain 0%Spain 13 Italy -25% Q111 Q2 Q3 Q4 Q112 Q2 Q3 Nordic Other -8% * Excluding Santander Consumer UKs profit as it is recorded in Santander countries UK. Including it, Jan-Sep12 attributable profit was EUR 638 mill.
  32. 32. Poland (BZ WBK) Jan-Sep12 32 Loans and deposits growth produced revenues increase and good profit performance Activity1 Basic revenues Volumes Balances (€ bn.) and LDR2 ratio Constant EUR mill. +10% Var. Sep12 /Sep11 85% 88% 216 219 +9% 208 208 198 199 10.6 11.0 8.8 9.7 +4% Loans Dep. Loans Dep. Loans Deposits Sep11 Sep12 Q211 Q3 Q4 Q112 Q2 Q3 Return on net interest income Attributable profit Constant EUR mill. Return / Cost Net interest inc. / ATAs6.84% 7.06% 7.09% 7.20% 88 3.74% 85 76 73 78 Return 3.41% 63 Cost 2.96% 3.00% 3.19%2.65%Q211 Q411 Q412 Q312 Q211 Jan-Sep12 Q211 Q3 Q4 Q112 Q2 Q3(1) Local currency(2) Loan-to deposit ratio
  33. 33. United Kingdom Jan-Sep12 33 • Revenues impacted by: scenario of reduced business, interest rates at their lowest and higher funding cost. Improved front book profitability • In Q3’12, extraordinary profit of £65 mill. (net between tender offer capital gain and provisions) Activity1 Basic revenues Volumes Profitability £ million -20% Balances in £, Var. Sep12/Sep11 Var. Loans/deposits 2.01% 2.04% 1.98% 1,202 -3% +6% +1% 1.85% 1.84% 1,183 1,175 1,154 1,044 954 936 167 SMEs 1.80% 1.77% +20% 153 1.63% 1.42% 1.35% 31 Net interest income / assets 2 Q311 Q4 Q112 Q2 Q3 Q111 Q2 Q3 Q4 Q112 Q2 Q3Mortgages Companies Deposits Attributable profit: £ 733 mill. (EUR 904 mill.) Attributable profit Var. Jan-Sep12 / Jan-Sep11 in £ £ million Gross income -18% 431 375 355 Expenses 0% 255 210 268 Net operating income -32% -101 Net op. income after provisions -45% Ordinary attrib. profit -5% Q111 Q2* Q3 Q4 Q112 Q2 Q3** Attributable profit +4% (*) Impact from PPI provision (**) Positive impact of £65 mill. from net between capital gains and provisions(1) Local criteria. Balances in billion sterling(2) Excluding GBM balances and other deposits for £29 bn. at September 2012Note.- Corporate Banking SME excludes SME assets held within the Corporate Centre
  34. 34. Brazil Jan-Sep12 34 Excellent track record in revenues and net operating income (+20%). Higher attributable profit in the quarter (+7%) due to lower provisions (-12%) Activity1 Basic revenues Volumes NII / Provisions (o/ATAs) Constant US$ mill. Var. Sep12 /Sep11 +14% 8.42% Net 7.22% interest +10% income 4.39 5,110 5,310 5,243 4.33 4,936 +4% Provisions 4,601 4.03% 4,431 4,531 2.89% 2 Loans Deposits Jan-Sep11 Jan-Sep12 Attributable profit: US$ 2.162 mill. Q111 Q2 Q3 Q4 Q112 Q2 Q3 (EUR 1,689 mill.)Var. Jan-Sep12 / Jan-Sep11 in constant US$ Excl. Attributable profit perimeter Basic revenues +15% +15% Constant US$ mill. Gross income +15% +15% Net profit 1,049 973 1,000 Expenses +7% +7% Minority 936 848 864 889 177 167 217 interests 158 134 177 198 Net operating income +20% +20% Attributable 872 778 806 783 Net op. income after 714 666 712 provisions -1% 0% profit Attributable profit -9% +1% Q111 Q2 Q3 Q4 Q112 Q2 Q3 (1) Local currency (2) Excluding Repos. Including «letras financieras»
  35. 35. Mexico Jan-Sep12 35 Higher profit fuelled by strong basic revenues (activity at double digits) and costs and provisions growing at a slower pace Activity1 Basic revenues Volumes NII / Provisions (o/ATAs) Constant US$ mill. Var. Sep12 /Sep11 3.77% 3.99% +18% Net +14% interest +10% income 844 846 901 710 766 782 3.00 3.16 699 Provisions 0.77% 0.83% Loans Deposits 2 Jan-Sep11 Jan-Sep12 Attributable profit: US$ 1,065 mill. (EUR 832 mill.) Q111 Q2 Q3 Q4 Q112 Q2 Q3Var. Jan-Sep12 / Jan-Sep11 in constant US$ Excl. perimeter Attributable profit Basic revenues +19% +19% Constant US$ mill. Gross income +15% +16% 381 319 321 342 343 Expenses +10% +10% 294 286 Net operating income +18% +19% Net op. income after provisions +17% +19% Attributable profit +14% +16% Q111 Q2 Q3 Q4 Q112 Q2 Q3 (1) Local currency (2) Excluding Repos
