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Santander Consumer Bank
Nordic Group
August 2019
Q2 2019 Investor Presentation
Who we areSantander Consumer Bank AS is a Nordic bank with more than
1,500 colleagues in Sweden, Norway, Denmark and Finland, with a long history in the Nordics, and with global strength by being a part
of Banco Santander.
We are one of the largest Nordic banks providing loans and credits, credit cards, deposits and insurance to private customers.
We work with the best people in an engaged, challenging and passionate organization, which provides great opportunities for
professional growth.
2
Regulated in Norway, owned by Banco Santander
SCB AS is
regulated
by the
Norwegian
FSA
Santander Consumer
Finance S.A.
Fitch/Moody’s/S&PA-/A2/A-
Santander Consumer Bank AS
Fitch/Moody’sA-/A3
Santander Consumer
Bank Denmark
(Branch)
Santander Consumer
Finance Finland
(Subsidiary)
Santander Consumer
Bank Sweden
(Branch)
BancoSantander S.A.
Fitch/Moody’s/S&PA-/A2/A
3
Source: SCB Group Q2 2019 Report and Management Figures
1) Adjusted for IFRS9 transitional rules
2) Headcount includes permanent and temporary employees
3) NII Ratio = Net Interest Income (annualized) / ANEA
YTD Q2 2019 | Key Figures
Gross
Outstanding
Loans
162.4NOK Billion
People2
1,545Employees
Core Capital
CET11
16.3Per cent
Customers
1.56Million
Total
Deposit
61.8NOK Billion
Net Interest
Income Ratio3
4.5per cent
Profit Before
Tax
2,314NOK Million
Partners
5,076Merchants
+5,600Car Dealers
4
Loan growth in the Nordics
59,575(mNOK)
71,891(mNOK)
83,322(mNOK)
116,297(mNOK)
124,625(mNOK)
143,615(mNOK)
83 322
118 991127 852
147 9702
162 8022162 377
2014 2015 2016 2017 2018 Q2 2019
Source: SCB Group Annual Reports (2013 – 2018) and Q2 2019 Report
1) Compound Annual Growth Rate 2013 – Q2 2019
2) SCB Group has reclassified Consignment from the financial statement line “Consignment” to “Loans to customers” in 2018. Comparison figures are changed similarly. As of December 31 2018 the Consignment
portfolio constitute NOK 4.2 billion of the financial statement line “Loans to customers”. Please see principle 6) on page 57 in the 2018 Annual Report for further details.
Driven by organic growth, particularly in the Auto portfolio
5
mNOK
mNOKmNOK
mNOK
mNOK mNOK
CAGR1
16%
Solid profitability
1 321
1 942
3 250
3 9952 4 1342
2 314
2014 2015 2016 2017 2018 Q2 2019
mNOK
Source: SCB Annual Reports (2013 – 2018) and Q2 2019 Report
1) Compound Annual Growth Rate 2013 – 2018
2) The Group reclassified issued AT1 capital of NOK 2.25 billion from liabilities to equity in 2017. Interest expenses for 2017 of NOK 169 million are consequently presented in equity instead of profit and
loss, with related tax impact presented as part of other equity. Comparison figures are changed similarly. Please see principle 6) on page 40 in the 2017 Annual Report for further details.
