Santander Consumer Bank Nordic Group · Santander Consumer Bank AS is a Nordic bank with more than...
Transcript of Santander Consumer Bank Nordic Group · Santander Consumer Bank AS is a Nordic bank with more than...
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Santander Consumer Bank
Nordic Group
February 2019
Q4 2018 Investor Presentation
Who we areSantander Consumer Bank AS is a Nordic bank with more than
1,500 colleagues in Sweden, Norway, Denmark and Finland, with a long history in the Nordics, and with global strength by being a part
of Banco Santander.
We are one of the largest Nordic banks providing loans and credits, credit cards, deposits and insurance to private customers.
We work with the best people in an engaged, challenging and passionate organization, which provides great opportunities for
professional growth.
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Regulated in Norway, owned by Banco Santander
SCB AS is
regulated
by the
Norwegian
FSA
Santander Consumer
Finance S.A.
Fitch/Moody’s/S&PA-/A2/A-
Santander Consumer Bank AS
Fitch/Moody’sA-/A3
Santander Consumer
Bank Denmark
(Branch)
Santander Consumer
Finance Finland
(Subsidiary)
Santander Consumer
Bank Sweden
(Branch)
BancoSantander S.A.
Fitch/Moody’s/S&PA-/A2/A
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Source: SCB Group 2018 Annual Report and Management Figures
1) Adjusted for IFRS9 transitional rules
2) Headcount includes permanent and temporary employees
3) Return on Assets = PBT / ANEA
Q4 2018 | Key Figures
Gross
Outstanding
Loans
162.8NOK Billion
People2
1,535Employees
Core Capital
CET11
15.7Per cent
Customers
1.53Million
Total
Deposit
54.6NOK Billion
Return on
Assets3
2.8per cent
Profit Before
Tax
4,134NOK Million
Partners
5,051Merchants
+5,600Car Dealers
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History
Bankia Bank acquired
(credit cards)
ELCON Finance becomes
Santander Consumer
Bank AS (SCB)
ELCON Finance
A leading Norwegian
company within equipment
leasing, factoring and auto
financing
Santander Consumer
Finance S.A. acquires
ELCON Finance
Company
demerges and auto finance is
retained in Norway and
Sweden
Launch consumer
loans Norway
Skandiabanken Bilfinans
acquired in Denmark
(auto finance)
Start up auto finance in
Finland
GE Finland acquired
(auto finance,
consumer loans)
Consumer loans in
Sweden (2012) and
Denmark (2013)
Deposits launched in
Norway and Sweden (2013)
Deposits launched in
Denmark (2014)
1963
2004
2005
2006/07
2009
2012/13
2015
SCB merges with
GE Money Bank
SCB becomes
leader within car
finance and
unsecured loans in
the Nordic region
2017
Solidified position in
sales finance with
the onboarding of
Elkjøp/Elgiganten,
Power and Media
Markt
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Executive Committee
Bo Jakobsen
MD DenmarkBo joined Santander in 2007 and was key to start up the business in Denmark the same year. Previously, he held several leadership roles within the financial industry.
Michael Hvidsten
CEO
Michael started in GE (first in GE Capital, later in GE Money Bank) in 2000, where he held various key position within risk management. He joined Santander in 2005 as Nordic Chief Risk Officer, and was appointed Nordic CEO in 2012.
Anders Bruun-Olsen
Nordic Chief Financial Officer
Anders has held several senior positions within banking institutions like DNB, Eksportfinans and Handelsbanken. He joined Santander in 2011.
Knut Øvernes
MD NorwayKnut has held various business management positions in GE Money Bank and Santander since he started in 1996.
Juan Calvera
IT & Ops
Director
Juan has held various
leadership positions
within IT and Operations
since joined Santander
in 2011.
Peter Sjöberg
MD Finland Peter has 20 years’ experience from banking and financial services. He has held several leadership positions in SCB. Joined Santander in 2010.
Andres Diez
Chief Risk Officer
Andres has held different leadership positions within Risk and Credit. Joined Santander in 2007.
Martin Brage
MD SwedenMartin joined GE in 1999. With his long and extensive experience within the financial sector and Santander, he has built up years of experience within auto and unsecured.
