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Activity and Results 2Q14 Banco Santander
This document provides important information for investors about Santander's offer to acquire minority interests in Santander Brasil. It cautions that materials related to the exchange tender offer contain forward-looking statements and risk factors. It directs investors to read SEC filings for the proposed transaction which contain additional important details. The information in this presentation must be read together with other public disclosures and no profit forecast should be construed from it.
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Activity and Results 2Q14 Banco Santander
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- 2. 22 Important information 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.
- 3. 33 Important information forinvestors about Santander’s offer to acquire the minority interests in Santander Brasil Santander has announced a voluntary public tender offer for the exchange of share deposit certificates (“Units”), common shares, preferred shares or American Depositary Shares (“ADSs”) issued by Banco Santander (Brasil) S.A. (“Santander Brasil”) for Brazilian Depositary Shares (“BDSs”) or ADSs representing common shares of Santander (“Exchange Tender Offer”). Potential investors should carefully read the Exchange Tender Offer materials, including the Edital and the Reference Form (Formulário de Referência) to be published by Santander in Brazil, especially the risk factors described in the “Risk Factors” sections of such materials, before deciding whether or not to tender their Santander Brasil Units, shares or ADSs into the Exchange Tender Offer. In connection with the proposed transaction, Santander has filed with the U.S. Securities and Exchange Commission (the “SEC”) a preliminary Registration Statement on Form F-4 that contains a preliminary offer to exchange/prospectus. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, OFFER TO EXCHANGE/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE AS THEY CONTAIN IMPORTANT INFORMATION. All such documents filed with the SEC will be available free of charge at the SEC’s website at www.sec.gov
- 4. 44 Agenda ■ Group performance1H'14 — Highlights — Results ■ Business areas performance 1H'14 ■ Conclusions ■ Appendix
- 5. 55 1H'14 Highlights INCOME STATEMENT Sharpincrease in ATTRIBUTABLE PROFIT 2Q’14: EUR 1,453 mill. (+12% / 1Q’14) 1H’14: EUR 2,756 mill. (+22% / 1H’13) Higher gross income and lower costs and provisions / 1Q’14 NII + fee income (+5%) costs (+1%) and provisions (-2%) Solid CAPITAL and LIQUIDITY ratios VOLUMES consolidate trend with a new increase over 1Q’14 CET1: 10.9% Total capital ratio: 12.1% LTD: 114% BALANCE SHEET CREDIT QUALITY: NPLs stabilising with lower cost of credit NPL ratio 5.45% (5.52% in Mar’14) Loans: +2% Deposits: 0% Mutual funds: +7%
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- 7. 77 Strong profit recoveryover previous quarters continues 1Q'13 2Q 3Q 4Q 1Q'14 2Q 1,205 1,050 1,055 1,060 1,303 1,453 EUR million Quarterly attributable profit +12%* 1H'13 1H'14 2,255 2,756 Half-year attributable profit +22%* (*) Excluding fx impact: +40%(*) Excluding fx impact: +9% vs. 1Q’14
- 8. 88 Further GROSS INCOMEgrowth in the second quarter spurred by net interest income and fee income Gross income - Group Net interest income and fee income - Group Constant EUR million EUR million Constant EUR million +3% / 1Q’14 +1% / 1Q’14 1Q'13 2Q'13 3Q 4Q 1Q'14 2Q 10,722 10,847 10,333 10,029 10,124 10,488 6,547 6,728 6,742 6,826 7,063 7,299 1Q'13 2Q 3Q 4Q 1Q'14 2Q Fee income Net interest income 9,810 10,018 10,032 9,872 10,214 10,397 2,284 2,303 2,233 2,299 2,350 2,384
- 9. 99 EUR million ConstantEUR million (1) Average year-on-year inflation for the first half (Source: Thomson Datastream) % in Constant EUR million Costs Average Costs (nominal) inflation1 (real terms) Spain -6.7 0.1 -6.8 Portugal -1.1 -0.2 -0.9 Poland -1.1 0.4 -1.5 Brazil 1.3 6.1 -4.8 SCF (excl. perimeter) 0.8 0.6 0.2 UK 1.6 1.7 -0.1 Mexico 11.9 3.9 8.0 Chile 4.0 3.9 0.1 USA 9.2 1.7 7.5 1Q'13 2Q 3Q 4Q 1Q'14 2Q 5,068 5,088 4,943 5,060 4,847 4,906 4,722 4,756 4,814 4,977 4,883 4,870 The Group's OPERATING EXPENSES reflected integration synergies and the first results of productivity and efficiency plans Group operating expenses 1H'14 / 1H'13 change by principal unit
- 10. 1010 Sustained reduction ofCOST OF CREDIT due to generalised reduction in provisions 2,850 3,135 2,952 2,747 2,722 2,611 2.45 2.14 1.89 1.69 1.65 1.56 1Q'13 2Q 3Q 4Q 1Q'14 2Q1Q'13 2Q 3Q 4Q 1Q'14 2Q 3,142 3,399 3,025 2,774 2,695 2,638 EUR million Constant EUR million Cost of credit (%)Loan-loss provisions Note: Cost of credit = 12 month loan-loss provisions / average lending, calculated in current euros
- 11. 1111 (*) Variations excludingfx impact Grupo Santander Results In short, higher profit in the quarter due to higher commercial revenues, costs control and lower cost of credit EUR million 2Q’14 Var. / 1Q’14 1H’14 Var. / 1H’13 % %* % %* NII + fee income 9,773 4.8 2.9 19,095 -2.2 6.9 Gross income 10,488 3.6 1.8 20,611 -4.4 4.0 Operating expenses -4,906 1.2 -0.3 -9,753 -4.0 2.9 Net operating income 5,582 5.8 3.7 10,858 -4.9 4.9 Loan-loss provisions -2,638 -2.1 -4.1 -5,333 -18.5 -10.9 PBT 2,435 13.3 11.1 4,584 16.0 31.8 Attributable profit 1,453 11.6 9.5 2,756 22.2 40.1 Note 2: 2Q’14 profit does not include the net capital gains expected from the announced transactions of Custody (EUR 410 mill.) and Insurance (EUR 250 mill.). Both transactions are expected to be closed in 2H’14. Note 1: Net capital gains of Altamira (EUR 385 mill.), SCUSA (EUR 730 mill.) and changes to the UK benefit pension entitlements (EUR 220 mill.) had no impact on profit. A fund was established for restructuring costs (EUR 744 mill.), and intangible assets impairment (EUR 512 mill.) and other provisions (EUR 79 mill.) made.
