Banco Santander, S.a. · BME:SAN
Banco Santander — FY2017 Earnings Presentation
101 slides from Banco Santander's earnings presentation, Jan 31, 2018
Slide 1: 2017 Earnings Presentation
31 January 2018 2017 Earnings Presentation Ana Botín, Group Executive Chairman José Antonio Álvarez, Group CEO
Slide 2: Important Information
Important Information Banco Santander, S.A. ("Santander") cautions that this presentation contains statements that constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “e
Slide 3: Important Information
Important Information In addition to the financial information prepared under International Financial Reporting Standards (“IFRS”), this presentation includes certain alternative performance measures as defined in the Guidelines on Alternative Performance Measures issued by the European Securities a
Slide 4: Agenda
1 Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 4
Slide 5: 2017 key achievements
2017 key achievements Growth Profitability Strength Loyal customers Underlying RoTE FL CET1 17Mn (+13%) c.12% (+70 bps) 10.84% (+29 bps) Customer revenues Cost-to-income NPL ratio €45,892Mn (+11%) c.47% (-70 bps) 4.08% (+15 bps) Note: All metrics include Popular, except ´loyal customers´ 5
Slide 6: Growth: Underlying PBT +20% YoY and attributable profit +7% YoY
Growth: Underlying PBT +20% YoY and attributable profit +7% YoY 2017 2016 Change €Mn Net interest income 34,296 31,089 +10% Net fees 11,597 10,180 +14% Customer revenues 45,892 41,268 +11% Other income 2,499 2,585 -3% Net capital gains & provisions Gross income 48,392 43,853 +10% Allfunds +297 Opera
Slide 7: Growth: Building loyalty & deeper relationships
Growth: Building loyalty & deeper relationships Loyal Digital Net fees customers customers 17.3Mn 25.4Mn €11.6Bn +13% +21% +14% YoY growth YoY growth YoY growth Note: Customer metrics exclude Popular 7
Slide 8: Profitability: RoTE improves +70bps YoY to c.12%
Profitability: RoTE improves +70bps YoY to c.12% Europe Underlying RoTE Local peers avg. c.12% 12% 8% (YoY) (+1pp) 9% Americas Local peers avg. 17% 17% (YoY) (+2pp) Global Peers Source: Company data and Bloomberg Note: RoTE as of 9M´17 for peers. Global Peers included in the average are Wells Fargo,
Slide 9: Profitability: Our cost-to-income improves by 70bps YoY to c.47%
Profitability: Our cost-to-income improves by 70bps YoY to c.47% Cost-to-income Top 3 in customer satisfaction 64% c.47% Global Peers Source: Cost to income company data and Bloomberg. Note: Cost-to-income as of 9M´17 for peers. Peers included for average are Wells Fargo, JP Morgan, Bank of America,
Slide 10: Strength: Focused on profitable growth & disciplined capital allocation
Strength: Focused on profitable growth & disciplined capital allocation Organic growth CET1 FL (YoY) 2016 2017 +29 bps RoTE c.11% c.12% 1 RoRWA1 1.4% 1.5% +53 bps (organic) -5 bps Inorganic growth (other) 10.84% -19 bps 10.55% (perimeter) Acquisitions Poland Argentina 2016 2017 Disposals Real Estate
Slide 11: Strength: Priority for SAN Spain/Popular is responsible and profitable growth
Strength: Priority for SAN Spain/Popular is responsible and profitable growth Key challenges addressed in the …while managing integration … first 60 days… deposits mkt share (Jun/Oct) 51% Popular Real estate disposal revenues (YoY)* Loyalty bond from to RoTE (YoY)* acceptance …in a responsible way C
Slide 12: Delivered all strategic targets ahead of plan
2017 2017 Targets Loyal customers (Mn) 17 17 Delivered all Digital customers (Mn) 25 25 strategic Fee income 1 13% Increase targets ahead Cost of credit risk 1.07% Improve of plan… Cost-to-income 47.4% Broadly stable EPS (€) 0.40 Increase 2 DPS (€) 0.22 Increase FL CET1 (organic per year) +53bps +40
Slide 13: ...and growing the underlying EPS by 8%
