Grupo Financiero Santander Mxico, S.A.B. de C.V. Investor - PowerPoint PPT Presentation

Grupo Financiero Santander México, S.A.B. de C.V. Investor Presentation First Quarter 2015 0

Safe Harbor Statement Grupo Financiero Santander México cautions that this presentation may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements could be found in various places throughout this presentation and include, without limitation, statements regarding our intent, belief, targets or current expectations in connection with: asset growth and sources of funding; growth of our fee-based business; expansion of our distribution network; our focus on strategic businesses; our compound annual growth rate; our risk, efficiency and profitability targets; financing plans; competition; impact of regulation; exposure to market risks including interest rate risk, foreign exchange risk and equity price risk; exposure to credit risks including credit default risk and settlement risk; projected capital expenditures; capitalization requirements and level of reserves; liquidity; trends affecting the economy generally; and trends affecting our financial condition and our results of operations. 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: changes in capital markets in general that may affect policies or attitudes towards lending to Mexico or Mexican companies; changes in economic conditions, in Mexico in particular, in the United States or globally; the monetary, foreign exchange and interest rate policies of the Mexican Central Bank ( Banco de México ); inflation; deflation; unemployment; unanticipated turbulence in interest rates; movements in foreign exchange rates; movements in equity prices or other rates or prices; changes in Mexican and foreign policies, legislation and regulations; changes in requirements to make contributions to, for the receipt of support from programs organized by or requiring deposits to be made or assessments observed or imposed by, the Mexican government; changes in taxes; competition, changes in competition and pricing environments; our inability to hedge certain risks economically; economic conditions that affect consumer spending and the ability of customers to comply with obligations; the adequacy of allowances for loans and other losses; increased default by borrowers; technological changes; changes in consumer spending and saving habits; increased costs; unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms; changes in, or failure to comply with, banking regulations; and certain other risk factors included in our annual report on Form 20-F. The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the U.S. Securities and Exchange Commission, could adversely affect our business and financial performance. Note: The information contained in this presentation is not audited. Nevertheless, the consolidated accounts are prepared on the basis of the accounting principles and regulations prescribed by the Mexican National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ) for credit institutions, as amended (Mexican Banking GAAP). All figures presented are in millions of nominal Mexican pesos, unless otherwise indicated . Historical figures are not adjusted by inflation. 1

Consistent Signs of Economic Recovery Supported by Solid Macro Fundamentals GDP (% Growth) 2.1 3.2 4.0 3.8 3.4 3.3 3.2 2.9 2.6 2.2 2.0 1.6 1.4 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15E 2Q15E 3Q15E 4Q15E 2016E Interest Rate (CETEs) Inflation (% Annual) 4.1 4.5 4.5 4.5 4.0 3.8 3.6 3.9 3.5 3.2 3.5 3.0 2011 2012 2013 2014 2015E 2016E 2011 2012 2013 2014 2015E 2016E GDP – INEGI Source: CETE, Inflation, Exchange Rate – BANXICO 2 Estimates – SANTANDER

…Driven by Both Internal and External Factors in the Near and Long Term Near Term Public  Support economic recovery Expenditure US  Drive stronger industrial growth Economy Infrastructure  Increase of public and private investment Plan  Energy - Reduce industrial operating costs, strengthen public Mid-Long Term finance, encourage private investment  Telecom – Increase competition Structural  Labour - Increase flexibility and formalization Reforms  Financial – Enhance transparency and foster competition Fiscal – Increase tax revenues  3

Solid Macro Fundamentals are Complemented by an Under Banked System with Favorable Demographics… Low Banking Penetration 1 Loan-to-GDP Ratio 38% Avg. pre-tequila crisis levels 2 : 31.5% 35% 32% 29% 26% 24% 21% 21% 19% 18% 18% 17% 17% 16% 16% 16% 15% 15% 14% 14% 13% 13% 12% 12% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CNBV, INEGI and IMF and HBS ”Mexico’s financial crisis of 1994 - 1995” from May 2012 An Expanding Middle-Class Source: CONAPO 2010 Notes: 1) Considers loans within the banking sector (CNBV) 2) Pre-tequila average takes into account 1991-1994 period 4

