Shareholder report 2012

Transcription

1 Shareholder report 2012 January February March April May June July August September October November December

2 2 CONTENTS Santander Share ACTIVITY Dividends SUMMARY OF SHAREHOLDER AND CAPITAL POSITION Results BALANCE SHEET ANNUAL GENERAL MEETING 2013 NEWS SANTANDER SCRIP DIVIDEND SCHEME BENEFITS marked a turning point in terms of profit. In 2013, with the exceptional write-offs behind us, we should see a marked recovery in results. Emilio Botín Chairman

3 Santander Share activity 3 MARKET PRICE IN 2012 Euros 02 January Highest Lowest December Market capitalisation (millions) 62,959 Source: Bloomberg The Santander share ended the year at 6.100, representing a quarterly rise of 5.3%. Overall performance in 2012 was positive (+3.9%), better than the main index of the Spanish market, the IBEX 35, (-4.7%), but worse than that of the STOXX Europe 600 Banks (+23.1%) and the Euro STOXX 50 (+8.8%). Sovereign debt problems in the eurozone weighed heavily on the Spanish stock market and on the Spanish financial sector in particular. On 30 January, the Santander share price was 6.400, an increase of 4.9% over the year, around the same as the IBEX 35 (+5.0%). INTERNATIONAL RANKING BY MARKET CAPITALISATION 1. ICBC (CHINA) January CHINA CONSTRUCTION BANK (CHINA) HSBC (UK) WELLS FARGO (USA) JP MORGAN CHASE (USA) AGRICULTURAL BANK OF CHINA (CHINA) BANK OF CHINA (CHINA) CITIGROUP INC (USA) BANK OF AMERICA (USA) C wealth Bank of Australia (Australia) BANCO SANTANDER (SPAIN) WESTPAC BANKING CORP (Australia) Royal Bank of Canada (CANADA) Mitsubishi UFJ Financial (JAPAN) bnp paribas (FRANCE) 57.4 Source: Bloomberg Billion euros

4 4 Dividends remuneration PER SHARE Euros * *The total shareholder return for the 2012 financial year is predicted to be: 0.60 per share This is the same return as in 2010 and 2011 As part of the Santander Scrip Dividend Scheme for the third interim dividend for 2012, shareholders have been able to choose between the following options: Option 1: - Sell your rights off-market and receive cash. Option 2: - Sell your rights on-market and receive cash (no Spanish withholding tax liability). Option 3: - Hold your rights and receive shares (no Spanish withholding tax liability). On 1 February, shareholders that opted to sell their rights to the Bank received the cash amount due to them. On 7 February, those that chose the share option received their new shares. On the usual payment date of the fourth dividend, in April/May 2013, pending approval at the Annual General Meeting, shareholders will again be able to choose between receiving an equivalent cash amount or new Santander shares. YIELD PER DIVIDEND (1) % 10.85% Earnings per share Euros 8.27% % 2012 / % (1) (1) Total shareholder remuneration for the fiscal year/ average price. (1) Before the real-estate provisions net of capital gains: 0.54 (-31.9%). Santander ended 2012 with a dividend yield of 10.85%. Source: Bloomberg. Earnings per share in 2012 were 0.23, (62.5% less than in the same period of 2011). Recurring earnings per share were 0.54 (-31.9%). Both earnings figures were affected by the capital increases in 2011 and 2012.

5 SUMMARY OF SHAREHOLDER AND CAPITAL POSITION 5 Shareholder NUMBERS 3,296,270 3,293,537 Dec 11 Dec 12 Shareholders and trading data 31 December 2012 Shareholders (number) 3,296,270 Shares outstanding (number) 10,321,179,750 Average daily turnover (no. of shares) 107,075,189 Share liquidity (%) (Number of shares traded during the year/number of shares) 286 Capital Stock ownership Geographical distribution of share capital % Share capital 31 December 2012 % Share capital 31 December 2012 The Board of Directors 1.92% America 11.71% Europe 87.93% Institutional Individuals investors 40.04% 58.04% Rest of the world 0.36% Distribution of capital by tranches 31 December 2012 Share range Shareholders Shares % Share capital ,833, ,733, % 201 1, , ,622, % 1,001 3, , ,179, % 3,001 30, ,861 1,999,817, % 30, ,000 19,451 1,317,521, % More than 400, ,706,305, % Total 3,296,270 10,321,179, %

