Santander Consumer Bank Q4 2017 Investor Presentation .Q4 2017 Investor Presentation. ... leasing,

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  • Santander Consumer Bank

    Q4 2017 Investor Presentation

  • Who we areSantander Consumer Bank is a Nordic bank with more than

    1,200 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 that provides great opportunities for professional growth.

  • Regulated in Norway, owned by Banco Santander

    SCB is

    regulated

    by the

    Norwegian

    FSA

    Santander Consumer

    Finance S.A

    Fitch/Moodys/S&PA-/A3/BBB+

    Santander Consumer Bank AS

    Fitch/MoodysA-/A3

    Santander Consumer

    Bank Denmark

    (Branch)

    Santander Consumer

    Finance Finland

    (Subsidiary)

    Santander Consumer

    Bank Sweden

    (Branch)

    BancoSantander S.A.

    Fitch/Moodys/S&PA-/A3/A-

  • Q4 Key figures

    Total

    deposits

    50.6NOK Bn

    Gross

    Outstanding

    Loans

    143.6NOK Bn

    Profit Before

    Tax

    4.0NOK Bn

    Core capital

    CET1

    15.5per cent

    People

    1,229employees

    Customers

    1.35million

    Return on

    Asset

    3.0per cent

    Partners

    +4,100merchants

    +4,200car dealers

    Source: SCB Annual Report 2017 and Management Figures as per Q4 2017

  • 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 (SCF) acquires

    ELCON

    Company

    demerges

    Auto finance retained in

    Norway and Sweden

    Launch consumer

    loans Norway

    Start up auto finance in

    Denmark and 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 in 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

  • Main product areas

    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

  • Gross outstanding loans, distribution by productTotal Auto and Total Unsecured

    Auto SME

    10%

    Non Std. Auto

    7%

    Consumer

    Loan

    19%

    Credit Card

    5%

    Auto Private

    Persons

    59%

    Total

    Unsecured

    24%

    Total Auto

    76%

    Source: Annual Report 2017 and Management Figures as per Q4 2017

  • Our auto products

    Saving products with high interest

    rates provided to private customers

    Auto &

    Leisure

    Loans and financial services

    provided to private

    customers SMEs and car dealers

    Distribution

    Online

    Dealers

    Cross sale

    Auto Loans & Hire Purchase

    Customers

    Private Customers

    Business Customers

    Distribution

    Online direct distribution

    Indirect distribution with

    dealers and importers

    Stock & Demo Financing

    Finance of dealer inventories

    Importer agreements (new)

    Direct to dealers (used)

    Customers

    Private Customers

    Business Customers

    Distribution

    Dealers

    Direct SME

    Auto Leasing

  • Position within Auto

    Source Norway: Internal calculations based on data from Finansieringsselskapenes Forening as per Q4 2017

    Source Finland: Internal calculations based on data from Finnish Transportation Safety Agency (Trafi) as per Q4 2017

    Source Denmark: Internal calculations based on data from Finans og Leasing as per Q4 2017

    Source Sweden: Internal calculations based on data from Finansbolagens Frening as per Q4 2017

    Partnershipswith

    21brands

    +4.200dealers

    Position and market share in the Nordics

    #1Position

    26%market share

    #1Position

    21%market share

    #1Position

    36%market share

    #4Position

    11%market share

  • Unsecured products

    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

    GDPRPSD2

  • Partnerships a key success factor

    +4,100 merchants +4,200 car dealers and 30 brokers

    We started working with

    Santander as an exclusive

    partner two years ago.

    Since then, we have

    reached targets we didnt

    think were possible

    Paal Jahrmann,

    CEO Birger N. Haug

    Ive seen Santander work in a way that is not typical to a bank. You always take and run with our targets

    Stefan Andstrm, Sales Director, Nissan Nordic,

    Helsinki

  • Financials

  • Q4 2017 | Santander Group key figures

    Banco Santander S.A.

