Banco Santander, S.a. · BME:SAN
Banco Santander — Investor Presentation (2023)
63 slides from Banco Santander's investor presentation, 2023
Slide 1: Institutional Presentation 9M'23
Strategic and Financial Analysis. Financial Division Institutional Presentation 9M’23
Slide 2: Index
Index 1 2 3 4 5 Our business Group structure 9M'23 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 9M'23 Highlights leading financial group Total assets (€ bn) 1,817 Customer loans (€ bn excluding reverse repos) 1,017 Customer deposits + mutual funds (€ bn excluding repos) 1,160 Branches 8,652 9M'23 Net operating income (pre-provision profit) (€ mn) 24,134 9M'23 Attributable profit (
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 Geography based on unique Digital bank In-market Business 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: Customer focus
01. Distribution by market Customer focus 166 (+9mn) 15% 28% million customers 45% DCB 12% We have grown our customer base over the last seven years, 101 mn (+2.1mn) 53.6 mn (+6%) Active customers Digital customers with balanced growth by region and business Customer satisfaction Top 3 NPS1 in +12%
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: Scale: market shares
02. Market shares Scale Europe North America 9% 4% Loans Auto lending 7% Digital 2% Deposits Deposits Consumer Bank 17% 11% Loans Our unique combination Loans 13% 11% Loans South America 13% Deposits Deposits of in-market scale and 12% #1 European Deposits 18% Consumer Loans Bank global scale networ
Slide 10: Diversification
03. Diversification Profit Customer loans Customer funds 9% 6% 45% 13% 55% 61% Geographical 18% well-diversified profit 16% 25% and balance sheet 15% 21% 16% Europe North America South America Digital Consumer Bank Note: 9M'23 underlying attributable profit by region (% operating areas excluding Cor
Slide 11: Diversification
03. Diversification Customer loans Customer funds Individual mortgages, 33% Mutual funds, Corporates, 13% 18% Individuals, 48% Business diversification among Other individuals, 16% customer segments SCIB, 13% SMEs, 24% Consumer, 14% SMEs, Corp & other, 21% Note: data as of Sep-23. Customer loans exc
Slide 12: Diversification: 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 Lower volatility of results In summary Differential Pre-provision profit / loans and cost of credit EPS volatility2 Our results show that 1.90% 1.89% 1.80% 1.80% 1.70% 1.80% 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
Slide 14: Environmental, Social and Governance
Environmental, Social and Governance 9M'23 2025 targets Green Finance raised and facilitated €105.9bn €120bn We continue to (since 2019) make progress on our ESG agenda Socially responsible €64bn €100bn Investments (AuM) Financial inclusion (# People)1 1.33mn 5mn More information available at www.sa
Slide 15: Group structure and businesses
2. Group structure and businesses
Slide 16: Group organizational structure
Primary segments Group Europe North America South America Digital Consumer Bank organizational Spain Portugal UK Poland United States Mexico Brazil Chile Uruguay Peru SCF structure Other Europe Argentina Colombia in 2023 Secondary segments Retail Banking SCIB WM&I PagoNxt Includes Cards & Digital So
Slide 17: Our last step towards ONE SANTANDER
One Santander Our last Europe North America South America European DCB step towards DCB ONE SANTANDER Retail & Commercial* announced on R&CB 18 September DCB Digital Consumer Bank* 2023 SCIB Corporate & Investment Banking - Wealth Management & Insurance New reporting WM&I Payments* from 2024* Paymen
Slide 18: Primary segments
@ Santander Primary segments 18
Slide 19: Europe
Europe 'We continue to accelerate our business transformation to achieve higher growth and a more efficient operating model' 9M'23 Highlights Strategic priorities Branches 3,095 ▪ Customer centric: grow our active customer base through better customer service and Employees 67,151 experience Total cu
Slide 20: Spain
Spain 'Focus on our business transformation leveraging global solutions to enhance customer service while increasing efficiency and profitability' 9M'23 Highlights Strategic priorities Branches 1,881 Employees 26,819 ▪ Grow our customer base, providing the best customer experience across all channel
Slide 21: UK
UK 'Santander UK creates value by serving customers with tailored financial products and services' 9M'23 Highlights Strategic priorities Branches 444 Employees 22,204 ▪ Well established UK market position. Customer focused strategy with resilient Total customers (mn) 22.5 balance sheet Digital custo
Slide 22: Portugal
Portugal 'Santander Portugal aims to provide best-in-class service to its customers, maintaining a leadership position in lending' 9M'23 Highlights Strategic priorities Branches 376 Employees 4,982 ▪ Continue to implement our transformation plan with the aim of improving service Total customers (mn)
Slide 23: Poland
