CEO Banco Santander: "Profit will return to normal in three years"
Text of Santander Investor Day 2011
1. Alfredo SenzCEO Santander Group
2. DisclaimerBanco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements. These forward-lookingstatements are found in various places throughout this presentation and include, without limitation, statements concerning our futurebusiness development and economic performance. While these forward-looking statements represent our judgment and futureexpectations concerning the development of our business, a number of risks, uncertainties and other important factors could causeactual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) generalmarket, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currencyexchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financialposition or credit worthiness of our customers, obligors and counterparties. The risk factors that we have indicated in our past andfuture filings and reports, including those with the Securities and Exchange Commission of the United States of America (the SEC)could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results todiffer materially from those in the forward-looking statements.Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, informationavailable and views taken on the date on which they are made; such knowledge, information and views may change at any time.Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of newinformation, future events or otherwise.The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly availableinformation, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiringsecurities must do so only on the basis of such persons own judgment as to the merits or the suitability of the securities for itspurpose and only on such information as is contained in such public information having taken all such professional or other adviceas it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. Inmaking this presentation available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal inshares in Santander or in any other securities or investments whatsoever.Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buyany securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. SecuritiesAct of 1933, as amended, or an exemption therefrom. Nothing contained in this presentation is intended to constitute an invitation orinducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Servicesand Markets Act 2000.Note: Statements as to historical performance or financial accretion are not intended to mean that future performance, share price orfuture earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in thispresentation should be construed as a profit forecast. 2
3. Index Reminder of the 2007 Investor Day: 1 Outperforming across the cycle A business model based on recurrent, sustainable earnings 2 generation that allows us to create value as a Group Outlook: environment and state of the Industry: 3 It is possible to create value in both mature and emerging markets Santander: Outlook - The value of diversification 4 Expected contribution from profit normalisation 5 Conclusions 3
4. Index Reminder of the 2007 Investor Day: 1 Outperforming across the cycle A business model based on recurrent, sustainable earnings 2 generation that allows us to create value as a Group Outlook: environment and state of the Industry: 3 It is possible to create value in both mature and emerging markets Santander: Outlook - The value of diversification 4 Expected contribution from profit normalisation 5 Conclusions 4
5. Reminder of the 2007 Investor Day: The crisis hasvindicated our business model-outperforming our peersin good, but especially in hard, times 2007 Investor Day The key messages 40 still stand The current environment vindicates our business model 1. Sustainable / n We have been cautious for the last year on credit and given up structural growth profit opportunities across the cycle n because what we want is to build a machine that produces sustainable growth across the cycle 2. Low and diversified n and that outperforms peers in good but especially in hard time risk profile n We think the current environment vindicates our business model 3. Outperforming peers n Diversified among economies and businesses in good, but n Built around strong commercial franchises specially in bad, n and with strong deposit franchises times n Leveraged on a global business and cost models that permits us to outperform local peers in spite of the fact that the World has changed 5
6. Our strategy has worked: SAN has been the Western bankwith the highest accumulated results during the crisis Attributable profit Capital CT1 (EUR Bn) Revenues (2010) (2010) (2007-2010) (EUR Bn.) (EUR Bn.) (EUR Bn.) ICBC 51 BAC 80 Citi 94 China Constr. 42 JPM 75 BAC 91 Citi 63 JPM 84 Santander 35 3 JPM 33 WFC 62 Bank of China 83 Bank of China 32 HSBC 57 ICBC 81 HSBC 31 ICBC 43 HSBC 78 Agr. BK of China 27 BnP 42 China Constr. 69 Barclays 27 Santander 42 8 WFC 59 BNP 25 China Constr. 35 Agr. BK of China 59 Goldman Sachs 24 Barclays 35 BnP 54 WFC 22 Agr. BK of China 32 Santander 53 11 BBVA 20 Bank of China 30 Barclays 42 ITAU 16 Goldman Sachs 29 Goldman Sachs 42 Intesa 15 ITAU 28 Unicredit 39 Unicredit 13 Unicredit 27