FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of July, 2019
Commission File Number: 001-12518
Banco Santander, S.A.
(Exact name of registrant as specified in its charter)
Ciudad Grupo Santander
28660 Boadilla del Monte (Madrid) Spain
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ☐ No ☒
Banco Santander, S.A.
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1 | Press Release regarding January June 2019 Results | |
2 | January June 2019 Financial Report | |
3 | January June 2019 Earnings Presentation |
Santander earns 3,231 million in attributable profit for the first
half of 2019, after 814 million of charges relating primarily to
planned restructuring costs
Excluding these charges, underlying profit increased by 2% in constant euros to 4,045 million
Madrid, 23 July 2019 - PRESS RELEASE
∎ | In the first half of the year net interest income increased to 17,636 million, up 4% year on year (yoy) as lending and customer funds increased by 4% and 6% respectively in constant euros (i.e. applying constant exchange rates). |
∎ | The bank attracted one million new customers in the second quarter, taking the total number of customers it serves to 142 million, more than any other bank in Europe or the Americas. |
∎ | To support our strategy, all digital services have been consolidated under a single area Santander Global Platform. Digital adoption continued to accelerate over the first six months of the year, with 34.8 million customers now using digital services. On average, 240 customers now access one of Santanders mobile or digital platforms every second - an increase of 28% over the past 12 months. |
∎ | The positive trends in credit quality also continued, with the group non-performing loan ratio falling by 11 basis points in the quarter to 3.51%, while cost of credit remained stable at 0.98%. |
∎ | The group CET 1 ratio is now 11.30%, 50 basis points higher than 30 June 2018, while Santander remained among the most profitable and efficient banks in its peer group, with an underlying return on tangible equity (RoTE) of 11.7%, and a cost-to-income ratio of 47.4%. |
∎ | Further to the 108 million net charges announced in the first quarter, the bank took an additional charge of 706 million in Q2, primarily relating to planned restructuring costs in Spain and UK (626 million), and additional provisions for PPI (80 million). This led to a fall in attributable profit in the second quarter of 18% yoy to 1,391 million. |
∎ | Excluding these charges, underlying profit for the second quarter increased to 2,097 million, up 5% compared to the same quarter last year - the strongest underlying quarterly performance since 2011, driven by strong growth in lending in Latin America, further improvements in profitability in North America, as well as improving costs in Europe. |
Banco Santander Group Executive Chairman, Ana Botín, said:
The bank has delivered its strongest underlying quarterly performance in eight years, reflecting the progress we have made in our commercial and digital transformation.
All our businesses continue to deliver solid results, with particularly good growth in North America, which now represents 17% of Group profits (vs. 14% at 30 June 2018).
During the quarter we have taken a further step forward in our digital transformation with the creation of the Santander Global Platform area, which aligns our reporting structure with our organisation and strategy. This helps ensure that the groups talent and scale can be leveraged fully by our high-growth digital and payments businesses, helping us offer the best services to retail customers, merchants and SMEs, while also increasing transparency around our digital investments.
Corporate Communications | 1 | |||
Ciudad Grupo Santander, edificio Arrecife, planta 2 | ||||
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
We have a strong foundation on which we can continue to grow profitably, and I am confident we will achieve the targets outlined at our investor day, including reaching a RoTE of 13-15% in the medium term.
Results Summary (H119 v. H118 unless otherwise stated)
Q219 (m)
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Q219 v. Q218
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Q219 v. Q218 (EX FX)
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H119 (m)
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H119 v. H118
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H119 v. H118 (EX FX)
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Total income | 12,351 | +3% | +4% | 24,436 | +1% | +3% | ||||||
Operating expenses | (5,829) | +2% | +3% | (11,587) | +1% | +2% | ||||||
Net operating income | 6,522 | +4% | +5% | 12,849 | +1% | +3% | ||||||
Net loan-loss provisions | (2,141) | +6% | +7% | (4,313) | 0% | +1% | ||||||
Profit before tax | 3,895 | +3% | +4% | 7,579 | +1% | +3% | ||||||
Tax | (1,353) | -2% | 0% | (2,679) | +1% | +3% | ||||||
Underlying profit | 2,097 | +5% | +7% | 4,045 | 0% | +2% | ||||||
Net capital gains and provisions | (706) | +135% | +134% | (814) | +171% | +171% | ||||||
Attributable Profit | 1,391 | -18% | -16% | 3,231 | -14% | -12% |
The Group achieved an attributable profit of 3,231 million during the first half of 2019, down 14% year on year (yoy) after 814 million in charges relating primarily to restructuring costs incurred as part of the banks plans to reduce its annual cost base in Europe by 10% (1 billion) as announced at the banks investor day on 3 April 2019.
