Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Presentation (2023)
73 slides from Banco Santander's investor presentation, 2023
Slide 1: Institutional Presentation 2023
Strategic and Financial Analysis. Financial Division Institutional Presentation 2023
Slide 2: Index
Index 1 2 3 4 5 Our business Group structure 2023 results Final remarks Links to model and and businesses & activity public materials strategy 2
Slide 3: Our business model and strategy
1. Our business model and strategy
Slide 4: Santander, a leading financial group
Santander, a 2023 Highlights leading financial group Total assets (€ bn) 1,797 Customer loans (€ bn excluding reverse repos) 1,015 Customer deposits + mutual funds (€ bn excluding repos) 1,177 Branches 8,518 2023 Net operating income (pre-provision profit) (€ mn) 32,222 2023 Attributable profit (€ m
Slide 5: The Santander Way
The Santander Way Who we are and what guides us 5
Slide 6: Santander business model
Santander business model Our business model Business based on unique Digital bank In-market Geography competitive advantages with branches & Global is the foundation for Balance sheet generating value for our shareholders Entering a new phase of value creation 6
Slide 7: Distribution by market
01. Distribution by market Customer focus 165 (+5mn) 15% 28% million customers 45% 12% We have grown our customer base over the last seven years, 100 mn (+0.3mn) 54.2 mn (+5%) Active customers Digital customers with balanced growth by region and business Customer satisfaction Top 3 NPS1 in +10% Tran
Slide 8: Customer focus
01. Traditional Digital Customer focus banking banking Internet, Branches, mobiles, ATMs, tablets, retail agents, … smartphones, smartwatches,… To bring all our customers to a common operating model, while converging to a Collaborative spaces and increased digital capabilities Branches: >8,000 Santa
Slide 9: In-market scale
02. In-market scale Market shares Europe North America Scale 4% Auto lending 9% Loans Digital Consumer 7% 2% Deposits Bank Deposits Europe 17% 12% Loans Loans 13% Loans South America 13% Deposits 11% Deposits 12% #1 European Deposits 18% Consumer Loans Bank Our unique combination 18% 9% Loans 20% De
Slide 10: Diversification: geographic
03. Diversification Profit Customer loans Customer funds 10% 6% 45% 13% 55% 62% Geographical 17% well-diversified profit 16% 25% and balance sheet 15% 20% 16% Europe North America South America DCB Europe Note: 2023 underlying attributable profit by region (% operating areas excluding Corporate Cent
Slide 11: Diversification: business
03. Diversification Customer loans Customer funds CIB, Home 13% mortgages, Mutual funds, 33% Individuals, 48% 18% Corporates, Business 15% diversification SMEs, CIB, 13% 9% Other individuals, Consumer, 6% SMEs, Corp & 24% other, 21% Note: data as of Dec-23. Customer loans excluding reverse repos. Cu
Slide 12: Simple, transparent and easy to analyze balance sheet
03. Simple, transparent and easy to analyze balance sheet Diversification Medium-low risk profile Strong liquidity ratios Strong solvency ratios well above requirements Focus on capital efficiency and asset rotation Rock-solid balance sheet with Stable and diversified Highly collateralized and conse
Slide 13: In summary: reliable risk-return profile
Reliable risk-return profile Lower volatility of results In summary Differential Pre-provision profit / loans and cost of risk EPS volatility2 Our results show that 1.90% 1.89% 1.80% 1.80% 1.70% 1.90% our business model 12% 1.60% 1.61% 1.65% 1.65% 1.25% 1.21% US 40% works. It is based on 0.62% NL 39
Slide 14: A new phase of profitability and growth underpinned by three tenets
Delivering double-digit value creation, on average Think Value through-the-cycle A new phase of profitability and growth underpinned Building a digital bank with branched with well targeted by three tenets Think Customer products and services to grow our customer base Best customer experience levera
Slide 15: Environmental, Social and Governance
Environmental, Social and Governance 2023 2025 targets Green Finance raised and facilitated €114.6bn €120bn We continue to make progress on our ESG agenda Socially responsible €67.7bn €100bn Investments (AuM) Financial inclusion (# People) 1.8mn 5mn More information available at www.santander.com/en