Year-on-year growth in margins
CAGR1
33%
6
mNOKmNOK
mNOK
mNOK
mNOK
YTD Q2 2019 | SCB Group overviewPortfolio and results by region
7
Source: SCB Group Q2 2019 Report (All figures in NOK)
36% Norway
20% Denmark
23% Sweden
21% Finland
% of Gross Outstanding LoansNordic
Q2 2019
Result
162.4 BnGross Outstanding
2,314 MMProfit Before Tax
Finland
Auto Loans
Unsecured Loans
Profit Before Tax
31.3 Bn
3.3 Bn
359 MM
Sweden
Auto Loans
Unsecured Loans
Profit Before Tax
22.2 Bn
14.3 Bn
436 MM
Denmark
Auto Loans 25.4 Bn
6.8 Bn
561 MM
Norway
Auto Loans
Unsecured Loans
Profit Before Tax
48.7 Bn
10.5 Bn
960 MM
Unsecured Loans
ProfitBefore Tax
History
Bankia Bank acquired
(credit cards)
ELCON Finance becomes
Santander Consumer
Bank AS (SCB)
ELCON Finance
A leading Norwegian
company within equipment
leasing, factoring and auto
financing
Santander Consumer
Finance S.A. acquires
ELCON Finance
Company
demerges and auto finance is
retained in Norway and
Sweden
Launch consumer
loans Norway
Skandiabanken Bilfinans
acquired in Denmark
(auto finance)
Start up auto finance in
Finland
GE Finland acquired
(auto finance,
consumer loans)
Consumer loans in
Sweden (2012) and
Denmark (2013)
Deposits launched in
Norway and Sweden (2013)
Deposits launched in
Denmark (2014)
1963
2004
2005
2006/07
2009
2012/13
2015
SCB merges with
GE Money Bank
SCB becomes
leader within car
finance and
unsecured loans in
the Nordic region
2017
Solidified position in
sales finance with
the onboarding of
Elkjøp/Elgiganten,
Power and Media
Markt
8
Executive Committee
Bo Jakobsen
MD DenmarkBo joined Santander in 2007 and was key to start up the business in Denmark the same year. Previously, he held several leadership roles within the financial industry.
Michael Hvidsten
CEO
Michael started in GE (first in GE Capital, later in GE Money Bank) in 2000, where he held various key position within risk management. He joined Santander in 2005 as Nordic Chief Risk Officer, and was appointed Nordic CEO in 2012.
Anders Bruun-Olsen
Nordic Chief Financial Officer
Anders has held several senior positions within banking institutions like DNB, Eksportfinans and Handelsbanken. He joined Santander in 2011.
Knut Øvernes
MD NorwayKnut has held various business management positions in GE Money Bank and Santander since he started in 1996.
Juan Calvera
IT & Ops
Director
Juan has held various
leadership positions
within IT and Operations
since joined Santander
in 2011.
Peter Sjöberg
MD Finland Peter has 20 years experience from banking and financial services. He has held several leadership positions in SCB. Joined Santander in 2010.
Andres Diez
Chief Risk Officer
Andres has held different leadership positions within Risk and Credit. Joined Santander in 2007.
Martin Brage
MD SwedenMartin joined GE in 1999. With his long and extensive experience within the financial sector and Santander, he has built up years of experience within auto and unsecured.
Trond Debes
HR & Legal Director
Trond started in GE Money Bank in 2002. He has been responsible for Legal, Communications, Compliance and HR in various leadership positions.
9
Corporate Social ResponsibilityWe engage in a broad spectrum of activities that contribute to UN’s Sustainable Development Goals
10
Ensure healthy lives and promote well-being for all Ensure access to affordable, reliable,
sustainable and modern energy
Take action to combat climate change and its
impacts by regulating emissions and promoting
developments in renewable energy
Ensure inclusive and equitable quality education
and promote lifelong learning opportunities for all
SCB has for a long time been a Gold partner supporting Right
To Play, an organization that protects, educates and empowers
children to rise above adversity using the power of play.
Right To Play focus in five key areas; Quality education,
gender equality, health & well -being, child protection and
peaceful communities.
The partnership with Right To Play for us is about something
more than contributing financially. We actively participate
involving employees and partners contributing.
“Team Rynkeby” a charity cycling team that raise money for
children with critical illnesses
Engaging employees in “Kræftens Bekæmpelse”, the Danish
Cancer Society.
Supporting the Finnish “Icehearts”, an organization that uses
team sports as a tool for engaging children with social work.
In Norway, we have partnered with the Football Association to
make “3v3” kid’s soccer tournaments – an inclusive sports
variety where every team member is part of the active play and
everyone gets equal playing time.
We engage in collaborations to innovate new and more
environmental friendly mobility solutions, and we add the
commercial strength to bring them to the market.