The charges include: restructuring costs in Spain (600 million) and the UK (26 million); and a further PPI provision in the UK (80 million), in addition to the net charge of 108 million announced in the first quarter.
Excluding these charges, underlying profit in the first half of the year increased to 4,045 million, up 2% in constant euros (i.e. excluding the impact of exchange rate movements). In the second quarter alone, underlying profit increased to 2,097 million, up 5% compared to the same quarter last year - the strongest underlying quarterly performance since 2011 (+7% in constant euros).
Santanders commercial and digital transformation continued to improve the quality and recurrence of its revenues, with net interest income in the first half increasing by 4% year-on-year (+6% in constant euros) and lending and funds increasing by 4% and 6% respectively over the same period in constant euros.
The bank added 1 million customers in the quarter, taking the total number of customers it serves to 142 million. The number of loyal customers (customers using Santander as their primary bank) has increased by 10% since 30 June 2018 to 20.6 million.
Corporate Communications | 2 | |||
Ciudad Grupo Santander, edificio Arrecife, planta 2 | ||||
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
The increase in customer revenue, coupled with strong cost control, allowed the bank to maintain a best-in-class cost-to-income ratio of 47.4%, with operating expenses falling by 2% in real terms and constant euros due to synergies from integrations.
The rapid growth in the adoption of digital products and services continued in the quarter, with the number of digital customers now standing at 34.8 million, 22% higher than 30 June 2018. Accesses to our online or mobile platforms increased to 3,725 million in the first six months of the year, up 28% yoy, with over one billion transactions completed through digital channels in the period (+25%), not including ATM transactions.
To accelerate progress towards becoming the best open digital financial services platform, the bank has consolidated all its digital services under the new Santander Global Platform area. That unit, which includes Openbank, Global Payments Services, and Digital Assets, generated total customer revenues of 48 million (up 18% yoy), while expenses rose to 108 million as the bank continued to invest in this area.
The Groups scale and presence across both mature and developing markets is a key point of differentiation for Santander among its peers, with European franchises contributing 45% of group underlying profit, South America contributing 38% and North America contributing 17%. Brazil remained the largest contributor with 29% of total Group attributable profit, followed by Spain (13%), Santander Consumer Finance (13%), the UK (11%) and the US (9%).
Credit quality improved further in the quarter, with the non-performing loan ratio falling by 11 bps in the quarter to 3.51% and loan-loss provisions remaining stable at 4,313 million. Cost of credit (the rate at which the bank needs to provision when lending money) also remained broadly stable at 0.98%.
The Group continued to generate capital organically adding 11 basis points in the quarter to its CET1 ratio which stood at 11.30% at 30 June 2019, in line with its medium-term target of 11-12%.
The Group remained one of the most profitable banks in its peer group, with an underlying return on tangible equity (RoTE) 11.7% and statutory RoTE of 10.5%. Tangible net asset value per share, a key measure of shareholder value, has increased by 5% in the past 12 months to 4.30 per share.
1. Excluding corporate centre (-1,108 million) and Santander Global Platform (-51 million). 2. Uruguay and Andean Region underlying profit (94 million). |
Corporate Communications | 3 | |||
Ciudad Grupo Santander, edificio Arrecife, planta 2 | ||||
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
Markets Summary (1H19 v. 1H18)
To better reflect the local performance of each market, the year-on-year percentage changes provided below are presented in constant exchange euros. Variations in current euros are available in the financial report.
Europe. Underlying profit in Europe amounted to 2,354 million, 3% less than in the same period of the previous year. Costs decreased 1% (-3% in real terms) reflecting the initial savings from the banks optimisation processes, announced at its investor day last April. As a result, RoTE was 10%. Gross loans increased by 2%, driven by growth in Santander Consumer Finance and the integration of Deutsche Bank Polskas retail and SME business, while customer funds also increased by 5%. Digital customers grew 13% to 13.5 million, while loyal customers reached 9.7 million.