Trond Debes
HR & Legal Director
Trond started in GE Money Bank in 2002. He has been responsible for Legal, Communications, Compliance and HR in various leadership positions.
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Corporate Social ResponsibilityWe engage in a broad spectrum of activities that contribute to UN’s Sustainable Development Goals
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Ensure healthy lives and promote well-being for all Ensure access to affordable, reliable,
sustainable and modern energy
Take action to combat climate change and its
impacts by regulating emissions and promoting
developments in renewable energy
Ensure inclusive and equitable quality education
and promote lifelong learning opportunities for all
SCB has for a long time been a Gold partner supporting Right
To Play, an organization that protects, educates and
empowers children to rise above adversity using the power of
play. Right To Play plays for change in five key areas; Quality
education, gender equality, health & well -being, child
protection and peaceful communities.
Right To Play partners with Ministries of Education and local
organizations to incorporate play-based learning into the
education system, allowing more children to rise.
Across the Nordics SCB supports people, events and
organizations that encourages, inspires and invites a broad base
of people to physical activity and camaraderie.
“Team Rynkeby” a charity cycling team that raise money for
children with critical illnesses
Engaging employees in “Kræftens Bekæmpelse”, the Danish
Cancer Society.
Supporting the Finnish “Icehearts”, an organization that uses
team sports as a tool for engaging children with social work.
We engage in collaborations to innovate new and more
environmental friendly mobility solutions, and we add the
commercial strength to bring them to the market.
In 2013 Santander pioneered the All-in-One product suite in
Finland, speeding up renewal of one of the oldest car parks in
Europe.
We developed the IT solution to enable online sales of the all
electric Nissan Leaf - helping it to be last year's single most
sold car model in Norway.
In 2018, SCB partnered with CHOOOSE, a global leader in
retiring carbon credits and a platform for climate action,
battling the core problem of climate change – emissions from
big polluters
SCB has been certified as “Miljøfyrtårn” since 2009,
meaning that we are compliant with all requirements regarding
health, environment and safety, procurement, transportation,
waste handling and energy consumption.
Auto & Leisure Unsecured InsuranceDeposits
Saving products with high interest rates provided to
private customers
Insurance products related to payment protection, auto, health and travel, offered to
private customers
Loans, credit cards and sales finance services
offered to private customers
Loans and financial services provided to private
customers and car dealers
Products
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Gross lending and distribution by productTotal Auto and Unsecured
Source: SCB Group 2018 Annual Report and Management Figures
Auto SME
11%
Non Std. Auto
7%
Consumer
Loan
18%
Credit Card
4%
Auto Private
Persons
60%
Total
Unsecured
21%
Total Auto
79%
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Partnerships a key success factor
5,051 merchants, 35 brokers,
+5,600 car dealers and 22 Brands
“I’ve seen Santander work in a way that is not typical to a bank. You always take and run with our targets”
— Stefan Andström, Sales Director, Nissan Nordic,
Helsinki
On the high score on the MRF2018 Dealer survey:
“Kia Finance have developed many newproducts, which have
positively impacted thescore”
— Peter Himmer, MD Kia Motors Sweden AB
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Financials
Q4 2018 | Santander Group key figures
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Santander Group
Total assets 1.46 (€ trillion)
Branches globally13,217
Headcount 202,713
Customers144 (million)
Profit After Tax 7,810 (€ million)
Santander Consumer Finance Subgroup
Loans 106 (€ billion)
European countries15
Headcount 15,772
Customers 20 (million)
Profit After Tax 1,421 (€ million)
Source: Banco Santander and Santander Consumer Finance Q4 2018 Institutional Presentation
Q4 2018 | SCB Group overviewPortfolio and results by region
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Source: SCB Group 2018 Annual Report (All figures in NOK)
36% Norway
20% Denmark
23% Sweden
21% Finland
% of Gross Outstanding LoansNordic
Q4 2018
Result
163.4 BnGross Outstanding