…and growing the underlying EPS by 8% €/share 2016 2017 +11% 0.19 Cash DPS 0.17 4.15 4.15 TNAV/ share +8% 0.463 Underlying EPS 0.429 Note: 2016 metrics have been re-stated to reflect the capital increase 13
Slide 14: Embedding our common culture in the day to day of all our teams
Embedding our common culture in the day to day of all our teams Rewarding people for Making solid progress in the Becoming the best place “doing things right” Santander Way to work 60% What? Top 3 in 5 countries SIMPLE | PERSONAL | FAIR (+2 YoY) 40% How? 2018 target achieved 1 year ahead c.100k em
Slide 15: Fulfilling our purpose of helping people and businesses prosper
Fulfilling our purpose of helping people and businesses prosper Promoting social and financial inclusion Santander invests in numerous social programs to support communities Microcredits > 200K micro- People helped 1.9Mn entrepreneurs supported 1.7Mn 1.2Mn 2016 2017E 2015 Santander Universities Supp
Slide 16: Agenda
1 Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 16
Slide 17: 2017 Key achievements
2017 Key achievements Growth Profitability Strength Customer revenues Underlying PBT FL CET1 €45,892Mn (+11%) €13,550Mn (+20%) 10.84% (+29 bps) Loans1 Underlying RoTE NPL ratio +12% (+2% ex-Pop) c.12% (+70 bps) 4.08% (+15 bps) Customer funds1 EPS Cost of credit +17% (+8% ex-Pop) €0.404 (+1%) 1.07% (
Slide 18: Excellent quality and strong top-line growth with performance sustained QoQ
Excellent quality and strong top-line growth with performance sustained QoQ 2017 % vs. 2016 Underlying attributable profit €Mn Euros Constant Constant €Mn euros Excluding Popular Net interest income 34,296 10 10 Net fees 11,597 14 13 Customer revenues 45,892 11 11 2,022 1,993 Other income 2,499 -3 -
Slide 19: Results impacted by several one-offs, mainly related to integrations and goodwill
Results impacted by several one-offs, mainly related to integrations and goodwill 2017 % vs. 2016 €Mn Euros Constant euros Net interest income 34,296 10 10 Net fees 11,597 14 13 (€Mn, net of tax) Customer revenues 45,892 11 11 Other income 2,499 -3 -2 • Allfunds +297 Gross income 48,392 10 10 • Inte
Slide 20: Revenues: sustained growth QoQ
Revenues: sustained growth QoQ… €Mn excluding Popular …driven by strong recurring customer revenues Net interest income 8,342 8,458 7,969 7,632 Fee income 2,836 2,913 2,582 2,608 Other income1 635 535 519 560 1Q'16 2Q 3Q 4Q 1Q'17 2Q 3Q 4Q Note: Constant euros. (1) Other income includes gains on fina
Slide 21: Costs: flat in the Group in real terms
Costs: flat in the Group in real terms… Chg. 2017 / 2016 (%) ∆Revenues Nominal In real terms1 vs. costs 6.5 3.0 3.4 0.7 3.8 0.2 -1.1 -3.1 …with cost-to-income stable or 11.9 5.8 1.7 -0.5 improving in 8 geographies -6.7 -8.0 1.9 -0.2 - 48.9 4.4 - 1.9 0.0 C.C. 5.8 3.9 - Note: Constant
Slide 22: Loan-loss provisions: lower even though the loan portfolio increased
Loan-loss provisions: lower even though the loan portfolio increased Cost of credit (%) Better cost of credit at Group level… …and in most geographies 1.18 1.07 2016 2017 22
Slide 23: NPL ratio: The Group's ratio improved YoY for the 4th straight year
NPL ratio: The Group's ratio improved YoY for the 4th straight year (ex-Popular) NPL ratio (%) Group NPL ratio improving YoY… …backed by 8 geographies Including Popular 5.37 4.24 4.08 3.93 3.74 3.55 3.51 3.38 D'16 M'17 J'17 S'17 D'17 23
Slide 24: Continuing the reduction of real estate exposure
Continuing the reduction of real estate exposure Real estate exposure1 Net value €Bn €Bn Dec’17 41.1 29.4 Real estate assets 4.7 Foreclosed assets 3.5 Rental assets 1.2 RE non-performing loans (NPLs) 1.0 11.7 6.0 RE assets + RE non-performing loans 5.7 5.7 Gross value Blackstone Gross value Provisio