∎ | In Spain, underlying profit was 5% higher at 694 million. Costs were 7% lower thanks to the efficiencies resulting from the Banco Popular integration. The migration of all offices to the Santander platform was successfully completed recently. Santander Spain grew its business and increased profitability in all segments and products. New insurance premiums rose 9%, while at the same time we completed the reorganisation of this business. Lending was down 4% due to the deleveraging of large corporates and a drop in the stock of mortgages. Stock of consumer loans, however, rose by 600 million. Customer deposits increased by 13,300 million. Santander Spains digital customers grew 21% to 4.6 million. |
∎ | Santander Consumer Finance first half underlying profit was 658 million, slightly lower than the same period of 2018. Costs rose slower than revenues (+2%), improving the efficiency ratio to 44.6% and resulting a RoTE of 15%. The largest profits were generated by the Nordic countries (EUR 177 million), Germany (EUR 157 million) and Spain (EUR 116 million). New lending rose 4%, underpinned by new commercial agreements and growth in Italy (+13%), France (+8%) and Spain (+7%). |
∎ | In the UK, underlying profit in the first half stood at EUR 582 million, down 13% due to continued competitive pressure on mortgage margins, a reduction in net fee income and lower gains on financial transactions. Costs reduced by 1%, while loan-loss provisions fell by 22%, with the cost of credit at just 0.06%. Gross loans were stable and mortgage business volumes increased. Customer deposits increased by 2%, boosted by higher corporate and retail savings deposits. |
∎ | In Portugal, underlying profit rose by 14% to 260 million, as costs declined further. Loans were still lower than a year ago, but rose slightly this year, aligned with the growth in market shares in new mortgages and loans to companies, while customer funds increased by 7%. |
∎ | In Poland, underlying attributable profit was 150 million, down 1%, with strong growth (+26%) in gross loans, mainly due to the integration of Deutsche Bank Polskas retail and SME business. Likewise, customer deposits increased strongly (+24%). |
North America. Underlying profit in North America, which includes Mexico and the US, was 889 million, up 21%. There was good performance in total income at both units, with growth driven by both net interest income (+8%) and net fee income (+4%). Expenses grew less than revenue, resulting in an improved cost-to-income ratio of two percentage points to 42%. Gross loans increased by 10%, with similar growth rates in both units. Customer funds grew in both countries. Digital customers grew 43% to 4.5 million, while loyal customers are now 3.2 million.
∎ | In the US, underlying profit was 465 million, up 30%, income increased 7% and costs were broadly flat. Volumes improved in the quarter due to growth in lending in retail banking (auto) and commercial banking. A joint initiative between Santander Bank and Santander Consumer USA originated almost $3 billion in auto finance. Digital customers were 0.9 million, up 9%. |
Corporate Communications | 4 | |||
Ciudad Grupo Santander, edificio Arrecife, planta 2 | ||||
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
∎ | In Mexico, underlying profit was 424 million, up 12%, and RoTE reached 20.5%. The bank introduced new functionalities to its SuperMóvil service, notably Santander Tap, a system of free instant messaging transfers for operations between our customers. Digital customers grew 57% to 3.5 million. |
South America. Underlying profit in South America was 1,961 million, up 15%. Total income increased 9%, underpinned by higher volumes, good spread management and increased loyalty. As a result, RoTE was 21%. Gross loans (+9%) and customers funds (+11%) increased in all units. Digital customers grew 26% to 16.3 million, while loyal customers are now 7.5 million.
