institutional presentation q1'20 · 2020. 6. 5. · internet, mobiles, tablets, smartphones...

Q1’20

Strategic and Financial Analysis. Financial Division

Institutional Presentation

Index

Our business model and strategy1

2

3

4

5

Group structure and businesses

Q1’20 results and activity

COVID-19 and Key takeaways

Links to Grupo Santander public materials

Our business model and strategy

1.

Santander, a leading financial group

People Customers

Communities Shareholders

... resulting in higher investment in the community …

... which drives profitability and sustainable growth ...

… more motivated and engaged employees ...

... make our customers more satisfied and loyal ...

Total assets (EUR billion) 1,540

Customer loans (EUR billion excluding reverse repos) 909

Customer deposits + mutual funds (EUR billion excluding repos) 923

Branches 11,902

Q1’20 Attributable profit (EUR million) 331

Q1’20 Underlying attributable profit (EUR million) 1,977

Market capitalisation (EUR billion; 31-03-20) 37

People (headcount) 194,948

Customers (millions) 146

Shareholders (millions) 4.0

Communities in 2019 (million people financially empowered) 2.0

Q1’20 Highlights

Our strategy is built around a virtuous circle based on loyalty

Simple Personal Fair

5

OUR PURPOSE

OUR AIM AS A BANK

OUR HOW

To help people and businesses prosper

To be the best open financial services platform, by acting responsibly and earning the lasting loyalty of our people, customers, shareholders and communities

Simple Personal Fair

We continue to do business in a more responsible and sustainable way

Everything we do should be

The Santander Way

6

SCOPE

CUSTOMER FOCUS

DIVERSIFICATION

Local scale and global reach

Unique personal banking relationships strengthen customer loyalty

Our business model drives predictable and profitable growth

Santander business model

1

2

3 Our geographic and business diversification make us more resilient under adverse circumstances

Scope1

Market share data: as at Dec-19 and the US and SCF latest available. The UK: includes London Branch. Poland: including SCF business in Poland. The US: in all states where Santander Bank operates.Brazil: deposits including debenture, LCA (agribusiness notes), LCI (real estate credit notes), financial bills (letras financeiras) and COE (certificates of structured operations)

Local scale based on three geographic regionswith global reach backed by our global businesses

Global businesses (SCIB and WM&I)

Santander Global Platform

We maintain a leadership positionin our 10 core markets

Top 3auto

finance

17%Loans

19%Deposits

18%Loans

16%Deposits

10%Loans

8%Deposits

12%Loans

12%Deposits

Europe

3%Loans

3%Deposits

13%Loans

13%Deposits

Top 7 in retail auto lending

North America

10%Loans

10%Deposits

10%Loans

12%Deposits

18%Loans

17%Deposits

South America

Enabling greater collaboration across the Group to generate higher revenue and efficiencies

Market shares

SGP

7

Spain 9%

SCF 13%

UK 17%

Poland 4%Portugal 2%

US 4%Mexico 13%

Brazil 32%

Chile 2%

Argentina 2%Others 2%

8(1) NPS = Net Promoter Score. Customer Satisfaction internal benchmark of active customers audited by Stiga / Deloitte

(2) Active customer who receive most of their financial services from the Group according to the commercial segment to which they belong. Various engaged customer levels have been defined taking profitability into account

Customer focus2

146 million customers, in markets with a total population

of more than one billion

Customers by market, Mar-20

The trust and loyalty of our customers are the most important

assets for Santander

Top 3in NPS1 in 6 countries

+71%Loyal customers2

Dec-14 vs. Mar-20

Customer satisfaction is essential to build loyalty

Unique personal banking relationships with over 100,000 people talking to our customers every day in our branches and other customer support services

9

21.5 mn (+6%)

2 Customer focus

Loyal/activecustomers

31%

Note: data as of Mar-20 and year-on-year changes(1) Excluding Chinese banks and Sberbank of Russia

Individuals

19.6 mn (+6%)

Companies

1,808 (+6%)

Loyal customers Collaborative spaces and increased digital capabilities

Santander Smart and Ágil branches

The largest branch network in the international banking world1

Branches: c.12,000

Available anytime, anywhere, anyhow

Customer support services

10

38.3 mn (+13%)

2 Customer focus

Digital sales2

as % of total sales

43%

Note: data as of Mar-20 and year-on-year changes(1) Every physical or legal person, that, being part of a commercial bank, has logged in its personal area of internet banking or mobile phone or both in the last 30 days(2) Percentage of new contracts executed through digital channels during Mar-20(3) Private accesses. Logins of bank’s customers on Santander internet banking or apps. ATM accesses by mobile are not included(4) Customer interaction through mobile or internet banking which resulted in a change of balance. ATM transactions are not included

# Accesses3

(online & mobile)

Digital customers1

Digital customers are engaging and transacting more

Digital technologyboosting financial access

Traditional bankingBranches, ATMs, retail agents, …

Digital bankingInternet, mobiles, tablets,

smartphones and smartwatches…

Guaranteeing access for all segments

Sparsely populated communities

Most vulnerable groups

Low-income communities

University students

+23% YoY +22% YoY

# Transactions4

(monetary & voluntary)

Spain; 14%

SCF; 12%

UK; 8%

Portugal; 5%

Poland; 2%US; 11%Mexico; 10%

Other South America; 2%

Argentina; 2%

Chile; 5%

Brazil; 29%

(1) As a % of operating areas, excluding Corporate Centre and Santander Global Platform (2) Uruguay, Peru and Colombia (3) As a percentage of operating areasNote: customer loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds

41%38%

21%

EuropeSouth America

North America

2

3 DiversificationGeographic diversification in three regions,

with a good balance between mature and developing markets

Contribution to Q1’20 underlying attributable profit1

Customer loans Customer funds

72%

14%

14%

Europe

South America

North America 70%

16%

13%

Europe

South America

North America

Higher exposure in Europe, greater opportunity to grow in the Americas

Well-balanced profit distribution between Europe and the Americas.