In 2013 Santander pioneered the All-in-One product suite in
Finland, speeding up renewal of one of the oldest car parks in
Europe.
We developed the IT solution to enable online sales of the all
electric Nissan Leaf - helping it to be last year's single most
sold car model in Norway.
In 2018, SCB partnered with CHOOOSE, a global leader in
retiring carbon credits and a platform for climate action,
battling the core problem of climate change – emissions from
big polluters
SCB has been certified as “Miljøfyrtårn” since 2009,
meaning that we are compliant with all requirements regarding
health, environment and safety, procurement, transportation,
waste handling and energy consumption.
Auto & Leisure Unsecured InsuranceDeposits
Saving products with high interest rates provided to
private customers
Insurance products related to payment protection, auto, health and travel, offered to
private customers
Loans, credit cards and sales finance services
offered to private customers
Loans and financial services provided to private
customers and car dealers
Products
11
Gross lending and distribution by productTotal Auto and Unsecured
Source: SCB Group Q2 2019 Report and Management Figures
Auto SME
11%
Non Std. Auto
7%
Consumer
Loan
17%
Credit Card
4%
Auto Private
Persons
61%
Total
Unsecured
21%
Total Auto
79%
12
Auto market share and products
Position and market share in the Nordics
Source Norway: Internal calculations based on data from Finansieringsselskapenes Forening as per YTD Q2 2019
Source Finland: Internal calculations based on data from Finnish Transportation Safety Agency (Trafi) as per YTD Q2 2019
Source Denmark: Internal calculations based on data from Finans og Leasing as per YTD Q2 2019
Source Sweden: Internal calculations based on data from Finansbolagens Förening as YTD Q2 2019
Auto Loans & Hire Purchase
Loans and financial services provided to
private customers, SMEs and car dealers
Customers
Private Customers
Business Customers
Distribution
Online direct distribution
Indirect distribution with dealers and importers
Cross sale
Auto Leasing
Customers
Private Customers
Business Customers
Distribution
Dealers direct
SME direct
Stock & Demo Financing
Customers
Inventory financing for dealers
Distribution
New cars: Importer agreements
Used Cars: Direct to dealers
Auto & Leisure
#121%
market share
#124%
market share
#133%
market share
#49%
market share
13
We are responding to mobility trends through digital strategy
14
All in one
Auto Direct
Platform
Magasinet
Subscription
models
SHFT – A convenient all-inclusive subscription service
15
The customer will be offered a car subscription
ensuring a predictable and fixed cost.
PREDICTABLE
A safeguard against
decreasing vehicle value
combined with the ability to
drive a reliable and safe
car, fit for purpose
FUTUREPROOF
Is offered the opportunity to
change the primary car to
support temporary or
unpredicted transportation
needs. Increasing the
transport flexibility
throughout the subscription
FLEXIBLE
A simplified car “ownership”
that includes direct and
indirect cost of ownership
SIMPLE
A shorter period of contract
binding and a lower step-in
threshold compared to
other financial products
offered to car buyers
LIBERATING
Unsecured products and portfolio
Sales finance Credit cardsDirect loans
Unsecured
Loans, credit cards and sales finance
services offered to private customers
Distribution
Online
Stores
Cross sale
Portfolio Management
Distribution
Online
Stores
Cross sale
Distribution
Online
Agents
Cross sale
Distribution of Unsecured portfolio¹
Source: SCB Group Q2 2019 Report
1) Gross outstanding loans
30%10.5 Bn
19%6.8 Bn
41%14.3 Bn
10%3.3 Bn
16
