Brazil. Results 1H13. July 30 th, 2013

Transcription

1 Brazil Results 1H13 July 30 th, 2013

2 Important information Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates, and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors and other key factors that we have indicated in our past and future 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 to differ materially from those in the forward-looking statements. 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 document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever. No offering of Securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption there from. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act Note: Statements as to historical performance, historical share price or financial accretion are not intended to mean that future performance, historical share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast. Note: The results information contained in this presentation has been prepared according to Spanish accounting criteria and regulation in a manner applicable to all subsidiaries of the Santander Group and as a result it may differ from the one disclosed locally. All figures in this presentation were converted to constant currency at an average during Jun.13 of US$ (for income statements and average balances figures) and at US$ at the end of Jun.13 (for final balance sheet figures). 2

3 Table of Contents 3 Macroeconomic Scenario and Financial System 1H13 - Strategies and Business - Results

4 Macroeconomic Scenario 4 GDP (real annual growth %) Interest Rate Selic (Final %) (e) 2014 (e) (e) 2014 (e) Inflation (IPCA %) Exchange Rate R$/US$ End of period (e) 2014 (e) (e) 2014 (e) Source: The Central Bank of Brazil, IBGE and estimates by Santander Research (July,23).

5 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Macroeconomic Scenario 5 International Reserves and External Debt Current Account Balance vs. FDI US$ billion Total External debt¹ US$ billion, in 12 months Current account balance Foreign direct investment Reserves Jun-13 Exchange Rate May-11 Nov-11 May-12 Nov-12 May-13 EMBI End of Period R$/US$ R$/EUR Average of Period Brazil Emerging Markets Source: The Central Bank of Brazil and IBGE 1. Last data from May/13

6 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Macroeconomic Scenario 6 Interest rate¹ and Inflation Unemployment Rate (%) - Monthly 12.10% Interest Rate (Selic) Inflation - IPCA - 12 months Unemployment remains at minimum levels since % 6.70% % 5.8 Target: 4.5% Source: The Central Bank of Brazil and IBGE 1. Effective annualized Selic

7 Financial System: Credit Dynamics Total Loan grows 16% YoY due to the earmarked loans, which grow 25% in the same period. 7 Total Loans Non-Earmarked Loans US$ Billion (constant FX rate) ,016 1,072 1,099 1,125 US$ Billion (constant FX rate) % 18.2% 15.9% 16.4% 16.7% 16.1% 15.7% 15.9% 13.9% 13.6% 12.0% 10.4% Mai.12 Jun.12 Sep.12 Dec.12 Mar.13 Mai.13 Var. 12M (%) Earmarked Loans Mai.12 Jun.12 Sep.12 Dec.12 Mar.13 Mai.13 Var. 12M (%) Market Share (%) Total Loans US$ Billion (constant FX rate) % 24.7% 22.2% 21.9% 20.9% 19.1% Mai.12 Jun.12 Sep.12 Dec.12 Mar.13 Mai.13 Var. 12M (%) Source: The Central Bank of Brazil May/13 6% 7% 16% 49% 35% 28% Public Banks Private Banks Foreign Banks Growth (%) May.13/May.12

8 Financial System: Funding growth dynamics Total funding grows 11% in twelve months. Highlight for other funding from clients, which grew 30% in twelve months. US$ Billion (Constant FX Rate) Total Funding Other Funding from Clients Debentures LCI+LCA¹ Treasury Notes 8 1,764 1,782 1, % 1,893 1,929 1, % Mai.12 Jun.12 Sep.12 Dec.12 Mar.13 Mai.13 Deposits Mai.12 Jun.12 Sep.12 Dec.12 Mar.13 Mai.13 Mutual Funds % 1.4% Mai.12 Jun.12 Sep.12 Dec.12 Mar.13 Mai.13 Time Demand + Savings ,006 1,039 1, % 12.6% Mai.12 Jun.12 Sep.12 Dec.12 Mar.13 Mai.13 Non Retail Retail Source: The Central Bank of Brazil 1. Real Estate Credit Notes (LCI) and Agribusiness Credit Notes (LCA). Volume Y-o- Y %