SCIB and WM&I contribution: 30%

Mar-20 Group’s contribution3 by regions

11

SGP 1%

Individuals demand deposits, 39%

Individuals time deposits, 10%

Individuals mutual funds, 12%

Consumer, 4%

SMEs, 10%

Corporates, 14%

SCIB, 11%

Customer funds

Customer funds by business, Mar-20

12

3 Diversification

Business diversification among customer segments (individuals, SMEs, corporates and large corporates)

Note: customer loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds

Other individuals, 10% Home mortgages, 36%

Consumer, 17%SMEs, 10%

Corporates, 13%

SCIB, 14%

Loans

Customer loans by business, Mar-20

13

Our strength and resilience of our model drives predictable and profitable growth

Pre-provision profit, EUR bn EPS volatility calculated using quarterly data from Jan-99 to 20191

Net profit increase 1999-2019

(1) Source: Bloomberg, with GAAP criteria. Standard deviation of the quarterly EPS starting from the first available data since Jan-99

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

18

23 24 24 24

2023 24 23

25 26 26

3.03% 3.28% 3.26% 3.25% 3.06% 2.94% 3.04% 2.90% 2.83% 2.97% 2.89% 2.80%

1.02% 1.36% 1.40% 1.65%2.44% 1.69%

1.43% 1.25%1.18% 1.07% 1.00% 1.00%

Cost of credit

Pre-provision profit / loans

Recurring pre-provision profit with the lowest earnings per share volatility

14

The Group’s medium-term strategy is based on three main pillars to drive profitable growth in a responsible way

Improve operating performance

Accelerate digitalisation through Santander Global Platform

Optimise capital allocation

Continue building a more Responsible Bank

15

Improving operational performance: Further leveraging our diversification and scale and adding value via our global businesses and shared capabilities

North America

South America

Europe

Accelerating growth with sustainable profitability

A region with structural growth and high and increasing profitability

Building the leading European bank in customer experience and profitability, leveraging our scale & digital

IT & Operations

Shared services & Others

Global capabilities to enhance operating efficiency across the Group

Medium-term efficiency expected, mainly in Europe:

16

Continuing to improve capital allocation: Ongoing capital allocation optimisation to improve profitability

Rebalancing to more profitable

regions and businesses

Active management and senior team

alignment

Improved pricing, processes and

governance

Strong profitability improvement leading to higher capital generation capacity

17

Accelerating our digitalisation by developing global payments and financial solutions for SMEs and individuals in high-growth and large addressable markets

SMEs Individuals


Global Merchant Services

Global Trade

Services

Banking withouta bank

Focused on relevant

global markets…

… building on relevant

assets to accelerate

growth

Global Digital

Banking

Digital payment services as a driver of customer engagement and loyalty

1

Built with global platforms, leveraging our scale for efficiency and customer experience

2

Offered to both our banks (B2C) and to third parties (B2B2C)

3

Run autonomously, with a blend of tech and banking talent

4OneTrade

We continue doing business in a more responsible and sustainable way

Sustainability

Financial inclusionCommunities

Culture

2.0 mnpeople financially empowered

69 kscholarships granted

1.6 mnpeople helped through our community programmes

Women

40% Group Board

23% Group leadership

(+2pp vs. 2018)

EUR 277 mncredit to microentrepreneurs3

(+73% vs. 2018)

EUR 1 bnSantander first green bond issuance

Engagement

86% of employees

proud to work for Santander(+1pp vs 2018)

EUR 19 bnmobilised in Green finance

Dow Jones index2

Leader

18More information on Group’s Overview of our Corporate Governance presentation. See link to this presentation on page 70 Note: figures as of 2019 and changes on a YoY basis (2019 vs. 2018)(1) Dow Jones Sustainability index 2019(2) Microentrepreneurs are already included in the people financially empowered metric

Santander Responsible Banking goals

19

2018 2021 202520202019

Top 10 company to work for1

Women on the Board

Women in senior leadership positions2

Equal pay gap3

Financially empowered people4

Green finance raised and facilitated5 (euros)

Electricity used from renewable energy sources6

Scholarships, internships & entrepreneurs programmes7

People helped through our community programmes8

4

3%

43%

6

40%-60%

30%

~0%

100%

60% 100%

10 mn

120 bn

200 k

4 mn

0%

33

20

Becoming carbon neutral in our own operations

5

20%

2%

2.0 mn

19 bn

50%

69K

1.6 mn

75%

40%

23%20%

33%

Reduction of unnecessary single use plastic in corporate buildings and branches

From…To….

Cumulative target

We are building a more Responsible Bank aligned with our commitments

(1) According to relevant external indexes in each country (Great Place to Work, Top Employer, Merco, etc.)(2) Senior positions represent 1% of total workforce(3) Calculation of equal pay gap compares employees of the same job, level and function(4) People (unbanked, underbanked or financially vulnerable), who are given access to the financial system, receive tailored finance and increase their knowledge and resilience through financial education(5) Includes Santander overall contribution to green finance: project finance, syndicated loans, green bonds, capital finance, export finance, advisory, structuring and other products to help our clients in the

transition to a low carbon economy. Commitment from 2019 to 2030 is EUR 220 bn(6) In those countries where it is possible to certify renewable sourced electricity for the properties occupied by the Group(7) People supported through Santander Universities initiative (students who will receive a Santander scholarship, will achieve an internship in an SME or participate in entrepreneurship programmes

supported by the bank)(8) People helped through our community investment programmes (excluded Santander Universities and financial education initiatives)

Group structure and businesses2.

21

Santander Wealth Management & InsuranceRetail Banking

Communication, Corporate

Marketing and Research

UniversitiesComplianceAudit CostsTechnology

and Operations

General Secretariatand Human Resources

Financial Accounting & Control

FinanceStrategy,

Corporate Dev.& Financial Planning

Exec. Chairman´s Office & Responsible

Banking

Santander Global

PlatformSantander

Corporate & Investment Banking

Secondary segments – Global businesses

Group functions and Corporate Centre activities

10 core markets

Risk

Primary segments – Operating areas

North America

South America

Other Europe

Europe

Leveraging One Santander to accelerate the execution of our strategy

Three geographic regions (with 10 core markets) to improve operating performance

Global businesses to enhance our local scale with global reach and collaboration

Santander Global Platform to accelerate digital transformation

The Corporate Centre and other functions servicing the whole Group

Group organisational and management structure

22

North America

South America

Europe

Santander Wealth Management & Insurance

Santander Corporate & Investment

Banking



Three geographic regions(with 10 core markets)

Building one European banking platform to enhance profitability

Europe

Q1’20 Highlights

Branches 5,329

Employees 85,805

Loyal customers (mn) 9.9

Digital customers (mn) 14.2

Customer loans (EUR bn) 653

Customer funds (EUR bn) 644

Underlying attributable profit (EUR mn) 974

Underlying RoTE 8%

Contribution to Group’s profit 41%

Note.- Customer loans: Gross loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds

Other Europe

23

Given the current conjuncture, and in a lower for longer interest rate and low growth environment, we are working to simplify our European business model and structure:

Adaptation of our technological platforms and acceleration of the digital transformation to improve customer experience

Simplification of our business model, reducing the number of products to gain efficiency and agility, while maintaining a full value proposition

In addition, we are managing regulatory impacts on income and costs

Strategic priorities

Increase funding to companies in the short-term

Santander España remains committed to maintaining its leadership by supporting individual customers, SMEs and Corporates

