Apresentacoes evento santander_corretora

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Apresentacoes evento santander_corretora

  1. 1. Santander BrasilWholesale Banking May 12, 2010
  2. 2. 2This presentation was prepared by Banco Santander (Brasil) S.A. It is provided for p p p y ( ) pinformational purposes only and does not constitute an offer to sell or a solicitationto buy any security. It may contain forecasts about future events. Thesepredictions/estimates evidently involve risks and uncertainties, whether foreseen ornot by the Company. Therefore, the future results of the Company may differ from y p y p y ycurrent expectations. Past performance and/or these predictions are not guaranteeof future performance. The Company is not obliged to update the presentation/suchforecasts in light of new events or circumstances.© 2010 by Banco Santander (Brasil) S.A.. All Rights Reserved. y ( ) g
  3. 3. 3Agenda Market Overview Santander Wholesale Banking Santander Wholesale Banking Growth Strategy
  4. 4. 0 100 200 300 400 500 600 150 200 250 300 350 Jun-05 5 Jan-08 33% 195 Sep-05 5 Mar-08 Dec-05 5 May-08 Mar-06 6 Jun-06 6 Jul-08 Sep-06 6 Sep-08 Dec-06 6 Nov-08 46% Mar-07 7 TSource: Santander Investor Relations Jun-07 7 Jan-09 Credit to Corporate (Volume - BRL bln) Sep-07 7 Mar-09 Tenors Dec-07 7 Mar-08 8 May-09 Jun-08 8 Jul-09 Market Overview – Credit Sep-08 8 Sep-09 310 Dec-08 8 Mar-09 9 Nov-09 % 1% Corporate Loans (YoY Growth%) Jun-09 9 Jan-10 Sep-09 9 Dec-09 9 Mar-10 4% 0% Mar-10 0 287 Credit to Corporate (YoY Growth %) 10% 20% 30% 40% 50% 0,0 1,0 2,0 3,0 4,0 5,0 , 10 0 10,0 12,5 15,0 17,5 20,0 Jun-05 5 Jun-05 1,7 13,6 Sep-05 5 Sep-05 Dec-05 5 Dec-05 Mar-06 6 Mar-06 Jun-06 6 Jun-06 Sep-06 6 Sep-06 Dec-06 6 Dec-06 D li Mar-07 7 Mar-07 Jun-07 7 Jun-07 Sep-07 7 Sep-07 Dec-07 7 Dec-07 Mar-08 8 Mar-08 Spreads (%) Jun-08 8 Jun-08 Delinquency (%) Sep-08 8 Sep-08 Dec-08 8 Dec-08 Mar-09 9 Mar-09 19,0 Jun-09 9 Jun-09 Sep-09 9 Sep-09 Dec-09 9 Dec-09 Mar-10 0 Mar-10 3,6 1 1 17,1 4 4
  5. 5. 5 Market Overview – Capital Markets (ECM & DCM) ECM Evolution – Volume & Number of Deals DCM Evolution – Volume & Number of DealsVolume = BRL MM; N = Number of Deals Volume (BRL MM) -5.5% -6.4% +34.2% 71,407 71 407 67,474 67 474 63,161 63 161 10,882 14,600 +335% 14% 38% 36% 30% 17% 49% 15,025 N=12 47,131 9,619 15% 20% 19% 34,882 2.962 N=3 N=64 67% 28% 60,474 N=11 36,287 N=19 44% 42% 27,280 2,213 36% 6.657 N=5 13% 7,602 N=4 10,844 N=5 2.213 N=1 2% 7% 5% 10% 8% 2007 2008 2009 2007 2008 2009 YTD Mar 09 YTD Mar 10 YTD Mar 09 YTD Mar 10 Promissory Notes y FIDC Debentures CRI IPOs Follow ons Foreign Investors Participation – YTD Feb10 Number of Deals +9.2% 318 289 71 81 65 40 10 224 20 19 66 23 USA 131 Inst. Investors 36.8% 97 16 Foreign 69 13 36.5% Investors 3 33 54.8% EU 47 102 27 25 Individuals Other 15.7% 60 85 8.7% 2.3% 2007 2008 2009 YTD Mar 09 YTD Mar 10 Total Promissory Notes FIDC Debentures CRI Source: ANBIMA
  6. 6. 6 Market Overview – Capital Markets (M&A) M&A Evolution – Volume & Number of Deals*Volume = BRL billion; N = Number of Deals N=2 N=1 N=2 N=1 N=65 N=134 N=86 N=91 N=40 N 40 N=14 N=10 N=15 N=10 N=9 Announced Deals by Value Capital Source (2009) Volume Number of Deals (*) – Source: ANBIMA. Megadeals include operations with volume greater than BRL 3.0 billion Source: ANBIMA