…that Support Increasing Demand for Financial Products A Large, Young… 113.5mm 126.4mm % % % % Ages 25-60 25-60 +9.1mm 43% 46% 2010 2020 (E) Source: CONAPO …and Active Population, Expected to Expand… …and Join the Formal Sector Population <60 years old Active Population per Sector Total Informal Population 90 13.5 mm 120.5mm 81 77 76 73 68 27% % 73% Formal Mexico US UK Canada Germany Japan 36.3 mm Source: US Census Bureau Source: INEGI As of January 2015 5

Santander México: One of the Most Important Retail Banking Franchises in Mexico, Consistently Generating Profits and Strong Loan Growth Net Income 2 Santander México Ranking  MX$930.4 billion in assets #4 20,876 18,683  17,822 MX$441.5 billion in loans #4 13,851 14,014 11,827  MX$511.5 billion in deposits #3  MX$105.1 billion in equity #4  1,346 branches 1 #4 2009 2010 2011 2012 2013 2014  11.7 million customers Retail Banking Franchise Total Loans Corporate Activities 465,541 394,932 Wholesale 9% 350,683 313,672 Banking 14% 227,556 207,737 Retail 77% Banking Distribution by profit before taxes 2009 2010 2011 2012 2013 2014 Source: Company filings and CNBV (Mexican banking GAAP) figures for Groups as 4T14 Notes: 1 Comprised by: 1,081 branches + 18 SME offices + 6 SME branches + 119 cash desks + 3 select offices + 44 select units + 51 select boxes + 24 brokerage house branches 2 Net income in 2011, 2012 and 2013 include the following non-recurring gains: 2011 = 4,348 Insurance business sale to Zurich 6 2012 = 1,731 Sale and leaseback of branches and 2013 = 4,929 Asset managemnet divestiture and change in EPS methodology CAGR takes into account recurring gains

Our Successful Track Record is Driven by a Focused Strategy that Targets the Growing Middle Class and Profitable Affluent Segments… Individuals Segmentation Contribution Number of customers A 2% 4% Private Banking 17% 14,290 High-Income 21% B 34% Select 242,760 15% Premier 36% 333,623 C 16% Mid-Income Preferred 13% 4.1 million 49% D 36% 29% Classic 7.0 million 12% 11% E 5% Loans Deposits GOI* Source: Company data As of March, 2015 7 Notes: *Gross Operating Income

…with a Comprehensive and Innovative Product Offering …  Top 3 player in Credit Cards  Fast assessment processes  Products that meet clients’  New products to increasingly needs and provide access penetrate the open market to promotions  Introducing innovative products  2nd largest market player  A full range of product offerings through a  Focus on mid and high strategic alliance with income residential market Zurich  Auto insurance platform offering 12 top auto insurance companies services Source: Company data As of March, 2015 8

… and a Superior Multi -Channel Distribution Platform Supported by a Unique CRM System CRM Branches ATMs  Main sales and service channel 15% consumer loans   20% insurance policies 44% consumer loans  58% credit cards  59% mortgages Customer  Management Tool 52% insurance policies Contact Brokers Centers   41% consumer loans 41% mortgages  42% credit cards  28% insurance policies 1.6 million customers with pre-authorized credit offers Source: Company data As of 1Q15 9

High Potential, Profitable SMEs and Middle-Market Customers are Targeted and Serviced… Commercial Segmentation Contribution Number of customers Number of customers 14% 20% A 26% Corporates 10% Institutions 7% B 20,141 32% 37% Middle-market C 44% 34,560 35% D 39% D SMEs 23% 318,829 13% GOI 1 Loans Deposits Source: Company data As of March, 2015 10 Notes: *Gross Operating Income