We are launching new services and building strong partnerships to stay competitive in Unsecured
17
ApplePay
Sandrine Chatbot
Moneybit
Digital Wallets
Key Partnerships
Santander
Commerce Universe
Push-To-Pull
Content marketing
How Who
What
Source: SCB Group Q2 2019 Report and Management Figures
Partnerships a key success factor
5,076 merchants, 36 brokers,
+5,600 car dealers and 22 Brands
“I’ve seen Santander work in a way that is not typical to a bank. You always take and run with our targets”
— Stefan Andström, Sales Director, Nissan Nordic,
Helsinki
On the high score on the MRF2018 Dealer survey:
“Kia Finance have developed many newproducts, which have
positively impacted thescore”
— Peter Himmer, MD Kia Motors Sweden AB
18
Financials
YTD Q2 2019 | Santander Group key figures
20
Santander Group
Total assets 1.51 (€ trillion)
Branches globally13,081
Headcount 201,804
Customers142 (million)
Profit After Tax 4,045 (€ million)
Santander Consumer Finance Subgroup
Loans 112 (€ billion)
European countries15
Headcount 15,406
Customers 20 (million)
Profit After Tax 736 (€ million)
Source: Banco Santander and Santander Consumer Finance Q2 2019 Institutional Presentation
Stable financial performance
4.54.44.7
5.34.9
4.6
2014 2015 2016 2017 2018 Q2 2019
4244
50
3840
44
2014 2015 2016 2017 2018 Q2 2019
2.9
1.7 1.8
2.7
3.02.8
2014 2015 2016 2017 2018 Q2 2019
Return on Assets1
Per cent
Net Interest Income Ratio2
Per cent
Cost / Income Ratio3
Per cent
Source: SCB Annual Reports (2013 – 2018) and Q2 2019 report
1) ROA = PBT (annualized) / ANEA
2) NII Ratio = Net Interest Income (annualized) / ANEA
3) Cost/Income Ratio = OPEX / Gross Margin (OPEX: Total Operating Costs)
Normalised KPI’s as a results of higher growth in Auto portfolio
21
Group Balance Sheet summaryHealthy balance sheet driven by loan and deposit growth
Source: SCB Group Q2 2019 Report
Key changes year-to-date
Deposits with external institutions: Increase in the reverse repo
as a result of deposit growth
Loans to customers: All countries showing growth in local
currency, but slight decrease consolidated due to stronger NOK.
Growth is driven by good market conditions with sharper focus on
financing as a tool to improve car sales and customer loyalty
Other financial assets: Decreased liquidity portfolio because of
smaller bond maturities during 2019
Debt to credit institutions: Reduced levels of short-term
intragroup funding owing to deposits balance growth, reflecting our
increased self-funding
Deposits from customers: Particularly strong growth in Norway
and Sweden following increased deposit interest rates
Debt established by issuing securities: Decrease mainly related
to net repayments of issued securities
NOK million Q2 2019 Q4 2018 Δ 19/18
Deposits with external institutions 3 652 3 047 605
Loans to customers (net) 159 048 159 284 -236
Other financial assets 7 793 10 453 -2 660
Other assets 3 864 3 325 540
Total assets 174 358 176 108 -1 750
Debt to credit institutions 33 777 40 253 -6 476
Deposits from customers 61 826 54 645 7 181
Debt established by issuing securities 49 360 52 929 -3 569
Other liabilities 3 763 3 213 550
Subordinated loan capital 1 692 1 731 -39
Total equity 23 940 23 336 604
Total liabilities and equity 174 358 176 108 -1 750
22
Group Income Statement summaryP&L showing stable growth with increasing profits
Source: SCB Group Q2 2019 Report
Key changes year-on-year
Net Interest Income: Increase in interest income as a result of
higher lending volumes, albeit slightly offset by higher cost of
funding. Negative overall effect on net interest income from lower
lending margins, as the product portfolio mix is shifting more