9 Table of Contents 9 Macroeconomic Scenario and Financial System 1H13 - Strategies and Business - Results

10 Strategy Universal bank focused on retail 10 Revenues¹ by Segment 1H13 Commercial Bank 89% Business (US$ billion) 1H13 Loan Portfolio 99.6 Total Funding² Results (US$ Million) Net Profit 1,549 Attributable Net Profit 1,206 2% 9% Global Banking and Markets Asset Management and Insurance Customer Base 1H13 Current Account Holders³(thousand) 21,364 Total Customers (thousand) 28,418 Commercial Network Branches 4 2,375 Mini-Branches (PABs) 1,322 ATMs 17, Considers Net Interest Income + Net Fees + Gain (losses) on financial transactions + other operating income 2. Total funding: total deposits + debentures/lci/lca+ Letras Financeiras +AUM 3. Active and inactive current account during a 30-day period, according to Banco Central do Brasil. 4. Does not include the 18 branches Select. Considering are 2,393.

11 Strategy Focus on the customer, with differentiated products and services offers 11 New category of financial services for High Income public¹: Differentiated attendance and services: focus on the profile and needs of the customers Santander Conta Combinada 4 types of offers, to attend different profiles of customers Free of the current account monthly fee, and credit card fees and annuity Flexibility on overdraft and credit card tenors, interest free LIGHT Lower fees when the use of overdraft and credit card is needed Free of monthly fee of the Pack of Services and credit card annuity 1. Customers with income over R$ 10 thousand and investments over R$ 30 thousand.

12 Business: Portfolio Evolution 12 Credit Portfolio grows 6% in twelve months US$ Billion (Constant FX Rate) US$ Bi US$ Bi Y-o-Y Q-o-Q 5.8% % Individuals % 1.7% - Credit Cards % 1.3% - Mortgage % 6.5% - Consumption % 0.3% Consumer financing % -0.7% SMEs / Companies % 0.3% Retail % 0.7% Corporate¹ % 10.1% Jun.12 Sep.12 Dec.12 Mar.13 Jun.13 Expanded Credit Portfolio Total % 2.5% Other operations² % 8.3% Total + acquired loans² % 2.9% 1. Includes Corporate Activities and GB&M. 2. Includes portfolios acquired from others banks: US$ 0.4 billion in 2Q13, US$ 0.9 billion in 2Q12 and other credit risk transactions (debentures, FDIC, CRI, Floating Rate Notes and Promissory Notes).

13 Business: Deposits + Funds Evolution 13 Total Funding grows 7% in twelve months. Highlight to Demand + Savings and Debentures/LCI/LCA, which grow 21% in twelve months US$ Billion (Constant FX Rate) 6.8% US$ Bi US$ Bi Y-o-Y Q-o-Q 2.5% Demand+ Savings % 4.7% Time Deposits % 1.6% Debentures/ LCI/ LCA¹ Letras Financeiras² Total Funding % -1.5% % 11.5% % 2.8% Mutual Funds ³ % 2.1% Jun.12 Sep.12 Dec.12 Mar.13 Jun.13 Mutual Funds³ Total Funding Total Funding + Mutual Funds % 2.5% 1. Repurchase Agreement backed on Debentures, Real Estate Credit Notes (LCI) and Agribusiness Credit Notes (LCA) 2. Bonds issued by Financial Institution on the domestic market 3. Considers ANBIMA criterion.

14 Business: Market Share 14 Market Share (%) May/13* Var. 1M (b.p) Var. 3M (b.p) Var. 12M (b.p) Total Banking System Loans Total Loans 8.6% Total Non-Earmarked Loans 10.9% Individuals Non-Earmarked Loans 12.2% Deposits + Funds Deposits 7.6% Mutual Funds 6.1% Retail Funds 10.7% Source: Banco Central do Brasil and ANBIMA. (*) last data available. (**) From 2013 on, credit market share is over the Financial System, and not over the Banking System.