4,134 MMProfit Before Tax
Finland
Auto Loans
Unsecured Loans
Profit Before Tax
31.4 Bn
2.8 Bn
664 MM
Sweden
Auto Loans
Unsecured Loans
Profit Before Tax
22.8 Bn
14.4 Bn
1,010 MM
Denmark
Auto Loans 26.0 Bn
6.2 Bn
854 MM
Norway
Auto Loans
Unsecured Loans
Profit Before Tax
48.2 Bn
11.0 Bn
1,606 MM
Unsecured Loans
ProfitBefore Tax
Auto market share and products
Position and market share in the Nordics
Source Norway: Internal calculations based on data from Finansieringsselskapenes Forening as per YTD Q4 2018
Source Finland: Internal calculations based on data from Finnish Transportation Safety Agency (Trafi) as per YTD Q4 2018
Source Denmark: Internal calculations based on data from Finans og Leasing as per YTD Q4 2018
Source Sweden: Internal calculations based on data from Finansbolagens Förening as YTD Q4 2018
Auto Loans & Hire Purchase
Loans and financial services provided to
private customers, SMEs and car dealers
Customers
Private Customers
Business Customers
Distribution
Online direct distribution
Indirect distribution with dealers and importers
Cross sale
Auto Leasing
Customers
Private Customers
Business Customers
Distribution
Dealers direct
SME direct
Stock & Demo Financing
Customers
Inventory financing for dealers
Distribution
New cars: Importer agreements
Used Cars: Direct to dealers
Auto & Leisure
#122%
market share
#127%
market share
#139%
market share
#49%
market share
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Unsecured products and portfolio
Sales finance Credit cardsDirect loans
Unsecured
Loans, credit cards and sales finance
services offered to private customers
Distribution
Online
Stores
Cross sale
Portfolio Management
Distribution
Online
Stores
Cross sale
Distribution
Online
Agents
Cross sale
Distribution of Unsecured portfolio¹
Source: SCB 2018 Annual Report
1) Gross lending
32%11.4 Bn
18%6.3 Bn
41%14.6 Bn
9%3.0 Bn
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Steady loan growth in the Nordics
59,575(mNOK)
71,891(mNOK)
83,322(mNOK)
116,297(mNOK)
124,625(mNOK)
143,615(mNOK)
71 89183 322
118 991127 8521
147 9701
162 802
2013 2014 2015 2016 2017 2018
mNOK
mNOK
mNOK
mNOK
mNOK
mNOK
16%
43%7%
16%
10%
Source: SCB Group Annual Reports (2013 – 2018)
1) SCB Group has reclassified Consignment from the financial statement line “Consignment” to “Loans to customers” in 2018. Comparison figures are changed similarly. As of December 31 2018 the
Consignment portfolio constitute NOK 4.2 billion of the financial statement line “Loans to customers”. Please see principle 6) on page 57 in the 2018 Annual Report for further details.
Driven by organic growth, particularly in the Auto portfolio
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Solid profitability
1 393 1 321
1 942
3 2502
3 9952 4 134
2013 2014 2015 2016 2017 2018
Source: SCB Annual Reports (2013 – 2018)
1) Compound Annual Growth Rate
2) The Group reclassified issued AT1 capital of NOK 2.25 billion from liabilities to equity in 2017. Interest expenses for 2017 of NOK 169 million are consequently presented in equity instead of
profit and loss, with related tax impact presented as part of other equity. Comparison figures are changed similarly. Please see principle 6) on page 40 in the 2017 Annual Report for further details.
Year-on-year growth in margins
mNOKmNOK
mNOK
mNOK
mNOKmNOK
CAGR1
24%
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Stable financial performance
4.6 4.44.7
5.34.9
4.6
2013 2014 2015 2016 2017 2018
4244
50
3840
44
2013 2014 2015 2016 2017 2018
2.1
1.71.8
2.7
3.02.8
2013 2014 2015 2016 2017 2018
Return on Assets1
Per cent
Net Interest Income Ratio2
Per cent
Cost / Income Ratio3
Per cent
Source: SCB Annual Reports (2013 – 2018)
1) ROA = PBT / ANEA
2) NII Ratio = Net Interest Income / ANEA
3) Cost/Income Ratio = OPEX / Gross Margin (OPEX: Total Operating Costs)
Normalised KPI’s as a results of higher growth in Auto portfolio
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Group Balance Sheet summaryHealthy balance sheet driven by loan growth
Source: SCB Group 2018 Annual Report
Key changes year-on-year
Deposits with external institutions: Reduction in reverse repo
transactions towards the end of 2018
Loans to customers: Increase driven by portfolio growth, mainly
from the auto business
Other financial assets: Increased liquidity portfolio due to net
purchase of bonds during 2018
Other assets: Reduction as a result of reclassification of
consignment from the financial statement line “Consignment” to
“Loans to customers” in 2018. Comparison figures are changed
similarly.