towards auto financing which carries a lower yield
Commissions and fees: Growth in income both from insurance
and banking services
Other income and costs: Decrease caused largely by reduced
loss allowance on off-balance exposures
Total losses: Lower impairment losses following LLR model
update, resulting in lower loan reserves. Reduced realized losses
and lower amount of recoveries, driven by portfolio sale. During Q2
portfolios of non performing and written-off loans were sold,
resulting in a net gain of approximately NOK 875 million
NOK million Q2 2019 Q2 2018 Δ 19/18
Interest income and similar income 4 237 4 055 182
Interest expenses and similar expenses -696 -643 -54
Net interest income 3 541 3 412 129
Commissions and fees 208 202 6
Other product and funding related income and
cost48 37 11
Gross margin 3 796 3 651 145
Salaries and personnel expenses -703 -681 -22
Administrative expenses -794 -779 -15
Depreciations and amortisation -100 -99 -1
Net operating income 2 199 2 092 107
Other incomes and costs 16 -36 52
Total losses on loans, guarantees etc. 99 -9 108
Profit before tax 2314 2046 268
Income tax -552 -510 -42
Profit after tax 1762 1537 225
23
Credit Risk PerformanceFavourable product mix and stable customer behaviour
24
Risk Portfolio - Total (mNOK) 2016 2017 2018 Q2 2019
Current 118 837 92.7 % 136 821 92.2 % 150 284 92.5 % 150 935 93,0 %
5-30 dpd 5 451 4.2 % 6 806 4.6 % 7 258 4.5 % 6 322 3,9 %
31-60 dpd 1 041 0.8 % 1 329 0.9 % 1 218 0.7 % 1 294 0,8 %
61-90 dpd 393 0.3 % 510 0.3 % 462 0.3 % 565 0,3 %
NPL 2 577 2.0 % 2 912 2.0 % 3 320 2.0 % 3 250 2,0 %
Total 128 299 100.0 % 148 378 100.0 % 162 541 100.0 % 162 366 100,0 %
Risk Portfolio - Secured (mNOK) 2016 2017 2018 Q2 2019
Current 91 510 94.3 % 106 859 93.9 % 119 752 93.9 % 120 305 94,4 %
5-30 dpd 3 720 3.8 % 4 787 4.2 % 5 389 4.2 % 4 620 3,6 %
31-60 dpd 615 0.6 % 753 0.7 % 691 0.5 % 787 0,6 %
61-90 dpd 170 0.2 % 231 0.2 % 226 0.2 % 294 0,2 %
NPL 1 052 1.1 % 1 211 1.1 % 1 435 1.1 % 1 463 1,1 %
Total 97 067 100.0 % 113 841 100.0 % 127 492 100.0 % 127 469 100,0 %
Risk Portfolio - Unsecured (mNOK) 2016 2017 20183 Q2 20193
Current 27 327 87.5 % 29 963 86.8 % 30 532 87.1 % 30 629 87,8 %
5-30 dpd 1 731 5.5 % 2 019 5.8 % 1 869 5.3 % 1 703 4,9 %
31-60 dpd 426 1.4 % 576 1.7 % 526 1.5 % 507 1,5 %
61-90 dpd 224 0.7 % 279 0.8 % 237 0.7 % 271 0,8 %
NPL 1 525 4.9 % 1 700 4.9 % 1 885 5.4 % 1 787 5,1 %
Total 31 233 100.0 % 34 537 100.0 % 35 049 100.0 % 34 897 100,0 %
Source: SCB Group Risk Department
1) NPL ratio = Non-performing loans / Gross loans
2) Coverage Ratio = Loan Loss Reserves (Write Downs) / NPL
3) Change in write-off policy in Sweden, Denmark and Finland during Oct 2018. The policy extends the time before contracts get written off from 180 to 720 days past due
NPL ratio1
Coverage ratio2
98.6
126.9107.7 113.6
96.9109.7 105.5
2013 2014 2015 2016 2017 2018 Q2 2019
1.61 1.48
2.05 2.01 1.96 2.03 2.00
2013 2014 2015 2016 2017 2018 Q2 2019
Capital and
Funding
Strict capital requirements in NorwayEnsuring strong capitalization of the bank
Source: SCB Group Q2 2019 Report
1) Includes increase in Norwegian countercyclical buffer to 2.5% applicable from 31 December 2019
Capital requirements in Norway
Strict requirements in Norway with the
inclusion of additional buffer requirements
and a high countercyclical buffer
requirement
Pillar 2 requirement for SCB Group was set
to 2.6% by the Norwegian FSA, applicable
from March 2019
During 2019, the Countercyclical buffer
requirement for SCB Group will increase to
1.62%1. Norway and Sweden will increase
by 50bps from 2% to 2.5% while Denmark
will increase from 0% to 1%. Finland will
maintain the buffer at 0%.