  7. 7. 7Agenda Market Overview Santander Wholesale Banking Santander Wholesale Banking Growth Strategy
  8. 8. 8Santander Wholesale Banking Client Segmentation Revenue Classification Criteria Client Distribution GB&M ~530 * GB&M Client List (10%) Corporate ~650 (13%) Corporate BRL 250MM and above Empresas ** ~3900 (77%) Empresas BRL 30MM-250MM () (*) Includes MRG model clients only (**) Annual revenues greater than BRL 20K
  9. 9. 9Santander Global Wholesale Banking* Overview – (IFRS Criteria) Profit Before Tax (% / Total)3M10 3M10 Total Revenues = BRL 931 MM Costs = BRL 167 MM Profit Before Tax = BRL 758 MM (*) GB&M onlySource: Santander Financial Statements (IFRS)
  10. 10. 10 Santander Wholesale Banking – Credit Evolution & League Tables Credit Evolution (Large Corporates) * League TablesBRL MM M&A (Announced Transactions – Value) ( ) 1.3% 1st Bloomberg - 2009 Project Finance (Fin. Advisor & Structuring) 39.1 39.6 1st 38.6 Anbima - 2009 36.5 36 5 35.0 DCM (External Issues)1 1st Bond Radar - 2009 DCM (Domestic Issues) 4th Anbima - 2009 ECM (Closed Deals) 1stt Thomson Financial and Bloomberg - 2009 FX 1Q09 2Q09 3Q09 4Q09 1Q10 3rd Banco Central de Brasil - 2009(*) Does not include Empresas. Volumes do not include guarantees and other collaterals 1 Brazilian Corporate Bonds Source: Managerial Information 1Q10
  11. 11. 11Agenda Market Overview Santander Wholesale Banking Santander Wholesale Banking Growth Strategy
  12. 12. 12Santander Wholesale Banking Growth Strategy General Strategy… Focus on clients relationship Empresas (BRL 30- Increase share of wallet cross-selling and lead strategic transactions/loans with wallet, 250MM) the existents key clients ~3,900 active clients Expand market penetration with new clients and clients with unexplored potential Cross-selling to individual clientsCompanies Explore value chain and sector opportunities with large companies General Strategy…C Increase cross-selling and diversification Corporate (BRL 250MM Expand use of our wholesale and Investment Banking product platforms and above) ~650 clients Increase share of wallet Continuous active NPL management (recovery and prevention) Cross-selling Cross selling to individual clients
  13. 13. 13GB&M Growth Strategy Become the top relationship bank for the main players of sectors with high growth perspectives, like 1 Energy, Mining, Construction, Infrastructure and Agribusiness. 2 Take advantage of our global capabilities and support local clients who intends to become international. 3 The concept of one-stop shop and the first option for share of mind products. p p p p p Santander is well positioned in Investment Banking products and intends to take advantage of the good 4 perspectives for M&A, ECM and DCM markets. 5 Increase our client’s satisfaction, generating value to the Bank. 6 Leverage Retail opportunities through our origination capacity. 7 Increase net profit, ensuring full costs control and preserving a low risk profile.