6 6 Results In 2012 SANTANDER GENERATED PRE-PROVISION PROFIT OF BILLION, 1.6% MORE THAN THE SAME PERIOD LAST YEAR Santander registered net attributable profit of 2,205 million in 2012, 59% less than in 2011 after making charges of billion and reducing property exposure in spain. Ordinary profit was 5,251 million, while capital gains came to 1,065 million, mainly from the sale of the Colombian unit and the reinsurance of the Spanish and Portuguese life insurance portfolios. Profit for the year would have been 6,315 million, but after setting aside a net 4,110 million to cover real-estate exposure in Spain, this fell to 2,205 million. Santander s Chairman Emilio Botín said: Profits reached a turning point in In 2013, with the exceptional write-offs behind us, we should see a marked increase in earnings, based on the group s recurrent revenues and cost control. Income statement (Million euros) Change (%) Net interest income 30,147 29, Gross income 43,675 42, Pre-provision profit (net operating income) 23,559 23, Profit from continuing operations 6,148 7,812 (21.3) Attributable profit to the Group 2,205 5,351 (58.8) DISTRIBUTION OF ORDINARY ATTRIBUTABLE PROFIT BY GEOGRAPHIC SEGMENT 2012 Santander s diversification is the main reason that Group results have held up so well against such a difficult backdrop in Europe, where it carries out a large part of its business. USA UK Other Europe Portugal Poland Germany Spain Brazil Chile Other Latin America Mexico Latin America: 50% Brazil: 26% Mexico: 12% Chile: 6% Other Latin America: 6% Continental Europe: 27% Spain:15% Germany: 4% Poland: 5% Portugal: 1% Other Europe: 2% United Kingdom: 13% USA: 10% Note: The businesses included in each of the geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable accounting principles of the public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for the geographic segments may differ materially from those of such subsidiaries.

7 BALANCE SHEET 7 SANTANDER ENDED 2012 WITH MANAGED FUNDS OF 1,387,769 MILLION AND A SOLID CORE CAPITAL OF 10.33% UNDER BASEL II Under Basel II criteria, Santander s core capital ratio was 10.33% at 31 December, up from 10.02% at the close of BALANCE Sheet (Million euros) Change (%) Total assets 1,269,628 1,251, Net customer loans 720, ,100 (3.9) Customer deposits 626, ,533 (0.9) Customer funds under management 968, ,353 (1.6) Shareholders equity (1) 80,821 80, Total managed funds 1,387,769 1,382, (1) In 2012 includes estimated data for the May 2013 scrip dividend. CORE CAPITAL (BaSel II) (%) p.p.* Dec 11 to Dec 12 Dec 10 Dec 11 Dec 12 * Percentage points. Rating agencies 31 January 2013 Long term Short term Perspective Standard & Poor s BBB A-2 Negative Fitch Ratings BBB+ F2 Negative Moody s Baa2 P-2 Negative DBRS A r1(low) Negative Although the rating agencies recognise Santander s financial strength and diversification, their methodology prevents the Group s rating from being more than one notch above that of the sovereign debt rating. Santander is the only bank in Spain given a rating higher than that of Spanish sovereign debt by all four main agencies. Moreover, it is the only bank in the world given a rating above that of sovereign debt by Standard & Poor s and the only bank among the 20 largest worldwide given that rating by Moody s.

8 8 NEWS annual GENERAL MEETING 2013 Palacio de Exposiciones y Congresos Santander s board of directors has agreed to call shareholders to the Annual General Meeting which will most likely be held on 22 March 2013 at 9.30 a.m. (Central European Time), at the Palacio de Exposiciones y Congresos (Avenida del Rancing, s/n) in Santander, Spain, in the event that, due to the necessary quorum not being reached, the meeting cannot be held on first call on 21 March at the same time and place. Further detailed information and documents relating to the meeting are available on the Santander website just follow the AGM link. How can I vote? Using one of the two voting options below, you need to ensure that your vote is submitted in sufficient time to be received before the deadline of 12 noon on Friday 15 March Vote Online Vote by Post Go to and click on the link on the AGM information web page. Enter the codes provided on your form of instruction and follow the simple online directions. Complete and sign the form of instruction and return it in the pre-paid envelope provided. For more information, please contact the Shareholder helpline on * or write to uk_agm@gruposantander.com. Vote now and make a difference for children and young people with cancer The AGM voting documents are enclosed with this mailing and provide relevant information to help you vote. Santander is encouraging everyone to vote either online or by returning the voting form enclosed. This year s deadline for voting via Santander Nominee Service is 15 March. For every vote made online or via post before the deadline, Santander will donate 20p (up to a maximum of 50,000), to CLIC Sargent, the Santander UK Charity of the Year. *Calls are charged at 8p per minute plus network extras. Lines are open from 8.30 a.m. to 5.30 p.m. Monday to Friday (excluding UK public holidays).

