Investor Presentation • Sep 23, 2015
Investor Presentation
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Banco Santander Totta S.A. ("Santander Totta") and Banco Santander, S.A. ("Santander") both caution that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. 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: (1) general market, macroeconomic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors that we have indicated in our past and future filings and reports could adversely affect our business and financial performance. Other unknown or unpredictable 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 and views taken on the date on which they are made; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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 so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate 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 or investments whatsoever.
Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. 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 to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.
Note: Statements as to historical performance, share price or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast.
Note: The businesses included in each of the geographical segments and the accounting principles under which their results are presented by Grupo Santander may differ from the business included in the public subsidiaries in such geographies and the accounting principles applied locally. Accordingly, the results of operations and trends shown by Grupo Santander for its geographical segments may differ materially from those disclosed locally by such subsidiaries.
| 1 | Market and financial system |
|---|---|
| 2 | Strategy |
| 3 | Targets |
| 1 | Market and financial system |
|---|---|
| 2 | Strategy |
| 3 | Targets |
Source: Statistics Portugal, Ministry of Finance, Santander Totta Economic Research
…supported by the strengthening of domestic demand and resilient export growth. Better economic growth also underpins the continued reduction in unemployment and the fiscal deficit
Source: Statistics Portugal, Ministry of Finance, Santander Totta Economic Research (2014 fiscal deficit adjusted for one-offs)
The credit reduction has allowed the whole system to deleverage significantly while depositors kept full trust in local financial institutions
Santander Totta is the only large Portuguese Bank that has been continuously profitable throughout the financial crisis, without the need of support (private or public) in terms of liquidity and capital
Source: Press Releases (domestic activity; excludes extraordinary items, when available). ST's net income is local criteria Bank #: BPI, CGD, Millennium bcp
| Who are we? | Attributable profit2 |
|---|---|
| • Retail bank with 576 branches and a market share of 11% |
(€MM) 184 |
| The 2nd Private bank by loans • |
54% 119 |
| • The only large Portuguese bank continuously profitable throughout the financial crisis |
|
| • The best rated Portuguese financial institution |
2012 2013 2014 |
BST Portugal
| Solid balance sheet | ||||
|---|---|---|---|---|
(1) As at Jun'15 (phase-in) (2) Group criteria
Fitch BBB BB+
Moodys Ba1 Ba1
S&P BB+ BB+
DBRS BBBH BBBL
Santander leads with lower cost of deposits and cost of credit…while maintaining the best efficiency and capital ratios
| 1H'15 | 2018 | ||
|---|---|---|---|
| People | Top 3 (banks) in 2018 Great Place to Work bank ranking1 |
||
| Retail loyal customers (k) | 490 | 532 | |
| Loyal SMEs and corporates (k) | 22.5 | 27.7 | |
| Digital customers (k) | 340 | 600 | |
| Customers | Service quality (Quality Corporate Study) | Top 1 | Top 3 |
| Loans growth above peers | | | |
| Fee income CAGR | -2%(2) | >10%(3) | |
| RoTE | 8.7% | >14% | |
| FL CET1 | 13.6% | >11% | |
| Shareholders | C/I ratio | 52.0% | <45% |
| NPL ratio | 8.8% | <8% | |
| Number of scholarships 2016-2018 (k) | 2.8 | ||
| Communities | People supported 2016-2018 (k) | 12 |
Note: Group criteria except FL CET1 (1) Among banks (2) 1H'14-1H'15 (3) 2015-2018
| Key metric | 1H'15 | 2016 | Improvement | Comment |
|---|---|---|---|---|
| Retail Loyal customer (k) |
490 | 502 | +2.5% | • Continue the consistent growth of loyal customers |
| SME and Corporates Loyal customer (k) |
22.5 | 23.2 | +3.2% | • Create value through an increase in corporate transactional business |
| Digital customer (k) |
340 | 418 | +22.9% | • Strong increase as a consequence of the improving of new digital channels functionalities |
| 'Mundo' 1 2 3 customers (k) |
28 | 160 | >400% | • Enhancing the strong and positive evolution since its launching |
| Market Share - Loans (%) |
11.0 | 12.2 | +1.2pp | • Continue to grow in loans above peers |
Increase the number of loyal customers (Var. 2015-2018)
Optimise the cost of funding
Increase volumes and market share
Strengthen the capacity in trade finance and international business
Improve efficiency levels (cost to income <45%)
Reduce and stabilise the cost of credit
Normalise the capital and the medium and long term funding structure
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