Slide 16: Group structure and businesses
2. Group structure and businesses
Slide 17: Group organizational structure
Primary segments (Global Businesses) Retail Consumer CIB Wealth Payments Group Individuals Consumer business1 Transactional Banking Private Banking organizational Asset Management PagoNxt SMEs SBNA consumer2 Investment Banking (SAM) Cards Corporates Openbank Markets structure Insurance from January
Slide 18: Global businesses: last step towards ONE Santander
Retail Retail & Commercial Banking Our last Consumer Digital Consumer Bank step towards Global businesses ONE Santander CIB Corporate & Investment Banking ONE Santander announced on Wealth Wealth Management & Insurance 18 September 2023 Payments Payments - New reporting from 2024* Europe North Ameri
Slide 19: Global Businesses
@ Santander Global Businesses 19
Slide 20: Retail & Commercial Banking
Retail & Commercial Banking ‘A new global business integrating all our retail and commercial banking business globally to better serve our customers, improve efficiency and drive value creation’ 2023 Highlights Strategic priorities Total income (€ mn) 29,754 Efficiency ratio 43.1% ▪ Implement a comm
Slide 21: Digital Consumer Bank
Digital Consumer Bank ‘Global leader in auto financing and digital consumer activities’ 2023 Highlights Strategic priorities Total income (€ mn) 12,296 ▪ Expand our leadership in consumer lending across our footprint (e.g. #1 finance Efficiency ratio 42.8% company in Europe and LatAm, top 5 in the U
Slide 22: Corporate & Investment Banking
Corporate & Investment Banking ‘Santander CIB supports corporate and institutional clients, delivering tailored services and value-added wholesale products suited to their complexity and sophistication’ 2023 Highlights Strategic priorities Total income (€ mn) 7,527 ▪ Our aim is to become a focused w
Slide 23: Wealth Management & Insurance
Wealth Management & Insurance ‘We want to become the best Wealth and Insurance Manager in Europe and the Americas’ 2023 Highlights Strategic priorities Total assets under management 460 ▪ Continue building our global platform leveraging the connectivity of our teams Total fees generated as % of the
Slide 24: Payments
Payments ‘One-of-a-kind paytech business that offers innovative payment solutions’ 2023 Highlights Strategic priorities PagoNxt revenue (€ mn) 1,140; +17% YoY ▪ We are a one-of-a-kind paytech business backed by Santander ▪ Helping our customers prosper and accelerate their growth through a one-stop
Slide 25: Cards Payments
Cards Payments ‘Provide exceptional payments experiences, fostering customer loyalty and leveraging transactional data to enhance profitability’ 2023 Highlights Strategic priorities Turnover (€ bn) 306; +8% YoY ▪ Expand cards business to increase our revenue Total revenue (€ mn) 4,158; +10% YoY ▪ Ex
Slide 26: Geographic segments
> Santander Geographic segments 26
Slide 27: Europe
Europe 'We continue to accelerate our business transformation to achieve higher growth and a more efficient operating model' 2023 Highlights Strategic priorities Branches 3,083 ▪ Improve our customer experience with our omnichannel strategy and adding value Employees 67,457 to our customer interacti
Slide 28: Spain
Spain 'Focus on our business transformation leveraging global solutions to enhance customer service while increasing efficiency and profitability' 2023 Highlights Strategic priorities Branches 1,874 ▪ Grow our customer base, providing the best customer experience across all channels Employees 26,834
Slide 29: UK
UK 'Santander UK creates value by serving customers with tailored financial products and services' 2023 Highlights Strategic priorities Branches 444 Employees 22,280 ▪ Well established UK market position. Customer focused strategy with resilient Total customers (mn) 22.5 balance sheet Digital custom
Slide 30: Portugal
Portugal 'Santander Portugal aims to provide best-in-class service to its customers, maintaining a lending leadership position' 2023 Highlights Strategic priorities Branches 376 Employees 4,945 ▪ Continue to implement our transformation plan with the aim of improving service Total customers (mn) 2.9
Slide 31: Poland