Spain

Q1’20 Highlights


Branches 3,222

Employees 27,354






Underlying RoTE 9%


24

for non-residents

Continue growing SMEs and corporate segments

Focus on optimising the commercial network. Acceleratethe digital transformation to improve customer experience

Develop a sustainable profit and profitability model (optimal capital allocation and focus on profitable segments & products)


e-commerce open platform

Q1’20 Highlights

SCF is the consumer finance leader in Europe, with advanced captive car finance and strong foothold in consumer with presence in 15 countries

Santander Consumer Finance

Austria

Belgium

Denmark

Finland

France

Germany

Italy

Norway

Poland

Portugal

Spain

Sweden

Switzerland

The Netherlands

The United Kingdom1

Countries:

(1) UK data included in Santander UK


Branches 417

Employees 13,859

Active customers (mn) 18.8

Point of sales (k) >130




Underlying RoTE 14%


25

Reinforce our position in consumer finance and e-commerce. Digital business model converging on-line and off-line payments and financing to support merchant partners

Provide best service to our auto partners, OEMs and car dealers, to support our dealers & brands with their transformation plans

Simplification, digitalisation & transformation projects to maximise efficiency and customerexperience


Uniquely placed as the leading UK scale challenger bank with an innovative value proposition for retail customers and small businesses

United Kingdom

Q1’20 Highlights

Online mortgage


Branches 615

Employees 24,500






Underlying RoTE 5%


26

Invest in our people and ensure they have the skills and knowledge to thrive

Simplify and digitalise the business for improved efficiency and returns

Grow customer loyalty by providing an outstanding customer experience

Further embed sustainability across our business


Santander Totta is the largest privately-owned bank in Portugal by assets and loans

Portugal


Branches 529

Employees 6,512

Loyal customers (k) 782

Digital customers (k) 797




Underlying RoTE 13%


27

Q1’20 Highlights

Continue gaining profitable market share and leveraging our position in the corporate sector, especially in SMEs

Improve efficiency and maintain low cost of credit

Progress in our digital transformation and streamlining workflow

Maintain a solid capital position, managing it in line with the new regulatory requirements


Santander is the second largest bank in Poland, maintaining its position of the best traditional, private banking and investment bank in Poland

Poland

#1 in mobile banking

(1) RoTE adjusted for excess capital. Otherwise 5%


Branches 535

Employees 11,034






Underlying RoTE1 8%


28

Q1’20 Highlights

Anticipate and respond to customers’ needs with tailored products, services and solutions, enhancing customer experience

Growth of profitable business, strengthening its position in the key market segments

Modernise banking services through digital transformationand improve the operating model


Investing together to improve commercial capabilities

North America

(1) RoTE adjusted for excess capital. Otherwise 10%Note.- Customer loans: Gross loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds

Branches 2,048

Employees 37,398






Underlying RoTE1 15%


29

Q1’20 Highlights

The US and Mexico coordination between the countries has increased as we continue to pursue joint initiatives, such as:

Accelerate execution of regional strategy, increase profitability and contribute to efficiency objectives

Continued development of the USMX trade corridor (revenue growth: +38% SCIB; +23% Commercial)

Together with other payment alternatives, commission-free remittance service from US branches to any bank in Mexico

Joint technology programmes between the two countries


Santander US includes a Northeast US regional bank, a nationwide auto finance business, an international private banking operation and a broker-dealer

United States

(1) RoTE adjusted for excess capital. Otherwise 7%Note.- Customer loans: Gross loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual fundsOn 21 October 2019, it was announced that Grupo Santander has agreed to sell its retail and commercial banking franchise in Puerto Rico to FirstBank Puerto Rico for approximately USD 1.1 bn.

The sale includes Santander’s 27 bank branches in Puerto Rico and total assets of USD 6.2 billion. The transaction is expected to close in the middle of 2020, subject to regulatory approvals.

Branches 619

Employees 17,277


Digital customers (k) 1,019




Underlying RoTE1 12%


30

Q1’20 Highlights

Optimise funding and capital to improve results

Improve margins through focus on integration of U.S. operations

Improve customer experience and loyalty across segments

Manage the COVID-19 crisis to support customers, employees and communities


Santander México, a leading financial group in the country, focused on commercial transformation and innovation

Mexico


Santander Plus

Select Me

Branches 1,429

Employees 20,121






Underlying RoTE 18%


31

Q1’20 Highlights

Strong growth rates in loyal and digital customers, whilst increasing revenue through greater volumes and lower cost of deposits

Improve customer experience by leveraging both the new tools and methodologies as well as improving operating processes

Strengthen our corporate businesses to continue to bethe reference in the market in value-added products


Natural reweighting and high profitable growth opportunity

South America


Branches 4,524

Employees 68,624






Underlying RoTE 21%


32

Q1’20 Highlights

This region remains a growth engine and aims to generate profitable growth and export positive experiences to other countries in the region with focus on leveraging our products & services with strong expected medium-term growth, such as:

Auto financing using experience from the Group and Brazil to boost growth in other pe of business in Peru, and its profitability in n and strategic alliances).

export Uruguay’s successful model to other regions

to satisfy the demand for small businesses in Brazil,

largest card issuers & merchant acquirers in the es and instant transfers, and the roll-out of Getnet

countries (e.g. we are increasing this tyColombia through our digital propositio

In financing goods & services - plan to

Prospera, our micro-credit programmecontinued expand in Uruguay as well

Payments methods (we are one of theregion): exploring e-commerce strategito the rest of Latin America


Santander Brasil has a solid strategy, which benefits from being part of a large international Group

Brazil


SantanderWay

SMEs Agribusiness

Branches 3,617

Employees 45,807






Underlying RoTE 22%


33

Q1’20 Highlights

Acceleration of digitalisation: Self-service, combined with increased product implementation and availability

Relentless quest for efficiency and profitability with another way of operating our business

Continuous evolution of the platform in the face of a new cycle

Committed to meeting our customers’ needs. Focus on helping society and our country


Santander Chile is the country’s leading bank

Chile


Branches 366

Employees 11,437


Digital customers (k) 1,316




Underlying RoTE 15%


34

Q1’20 Highlights

Focus on mass market through Santander Life, SuperDigital and Klare (open platform insurance broker)

Improve customer service quality and grow loyal and digital customer base

Accelerate the commercial transformation via the new branch network model and digital banking


Santander Argentina is the country's largest privately-owned bank by business volume

Argentina


Branches 438

Employees 9,290






Underlying RoTE 30%


35

Q1’20 Highlights

Progressing towards a simple and more efficient model, driven by digital transformation

Customer-centric decisions, helping people and businesses prosper


Profitable growth increasing revenue with efficient capital allocation

Santander Uruguay is the country’s leading privately-owned bank

Uruguay

36

Q1’20 Highlights

Underlying att. profit (EUR mn) 35

Underlying RoTE 28%

Activity focused on corporates, the country’s large companies and

the Group’s global customers (SCIB)

