Santander Consumer Finance

25 July 2018 Santander Consumer Finance H1'18 Earnings Presentation

Disclaimer Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements. 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 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. Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of 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. 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 2000. 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 my differ materially from those of such subsidiaries. 2

Index 1. Macroeconomic environment and financial system 2. Strategy and business 3. Results 4. Appendix 3

Macroeconomic environment and financial system 01

Macroeconomic environment Euro Area growth is expected to be slightly lower than in 2017 Annual GDP Growth (real, %) 1 New car sales (millions) 2 14.1 14.5 14.6 14.5 14.5 1.8 2.6 2.4 1.8 1.5 2016 2017 2018 (e) 2019 (e) 2020 (e) 2016 2017 2018 (e) 2019 (e) 2020 (e) Unemployment rates (%) 1 Interest rates (%, year end) 1 10.0 9.1 8.3 7.8 7.4 0.0 0.0 0.0 0.2 0.4 2016 2017 2018 (e) 2019 (e) 2020 (e) 2016 2017 2018 2019 (e) 2020 (e) (1) Source: Santander Research Department (Eurozone indicators) (2) Source: ACEA. Forecast from MSI and market consensus (for SCF countries, including SC UK) 5

Strategy and business 02

Our Franchise SCF is the consumer finance leader in Europe STRATEGIC PRIORITIES KEY DATA H1 18 YoY Var. 5 Support the transformation of manufacturers and dealers Gross loans 1 94,299 Deposits 1 36,726 +6% +4% Develop innovative products and digitalise the customer cycle processes Implement open e-commerce platforms in the businesses and sign new agreements with distributors Develop channels, business intelligence and digital value-added propositions Underlying Attributable profit 1 669 +7% RoTE 17.03% -5 bps Efficiency ratio 44.8% +30 bps Market share 2 Top 3 Countries 3 15 Active Customers 4 19.4-1% (1) EUR mn (2) Top 3 market share in main markets: New production of auto loans as of H1 17 (last available) (3) SCF countries including SC UK (4) Million (5) Constant euros 7

Commercial strategy and business transformation Solid business model: geographic diversification with leading positions, advanced captive car finance and strong foothold in consumer, a common risk system that enables SCF to maintain high credit quality and a sound funding structure Present in 15 European countries 130,000 point of sale partners More than 100 agreements with car and bike manufacturers in 15 countries Awards and recognitions 19.4 million active customers e-commerce open platform Digital interaction Helping partners to start, run and grow their businesses Optimising efficiency on Direct business Top Service Austria 2018 by emotion banking Germany s Best Automotive Bank by markt intern (2017) Mobile payments Analytics & digital marketing Meeting customer & market payment demands while leveraging dominant position in stores Integrating and monitoring all touch-points to track, interpret data and react in real time First position Financial Institutions Polish Market Poland (2017) TOP EMPLOYER EUROPE 2018 (Austria, Belgium, Germany, Italy, the Netherlands, Poland) 8

Volume performance Increased new lending across most geographies Total loans (Constant EUR bn 1 ) Total deposits (Constant EUR bn 1 ) +6.1% +3.6% 88.9 88.8 92.7 92.2 94.3 35.5 35.7 35.5 36.9 36.7 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Geographical diversification (% Total loans) Wholesale Market Funding 3 (EUR bn) Spain, 15% Germany, 36% Unsecured Secured -2.5% 2 Others, 32% 8.4 7.8 8.3 8.0 8.4 23.1 21.5 22.5 22.9 22.3 Nordics, 16% Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 (1) End period exchange rates as at H1 18 (2) Austria, Belgium, France, Italy, The Netherlands, Poland, Portugal and Switzerland (3) Unsecured: short and medium term unsecured issuances and subordinated debt. Secured: ABS bonds placed in the market, Repos, Covered bonds and others 9

Results 03

Net interest income NII increased YoY and QoQ due to volume growth and lower cost of funding Net interest income (Constant EUR mn 1 ) Yield on loans (%) 4 873 894 906 915 928 4.74 4.66 4.61 4.60 4.55 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 NIM 2 (%) 3.59% 3.65% 3.63% 3.57% 3.61% Official interest rate 3 (%) 0.00% 0.00% 0.00% 0.00% 0.00% (1) Average exchange rates as at H1 18 (2) Group criteria (3) Quarter average, ECB (4) Restated figures with new criteria mainly due to the inclusion of financial fee income 11

Gross income Lower fee income QoQ due to lower insurance fee income in Germany. SRF contribution is partially offset by an one-off gain from other insurance activities Gross income (Constant EUR mn 1 ) H1 18 H1 17 YoY(%) QoQ(%) 1,094 1,131 1,132 1,140 1,127 Net interest income 1,843 1,753 5.1 1.4 Net fees 403 450-10.5-12.1 Subtotal 2,246 2,203 1.9-1.1 Other 2 21-1 - -3.9 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Gross income 2,266 2,203 2.9-1.2 (1) Average exchange rates as at H1 18 (2) Other includes gains (losses) on financial transactions and other operating income 12

Operating expenses Slight decrease QoQ in operating expenses. YoY increased due to business growth Operating expenses (Constant EUR mn 1 ) H1 18 H1 17 YoY(%) QoQ(%) 483 483 506 509 507 General expenses 930 893 4.1-1.4 - Personnel 440 420 4.8-0.6 - Other 490 473 3.5-2.0 Amortisations 86 88-1.9 11.8 Total 1,016 981 3.6-0.3 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Efficiency ratio (%) 44.8% 44.5% (with amortisations) (1) Average exchange rates as at H1 18 13

Net operating income after loan-loss provisions (LLPs) Higher provisions YoY due to positive impacts from bad debt sales and other releases in 2017. NPL ratio improved 17 bps YoY LLPs and cost of credit (Constant EUR mn 1, %) Cost of credit 0.37 0.34 0.30 0.36 0.37 H1 18 H1 17 YoY(%) QoQ(%) Net operating income 1,250 1,222 2.4-1.8 Net LLPs 58 89 58 120 69 Loan-loss provisions -189-117 61.1-42.7 Net operat. income after provisions 1,061 1,104-3.9 7.8 NPL ratio 2.44% 2.61% Coverage ratio 107.7% 106.5% Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 (1) Average exchange rates as at H1 18 14

Attributable profit Attributable profit up 7% YoY, backed by higher revenue and lower provisions in connection with legal matters and claims and other releases Underlying attributable profit (Constant EUR mn 1 ) 317 308 311 323 346 H1 18 H1 17 YoY(%) QoQ(%) PBT 1,098 1,032 6.3 5.3 Tax on profit -298-287 3.8 3.3 Consolidated profit 800 745 7.3 6.1 Attributable profit 669 627 6.6 7.2 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Effective tax rate 27.1% 27.8% Attributable profit (Constant EUR mn 1 ) 317 223 311 323 346 (1) Average exchange rates as at H1 18 15

Concluding remarks SCF continues to deliver recurrent profits through the cycle European leadership with high geographic diversification. Strategy Critical mass and top positions in its geographies. Advanced captive car finance model and a strong foothold in consumer lending. Healthy risk performance and sound funding structure. 9% YoY increase in new loans. Auto loans (+14%) and credit cards (+12%) 1. Activity SCF has a diversified and stable funding mix, having banking licenses in most of the countries where it operates. Focused on capital optimisation while maintaining strong leadership, in an environment characterised by an excess of liquidity in the markets and low GDP growth. Results Positive trend in NII, driven by an increase in new lending activity and an improvement in cost of funding. Lower fee income QoQ due to insurance fee income in Germany. Expenses under control. Slight increase YoY due to business growth. LLPs increased YoY, due to positive impacts from bad debt sales and other releases in H1 17. Cost of credit at historically low levels. (1) Average exchange rates as at H1 in new loans 16

Appendix 04

Appendix Balance sheet Constant EUR million 1 Change 30-Jun-18 30-Jun-17 Amount % Customer loans 91,861 86,395 5,465 6.3 Cash, central banks and credit institutions 5,197 4,602 594 12.9 Debt securities 3,222 3,524 (302) (8.6) o/w: available for sale 1,940 3,476 (1,536) (44.2) Other financial assets 21 31 (9) (30.7) Other assets 3,578 3,499 79 2.2 Total assets 103,879 98,052 5,827 5.9 Customer deposits 36,774 35,500 1,273 3.6 Central banks and credit institutions 25,189 20,233 4,956 24.5 Other financial liabilities 995 986 9 0.9 Other liabilities 3,687 3,469 218 6.3 Total liabilities 93,980 88,920 5,060 5.7 Total equity 9,899 9,132 767 8.4 Other managed and marketed customer funds 8 7 0 5.0 Mutual funds 1 2 (0) (4.2) Pension funds 6 6 0 7.3 Managed portfolios (1) End period exchange rates as at H1 18 18

Appendix Income statement Change Constant EUR million 1 H1'18 H1'17 Amount % Net interest income 1,843 1,753 90 5.1 Net fees 403 450 (47) (10.5) Gains (losses) on financial transactions 20 1 19 Other operating income 1 (1) 2 Gross income 2,266 2,203 64 2.9 Operating expenses (1,016) (981) (35) 3.6 General administrative expenses (930) (893) (37) 4.1 Personnel (440) (420) (20) 4.8 Other general administrative expenses (490) (473) (16) 3.5 Depreciation and amortisation (86) (88) 2 (1.9) Net operating income 1,250 1,222 29 2.4 Net loan-loss provisions (189) (117) (72) 61.1 Other income 36 (72) 108 Underlying profit before taxes 1,098 1,032 65 6.3 Tax on profit (298) (287) (11) 3.8 Underlying profit from continuing operations 800 745 55 7.3 Net profit from discontinued operations Underlying consolidated profit 800 745 55 7.3 Minority interests 131 118 13 11.0 Underlying attributable profit to the Group 669 627 42 6.6 Net capital gains and provisions Attributable profit to the Group 669 627 42 6.6 (1) Average exchange rates as at H1 18 19

Appendix Income statement Constant EUR million 1 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Net interest income 880 873 894 906 915 928 Net fees 231 219 223 204 214 189 Gains (losses) on financial transactions (2) 2 (1) 3 4 16 Other operating income (1) (0) 15 19 6 (5) Gross income 1,108 1,094 1,131 1,132 1,140 1,127 Operating expenses (498) (483) (483) (506) (509) (507) General administrative expenses (455) (439) (438) (460) (468) (462) Personnel (208) (211) (204) (220) (221) (219) Other general administrative expenses (246) (227) (233) (240) (247) (242) Depreciation and amortisation (44) (45) (45) (46) (41) (46) Net operating income 610 611 648 626 631 619 Net loan-loss provisions (60) (58) (89) (58) (120) (69) Other income (37) (35) (30) (56) 24 13 Underlying profit before taxes 513 519 530 512 535 563 Tax on profit (147) (140) (160) (138) (146) (151) Underlying profit from continuing operations 366 379 369 373 388 412 Net profit from discontinued operations Underlying consolidated profit 366 379 369 373 388 412 Minority interests 56 62 61 62 66 66 Underlying attributable profit to the Group 310 317 308 311 323 346 Net capital gains and provisions (85) Attributable profit to the Group 310 317 223 311 323 346 (1) Average exchange rates as at H1 18 20

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