9 NEWS 9 SANTANDER TO ABSORB BANESTO AND BANIF, UNITING ITS BRANDS IN SPAIN On 17 December 2012, Santander s board of directors approved the absorption of Banesto and Banif through a merger, uniting its commercial brands in Spain. This transaction is part of a restructuring of the Spanish financial system, which involves a drastic reduction in the number of competitors and the creation of larger financial institutions. With this transaction, Santander will reinforce its specialised business banking networks, taking advantage of Banesto s leadership in SME financing, and its private banking business, where Banif is the leading financial entity in Spain. Santander, Banesto and Banif customers will benefit from a broader branch network (with 4,000 branches in Spain), a wider range of products and will have access to the largest network of offices in international banking, with over 14,000 branches worldwide. Benefits for shareholders Santander shareholders: It is expected that the merger will increase earnings per share by 3% in the third year. The transaction has a low execution risk and is expected to generate annual synergies of 520 million before tax from the third year onwards. Banesto shareholders: They will receive existing Santander shares with a premium of 24.9% over the closing price on Friday 14 December. They will become shareholders of Santander, a diversified international group with a presence in high growth markets and the most attractive remuneration per share in the market. SANTANDER LAUNCHES A NEW CORPORATE SLOGAN: santander a bank for your ideas Value from ideas was the corporate slogan that, from 2002 onwards, was used alongside the Santander logo on all advertising and communications in the countries in which the Group operates. With this slogan, a greater branding unity was achieved and an innovative and dynamic banking message was transmitted. In light of the new international socioeconomic environment, with each day more and more competitive, and the emergence of an increasingly demanding consumer, Santander must take a step closer to the customer, reinforcing an internal service culture with an emphasis on looking after the customers needs in order to guarantee their satisfaction. This new culture is summarised in the new slogan, a bank for your ideas. All of Santander s capabilities, experience and talent are at its customers service to help them make their projects, targets and objectives become reality. Emilio Botín said: With this slogan we want to let our customers know that it is our job to think about them, anticipate their needs and offer them a unique brand experience. We want them to feel that they can rely on all our talent and resources every day to continue to make their projects reality.

10 10 NEWS THE BANKER names SANTANDER BANK OF THE YEAR IN THE UNITED KINGDOM, MEXICO, POLAND, PORTUGAL, ARGENTINA AND PUERTO RICO SANTANDER, BANK OF THE YEAR in: UK, Mexico, Puerto Rico, Portugal, Poland and Argentina For the fourth consecutive year, The Banker the leading publication in international banking and finance has awarded Santander the title of Bank of the Year in the United Kingdom. The Bank also won the same award in Argentina (for the third consecutive year), in Portugal (for the sixth time in eight years), and in Mexico (for the first time). Referring to the Bank in the UK, the magazine says that in a battered and bruised UK banking sector, Santander remains the best in its class. It goes on to highlight the success of Santander Mexico s IPO and its net profit growth of The Banker: EMILIO BOTÍN, THE SECRET OF SANTANDER S SUCCESS almost 35% in The publication also mentions Bank Zachodni s sustainable growth in Poland and notes that, in Portugal, it is the only large bank that has not needed help to strengthen its capital nor a public guarantee for its debt issues. The magazine also highlights Santander Río s strong position in Argentina and the 49% growth in net profit logged in Puerto Rico in The Bank of the Year awards are a benchmark in international banking. The winners are selected by the editors of The Banker on the basis of criteria such as profitability, growth and efficiency. Santander won the award as the best bank in five of the ten core markets in which it operates. The prestigious magazine The Banker has dedicated its front cover and the main article of its January edition to the interview with Emilio Botín it recorded last November. The January issue is of particular importance because, in addition to its usual distribution, it is handed out to the 5,000 attendees of the World Economic Forum in Davos, all of whom are global leaders and influencers of opinion. The article, entitled Emilio Botín, the secret of Santander s success, describes the Bank s business model, and in the words of the magazine s editor, how its geographical diversification and its philosophy of operating through standalone subsidiaries has helped it thrive during the worst years of the crisis, and stands it in good stead for the future. In the question and answer session, the Chairman explained the importance of the Bank s diversification, its subsidiary model, the initial public offering of Santander Mexico, technology, the advantages and disadvantages of the new regulatory framework and the reform of the Spanish banking system. This is the first cover that The Banker has dedicated to a banker in the last year, a clear indication of the importance that the magazine gives to Santander s leadership and ideas. In the last ten months, the Bank has also been on the front covers of Euromoney and Fortune, which highlighted it as an example to follow in international banking. This demonstrates the recognition that the Bank enjoys in the current complex financial climate.