∎ | In Brazil, underlying profit was 1,482 million, up 18% more year-on-year. Net interest income rose by 7% and net fee income by 9%. Costs increased at a slower pace than income, which helped improve the efficiency ratio to 32.4%. As a result, RoTE was 22% in the first half of the year, versus 20% in June 2018. Gross loans grew by 9%, with profitable gains in market share, while customer deposits rose by 13%. The bank launched several initiatives which helped capture new customers and improve customer satisfaction and market share, including Santander Duo, a differentiated offer for microbusinesses; a new offer for SMEs, and a new digital investment platform. Digital customers grew by 33% to 12.7 million. |
∎ | In Chile, underlying profit was 311 million, up 4%. Net interest income recovered in the second quarter thanks to larger volumes and greater inflation. Gross loans increased by 7%, while customer funds rose 5%. |
∎ | In Argentina, underlying profit was 73 million, similar to underlying profit generated in the first half of 2018. Income is growing at a faster rate than inflation due to strong growth in customer revenues (+98% yoy). |
∎ | In the rest of South America, which includes, Uruguay, Peru and Columbia, underlying profit increased to 94 million (+16%). |
Note: Loans excluding reverse repos. Customer funds: deposits excluding repos. Underlying RoTE. |
(1) Adjusted for excess of capital in the US. Otherwise, 9.5%. |
Banco Santander is the largest bank in the euro zone with a market capitalisation of 66,253 million at 30 June 2019. It has a strong and focused presence in ten core markets across Europe and the Americas with more than 4 million shareholders and 200,000 employees serving 142 million customers.
Corporate Communications | 5 | |||
Ciudad Grupo Santander, edificio Arrecife, planta 2 | ||||
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
Key consolidated data (from Q2 2019 financial report)
BALANCE SHEET (EUR million) | Jun-19 | Mar-19 | % | Jun-19 | Jun-18 | % | Dec-18 | |||||||||||||||||||||
Total assets |
1,512,096 | 1,506,151 | 0.4 | 1,512,096 | 1,433,833 | 5.5 | 1,459,271 | |||||||||||||||||||||
Loans and advances to customers |
908,235 | 910,195 | (0.2 | ) | 908,235 | 862,092 | 5.4 | 882,921 | ||||||||||||||||||||
Customer deposits |
814,751 | 808,361 | 0.8 | 814,751 | 774,425 | 5.2 | 780,496 | |||||||||||||||||||||
Total funds |
1,032,769 | 1,019,878 | 1.3 | 1,032,769 | 981,363 | 5.2 | 980,562 | |||||||||||||||||||||
Total equity |
109,985 | 110,365 | (0.3 | ) | 109,985 | 104,445 | 5.3 | 107,361 | ||||||||||||||||||||
Note: Total funds includes customer deposits, mutual funds, pension funds and managed portfolios.
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INCOME STATEMENT (EUR million) | Q219 | Q119 | % | H119 | H118 | % | 2018 | |||||||||||||||||||||
Net interest income |
8,954 | 8,682 | 3.1 | 17,636 | 16,931 | 4.2 | 34,341 | |||||||||||||||||||||
Total income |
12,351 | 12,085 | 2.2 | 24,436 | 24,162 | 1.1 | 48,424 | |||||||||||||||||||||
Net operating income |
6,522 | 6,327 | 3.1 | 12,849 | 12,680 | 1.3 | 25,645 | |||||||||||||||||||||
Profit before tax |
2,929 | 3,602 | (18.7 | ) | 6,531 | 6,899 | (5.3 | ) | 14,201 | |||||||||||||||||||
Attributable profit to the parent |
1,391 | 1,840 | (24.4 | ) | 3,231 | 3,752 | (13.9 | ) | 7,810 | |||||||||||||||||||
Changes in constant euros: Q219/Q119: Nil: +3.9%; Total income: +3.0%; Net operating income: +4.0%; Attributable profit: -23.2% H119 / H118: Nll: +5.5%; Total income: +2.8%; Net operating income: +3.2%; Attributable profit: -11.7% |
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UNDERLYING INCOME STATEMENT (1) (EUR million) |
Q219 | Q119 | % | H119 | H118 | % | 2018 | |||||||||||||||||||||
Net interest income |
8,954 | 8,682 | 3.1 | 17,636 | 16,931 | 4.2 | 34,341 | |||||||||||||||||||||
Total income |
12,351 | 12,085 | 2.2 | 24,436 | 24,162 | 1.1 | 48,424 | |||||||||||||||||||||
Net operating income |
6,522 | 6,327 | 3.1 | 12,849 | 12,680 | 1.3 | 25,645 | |||||||||||||||||||||
Profit before tax |
3,895 | 3,684 | 5.7 | 7,579 | 7,480 | 1.3 | 14,776 | |||||||||||||||||||||
Attributable profit to the parent |
2,097 | 1,948 | 7.6 | 4,045 | 4,052 | (0.2 | ) | 8,064 | ||||||||||||||||||||
Variations in constant euros: Q219/Q119: Nll: +3.9%; Total income: +3.0%; Net operating income: +4.0%; Attributable profit: +8.7% H119 / H118: Nll: +5.5%; Total income: +2.8%; Net operating income: +3.2%; Attributable profit: +2.1%