Group CET1-ratio requirement for 20191
~11.6%
Pillar 1 CET1-requirement
2.6%
Pillar 2 CET1-requirement
~14.2%
Minimum CET1 requirement 4.5%
Conservation buffer 2.5%
Countercyclical buffer 1.62%
Systemic risk buffer 3%
~11.62%
26
Strong Capital PositionCET1 ratio of 16.3%
Recent Capital developments
• SCB Group is using the transitional rules for
IFRS9 capital impact when calculating capital
ratios
• SCB Group had a CET1-ratio of 16.3% per Q2
2019 using transitional rules for IFRS9. The
CET1-ratio is 200 bps higher than the
regulatory requirement
• SCB Group had a strong Leverage Ratio of
12.43%
• In October 2018, SCB Group called its existing
Hybrid loan of NOK 2.25 billion and replaced it
with three new Hybrid loans of NOK 750 million
each
• SCB Group paid a dividend for 2018 of NOK 1
billion to its parent
Capital ratios evolution SCB GroupPer cent
Source: SCB Group Q2 2019 Report
The capital ratios include half year capital profits, based on a 50% payout ratio
15.3 15.1 15.5 15.716.3
17.8 17.4 17.5 17.618.1
19.1 18.7 19.1 19.019.5
11.4 11.5 12.0 12.0 12.4
2015 2016 2017 2018 Q2 2019
CET 1 Tier 1 Tier 2 Leverage ratio
27
Self-funding is a strategic focusThree pillars approach provides funding flexibility
2011 2012 2013 2014 2015 2016 2017 2018 Q2 2019
Unsecured Bonds
Deposits
Securitization
Parent funding
22% 28%
50%62%
70% 70% 77% 73% 77%
2011 2012 2013 2014 2015 2016 2017 2018 Q2 2019
Funding Composition1
Self-funding ratio
23%
26%
43%
8%
Source: SCB Group Q2 2019 Report
1) Outstanding amounts/transactions as per Q2 2019
In Norway deposits are guaranteed up to NOK 2
million
In EU countries the guarantee is up to EUR 100,000
NOK 61.8 billion in total deposits across Norway,
Sweden and Denmark
Deposits
NOK 9,501 billion outstanding in the bond market
including NOK 900 million in Commercial Paper
SEK 7,662 billion outstanding in the bond market
market including SEK 1,107 million in Commercial
Paper
DKK 1,250 million outstanding in the bond market
EUR 2,000 million outstanding from four benchmark
transactions
Unsecured
5 outstanding transactions across Nordics
Represents a low-cost and stable funding sourceSecuritization
28
Deposits at a glanceConsolidated total balance: NOK 61.8 billion
29
Distribution of Deposit portfolio and products
40%of total balance
Savings account
31%of total balance
Savings account
Notification product
Term deposits
29%of total balance
Savings account
Notification product
N/A
Source: SCB Group Q2 2019 Report
Deposit guarantees: Norway NOK 2 million | Sweden SEK 950,000 | Denmark EUR 100,000 equivalent
Deposit balance development NOK billion
14.9
18.6
20.922.1
25.0
14.4
11.9
15.4 15.4
19.0
8.0
10.5
14.3
17.217.8
2015 2016 2017 2018 Q2 2019
Norway Sweden Denmark
Unsecured Senior & Commercial Paper FundingYTD Q2 2019 summary
Source: Bloomberg
1) Outstanding amounts as per Q2 2019
New Issuances Volume
New Issuances #
Taps #
Maturities
Outstanding Volume¹
Outstanding bonds #
Format
Preferred Tenor
1,800 million
2
1
2,000 million
8,601 million
9
FRN
3 – 5 year
355 million
-
2
-
6,555 million
8
FRN
3 – 5 year
500 million
1
-
500 million
2,000 million
4
FXD
3 – 5 year
NOK SEK EUR
750 million
1
-
-
1250 million
2
FRN
3 - 5 year
DKKYTD Q2 2019
400 million
2
-
400 million
900 million
4
FXD/FRN
4 – 12 months
NOK