Poland '3rd largest bank in Poland and one of the most innovative financial institutions in Poland' 9M'23 Highlights Strategic priorities Branches 386 ▪ Maintain Top 3 NPS position in a highly competitive digital market in Poland - Employees 10,721 implementing the agenda from our customer roadmap t
Slide 24: North America
North America 'We provide a full range of financial services with a particular focus on Retail, Private and Corporate Banking' 9M'23 Highlights Strategic priorities Branches 1,789 ▪ Continue leveraging our own local strengths and capabilities while promoting strong Employees 45,834 Group network con
Slide 25: United States
United States 'Santander US combines a stable, retail-oriented depository base supporting its auto finance, wealth management and corporate banking businesses' 9M'23 Highlights Strategic priorities Branches 420 Employees 13,971 ▪ Targeting segments with proven competitive advantage and strong Group
Slide 26: Mexico
Mexico 'Santander México, one of the leading financial groups in the country, focused on commercial transformation and innovation' 9M'23 Highlights Strategic priorities Branches 1,369 Employees 30,704 ▪ Advance with the technological transformation to improve the digital channels Total customers (mn
Slide 27: South America
South America 'Moving forward to become the most profitable bank in each of the countries in which we operate in the region while promoting synergies across our global and regional businesses' 9M'23 Highlights Strategic priorities Branches 3,407 ▪ In individuals, pursue optimization, simplification
Slide 28: Brazil
Brazil 'Santander Brasil has a solid strategy, which benefits from being part of a large international group' 9M'23 Highlights Strategic priorities Branches 2,662 Employees 57,722 ▪ Continuing to develop the best integrated distribution platform in the market in order to strengthen connectivity betw
Slide 29: Chile
Chile 'We are the leading bank in the country and we always have the customer at the centre of our strategy' 9M'23 Highlights Strategic priorities Branches 249 Employees 9,828 ▪ Continue with a leadership position through the commercial network transformation and digital banking proposition Total cu
Slide 30: Argentina
Argentina 'The leading privately-owned bank in Argentina by deposit volumes' 9M'23 Highlights Strategic priorities Branches 337 Employees 8,168 ▪ Grow customer base and loyalty and ensure the best service through our multi- channel strategy Total customers (mn) 4.8 Digital customers (mn) 3.1 ▪ Incre
Slide 31: 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)' 9M'23 Highlights 9M'23 Highlights 9M'23 Highlights Un
Slide 32: Digital Consumer Bank
Digital Consumer Bank ‘Europe’s consumer finance leader: solid business model, geographic diversification and leading market shares in auto/mobility finance and in personal finance/e-commerce’ 9M'23 Highlights Strategic priorities Branches 361 Secure leadership in global digital consumer lending: Em
Slide 33: Secondary segments
@ Santander Secondary segments 33
Slide 34: Corporate & Investment Banking
Corporate & Investment Banking ‘Santander CIB supports corporate and institutional customers, offering tailored services and value-added wholesale products suited to their complexity and sophistication’ 9M'23 Highlights Strategic priorities Total income (€ mn) 6,479 ▪ Our ambition is to become a wor
Slide 35: Wealth Management & Insurance
Wealth Management & Insurance ‘We want to become the best Wealth and Protection Manager in Europe and the Americas’ 9M'23 Highlights Strategic priorities Total assets under management 447 ▪ Continue building our global platform leveraging the connectivity of our teams Total fees generated as % of th
Slide 36: PagoNxt: paytech business
‘One-of-a-kind paytech business that offers innovative payment solutions’ 9M'23 Highlights PagoNxt revenue (€ mn) 820; +23% 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 shop, providing solutions beyond pa
Slide 37: 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 37
Slide 38: Technology and Operations (T&O)
Confidential 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 Compos
Slide 39: HR strategy: employer of choice
Confidential 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 212,219 Employees (Sep-23) Continuous Emp
Slide 40: Risk management & compliance
Confidential Risk management & compliance 'Our risk management & compliance function is key to remain a strong, secure and sustainable bank that helps people and businesses prosper' A risk management & compliance model that relies on: Common Risk Principles AdAdvanced risk and compliance management
Slide 41: 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, Sep-23 Board committees Executive Diversified and well-balanced shareholder base 20.0% Audit Non-executive di
Slide 42: 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 43: 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, 2022 As one of our most important strategic assets, our brand helps us connect wit
Slide 44: 9M'23 results & activity
3. 9M'23 results & activity
Slide 45: 9M'23 highlights
