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Santander Advance Presentation

Santander launches Santander Advance, a global strategy to become SMEs’ partner for growth

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Santander Advance Presentation

  2. 2. SMEs are a strategic segment for the Group • 24 million SMEs in the markets where we operate. • Contribute between 30% (e.g. USA) and 60% (e.g. MX) of GDP. • Generate 300 million jobs, 66% of total in Europe and 69% in Latin America. • Growing presence in international business, up to 40% of exports. They are the driving force of the economies where we operate:
  3. 3. 18% 11% 6% 11% 9% 8% 20% 6.5% 30% SMEs’ market share by country • Spain includes micro companies and SMEs, excludes retailers and the self-employed. • UK includes retailers and the self-employed.
  4. 4. SMEs are a strategic segment for the Group They are the driving force of the economies where we operate: Significant contribution to Group’s results: • 24 million SMEs in the markets where we operate. • Contribute between 30% (e.g. USA) and 60% (e.g. MX) of GDP. • Generate 300 million jobs, 66% of total in Europe and 69% in Latin America. • Growing presence in international business, up to 40% of exports. • 3.8 million customers • EUR 6.5 billion gross income, 22% of commercial banking. • EUR 65 billion in loans. • EUR 125 billion of business volume.
  5. 5. •Education and training for their employees. •Access to other markets •Constantly updating its technology •Means to connect with complementary SMEs •Guidelines for management and leadership And they tell us that they need much more than financing. We have actively listened to our CUSTOMERS… •At our branches •Through surveys •Pilot workshops with more than 200 companies •Market research •Expert reports We looked at the Group’s best practices. SMEs are a strategic segment for the Group • •Argentina SME training – Universities •SME Power (Mexico) •Breakthrough (UK) •Exporta Plan and SME Internship Programme (Spain) •International Desk (Latin America)
  6. 6. Our proposal: Advance Financing Financing and linkage programme for SMEs Advance Fund Value proposition for SMEs, customers and non- customers Recruitment and training International Advance Development Employment Connectivity SMEs’ partner of choice for growth
  7. 7. Progressive implementation in the Group’s units Phase 1: Spain Phase 2: Mexico Brazil UK Phase 3: Other major markets 15% 70% MAR-14 2015START 2H’14
  8. 8. Advance Financing Linkage and financing programme Dec-13 Dec-14 Santander Market Spain* 26,200 29,100 11% 0% Brazil 8,313 9,727 17% +11%-13% UK 14,029 16,123 15% +2.5% Mexico 2,255 2,900 29% +26% Chile 4,300 4,844 13% 12% Growth in balancesOutstanding balance (in € mn) * Excluding self-employed and retailers. • Selected SMEs (operational for at least three years, growing and with a specific investment project). • Minimum investment: € 1mn; medium / long term financing. • New or existing customers. Advance Fund • EUR 250 mn for Spain. Can be expanded and replicated in other markets. • Subordinated debt  Capital
  9. 9. Advance Development Advance Development • Knowledge Institute • Development workshops • Masterclass 80,000 Jobs and scholarships • Scholarships • Jobs platform 80,000 Connectivity • International • International Desk • Santander Trade • Trade missions • Santander Passport (June 2014) 30,000
  10. 10. Aim of the Advance programme: provide service to 200,000 SMEs in three years Spain 20,000 42,000 60,000 2014 2014* 2016* Mexico / Brazil / UK 7,500 45,000 90,000 Rest -- 13,000 50,000 27,500 100,000 200,000 * Cumulative figures
  11. 11. Santander, a partner of choice for SMEs • We have the capital and liquidity to support SMEs’ growth. • We have the geographic diversification to support their international expansion. • We have partnerships to offer (Santander Universities). • We have the experience of proven strategies in different countries. • We have the necessary teams and tools to help. • We are determined to become their partner of choice.
  13. 13. We are seeing loan growth and signs of genuine demand SMEs already show credit growth and a rising demand... New loans to SMEs have stopped falling and are growing at 5-10% year-on-year. There is demand from SMEs that only needs a change in the market New loans to SMEs1 ECB survey of SMEs -25% -13% -20%-19% -9% -16% -12% -7%-6% -1% 0% 4.7% 9.6% 5.0% dic-12 ene-13 feb-13 mar-13 abr-13 may-13 jun-13 jul-13 ago-13 sep-13 oct-13 nov-13 dic-13 ene-14 SMEs that needed loans… 11% 30% 59% Expected loan to be denied Expected restrictive conditions Did not have sufficient funds of their own Request ed loans 27% 73% Did not seek loans 1 New loans to companies of less than €1 million. (Source: Bank of Spain)
  14. 14. … and they make an outstanding contribution to Santander Spain They are the driving force of the Spanish economy… • Spain’s is an economy based on SMEs • They are 1,250,000… • … 90% of corporate Spain • They represent > 50% of GDP • They generate > 65% of jobs in the private sector • They account for 56% of exports • 280,000 active customers including companies, SMEs and micro companies • > €26 bn loans • > €45 bn business volume SMEs: A strategic segment in Spain and for the bank