1,942 million
17
1
1710 million
1,107 million
9
FXD
3 – 6 months
SEK
Senior Unsecured Commercial Paper
30
31
Unsecured FundingMaturity profile Q2 2019 – 2024 for Senior Unsecured and Commercial Paper
Total Maturity (EUR MM)
243 217139
299
83
242
95 213
62
118
500
500
500
50067
100
2019 2020 2021 2022 2023 2024
DKK
EUR
SEK
NOK
500 500 500 500
2019 2020 2021 2022 2023 2024
2 3512 100
1 350
2 900
800
2019 2020 2021 2022 2023 2024
Commercial Paper Senior
2 557
1 000
2 250
6051 250
2019 2020 2021 2022 2023 2024
Commercial Paper Senior
NOK million
SEK million
EUR million
Source: Bloomberg, Management Figures (outstanding amounts as per Q2 2019)
FX: EURNOK 9.6538 | EURSEK 10.5633 | EURDKK 7.4636
500
750
2019 2020 2021 2022 2023 2024
DKK millionTotal Maturity
(EUR million)
Key takeaways
Anchored by a global banking franchise
Sustained market leader in auto
Building out position in unsecured space
Robust financial results
Stable credit risk
32
Appendix
Santander Group &
Santander Consumer
Finance
Section divider
Santander Group
Santander, a leading financial group
35
Headcount 201,804
Branches (units) 13,081
Shareholders (millions) 4.05
Customers (millions) 142
Total assets (trill. €) 1.51
Key Figures H1’19
Attributable Profit 2018 (mill. €) 8,064
Attributable Profit Q1’19 (mill. €) 4,045
Well diversified between Europe and the Americas
36
(1) Excluding Corporate Centre and Santander Global Platform (new single unit that consolidates digital services)
NOTE: SCF excluding SCUK
With leading positions in its core markets
37
Data: Market-share as at Mar-19 and the US latest available. (1) Includes London Branch (2) Including SCF business in Poland (3) In all states where Santander Bank operates (4) Includes debenture, LCA
(agribusiness notes), LCI (real estate credit notes), financial bills (letras financieras) and COE (certificates of structured operations) (5) Countries in Europe, including the UK. Top 3 in retail car finance in its key markets
Nº of countries: 15
Top 3
SCF5
Brazil
Loans: 10%
Deposits4: 11%
Argentina
Loans: 10%
Deposits: 12%
North America Europe
Loans: 17%
Deposits: 19%
Spain
United Kingdom1
Loans: 9%
Deposits: 9%
Loans: 18%
Deposits: 16%
Portugal
Loans: 12%
Deposits: 12%
Poland2
Loans: 18%
Deposits: 17%
Chile
Loans: 13%
Deposits: 14%
MexicoUnited States3
Loans: 3%
Deposits: 3%
South America
H1’19 Highlights
38
(1) QoQ and YoY volume changes in constant euros
QoQ strong growth in volumes (+2% loans; +3% customer funds),
underlying profit (+8%) and continued generation of capital organically (+11 bps)
H1’19 Highlights
39
Note: YoY changes. Results and volume changes in constant euros. Loans excluding
reverse repos. Customer funds: deposits excluding repos + marketed mutual funds
H1’19 underlying P&L YoY performance
40
(1) Q2’19: Restructuring costs (-EUR 600 mn in Spain; EUR 26 mn in UK), PPI in UK (-EUR 80 mn); Q1’19: Prisma sale in Argentina (EUR 150 mn), real estate sale in Spain (-EUR 180 mn); Restructuring costs (-EUR 66
mn in UK; -EUR 12 mn in Poland); Q2’18: Portugal integration (EUR 20 mn); Restructuration costs (-EUR 280 mn in Spain and -EUR 40 mn in the C.C.). Pending accounting of capital gain from custody transaction: EUR
700 mn – The amount is estimated and on the proviso that the transaction is carried out in Q4’19.