Slide 25: Progress in reaching our target of fully-loaded CET1 >11% in 2018
Progress in reaching our target of fully-loaded CET1 >11% in 2018 In the quarter, high organic capital generation… FL CET1 (%) YoY +0.27 Dec’17 change 10.80 10.84 10.55 -0.15 -0.08 FL Total capital ratio 14.48% +61 bps FL Tier 1 capital ratio 12.11% +58 bps Leverage ratio 5.0% stable Expected to org
Slide 26: Funding plan focused on TLAC-eligible instruments
Funding plan focused on TLAC-eligible instruments: Parent Bank and rest of units met 2017 plan Parent Bank funding plan 2017 (€Bn) Target Issuances Issuances 2017: Senior Non preferred 12-14 9.9 €27Bn (c.€19Bn TLAC-eligible) Diversified issuers: Senior preferred - 0.7 Parent bank, SCF, UK and USA Di
Slide 27: Breakdown by geographies
rT “I Breakdown by geographies
Slide 28: Solid profit growth across the board with results well diversified by geography
Solid profit growth across the board with results well diversified by geography 2017 Underlying attributable profit Underlying attributable profit in core geographies Americas Europe €Mn and % chg. / 2016 in constant euros 2,544 +34% 48% 52% 1,498 -4% Other Latam, 1% 1,254 +15% Argentina, 4% Chile,
Slide 29: Brazil
BRAZIL KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 2,530 2.9 10,078 17.3 Loyal customers (million) 3.7 4.2 Fee income 929 9.3 3,640 16.2 Digital customers (million) 6.4 8.6 Gross income 3,512 1.8 14,273 18.3 NPL ratio (%) 5.90 5.29 Operating expenses -1,289 6.1 -5,080 6.5 LLPs -814 2.0 -3,39
Slide 30: United Kingdom
UNITED KINGDOM KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 1,048 -3.3 4,363 6.2 Loyal customers (million) 4.0 4.2 Fee income 243 -2.3 1,003 4.3 Digital customers (million) 4.6 5.0 Gross income 1,344 -4.9 5,716 5.4 NPL ratio (%) 1.41 1.33 Operating expenses -721 2.6 -2,861 3.4 LLPs -81 22.4 -
Slide 31: Santander Consumer Finance
SANTANDER CONSUMER FINANCE KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 906 1.3 3,571 5.2 Active customers (million) 17.9 19.9 Fee income 204 -8.6 878 1.8 NPL ratio (%) 2.68 2.50 Gross income 1,132 0.1 4,484 5.1 Operating expenses -506 4.9 -1,978 3.8 Cost of credit (%) 0.47 0.30 LLPs -58 -34.
Slide 32: Spain – excl. Popular
SPAIN – excl. Popular KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 686 -5.5 2,909 -5.5 Loyal customers (million) 1.3 1.9 Fee income 562 10.3 2,067 16.1 Digital customers (million) 2.7 3.2 Gross income 1,368 -4.7 5,694 1.5 NPL ratio (%) 5.41 4.72 Operating expenses -841 3.2 -3,259 -1.1 LLPs -1
Slide 33: Popular
POPULAR ACTIVITY P&L1 3Q'17 4Q'17 20172 NII 456 438 1,003 Customer deposits in Spain (€Bn) Fee income 128 129 288 Gross income 634 536 1,309 Operating expenses -388 -390 -873 -28% +15% LLPs -38 -68 -114 71 51 58 PBT 216 71 302 Underlying att. profit 168 85 263 Non-recurring3 -300 - -300 Attributable
Slide 34: Good performance in other markets
UNDERLYING ATTRIBUTABLE PROFIT (DETAIL BY MARKETS IN THE APPENDIX) Good performance in other markets: larger customer base, higher profits and better credit quality ■ Significant investment in multichannel, digitalisation and commercial initiatives Mexico €710Mn; +16% ■ Profit up driven by NII and f
Slide 35: Corporate Centre
CORPORATE CENTRE P&L €Mn 2016 2017 Higher losses in NII due to increased issuances (TLAC) NII -739 -851 Gains/Losses on FT -243 -227 Negative gains on financial transactions due to cost of hedging, Operating expenses -450 -476 offset by the positive FX impact in the business areas Provisions -73 -22
Slide 36: Agenda
1 Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 36
Slide 37: Our vision and aim