  36. 36. Chile Jan-Sep12 36 In activity, focus on customer deposits and selective lending criteria. Quarterly results: impact on revenues from lower inflation (UF portfolio) and higher provisions due to worsening credit quality in the sector Activity1 Basic revenues Volumes NII/Provisions (o/ATAs) Constant US$ mill. Var. Sep12 /Sep11 4.04% +1% 3.83% Net interest income +5% 2.83 2.70 687 710 711 686 642 +4% 630 638 Provisions 1.00% 1.34% 2 Loans Deposits Jan-Sep11 Jan-Sep12 Attributable profit: US$ 464 mill. Q111 Q2 Q3 Q4 Q112 Q2 Q3 (EUR 362 mill.)Var. Jan-Sep12 / Jan-Sep11 in constant US$ Excl. Attributable profit perimeter Basic revenues +4% +4% Constant US$ mill. Gross income +3% +5% 332 Net profit 279 281 75 251 240 Expenses +7% +7% Minority 60 205 77 interests 77 75 172 Net operating income +1% +4% 45 257 47 Net op. income after Attributable 219 204 174 165 -13% -10% 160 125 provisions profit Attributable profit -27% -12% Q111 Q2 Q3 Q4 Q112 Q2 Q3 (1) Local currency (2) Excluding Repos
  37. 37. 37 Latin America ex-Brazil The remaining countries in the region registered growth, mainly driven by basic revenues Attributable profit. Constant US$ million Argentina Puerto Rico Uruguay +15% +36% +180% 304 47 264 50 37 17 Jan-Sep11 Jan-Sep12 Jan-Sep11 Jan-Sep12 Jan-Sep11 Jan-Sep12 Peru IPB* +28% -5% 149 141 15 11 Jan-Sep11 Jan-Sep12 Jan-Sep11 Jan-Sep12(*) International Private Banking
  38. 38. United States Jan-Sep12 38Santander US includes Sovereign Bank and SCUSAs contribution by the equity accounted method. Profit of US$ 747 mill. (EUR 584 mill.) Activity1 Quarterly profit US$ Mill. Trust PIERS impact: Volumes NII/Provisions (o/ATAs) US$127 mill. Var. Sep12 /Sep11 3.26% Net 2.83% 176 183 195 177 191 interest 171 income +6% 2.59 +5% 2.39 Provisions 54 0.67% 0.44% Loans Deposits Jan-Sep11 Jan-Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Activity1 Quarterly contribution US$ Mill. Use of provisions: US$ 77 million Gross loans New loans US$ billion US$ billion SCUSA profit 240 +22% 2.3 2.1 Minority int. and 172 191 17.8 1.4 perimeter 164 163 162 159 14.6 Contribution to SAN 156 (like-for-like 107 106 112 124 105 103 2011 H112 Q312 basis) Sep11 Sep12 quarterly quarterly average average Q111 Q2 Q3 Q4 Q112 Q2 Q3(1) Local currency
  39. 39. Corporate Activities 39 Greater losses due to higher funding costs and lower tax recoveries Attributable profit (Jan-Sep12 vs. Jan-Sep11) EUR mill. Main effects: Revenues (mainly net interest income) -175 Provisions and other -104 Taxes -181 Impact on profit -460 Net capital gains and real estate prov. -2,526 Total impact on profit -2,986
  40. 40. 40 Agenda■ Group performance Jan-Sep 2012 — Highlights — Results■ Business areas performance Jan-Sep 2012■ Conclusions■ Appendix
  41. 41. Outlook (I) 41 Santander continues laying the foundation for future growth, while managing a most demanding scenario Continue strengthening the balance sheet Spain and Portugal Gain profitable market share in a consolidating market Other SCF: maintain solid profits and return above peers Continental Poland: continue delivering results while merging with Kredyt Europe Bank Improve profitability of the front book UK Continue improving customer base in individuals & companies
  42. 42. Outlook (II) 42 Santander continues laying the foundation for future growth, while managing a most demanding scenario Brazil Revenues and provisions backed by better economic scenario Mexico Continue to strengthen the franchise (+200 branches in 3 years) Chile Focus on selective growth and risk quality Complete retail franchise (business, products…) backed by the USA established technological and operational base
  43. 43. 43 Agenda■ Group performance Jan-Sep 2012 — Highlights — Results■ Business areas performance Jan-Sep 2012■ Conclusions■ Appendix
  44. 44. 44 Groupsbalance sheet
  45. 45. Main trends of the Group’s balance sheet 45 Retail balance sheet, appropriate for the business nature of low risk, liquid and well capitalised Balance sheet at September 2012 1 Lending: 58% of balance sheet EUR billion 1,301 2 Cash, Central Banks and credit 1,301 Credit institutions: 15% Cash and credit 194 2 162 institutions institutions Derivatives 130 3 Derivatives 145 3 Derivatives (with counterpart on AFS Portfolio 4 Other 39 Trading portfolio 78 the liabilities side): 10% of 47 5 balance sheet Other* 98 6 Customer Deposits** 642 4 Available for sale portfolio (AFS): 6% Loans to 754 1 customers 5 Issues and subordinated Trading portfolio: 4% liabilities 213 Shareholders’ equity 6 & fixed liabilities 100 Other (goodwill, fixed assets, Assets Liabilities accruals): 7%(*) Other assets: Goodwill EUR 25 bn., tangible and intangible assets EUR 17 bn., other capital instruments at fair value EUR 1 bn., accruals and other accounts EUR 55 bn.(**) Including retail commercial paper
  46. 46. 46Secondary segments results
  47. 47. Retail Banking 47 The positive evolution of basic revenues is not feeding through to profit because of larger provisions and minority interests Activity Basic revenues1EUR billion EUR million Loans Deposits2 +3% +12% 585 9,086 9,430 9,438 9,443 9,913 9,813 9,727 +6% 677 522 640 Sep11 Sep12 Sep11 Sep12 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Attributable profit: EUR 4,872 mill.Var. Jan-Sep12 / Jan-Sep11 Attributable profit Basic revenues +5% EUR million Gross income +5% 2,187 Expenses +5% 1,727 1,570 1,647 1,619 1,605 1,427 Net operating inc. +5% Net op. income after provisions -14% Ordinary attributable profit -10% Q111 Q2 Q3 Q4 Q112 Q2 Q3* Attributable profit -9% (*) Positive impact of EUR 80 mill. from the net between capital gains and provisions in the UK(1) Net interest income + fee income + Insurance activity(2) Including retail commercial paper and "letras financieras"
  48. 48. Santander Consumer Finance Total. Jan-Sep12 48 Aggregates the Continental Europe, United Kingdom and USA units Basic data Total portfolio2 (Sep.’12): EUR 77 bill. EUR million Top 31 in Continental 10 countries 59 14 Countries Europe Agreements with manufacturers United Kingdom 4 37 for captive financing USA 14 15.4 Million customers Attributable profit Jan-Sep12: EUR 898 mill. 135,500 Dealers-participants EUR million 77,466 Million euros in loans2 Continental Europe 564 33,087 Million euros in deposits United Kingdom 75 Million euros in attributable profit USA 259 1,228 for 2011Note: basic data as of December except business volumes (September 2012)(1) Market share of new car financing loans(2) Gross loan portfolio under management
  49. 49. Global Wholesale Banking (GBM) 49 Solid revenues amid an environment of volatile markets, underpinned by customer revenues Gross income Gross incomeEUR million EUR million 0% +1% 1,409 3.635 Total 1,322 TOTAL 3.583 1,183 195 Trading 197 1,078 1,025 1,152 1,074 Trading & capital 418 +4% 434 140 81 130 109 183 Equities 293 +10% 323 Clients 1,214 1,125 1,043 997 1,022 965 842 Rates 975 -2% 953 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Credit 609 +4% 632Corporate finance -41% 46 Attributable profit 79 EUR million Transactional +3% 1,209 1,247 Banking 636 602 435 397 415 445 372 Jan-Sep11 Jan-Sep12 Customer revenues (+1% / Jan-Sep11) Q111 Q2 Q3 Q4 Q112 Q2 Q3
  50. 50. Asset Management and Insurance 50High contribution to the Group: 9% of operating areas total revenues. Lower profit as a result of preference for liquidity (Asset Management) and perimeter (Insurance) Total revenues. Contribution Gross income to the Group EUR millionEUR million -7% 243 250 234 231 229 218 3,260 3,026 189 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Jan-Sep11 Jan-Sep12 Attributable profit EUR million Asset Management Insurance 120 129 -7% 88 97 98 92 83 2,272 2,111 -7% 988 915 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Jan-Sep11 Jan-Sep12 Jan-Sep11 Jan-Sep12
  51. 51. 51Main units spreads and NPL ratios
  52. 52. Continental Europe. Main units spreads 52(%) SAN Branch Network Banesto Retail Banking 2.87 3.09 2.53 2.68 2.54 2.70 2.54 2.52 2.66 2.03 2.20 2.49 2.39 1.95 2.42 2.62 2.03 2.01 2.19 1.67 2.08 2.12 2.16 2.33 2.31 2.30 1.90 1.97 0.56 0.65 0.53 0.51 0.45 0.47 0.42 0.36 0.05 0.12 0.33 0.18 0.09 -0.36 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Loans Deposits Total Loans Deposits Total Santander Consumer Lending Portugal Retail Banking 2.15 2.23 2.34 2.39 2.47 2.08 2.06 4.83 4.43 4.48 4.57 4.51 4.57 4.67 1.96 1.75 1.68 1.45 1.43 1.43 1.34 0.12 -0.31 -0.47 -0.78 -0.91 -0.96 -1.13 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Loans Loans Deposits Total
  53. 53. 53 Continental Europe. NPL and coverage ratios Banco Santander1 Banesto 55% 62% 68% 49% 44% 39% 39% 41% 53% 53% 54% 52% 52% 51% 4.68% 5.08% 5.63% 5.99% 6.33% 6.59% 6.98% 4.54% 4.69% 5.01% 5.07% 5.27% 5.74% 4.31% Mar11 Jun Sep Dec Mar12 Jun Sep Mar11 Jun Sep Dec Mar12 Jun Sep NPL Coverage NPL Coverage Santander Consumer Portugal 103% 105% 109% 108% 111% 110% 62% 62% 58% 98% 53% 55% 53% 52% 4.99% 5.42% 6.16% 4.74% 3.25% 3.78% 4.06% 4.59% 4.50% 3.03% 3.97% 4.05% 3.88% 3.96% Mar11 Jun Sep Dec Mar12 Jun Sep Mar11 Jun Sep Dec Mar12 Jun Sep NPL Coverage NPL Coverage(1) Santander Branch Networks NPL ratio was 9.56% and coverage ratio 62% as of Sep12
  54. 54. 54Loans with real estate purpose and foreclosed real estate in Spain LOANS with real estate purpose Foreclosed REAL ESTATE EUR Million EUR Million Gross Net Sep’12 Dec’11 Var. amount Coverage amount Finished buildings 7,993 10,154 -2,161  Finished buildings 2,818 33% 1,894 Buildings under constr. 1,839 1,985 -146  Buildings under constr. 730 50% 368 Developed land 3,375 3,994 -619  Developed land 1,874 60% 758 Building and other land 2,225 2,572 -347  Building land 2,591 60% 1,049 Non mortgage guarantee 2,746 4,737 -1,991  Other land 264 60% 106 Total 18,178 23,442 -5,264 Sub Total 8,277 50% 4,175
  55. 55. United Kingdom. Spreads and NPL ratios 55(%) Spreads Retail Banking NPL and coverage 2.40 2.40 2.46 2.53 2.57 2.61 2.67 47% 47% 43% 42% 40% 40% 40% 2.08 2.00 2.01 2.03 1.98 1.85 1.84 -0.32 -0.40 -0.45 -0.50 1.73% 1.81% 1.86% 1.84% 1.82% 1.83% 1.94% -0.59 -0.76 -0.83 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Mar11 Jun Sep Dec Mar12 Jun Sep Loans Deposits Total NPL Coverage
  56. 56. Spreads main countries Latin America 56(%) Retail Banking Brazil Retail Banking Mexico 15.84 16.17 15.41 15.44 15.49 10.67 10.44 10.26 10.32 10.65 10.73 10.72 15.17 14.81 14.72 15.05 14.23 14.44 14.44 14.84 14.25 8.58 8.40 8.27 8.36 8.69 8.81 8.79 1.12 1.12 1.18 1.00 0.73 0.65 0.56 2.09 2.04 1.99 1.96 1.96 1.92 1.93 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Loans Deposits Total Loans Deposits Total Retail Banking Chile 7.47 7.04 7.01 6.98 6.83 6.87 6.84 4.38 4.14 4.18 4.35 4.56 4.62 4.48 3.09 2.90 2.65 2.52 2.45 2.36 2.36 Q111 Q2 Q3 Q4 Q112 Q2 Q3 Loans Deposits Total

×