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- 13. 1313 Gross loans The volumesrecovery trend started in Dec’13 continued in 2Q’14 Deposits + Mutual funds Spain Portugal Poland SCF UK USA Brazil Mexico Chile Total Group +2% -0.3% +3% +1% +1% +1% +0.4% +7% +1% +1% Group: +2.4% / Dec’13 Group: +2.4% / Dec’13 % Var. Jun’14 / Mar’14 in constant euros1 (1) Excluding repos Spain Portugal Poland UK USA Brazil Mexico Chile Total Group 0% +1% -2% +0.4% +0% +3% +2% -1% +0.5% % Var. Jun’14 / Mar’14 in constant euros1
- 14. 1414 Grupo Santander creditquality NPL ratio stabilising Sharp drop of NPL entries in recent quarters Higher coverage ratio in 2014 70 67 65 66 67 J'13 S'13 D'13 M'14 J'14 5.15 5.40 5.61 5.52 5.45 J'13 S'13 D'13 M'14 J'14 NPL ratio (%) Coverage ratio (%)
- 15. 1515 2.96 3.04 3.092.88 2.93 J'13 S'13 D'13 M'14 J'14 2.01 1.98 1.98 1.88 1.91 J'13 S'13 D'13 M'14 J'14 6.49 6.12 5.64 5.74 5.78 J'13 S'13 D'13 M'14 J'14 5.75 6.40 7.49 7.61 7.59 J'13 S'13 D'13 M'14 J'14 Spain 23% Portugal 3% Poland 2% Germany 4% Run-off real estate 1% Other Europe 5% UK 34% USA 9% Brazil 10% Mexico 3% Chile 4% Other LatAm 2% NPL ratio by unit (%) Net loans to customers UK Brazil Spain USA Managing different environments
- 16. 1616 High solvency ratiosand low leverage CET1 Tier1 LCR Mar'14 Jun'14 10.77% 10.92% 10.77% 10.92% 12.05% 12.07% 1 (1) Considering Spanish regulation on intangibles homogeneous with European one Capital ratios Capital ratio Leverage ratio June 14: 4.5% (stable in the quarter) Above 100% in the Group and principal units (vs. 60% required by Jan.1, 2015) Organic capital generation AT1 issuance Hybrid debt amortisation 1
- 17. 1717 Agenda ■ Group performance1H'14 — Highlights — Results ■ Business areas performance 1H'14 ■ Conclusions ■ Appendix
- 18. 1818 Percentage over operatingareas attributable profit, excluding Spain's run-off real estate Business areas High diversification by country in profit generation Poland, 6% Brazil, 19% Mexico, 8% Chile, 7% Other LatAm, 5%USA, 9% UK, 20% Other Europe, 6% Germany, 5% Spain, 13% Portugal, 2% Attributable profit by country in 1H'14
- 19. 1919 Activity Spain Lending rosefor the second straight quarter. In deposits, the focus was kept on cutting costs Higher commercial revenues in 2Q due to net interest income (+4%) and fee income (+3%) Costs reflected integration process (-7% /1H’13) Provisions continue to normalise Sharp profit recovery trend was maintained Var. Jun’14 / Jun’13 Volumes1 Cost of new time deposits EUR million P&L 1.54% 1.41% 1.36% 0.91% 0.75% 2Q'13 3Q 4Q 1Q'14 2Q (1) Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds Loans Funds -4% +0% +2% / 1Q’14 0% / 1Q’14 2Q’14 %1Q’14 1H’14 %1H’13 NII + Fee income 1,663 3.8 3,264 3.4 Gross income 1,782 -0.5 3,574 -0.1 Operating expenses -873 -2.3 -1,767 -6.7 Net op. income 909 1.2 1,807 7.4 LLPs -488 -3.8 -995 -17.4 Attributable profit 261 3.8 513 78.8
- 20. 2020 EUR billion Gross loans Spain Deposits EURbillion (*) Excluding commercial bills Public sector Companies Other loans to individuals Household mortgages Demand deposits Jun'14 94 82 1 177 LTD Spain: 87% Lending (excl. repos): +EUR 3,245 mill. / Dec’13 Rise in new loans (1H'14 / 1H'13): +62% mortgages; +30% companies* Santander Advance (SMEs): high capturing and greater new lending* (+21% /1Q’14) Focusing on profitability improvement - Increase in transactional deposits (demand: +2,800 million in 2Q’14) Further market share gain in mutual funds (+2 p.p. in 12 months ) Jun'13 Dec'13 Mar'14 Jun'14 88 83 83 85 12 13 13 12 51 50 50 50 18 13 14 15 169 159 160 162 (1) Repos (1) Repos7 7 4 3 5 Loans (excl. repos1) Time deposits Retail commercial paper Deposits (excl. repos1)
- 21. 2121 5.75 6.40 7.49 7.61 7.59 Jun'13Sep'13 Dec'13 Mar'14 Jun'14 43 45 44 45 45 Spain. NPL ratio and entries (1) Gross NPL entries by date (before recoveries), annualised. Provisional 100 123 142 170 179 179 148 Base 100: 2008 100 102 74 83 78 71 53 100 97 53 44 42 35 27 2008 2009 2010 2011 2012 2013 1H'14 NPL entries1 > 90 daysNPL and coverage ratios (%) Coverage ratio Mortgages to individuals Individuals Cards + Consumer loans Companies w/o real estate purpose In 2014, stable NPL ratio due to lower net entries of recoveries (-90% /1H’13) Coverage ratio remained unchanged NPL ratio