Poland '3rd largest bank and one of the most innovative financial institutions in Poland' 2023 Highlights Strategic priorities Branches 381 ▪ Maintain Top 3 NPS position in a highly competitive digital market in Poland - Employees 10,822 implementing the agenda from our customer roadmap to strengthe
Slide 32: Digital Consumer Bank Europe
Digital Consumer Bank Europe ‘Europe’s consumer finance leader: solid business model, geographic diversification and leading market shares in auto/mobility finance and in personal finance/e-commerce’ 2023 Highlights Strategic priorities Branches 342 Employees 16,795 ▪ Secure leadership positions in
Slide 33: North America
North America 'We provide a full range of financial services with a particular focus on Retail, Private and Corporate Banking' 2023 Highlights Strategic priorities Branches 1,784 ▪ Leveraging our own local strengths and capabilities while promoting strong Group Employees 45,593 network contributions
Slide 34: United States
United States 'Santander US combines a stable, retail-oriented depository base supporting its auto finance, wealth management and corporate banking businesses' 2023 Highlights Strategic priorities Branches 415 Employees 13,489 ▪ Targeting segments with proven competitive advantage and strong Group n
Slide 35: Mexico
Mexico 'Santander México, one of the leading financial groups in the country, focused on commercial transformation and innovation' 2023 Highlights Strategic priorities Branches 1,369 Employees 30,876 ▪ Advance with the technological transformation to improve the digital channels Total customers (mn)
Slide 36: South America
South America 'Moving forward to become the most profitable bank in each of the countries across the region while promoting synergies in our global and regional businesses' 2023 Highlights Strategic priorities Branches 3,309 ▪ In consumer finance, continue to strengthen our leadership position in th
Slide 37: Brazil
Brazil 'Santander Brasil has a solid strategy, which benefits from being part of a large international group' 2023 Highlights Strategic priorities Branches 2,580 Employees 57,775 ▪ Continuing to develop the best integrated distribution platform in the market in order to strengthen connectivity betwe
Slide 38: Chile
Chile 'We are the leading bank in the country and we always have the customer at the centre of our strategy' 2023 Highlights Strategic priorities Branches 248 Employees 9,948 ▪ Continue with a leadership position through the commercial network transformation and digital banking proposition Total cus
Slide 39: Argentina
Argentina 'The leading privately-owned bank in Argentina in terms of loans and deposits' 2023 Highlights Strategic priorities Branches 322 Employees 8,455 ▪ Grow customer base and loyalty and ensure the best customer service through our multi-channel strategy Total customers (mn) 4.8 ▪ Increase our
Slide 40: Uruguay, Peru, Colombia
Uruguay Peru Colombia ‘Santander Uruguay is the country’s 'Activity focused on corporates, 'Bank specialized in corporates, leading privately-owned bank’ the country’s large companies and CIB and auto finance' the Group’s global customers (SCIB)' 2023 Highlights 2023 Highlights 2023 Highlights Under
Slide 41: Group functions and Corporate Centre activities
Group functions and Corporate Centre activities • Global T&O strategy • HR strategy • Risk management and compliance • Corporate governance and internal control • Our brand 41
Slide 42: Technology and Operations (T&O)
Technology and Operations (T&O) ‘The T&O mission is to enable the Group strategy by building customer- oriented, secure, efficient and innovative technology working with the business units in a flexible and agile way’ Global T&O capabilities are key for our digital transformation Composed of four ma
Slide 43: HR strategy: Our aim is to be an employer of choice
HR strategy: Our aim is to be an employer of choice 'Focus on employee engagement, leveraging our SPF culture to retain and attract the best talent' Our corporate management The SPF culture is based on our 5 corporate behaviours evaluation model 212,764 Employees (Dec-23) Continuous Employee Listeni
Slide 44: Risk, compliance & conduct management
Risk, compliance & conduct management 'Our risk, compliance & conduct management is key to remain a strong, secure and sustainable bank, that helps people and businesses prosper' A risk, compliance & conduct management model that relies on: Common Risk Principles Advanced management tools A proactiv