Confirming our medium-term goals
41
(1) Underlying
Section divider
2. Santander Consumer Finance
43
PoS partners (thousand) >130
Market positions1 Top 3
Loans (bill. €) 112
Deposits (bill. €) 39
European countries 15
Underlying Att. Profit H1’19 (mill. €) 736
Customers (million) 20
Grupo Santander is the
main and unique
shareholder of SCF ...
… and at the same time,
SCF acts as a holding
for its subsidiaries
through a banking license
Operations are mainly
done through points-of-
sale (dealers and
retailers)
Key Figures H1’19
Santander Consumer Finance, European leader in the consumer finance industry
Underlying Att. Profit 2018 (mill. €) 1,421
SCF: Management perimeter (i.e. including SCUK)
(1) In retail car finance in its key markets
44
Recurrent profits through the cycle
SCF: Management perimeter (i.e. including SCUK)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
472555
744825
895 908
1 093
1 238
1 373 1 421
Underlying Attributable Profit€ Million
H1’19
Underlying Attrib. Profit
€736 million
(+1% YoY)
45
Significant contributor to Santander’s results, representing 13% of the Group’s profit1 in H1’19
SCF, 13%
SCF excluding SCUK. Including SCUK, SCF represents 14% of SAN profit1.
(1) Percentage over SAN underlying attributable profit in H1’19, excluding Corporate Centre and Santander Global Platform
46
Well spread across Europe and well balanced between car loans and consumer lendingSCF Portfolio: €112 bnJun’19
Well spread across 15 European countries
Important foothold in the largest economies
74% portfolio in AAA & AA countries
Car financing represents the biggest share
of the portfolio: 72%
Consumer lending (durables financing,
cash loans and credit cards): 19%
SCF: Management perimeter (i.e. including SCUK)
NOTE: SCF’s portfolio also includes mortgages (5%) and corporate loans & others (5%)
47
Advanced car financing platform and strong foothold in consumer lending
TOP retail chain agreements throughout
Europe
>55,000 POS partners
5.7 MM consumer loans during last year
TOP positions in core geographies
Digital direct business platforms
Strong foothold in consumer lending
Consumer Lending: Durable financing, Personal loans and Credit Cards
Presence in all main European markets
TOP positions in its geographies,
including the 5 biggest European auto
markets: Germany, France, UK, Italy
and Spain
>75,000 POS (captive and non-captive)
The longest European captive
agreements base: more than 115
agreements with 15 manufacturers
Advanced car financing platform
48
Sound risk metrics
SCF: Management perimeter (i.e. including SCUK)
Risk KPIs better than sector average
Strong capacity to balance adverse
economic cycles across geographies
Low cost of risk, despite important
increase in SCF’s loan portfolio
Adaptation of risk management for the
growing digital business while being
involved in the ecosystem platforms
initiatives
SCF Key Risk Metrics
4,56%
6,26%
2,04%
1,73%
2,53%
0,36%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1'19
SCF Cost of Risk (LLPs over ANEAS %)
SCF NPL Ratio (%)
49
Funding diversification
SCF’s funding structure (%)
High diversification of funding
sources
Capacity to do issuances in all
countries
Diversification of deposits.
Different initiatives to develop
retail deposits
Increasing long-term finance vs
short term
Jun’19
Retail Deposits31%
Non Retail Deposits4%
Secured funding11%
ECB7%
Interbank20%
ECPs & Pagares8%
MTNs & other M/L Term Unsc.18%
Subordinated Debt
1%
SCF: Management perimeter (i.e. including SCUK)
50
In summary, SCF has a strong competitive position
High geographic diversification with majority of exposure in AAA & AA countries
Sustainable earnings through the cycle with constant profit growth
Top 3 positions and critical mass in its geographies
Long-standing base of European captive agreements
Extensive network capillarity of POS throughout Europe
Resilient asset quality with sound risk ratios
High diversification of funding sources with stable deposits base
51
With clear strategic priorities
Our purpose is to help people
and business prosper.
Our culture is based on believing
that everything we do should be:
Thank You.
Nordics