Debt to credit institutions: Increased levels of intragroup funding
due to weaker credit markets in Q4
Deposits from customers: Increase in deposits in accordance
with funding strategy
Debt established by issuing securities: increase in senior
unsecured and commercial paper issuances throughout 2018
NOK million Q4 2018 Q4 2017 Δ 18/17 %
Deposits with external institutions 3 047 3 291 -244 -7 %
Loans to customers (net) 159 284 145 148 14 135 10 %
Other financial assets 10 453 7 132 3 321 47 %
Other assets 3 325 3 528 -204 -6 %
Total assets 176 108 159 100 17 008 11 %
Debt to credit institutions 40 253 31 020 9 233 30 %
Deposits from customers 54 645 50 617 4 028 8 %
Debt established by issuing securities 52 929 51 270 1 659 3 %
Other liabilities 3 213 3 260 -47 -1 %
Subordinated loan capital 1 731 1 753 -22 -1 %
Total equity 23 336 21 179 2 157 10 %
Total liabilities and equity 176 108 159 100 17 008 11 %
19
Group Income Statement summaryP&L showing steady growth with increasing profits
Source: SCB Group 2018 Annual Report
Key changes year-on-year
Net Interest Income: Increased due to higher volumes and
lower cost of funding
Other product and funding related income and cost:
Increase mainly due to value change and gains on FX
Salaries personnel and administrative expenses: Due to
restructuring provision of NOK 200 million in Q4 2018 and
closing of defined benefit plan in Norway of NOK 113 million in
2017
Other income and losses: Increase mainly due to recognition
of loss allowance on off-balance exposure
Total losses: Lower impairment losses due to increased bad
debt sales in 2018
NOK million FY 2018 FY 2017 Δ 18/17 %
Interest income and similar income 8 158 7 850 308 4 %
Interest expenses and similar expenses -1 239 -1 243 4 0 %
Net interest income 6 919 6 607 312 5 %
Commissions and fees 429 442 -13 -3 %
Other product and funding related income and cost 36 -60 96 -159 %
Gross margin 7 384 6 989 395 6 %
Salaries and personnel expenses -1 538 -1 125 -412 37 %
Administrative expenses -1 545 -1 587 42 -3 %
Depreciations and amortisation -162 -106 -55 52 %
Net operating income 4 139 4 171 -32 -1 %
Other incomes and costs -189 -63 -126 201 %
Total losses on loans, guarantees etc. 184 -113 297 -263 %
Profit before tax 4 134 3 995 139 3 %
Income tax -995 -941 -54 6 %
Profit after tax 3 139 3 055 84 3 %
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Credit Risk PerformanceFavourable product mix and stable customer behaviour
Source: SCB Group Risk Department
1) NPL ratio = Non-performing loans / Gross loans
2) Coverage Ratio = Loan Loss Reserves (Write Downs) / NPL
Risk Portfolio - Total (mNOK) 2015 2016 2017 2018
Current 110 186 92,4 % 118 837 92,7 % 136 821 92,2 % 150 284 92,5 %
5-30 dpd 5 127 4,3 % 5 451 4,2 % 6 806 4,6 % 7 258 4,5 %
31-60 dpd 1 066 0,9 % 1 041 0,8 % 1 329 0,9 % 1 218 0,7 %
61-90 dpd 423 0,4 % 393 0,3 % 510 0,3 % 462 0,3 %
NPL 2 444 2,0 % 2 577 2,0 % 2 912 2,0 % 3 320 2,0 %
Total 119 246 100,0 % 128 299 100,0 % 148 378 100,0 % 162 541 100,0 %
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NPL ratio1
Coverage ratio2
1.61 1.482.05 2.01 1.96 2.03
2013 2014 2015 2016 2017 2018
98.6126.9
107.7 113.696.9
109.7
2013 2014 2015 2016 2017 2018
Per cent
Per cent
Risk Portfolio - Secured (mNOK) 2015 2016 2017 2018
Current 82 783 94,3 % 91 510 94,3 % 106 859 93,9 % 119 752 93,9 %
5-30 dpd 3 356 3,8 % 3 720 3,8 % 4 787 4,2 % 5 389 4,2 %
31-60 dpd 586 0,7 % 615 0,6 % 753 0,7 % 691 0,5 %
61-90 dpd 177 0,2 % 170 0,2 % 231 0,2 % 226 0,2 %
NPL 887 1,0 % 1 052 1,1 % 1 211 1,1 % 1 435 1,1 %
Total 87 789 100,0 % 97 067 100,0 % 113 841 100,0 % 127 492 100,0 %
Risk Portfolio - Unsecured (mNOK) 2015 2016 2017 2018