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EPS, PROFITABILITY AND EFFICIENCY (%) | Q219 | Q119 | % | H119 | H118 | % | 2018 | |||||||||||||||||||||
EPS (euro) |
0.076 | 0.104 | (26.7 | ) | 0.181 | 0.216 | (16.4 | ) | 0.449 | |||||||||||||||||||
Underlying EPS (euros) (1) |
0.120 | 0.111 | 8.1 | 0.231 | 0.235 | (1.6 | ) | 0.465 | ||||||||||||||||||||
RoE |
7.79 | 7.85 | 7.41 | 8.24 | 8.21 | |||||||||||||||||||||||
RoTE |
11.02 | 11.15 | 10.51 | 11.79 | 11.70 | |||||||||||||||||||||||
Underlying RoTE (1) |
12.03 | 11.31 | 11.68 | 12.24 | 12.08 | |||||||||||||||||||||||
RoA |
0.63 | 0.63 | 0.60 | 0.65 | 0.64 | |||||||||||||||||||||||
RoRWA |
1.56 | 1.54 | 1.48 | 1.55 | 1.55 | |||||||||||||||||||||||
Underlying RoRWA (1) |
1.67 | 1.56 | 1.62 | 1.60 | 1.59 | |||||||||||||||||||||||
Efficiency ratio |
47.2 | 47.6 | 47.4 | 47.5 | 47.0 | |||||||||||||||||||||||
SOLVENCY AND NPL RATIOS (%) | Jun-19 | Mar-19 | Jun-19 | Jun-18 | Dec-18 | |||||||||||||||||||||||
CET1 (2) |
11.30 | 11.23 | 11.30 | 10.80 | 11.30 | |||||||||||||||||||||||
Fully loaded Total ratio (2) |
14.80 | 14.82 | 14.80 | 14.24 | 14.77 | |||||||||||||||||||||||
NPL ratio |
3.51 | 3.62 | 3.51 | 3.92 | 3.73 | |||||||||||||||||||||||
Coverage ratio |
68 | 68 | 68 | 69 | 67 | |||||||||||||||||||||||
MARKET CAPITALISATION AND SHARES | Jun-19 | Mar-19 | % | Jun-19 | Jun-18 | % | Dec-18 | |||||||||||||||||||||
Shares (millions) |
16,237 | 16,237 | | 16,237 | 16,136 | 0.6 | 16,237 | |||||||||||||||||||||
Share price (euros) |
4.081 | 4.145 | (1.5 | ) | 4.081 | 4.592 | (11.1 | ) | 3.973 | |||||||||||||||||||
Market capitalisation (EUR million) |
66,253 | 67,292 | (1.5 | ) | 66,253 | 74,097 | (10.6 | ) | 64,508 | |||||||||||||||||||
Tangible book value per share (euros) |
4.30 | 4.30 | 4.30 | 4.10 | 4.19 | |||||||||||||||||||||||
Price / Tangible book value per share (X) |
0.95 | 0.96 | 0.95 | 1.12 | 0.95 | |||||||||||||||||||||||
P/E ratio (X) |
11.29 | 9.94 | 11.29 | 10.62 | 8.84 | |||||||||||||||||||||||
OTHER DATA | Jun-19 | Mar-19 | % | Jun-19 | Jun-18 | % | Dec-18 | |||||||||||||||||||||
Number of shareholders |
4,054,208 | 4,089,097 | (0.9 | ) | 4,054,208 | 4,152,125 | (2.4 | ) | 4,131,489 | |||||||||||||||||||
Number of employees |
201,804 | 202,484 | (0.3 | ) | 201,804 | 200,961 | 0.4 | 202,713 | ||||||||||||||||||||
Number of branches |
13,081 | 13,277 | (1.5 | ) | 13,081 | 13,482 | (3.0 | ) | 13,217 |
(1) | In addition to financial information prepared in accordance with International Financial Reporting Standards (IFRS) and derived from our consolidated financial statements, this report contains certain financial measures that constitute alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015 and other non-IFRS measures, including the figures related to underlying results, as they are recorded in the separate line of net capital gains and provisions, above the line of attributable profit to the parent. Further details are provided on page 12 of this 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 IFRS, please see 2018 Annual Financial Report, published in the CNMV on 28 February 2019, our 20-F report for the year ending 31 December 2018 registered with the SEC in the United States as well as the Alternative performance measures section of the annex to this report. |
(2) | 2019 and 2018 data applying the IFRS 9 transitional arrangements. As indicated by the consolidating supervisor a pay-out of 50%, the maximum within the target range (40%- 50%), was applied for the calculation of the capital ratios in 2019. Previously, the average cash pay-out for the last three years was considered. |
Corporate Communications | 6 | |||
Ciudad Grupo Santander, edificio Arrecife, planta 2 | ||||
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
IMPORTANT INFORMATION
Non-IFRS and alternative performance measures
In addition to the financial information prepared in accordance with International Financial Reporting Standards (IFRS), this press release contains certain financial measures that constitute alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015 (ESMA/2015/1415en) and other non-IFRS measures (Non-IFRS Measures). The financial measures contained in this press release that qualify as APMs and non-IFRS measures have been calculated using the financial information from Santander Group but are not defined or detailed in the applicable financial reporting framework and have neither been audited nor reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period. While we believe that these APMs and non-IFRS measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute of IFRS measures. In addition, other companies, including companies in our industry, may calculate or use such measures differently, which reduces their usefulness as comparative measures. 