  14. 14. Investor RelationsJuscelino Kubitschek Avenue 2,235 10th floor São Paulo | SP | Brazil | 04543-011 Tel. ( T l (55 11) 3553-3300 3 3 3300 e-mail: ri@santander.com.br
  15. 15. Santander BrasilReal Estate Finance&R l E t t Fi &Mortgage in Brazil May 12, 2010
  16. 16. 2This presentation was prepared by Banco Santander (Brasil) S.A. It is provided for p p p y ( ) pinformational purposes only and does not constitute an offer to sell or a solicitationto buy any security. It may contain forecasts about future events. Thesepredictions/estimates evidently involve risks and uncertainties, whether foreseen ornot by the Company. Therefore, the future results of the Company may differ from y p y , p y ycurrent expectations. Past performance and/or these predictions are not guaranteeof future performance. The Company is not obliged to update the presentation/suchforecasts in light of new events or circumstances.© 2010 by Banco Santander (Brasil) S.A.. All Rights Reserved. y ( ) g
  17. 17. 3Main Topics I. Macro Conditions II. Market Potential III. Loans Evolution IV. Builders: Offer and Demand V. Funding VI. Final Remarks
  18. 18. Supportive Macro Backdrop 4 Interest rates are at historical low levels. Resilient job market, supportive for the housing sector. In our view, these are tailwinds for the Brazilian real estate sector. Brazilian Interest Rate (2003 2011E) (2003- Brazil s Brazil’s Job Market (2005-2011E)30 12 11 Real Growth in Payroll (%) Nominal Selic Real Selic 10 Unemployment Rate (%)25 1020 8 9 P 615 12 8 410 2 7 7 2 5 7 - 6 0 2005 2006 2007 2008 2009E 2010E 2011E M-03 M-04 M-05 M-06 M-07 M-08 M-09 M-10 M-11 S-03 S-04 S-05 S-06 S-07 S-08 S-09 S-10 S-11 J-03 J-04 J-05 J-06 J-07 J-08 J-09 J-10 J-11 Real Growth in Payroll Unemployment RateSource: BACEN and Santander. Source: BACEN and Santander.
  19. 19. Favorable Macro Conditions 5 High Housing Deficit Brazil´s main Real Estate drivers Monthly Houses Housing g Wages Deficit > 10 minimum Regulatory Framework A/B wages . 12% 0.1 million C 5 – 10 minimum 18% 0.3 million wages Reduction of interest rates 3 - 5 minimum D 28% 0.7 million wages < 3 minimum E wages 42% 4.5 million Loans tenor extension 54 million 5.7 millionSource: IBGE 2006, CBCI e GV Consult. Construction and consumer credit availability (Earmarked resources) Favorable Demographic Pyramid 80 70 Housing Deficit (5.7 million) 60 50 Income growth 40 30 20 Government support 10 ( “Minha Casa, Minha Vida” ) 0Source: IBGE and Santander. 
  20. 20. 6Brazilian Mortgage Market Potential Mortgage as % of GDP (2008) 99% 81% 80% 63% 62% 16% 15% 11% 3% Holanda Reino Unido Irlanda Portugal Espanha Polônia Chile México Brasil * * Brazil includes FGTS e SBPE Source: Associação Hipotecária Espanhola, ABECIP e BACEN ( ç p p , (2008 ) Credit Distribution: Santander Brazil vs. Santander Global Brazil Global 6.4% 6 4% Mortgages 32% Others 93.6% 68% Others Mortgages Source: Financial Statements 2009 - Santander Brazil Source : Annual Report 2009 – Santander Group (Distribution of credit risk)
  21. 21. 7 Mortgage Loans Evolution Over the past years the Brazilian residential mortgage market O th t th B ili id ti l t k t has shown strong growth. R$ Billion 68 51 CAGR: +47% 40 Private and 50 Public Banks 34 25 30 16 10 18 Mainly public banks 9 operates FGTS 5 17 18 7 7 10 5 2005 2006 2007 2008 2009 2010E(1) SBPE: Brazilian System of Savings and Loans (1) FGTS: Guarantee Fund for length of Service FGTS SBPE Source: ABECIP – Brazilian Association of Real State Loan and Savings
  22. 22. 8Mortgage Market Overview 2010 Mortgage Origination – 1Q10 Outstanding balance Jan/2010 Number of units Amount Santander Group leads the market (thousands units) (R$ billion) among private banks 75% 36% Total market: R$ 103.2 billion 6.2 45 3.5 Other Banks 33 Banco C 5.4% 6.9% Banco A 1Q09 Mar/10 1Q10 1Q09 1Q10 Banco B 8.5% Construction Loan Origination – 1Q10 8.9% Number of units Amount (thousands units) (R$ billion) 70.3 % 79% 67% 3.8 32 2.0 20 19 FGTS outstanding is about R$ 40 bn Santander market share without FGTS is 15% Mar/09 1Q09 Mar/10 1Q10 Mar/09 1Q09 Mar/10 1Q10Source: ABECIP, BACEN and Santander
  23. 23. Sales vs. Inventories 9 Housing market seems pretty healthy in terms of inventory (less than 6 months of sales and below 2007 levels in absolute terms). Market rebound coupled with conservative launching have boosted sales speed (VSO). Rebound was lead by smaller segment ( (more affordable). ff ) Inventories in SP below Sep/08 Level 25.000 16 14 Months of Sal (3-MMA) 20.000 12 Stock of Units 15.000 10 le o 8 10.000 6 4 5.000 5 000 2 - - O-06 O-07 O-08 O-09 F-07 F-08 F-09 F-10 M-06 M-07 M-07 M-08 M-08 M-09 M-09 A-06 A-06 S-06 A-07 A-07 S-07 A-08 A-08 S-08 A-09 A-09 S-09 J-06 J-06 J-07 J-07 J-07 J-08 J-08 J-08 J-09 J-09 J-09 J-10 N-06 D-06 N-07 D-07 N-08 D-08 N-09 D-09 Inventory (LHS) Sales (LHS) Months of Sale (RHS) Source: Secovi and elaborated by Santander
  24. 24. Government’s Housing Package: “Minha Casa,Minha Vida” 10 Government program created to reduce the housing deficit and support the sector. p g g pp Construction of 1.0 million homes for families with monthly income of up to 10 minimum wages. Package totaling R$34 0 billion R$34.0 billion. In 2010 Minha Casa, Minha Vida (MCMV) is running at a rate of 600,000 units per year. 800 723.5  723 5 700 595.7  600 500 nd 408.7  408.7 thousan 400 352.0  300 231.7  200 170.0  104.6  100 5.6  0 2Q09 3Q09 4Q09 1Q10 Contracts Submitted (accum.) Contracts Signed (accum.) Annualized RateSource: CEF and elaborated by Santander
  25. 25. Sales Regaining “pre-Lehman” levels 11 Sales from Listed Co’s (R$MM) Close to Sep/0810.00010 000 R$ MM 9.000 8,286 7,577 7,563 8.000 6,392 6,186 6,620 7.000 5,916 2,602 6.000 3,332 3,131 1,750 5.000 1,616 2,110 4,142 4 142 3,912 3 912 3,088 Sales in the mid-high income mid high 4.000 3.000 1,300 1,691 segment are still some 20-30% 5,684 2.000 4,642 4,300 4,076 3,532 4,245 4,432 bellow pre-crisis levels. 2,842 1.000 2,221 - Affordable segment is offsetting 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 the d li th decline. Mid-High Total Brokerage CosSource: Listed Constructions and Properties Agency’s Reports ‐ Elaborated by Santander Listed companies are selling at an annualized rate of 200,000 Sales Speed VSO from Listed Co’s coming back to 30% s Co s 30%’s units/year. 30% 30% 28% 27% Sales speed (VSO) is coming 26% 24% 23% back to 30%’s. 15% 15% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09Source: Listed Constructions and Properties Agency’s Reports ‐ Elaborated by Santander
  26. 26. 12Brazilian Saving Accounts and Mortgage system Uses Sources S 52% Individual mortgages g g 65% Properties up to R$ 500,000 Individual Saving Accounts mortgages Construction loans 100% (R$ billion) and Average loan per unit up to construction R$ 500,000 Saving loans Accounts 19 % 256.6 13% Deposits Properties over R$ 500,000 Cost of TR+ 6.17% aa 30% Compulsory Monthly average 215.8 Deposits or last 12 months average ( (the lower 5% amount) Free Usage jan‐09 jan‐10Source: BACEN
  27. 27. 13Funding Analysis (SBPE) (1) Mortgage R$ Billion Scenario Jan’10 Jan 10 outstanding 2013 Sources Uses R$ 169 bn With 40% of annual R$ 169 bn growth in mortgage and 10% in saving LCIs, LHs (2) 20 accounts, the funding 86 will finish in 4 years. Remaining (3) 230 Earmarked Committed 20 resources 149 Loans Mortgage 63 outstanding Mortgage Savings Mortgage Month / Scenario Outstanding Oustandings Outstanding (R$ Bi) Year 1 60% 20% 262 Jan-13 2 40% 10% 230 Nov-13 3 40% 17% 331 Dec-14 4 20% 0% 167 May-15 y(1) SBPE (Brazilian System of Savings and Loans) Not included FGTS.(2) Real estate credit bills (LCI’s) and Mortgages Notes (LH).(3) FCVS (Compensation Fund Wage Variation) , default and multipliers.
  28. 28. Securitization in Brazil:  CRI market 14 Total I T l Issuance : R$ 13.8 b 13 8 bn CRI Issuance CRI1(R$ billions)(R$ billion) Issuance Share (%) ALTERE 6 5% CIBRASEC OTHERS 32% 9% 5 WALTER TORRE 5% 4 3 BRC 2 6% 1 RIO BRAVO 17% BRAZILIAN 0 SECURITIES 1999 1 2000 2 2001 2 2002 2 2003 2 2004 2 2005 2 2006 2 2007 2 2008 2 2009 2 26%1. CRI: Mortgage Backed SecuritiesSource: CIBRASEC – Brazilian Securitization Company
  29. 29. 15 Pension Funds Investment Profile in Brazil 55% of the pension f d’ i f h i fund’s investments are i fi d i in fixed income products. d Investment distribution Biggest Pension Funds Investment Total: R$ 447 bn # Pension Funds (Billion R$) 1 Previ 137.75 Mortgage Mortgage 2 Petros 40.55 0.5% 0,5% , Others 9% 3 Funcef F f 32.98 32 98 4 Fundação Cesp 15.21 Stocks 5 Valia 10.37 20% Investment 6 ItauBanco 9.49 Funds 7 Sistel 9.46 9 46 (Fixed Income) 40% 8 Centrus 9.09 9 Banesprev 8.67 10 Forluz 6.92 Investment  Investment Funds  (Equities) Public Bonds 16% 15% 2% of fixed income investment shifted to CRIs would represent around R$ 5.0 bn.Source: CIBRASEC – Brazilian Securitization Company
  30. 30. 16Final Remarks Mortgage growth will reduce the funding availability to the Real Estate financing. Other funding alternatives will be required(Debentures,Notes,IPO’s) Construction cycle shortening will be important to reduce companies’ short term funding liabilities, and to deliver affordable segment houses(lack of savings) Mortgage will be available earlier in the process to speed up the cash process, management ,new product development (PIP) Inflation Hedge will be provided to avoid industry mismatch.
  31. 31. Investor RelationsJuscelino Kubitschek Avenue 2,235 10th floor São Paulo | SP | Brazil | 04543-011 Tel. (55 11) 3553-3300 e-mail: ri@santander.com.br
  32. 32. Santander BrasilSantander Cards Business May 12, 2010
  33. 33. 2This presentation was prepared by Banco Santander (Brasil) S.A. It is provided for p p p y ( ) pinformational purposes only and does not constitute an offer to sell or a solicitationto buy any security. It may contain forecasts about future events. Thesepredictions/estimates evidently involve risks and uncertainties, whether foreseen ornot by the Company. Therefore, the future results of the Company may differ from y p y p y ycurrent expectations. Past performance and/or these predictions are not guaranteeof future performance. The Company is not obliged to update the presentation/suchforecasts in light of new events or circumstances.© 2010 by Banco Santander (Brasil) S.A.. All Rights Reserved. y ( ) g
  34. 34. 3Agenda Overview of Brazilian Cards Industry Santander Cards Issuer Santander Cards Acquirer
  35. 35. Overview of Brazilian Cards Industry 4Cards industry continues to show substantial growth rates, even considering the competitivescenario consolidation and recent regulation changes Total industry debit + credit cards and spend 600 500 400 18.8% a.a. 300 200 23.7% a.a. 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 # cards (MM) Total Spend (R$ bn) Source: ABECS. Prepared by Ferrés Consultoria.
  36. 36. Overview of Brazilian Cards Industry 5Cards transactions have been strongly replacing checks transactions last 10 years In billions transactions (cards include debit + credit) 7 6 5 21% a.a. 4 3 ‐8.1% a.a. 2 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Cards Checks Source: ABECS and BCB. Prepared by Ferrés Consultoria.