11 NEWS 11 A new look for Santander Corporate & Commercial At the end of last year Santander Corporate & Commercial Banking launched a new marketing campaign with customers taking a starring role. The campaign marks a change in the creative style of Santander UK and features customers telling the story of their relationship with Santander and how that has translated into success for their business. Lindsey Rix, Managing Director, Product, Strategy and Marketing, Santander Corporate & Commercial Banking, said: We wanted to celebrate our customers and to inspire more businesses to reach their growth ambitions. These stories from real customers demonstrate how Santander UK can help them fulfil their potential. This marks an important change in our marketing strategy and we will continue to use this theme and feature more and more customers in future campaigns and sales materials. The campaign was launched at the 2012 Corporate & Commercial Annual Event, held at the London Transport museum. Over 200 businesses attended to network with their peers and hosts from Santander. They heard from Steve Pateman, Head of Santander UK Banking, who talked about how Corporate & Commercial Banking had grown and developed over the last few years and where Santander needs to be to support businesses in the coming years. Olympic medallist opens Santander university branch Senior delegations of the University of Bath and Santander attended the opening of a new Santander branch on campus. Among the guests was Samantha Murray, Olympic medallist at London The talented athlete, who won Silver in the Modern Pentathlon for Team GB, is currently studying Politics and French at the University. Samantha has managed to successfully balance her studies and training which prompted the University and Santander to reward her hard work and perseverance with a Santander Universities scholarship. Several other beneficiaries of funding from Santander, including international students, also attended the branch opening. In 2007 the University of Bath signed an agreement with the Bank, through its Santander Universities Global Division. Since then the Bank has provided funding for scholarships, awards, support for entrepreneurial activities, research and more.

12 12 NEWS Jenson Button wows Bluewater shoppers at 123 Event save with a 123 Current Account and 123 Credit Card. On the Saturday, Santander also presented shoppers with the opportunity to attend an audience with Vodafone McLaren Mercedes driver Jenson Button. The public response was fantastic and the two sessions held with Jenson were filled to capacity. Jenson Button and Louise Goodman during the visit to Bluewater. Over one thousand people saw Jenson Button at Bluewater shopping centre on Saturday 1 December, courtesy of Santander s 123 Event. In a similar event to Shrewsbury (which featured in Santander s last TV ad), branch colleagues from the area surrounding Bluewater joined together on the Friday and Saturday to encourage shoppers to use Santander s 123 Calculator to see how much money they could He delighted the audience with a very open Q&A session led by former F1 TV presenter Louise Goodman. Jenson said he had enjoyed working with Lewis Hamilton and wished him well in the future. When talking about his new teammate, Sergio Pérez, he said he hoped they might both be wearing winning sombreros in future, a reference to the Stetsons worn after the Grand Prix in Texas. The 123 events have been an excellent way of increasing brand awareness and engaging the public in 123 World. Shareholder Regional Roadshows The Santander UK Shareholder Relations team has continued to hold a series of roadshows during the first quarter of 2013 and so far they have visited Birmingham and Weymouth. During these events shareholders are able to meet Pilar Vega de Seoane, Director of UK Shareholder Relations, and to ask questions and give feedback on Santander and the services provided to shareholders. The Shareholder Relations team look forward to seeing more shareholders this year at one of the following events: March * Nottingham 6 th April Buckinghamshire 10 th Edinburgh 17 th For a full schedule, visit If you would like to attend one of the roadshows please uk_shareholders@santander.com or write to Shareholder Relations, 2 Triton Square, Regent s Place, London, NW1 3AN giving your name, address, shareholder URN (Unique Reference Number), contact number and details of the event you would like to attend. May Newport 1 st Derry/Londonderry 15 th * Due to unforeseen circumstances the Norwich roadshow, originally due to be held in March, will now take place later in 2013.