Q1’20 Highlights


Underlying RoTE 19%

Peru

Focus on corporate and SCIB, and new alliances in auto finance

Q1’20 Highlights


Underlying RoTE 19%

Colombia


Focus on improving efficiency and enhancing the quality of service, through digital transformation and commitment to the community


Digital transformation and expand our customer base, increasing customer loyaltyand maintaining credit quality


Digital transformation and results growth focused on most segments

North America

South America

Europe



Banking



Global businesses and


37

Santander Corporate Investment & Banking

SCIB is the global business division for corporate and institutional customers who require a tailored service and value-added wholesale products suited to their complexity and sophistication


Note.- Customer loans: Gross loans excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual fundsFor more information (awards, etc.) see https://www.santandercib.com

38

Q1’20 Highlights

34%

29%

29%

8%

Global Transaction Banking

Global Debt Financing

Global Markets

Capital & Other

Total revenue breakdown



Total revenue (EUR mn) 1,300

Collaboration revenue +20% YoY

Underlying RoRWA 2.0%



Fully leverage our customer-centric model, to drive greater penetration of our franchise and faster growth in retail banking business (collaboration revenue)

Strengthen the global value proposition, focusing on increasing our presence in the US, the UK and Continental Europe

ESG – support our customers along their transformation journey. Contribute to Group’s green finance public commitment

Accelerate capital rotation and the originate to share model

Continue the digital transformation to build the Digital Investment Bank

1

2

3

4

5

https://www.santandercib.com/

• One Global value proposition

• Develop a global Private Wealth proposition to c.1,700 clients with >EUR 20 mn4 growing +18%

• Execute the digital transformation


Our aim: become the best and most responsible Wealth Manager in Europe and the Americas


• Become the best local supplier – strengthening leadership and commitment in our 10 core markets

• Implement the new IT platform

• Build a competitive edge on our global capabilities + develop institutional business

New funds: alternatives, private debt and infrastructure and Santander GO» product range

Best provider of savings and investments solutions

in Ibero-america

• Reach our full potential by completing our value proposition in our core markets

• E2E digital journeys and online open platforms

First choice of insurance for Santander customers

Motor Home Health

Accidents SME Term life

Savings

Pensions and Wealth Planning

Responsible Banking;

Environmental, Social and

Governance (ESG)

(1) Total assets marketed and/or managed. Private Banking + SAM excluding AUM of Private Banking customers (2) Including fees generated by asset management and insurance transferred to the commercial network (3) Profit after tax + net fee income generated by this business (4) Assets under management cut-off may differ in each country

For more information see http://www.santanderassetmanagement.com

Single truly global Private Banking platform

39

Q1’20 Highlights

Total assets under management1 EUR 345 bn; -2% YoY

Total fees generated as % of the Group’s total fees2 30%

Private Banking clients (k) c.200

Private banking collaboration volume +25% YoY

SAM market shares in most core markets Higher YoY

Underlying RoRWA 8.9%



Total contribution to Group’s profit3 (EUR mn) 596

http://www.santanderassetmanagement.com/

Santander Global Platform (SGP)SGP

Note: GMS and GTS revenue include Retail Banking and excluding SCIB and WM&I

More information on Group’s financial report, pages 48 and 49. See link to this document on page 70

Ind

ivid

ua

ls

OneTrade

SM

Es

Global Merchant Services

Global Trade

Services

Banking withouta bank

Global Digital

Banking

Finalised the development of the platform with Getnet functionalities and new features (i.e. architecture cloud)

Rolled-out in Mexico. In addition, acquisition of Elavon Mexico (currently 100% Santander)

>1 mn active merchants. Q1’20 revenue of EUR 144 mn

1st services launched in April and new services will be extended throughout the year

Acquisition of a majority stake of Mercury TFS (software solutions for trade finance) announced

>200 k SME customers trading internationally. Q1’20 revenue of EUR 307 mn

Operates in Brazil, Mexico and Chile

Active customers grew c.60% YoY, whereas transactions are growing by c.70% YoY

Our goal is to scale the business to reach over 5 mn active customers across 7 markets in the medium term

Openbank is already in Spain, Germany, the Netherlands and Portugal

Loan growth +84% YoY and deposits +9%YoY

New customer growth +78% (Q1’20 vs. Q1’19) - average of 4.4 products per customer

We continued to make relevant progress on developing our platforms

40

North America

South America

Europe



Banking



Global T&O strategy

HR strategy

Risk management and control

Corporate governance and internal control

Our brand

41


T&O strategy is aligned with our two-pronged approach: digitalising our core banks and global businesses and building SGP focusing on better serving our customers’ needs

Global T&O capabilities are key for our commercial and digital transformation

Composed of four main domains that contribute to the digital transformation

Technology

Cybersecurity

Operations

Data

Focused on five technological pillarsto respond to the changing business needs

ATMs

Robust Santander T&O allowing us to continue running the Bank and serving our customers remotely with high standards during the COVID-19 crisis

RiskManagement

(incl. cybersecurity)

Agile Cloud Core systems

evolution

Deep technology

skills

Data

CommonArchitecture

Speed InnovationSecurity

by designCost

Servicequality

Open business

model

Business needs

Operating model oriented to develop global products and digital services,

guaranteeing their quality and security

c. 2,000 professionals

42

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

194,948

Employees with permanent contracts in 20191

98%Employees, Mar-20

Average length of employment in 20191

10.2 years

The SPF culture is based on our 8 corporate behaviours and 4 leadership commitments

Our corporate management evaluation model

50%what we

do 40%how

we do itShow respect Truly listen Talk straight Keep promises

Support people Embrace change Actively collaborate Bring passion

Encouraging the team to prosper

Leadingby example

Being openand inclusive

Inspiring and executing transformation

Employees proud to work for Santander2

Openness to change, good at sharing best practices and encouraging innovation2

86% 85%

Engagement among the best in the sector

(1) Last available(2) 2019 Global engagement survey

43

10%Risk

COVID-19. Our priority has been to protect the health and safety of our employees, we quickly moved to remote working (112 k people and over 50% of contact centres agents; rotation scheme in branches)

Risk management and control

More information on the Group’s Overview of our Corporate Governance presentation. See link to this document on page 70

3 lines of defence model with a robust structure of risk

rcommittees

A clear Risk Strategy with well defined priorities

Common Risk Principles which are mandatory and must be applied all times

Advanced risk management tools which a comprehensive and forward-looking approach to all risks

Clearly defined management and control processes

Risk Profile Assessment

Risk appetite &

structure of limits

Scenario Analysis

Risk Reporting Structure

The identification and assessment of the various risks that it is exposed to

The amounts and type of risks considered prudent to assume

Analysis of impacts triggered by different scenarios

Complete, precise and recurring information

This model relies on:

Santander’s risk management and control model, specially under the current circumstances, is key to ensure that we remain a robust, safe and sustainable bank that helps people and businesses

44

93%of employees claim that they are able to identify and feel responsible for the risk they face in their daily work

Climate change and risk management

Risk culture

Our risk management and control model is a key driver of Santander’s contribution to sustainable economic growth

91%of employees claim that cyber security is considered a critical priority

Anticipating changes in the risk profile & defining strategies to mitigate negative impacts is key to preserve our solid position, mainly in terms of capital and liquidity

COVID-19

45

As a responsible bank, we have clear and robust governance with well-defined accountability and prudent management of risks and opportunities


Diversified and well-balanced shareholder base

Effective engagement with our shareholders

Focus on responsible business practices and attention to all

stakeholders’ interests

Effective board of directors

11%

33%40%

2011 2015 Mar-20

Non-executive directors (independent)

Executive directors

Non-executive directors (neither proprietary nor independent)

60%

13%

27%

Womenon the Board

Composition of the Board, Mar-20 Board committees

External advisory boardInternational advisory board

Executive

Responsible banking, sustainability and culture

Innovation and technology

Remuneration

Audit

Nominations

Risk supervision, regulation and compliance

More information on the Group’s Overview of our Corporate Governance presentation. See link to this document on page 70

46

Group-subsidiary governance model

Group

Board of Directors

Group Executive Chairman1

Group CEO2

Regional Heads3

Control, management and business functions

• Compliance

• Audit

• Risk

• Finance

• Financial Control / Accounting

• Others4

Subsidiary B

Control, management and business functions

CEO / Country Head

Board of Directors

Subsidiary A

A

B

C

(1) First executive (2) Second executive (3) Europe, North America and South America, reporting to Group CEO (4) IT & Operations, Human Resources, General Secretariat,Marketing, Communications, Strategy, Santander Corporate & Investment Banking, Wealth Management & Insurance, Digital & Innovation and Global Platforms

• Compliance

• Audit

• Risk

• Finance

• Financial Control / Accounting

• Others4

Best practices on robust governance are channelled to all subsidiaries

Presence of Grupo Santander in the subsidiaries' Boards of Directors establishing guidelines for board structure, dynamics and effectivenessA

Reporting of the CEO / Country Heads to the Group CEO / Regional Heads and Group Executive CommitteeB

Interaction between the Group’s and the subsidiaries’ control, management and business functionsC

The Group-subsidiary governance modelenhances control and oversight through:


47

Our brand embeds the essence of the Group's culture and identity

best global bank brand by BrandZ ranking, 2019

best global banking brand by BGB 2019, Interbrand Ranking

Santander is one of the most valued brands in the world

As one of our most important strategic assets, our brand helps us connect with people and businesses, demonstrating our commitment to prosperity and determination to bring it to life in a positive and sustainable manner every day

5th

More information: https://brand.santander.com/en

https://brand.santander.com/en

3.Q1’20results and activity

49Note: Changes in constant euros

Q1’20 Highlights

Steady growth in volumes YoY (loans +7%, deposits +6%). Pick up in March: loans +EUR 26 bn and deposits +EUR 24 bn.

New lending exceeded typical monthly levels, driven by corporates and SCIB

Our digital products and services have been more important than ever: strong quarterly increase in our digital customer base

(+1.5 mn) and digital sales stood at 43% of the total sales in March. Accesses and transactions grew +23% and +22% YoY

The COVID-19 outbreak has caused an unprecedented worldwide health crisis. Today’s financial system is more resilient and

banks are part of the solution to the current economic situation

We have implemented specific measures for each of our stakeholders to help protect our employees, customers,

shareholders and investors, ensure business continuity and mitigate economic and social costs

Q1’20 underlying attributable profit of EUR 1,977 mn (+8% YoY), driven by increased revenue, cost control and stable cost of

credit. Delivered a solid underlying RoTE of 11.1%

Q1’20 attributable profit of EUR 331 mn, affected by a provisions overlay of EUR 1,600 mn related to COVID-19

Credit quality maintained in Q1’20: NPL ratio (3.25%), Coverage ratio (71%) and Cost of credit (1.00%)

Mar-20 CET1 ratio: 11.58%. Continued organic generation and dividend measures reinforced the ratio (+36 bps). However,

significantly affected by strong increase in volumes, together with regulatory, corporate transactions and markets impacts

COVID-19

Growth

Profitability

Strength

50

Q1’20 underlying results continued to grow, marginally affected by the crisis

Note: Contribution to the SRF (net of tax) recorded in Q2’19 (EUR -162 mn). Contribution to the DGF in Spain (net of tax) in Q4’19 (EUR -160 mn)

(1) In Q1’20: Provisions overlay EUR 1,600 mn related to COVID-19 and restructuring costs and others of EUR 46 mn.

EUR mnConstant

eurosEurosQ1’20

% vs. Q1’19

1,832

1,975 2,056 2,007 1,977

Q1'19 Q2 Q3 Q4 Q1'20

Constant EUR mn

Underlying attributable profit

Attributable profit

+8%Net interest income 8,487 -2 3

Net fee income 2,853 -3 3

Customer revenue 11,340 -2 3

Trading and other income 474 0 2

Total income 11,814 -2 3

Operating expenses -5,577 -3 1

Net operating income 6,237 -1 5

Loan-loss provisions -2,309 6 12

Other results -372 -21 -17

Underlying PBT 3,556 -3 3

Underlying attributable profit 1,977 1 8

Net capital gains and provisions1 -1,646 — —

Attributable profit 331 -82 -801,675 1,269 450 2,656 331

51

High quality revenue: customer revenue delivered 96% of the total and grew 3% YoY driven by the Americas and global businesses

Note: YoY change in constant euros(1) Including fees generated by asset management and insurance transferred to the commercial network

Other Revenue

4%

Customer Revenue(NII + Fees)

96%

South America +10%

North America +2%

Europe -3%

CIB +13%

WM&I1 +5%

+3%Customer Revenue

WM&I1: 30%; CIB: 14%

NII +3%

Fees

NII growing in 7 markets. Volumes growth and cost of deposits decreased

Improved trend from global businesses, amounting to 44%

of total fees

+3%

52

We are on track to meet our efficiency plan

(1) Excluding perimeter(2) Excluding Argentina due to high inflation. Including it, South America: +6.6% nominal costs and -3.3% costs in real terms

Europe

South America2

North America

-3.4%

3.4%

2.5%

Nominal costs

-8%

-4%

-6%

-1%

2%

-2%

3%

-4.6%

-0.3%

0.0%

Costs in real terms YoY change in constant euros

Group 0.8% -3.0%

Regional revenue

and cost management

Synergies as a region

and joint investments

Q1’20 efficiencies achieved:

> EUR 100 mn

-3%1

-4%

53

Credit quality maintained in Q1’20. COVID-19 impacts have not yet been reflected

Cost of credit

NPL ratio

0.97% 1.00%

3.62% 3.32%

Coverage ratio 68% 68%

Credit quality ratios

Mar-19 Dec-19

1.00%

3.25%

71%

Mar-20

Roughly stable cost of credit QoQ in most

markets

NPL ratio fell QoQ and YoY in most markets

High level of allowances to total loans

54

Non-recurring items significantly impacted CET1, offsetting continued organic generation and dividend measures

(1) New securitisations framework (-0.06), Brazil models (-0.05) and IFRS 9 phased-out (-0.04)

(2) Corporate transactions: Allianz (-0.09), Put Olé (-0.03) and Elavon & Other (-0.07)

Data applying the IFRS 9 transitional arrangements

Mar-20Organic generation

Market and others

Regulatory & models

(1)

Dec-19

CET1 ratio YTD evolution

Mar-20No complementarydividend 2019

Corporate transactions

(2)

12.01%

11.58%-0.09-0.15

-0.19

11.65% +0.07

+0.29

55

Resilient underlying profitability in Q1’20

Underlying RoTE1

11.3% 11.1%

Q1'19 Q1'20

1.56% 1.52%

Q1'19 Q1'20

Underlying RoRWA1

TNAV per share

EUR

4.304.21

Mar-19 Mar-20

Profitability ratios

TNAV per share + Dividend per share:

+1.8% YoY

Notes: The averages for the Q1 RoTE and RoRWA denominators are calculated on the basis of 4 months from December to March. For periods of less than a year, and in the event of non-recurring results existing, the profit used to calculate the statutory RoTE is the annualised underlying attributable profit (excluding non-recurring results), to which are added non-recurring results without annualising them. For periods of less than a year, and in the event of non-recurring results existing, the profit used to calculate the statutory RoRWA is the annualised underlying consolidated result (excluding non-recurring results), to which is added non-recurring results without annualising them.

(1) Statutory RoTE Q1’19 11.2% and Q1’20 8.8%. Statutory RoRWA Q1’19 1.54% and Q1’20 1.25%.

North America

South America

Europe



Banking



56

Details by geographic regions

and global businesses

57

Resilient underlying performance supported by our geographic diversification…

Note: Changes in constant euros. Gross loans and advances to customers excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual funds. Underlying RoTE(1) Adjusted for excess of capital in the US. Otherwise 10%

Europe

South America

North America

9.9 653+4%

Loyal customers(mn)

Loans(EUR bn)

Underlying profit (EUR mn)

RoTE(%)

974-16%

8%-167 bps

3.6 132+13%

522+34%

15%1

+172 bps

7.8 118+16%

928+15%

21%+154 bps

Q1’20 (vs. Q1’19)

6440%

Customer funds(EUR bn)

120+15%

148+16%

+2%

+21%

+5%

58

…with Global Businesses driving network effects and contributing 30% of Group’s earnings

Note: variations on a YoY basis; in constant euros

Customer-centric providing

liquidity and transactional solutions

Corporate & Investment Banking

RoRWA

Underlying profit

SCIB

2.0% +13 bps

Wealth Management & Insurance

RoRWA

Underlying profit

WM&I

8.9% +1.4 pp

Connecting our banks via our global

value proposition and new products

EUR 240 mn +21%EUR 491 mn +21%

59

Delivered profit growth driven by the Americas and global businesses

Underlying profit weight excludes Corporate Centre (EUR -434 mn) and Santander Global PlatformSouth America’s weight includes Uruguay & Andean Region (EUR 53 mn)

41%

352

304

188

120

38

273

249

694

125

59

Q1’20 Underlying attributable profit

EUR mn and % change vs. Q1’19 in constant EUR

491240

Europe

South America

North America

Global businesses

21%

Well balanced Group profit

by regions

Enhancing our local scale with global reach

+21%

+21%

-1%

-5%

-27%

-11%

-38%

+46%

+22%

+10%

-2%

+745%

38%

60

Positive trend across regions and global businesses accelerating in March

Note: Gross loans and advances to customers excluding reverse repos. Customer funds: customer deposits excluding repos + marketed mutual fundsEurope includes Rest of Europe (mainly SCIB) with loans: EUR 47 bn (+37% YoY)

Mar-20 Customer funds

294

38

210

42

35

82

38

98

34

10

EUR bn and % change in constant EUR

Europe

South America

North America

YoY

-4%

7%

4%

3%

4%

18%

10%

12%

21%

34%

Global businesses

Group Total 923 4%

101142

19%

-1%

Mar-20 Loans and advances to customers

192

103

244

37

30

101

31

69

38

5

EUR bn and % change in constant EUR

Group Total

Europe

South America

North America

YoY

-4%

7%

5%

2%

9%

12%

13%

18%

13%

16%

Global businesses

12517

29%

6%

909 7%

COVID-19 and Key takeaways4.

62

COVID-19. How Santander is contributing to tackle this outbreak

Since the beginning of the crisis we have been monitoring the situation

and activated all of the protocolsAs a responsible bank, we have

implemented specific measures to support our stakeholders

Strong Group Governance has been demonstrated with close coordination within corporate areas and across countries

We are also taking a number of steps toprotect and support our customers and the society as a whole

Robust Santander T&O allowing us to continue running the Bank and serving our customers remotely with high standards

Business activity indicators point towards the expected deterioration but it is too early to assess real impact

A

B

C

D

More measures implemented across the Group are available in the Group website www.santander.com

http://www.santander.com/

63

We have progressively adopted measures in all our markets across four dimensions

Large scale telecommuting & branch closure strategy

112 k employees working from home

c.70% of branches opened and employees working in a rotation scheme

Progress in contact centres home working (inbound and collections). Remote agents: >50%

95% of ATMs working

Implementing and adapting them to the real situation

Plans that we had for mainly operational issues, identifying critical services, people,

buildings and suppliers, etc.