- 22. 2222 2.27% 1.84% 1.70% 1.72% 1.69% 2Q'133Q 4Q 1Q'14 2Q Activity Portugal Market share gain in loans (+25 b.p. in the last 12 months) backed by individuals and companies Profit normalisation continued, with year-on-year increase of 63% Higher gross income, backed by lower cost of funds and higher trading gains Cost control maintained Sustained trend in cost of credit reduction Var. Jun’14 / Jun’13 Volumes1 Cost of new term deposits (1) Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds Loans Funds -4% -3% -0.3% / 1Q’14 +1% / 1Q’14 EUR million P&L 2Q’14 %1Q’14 1H’14 %1H’13 NII + Fee income 204 1.4 406 -4.0 Gross income 237 4.0 465 0.2 Operating expenses -121 -0.7 -243 -1.1 Net op. income 116 9.5 222 1.7 LLPs -40 18.7 -75 -40.8 Attributable profit 39 9.6 74 62.6
- 23. 2323 Activity Poland Var. Jun’14 /Jun’13 Volumes1 Stock deposit cost 2.51% 1.81% 1.69% 1.69% 1.56% 2Q'13 3Q 4Q 1Q'14 2Q (1) Local currency. Loans excluding repos. Funds: deposits excluding repos + mutual funds Integration completed with enhanced productivity and commercial activity Higher gross income (lower cost of funds and selective growth in volumes) Costs reflected integration Lower loan-loss provisions and cost of credit Double-digit growth in profit before tax over 1H’13 Loans Funds +2% +5% +3% / 1Q’14 -2% / 1Q’14 P&L EUR million (*) Changes excluding fx impact 2Q’14 %1Q’14* 1H’14 %1H’13* NII + Fee income 328 3.1 645 13.5 Gross income 353 5.1 687 5.5 Operating expenses -148 0.4 -294 -1.1 Net op. income 205 8.9 393 11.0 LLPs -42 -2.9 -85 -9.1 Attributable profit 88 3.1 173 7.0
- 24. 2424 Activity Santander Consumer Finance– Continental Europe Market share gain in a recovering market High recurring P&L with profit growing and improved profitability PBT growth in most countries. Of note: Nordic countries, Poland, Spain and Portugal. Promoting business through strategic alliances: GE capital acquisition (Sweden, Denmark and Norway) and signing of agreement with Banque PSA Finance, to materialise in 2015. 2Q'13 3Q 4Q 1Q'14 2Q 2.6% 2.6% 2.7% 2.6% 2.8% NII – Provisions / ATAsVolumes Note: Not including Santander Consumer UK profit, as it is recorded in Santander UK results. If included, 2Q14 attributable profit: EUR 265 mill. (+5% q-o-q and +20% y-o-y) 3.41% 3.48% 3.31% 3.33% 3.50% 0.77% 0.93% 0.61% 0.74% 0.70% Gross loans New loans +4% +12% EUR million P&L 2Q’14 %1Q’14 1H’14 %1H’13 NII + Fee income 822 2,8 1.622 4,1 Gross income 827 3,4 1.626 4,9 Operating expenses -357 -2,4 -722 4,3 Net op. income 470 8,3 904 5,3 LLPs -123 -5,2 -252 -16,5 Attributable profit 237 8,6 456 21,0 Var. Jun’14 / Jun’13 Prov. NII +1% / 1Q’14 +9% / 1Q’14
- 25. 2525Spain run-off realestate Total real estate exposure dropped 15% in the last twelve months (loans -25%) Coverage ratios remained above 50% 1H'14 attributable profit : -EUR 307 mill. (-EUR 337 mill. in 1H'13) Jun'13 Sep'13 Dec'13 Mar'14 Jun'14 6.5 6.2 5.7 5.2 4.9 3.6 3.7 3.6 3.6 3.5 11.6 11.4 10.8 10.3 9.8 EUR billion Loans Foreclosures 52% 55% Total balance sheet Coverage ratio Net foreclosures Net loans Equity stakes Buildings: 43% Land: 62%
- 26. 2626United Kingdom Loans Funds -1% -3% Var.Jun’14 / Jun’13 Volumes1 Banking NIM2 1.46% 1.59% 1.71% 1.79% 1.81% 2Q'13 3Q 4Q 1Q'14 2Q Activity +1% / 1Q’14 +0.4% / 1Q’14 £ million P&L 2Q’14 %1Q’14 1H’14 %1H’13 NII + Fee income 1,045 2.1 2,068 14.8 Gross income 1,105 0.4 2,205 9.1 Operating expenses -571 -0.5 -1,145 1.6 Net op. income 533 1.4 1,059 18.4 LLPs -71 -28.8 -170 -28.8 Attributable profit 325 4.6 636 53.6 Continuing transformation of our retail and commercial banking franchise, reflected in the results In 1H’14 customer loans grew 1% with customer funds up 2% Good revenue performance due to reduced cost of deposits and renewed loan growth Control of costs to accommodate investments in the Bank’s business transformation Provisions reflect good credit management and positive momentum across the UK economy (1) Volumes in local currency. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds (2) In local criteria
- 27. 2727United Kingdom Boosting retailcustomers … Jun'12 Jun'13 Jun'14 13.3 21.3 35.1 £ billion 1│2│3 +65% Jun'12 Jun'13 Jun'14 0.4 1.9 3.0 Million … and corporates Jun'12 Jun'13 Jun'14 9% 11% 12% Jun'12 Jun'13 Jun'14 19.0 21.0 23.1 £ billion +10% +11% +60% Current accounts1|2|3 World Customers Corporate loans / Total loansCorporate loans Launch C/A (March’12) First choice for customers switching1 their current account provider to Santander UK (1 in 4) Total deposits held by primary banking customers up 36% over 12 months Further progress with business diversification; double-digit growth in loans and deposits Building our capability; more regional centres for SMEs, and more relationship managers servicing larger corporates (1) Since the introduction in September 2013 of the new system to help customers with their current account switching.