Slide 45: Corporate governance and internal control
Corporate governance and internal control ‘As a responsible bank, we have clear and robust governance to ensure a long-term sustainable business model’ Composition of the board of directors, Dec-23 Board committees Executive Diversified and well-balanced shareholder base 20.0% Audit Non-executive di
Slide 46: Corporate governance and internal control
Corporate governance and internal control 'Best practices on robust governance are channelled to all subsidiaries' Group-subsidiary governance model Group Subsidiary B The Group-subsidiary governance model enhances control and oversight through: Board of Directors Subsidiary A A Presence of the Grou
Slide 47: Santander brand
Santander brand 'Our brand embeds the essence of the Group's culture and identity' Santander is one of the most valued brands in the world 3 rd best global retail bank brand by Interbrand’s Best Global Brands Ranking, 2023 As one of our most important strategic assets, our brand helps us connect wit
Slide 48: 2023 results & activity
3. 2023 results & activity
Slide 49: Achieved a record year and delivered on our financial targets
Achieved a record year and delivered on our financial targets FY’23 Attributable Profit FY’23 Revenue Record results with 5mn new customers YoY contributing to double-digit revenue growth €11.1bn €58bn +15% +11% Cost-to-income RoTE First year of ONE Transformation is driving profitable growth and st
Slide 50: All time high attributable profit boosted by net operating income growth
All time high attributable profit boosted by double-digit net operating income growth P&L Current Constant € million 2023 2022 % % Delivered on Group 2023 targets NII 43,261 38,619 12 16 Double-digit revenue growth Net fee income 12,057 11,790 2 5 Other income 2,329 1,745 33 11 Efficiency ratio impr
Slide 51: Higher capital generation and cash DPS growth
Strong performance drove higher gross organic capital generation and TNAVps + Cash DPS growth of 15%, while improving our payout to 50% FL CET1 TNAVps + Cash DPS 2023 shareholder remuneration +c.50bps % € per share Cash DPS: €14 cents like-for-like Total shareholder +1.19 +15% remuneration 4.90 12.0
Slide 52: Business model delivers sustained earnings with lower volatility
Our business model and strategy deliver sustained earnings with lower volatility and allow us to accelerate profitable growth and shareholder value creation High profitable growth Increasing remuneration and strengthening capital Attributable profit1 (€bn) Dividends & Buybacks2 (€bn) Dividends3 Covi
Slide 53: A strong first year in our new phase of value creation
A strong first year in our new phase of value creation for our shareholders… 2023 vs. 2025 ID targets Strength Disciplined capital allocation FL CET1 RWAs with RoRWA > CoE 12.3% TNAVps + DPS 84% +15% >12% c.85% Double-digit growth average through-the-cycle Shareholder remuneration Profitability Payo
Slide 54: Leveraging business model strengths
…leveraging our business model strengths: diversification, customer focus and global and in-market scale Our two key strategic and …are driving structural benefits helping us become the most operating advantages… profitable bank in every market Higher growth in customer Leadership position revenue a
Slide 55: Global Businesses: last step towards ONE Santander
With our last step towards ONE Santander, we have laid the foundation to capture the full potential of our in-market and global value Our model capitalizes on our strategic advantage of Tangible progress on our transformation combining global capabilities with local expertise Retail Retail & Commerc
Slide 56: Retail
Retail Driving growth and efficiency on the back of our new model and proprietary technology Customer experience Operational leverage Global platform 2025 target c.17% RoTE Common operating Proprietary back-end 15.1% 2023 Product simplification model globally (Gravity) and our cloud and digital firs
Slide 57: Consumer
Consumer Transforming into a best-in-class, global business and operating model Customer experience Operational leverage Global platform 2025 target > 14% RoTE Global relationship Operational & commercial From multiple country- 11.5% 2023 management benchmark to maximize specific platforms to global