Anticipating changes in the risk profile & defining strategies to mitigate negative impacts

is key to preserve our solid position, particularly in terms of capital and liquidity

We have published information in our internal and external channels

>500 communications since the beginning of the crisis

To keep our people, customers, shareholders and investors informed at all times

Health & Contagion Prevention

Business Preventive Plans

Communication Plans

Risk & Financial Preparedness

A

64

We are also taking care of society as a whole: EUR 100 mn has been dedicated in the fight against COVID-19

Resources come from senior management salary reductions & board compensation; direct donations from the Bank and employee donation funds

Santander has pulled together EUR 54 mn to provide essential equipment and materials to support the global effort to fight the pandemic

Donation channels and tools to facilitate the collaboration of customers and society in general. In collaboration with non-governmental organisations that work to help the most vulnerable groups

Some local units (US and the UK) have devoted EUR 16 mn to support vulnerable communities specifically impacted by COVID-19

Santander Universities: EUR 30 mn to support the response of universities to the COVID-19 crisis, whether in health, education or social issues; promote online education; and mobilise the entrepreneurial community to identify solutions to social challenges posed by COVID-19

“Overcome Together”, a resource centre which contains information and resources to help support the fight against coronavirus. (Live in )

Self-diagnosis app to manage the impact of the virus among the population. Working with the Mexican Government, supporting the Spanish Government with Telefonica’s solution and collaborating with

All Together Fund: support

the health crisis

Support vulnerable

communities

Santander universities

Digital solutions

B

65

Robust Santander technology, allowing us to continue running the Bank and serving our customers remotely

+23% YoY

# Accesses3

(online & mobile)

Digital customers138.3 mn (+13% YoY)

43% in March-20 (36% in 2019)

Digital sales2

as % of total sales

Supporting our remote working

>780 k video calls a day

>3 mn chats a day

127 k laptops

Technology & Operations (T&O) is keeping the business up and running

Improving ourT&O capacity

bandwidth /

VPN capacity

maximum users supported by VPN

C

Initial 51 k Today 247 k

Increased

Contact centresService volumes +21% on average

(154% highest)

4.9 mn digital customers (+139 k YTD). Accelerated launch of new products to serve our current customer needs

71% digital sales in Mar-20 (61% in Dec-19; 57% in Mar-19) and 1.7 k new mobile users per day

55% digital sales in Mar-20 (50% in Dec-19) and mobile transactions +65% YoY

+22% YoY

# Transactions4

(monetary & voluntary)

+1.5 mn in Q1’20

Digital customers

(1) Every physical or legal person, that, being part of a commercial bank, has logged in its personal area of internet banking or mobile phone or both in the last 30 days(2) Percentage of new contracts executed through digital channels during the period

(3) Private accesses. Logins of bank’s customers on Santander internet banking or apps. ATM accesses by mobile are not included(4) Customer interaction through mobile or internet banking which resulted in a change of balance. ATM transactions are not included

Note: data as of Mar-20 and year-on-year changes

66

We have taken a number of steps to protect and support customers: individuals and self-employed

Mortgage payment holidays Consumer payment holidays

# Operations requested

% ofportfolio

207 k 15%

45 k 8%

1.6 k 5%SC USA

# Operations requested

% ofportfolio

171 k 2%

46 k 9%

409 k 14%

SBNA 506 k 5%

Note: as of 22 April 2020

C

67

We have taken a number of steps supported by Government Guarantee Programmes

Example: Santander España

Government Guarantee Programmes

Country Guarantee

EUR 100 bn

GBP 330 bn

EUR 820 bn

EUR 750 bn

USD 950 bn

BRL 40 bn

CLP 24 bn

ICOfinancingfacilities

60 k transactions granted

EUR 9.6 bn

EUR 2.6 bnLarge corporates

Non-ICO financingfacilities1

EUR 7.0 bnSMEs and

self-employed

176 k transactions granted

EUR 12 bn

(1) From mid-March includes EUR 5 bn of commercial bills

C

68

Key takeaways

The best way to support our shareholders is to prioritise the health and safety of our employees, help our customers and communities, and ensure a profitable business continuity

We are confident about our strengths and business model to ease the COVID-19 impact on our business:

- Scale: we maintain a leadership position in our 10 core markets (Top 3 bank in 9 of our 10 core markets)

- Customer focus: 146 million of customers with a unique personal banking relationship

- Geographic and business diversification: makes us more resilient under adverse circumstances

- Digital transformation: continued execution of our plans to be the best open financial services platform is critical

While it is too early to be conclusive about the macro and financial effects of the current health crisis, the pillars of our strategy remain unchanged:

- Improving operating performance

- Optimising capital allocation to the regions and businesses that generate the highest returns

- Accelerating the Group’s digital transformation

Our strong pre-provision profit across the cycle, combined with our resilient balance sheet and capital position, are the key levers to manage the economic downturn. In addition, we are activating management actions in revenue and costs

Links to Grupo Santander public materials5.

For additional information on the Group, please click on the images, icons or flags below

Links to Grupo Santander public materials

www.santander.com Follow us on70

Financial report

Q1’20 Quarterly financial results

Earnings presentation

Country presentations

US

Mexico

ArgentinaChile

Portugal

Spain

UK

Poland

Brazil

Other information

Overview of our Corporate Governance presentation

Series(excel)

Press release CEO’s video (4 minutes)

2019 Annual report

Fixed income presentation

Shareholders report(interactive)

Strategic Overview& Executive Chairman

and CEO’s lettersAnnual report

Online report

http://www.santander.com/

https://twitter.com/bancosantander

https://twitter.com/bancosantander

https://www.youtube.com/user/SantanderGroup

https://www.youtube.com/user/SantanderGroup

https://www.linkedin.com/company/banco-santander

https://www.linkedin.com/company/banco-santander

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-scfinance-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-scfinance-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-portugal-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-portugal-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-estadosunidos-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-estadosunidos-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-mexico-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-mexico-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-argentina-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-argentina-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-chile-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-chile-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-espana-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-espana-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-polonia-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-polonia-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-brasil-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-brasil-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-reinounido-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-reinounido-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-series-en.xlsx

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-series-en.xlsx

https://www.santander.com/content/dam/santander-com/en/documentos/informacion-privilegiada/2020/04/hr-2020-04-28-press-release-on-the-first-quarter-2020-results-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/informacion-privilegiada/2020/04/hr-2020-04-28-press-release-on-the-first-quarter-2020-results-en.pdf

http://waveplayer01.santandergroup.net/download/yYbqtYyuQPtRkxWd/1

http://waveplayer01.santandergroup.net/download/yYbqtYyuQPtRkxWd/1

https://www.santander.com/content/dam/santander-com/en/documentos/contenidos-accionistas-e-inversores/presentacion-gobierno-corporativo/do-corporate-governance-presentation.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/contenidos-accionistas-e-inversores/presentacion-gobierno-corporativo/do-corporate-governance-presentation.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/presentaciones-de-renta-fija/2020/03/PRF-2020-03-31-Fixed-income-presentation-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/presentaciones-de-renta-fija/2020/03/PRF-2020-03-31-Fixed-income-presentation-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/informe-anual/2019/ia-2019-strategic-vision-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/informe-anual/2019/ia-2019-strategic-vision-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/informe-anual/2019/ia-2019-annual-report-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/informe-anual/2019/ia-2019-annual-report-en.pdf