Our vision Our aim To be the best open Our purpose digital financial To help people and services platform, businesses prosper earning the lasting loyalty of our people, customers, shareholders and communities A bank that is… SIMPLE | PERSONAL | FAIR 37
Slide 38: Our key assets support the path to long-term success
Our key assets support the path to long-term success Scale Predictable Innovation growth 38
Slide 39: Scale: We have in-market scale and have proven we can deliver profitable organic growth
Scale: We have in-market scale and have proven we can deliver profitable organic growth Ranking in loans market share 1 #1 1,000Mn Total population 17Mn Loyal customers 133Mn #3 #5 Total customers 2 25Mn 3% Digital customers 3 Latest available data Note*: Santander’s market share for the respective
Slide 40: Predictable growth: Diversified business across Europe & Americas
Predictable growth: Diversified business across Europe & Americas Mature Emerging Loan portfolio by business YoY Growth markets 1 markets 2 Loans +14% +7% Other (0%)3 Global individuals Funds +18% +14% Corporate (+5%)3 Banking Mortgages Customer revenues +7% +16% Corporate (+1%)3 SMEs Consumer Total
Slide 41: Predictable growth: Over the last years earnings have increased 4x
Predictable growth: Over the last 20 years earnings have increased 4x with the lowest volatility amongst peers Quarterly reported EPS volatility (Jan’99-9M´17) 711% 358% 128% 113% 92% 78% 52% 46% 44% 32% 9% 1x -9x -1x 1x 5x 2x 3x 2x 1x 6x 4x Net income increase 1999-2016 Source: Bloomberg; Note: GAA
Slide 42: Predictable growth: Cash DPS & customer revenues grew by 11%
Predictable growth: Cash DPS & customer revenues grew in 2017 by 11% and CET1 by €3.5Bn Top tier profitability allows us to equally: Finance Pay Accumulate business dividends capital growth +11% Cash dividend +11% customer +29bps per share revenues 10.84% FL CET1 (2017 vs. 2016) (2017 vs. 2016) (201
Slide 43: Innovation: Our priority is to improve customer experience efficiently
Innovation: Our priority is to improve customer experience efficiently Distributed Data & A.I ledger technology Platforms & Payments Services 43
Slide 44: Innovation: Same day mobile international payments using distributed ledger technology
Innovation: Same day mobile international payments in “3 clicks & 40 seconds” for our retail customers using distributed ledger technology Going live in 4 countries Digital wallet 1Q´2018 Full transparency on fees Personal Finance Manager and FX upfront We expect to be one of the Same day internatio
Slide 45: Innovation: Unique customer insights deliver better experience & bottom line
Innovation: Unique customer insights deliver better experience & bottom line GLOBAL MACHINE LEARNING Increasing both: PLATFORM Open source platform and a team of >100 data scientists Customer loyalty Learning from >5Bn transactions Results obtained on >10Mn customers Operational 15-30% lower a
Slide 46: Innovation: Superdigital, a digital platform for the unbanked
Innovation: “Superdigital” a digital platform for the unbanked >1Mn Can receive transfers customers from third parties IN (Charge) Top-ups from current account Transfers from other Super customers ATM withdrawals (in any OUT entity) +2.4x Payments (Internet and physical) Transfers to oth
Slide 47: Innovation: Openbank and Santander Cash Nexus
Innovation: Openbank and Santander Cash Nexus Openbank 100% Digital Santander Cash Nexus (YoY) Global Treasury Services for multinationals +26% Loyal customers Single entry point +20% Deposits growth Up to 75% workload reduction Number of multinationals -27% Deposits cost +25% 154 123 2016 2017 €4.1
Slide 48: Innovation: New simple and personal solutions
Innovation: New simple and personal solutions Growing our digital …being where our customers customer base… are in the digital world Smart watch Pay First bank to offer smart watch Payments c.41% of our active customers Santander App Speak directly or set up a meeting with your banker from your App
Slide 49: Innovation: Growing digital contacts while reducing cost per transaction
Innovation: Growing the number of digital contacts per customer while reducing our cost per transaction # digital transactions Digital sales share 10,326Mn Over total volume of sales (Dec´17) +155% 31% +7% 4,050Mn Costs per transaction 3,791Mn Transaction costs for every 1,000 transactions (2016-17)
Slide 50: Agenda
1 Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 50
Slide 51: Committed to delivering profitability, growth and strength
Committed to delivering PROFITABILITY improving and GROWTH in a sustainable, above peers. Priorities remain predictable and responsible way operational excellence and customer loyalty Underlying Underlying +20% c.12% PBT RoTE Organic capital growth and low Commercial transformation & volatility earn
Slide 52: Agenda
1 Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 52
Slide 53: Appendix
Appendix Santander Group (with and w/o Popular) and non-recurring items detail Other geographies’ results Global segments results Liquidity NPL and coverage ratios, and cost of credit Quarterly income statements Glossary 53
Slide 54: Santander Group (with and w/o Popular) and non-recurring items detail
Santander Group (with and w/o Popular) and non-recurring items detail 54
Slide 55: Excellent quality and strong top-line growth, with and without Popular
Excellent quality and strong top-line growth, with and without Popular 2017 P&L – P&L breakdown 2017 % vs. 2016 2017 % vs. 2016 Euros Constant Total Group Euros Constant €Mn euros €Mn euros excl. Popular Net interest income 34,296 10 10 Net interest income 33,293 7 7 Net fees 11,597 14 13 Net fees 1
Slide 56: 2016 and 2017 profit impacted by several non-recurring items
2016 and 2017 profit impacted by several non-recurring items P&L – Net capital gains and provisions 2016 2017 €Mn net of tax €Mn net of tax -1,267 130 Equity stakes and intangible assets 85 Germany integration costs 300 -897 Popular integration costs -417 -644 149 USA (hurricanes + increased stake i
Slide 57: Highly diversified balance sheet, by geography and product
Highly diversified balance sheet, by geography and product 2017 BALANCE SHEET – Volumes’ performance excluding Popular Loan portfolio: growth supported by developing markets Customer funds: growth in 8 core units Mature markets Developing markets Mature markets Developing markets Dec’17 €Bn YoY chan
Slide 58: Other geographies' results
Other geographies’ results 58
Slide 59: Mexico
MEXICO KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 630 -1.8 2,601 12.5 Loyal customers (thousands) 1,608 1,993 Fee income 181 -1.5 749 8.7 Digital customers (thousands) 1,282 1,948 Gross income 830 -0.9 3,460 11.5 NPL ratio (%) 2.76 2.69 Operating expenses -345 3.0 -1,382 11.9 LLPs -187 -16.
Slide 60: Chile
CHILE KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 492 10.0 1,907 0.1 Loyal customers (thousands) 604 622 Fee income 91 -3.4 391 8.6 Digital customers (thousands) 959 1,012 Gross income 630 2.9 2,523 2.0 NPL ratio (%) 5.05 4.96 Operating expenses -248 -3.3 -1,025 1.7 LLPs -110 0.5 -462 -12.0
Slide 61: Portugal – excl. Popular
PORTUGAL – excl. Popular KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 181 2.0 697 -4.9 Loyal customers (thousands) 636 686 Fee income 84 -0.2 341 8.7 Digital customers (thousands) 502 558 Gross income 281 -7.8 1,145 -5.3 NPL ratio (%) 8.81 5.71 Operating expenses -138 0.9 -550 -6.7 LLPs 12 —
Slide 62: United States – excl. Popular
UNITED STATES – excl. Popular KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 1,273 -3.3 5,569 -4.1 Loyal customers (thousands) 280 303 Fee income 222 -1.3 971 -10.2 Digital customers (thousands) 778 814 Gross income 1,596 -0.5 6,959 -5.8 NPL ratio (%) 2.28 2.79 Operating expenses -773 3.9 -3,19
Slide 63: Argentina
ARGENTINA KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 261 10.0 985 57.8 Loyal customers (thousands) 1,118 1,340 Fee income 138 -0.7 596 43.1 Digital customers (thousands) 1,511 1,957 Gross income 449 7.6 1,747 44.3 NPL ratio (%) 1.49 2.50 Operating expenses -244 5.3 -970 48.9 LLPs -41 -8.2 -
Slide 64: Poland
POLAND KEY DATA 2016 2017 P&L1 4Q'17 %3Q'17 2017 %2016 NII 243 2.6 928 8.6 Loyal customers (thousands) 1,350 1,387 Fee income 116 1.3 443 8.1 Digital customers (thousands) 1,979 2,089 Gross income 378 4.9 1,419 5.4 NPL ratio (%) 5.42 4.57 Operating expenses -160 6.2 -605 1.9 LLPs -40 10.4 -137 -7.5
Slide 65: Other Latin American countries
OTHER LATIN AMERICAN COUNTRIES Attributable profit Constant € million Uruguay Peru +19% +7% 103 40 38 86 2016 2017 2016 2017 Focusing on loyalty, transactions and target segments Uruguay’s profit driven by higher revenues and cost control Peru’s profit driven by higher revenues and release of provis
Slide 66: Global segments results
rT “I Global segments results L ai
Slide 67: Retail Banking
RETAIL BANKING ACTIVITY P&L1 4Q’17 %3Q’17 2017 %2016 €Bn and % change in constant euros NII 7,812 0.7 31,701 7.9 Fee income 2,444 4.3 9,718 9.8 740 Gross income 10,520 0.9 42,755 8.4 681 Operating expenses -4,874 4.2 -19,374 4.9 +2% +2% QoQ QoQ LLPs -1,872 -7.3 -8,174 -7.2 PBT 3,349 4.4 12,820 22.7
Slide 68: Global Corporate Banking
GLOBAL CORPORATE BANKING GROSS INCOME P&L1 4Q’17 %3Q’17 2017 %2016 Constant €Mn NII 587 -2.0 2,478 -2.5 5,486 +1% 5,552 Fee income 393 0.1 1,627 15.9 TOTAL Capital & Other 655 -6% 617 Gross income 1,239 -8.4 5,552 1.2 Operating expenses -519 6.0 -1,988 4.8 Global Markets 1,715 0% 1,721 LLPs -207 81.
Slide 69: Liquidity
rT Liquidity Lol
Slide 70: We made good headway YTD in our funding plan to enhance the Group's TLAC position
We made good headway YTD in our funding plan to enhance the Group’s TLAC position and optimise its cost of capital – Group excl. Popular Key liquidity ratios Funding plan - issuances Dec’17 Jan-Dec’17 Net Loan-to-Deposit ratio (LTD): 109% Group issuances €27bn (~€19bn TLAC-eligible) Deposits + M/LT
Slide 71: NPL, coverage ratios and cost of credit
NPL, coverage ratios and cost of credit 71
Slide 72: NPL ratio
NPL ratio % 31.03.16 30.06.16 30.09.16 31.12.16 31.03.17 30.06.17 30.09.17 31.12.17 Continental Europe 7.08 6.84 6.43 5.92 5.62 5.11 4.95 4.50 Spain 6.36 6.06 5.82 5.41 5.22 4.99 4.99 4.72 Santander Consumer Finance 3.28 2.95 2.86 2.68 2.62 2.61 2.60 2.50 Poland 5.93 5.84 5.71 5.42 5.20 4.66 4.70 4.
Slide 73: Coverage ratio
Coverage ratio % 31.03.16 30.06.16 30.09.16 31.12.16 31.03.17 30.06.17 30.09.17 31.12.17 Continental Europe 65.4 61.3 61.3 60.0 60.6 58.7 58.1 58.0 Spain 50.2 47.6 47.6 48.3 49.1 46.0 45.2 45.9 Santander Consumer Finance 111.9 110.6 110.7 109.1 108.9 106.5 104.3 101.4 Poland 67.0 65.8 68.9 61.0 61.2
Slide 74: Non-performing loans and loan-loss allowances
Non-performing loans and loan-loss allowances. December 2017 – Group excl. Popular Non-performing loans Loan-loss allowances 100%: €28,104Mn 100%: €19,906Mn Other, 6% Other, 6% Spain, 19% USA, 8% Spain, 29% USA, 18% Chile, 7% Mexico, 3% SCF*, 12% Chile, 6% Brazil, 16% SCF*, 8% Mexico, 4% Poland, 4%
Slide 75: Cost of credit
Cost of credit % 31.03.16 30.06.16 30.09.16 31.12.16 31.03.17 30.06.17 30.09.17 31.12.17 Continental Europe 0.60 0.51 0.46 0.44 0.38 0.37 0.34 0.32 Spain 0.54 0.45 0.41 0.37 0.33 0.33 0.31 0.33 Santander Consumer Finance 0.64 0.55 0.49 0.47 0.39 0.37 0.34 0.30 Poland 0.82 0.75 0.76 0.70 0.66 0.65 0.
Slide 76: Quarterly income statements
Quarterly income statements 76
Slide 77: Grupo Santander (with Popular)
Grupo Santander (with Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,021 10,119 10,395 10,734 11,246 11,522 11,569 11,556 41,268 45,892 Gross income 10,730 10,755 11,080 11,288 12,029 12,049 12,252 12,062 43,853 48,392 Operating expenses (5,158) (5,2
Slide 78: Grupo Santander (with Popular), constant euros
Grupo Santander (with Popular) Constant € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,227 10,214 10,330 10,577 10,820 11,318 11,817 11,938 41,349 45,892 Gross income 10,921 10,849 11,014 11,111 11,570 11,836 12,519 12,466 43,897 48,392 Operating expenses (5,
Slide 79: Grupo Santander (w/o Popular)
Grupo Santander (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,021 10,119 10,395 10,734 11,246 11,382 10,984 10,989 41,268 44,601 Gross income 10,730 10,755 11,080 11,288 12,029 11,910 11,617 11,526 43,853 47,082 Operating expenses (5,158) (5,22
Slide 80: Grupo Santander (w/o Popular), constant euros
Grupo Santander (w/o Popular) Constant € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,227 10,214 10,330 10,577 10,820 11,178 11,232 11,371 41,349 44,601 Gross income 10,921 10,849 11,014 11,111 11,570 11,697 11,885 11,931 43,897 47,082 Operating expenses (5,2
Slide 81: Spain (w/o Popular)
Spain (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,243 1,232 1,185 1,198 1,206 1,287 1,235 1,248 4,858 4,976 Gross income 1,543 1,343 1,398 1,324 1,539 1,351 1,435 1,368 5,608 5,694 Operating expenses (837) (834) (824) (802) (798) (806) (815) (
Slide 82: Santander Consumer Finance
Santander Consumer Finance € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,041 1,061 1,099 1,052 1,121 1,096 1,121 1,110 4,253 4,449 Gross income 1,045 1,051 1,106 1,060 1,118 1,099 1,135 1,132 4,262 4,484 Operating expenses (483) (468) (467) (486) (502) (485)
Slide 83: Santander Consumer Finance, constant euros
Santander Consumer Finance Constant € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,047 1,063 1,100 1,049 1,116 1,096 1,122 1,114 4,258 4,449 Gross income 1,051 1,053 1,106 1,057 1,113 1,099 1,136 1,136 4,267 4,484 Operating expenses (485) (469) (467) (485) (50
Slide 84: Poland
Poland € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 292 298 321 323 318 343 350 360 1,233 1,371 Gross income 311 345 330 329 321 363 358 378 1,314 1,419 Operating expenses (145) (146) (149) (139) (146) (150) (149) (160) (579) (605) Net operating income 166 199
Slide 85: Poland (PLN million)
Poland PLN million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,275 1,301 1,391 1,412 1,374 1,449 1,489 1,522 5,379 5,835 Gross income 1,357 1,507 1,430 1,440 1,386 1,532 1,525 1,599 5,733 6,041 Operating expenses (632) (638) (647) (609) (630) (634) (636) (675) (2,527
Slide 86: Portugal (w/o Popular)
Portugal (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 273 262 260 251 261 249 262 266 1,047 1,038 Gross income 337 281 287 304 294 265 305 281 1,209 1,145 Operating expenses (154) (149) (142) (143) (139) (137) (137) (138) (589) (550) Net operatin
Slide 87: United Kingdom
United Kingdom € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,434 1,393 1,302 1,307 1,349 1,409 1,317 1,291 5,436 5,366 Gross income 1,513 1,501 1,377 1,425 1,432 1,544 1,397 1,344 5,816 5,716 Operating expenses (794) (788) (703) (683) (723) (723) (694) (721)
Slide 88: United Kingdom (£ million)
United Kingdom £ million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,105 1,096 1,108 1,133 1,160 1,213 1,183 1,146 4,442 4,702 Gross income 1,166 1,180 1,172 1,234 1,231 1,329 1,255 1,193 4,752 5,008 Operating expenses (611) (619) (599) (594) (622) (622) (623) (639)
Slide 89: Brazil
Brazil € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 2,365 2,583 2,899 3,155 3,455 3,413 3,392 3,458 11,002 13,718 Gross income 2,381 2,703 3,050 3,187 3,717 3,502 3,542 3,512 11,321 14,273 Operating expenses (947) (1,046) (1,177) (1,305) (1,314) (1,233) (1,244
Slide 90: Brazil (R$ million)
Brazil R$ million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,161 10,216 10,500 11,271 11,561 12,036 12,567 13,139 42,147 49,304 Gross income 10,227 10,708 11,067 11,364 12,438 12,367 13,129 13,367 43,366 51,301 Operating expenses (4,068) (4,138) (4,266) (4,671) (4,
Slide 91: Mexico
Mexico € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 767 768 767 794 804 856 879 811 3,096 3,350 Gross income 792 786 796 828 824 914 892 830 3,203 3,460 Operating expenses (322) (317) (311) (325) (319) (361) (356) (345) (1,274) (1,382) Net operating income 470
Slide 92: Mexico (million pesos)
Mexico Million pesos 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 15,253 15,690 16,028 16,922 17,348 17,505 18,399 18,076 63,893 71,327 Gross income 15,745 16,054 16,647 17,645 17,779 18,706 18,677 18,508 66,093 73,671 Operating expenses (6,402) (6,479) (6,497) (6,922)
Slide 93: Chile
Chile € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 509 534 561 613 592 589 534 583 2,216 2,298 Gross income 556 577 616 672 645 644 604 630 2,422 2,523 Operating expenses (235) (237) (249) (265) (264) (260) (253) (248) (986) (1,025) Net operating income 321 33
Slide 94: Chile (Ch$ billion)
Chile Ch$ billion 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 393 409 414 441 413 430 403 434 1,657 1,681 Gross income 430 441 455 484 450 470 456 470 1,810 1,846 Operating expenses (182) (182) (184) (191) (184) (190) (191) (185) (737) (750) Net operating income 248 26
Slide 95: United States (w/o Popular)
United States (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,831 1,755 1,724 1,708 1,763 1,738 1,545 1,495 7,019 6,540 Gross income 1,968 1,888 1,867 1,809 1,879 1,880 1,604 1,596 7,532 6,959 Operating expenses (777) (774) (784) (864) (837) (845)
Slide 96: United States (w/o Popular), $ million
United States (w/o Popular) $ million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 2,018 1,983 1,925 1,838 1,877 1,912 1,820 1,765 7,764 7,373 Gross income 2,168 2,133 2,085 1,945 2,001 2,068 1,893 1,884 8,332 7,845 Operating expenses (856) (874) (875) (932) (891) (929)
Slide 97: Banco Popular
Banco Popular € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 140 584 567 1,291 Gross income 139 634 536 1,309 Operating expenses (96) (388) (390) (873) Net operating income 43 247 146 436 Net loan-loss provisions (8) (38) (68) (114) Other (20) 8 (8) (20) Underly
Slide 98: Corporate Centre
Corporate Centre € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income (173) (192) (201) (204) (198) (223) (227) (240) (771) (889) Gross income (223) (244) (316) (282) (341) (340) (300) (239) (1,066) (1,220) Operating expenses (126) (120) (104) (99) (119) (118) (118) (
Slide 99: Glossary
rT Glossary Lol
Slide 100: Glossary - Acronyms
Glossary - Acronyms AFS: Available for sale P&L: Profit and loss Bn: Billion RoRWA: Return on risk-weighted assets CET1: Common equity tier 1 RWA: Risk-weighted assets C&I: Commercial and Industrial RoTE: Return on tangible equity DGF: Deposit guarantee fund SCF: Santander Consumer Finance FL: Fully
Slide 101: Thank you
Thank you Our purpose is to help people and businesses prosper. Our culture is based on the belief that everything we do should be