Current 27 403 87,1 % 27 327 87,5 % 29 963 86,8 % 30 532 87,1 %
5-30 dpd 1 770 5,6 % 1 731 5,5 % 2 019 5,8 % 1 869 5,3 %
31-60 dpd 480 1,5 % 426 1,4 % 576 1,7 % 526 1,5 %
61-90 dpd 246 0,8 % 224 0,7 % 279 0,8 % 237 0,7 %
NPL 1 557 4,9 % 1 525 4,9 % 1 700 4,9 % 1 885 5,4 %
Total 31 456 100,0 % 31 233 100,0 % 34 537 100,0 % 35 049 100,0 %
Capital and
Funding
Strict capital requirements in NorwayEnsuring strong capitalization of the bank
Source: SCB Group 2018 Annual Report
Capital requirements in Norway
Strict requirements in Norway with the
inclusion of additional buffer requirements
and a high countercyclical buffer
requirement
Pillar 2 requirement for SCB Group was set
to 2.3% by the Norwegian FSA, applicable
from January 2018.
During 2019, the Countercyclical buffer
requirement for SCB Group will increase to
1.37%. Denmark, Sweden and Norway will
increase with 50bps, from 0% to 0.5% in
Denmark and from 2% to 2.5% in Sweden
and Norway. Finland will maintain the buffer
at 0%.
Group CET1-ratio requirement for 2018
~11.1%
Pillar 1 CET1-requirement
2.3%
Pillar 2 CET1-requirement
~13.4%
Minimum CET1 requirement 4.5%
Conservation buffer 2.5%
Countercyclical buffer 1.14%
Systemic risk buffer 3%
~11.1%
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Strong Capital PositionCET1 ratio of 15.7%
2018 Capital developments
• SCB Group is using the transitional rules for
IFRS9 capital impact when calculating capital
ratios
• SCB Group had a CET1-ratio of 15.7% per
financial year-end using transitional rules for
IFRS9. The CET1-ratio is 229bps higher than
the regulatory requirement
• SCB Group had a strong Leverage Ratio of
12.0%
• In October 2018, SCB Group called its existing
Hybrid loan of NOK 2.25 billion and replaced it
with three new Hybrid loans of NOK 750 million
each
• SCB Group paid a dividend for 2018 of NOK 1
billion to its parent
Capital ratios evolution SCB GroupPer cent
Source: SCB Group 2018 Annual Report
15.3 15.1 15.5 15.7
17.8 17.4 17.5 17.6
19.1 18.7 19.1 19.0
11.4 11.5 12.0 12.0
2015 2016 2017 2018
CET 1 Tier 1 Tier 2 Leverage ratio
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Self-funding is a strategic focusThree pillars approach provides funding flexibility
2011 2012 2013 2014 2015 2016 2017 2018
Unsecured Bonds
Deposits
Securitization
Parent funding
22% 28%
50%62%
70% 70% 77% 73%
2011 2012 2013 2014 2015 2016 2017 2018
Funding Composition1
Self-funding ratio
27%
25%
37%
11%
Source: SCB Group 2018 Annual Report
1) Outstanding amounts/transactions as per Q4 2018
In Norway deposits are guaranteed up to NOK 2
million
In EU countries the guarantee is up to EUR 100,000
NOK 54.6 billion in total deposits across Norway,
Sweden and Denmark
Deposits
NOK 9.701 billion outstanding in the bond market
including NOK 900 million in Commercial Paper
SEK 7.075 billion outstanding in the bond market
market including SEK 875 million in Commercial
Paper
DKK 500 million outstanding in the bond market
EUR 2.00 billion outstanding from four Benchmark
transactions
Unsecured
6 outstanding transactions across Nordics
Represents a low-cost and stable funding sourceSecuritization
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Deposits at a glanceConsolidated total balance: NOK 54.6 billion
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Distribution of Deposit portfolio and products
40%of total balance
Savings account
32%of total balance
Savings account
Notification product
Term deposits
28%of total balance
Savings account
Notification product
N/A
Source: SCB Group 2018 Annual Report
Deposit guarantees: Norway NOK 2 million | Sweden SEK 950,000 | Denmark EUR 100,000 equivalent
Deposit balance development NOK billion
9,9
14,9
18,6
20,922,1
4,9
14,4
11,9
15,4 15,4
3,2