13 SANTANDER SCRIP DIVIDEND SCHEME 13 HOLDERS OF 86.40% OF THE free allotment rights choose to receive NEW shares As part of the February 2013 Santander Scrip Dividend Scheme, shareholders holding 86.40% of the Bank s capital chose to receive the amount equivalent to the third dividend of the financial year in new shares. On 11 January, a guaranteed purchase price of was confirmed for each right sold off-market and a minimum number of 41 rights was set as the amount required to convert to one new share. In order to meet the needs of the shareholders who opted to receive new shares, the Bank issued 217,503,395 shares, with the share capital increasing by 108,751, Fourth and final dividend for 2012 Subject to approval at the Annual General Meeting, Santander will implement the Scrip Dividend Scheme for the fourth and final dividend in May Shareholders will be able to choose to receive their payment either in cash or in newly issued Santander shares. Details of the proposed scrip dividend and how the scheme will be implemented will be sent to shareholders in the Santander Nominee Service in March. MORE INFORMATION: Shareholder helpline: * *Calls are charged at 8p per minute plus network extras. Lines are open from 8.30 a.m. to 5.30 p.m. Monday to Friday (excluding UK public holidays).

14 14 BENEFITS AS A SANTANDER SHAREHOLDER YOU CAN Exclusive Golf Tournament for Santander Shareholders Santander Shareholder Relations would like to thank everybody who has already entered the draw for places in the Santander Shareholder Charity Golf Tournament If you have not yet applied please visit the following website for details of how to enter: Woburn (England) 11 April - The Duke s Course Archerfield (Scotland) 18 April - Dirleton Links St Pierre (Wales) 2 May - The Old Course Lough Erne (N. Ireland) 16 May - The Faldo Course The closing date for entries is 11 March Santander Shareholder Relations will be in touch by 25 March 2013 with those lucky enough to obtain a place. The entry fee will be 55 for each regional tournament and all money raised will go to CLIC Sargent LAITHWAITE S wine RRP: Offer: Save: Taste of Oz Reds 13 bottles for just (Plus 7.99 delivery) If you fancy some amazing value reds, then meet these generous-tasting favourites from Laithwaite s Wine, the UK s largest direct mail wine merchant. All 12 bottles for just (plus 7.99 delivery), plus a FREE gold medal Prosecco with every order (worth 8.99)! Terms and Conditions apply. For full details please visit Over 18 s only. Offer valid until 31/05/2013

15 15 TAKE ADVANTAGE OF EXCLUSIVE BENEFITS Free SHARE purchase SERVICE We would like to thank our shareholders for their continuing support and loyalty to Santander by offering them monthly opportunities to increase their shareholding without paying any dealing fees. 15 MARCH AND 19 APRIL are the next opportunities for you to buy Santander Shares without paying any fees Simply visit santander.co.uk, complete and sign the form, and send it together with your cheque, made payable to Santander Share Purchase Service, to Equiniti, PO Box 4608, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6NZ on or before the relevant closing date. The current closing dates* are 11 March and 15 April. Forms received after a closing date will be carried forward and included in the following month s arrangement. Details of your purchase will be confirmed shortly after the shares have been bought. * For full details please see the Terms and Conditions which are available at FREE LEGAL ADVICE As a Santander shareholder you can benefit from our free legal advice helpline. Effective immediately, you will benefit from: A bespoke service covering all legal subjects where you feel you may have a dispute or grounds for a dispute. Free advice which will provide an initial decision on whether the matter can be pursued or defended. Should further investigatory work be required it will be at the shareholder s expense. The helpline is available 24 hours a day, 365 days a year. Please note that this is not an insurance product. The helpline number is * and it is exclusive to you as a UK shareholder. * Standard network charges apply. MORE SHAREHOLDER BENEFITS AT :

16 United Kingdom Santander Shareholder Relations UK Web: Shareholder helpline: * From outside the UK dial: +44(0) Correspondence address: Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA Spain Relación con Accionistas Santander España Web: Shareholder helpline: From outside Spain dial: Portugal Relaçao com Accionistas Santander Portugal Web: Shareholder helpline: From outside Portugal dial: USA Santander Shareholder Relations US Web: Shareholder helpline: From outside the US: Brazil Relações com Acionistas Santander Brasil Web: Shareholder helpline: From outside Brazil dial: Mexico Relación con Accionistas Santander México Web: Shareholder helpline: From outside Mexico dial: Chile Relación con Accionistas Santander Chile Shareholder helpline: (02) From outside Chile dial: Registered Office Paseo de la Pereda, numbers 9 to 12, Santander. *Calls are charged at 8p per minute plus network extras. Lines are open from 8.30 a.m. to 5.30 p.m. Monday to Friday (except UK public holidays).