    Total assets 1,44 (trillion )

    Branches globally13,697 (units)

    Headcount 202,251

    Customers133 (million)

    Profit After Tax 6,619 (million )

    Santander Consumer Finance S.A.

    Loans 92 (billion )

    European countries15

    Headcount 15,960

    Customers 20 (million)

    Profit After Tax 1,373 (million )

    Source: Banco Santander and SCF Q4 2017 Institutional Presentation

  • Q4 2017 | SCB overview

    Nordic2017 results

    143.6 Bn Gross Outstanding

    Loans

    4.0 BnProfit Before Tax

    Norway

    Auto Loans

    Unsecured Loans

    Profit Before Tax

    44.9 Bn

    11.4 Bn

    1,822 MM

    Denmark

    Auto Loans

    Unsecured Loans

    Profit Before Tax

    23.4 Bn

    5.8 Bn

    871 MM

    Finland

    Auto Loans

    Unsecured Loans

    Profit Before Tax

    22.1 Bn

    2.6 Bn

    601 MM

    Sweden

    Auto Loans

    Unsecured Loans

    Profit Before Tax

    19.3 Bn

    14.1 Bn

    701 MM

    39% Norway

    20% Denmark

    24% Sweden

    17% Finland

    Source: SCB Annual Report 2017

    % of Gross Outstanding Loans

  • Growing presence in the NordicsWith a doubling of Gross Outstanding Loans in the past 5 years

    Source: SCB Annual Reports (2012 2017)

    59,575(mNOK)

    71,891(mNOK)

    83,322(mNOK)

    116,297(mNOK)

    124,625(mNOK)

    143,615(mNOK)

    59,575

    71,891

    83,321

    116,297124,625

    143,615

    2012 2013 2014 2015 2016 2017

    mNOK

    mNOK

    mNOK

    mNOK

    mNOK

    mNOK16%

    40%7%

    15%

    21%

  • Solid profitabilityStrong profitability, especially since the merger with GE Money Bank in 2015

    PBT development NOK MM

    1 1361 393 1 321

    1 942

    3250

    3 995

    2012 2013 2014 2015 2016 2017

    Source: SCB Annual Reports (2012 2017)

    1) The Group reclassified issued AT1 capital of 2,25 Bn NOK from liabilities to equity in 2017. Interest expenses for 2017 of 169 MM NOK 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.

    +23%

    23%

    CAGR

  • Strong financial performanceEvidencing well-managed growth

    Source: SCB Annual Reports (2012 2017)

    ROA = PBT / ANEA

    NII Ratio = Net Interest Income / ANEA

    Cost/Income Ratio = OPEX / Gross Margin (OPEX: Total Operating Costs)

    4.6 4.5 4.5 4.8

    5.24.9

    2012 2013 2014 2015 2016 2017

    42 42 4448

    3740

    2012 2013 2014 2015 2016 2017

    2.0 2.11.7

    1.9

    2.73.0

    2012 2013 2014 2015 2016 2017

    Return on AssetsPer cent

    Net Interest Income RatioPer cent

    Cost / Income RatioPer cent

  • Group Balance Sheet summaryRobust balance sheet driven by growth in loans to customers

    Q4 2017 Loans to customers: Continuous new business growth reflecting

    a high level of activity in all the Nordic countries

    Other financial assets: Reduced liquidity portfolio due to lower

    net liquidity flow at year end

    Other assets: Change mainly driven by increased consignment

    portfolio and a reclassification of the Danish Single Premium

    insurance portfolio

    Debt to credit institutions: Reduced levels of intragroup funding

    Deposits from customers: Increase in deposits in accordance

    with funding strategy

    Debt established by issuing securities: Increase issuance in

    unsecured bonds

    NOK MM Q4 2017 Q4 2016 17/16 %

    Deposits with external institutions 3 291 3 957 -666 -17 %

    Loans to customers