  15. 15. We want to be the partner of choice in their growth: Santander Advance Transformation of the business model Financial offer: Products and services centred on the customer. Specialisation, quality, security and agility in loans as an integral part of the business. The best non- financial offer An innovative offer: Unique value offer to help SMEs grow by providing complementary services alongside financing Areas involved: • Business • Risks • HR • Technology • Finance
  16. 16. The pillars of Advance Financing Financing and linkage programme for SMEs Advance Fund Recruitment and training International Advance Development Employment Connectivity
  17. 17. Advance Financing Short-term domestic market financing Advance lending • Interest rate discounts depending on linkage • Spreads of 3.50%, dependent on linkage and amount • Other Advance products to assist with billing and payments Short-term international financing Exporta plan • International trade finance: export and import • Specialists in international business and support services • Discounts for using electronic banking Long-term financing Aim: to be leader in ICO credit lines and EIB funding Competitive products to meet their needs: • Mortgage lending • Equipment leasing / renting • Launch of Bansacar Advance
  18. 18. Advance Financing Basic principles • Complements traditional financing • Independent vehicle, with its own process and risk managements Characteristics Stated target: • SMEs with a record of growth (3 years) • Job creation Investment: • Minimum €1 million • Medium- and long-term financing • Flexible repayments and guarantees Debt structure: • Mainly subordinated debt • Eventually, convertible debt or other kind of debt Advance Fund of €250 million
  19. 19. Advance Development Business inspiration • SME days hosted by regional “flagship companies”. Development workshops/ SME Observatory • Workshops in Santander branches with 15-20 SMEs to discuss specific problems • Information collected and studied in SME Observatory Business inspiration • Themed training videos • Testimonials of SME experiences Knowledge Institute • Training course (Business management and export training programmes) • Online training (languages, other skills) • Everything SME leaders need RECRUITMENT AND TRAINING
  20. 20. Advance Development INTERNATIONAL EXPANSION Santander Trade Portal / Club • International trade portal. Market research and contact with potential business partners • International Desk/ Passport • Network of specialists in different countries and regions to support customers in their international growth International Connections • Virtual and physical trade missions. We can put SMEs in touch with the different markets where the Santander Group is present. Local events with customers • Breakfast: promotional meetings with 15-20 SMEs • Talks on international expansion: for 50-75 SMEs
  21. 21. Advance Development EMPLOYMENT Employment • Platform to help find employees, including publication of specific vacancies. • Capacity for 50,000 job offers from 10,000 SMEs. Santander Scholarships • 5,000 scholarships for university students to do internships in SMEs
  22. 22. Advance Development
  23. 23. What makes Santander Spain’s offer different Proximity to SMEs • Extensive network of universal branches (4,097): Proximity to SMEs • Extensive network of corporate branches (224): Largest in Spain • Plan to increase number of staff specialising in SMEs from 325 to 600 in the corporate branches • In the universal branches we have more than 3,648 sales staff who directly handle SME business Specialisation • Product specialists to support the SME business (353): International and Transactional Banking managers • Risk management teams that specialise in SMEs (400): • Analysts specialised in managing non-customers • Sectorial expertise • Commitment to respond to every request: 3 days • Risk pre-classification for SMEs to analyse their future needs International presence • Presence in 15 countries: Support for SMEs in their international expansion
  24. 24. Advance Financing goals for 2014 Loans New loan production + 24%  €30.7 billion Customers Capture 22% Linkage 29%
  25. 25. Advance Development goals for 2014 •20,000 SMEs will access various training initiatives, internationalization and employment •In addition, 6,000 university students will benefit from Santander scholarships Training • 8,500 trained SMEs International • 1,500 pymes with international initiatives Employment • 10,000 SMEs in job portal/5,000 scholarships Main goals in 2014 “Partners for growth” 20,000 SMEs will benefit from Advance Development
  26. 26. Conclusions 2014 ADVANCE PROGRAMME • SMEs are a strategic segment for the country and for Santander Spain • Banco Santander is launching: • A unique programme in the market • With a range of products with very competitive financial conditions and • Based on entirely new non-financial solutions to support SMEs EUR 31 billion available to SMEs 20,000 SMEs in non-financial programme