Slide 58: CIB
CIB Playing to our strengths to better serve our corporate customers and institutions Customer experience Operational leverage Global platform 2025 target >20% RoTE Continue growing fee and Optimize capital returns Trusted advisor for our 17.5% 2023 transactional business on the back of origination
Slide 59: Wealth
Wealth Accelerating our customers connectivity with our global product platforms Customer experience Operational leverage Global platform 2025 target Leverage our global c.60% RoTE Providing our customers Global platforms and operations and factories to 72.2% 2023 with a specialized infrastructure c
Slide 60: Payments
Payments Seizing a growing opportunity by capturing scale through global platforms Customer experience Operational leverage Global platform 2025 target PagoNxt Migrate volumes to Deliver best-in-class >30% EBITDA margin Reduce cost per transaction common global platforms payment solutions 24.8% 2023
Slide 61: Global businesses summary
In summary, our global platforms will deliver operational leverage and profitable growth to become the most profitable bank in every market Most upside from changes to common platforms in Retail, Consumer and Payments, which represent 81% of total revenue Revenue Contribution to 2025 RoTE2 Efficienc
Slide 62: Final remarks
4. Final remarks
Slide 63: Record results in our first year of new phase of value creation
Record results in our first year of our new phase of value creation and growth Excellent progress in the execution of our strategy Efficiency and profitability improvement €11.1bn 44.1% +21.5% Resilient balance sheet with a stronger capital ratio Foundation for further growth, value creation and sha
Slide 64: A great set of results delivering on all 2023 targets
In summary, a great set of results delivering on all our 2023 targets Our 2023 2023 targets achievement Revenue1 Double-digit growth +13% Efficiency ratio 44-45% 44.1% CoR <1.2% 1.18% FL CET1 >12% 12.3% RoTE >15% 15.1% (1) YoY change in constant euros. 64
Slide 65: Looking ahead: targets for 2024
Looking ahead, we are well positioned to continue driving additional profitable growth in 2024 Our consistent track record and the implementation of ONE Santander make us confident we will deliver on the following targets in 2024 Mid-single digit growth <43% c.1.2% >12.0% 16% Revenue1 Efficiency CoR
Slide 66: Links to public materials
5. Links to public materials
Slide 67: Links to Grupo Santander public materials
Links to Grupo Santander public materials For additional information on the Group, please click on the images, icons or flags below 2023 financial results Other information Financial report Earnings presentation Series Shareholders report 2023 Digital Annual review (Excel) (interactive) (New operati
Slide 68: Glossary
@ Santander
Slide 69: Glossary - Acronyms
Glossary - Acronyms • ALCO: Assets and Liabilities Committee • FL: Fully-loaded • RoRWA: Return on risk-weighted assets • AM: Asset management • FX: Foreign exchange • RoTE: Return on tangible equity • AuMs: Assets under Management • FY: Full year • RWA: Risk-weighted assets • bn: Billion • IFRS 9:
Slide 70: Glossary - Definitions
Glossary - Definitions PROFITABILITY AND EFFICIENCY • RoTE: Return on tangible capital: Group attributable profit / average of: net equity (excluding minority interests) – intangible assets (including goodwill) • RoRWA: Return on risk-weighted assets: consolidated profit / average risk-weighted asse
Slide 71: Important information
Important information Non-IFRS and alternative performance measures broader view of our impact. NFI is not audited nor reviewed by an external auditor. NFI is prepared following various external and internal frameworks, reporting guidelines and measurement, collection and verification This presentat
Slide 72: Important information
Important information While these forward-looking statements represent our judgement and future expectations Not a securities offer concerning our business developments and results may differ materially from those anticipated, expected, projected or assumed in forward-looking statements. This presen
Slide 73: Thank You.
Thank You. Our purpose is to help people and businesses prosper. Our culture is based on believing that everything we do should be: