28 July 2017 SANTANDER US. First half 2017

Transcription

1 28 July 2017 SANTANDER US First half 2017

2 Disclaimer Banco Santander, S.A. and its affiliates ("Santander") cautions that this presentation contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 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 are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance and our shareholder remuneration policy. 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, industry, 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. Numerous factors, including those reflected in the Annual Report on Form 20-F filed with the Securities and Exchange Commission of the United States of America (the SEC ) under Key Information-Risk Factors - and in the Documento de Registro de Acciones filed with the Spanish Securities Market Commission (the CNMV ) under Factores de Riesgo - could affect the future results of Santander and could result in other results deviating materially from those anticipated in the forwardlooking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements speak only as of the date of this presentation and are based on the knowledge, information available and views taken on such date; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. 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. No investment activity should be undertaken on the basis of the information contained in this 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. Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. 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 therefrom. 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 or financial accretion are not intended to mean that future performance, 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. The businesses included in each of our 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 our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries. In addition to the financial information prepared under International Financial Reporting Standards ( IFRS ), this presentation includes certain alternative performance measures as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415es) as well as Non-IFRS measures. The APMs and Non-IFRS Measures are performance measures that have been calculated using the financial information from the Santander Group but that are not defined or detailed in the applicable financial information framework and therefore have neither been audited nor are capable of being completely audited. These APMs and Non-IFRS Measures are been used to allow for a better understanding of the financial performance of the Santander Group but should be considered only as additional information and in no case as a replacement of the financial information prepared under IFRS. Moreover, the way the Santander Group defines and calculates these APMs and Non-IFRS Measures may differ to the way these are calculated by other companies that use similar measures, and therefore they may not be comparable. Please refer to the quarterly financial Report for further details of the APMs and Non-IFRS Measures used, including its definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFR, see Section 26 of the Documento de Registro de Acciones for Banco Santander filed with the CNMV on July 4, 2017 (available on the Web page of the CNMV - and at Banco Santander - and Item 3A of the Annual Report on Form 20-F for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission on March 31, 2017 (the Form 20-F ). For a discussion of the accounting principles used in translation of foreign currency-denominated assets and liabilities to euros, see note 2(a) to our consolidated financial statements on Form 20-F and to our consolidated financial statements available on the CNMV s website ( and on Banco Santander s website ( Note: The information included in this presentation for Santander Holdings USA, Inc. ( SHUSA ) 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 information disclosed locally by SHUSA or Santander Bank. Any use of local (US GAAP) accounting will be noted where it occurs. IRS Circular 230 Disclosure: Santander and its employees are not in the business of providing, and do not provide, tax or legal advice to any taxpayer outside Santander. Any statements in this communication as to tax matters were not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. 2

3 Perimeter Data shown throughout this presentation refers to Santander Holdings USA, Inc. which includes Santander Bank NA (SBNA), Santander Consumer USA Holdings Inc. (SC), NY Branch and Santander Investment Securities, Banco Santander International (BSI Miami), and Puerto Rico (Santander Bancorp and Santander Financial Services) unless stated otherwise. 3

4 Content Macroeconomic environment and financial system Strategy and business Results Appendix Note: All figures excluding Popular

5 Macro-economic environment GDP growth accelerating in 2017 and 2018 with rate increases expected GDP Growth (%, real) Interest Rate 1 (%, period average) (e) 2018 (e) 2019 (e) (e) 2018 (e) 2019 (e) CPI Inflation Rate (%, period average) USD: EUR Exchange Rate (period average) (e) 2018 (e) 2019 (e) (e) 2018 (e) 2019 (e) Source: FRB, Knoema.com (EIU Forecasts), LongForecast.com and estimates by Santander Research La Semana 7/21/ month LIBOR rate from Moody s ECCA 5

6 Macro-economic environment Unemployment continues to decline as home sales level off Debt to GDP 1 Unemployment Rate (%) 81.0% 80.0% 79.3% 78.3% 78.2% 67.7% 69.0% 71.2% 71.3% 72.2% Q'17 Household Debt to GDP Nonfinancial Bus. Debt to GDP Q'17 Existing Home Sales (Mn) 2 Value of Used Vehicles AVERAGE, Q' Source: BLS. National Association of Realtors, FRB. 1. Household & Business debt data has been restated for previous periods by FRB data current as of Q1 2017; 2. Annual averages and monthly seasonally adjusted annual rates updated through May 2017; 3. Manheim Index, June

7 Financial System: Loan and Deposit Growth Loan growth declined in 1Q 2017 with weakness across most sectors USD billion Total loans 1 YoY (%) 8,941 9,123 9,235 9,307 9, % 6.7% 6.8% 5.3% 4.0% M'16 J'16 S'16 D'16 M'17 Total Loans grew every quarter in 2016 driven by commercial lending However, Loan growth slowed significantly 1Q17 Total deposits 12,429 12,528 12,799 12,895 13,084 Deposit growth of 5-6% across the industry continues into 2017 YoY (%) 3.9% 5.0% 6.7% 5.8% 5.3% Loans to deposit ratio for the industry decreased slightly to 71.1% as of Q vs % in Q M'16 J'16 S'16 D'16 M'17 Source: FDIC Statistics on Depository Institutions; data available one quarter in arrears. 1. Gross Loans 7

8 Content Macroeconomic environment and financial system Strategy and business Results Appendix

9 Our Franchise Santander has a retail banking presence in the Northeast and Puerto Rico, a nationwide auto finance business, a private bank for LatAm clients, and a Global Corporate Banking and Commercial Platform STRATEGIC PRIORITIES Key Metrics 1H'17 Var. YoY Santander US Business & Results Loans Bn (6.4%) Meet regulators expectations Deposits Bn (4.8%) Attributable Profit 264 Mn (1.6%) Improve customer experience & loyalty Santander Bank - Network & Customers 2 Clients 2.1 Mn 2.1% Branches 673 (1) Maintain leadership in auto finance ATMs Santander Bank - Market Share 3 Loans 2, % 37% Improve profitability Deposits Santander Consumer USA - Market Share 4 SC Market Share (Retail Auto Lending) 2.7% 17% 3.9% (#6 in the US) 1. Calculated using local US GAAP criteria. 2. Customer data is Jun 17 vs. Jun 16 for Clients, Branches and ATMs; var. YoY excluding SBB. 3. Market share as of 6/30/2016 from FDIC. Data available once a year (Considering all states where Santander Bank operates). 4. Source: J.D. Power Market Share Report for Q2 17 (includes Santander Consumer USA and Chrysler Capital combined). 9

10 Santander US: Strategy/Priorities SHUSA Execute multi-year transformation program to strengthen risk, capital and liquidity management Complete consolidation of US operations Meet regulatory expectations and build a compliant, successful business in the US Santander Bank Build more and deeper customer relationships through a simplified product offering Grow deposits across Consumer and Commercial segments Enhance digital capabilities and improving transaction processes Improve operating efficiency and manage costs Santander Consumer USA Leverage scalable technology, risk infrastructure and data to originate and service profitable assets Focus on compliance and responsible consumer practices Continuously optimize profitability of originations Expand in prime segment through Chrysler Capital Maintain Capital Base while growing dividends 10

11 Santander Bank: Retail & Commercial Focus Checking Customers (000s) 1,304 1,307 1,315 1,321 1,322 2Q16 3Q16 4Q16 1Q17 2Q17 Checking growth remains strong but slowed in Q2 Online digital customers (000 s) Solid YoY growth driven by roll-out of enhancements and digital capabilities 2Q16 2Q17 Funding Mix Q16 3Q16 4Q16 1Q17 2Q17 Core Deposits Borrowings ~41% YoY decline in Borrowings driving funding costs lower Commercial Loan Growth Total Commercial Loans ($ in billions) ~15% YoY decline driven by reduction of Global Clients at SBNA 2Q16 3Q16 4Q16 1Q17 2Q Core Deposits excludes Time, Brokered CDs, Government and Holding Company deposits.

12 SC: Optimizing Portfolio Profitability and Realizing Full Value of the Chrysler Relationship Optimize Portfolio Profitability Balance Sheet and Serviced for Others ($ in billions) Slight increase in retained assets held on balance sheet 2Q16 3Q16 4Q16 1Q17 2Q17 Owned and serviced Serviced for others Originate loans and leases through Chrysler relationship Chrysler Volume ($ in billions) Q16 3Q16 4Q16 1Q17 2Q17 Chrysler volume stabilized over last 4 quarters Expense Ratio (%) 3 Manage Our Expenses $53.22 $52.66 $52.01 $51.17 $ % 2.20% 2.27% 2.24% 2.00% $0.27 $0.28 $0.30 $0.31 $0.28 Q Q Q Q Q Average Managed Assets Operating Expenses Expense Ratio Expense ratio declined in Q2 driven by a reduction in operating expenses 1. Owned and Serviced portfolio excludes Personal Lending 2. Includes Chrysler Capital originated retail loans and leases. 3. US GAAP Expenses ($BN). 12

13 Total Loans Performance YoY decline driven primarily by Global Corporate Banking loans at SBNA, but overall yields have increased in 2017 USD Billion Total Loans 1 Jun'17 YoY (%) QoQ (%) Consumer Mortgages Auto Lending Other Consumer (4.2) 0.3 Commercial 38.8 (13.6) (3.3) CRE & Multifamily 16.8 (8.7) (1.9) C&I & Other Commercial 22.0 (17.1) (4.4) Private Banking J'16 S'16 D'16 M'17 J'17 Total Loans (6.4) (0.4) End of period balances. Calculated using local US GAAP accounting criteria. 2. Other includes personal lending, credit cards and HELOC

14 Total Customer Deposits Performance Core deposits declined in 2Q driven by large commercial and corporate deposits runoff; planned decline of Government deposits continues USD Billion Total Deposits Jun'17 YoY (%) QoQ (%) Core Deposits (3.9) Time Deposits 4.8 (0.6) 0.5 Gov t Deposits 3.2 (27.6) (11.0) Other Deposits (1.7) (3.1) Customer Deposits 61.4 (0.7) (4.0) Wholesale Deposits 1.6 (62.3) (40.2) Total Deposits (4.8) (5.5) J'16 S'16 D'16 M'17 J'17 Note: NY branch deposits not included. 1. End of period balances. Calculated using local US GAAP accounting criteria. 2. Core Deposits are comprised of Non-Interest DDAs, Int-bearing DDAs, MMAs & Savings. 3. Includes customer repo and Eurodollar deposits 14

15 SC Diversified Funding Base SC continues to demonstrate consistent access to funding USD Billion Total Committed Funds Jun '17 YoY (%) QoQ (%) Santander Funding Third Party Funding 10.6 (2.1) (0.7) Amortizing Notes (3.9) Public Securitizations Total Committed Funding % 1.8% J'16 S'16 D'16 M'17 J' Includes ~$4.5BN from SHUSA ($3BN backup line plus $1.45BN term lending), and $2.5BN BSNY lines to SC. 2. Privately issued amortizing notes only.

16 Content Macroeconomic environment and financial system Strategy and business Results Appendix

17 Net Interest income YoY decline of NII driven by mix change and lower balances at SC and SBNA; lower borrowings and higher interest rates at SBNA driving NII increases in 2017 USD million Loan yields (%) Net Interest Income SC ,652 1,625 1,561 1,586 1,636 SBNA Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 NIM (%) Total San US NIM (%) SBNA NIM (%) SC Federal Funds Rate (%) Deposit cost (%) SBNA Q16 3Q16 4Q16 1Q17 2Q Average Quarterly Rate. Note: NIM = Net interest income annualized / Total assets average period

18 Net Fees Fee Income down YoY driven by lower Servicing Portfolio volume; QoQ driven by lower consumer account fees at SC USD million Net Fees 1H'17 1H'16 YoY(%) QoQ(%) Account Fees (14.1) (29.5) Debit and CC Fees Invest. & Insurance (17.0) (4.2) Cont. Risk and Commit Other Fees (13.9) 1.1 SC Servicing Fees (27.3) 0.9 Others (9.3) 1.1 2Q16 3Q16 4Q16 1Q17 2Q17 Total Fees by Category (11.9) (5.4) Insurance includes gross earned fees

19 Gross Income YoY decline in gross income driven by impact of lower NII and fees at SC; QoQ increase driven by higher NII at SBNA USD million Gross Income 2,133 2,085 2,068 1H'17 1H'16 YoY(%) QoQ(%) Net Interest Income 3,222 3,358 (4.1) 3.2 1,945 2,001 Net Fees (11.9) (5.4) Subtotal 3,788 4,001 (5.3) 1.9 2Q16 3Q16 4Q16 1Q17 2Q17 Other (6.8) 25.6 Gross Income 4,069 4,302 (5.4) Other includes Gains (losses) on financial transactions, Other operating income and Leasing income

20 Operating Expenses YoY expenses unfavorable driven by higher personnel expenses at SC; QoQ expenses higher driven by Marketing and Consulting expenses at SBNA USD million Operating Expenses General and admin. expenses Depreciation and amortization 1H'17 1H'16 YoY(%) QoQ(%) 1,640 1,561 (5.0) (3.4) (7.1) (11.9) Operating expenses 1,821 1,730 (5.2) (4.3) 2Q16 3Q16 4Q16 1Q17 2Q17 SBNA Operating Expenses (1.1) (4.8) SC Operating Expenses (9.8) 6.5 Efficiency ratio (with amortizations) 44.8% 40.2% SBNA 78.2% 77.9% SC 18.2% 14.8% Number of branches Number of employees 18,008 17,871 20

21 Net Operating Income after Loan Loss Provisions (LLPs) YoY decline in provisions driven by asset mix at SC, and Oil & Gas provisions at SBNA in 1H 16 USD million LLPs and Cost of Credit Net loan-loss provisions H'17 1H'16 YoY(%) QoQ(%) Net Operating Income 2,248 2,572 (12.6) 2.6 LLPs (1,631) (1,746) Q16 3Q16 4Q16 1Q17 2Q17 Net op. income after LLPs (25.3) 50.1 Cost of credit 1 (%) 2Q16 3Q16 4Q16 1Q17 2Q17 SBNA SC NPL Ratio SBNA 1.16% 1.41% SC 5.28% 3.55% Coverage ratio SBNA 102% 96% SC 239% 357% 21 (1) Cost of credit: Provisions to cover losses due to impairment of loans in the last 12 months / average customer loans and advances of the last 12 months

22 Underlying and Attributable Profit Attributable profit for 1H 17 in line with 1H 16, with lower revenue offset by lower provisions USD million Underlying Profit 1H'17 1H'16 YoY(%) QoQ(%) Profit before taxes (24.7) Tax on profit (152) (275) 44.9 N/A Consolidated Profit (12.7) Minority interest (139) (194) (28.0) Underlying Profit (1.6) 60.8 Extraordinary Items Q16 3Q16 4Q16 1Q17 2Q17 Attributable profit (1.6) 60.8 Effective tax rate 27.4% 37.4% Attributable profit (24) Non-recurring Items: In 4Q 16, -$36mill. restatement Santander Consumer USA 22

23 Conclusions Market Environment & Financial System GDP growth accelerating in 2017 and 2018 with rate increases expected Unemployment continues to decline as home sales level off Loan growth declined in 1Q 2017 with weakness across most sectors Deposit growth of 5-6% across the industry continues into 2017 Strategy & Business Checking customer growth remains strong but slowed in Q2 Commercial Loans declined YoY driven by a reduction of Global Clients at SBNA Slight increase in retained assets held on SC s balance sheet SC continues to demonstrate consistent access to funding Continued Improvement in Profitability at SBNA with NIM increasing to 2.66% in 2Q 17 YoY decline of NII driven by mix change and lower balances at SC and SBNA; lower borrowings and higher interest rates at SBNA driving NII increases in 2017 Results Fee Income down YoY driven by lower SC Servicing Portfolio volume; QoQ lower driven by consumer account fees at SC YoY expenses unfavorable driven by higher personnel expenses at SC; QoQ expenses higher driven by Marketing and Consulting expenses at SBNA YoY decline in provisions driven by asset mix at SC, and the reduction of Oil & Gas reserves at SBNA in 1H 16 Attributable profit for 1H 17 in line with 1H 16, with lower revenue offset by lower provisions 23

24 Content Macroeconomic environment and financial system Strategy and business Results Appendix

25 Balance Sheet (IFRS) Santander US US $ Million Variation 30-Jun Jun-16 Amount % Customer loans 87,503 92,307 (4,804) (5.2) Cash, central banks and credit institutions 17,748 19,567 (1,820) (9.3) Debt securities 20,335 20,776 (441) (2.1) o/w: available for sale 17,879 18,826 (947) (5.0) Other financial assets 3,146 3,492 (346) (9.9) Other assets 14,463 13, Total assets 143, ,105 (6,911) (4.6) Customer deposits 63,326 65,926 (2,600) (3.9) Central banks and credit institutions 22,226 29,685 (7,459) (25.1) Debt securities issued 31,027 28,791 2, Other financial liabilities 3,645 3, Other liabilities 4,973 5,055 (82) (1.6) Total liabilities 125, ,639 (7,442) (5.6) Total equity 17,997 17, Other managed and marketed customer funds 19,655 21,330 (1,675) (7.9) Mutual funds 9,653 7,748 1, Pension funds Managed portfolios 10,001 13,581 (3,580) (26.4) 25

26 Balance Sheet (IFRS) Santander Bank US $ Million Variation 30-Jun Jun-16 Amount % Customer loans 51,791 56,563 (4,772) (8.4) Cash, central banks and credit institutions 2,992 3,558 (566) (15.9) Debt securities 18,839 17,444 1, o/w: available for sale 16,686 15, Other financial assets 1,040 1,516 (476) (31.4) Other assets 2,834 3,604 (771) (21.4) Total assets 77,495 82,685 (5,190) (6.3) Customer deposits 53,846 56,621 (2,774) (4.9) Central banks and credit institutions 11,043 12,481 (1,438) (11.5) Debt securities issued 769 1,633 (864) (52.9) Other financial liabilities Other liabilities 863 1,089 (226) (20.7) Total liabilities 67,038 72,240 (5,202) (7.2) Total equity 10,457 10, Other managed and marketed customer funds (3) (12.4) Mutual funds (3) (12.4) Pension funds Managed portfolios 26

27 Balance Sheet (IFRS) Santander Consumer USA US $ Million Variation 30-Jun Jun-16 Amount % Customer loans 26,407 27,113 (706) (2.6) Cash, central banks and credit institutions 3,188 2, Debt securities o/w: available for sale Other financial assets Other assets 10,262 9,143 1, Total assets 39,947 39, Customer deposits (0) (0) Central banks and credit institutions 7,832 9,305 (1,473) (15.8) Debt securities issued 23,766 22,577 1, Other financial liabilities Other liabilities 2,208 2, Total liabilities 34,008 34,028 (19) (0.1) Total equity 5,939 5, Other managed and marketed customer funds Mutual funds Pension funds Managed portfolios 27

28 Quarterly Income Statement (IFRS) Santander US US $ Million 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Net interest income 2Q16 1,706 3Q16 1,652 4Q16 1,625 1Q17 2Q17 1,561 1,586 1,636 Net fees Gains Net (losses) interest on income financial transactions 1, ,6259 1, ,586(18) 1,636 (6) 27 Net fees Other operating income Gains (losses) on financial transactions 9 11 (18) (6) 27 Gross income 2,168 2,133 2,085 1,945 2,001 2,068 Other operating income Operating Gross income expenses (856) 2,133 2,085 (874) 1,945 (875) 2,001 (932) 2,068(891) (929) General Operating administrative expenses expenses (775) (874) (875) (787) (932) (788) (891) (839) (929)(806) (834) Personnel General administrative expenses (458) (787) (452) (788) (839) (454) (806) (446) (834) (474) (471) Other Personnel general administrative expenses (317) (452) (454) (335) (446) (334) (474) (393) (471)(333) (363) Depreciation Other general and amortisation administrative expenses (335) (82) (334) (87) (393) (87) (333)(93) (363) (85) (95) Net operating Depreciation income and amortisation 1,312 (87) 1,259 (87) (93) 1,210 (85) 1,013 (95) 1,109 1,138 Net operating income 1,259 1,210 1,013 1,109 1,138 Net loan-loss provisions (949) (797) (867) (935) (863) (768) Net loan-loss provisions (797) (867) (935) (863) (768) Other income (72) (16) (3) (8) (34) (27) Other income (16) (3) (8) (34) (27) Underlying Underlying profit profit before before taxes taxes Tax Tax on profit on profit (114) (161) (102) (161) (15) (102) (65) (15) (86) (65) (86) Underlying profit profit from from continuing operations operations Net Net profit profit from from discontinued operations Underlying Underlying consolidated consolidated profit profit Minority Minority interests interests Underlying attributable profit to the Group Underlying attributable profit to the Group Net capital gains and provisions (36) Net capital gains and provisions (36) Attributable profit to the Group (24) Attributable profit to the Group (24)

29 Quarterly Income Statement (IFRS) Santander Bank US $ Million 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Net interest income 2Q Q Q Q17 2Q Net fees Gains Net interest (losses) income on financial transactions (11) 516 (2) 15 Other Net fees operating income Gains (losses) on financial transactions 4 20 (11) (2) 15 Gross income Other operating income Operating expenses (468) (483) (475) (514) (469) (492) Gross income General administrative expenses (406) (417) (411) (449) (407) (425) Operating expenses (483) (475) (514) (469) (492) General Personnel administrative expenses (254) (417) (247) (411) (449) (235) (407) (224) (425) (234) (234) Other Personnel general administrative expenses (152) (247) (235) (170) (224) (175) (234) (225) (234) (173) (191) Depreciation Other general and amortisation administrative expenses (170) (62) (175) (66) (225) (65) (173) (64) (191) (62) (67) Net Depreciation operating income and amortisation 139 (66) (65) 130 (64) 129 (62) 37 (67) Net Net loan-loss operating provisions income (79) (13) 37(7) 119(33) 148(32) (35) Other Net loan-loss income provisions (35) (13) (7) 2 (33) 18 (32) 3 (35) (9) 6 Underlying Other income profit before taxes (9) Underlying profit before taxes Tax on profit (8) (11) (32) (30) (14) (30) Tax on profit (11) (32) (30) (14) (30) Underlying profit from continuing operations (24) Underlying profit from continuing operations (24) Net Net profit profit from from discontinued discontinued operations operations Underlying Underlying consolidated consolidated profit profit (24) (24) Minority interests Underlying attributable profit profit to to the the Group Group (24) (24) Net Net capital gains and and provisions Attributable profit to to the the Group (24) (24)

30 Quarterly Income Statement (IFRS) Santander Consumer USA US $ Million 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Net interest income 2Q16 1,161 3Q16 1,111 4Q16 1Q17 1,088 2Q17 1,035 1,009 1,034 Net fees Net interest income 1,111 1,088 1,035 1,009 1,034 Gains (losses) on financial transactions 1 (7) (20) (16) (10) (7) Net fees Gains Other (losses) operating on income financial transactions 109 (7) (20) 121 (16) 137 (10) 122 (7) Other Gross operating income income 1, , , , ,236 1,256 Gross Operating income expenses 1,369 (207) 1,322 (205) 1,242 (217) 1,236(213) 1,256 (234) (218) Operating General administrative expenses expenses (205) (200) (217) (198) (213) (211) (234) (207) (218) (227) (212) General Personnel administrative expenses (123) (198) (211) (123) (207) (129) (227) (126) (212)(133) (126) Other Personnel general administrative expenses (123) (77) (129) (75) (126) (83) (133) (81) (126) (94) (86) Other general administrative expenses (75) (83) (81) (94) (86) Depreciation and amortisation (7) (7) (6) (6) (6) (6) Depreciation and amortisation (7) (6) (6) (6) (6) Net operating income 1,201 1,163 1,105 1,029 1,002 1,037 Net operating income 1,163 1,105 1,029 1,002 1,037 Net loan-loss provisions (843) (758) (835) (873) (805) (706) Net loan-loss provisions (758) (835) (873) (805) (706) Other Other income income (27) 2 (0) 2 (11) (0) (17) (11) (23) (17) (23) Underlying profit before taxes Tax on profit (149) (125) (72) (149) (48) (72) (63) (48) (76) (63) (76) Underlying profit from continuing operations Net profit from discontinued operations Underlying consolidated profit profit Minority interests Minority interests Underlying attributable profit to the Group Underlying attributable profit to the Group Net capital gains and provisions (36) Attributable Net capital gains profit and to provisions the Group (36) 138 Attributable profit to the Group

31 Thank you Our purpose is to help people and businesses prosper. Our culture is based on the belief that everything we do should be