- 28. 2828 Activity USA Var. Jun’14 /Jun’13 Gross loans New loans +21% +58% Santander Bank1 SCUSA Var. Jun’14 / Jun’13 (1) Local currency. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. +3% / 1Q’14 Higher profit in the second quarter in Santander Bank, SCUSA and Puerto Rico Gross income backed by volumes. Santander Bank’s rose in 1Q and 2Q, changing the trend Costs impacted by regulation costs (qualitative improvement of Capital Plan) Lower provisions in the quarter due to SCUSA, with coverage ratio already at 282% in June +1% / 1Q’14 +0.2% / 1Q’14 -12% / 1Q’14 US$ million P&L 2Q’14 %1Q’14 1H’14 %1H’13 NII + Fee income 1,798 4.1 3,527 15.8 Gross income 1,864 4.2 3,653 17.4 Operating expenses -649 -0.5 -1,301 9.2 Net op. income 1,215 6.9 2,352 22.5 LLPs -684 -8.6 -1,433 79.2 Attributable profit 272 25.8 488 -21.8 Loans Funds +3% +1%
- 29. 2929 Loans Funds +4% +14% Brazil Var. Jun’14/ Jun’13 Volumes1 Activity 2Q'13 3Q 4Q 1Q'14 2Q 3.5% 3.5% 3.7% 3.8% 3.7% NII – Provisions / ATAs 7.10% 6.56% 6.59% 6.48% 6.27% 3.59% 3.11% 2.88% 2.67% 2.55% Lending growth impacted by macroeconomic environment. Funds performed better Gross income reflected lending performance and change of mix, and lower trading gains Costs well below inflation (efficiency plan) Further reduction in provisions and cost of credit Improved profit compared to previous quarters +0.4% / 1Q’14 +3% / 1Q’14 (1) Local currency. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds EUR million P&L 2Q’14 %1Q’14* 1H’14 %1H’13* NII + Fee income 2,979 -0.5 5,807 -2.7 Gross income 2,986 -1.1 5,838 -6.0 Operating expenses -1,196 -0.3 -2,328 1.3 Net op. income 1,791 -1.7 3,509 -10.2 LLPs -933 -2.7 -1,837 -23.7 Attributable profit 395 2.6 758 -2.5 (*) Changes excluding fx impact Prov. NII
- 30. 3030 90 91 9295 95 95 6.90 6.49 6.12 5.64 5.74 5.78 M'13 J'13 S'13 D'13 M'14 J'141Q'13 2Q 3Q 4Q 1Q'14 2Q 2,346 2,322 2,203 2,253 2,264 2,230 11.1 10.5 9.9 9.8 9.9 9.8 Brazil Net interest income still affected by reduced lending growth and change of mix 1 (1) Rest = Consumer, payrolls, auto, cards, cheque and personal loans Net Interest Income Lending portfolio Var. Jun’14 / Mar’14 1Q'13 2Q 3Q 4Q 1Q'14 2Q 1,232 1,175 1,044 984 931 906 7.5% 7.1% 6.7% 6.3% 5.8% 5.4% Credit quality Constant EUR million Reduction in provisions and cost of credit continued, consistent with higher coverage LLPs and cost of credit Constant EUR million Coverage ratio NPL ratio NII and loan spreads NPL and coverage ratios (%) Net interest income Loan spreads Mortgages Other individuals SMEs / Companies Large companies Total +7% -2% -1% +2% +0.4% Net loan-loss provisions Cost of credit
- 31. 3131Mexico Expansion planreflected in market share gain of 1.1 p.p. y-o-y in loans and demand deposits Higher gross income due to volumes. Impact from lower benchmark rate and change of mix Costs reflected expansion plan Provisions grew at a slower pace year-on-year. Lower cost of credit Attributable profit rose in the quarter. Higher tax rate in year-on-year terms Loans Funds +19% +9% Var. Jun’14 / Jun’13 Volumes1 Activity +7% / 1Q’14 +2% / 1Q’14 2Q'13 3Q 4Q 1Q'14 2Q 2.5% 2.3% 2.6% 2.7% 2.5% NII – Provisions / ATAs 3.85% 4.37% 4.42% 4.10% 3.98% 1.31% 2.09% 1.81% 1.44% 1.43% (1) Local currency. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds P&L 2Q’14 %1Q’14* 1H’14 %1H’13* NII + Fee income 720 1.3 1,419 6.4 Gross income 775 6.9 1,488 3.8 Operating expenses -312 0.1 -619 11.9 Net op. income 463 12.1 870 -1.3 LLPs -191 5.0 -369 23.7 BAI 271 17.6 497 -17.9 Attributable profit 169 20.3 307 -24.0 EUR million (*) Changes excluding fx impact Prov. NII
- 32. 3232 P&L Chile Growth inloans (SMEs, companies and affluent clients) and better funding mix (demand: +11%) Higher gross income due to inflation, volumes and cost of funds. Impact from regulation on fee income Costs in 2Q reflected the impact of salary agreement Cost of credit continued to improve High profit both in the quarter and the first half, partly due to inflation Loans Funds +9% +8% Var. Jun’14 / Jun’13 Volumes1 Activity +1% / 1Q’14 -1% / 1Q’14 2Q'13 3Q 4Q 1Q'14 2Q 2.5% 2.9% 2.9% 3.0% 3.5% NII – Provisions / ATAs 3.86% 4.39% 4.38% 4.26% 4.69% 1.40% 1.52% 1.44% 1.21% 1.,24% (1) Local currency. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds 2Q’14 %1Q’14* 1H’14 %1H’13* NII + Fee income 526 8.1 1,015 20.9 Gross income 551 4.0 1,084 17.8 Operating expenses -210 5.2 -411 4.0 Net op. income 341 3.3 672 28.1 LLPs -118 2.2 -234 -6.6 Attributable profit 132 8.2 255 53.3 EUR million (*) Changes excluding fx impact Prov. NII
- 33. 3333Other Latin Americancountries Focus on linkage, transactional business and target segments Volumes growing at double-digit rates in all units P&L underpinned by gross income Argentina Constant EUR million Attributable profit Uruguay Peru 1H'13 2H'13 1H'14 104 120 135 1H'13 2H'13 1H'14 23 24 25 1H'13 2H'13 1H'14 8 10 10
- 34. 3434Corporate Activities Lowerlosses than in 1H’13, when a charge for the integration of the banks in Spain was recorded Similar gross income: higher net interest income due to reduced cost of issues offset by lower trading gains P&L 1H’14 1H’13 Gross income -461 -460 Operating expenses -389 -353 Provisions, tax and minority interests 1 -249 Attributable profit -849 -1,062 EUR million
- 35. 3535 Agenda ■ Group performance1H'14 — Highlights — Results ■ Business areas performance 1H'14 ■ Conclusions ■ Appendix
- 36. 3636 Better revenues dynamic.Main drivers: − Loan growth with mature markets recovering − Lower cost of funds Operating expenses performing well Provisions on a reduction trend, towards normalisation The Group's profit rose sharply with better-quality results 2012 / 2011 2013 / 2012 1H'14/1H'13 -18.2% -9.5% +26.6% OPERATING PROFIT - GROUP (Net op. income after provisions) Current euros -18.1% -16.2% +13.4% Plans to improve productivity, efficiency and linkage Business portfolio and ongoing transactions offer future growth potential Second quarter summary Year-on-year change in constant euros
- 37. 3737 Agenda ■ Group performance1H'14 — Highlights — Results ■ Business areas performance 1H'14 ■ Conclusions ■ Appendix
- 38. 3838 Group balance sheet Appendix Liquidityand funding Secondary segment results NPL, coverage ratios and cost of credit Spreads Quarterly income statements Business transformation and portfolio management
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- 40. 4040Highlights of theGroup balance sheet Lending: 60% of balance sheet Derivatives (with counterparty on the liabilities side): 6% of balance sheet Cash, central banks and credit institutions: 14% Other (goodwill, fixed assets, accruals): 9% Available for sale portfolio (AFS): 6% Trading portfolio: 5% 1 3 2 4 5 6 (*) Other assets: Goodwill EUR 27 bn., tangible and intangible assets EUR 20 bn., other capital instruments at fair value EUR 1 bn., accruals and other accounts EUR 55 bn. Retail balance sheet, appropriate for a low risk business model, liquid and well capitalised Assets Liabilities 707 102 103 211 64 618 76 41 71 88 167 128 1,188 1,188 Miles de millones de euros Other* 1 6 5 4 3 2 Balance sheet at June 2014 Net loans to customers Derivatives Cash and credit institutions AFS portfolio Trading portfolio Customer deposits Issues and subordinated liabilities Credit institutions Other Derivatives Shareholders’ equity & fixed liabilities
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- 42. 4242 Liquidity and funding Structuralliquidity1 surplus: EUR 151 bill. (16% net liabilities) Commercial Gap: EUR 89.1 bill. Well-funded balance sheet with high structural liquidity surplus June 2014. EUR billion Santander Group liquidity balance sheet Net loans to customers Deposits M/L term funding Financial assets Equity (86) and other (27) Securitisations Fixed assets & other Note: Liquidity balance sheet for management purposes (net of trading derivatives and interbank balances). Provisional (1) Financial assets – short term wholesale funding markets Assets Liabilities 172 21 72 113 707 135 64 618
- 43. 4343 LTD ratio Deposits+ M/L term funding / (net loans / deposits) net loans Spain 87% 156% Portugal 104% 112% Santander Consumer Finance 189% 74% Poland 93% 110% UK 124% 108% Brazil 104% 126% Mexico 99% 106% Chile 144% 92% Argentina 84% 121% USA* 150% 103% Group Total 114% 116% Adequate liquidity structure of stand-alone units Liquidity and funding June 2014 Main units and liquidity ratios (*) Including Santander Bank, Puerto Rico and SCUSA (the latter by global integration in 2014; in 2013 by the equity accounted method).