8,0
10,5
14,3
17,2
2014 2015 2016 2017 2018
Norway Sweden Denmark
Unsecured Senior & Commercial Paper Funding2018 summary
Source: Bloomberg
1) Outstanding amounts as per Q4 2018
New Issuances Volume
New Issuances #
Taps #
Maturities
Outstanding Volume¹
Outstanding bonds #
Format
Preferred Tenor
2,200 million
2
6
1,600 million
8,801 million
8
FRN
3 – 5 year
2,750 million
5
1
1,000 million
6,200 million
8
FRN
3 – 5 year
500 million
1
-
750 million
2,000 million
4
FXD
3 – 5 year
NOK SEK EUR
500 million
1
-
-
500 million
1
FRN
3 - 5 year
DKK2018
1,750 million
8
-
1,750 million
900 million
4
FXD/FRN
6 – 12 months
NOK
875 million
5
1
-
875 million
6
FXD
3 – 6 months
SEK
Senior Unsecured Commercial Paper
27
28
Unsecured FundingMaturity profile 2019 – 2023 for Senior Unsecured and Commercial Paper
Total Maturity (EUR MM)
437
211136
191
227
98 195 49
122
1000
500
50067
2019 2020 2021 2022 2023
DKK
EUR
SEK
NOK1000
500 500
2019 2020 2021 2022 2023
4351
21001350
1900
2019 2020 2021 2022 2023
Commercial Paper Senior
2325
1000
2000
500
1250
2019 2020 2021 2022 2023
Commercial Paper Senior
NOK million
SEK million
EUR million
Source: Bloomberg, Management Figures (outstanding amounts as per Q4 2018)
FX: EURNOK 9.9483 | EURSEK 10.2548 | EURDKK 7.4673
500
2019 2020 2021 2022 2023
DKK millionTotal Maturity
(EUR million)
Key takeaways
Anchored by a global banking franchise
Sustained market leader in auto
Building out position in unsecured space
Robust financial results
Stable credit risk
29
Santander & Santander Consumer Finance
Appendix
Section divider
1. Santander
Santander, a leading financial group
32
Headcount 202,713
Branches (units) 13,217
Shareholders (millions) 4.13
Customers (millions) 144
Total assets (trill. €) 1.46
Key Figures Dec’18
Attributable Profit 2017 (mill. €) 6,619
Attributable Profit 2018 (mill. €) 7,810
Well diversified between Europe and the Americas
33
(1) Excluding Corporate Centre and Spain Real Estate Activity.
NOTE: SCF excluding SCUK
Americas Europe
48% 52%
2018 Underlying attributable profit1
With leading positions in its core markets
34
(1) Lending (2) UK mortgages (excluding Social Housing), Consumer credit and commercial lending (excluding Financial Institutions) (3) Including Santander Consumer Finance business (SCF) (4) In the states where the Group operates (5) Countries in Europe, including UK
Data: Jun-18 or latest available. Branches do not include Santander Consumer Finance business
Mkt. share1: 18%
Branches: 672
Portugal United Kingdom
Mkt. share2: 10%
Branches: 780
Mkt. share1: 18%
Branches: 4,469
Spain
Mkt. share1,3: 10%
Branches: 540
Poland
United States
Mkt. share1,4: 3%
Branches: 670
Argentina
Mkt. share1: 11%
Branches: 482
Brazil
Mkt. share1: 9%
Branches: 3,490
Mkt. share1: 19%
Branches: 420
Chile
Mkt. share1: 13%
Branches: 1,402
Mexico
Americas Europe
Nº of countries5: 15
Points of sale: >130,000
SCF
2018 was an excellent year
35
Group performance 2018
Strong results in a sustainable way
36
Group performance 2018
(1) Constant euros
Successfully completed the 3 year plan
37
Group performance 2018
(1) % change (constant euros), 2018 figure relates to 2015-18 CAGR (2) 2018 figure relates to 2015-18 average (3) Total dividend charged to 2018 earnings is subject to the Board and 2019 AGM approval
(4) Underlying RoTE 2015: 11.0%. Underlying RoTE 2018 12.1%
Note: 2015 metrics have been re-stated to reflect the capital increase
Section divider
2. Santander Consumer Finance
39
PoS partners (thousand) >130
Market positions1 Top 3
Loans (bill. €) 106
Deposits (bill. €) 37
European countries 15
Underlying Attrib. Profit 2018 (mill. €) 1,421
Customers (million) 20
Grupo Santander is the
main and unique
shareholder of SCF ...
