Institutional Presentation 9M’19
Highlights Santander, a leading financial group 9M’19 Highlights 1.52 Total assets (EUR trillion) 900 Customer loans (EUR billion excluding reverse repos) Customer deposits + mutual funds (EUR billion excluding repos) 953 Branches 12,691 9M’19 Attributable profit (EUR million) 3,732 9M’19 Underlying attributable profit (EUR million) 6,180 Market capitalisation (EUR billion; 30-09-19) 62 201,017 People (headcount) 144 Customers (millions) 4.0 Shareholders (millions) 2.5 Communities (million people helped in 2018)
Index 1. Santander vision and business model 2. Aim and value creation 3. Corporate governance and internal control 4. Group structure and businesses 9M’19 Highlights – results and activity 5. 6. Summary and medium-term goals
1. Santander vision and business model
Santander vision 1. Santander vision and business model OUR To help people and businesses prosper PURPOSE To be the best open financial services platform, by OUR AIM acting responsibly and earning the lasting loyalty of our AS A BANK people, customers, shareholders and communities Simple Personal Fair OUR HOW In everything we do Building a responsible bank from our core strengths 5
Santander vision 1. Santander is a retail bank with a unique and business model business model underpinned by three strengths 1 Our scale provides potential for organic growth Unique personal banking relationships strengthen customer loyalty 2 Our geographic and business diversification and our model of subsidiaries 3 make us more resilient under adverse circumstances 6
Santander vision 1. We maintain a leadership position 1.1 Scale and business model in our core markets Market shares Customers by markets. Sep-19 5 Argentina Others United Kingdom 1 3% 1% Poland 2 Spain 10% Chile 2% Loans: 10% Deposits: 9% Loans: 12% United States 3 Deposits: 12% SCF SCF 13% Portugal Loans: 3% Top 3 Brazil 31% Deposits: 3% 144 Loans: 18% Spain Deposits: 16% Mexico Million customers Loans: 17% Loans: 13% Deposits: 19% Brazil UK 18% Deposits: 14% Loans: 10% Deposits 4 : 11% Chile Mexico 12% Poland 4% Loans: 18% Argentina USA Portugal Deposits: 17% 4% 2% Loans: 10% Deposits: 12% Data: Market-share as at Jun-19 and SCF and the US latest available. (1) Includes London Branch (2) Including SCF business in Poland (3) In all states where Santander Bank operates 7 (4) Includes debenture, LCA (agribusiness notes), LCI (real estate credit notes), financial bills ( letras financieras ) and COE ( certificates of structured operations ) (5) Includes Santander Global Platform
Santander vision 1. 1.2 Unique personal banking relationships Focus on increasing customer loyalty… and business model Total customers Loyal customers Loyal / Active customers 144 mn (+4%) 21.0 mn (+10%) 30.2% 29.5% Individuals (mn) Companies (k) Sep-18 Sep-19 +10% +5% 135 136 138 139 141 142 144 19.2 1,762 1,676 17.5 Increased loyalty ratio in 8 core markets Sep-18 Sep-19 Sep-18 Sep-19 Mar-18 Jun Sep Dec Mar-19 Jun Sep 8 Note: Year-on-year changes
Santander vision 1. …as well as increasing the number 1.2 Unique personal banking relationships and business model of digital customers and activity Digital customers 1 # Accesses 2 # Transactions 3 Online and mobile 36.2 mn (+20%) 5,742 mn in 9M’19 (+27%) 1,634 mn in 9M’19 (+25%) 545 573 27.5 28.4 30.1 32.0 33.9 34.8 36.2 2,016 517 498 1,895 1,381 1,521 1,624 1,768 1,830 456 443 409 Mar-18 Jun Sep Dec Mar-19 Jun Sep Q1'18 Q2 Q3 Q4 Q1'19 Q2 Q3 Q1'18 Q2 Q3 Q4 Q1'19 Q2 Q3 Note: Year-on-year changes (1) Data as of 30 September. Every natural or legal person that, being part of a commercial bank, has logged in to their personal area of internet banking or mobile phone (or 9 both) in the last 30 days. Digital customers in the last 90 days: 39.9 mn. (2) Private accesses. Logins of bank’s customers on Santander internet banking or apps. ATM accesses by mobile are not includ ed. (3) Customer interaction through mobile or internet banking which resulted in a change of balance (monetary and voluntary). ATM transactions are not included.
Santander vision 1. Well-balanced 1.3 Diversification and model of subsidiaries and business model geographic distribution * Balanced distribution between mature markets, which provide stability, and developing markets, which fuel growth in revenue Contribution to 9M’19 underlying attributable profit 1 Spain, 15% Brazil, Americas Europe 29% 54% 46% South Europe America SCF, 46% 13% 38% Chile, 6% North America 16% UK, 10% Argentina, 1% Uruguay and 2 Andean Region, Portugal, 2% 5% Mexico, Poland, USA, 8% 3% 8% (1) Excluding Corporate Centre (EUR -1,637 mn) and Santander Global Platform 10 (2) Uruguay and Andean Region underlying profit (EUR 159 mn)
Santander vision 1. Balance sheet 1.3 Diversification and model of subsidiaries and business model distribution by markets Customer loans by markets Customer funds by markets % operating areas. Sep-19 % operating areas. Sep-19 Brazil, 12% Argentina, 1% Uruguay and Andean Reg., 1% Chile, 5% Chile, 4% Brazil, 8% Spain, 22% Argentina, 1% Spain, 33% Uruguay and Andean Reg., 1% Mexico, 4% SGP, 1% Mexico, 4% US, 11% US, 8% SCF, 11% Other Europe, 2% Other Europe, 4% Poland, 4% SCF, 4% Poland, 3% Portugal, 4% Portugal, 4% UK, 26% UK, 22% Note: Customer loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds 11
Santander vision 1. A good mix of products 1.3 Diversification and model of subsidiaries and business model for individuals and companies Customer loans by business Customer funds by business Other individuals, 10% Individuals demand deposits, 37% CIB, 10% Home mortgages, 36% CIB, 12% EUR EUR Corporates, 14% 953 bn 900 bn Corporates, 14% Individuals time deposits, 11% SMEs, 10% SMEs, 11% Consumer, 4% Individuals mutual funds, 14% Consumer, 17% 12 Note: Customer loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds
Santander vision 1. Our diversification and model of 1.3 Diversification and model of subsidiaries and business model subsidiaries make us more resilient Low Earnings per share (EPS) volatility Profitability drivers - high and recurring pre-provision profit Pre-provision profit, EUR bn EPS volatility calculated using quarterly data from Jan- 99 to Q2’19 26 25 24 24 24 24 23 23 23 20 20 18 691% 341% 122% 108% 87% 76% 64% 44% 42% 35% 9% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 9M'19 Pre-provision profit / loans 3.28% 3.26% 3.25% 3.03% 3.06% 3.04% 2.97% 2.94% 2.90% 2.89% 2.83% 2.85% 2x 2x 0x 0x 6x 4x 6x 4x 1x 10x 5x Cost of credit Net profit increase 1999-2018 2.44% 1.69% 1.43% 1.25% 1.65% 1.02% 1.40% 1.36% 1.18% 1.07% 1.00% 1.00% Source: Bloomberg • Risk pro defines the way in which we understand Note: GAAP criteria. Standard deviation of the quarterly EPS starting from the first available data since Jan-99 and manage risks in our day-to-day activities 13
2. Aim and value creation
Aim and value 2. creation Santander is one of the most valued brands in the world Employees who are more ... make our customers motivated and committed ... more satisfied and loyal ... • 5 th best global bank brand (BrandZ ranking, 2019) People Customers • 5 th best global banking brand 201 144 (BGB 2019, Interbrand Ranking) thousand million Our brand embeds the essence of the Group's culture and identity Communities Shareholders 2.5 4.0 The Santander brand, one of the Bank’s greatest million people million helped in 2018 assets, embodies our culture: purpose, aim and way of doing things. ... which drives profitability and ... and results in more sustainable growth ... investment in communities. It transmits our global dimension, trustworthiness and commitment to act responsibly. Simple Personal Fair 15
Aim and value 2. People creation 201,017 96% 10.4 years Employees Employees with permanent Average length of Sep-19 contracts in 2018 employment in 2018 HR Strategy 2018 Global engagement survey * Aim: One of the Top 3 leading banks To be an employer of choice 82% to work for in 7 countries Engaged employees * Enablers: * The SPF culture is based on our corporate behaviours HR Digital Strategic Workforce Our Common Transformation Planning Culture OneTeam Santander Talent for the future The Santander Way Show respect Truly listen Talk straight Keep promises * Priorities: Support people Embrace change Actively collaborate Bring passion Culture & Engagement Attract & Recruit 60% 40% Our corporate management Retain & Develop Diversity & Inclusion evaluation model what how we do we do it 16
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