15 Table of Contents 15 Macroeconomic Scenario and Financial System 1H13 - Strategies and Business - Results

16 Results: Net Interest Income 16 Net Interest Income decreases 9% in twelve months (1H13 vs. 1H12) US$ Million (Constant FX Rate) Deposits Spread % -11.9% Retail -1.1% ,087 3,972 3,800 3,639 3, Total Deposits 2Q12 3Q12 4Q12 1Q13 2Q13 Loans Spread¹ % 2Q12 3Q12 4Q12 1Q13 2Q Retail Q12 Interest Rate (average) Selic 3Q12 4Q12 1Q13 2Q Total Loans 8.87% 7.77% 7.18% 7.13% 7.53% 2Q12 3Q12 4Q12 1Q13 2Q13 1. Spread of total loan portfolio (production + end of balance)

17 Results: Net Fees 17 Net Fees grow 8% in twelve months (1H13 vs. 1H12) US$ Million (Constant FX Rate) 13.1% 3.8% 1H13 1H12 Y-o-Y Q-o-Q Current Account % -0.4% Mutual Funds % 10.6% ,003 1,005 1,043 Credit Cards % 19.5% Insurance % -25.0% Values¹ % 56.1% Foreign Trade (COMEX) % 36.0% 2Q12 3Q12 4Q12 1Q13 2Q13 Net Fees Cash % 0.9% Others² % n.a. Total 2,048 1, % 3.8% 1. Securities brokerage, placement and custody services. 2. Includes guarantees, contingent liabilities and others

18 Results: Total Revenues 18 Total Revenues presents a slightly reduction of 6% in twelve months US$ Million (Constant FX Rate) -10.1% -3.9% 5,261 5,175 4,958 4,925 4,730 Net Interest Income 1H13 1H12 Y-o-Y Q-o-Q 7,240 7, % -1.1% Fees 2,048 1, % 3.8% Subtotal 9,288 9, % 0.0% Gain/Losses on financial transactions % -69.2% Others 3 (67) n.a. n.a. 2Q12 3Q12 4Q12 1Q13 2Q13 Total Revenues Total Revenues 9,655 10, % -3.9%

19 Results: Administrative Expenses and Amortization 19 Expenses increasing below inflation, reflection of efficiency and commercial productivity effort US$ Million (Constant FX Rate) 3.3% 1.8% 1,747 1,828 1,904 1,774 1, Administrative Expenses 1H13 1H12 Y-o-Y Q-o-Q 3,178 3, % 1.6% 1,585 1,640 1,704 1,576 1,602 Amortization % 3.4% Total 3,579 3, % 1.8% 2Q12 3Q12 4Q12 1Q13 2Q13 Amortization Administrative Expenses

20 Results: Operating Income 20 Operating Income reduces 10% in twelve months (1H13 vs. 1H12) and 7% in the quarter US$ Million (Constant FX Rate) -16.8% 1H13 1H12 Y-o-Y Q-o-Q -7.2% Net Interest Income + Fees 9,288 9, % 0.0% 3,513 3,347 3,054 3,151 2,924 Gain/ losses on financial transaction % -69.2% Others 3 (67) n.a. n.a. Adm. Expenses + Amortization. (3,579) (3,501) 2.2% 1.8% 2Q12 3Q12 4Q12 1Q13 2Q13 Operating Income 6,076 6, % -7.2% Operating Income

21 Results: Provisions and Loan Quality 21 Normalization of loan loss provisions since 3Q12 US$ MM (Constant FX Rate) Provisions and Risk Premium¹ NPL and Coverage 6.8% 6.8% 7.1% 6.6% 6.2% 6.5% 6.5% 2,128 1,882 1,838 1,911 1, % 91.3% 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 2Q13 Provisions Risk Premium NPL Coverage 1. Risk Premium: ((Initial NPL Balance Ending NPL Balance) + Charge Offs Recoveries) / Average Loan portfolio

22 Results: Net Profit 22 Net Profit reaches US$ 1,549 million in 1H13 US$ MM (Constant FX Rate) -13.2% -17.4% 1H13 1H12 Y-o-Y Q-o-Q Profit before Taxes 2,066 2, % -18.6% -Taxes (517) (599) -13.7% -22.2% Net Profit 1,549 1, % -17.4% Attributable profit 1,206 1, % -13.7% 2Q12 3Q12 4Q12 1Q13 2Q13 Net Profit

23 Results: Indicators 23 Efficiency* % Recurrence¹ % ROE % +510 b.p b.p b.p H12 1H13 1H12 1H13 1H12 1H13 (*) Includes amortization 1. Recurrence (fees/ expenses).

24 Conclusion 24 Loan portfolio grows 5% in twelve months Costs control reflects the effort of efficiency and commercial productivity Normalization of loan loss provisions, with improvement of risk premium Balance sheet strength

25 25 ANNEXES Results Quarterly Results Balance Sheet

26 Results Spanish GAAP 26 US$ million. Constant currency* 1H 13 1H 12 Amount % Net interest income 7,240 7,939 (698) (8.8) Net fees 2,048 1, Gains (losses) on financial transactions (103) (22.0) Other operating income** 3 (67) 70 Gross income 9,655 10,228 (573) (5.6) Operating expenses (3,579) (3,501) (78) 2.2 General administrative expenses (3,178) (3,183) 6 (0.2) Personnel (1,743) (1,772) 29 (1.7) Other general administrative expenses (1,435) (1,411) (24) 1.7 Depreciation and amortisation (401) (318) (84) 26.4 Net operating income 6,076 6,727 (651) (9.7) Net loan-loss provisions (3,733) (3,828) 95 (2.5) Other income (277) (556) 279 (50.3) Profit before taxes 2,066 2,343 (277) (11.8) Tax on profit (517) (599) 82 (13.7) Profit from continuing operations 1,549 1,744 (194) (11.1) Net profit from discontinued operations Consolidated profit 1,549 1,744 (194) (11.1) Minority interests (47) (12.1) Attributable profit to the Group 1,206 1,353 (147) (10.9) *As of R$/US$ ** Including dividends, income from equity-accounted method and other operating income/expenses.

27 Quarterly Results Spanish GAAP 27 US$ million. Constant currency* 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 Net interest income 3,852 4,087 3,972 3,800 3,639 3,601 Net fees ,003 1,005 1,043 Gains (losses) on financial transactions Other operating income** (47) (21) (22) (8) 0 2 Gross income 4,967 5,261 5,175 4,958 4,925 4,730 Operating expenses (1,754) (1,747) (1,828) (1,904) (1,774) (1,806) General administrative expenses (1,599) (1,585) (1,640) (1,704) (1,576) (1,602) Personnel (891) (881) (917) (942) (880) (863) Other general administrative expenses (708) (704) (724) (762) (697) (738) Depreciation and amortisation (155) (163) (188) (200) (197) (204) Net operating income 3,213 3,513 3,347 3,054 3,151 2,924 Net loan-loss provisions (1,700) (2,128) (1,882) (1,838) (1,911) (1,822) Other income (254) (302) (300) (143) (101) (175) Profit before taxes 1,259 1,083 1,166 1,072 1, Tax on profit (323) (276) (334) (221) (291) (226) Profit from continuing operations Net profit from discontinued operations Consolidated profit Minority interests Attributable profit to the Group * As of R$/US$ ** Including dividends, income from equity-accounted method and other operating income/expenses.

28 Balance Sheet Spanish GAAP 28 US$ million. Constant currency¹ 1. As of R$/US$ * Includes all stock of concept classified in the balance sheet ** Not including profit of the year Amount % Loans and credits* 93,596 88,987 4, Trading portfolio (w/o loans) 16,116 13,060 3, Available-for-sale financial assets 19,493 18, Due from credit institutions* 14,665 12,520 2, Intangible assets and property and equipment 3,892 3, Other assets 42,347 39,393 2, Total assets/liabilities & shareholders' equity 190, ,528 13, Customer deposits* 90,843 80,942 9, Marketable debt securities* 28,163 22,488 5, Subordinated debt 4,109 5,203 (1,094) (21.0) Insurance liabilities Due to credit institutions* 19,128 23,795 (4,667) (19.6) Other liabilities 30,292 29, Shareholders' equity** 17,573 14,524 3, Off-balance-sheet funds 46,774 45, Mutual funds 42,683 42, Pension funds (0) (0) Managed portfolios 4,091 3, Customer funds under management 169, ,521 15,

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