  37. 37. Overview of Brazilian Cards Industry 6Lower income population’s tool as formal payment means and bank services inclusionFor classes D/E the ratio of card holder is higher than check account holders Economic classes Total AB C DE Card holders (% of pop.) Cards 67% 81% 64% 36% Credit Cards 45% 61% 38% 20% Debit Cards 53% 70% 49% 19% Check accounts holders (% of pop ) pop.) 67% 82% 64% 33% Source: Researches Abecs. Survey on 11 metropolitan areas.
  38. 38. Overview of Brazilian Cards Industry 7The relative lower participation as a mean of payment shows a relevant up side opportunity forBrazilian Cards Industry Higher utilization of cards in private consumption (1) 15.8% 17.1% 19.1% 21.4% 12.4% 14.0% 2003 2004 2005 2006 2007 2008 ...but below developed countries (2) 2X(1) Source : ABECS and IBGE(2) Source: ABECS, Bank of International Settlements, United Nations, IBGE
  39. 39. Overview of Brazilian Cards Industry 8Card penetration, average ticket and transactions per card are still low in Brazil Number of cards (MM) ~ 15 MM credit cards / year 628 565 514 453 201 217 233 249 225 173 196 153 104 147 124 136 2007 2008 2009 2010 (e) Credit Debit Private Label Total Spend (R$ Bn) Average Ticket (R$ per transaction) CAGR: 21.1% CAGR: 3.7% 535 444 375 98 100 104 302 93 309 75 256 68 71 73 215 53 52 55 51 174 158 48 53 51 52 107 129 83 53 60 68 45 2007 2008 2009 2010 (e) 2007 2008 2009 2010 (e) Credit Debit Private Label Total Credit Debit Private Label TotalSource: ABECS (Associação Brasileira das Empresas de Cartões de Crédito e Serviços)
  40. 40. 9Agenda Overview of Brazilian Cards Industry Santander C d Issuer S t d Cards I Santander Cards Acquirer q
  41. 41. Santander Cards Issuer – Role in the Value Chain 10 Sets rules for issuers and acquirers Card Brands Issues credit and debit cards Captures and processes transactions Issuers Acquirers Use credit and debit cards Clients Merchants
  42. 42. 11Santander Cards Issuer – our approachTo be the world’s best integrated cards monoliner within a retail bank…Monoliner Retail Bank Product focus Access to customers’ base p Specialized capabilities Traditional channels: branches / agents Direct channels: Telemarketing / Mailings Brand Global specialized Economies of scale systems… contributing to improving our local banks’ performance
  43. 43. Santander Cards Issuer – our model 12 Is based on managing all levers along the product lifecycle … ACQUISITION PORTFOLIO MANAGEMENT Acquisition Activation Spending Outstandings Retention Depth of customer relationship Product innovation and… Unlimited Platinum r Reward Free Cancellation Mini Card Light VALUE h Flex Time Launch strategies Specialized risk management Multichannel Profitability management… supported by an end-to-end view of RISKS and TECHNOLOGY
  44. 44. Santander Cards Issuer – our model 13The Business expansion will be held in two dimensions: Customer Base and Profitabilityper Account Increase the profitability by using Card Accounts the card’s platforms as Δ Profitability per Account a distribution channel for other banking products and services 1Q10 Net income e 7% Personal Loan 1Q09 Savings S i Insurance 1Q09 1Q10 10% Payment Services Continuous product innovation as a growth lever(1) Source: Internal data
  45. 45. Santander Cards – market position 14In Brazil, where our model is already well established, our market share has improvedsignificantly Market Share end of 1Q10 Other Banks BANK “A” A increases to 23.40 25.30 9.9% Rev BANK “D” 7.10 volving Ba 15.10 15 10 9.4 BANK “C” 19.70 BANK “B” 3.6 9.4 alance % 2.3 3.5 % 2005 Organic Growth Banco Real Current Dec/2009 Santander AcquisitionNote 1: Competitor data as of December, 09, source Competitor Quarter Reports, BCB and internal analysis.Santander´s current Market Share as of December, 09Note 2: Include non interest bearing due to unpaid balances
  46. 46. Santander Cards Issuer – continuous growth 15The Credit market continues to show substantial growth rates, even considering the competitivescenario consolidation and recent regulation changes Cards C d (MM) CAGR (06~09) (06 09) Market Santander 124 136+21% (04~09) 104 82 +18% Key Observations 68 53 8 10 ~80% of the Cards Market is 5 7 +22% concentrated at the top 4 04 05 06 07 08 2009 Banks (Banco do Brasil, Itaú, Total Spend (R$ Bi) Bradesco and Santander) 256 215 There is an important+22% (04~09) 174 +22% opportunity for cards revolving 142 115 95 growth 14 19 26 33 +33% 33% Relevant regulation changes R l t l ti h are being implemented, 04 05 06 07 08 2009 Revolving Balance (R$ Bi) representing significant 25.7 opportunities for issuers and +27% (04~09) 22.1 22 1 new acquiring business +24% 17.2 13.4 players 11.3 8.2 1.2 1.7 2.1 2.4 +26% 04 05 06 07 08 2009Note 1: Source Banco Central do Brasil, including +360 days balanceNote 2: Source ABECs – Brazilian Cards Association
  47. 47. Santander Cards Issuer – 1Q10 performance 16The business growth is leveraged by Cards Accounts expansion… Cards Accounts (MM) Cards (MM) Key Notes +14% +16% Cards Accounts +20% +13% has presented sustainable growth, 7.542 7.890 7 890 9.745 10.042 10 042 year over year 6.916 8.674 Cards Accounts growth rate has continuously increased quarter 1Q09 4Q09 1Q10 1Q09 4Q09 1Q10 over last quarter, reflecting our strategy YoY growth Quarter annualized growth
  48. 48. Santander Cards Issuer – 1Q10 performance 17… generating relevant revenue increase Net Fee (R$ MM) +25% 213 171 1Q09 1Q10Source: Santander Income Statement 1Q10
  49. 49. 18Agenda Overview of Brazilian Cards Industry Santander Cards Issuer Santander Cards Acquirer
  50. 50. Santander as Issuer and Acquirer 19 Sets rules for issuers and acquirers Card Brand Issues credit and Captures and processes debit cards transactions Issuers Acquirers Uses credit and debit cards Clients Merchant
  51. 51. Santander’s Experience in Other Countries 20 Sovereign Puerto Rico UK Mexico Totta Colombia Spain S i Argentina Portugal Santander Santander + Acquiring Partners
  52. 52. New Model: Santander (Acquiring + Financial Services) 21 Innovative value offer Products and Services + Acquiring + rs Acquirer Other POS Capturing Services ACQUIRER FINANCIAL SERVICES SERVICES Banks FINANCIAL SERVICES + ACQUIRING - packaged in a suitable value offer to corporate clients
  53. 53. Partnership Santander & GetNet 22 Creation of a Partnership leveraged by GetNet’s p g y technological expertise and POS network Brand MASTERCARD Investment in Capturing Network and g License Processing Platform Partnership Integrated value offer – Acquiring and Banking Other POS Capturing Business Services Ser ices Commercial Model – Distribution/Pricing 165 POS (Capturing Communication and Terminals - 2009) “Time To Market” Media
  54. 54. GetNet Tecnologia 23 Entrance in the Acquirer industry through a technological partner - GetNet Tecnologia GETNET TECNOLOGIA Campo Bom – RS Technological Platform for capturing, CORREA DA SILVA GROUP authorizing and the processing of Domestic Capital transactions N&SP – Network and Service Provider 165 thousand POS Customized solutions for capturing, authorization and processing of transactions and information Services at Capturing Terminals: Main Clients: Goodcard, Banco BNG, Serasa, Microsoft, Base Card, Wal- - Mobile Recharge Mart, Brasil Telecom, Claro, Tim, Vivo, Telefonica, Oi, Embratel, CTBC, - “Vale Transporte” (transportation ticket) Amazonia Celular, Banco Matone, etc. Recharge - “PAT Alimentação e Refeição” (meal ticket) PAT Refeição Over 800 employees - “Cartão Convênio” / Private Label / Cobrand Annual turnover of R$ 2,29 Bn (2009)

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