- 44. 4444 June 2014 Sterling area, 26% Euro area, 47% US$ area, 27% Total 1H'13 1H'14 78 13 20 20 28 Higher recourse to wholesale funding at the start of the year, backed by improved markets conditions Liquidity and funding Diversified issuances 1H’2014Issuance (EUR bn.) M/L term issuance Securitisations1 (1) Placed in the market and including structured finance Note: 2013 data on a like-for-like basis
- 45.
- 46. 4646Retail Banking Activity EUR million P&L EURbillion EUR million 1Q'13 2Q 3Q 4Q 1Q'14 2Q 9,279 9,414 8,847 8,803 8,707 9,041 Gross income 2Q’14 %1Q’14* 1H’14 %1H’13* NII + Fee income 8,988 1.6 17,670 6.0 Gross income 9,041 2.0 17,749 3.4 Operating expenses -4,065 -0.6 -8,087 2.1 Net op. income 4,976 4.2 9,661 4.5 LLPs -2,372 -6.7 -4,858 -7.9 Attributable profit 1,450 15.2 2,692 18.6 Net loans Deposits (*) -3% excluding FX impact(*) +1% excluding FX impact Sharp exchange rate impact in recent quarters Excluding this impact: - Recovery of net interest income + fee income, (+2% / 1Q'14; +6% / 1H'13) - Costs in line with inflation - Provisions on a downward trend Jun'13 Jun'14 599 610 +2%* Jun'13 Jun'14 521 508 -2%* (*) excluding FX impact
- 47. 4747Consumer Business Includes ContinentalEurope, United Kingdom and USA (SCUSA) Basic data Gross loans (Jun’14): EUR 85 bn. Attributable profit 1H'14: EUR 685 mill. Continental Europe UK USA (SCUSA) 61 5 19 Continental Europe UK USA (SCUSA) 456 61 168 84,761 18.4 157,000 Countries14 61 Top 31 in 12 countries 30,736 EUR million in 1H'14 Attributable profit685 EUR billion EUR million Agreements with manufacturers for "captive" financing EUR million in loans Dealers-participants EUR million in deposits Million customers (1) Market share of new car financing and/or durable goods loans
- 48. 4848 1Q13 2Q 3Q4Q 1Q14 2Q 1,253 1,057 1,169 1,092 1,168 1,174 1,371 1,196 1,306 1,214 1,298 1,335 Global Wholesale Banking (GBM) TOTAL Financing solutions & advisory TOTAL Trading y capital Customers Customers +1%* Gross income P&L EUR million EUR million Global Transaction Services Global Markets Trading and capital (*) Excluding FX impact: total revenues: +10%; customer revenues +7% Customer revenues account for 89% of the total Gross income growth in constant euros (+10% /1H'13; +2% /1Q'14) Excellent efficiency ratio: 34% Higher provisions in the quarter 2Q’14 %1Q’14* 1H’14 %1H’13* NII + Fee income 1,026 9.7 1,947 11.7 Gross income 1,335 1.5 2,633 10.1 Operating expenses -445 -0.1 -886 5.5 Net op. income 890 2.3 1,748 12.6 LLPs -200 85.9 -308 0.9 Attributable profit 428 -11.0 902 14.9 917 848 531 576 863 917 256 292 1H'13 1H'14 +3%* -8% +6% +14% +9% 2,567 2,633 (*) excluding FX impact
- 49. 4949Private Banking, AssetManagement and Insurance 458 424 479 484 1,384 1,279 2,321 2,187 1H'13 1H'14 1Q'13 2Q 3Q 4Q 1Q'14 2Q 221 237 217 206 215 208 234 246 243 195 233 251 706 678 618 643 631 648 1,161 1,161 1,078 1,044 1,080 1,107 -6%2 -7% TOTAL -8% TOTAL +1% Total revenues for the Group1 P&L (*) Including fees paid to the Group retail networks EUR million EUR million (2) At constant perimeter and FX rates: Total +2%; Insurance 0%; Asset Mgmt.+12%: Private Banking: -4% Private Banking Private Banking Insurance Asset Management Insurance Asset Management 2Q’14 %1Q’14* 1H’14 %1H’13* NII + Fee income 256 -1.2 514 1.6 Gross income 364 2.7 714 -0.3 Operating expenses -144 0.9 -285 2.9 Net op. income 220 4.0 429 -2.4 LLPs 12 -- -14 -41,2 Attributable profit 180 29.7 317 1.9 Impacted by fx rates and reduced perimeter due to sale of 50% of mgmt. companies Large gross income contribution to the Group (+10% of operating areas total) At constant perimeter and fx rates, total gross income for the Group increased (+2% / 1H’13) (*) excluding FX impact
- 50.
- 51. 5151 CUSTOMER Progress in theGroup’s business transformation Specialised global models by segment Profitable linkage Committed to customer satisfaction Customer-driven Innovation Distribution models updating Santander Select (high income) Santander Advance (SMEs) Specialised services for companies NEOCRM Extension (global tool) Improvement of critical processes: 25 customer-journeys in 2014 1st / on-boarding new customers Observatory (USA) and LABs (at least in 3 countries) Santander InnoVenture Fund (UK) Multichannel transformation Customer’s choice
- 52. 5252 Disposal of non-strategic lines Altamira Enhancestrategic businesses SCF: GE Nordics, PSA, ECI Brazil: GetNet Alliances to bolster our position Custody, Asset Mgmt. companies, Insurance CNP Investing in the future
- 53. 5353 NPL, coverage ratiosand cost of credit
- 54. 5454 NPL ratios % 31.03.13 30.06.1330.09.13 31.12.13 31.03.14 30.06.14 Continental Europe 6.62 7.83 8.48 9.13 9.12 9.04 Spain 4.12 5.75 6.40 7.49 7.61 7.59 Portugal 6.88 7.41 7.86 8.12 8.26 8.16 Poland 7.39 8.08 7.75 7.84 7.35 7.42 Santander Consumer Finance 3.98 4.04 3.96 4.01 4.14 4.07 United Kingdom 2.03 2.01 1.98 1.98 1.88 1.91 Latin America 5.40 5.23 5.29 5.00 5.06 5.03 Brazil 6.90 6.49 6.12 5.64 5.74 5.78 Mexico 1.92 2.20 3.58 3.66 3.62 3.52 Chile 5.51 5.81 6.00 5.91 5.99 5.94 USA 3.01 2.96 3.04 3.09 2.88 2.93 Operating Areas 4.70 5.13 5.39 5.61 5.54 5.46 Total Group 4.75 5.15 5.40 5.61 5.52 5.45
- 55. 5555 Coverage ratio % 31.03.13 30.06.1330.09.13 31.12.13 31.03.14 30.06.14 Continental Europe 71.0 63.3 61.1 57.3 58.0 58.3 Spain 50.3 43.1 45.0 44.0 44.6 44.9 Portugal 52.9 52.4 51.9 50.0 50.6 53.1 Poland 67.6 59.3 64.1 61.8 64.6 65.3 Santander Consumer Finance 108.7 106.9 109.2 105.3 105.1 105.2 United Kingdom 42.1 42.1 41.6 41.6 42.9 41.1 Latin America 87.4 86.1 83.6 85.4 86.1 86.3 Brazil 90.4 91.3 92.0 95.1 95.2 94.8 Mexico 157.1 142.7 99.0 97.5 98.6 96.6 Chile 53.9 49.9 49.7 51.1 50.7 51.7 USA 149.6 156.5 148.9 148.1 163.3 165.0 Operating Areas 75.0 69.6 67.2 64.6 66.0 66.4 Total Group 74.1 69.7 67.1 64.9 66.3 66.7
- 56. 5656 Cost of credit % 31.03.1330.06.13 30.09.13 31.12.13 31.03.14 30.06.14 Continental Europe 3.13 2.33 1.71 1.23 1.21 1.14 Spain 1.23 1.26 1.36 1.36 1.37 1.31 Portugal 1.18 1.10 0.93 0.73 0.63 0.55 Poland 1.22 1.18 1.09 1.01 0.98 0.92 Santander Consumer Finance 1.26 1.15 1.13 0.96 0.89 0.87 United Kingdom 0.29 0.26 0.26 0.24 0.23 0.22 Latin America 5.07 4.87 4.73 4.53 4.24 3.95 Brazil 7.46 7.07 6.72 6.34 5.82 5.38 Mexico 2.46 2.73 3.27 3.47 3.59 3.58 Chile 1.95 2.00 1.96 1.92 1.82 1.76 USA 1.89 1.95 2.17 2.48 2.94 3.15 Operating Areas 2.49 2.15 1.85 1.65 1.61 1.55 Total Group 2.45 2.14 1.89 1.69 1.65 1.56 Cost of credit = 12 month loan-loss provisions / average lending
- 57. 5757 Jun'14 53% Gross risk CoverageNet Fund Risk Non-performing 7,517 4,426 3,091 Substandard1 2,286 831 1,455 Foreclosed real estate 7,919 4,392 3,527 Total problematic assets 17,722 9,649 8,073 Performing loans2 330 0 330 Real estate exposure 18,052 9,649 8,403 Spain run-off real estate. Exposure and coverage ratios Non-performing 59% Substandard1 36% Foreclosed real estate 55% Total problematic assets 54% Performing loans2 0% Total coverage (problematic assets + performing loans) Coverage by borrowers' situation (June 2014) provisions / exposure (%)EUR Million (1) 100% up-to-date with payments (2) Performing loans: loans up-to-date with payments Total real estate exposure
- 58. 5858Spain run-off realestate. Loans and foreclosures Finished buildings 4,046 4,673 -627 Buildings under constr. 527 614 -87 Developed land 3,177 3,124 +53 Building and other land 892 1,116 -224 Non mortgage guarantee 1,491 1,828 -337 Total 10,133 11,355 -1,222 Finished buildings 2,341 42% 1,353 Buildings under constr. 475 47% 254 Developed land 2,523 61% 992 Building land 2,506 64% 900 Other land 74 62% 28 Total 7,919 55% 3,527 LOANS with real estate purpose Foreclosed REAL ESTATE (June 2014) EUR Million EUR Million Jun’14 Dec’13 Var. Gross amount Coverage Net amount
- 59.
- 60. 6060 Spreads on loansand deposits % 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Retail Banking Spain Loan spreads 2.21 2.26 2.33 2.43 2.39 2.36 Deposit spreads 0.16 0.28 0.15 0.20 0.45 0.47 TOTAL 2.37 2.54 2.48 2.63 2.84 2.83 Retail Banking Portugal Loan spreads 2.44 2.44 2.44 2.42 2.44 2.39 Deposit spreads (1.22) (1.18) (1.06) (0.99) (0.93) (0.84) TOTAL 1.22 1.26 1.38 1.43 1.51 1.55 Retail Banking Poland Loan spreads 2.41 2.45 2.43 2.53 2.51 2.47 Deposit spreads 0.73 0.72 0.73 0.98 1.12 1.22 TOTAL 3.14 3.17 3.16 3.51 3.63 3.69 Santander Consumer Finance Loan spreads 4.76 4.83 4.93 4.91 5.04 5.03 Retail Banking United Kingdom Loan spreads 2.78 2.80 2.85 2.84 2.83 2.76 Deposit spreads (1.25) (1.17) (1.00) (0.86) (0.82) (0.70) TOTAL 1.53 1.63 1.85 1.98 2.01 2.06
- 61. 6161 Spreads on loansand deposits % 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Retail Banking Brazil Loan spreads 13.09 12.51 11.93 11.82 11.76 11.60 Deposit spreads 0.72 0.75 0.84 0.95 0.90 0.92 TOTAL 13.81 13.26 12.77 12.77 12.66 12.52 Retail Banking Mexico Loan spreads 8.46 8.41 8.34 8.23 8.17 7.83 Deposit spreads 1.86 1.64 1.56 1.51 1.52 1.46 TOTAL 10.32 10.05 9.90 9.74 9.69 9.29 Retail Banking Chile Loan spreads 4.31 4.27 4.01 3.98 3.98 4.00 Deposit spreads 2.39 2.47 2.42 2.31 2.35 2.37 TOTAL 6.70 6.74 6.43 6.29 6.33 6.37 Retail Banking USA Loan spreads 2.51 2.52 2.52 2.49 2.44 2.57 Deposit spreads 0.34 0.33 0.57 0.41 0.73 0.65 TOTAL 2.85 2.85 3.09 2.90 3.17 3.22
- 62.
- 63. 6363 Santander Group EUR million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 9,689 9,833 9,245 9,275 9,323 9,773 19,522 19,095 Gross income 10,722 10,847 10,333 10,029 10,124 10,488 21,570 20,611 Operating expenses (5,068) (5,088) (4,943) (5,060) (4,847) (4,906) (10,155) (9,753) Net operating income 5,655 5,760 5,390 4,968 5,277 5,582 11,414 10,858 Net loan-loss provisions (3,142) (3,399) (3,025) (2,774) (2,695) (2,638) (6,541) (5,333) Other (372) (549) (509) (366) (433) (508) (921) (942) Profit before taxes 2,141 1,812 1,856 1,828 2,149 2,435 3,953 4,584 Consolidated profit 1,564 1,345 1,337 1,301 1,579 1,771 2,908 3,350 Attributable profit 1,205 1,050 1,055 1,060 1,303 1,453 2,255 2,756
- 64. 6464 Santander Group Constant EURmillion 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 8,831 9,031 8,976 9,125 9,413 9,683 17,862 19,095 Gross income 9,810 10,018 10,032 9,872 10,214 10,397 19,828 20,611 Operating expenses (4,722) (4,756) (4,814) (4,977) (4,883) (4,870) (9,478) (9,753) Net operating income 5,088 5,261 5,218 4,895 5,331 5,527 10,350 10,858 Net loan-loss provisions (2,850) (3,135) (2,952) (2,747) (2,722) (2,611) (5,985) (5,333) Other (359) (528) (497) (354) (438) (504) (887) (942) Profit before taxes 1,880 1,598 1,769 1,794 2,171 2,413 3,478 4,584 Consolidated profit 1,366 1,183 1,278 1,280 1,596 1,755 2,549 3,350 Attributable profit 1,048 919 1,007 1,042 1,316 1,440 1,967 2,756
- 65. 6565 Continental Europe EUR million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 2,878 2,950 2,859 2,841 2,973 3,077 5,827 6,050 Gross income 3,171 3,163 3,152 2,979 3,196 3,256 6,333 6,452 Operating expenses (1,651) (1,619) (1,607) (1,618) (1,607) (1,582) (3,270) (3,189) Net operating income 1,520 1,543 1,545 1,361 1,589 1,673 3,064 3,263 Net loan-loss provisions (901) (993) (946) (763) (791) (770) (1,894) (1,561) Other (192) (194) (188) (185) (152) (196) (387) (348) Profit before taxes 427 356 411 413 647 707 782 1,354 Consolidated profit 331 290 327 301 499 536 621 1,036 Attributable profit 303 248 283 282 463 499 551 962
- 66. 6666 Spain EUR million 1Q 132Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 1,557 1,602 1,508 1,524 1,602 1,663 3,158 3,264 Gross income 1,798 1,780 1,742 1,634 1,792 1,782 3,578 3,574 Operating expenses (953) (941) (936) (902) (894) (873) (1,895) (1,767) Net operating income 844 838 805 732 898 909 1,683 1,807 Net loan-loss provisions (516) (690) (630) (575) (507) (488) (1,205) (995) Other (36) (29) (59) (11) (33) (51) (65) (84) Profit before taxes 293 119 116 145 358 370 412 728 Consolidated profit 204 84 81 98 253 261 288 514 Attributable profit 203 84 81 98 251 261 287 513
- 67. 6767 Portugal EUR million 1Q 132Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 202 221 211 198 202 204 423 406 Gross income 231 233 228 224 228 237 465 465 Operating expenses (124) (122) (123) (126) (122) (121) (246) (243) Net operating income 107 112 105 97 106 116 219 222 Net loan-loss provisions (64) (62) (56) (11) (34) (40) (126) (75) Other (13) (17) (6) (42) (30) (29) (30) (59) Profit before taxes 31 32 44 44 42 47 63 89 Consolidated profit 21 25 32 29 33 37 46 70 Attributable profit 21 25 32 37 36 39 46 74
- 68. 6868 Poland EUR million 1Q 132Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 278 290 302 310 317 328 568 645 Gross income 315 337 342 323 334 353 651 687 Operating expenses (156) (142) (136) (159) (147) (148) (297) (294) Net operating income 159 195 206 165 188 205 354 393 Net loan-loss provisions (42) (51) (35) (39) (43) (42) (93) (85) Other (5) 6 (2) (4) (3) (16) 1 (19) Profit before taxes 112 149 169 121 142 147 261 289 Consolidated profit 90 123 135 96 115 120 213 235 Attributable profit 70 91 100 72 85 88 161 173
- 69. 6969 Poland Constant EUR million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 276 292 307 310 318 327 568 645 Gross income 313 338 348 324 335 352 652 687 Operating expenses (155) (142) (139) (159) (147) (147) (297) (294) Net operating income 158 196 209 165 188 205 354 393 Net loan-loss provisions (42) (52) (36) (39) (43) (42) (93) (85) Other (5) 6 (2) (4) (3) (16) 1 (19) Profit before taxes 112 150 172 121 142 147 261 289 Consolidated profit 90 123 138 96 116 120 213 235 Attributable profit 70 91 102 73 85 88 161 173
- 70. 7070 Santander Consumer Finance EURmillion 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 779 779 799 762 800 822 1,558 1,622 Gross income 776 775 801 759 800 827 1,551 1,626 Operating expenses (351) (341) (345) (353) (366) (357) (692) (722) Net operating income 425 434 456 405 434 470 859 904 Net loan-loss provisions (171) (131) (158) (105) (130) (123) (302) (252) Other (21) (29) (15) (5) (14) (17) (50) (31) Profit before taxes 233 274 283 295 291 330 507 621 Consolidated profit 184 210 217 213 225 245 394 470 Attributable profit 176 201 208 209 219 237 377 456
- 71. 7171 United Kingdom GBP million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 896 906 956 1,014 1,023 1,045 1,802 2,068 Gross income 973 1,048 1,022 1,100 1,100 1,105 2,022 2,205 Operating expenses (560) (567) (538) (547) (574) (571) (1,127) (1,145) Net operating income 413 481 484 553 526 533 894 1,059 Net loan-loss provisions (137) (103) (132) (121) (99) (71) (239) (170) Other (35) (87) (22) (55) (38) (51) (123) (90) Profit before taxes 241 291 330 377 388 411 532 799 Consolidated profit 191 224 261 301 311 325 414 636 Attributable profit 191 224 261 301 311 325 414 636
- 72. 7272 United States USD million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 1,488 1,558 1,631 1,658 1,728 1,798 3,046 3,527 Gross income 1,538 1,573 1,622 1,721 1,789 1,864 3,111 3,653 Operating expenses (586) (605) (637) (676) (652) (649) (1,192) (1,301) Net operating income 952 968 985 1,045 1,137 1,215 1,919 2,352 Net loan-loss provisions (337) (462) (561) (657) (749) (684) (799) (1,433) Other (14) (24) (38) (37) (3) (4) (38) (7) Profit before taxes 601 481 386 351 385 527 1,082 912 Consolidated profit 413 349 288 244 276 362 762 638 Attributable profit 333 292 233 206 216 272 624 488
- 73. 7373 Brazil EUR million 1Q 132Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 3,563 3,484 2,899 2,992 2,828 2,979 7,047 5,807 Gross income 3,781 3,552 3,115 3,070 2,851 2,986 7,333 5,838 Operating expenses (1,359) (1,356) (1,263) (1,346) (1,133) (1,196) (2,715) (2,328) Net operating income 2,422 2,196 1,852 1,724 1,719 1,791 4,618 3,509 Net loan-loss provisions (1,471) (1,372) (1,065) (985) (905) (933) (2,844) (1,837) Other (78) (133) (126) (162) (143) (166) (210) (308) Profit before taxes 873 691 661 577 671 693 1,564 1,364 Consolidated profit 652 525 469 392 469 504 1,178 974 Attributable profit 499 420 358 301 364 395 919 758
- 74. 7474 Brazil Constant EUR million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 2,984 2,982 2,817 2,942 2,912 2,896 5,966 5,807 Gross income 3,167 3,041 3,018 3,026 2,935 2,902 6,209 5,838 Operating expenses (1,138) (1,160) (1,214) (1,312) (1,166) (1,162) (2,299) (2,328) Net operating income 2,029 1,881 1,804 1,713 1,769 1,740 3,910 3,509 Net loan-loss provisions (1,232) (1,175) (1,044) (984) (931) (906) (2,408) (1,837) Other (65) (113) (119) (155) (147) (161) (178) (308) Profit before taxes 731 593 641 574 691 673 1,324 1,364 Consolidated profit 546 451 457 393 483 491 997 974 Attributable profit 418 360 350 302 374 384 778 758
- 75. 7575 Mexico EUR million 1Q 132Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 725 730 730 718 699 720 1,455 1,419 Gross income 770 795 751 705 713 775 1,565 1,488 Operating expenses (299) (304) (307) (315) (307) (312) (603) (619) Net operating income 472 490 444 390 407 463 962 870 Net loan-loss provisions (142) (184) (257) (218) (179) (191) (326) (369) Other 26 (2) (3) (4) (2) (2) 24 (3) Profit before taxes 355 305 184 168 226 271 660 497 Consolidated profit 315 263 162 193 178 214 578 392 Attributable profit 241 199 123 149 138 169 441 307
- 76. 7676 Mexico Constant EUR million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 673 660 694 708 705 714 1,333 1,419 Gross income 716 719 715 697 719 769 1,434 1,488 Operating expenses (277) (275) (292) (309) (309) (309) (553) (619) Net operating income 438 443 423 387 410 460 882 870 Net loan-loss provisions (132) (167) (242) (214) (180) (189) (299) (369) Other 24 (2) (3) (3) (2) (2) 22 (3) Profit before taxes 330 275 178 170 228 269 605 497 Consolidated profit 293 237 157 193 180 213 529 392 Attributable profit 224 180 119 148 139 168 404 307
- 77. 7777 Chile EUR million 1Q 132Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 512 502 533 521 489 526 1,013 1,015 Gross income 550 560 573 566 533 551 1,110 1,084 Operating expenses (232) (245) (231) (218) (201) (210) (477) (411) Net operating income 319 314 342 348 332 341 633 672 Net loan-loss provisions (155) (147) (153) (142) (116) (118) (302) (234) Other (1) 3 6 (4) (7) (3) 2 (9) Profit before taxes 163 170 194 203 209 220 333 429 Consolidated profit 148 140 166 169 176 192 288 367 Attributable profit 103 97 116 119 123 132 201 255
- 78. 7878 Chile Constant EUR million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income 421 419 471 481 488 527 840 1,015 Gross income 453 467 506 522 531 552 920 1,084 Operating expenses (191) (205) (205) (202) (200) (211) (395) (411) Net operating income 262 262 302 320 331 342 525 672 Net loan-loss provisions (127) (123) (136) (131) (116) (118) (250) (234) Other (1) 3 5 (3) (7) (3) 2 (9) Profit before taxes 134 142 170 186 208 221 276 429 Consolidated profit 122 117 146 155 175 192 238 367 Attributable profit 85 81 102 109 122 132 166 255
- 79. 7979 Corporate Activities EUR million 1Q13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 1H 13 1H 14 NII + Fee income (588) (526) (541) (618) (542) (495) (1,114) (1,037) Gross income (322) (138) (163) (314) (224) (237) (460) (461) Operating expenses (177) (176) (176) (167) (191) (197) (353) (389) Net operating income (499) (314) (339) (482) (416) (434) (812) (850) Net loan-loss provisions (29) (189) 14 2 1 (1) (218) 0 Other (66) (89) (124) 106 (72) (67) (155) (139) Ordinary profit before taxes (594) (591) (448) (374) (487) (502) (1,185) (989) Ordinary consolidated profit (543) (521) (432) (374) (408) (444) (1,064) (852) Ordinary attributable profit (543) (519) (430) (384) (405) (444) (1,062) (849) Attributable profit (543) (519) (430) (384) (405) (444) (1,062) (849)
- 80.