https://www.santanderaccionistaseinversores.com/1T20/eng/index.php

https://www.santanderaccionistaseinversores.com/1T20/eng/index.php

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-informe-financiero-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-informe-financiero-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-presentacion-resultados-en.pdf

https://www.santander.com/content/dam/santander-com/en/documentos/resultados-trimestrales/2020/1q/rt-1t-2020-presentacion-resultados-en.pdf

https://www.santander.com/2019-annual-report

https://www.santander.com/2019-annual-report

71

Important information

Non-IFRS and alternative performance measures

In addition to the financial information prepared in accordance with International FinancialReporting Standards (“IFRS”) and derived from our financial statements, this presentation containscertain financial measures that constitute alternative performance measures (“APMs”) as definedin the Guidelines on Alternative Performance Measures issued by the European Securities andMarkets Authority (ESMA) on 5 October 2015 (ESMA/2015/1415en) and other non-IFRS measures(“Non-IFRS Measures”). The financial measures contained in this presentation that qualify asAPMs and non-IFRS measures have been calculated using the financial information fromSantander Group but are not defined or detailed in the applicable financial reporting frameworkand have neither been audited nor reviewed by our auditors. We use these APMs and non-IFRSmeasures when planning, monitoring and evaluating our performance. We consider these APMsand non-IFRS measures to be useful metrics for management and investors to facilitate operatingperformance comparisons from period to period. While we believe that these APMs and non-IFRSmeasures are useful in evaluating our business, this information should be considered assupplemental in nature and is not meant as a substitute of IFRS measures. In addition, othercompanies, including companies in our industry, may calculate or use such measures differently,which reduces their usefulness as comparative measures. For further details of the APMs andNon-IFRS Measures used, including its definition or a reconciliation between any applicablemanagement indicators and the financial data presented in the consolidated financial statementsprepared under IFRS, please see the 2019 Annual Financial Report, filed with the ComisiónNacional del Mercado de Valores of Spain (CNMV) on 28 February 2020, as well as the section“Alternative performance measures” of the annex to the Banco Santander, S.A. (“Santander”) 20201Q Financial Report, published as Relevant Fact on 28 April 2020. These documents are availableon Santander’s website (www.santander.com).

The businesses included in each of our geographic segments and the accounting principles underwhich their results are presented here may differ from the included businesses and localapplicable accounting principles of our public subsidiaries in such geographies. Accordingly, theresults of operations and trends shown for our geographic segments may differ materially fromthose of such subsidiaries.

Forward-looking statements

Santander cautions that this presentation contains statements that constitute “forward-lookingstatements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.Forward-looking statements may be identified by words such as “expect”, “project”, “anticipate”,“should”, “intend”, “probability”, “risk”, “VaR”, “RoRAC”, “RoRWA”, “TNAV”, “target”, “goal”,“objective”, “estimate”, “future” and similar expressions. These forward-looking statements arefound in various places throughout this presentation and include, without limitation, statementsconcerning our future business development and economic performance and our shareholderremuneration policy. While these forward-looking statements represent our judgment and futureexpectations concerning the development of our business, a number of risks, uncertainties andother important factors could cause actual developments and results to differ materially from ourexpectations. The following important factors, in addition to those discussed elsewhere in thispresentation, could affect our future results and could cause outcomes to differ materially fromthose anticipated in any forward-looking statement: (1) general economic or industry conditions inareas in which we have significant business activities or investments, including a worsening of theeconomic environment, increasing in the volatility of the capital markets, inflation or deflation,and changes in demographics, consumer spending, investment or saving habits; (2) exposure tovarious types of market risks, principally including interest rate risk, foreign exchange rate risk,equity price risk and risks associated with the replacement of benchmark indices; (3) potentiallosses associated with prepayment of our loan and investment portfolio, declines in the value ofcollateral securing our loan portfolio, and counterparty risk; (4) political stability in Spain, the UK,other European countries, Latin America and the US (5) changes in laws, regulations or taxes,including changes in regulatory capital and liquidity requirements, including as a result of the UKexiting the European Union and increased regulation in light of the global financial crisis; (6) ourability to integrate successfully our acquisitions and the challenges inherent in divertingmanagement’s focus and resources from other strategic opportunities and from operationalmatters while we integrate these acquisitions; and (7) changes in our ability to access liquidity andfunding on acceptable terms, including as a result of changes in our credit spreads or a downgradein our credit ratings or those of our more significant subsidiaries. Numerous factors could affectthe future results of Santander and could result in those results deviating materially from thoseanticipated in the forward-looking statements. Other unknown or unpredictable factors couldcause actual results to differ materially from those in the forward-looking statements.

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Forward-looking statements speak only as of the date of this presentation and are based on theknowledge, information available and views taken on such date; such knowledge, informationand views may change at any time. Santander does not undertake any obligation to update orrevise any forward-looking statement, whether as a result of new information, future events orotherwise.

No offer

The information contained in this presentation is subject to, and must be read in conjunction with,all other publicly available information, including, where relevant any fuller disclosure documentpublished by Santander. Any person at any time acquiring securities must do so only on the basisof such person’s own judgment as to the merits or the suitability of the securities for its purposeand only on such information as is contained in such public information having taken all suchprofessional or other advice as it considers necessary or appropriate in the circumstances and notin reliance on the information contained in this presentation. No investment activity should beundertaken on the basis of the information contained in this presentation. In making thispresentation available Santander gives no advice and makes no recommendation to buy, sell orotherwise deal in shares in Santander or in any other securities or investments whatsoever.

Neither this presentation nor any of the information contained therein constitutes an offer to sellor the solicitation of an offer to buy any securities. No offering of securities shall be made in theUnited States except pursuant to registration under the U.S. Securities Act of 1933, as amended,or an exemption therefrom. Nothing contained in this presentation is intended to constitute aninvitation or inducement to engage in investment activity for the purposes of the prohibition onfinancial promotion in the U.K. Financial Services and Markets Act 2000.

Historical performance is not indicative of future results

Statements as to historical performance or financial accretion are not intended to mean thatfuture performance, share price or future earnings (including earnings per share) for any periodwill necessarily match or exceed those of any prior period. Nothing in this presentation should beconstrued as a profit forecast.

Third Party Information

In particular, regarding the data provided by third parties, neither Santander, nor any of itsadministrators, directors or employees, either explicitly or implicitly, guarantees that thesecontents are exact, accurate, comprehensive or complete, nor are they obliged to keep themupdated, nor to correct them in the case that any deficiency, error or omission were to bedetected. Moreover, in reproducing these contents in by any means, Santander may introduceany changes it deems suitable, may omit partially or completely any of the elements of thispresentation, and in case of any deviation between such a version and this one, Santanderassumes no liability for any discrepancy.

Important information

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