… and at the same time,
SCF acts as a holding
for its subsidiaries
through a banking license
Operations are mainly
done through points-of-
sale (dealers and
retailers)
Key Figures Dec’18
Santander Consumer Finance, European leader in the consumer finance industry
Underlying Attrib. Profit 2017 (mill. €) 1,373
SCF: Management perimeter (i.e. including SCUK)
Attributable profit without non-recurring (provisions or capital gains) (1) In its main geographies by market share in New Business car loans or durables
40
Recurrent profits through the cycle
SCF: Management perimeter (i.e. including SCUK)
Attributable profit without non-recurring (provisions or capital gains)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
472555
744825
895 908
1 093
1 238
1 373 1 421
Underlying Attributable Profit€ Million
41
Significant contributor to Santander’s results, representing 13% of the Group’s profit1 in 2018
SCF, 13%
SCF excluding SCUK. Including SCUK, SCF represents 14% of SAN profit1.
(1) Percentage over SAN underlying attributable profit in 2018, excluding Corporate Centre and Spain Real Estate Activity
2018 Underlying attributable profit1
42
Well spread across Europe and well balanced between car and consumer loans
SCF Portfolio: €106 bnDec’18
Well spread across 15 European
countries
Important foothold in the largest
economies
73% portfolio in AAA & AA countries
Car financing represents the biggest
share of the portfolio: 72%
Consumer lending (durables financing,
cash loans and credit cards): 20%
SCF: Management perimeter (i.e. including SCUK). NOTE: SCF’s portfolio also includes mortgages (6%), corporate loans (1%) and other loans (1%).
43
Advanced car financing platform and strong foothold in consumer finance
TOP retail chain agreements throughout
Europe
>55,000 POS partners
>4 MM consumer loans per year
TOP 3 in core geographies
Digital direct business platforms
Strong foothold in consumer finance
Consumer Finance: Durable financing, Personal loans and Credit Cards
Presence in all main European markets
TOP positions in its geographies,
including the 5 biggest European auto
markets: Germany, France, UK, Italy
and Spain
>75.000 POS (captive and non-captive)
The longest European captive
agreements base: more than 100
agreements with 15 manufacturers
Advanced car financing platform
44
Sound risk metrics
SCF: Management perimeter (i.e. including SCUK)
3,02%
6,26%
2,14%
0,99%
2,53%
0,39%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
SCF Cost of Risk (LLPs over ANEAS %)
SCF NPL Ratio (%) Risk KPIs better than sector average
Strong capacity to balance adverse
economic cycles across geographies
Low cost of risk, despite important
increase in SCF’s loan portfolio
Adaptation of risk management for the
growing digital business while being
involved in the ecosystem platforms
initiatives
45
Funding diversification
SCF’s funding structure (%)
High diversification of funding
sources
Capacity to do issuances in all
countries
Diversification of deposits in
many countries
Increasing long-term finance vs
short term
Dec’18
31%
4%
12%7%
21%
3%
22%
Retail
Deposits
Non Retail
Deposits
Secured fundingECB
Interbank
Short
Term
Unsecured
Issuances
M/L Term Unsecured
Issuances
46
Clear strategic priorities
Our purpose is to help people
and business prosper.
Our culture is based on believing
that everything we do should be:
Thank You.
Nordics