9M'23 highlights Q3 Attributable Profit 9M Attributable Profit Strong 9M results with 9mn new customers YoY contributing to a double-digit revenue increase €2.9bn €8.1bn +20% vs. Q3’22 +11% YoY RoTE EPS ONE TRANSFORMATION driving efficiency improvement and profitable growth 14.8% +17% +126bps YoY Yo
Slide 46: Profit increased in 9M'23
Profit increased in 9M'23, supported by customer revenue and efficiency improvement, with double-digit growth in net operating income Attributable profit P&L Current Constant € mn € million 9M'23 9M'22 % % +20% 2,902 NII 32,139 28,460 13 16 Net fee income 9,222 8,867 4 6 2,670 2,543 2,571 +9% Other
Slide 47: On track to deliver on our 2023 financial targets
On track to deliver on our 2023 financial targets 2023 targets 9M'23 Revenue1 Double-digit growth +13% Efficiency ratio 44-45% 44.0% CoR <1.2% 1.13% FL CET1 >12% 12.3% RoTE >15% 14.8% Note: targets market dependent. Based on macro assumptions aligned with international economic institutions. 47 (1)
Slide 48: Building capital and higher shareholder remuneration
Building up capital organically and delivering double-digit value creation with higher shareholder remuneration FL CET1 TNAVps + Cash DPS Interim distribution in Nov-23 % € per share +0.3pp +0.92 Cash dividend +12% per share of €8.10 cents 12.3 12.0 -0.69 4.75 +39% YoY 4.26 Current share buyback pro
Slide 49: Improving efficiency through One Transformation
Improving efficiency due to the execution of One Transformation and extracting value from our Global & Network businesses Global & Network Global Tech FY’22 One Transformation businesses capabilities & others 9M’23 45.8% -117 bps -39 bps -29 bps 44.0% • Product simplification: 8% fewer • Multi-Latin
Slide 50: One Transformation driving simplification
One Transformation driving simplification, reducing cost to serve and increasing transactionality 9M’23 data (or latest available). Changes in constant euros Simplification Process automation Best-in-class Tech Platform Gravity Cost1 # Operational FTEs Deployed in 3 countries and SCIB per active cus
Slide 51: Global and Network businesses revenue growth
Global and Network businesses: revenue growing above Group 9M'23 data. Changes in constant euros SCIB WM&I Payments Auto Network revenue PB network AuMs # Transactions Auto loans and leases €3.0bn €52bn 26bn €179bn +27% +12% +15% +7% Total +21% +23% PagoNxt -4% 1 revenue +22% ID Targets (CAGR 22-25)
Slide 52: Progressing towards our 2025 profitability targets
Progressing towards our 2025 profitability targets RoTE 9M'23 2025 Target RoTE 9M'23 2025 Target Europe 14.8% c.15% SCIB 28.4% >20% North 10.4% c.15% 1 America WM&I 92.1% c.60% South 14.8% c.19% America EBITDA Margin 9M'23 2025 Target Digital DCB Consumer 11.3% c.15% Bank 19.6% >30% Group 14.8% 15-1
Slide 53: Final remarks
4. Final remarks
Slide 54: Well-positioned to create shareholder value
Well-positioned to create shareholder value and deliver sustainable profitability We increased our profitability YoY, supported by customer growth and double-digit increase in revenue 9M'23 Completed our changes to a simpler & more integrated model through ONE TRANSFORMATION that will accelerate eff
Slide 55: One Transformation driving double-digit growth in value creation
One Transformation driving double-digit growth in value creation 2022 9M'23 2025 targets RoTE (%) 13.4 14.8 15-17 Profitability Payout (Cash + SBB)1 (%) 40 50 50 EPS Growth (% CAGR 22-25) 23 17 Double-digit Total customers (mn) 160 166 c.200 Customer centric Active customers (mn)2 99 101 c.125 Simpl
Slide 56: Links to public materials
5. Links to public materials
Slide 57: 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 9M'23 financial results Other information Financial report Earnings presentation Series Shareholders report 2022 Digital Annual review (Excel) (interactive) 2022 Annual
Slide 58: Glossary
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Slide 59: Glossary - Acronyms
Glossary - Acronyms • ALCO: Assets and Liabilities Committee • GDF: Global Debt Finance • Ps: Per share • AM: Asset management • GDP: Gross domestic product • QoQ: Quarter-on-Quarter • AT1: Additional Tier 1 • GTB: Global Transaction Banking • Repos: Repurchase agreements • AuMs: Assets under Manage
Slide 60: 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 61: Important information
Important information Non-IFRS and alternative performance measures Non-financial information This presentation contains financial information prepared according to International Financial Reporting This presentation contains, in addition to financial information, non-financial information (NFI), in
Slide 62: Important information
Important information The following important factors (and others described elsewhere in this presentation and other regulatory requirements and internal policies, including those related to climate-related risk factors, uncertainties or contingencies detailed in our most recent Form 20-F and subseq
Slide 63: 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: