Banco Santander, S.A. · BME:SAN
Banco Santander — European Financials Conference 2020 (Morgan Stanley)
24 slides from Banco Santander's conference presentation, Mar 17, 2020
Slide 1: European Financials Conference
Confidential 17th March 2020 European Financials Conference Morgan Stanley Ana Botín Group Executive Chairman | 1
Slide 2: Important Information
Confidential Important Information Non-IFRS and alternative performance measures In addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) and derived from our financial statements, this presentation contains certain financial measures
Slide 3: COVID-19 Update
Confidential COVID-19 Update Impact of Covid-19 on the business • We have not yet seen any relevant impact on business activity; do not • Santander has taken action to protect the expect any material impact in Q1 wellbeing of our employees, customers and shareholders while ensuring that we • Expect
Slide 4: Index: Achievements & delivery; Santander for the future
Confidential Index 1 Achievements & delivery 2 Santander for the future | 4
Slide 5: In 2015 we set a strategy focused on customer loyalty
Confidential In 2015 we set a strategy focused on customer loyalty… Our aim as a bank Our purpose To be the best open Our how financial services platform, To help people and by acting responsibly and Everything we do should be businesses prosper earning the lasting loyalty Simple, Personal and Fair
Slide 6: …while building a more responsible and sustainable bank
Confidential …while building a more responsible and sustainable bank Culture Sustainability Engagement Women 86% of employees 40% Group Board Leader €18bn €1bn proud to work for SAN (+5pp vs peers ) 1 23% Group leadership mobilised in Green finance Santander first green bond issuance (+3pp vs. 2018)
Slide 7: We have delivered strong growth based on Scale, Customer Focus and Diversification
Confidential We have delivered strong growth based on Scale, Customer Focus and Diversification Scale Customer Focus Diversification 2019 underlying attributable profit by region3 c.145 mn Top 3 in NPS1 in 6 South America North America total customers in Europe countries and the Americas 16% 37% Top
Slide 8: Our strategy has delivered on our Growth, Profitability and Strength
Confidential Our strategy has delivered on our Growth, Profitability and Strength 2019 (vs. 2014) …supported by Strong performance in the last 5 years… investments Growth Profitability Strength >€2bn Transformation EPS1 +22% RoTE +84 bps FL CET1 +€22 bn 3 charges TNAVps2 +19% RoRWA +34 bps €5bn Inve
Slide 9: Doubled profits and increasing CET1 since 2013
Confidential Doubled profits and increasing CET1 since 2013 Profitability 2013 2014 2018 2019 Since 2014 8,064 8,252 Underlying profit (€ Mn) +42% Attributable profit 1 5,816 7,810 6,515 +12% (€ Mn) 4,175 Underlying RoTE 9.6% 11.0% 12.1% 11.8% +84bps 0.54% 0.48% Avg. Euribor 12M2 -69bps -0.17% -0.21
Slide 10: Significant improvement in profitability since 2015
Confidential Significant improvement in profitability since 2015… Profitability RoTE RoRWA 1.61%3 2015 2019 c.40% of our >70% of our Capital discipline in growth: Organic 2019 11.84% 1.20% capital1 with capital1 with RoTE > CoE RoTE > CoE Value-creating acquisitions (Popular, Banif Inorganic Portuga
Slide 11: Significant and increasing capital accumulation
Confidential This strong profitability has led to a significant and increasing capital accumulation Strength FL CET1 Jan 2015-2020 c.+40 bps c.12% +200 bps 11.65% 5 Year 9.65% run-rate +40bps per annum Jan-15 5 Yr net capital accumulation 2019 2020 net capital 2020 accumulation | 11
Slide 12: Better credit profile and CDS spreads than European peers
Confidential Better credit profile and CDS spreads than the European peers’ average… Strength Senior unsecured LT ratings peer comparison Santander senior unsecured ratings evolution 5Y Senior 176 104 65 76 99 63 94 58 63 CDS A A2 A AA 17 AA- 16 A+ 15 A 14 BBB+ A- 13 BBB BBB BBB+ 12 BBB11 10 BBB- BB
Slide 13: Strongest European bank under the 2018 EBA stress test
Confidential …being the strongest European bank under the 2018 EBA stress test adverse scenario Strength FL CET1 erosion under the adverse scenario (bps) 694 657 625 576 533 437 403 bps PEER AVERAGE 381 363 341 334 395 bps SYSTEM AVERAGE 288 265 219 193 141 Source 2018 EBA stress test | 13
Slide 14: Differentiated business model with predictable earnings growth
Confidential Building on a differentiated business model that has delivered best-in-class predictable earnings growth for the last 20 years Quarterly reported EPS volatility1 1999-Q4’19 683% 337% 121% 106% 86% 75% 67% 44% 42% 34% 9% 3x 3x 1x 1x 7x 4x 8x 5x 2x 10x 5x Net income increase 1999-2019 (1)
Slide 15: Index: Achievements & delivery; Santander for the future
Confidential Index 1 Achievements & delivery 2 Santander for the future | 15
Slide 16: Execution of our three-pillar plan
Confidential Execution of our three-pillar plan to drive profitable growth in a responsible way Improve operating Optimise capital Accelerate performance allocation digitalisation through Santander Global Platform Continue building a more Responsible Bank | 16
Slide 17: Improving operating performance leveraging One Santander
Confidential Improving operating performance leveraging One Santander Europe North America South America 2019 Mid-term goal 2019 Mid-term goal 2019 Mid-term goal Underlying RoTE 10% 12-14% 13%1 14-16%2 21% 20-22% Efficiency 53% 47-49% 43% 39-41% 36% 33-35% Goal Building one European Investing togeth
Slide 18: Ongoing capital allocation optimization to improve profitability
Confidential Ongoing capital allocation optimization to improve profitability Rebalancing to more Strong profitability improvement leading profitable businesses to higher capital generation capacity 1.8-2.0% Improved pricing, processes and governance 1.6% 1.3% Active management and Group senior team
Slide 19: Accelerating digitalisation and building Santander Global Platform
Confidential Accelerating digitalisation and building Santander Global Platform Accelerate the Provide faster transformation and better global of our ‘core payments and Banks’ solutions Moving towards ONE SANTANDER to build simpler, faster and better services | 19
Slide 20: Best-in-class global payments and digital banking open solutions
Confidential Accelerate digitisation Best-in-class global payments and digital banking open solutions to serve SMEs and individuals Built with global open platforms, leveraging our scale for Santander Global Platform 1 efficiency and customer experience SMEs Individuals Run autonomously with dedicat
Slide 21: Leveraging SGP to bring global payments solutions to SMEs
Confidential Leveraging SGP to bring best-in-class Global payments solutions to SMEs Global Merchant Services Global Trade Services Leveraging Getnet to build Global Merchant Services One global platform to serve international SMEs High growth €42bn c.7% and large $200bn >200k Revenue pool for globa
Slide 22: Leveraging SGP to offer fully digital banking solutions to individuals
Confidential Leveraging SGP to offer fully digital banking solutions to individuals Financial inclusion platform to cost- effectively serve the bottom of the pyramid Our global, full-service digital bank High growth >300mn c.60mn and large 1bn 68% Underserved1 Middle class2 expansion addressable Pop
Slide 23: Our business model and track record support delivery of mid-term goals
Confidential Our business model and track record support delivery of our mid-term goals ’19 Investor Day 2019 Mid-term goals Loyal customers1 22mn c.26mn New goal: Digital customers2 37mn c.50mn 36% High-single Digital sales3 >50% C/I 47% 42-45% FL CET1 11.65% 11-12% digit EPS Underlying RoTE 11.8%
Slide 24: Thank You.
Confidential Thank You. Our purpose is to help people and businesses prosper. Our culture is based on believing that everything we do should be: | 24
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