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 IFRS, please see our 2018 Annual Financial Report, filed with the Comisión Nacional del Mercado de Valores (CNMV) on 28 February 2019, as well as the section Alternative performance measures of the annex to our 2019 2Q Financial Report, published as Relevant Fact on 23 July 2019. These documents are available on Santanders website (www.santander.com).
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
Forward-looking statements
Santander cautions that this press release contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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 press release 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. The following important factors, in addition to those discussed elsewhere in this press release and in our annual report on Form 20-F for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission, could affect our future results and could cause outcomes to differ materially from those anticipated in any forward-looking statement: (1) general economic or industry conditions in areas in which we have significant business activities or investments, including a worsening of the economic environment, increasing in the volatility of the capital markets, inflation or deflation, and changes in demographics, consumer spending, investment or saving habits; (2) exposure to various types of market risks, principally including interest rate risk, foreign exchange rate risk, equity price risk and risks associated with the replacement of benchmark indices; (3) potential losses associated with prepayment of our loan and investment portfolio, declines in the value of collateral securing our loan portfolio, and counterparty risk; (4) political stability in Spain, the UK, other European countries, Latin America and the US (5) changes in laws, regulations or taxes, including changes in regulatory capital and liquidity requirements, including as a result of the UK exiting the European Union and increased regulation in light of the global financial crisis; (6) our ability to integrate successfully our acquisitions and the challenges inherent in diverting managements focus and resources from other strategic opportunities and from operational matters while we integrate these acquisitions; and (7) changes in our ability to access liquidity and funding on acceptable terms, including as a result of changes in our credit spreads or a downgrade in our credit ratings or those of our more significant subsidiaries. Numerous factors could affect the future results of Santander and could result in those results deviating materially from those anticipated in the forward-looking 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 press release 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.
No offer
The information contained in this press release 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 persons 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 this press release. No investment activity should be undertaken on the basis of the information contained in this press release. In making this press release 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 press release 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 press release 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.
Historical performance is not indicative of future results
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 period. Nothing in this press release should be construed as a profit forecast.
Corporate Communications | 7 | |||
Ciudad Grupo Santander, edificio Arrecife, planta 2 | ||||
28660 Boadilla del Monte (Madrid). Tel. +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
FINANCIAL REPORT First half 2019
Financial report First half 2019 KEY CONSOLIDATED DATA 3 SANTANDER AIM AND CORPORATE CULTURE 4 GROUP FINANCIAL INFORMATION 6 Group performance 6 Income statement and balance sheet 8 Solvency ratios 17 Risk management 18 FINANCIAL INFORMATION BY SEGMENTS 22 Primary segments 26 Secondary segments 42 RESPONSIBLE BANKING 45 CORPORATE GOVERNANCE 47 THE SANTANDER SHARE 48 APPENDIX 50 Financial information 51 Alternative Performance Measures 72 Interim condensed consolidated financial statements 79 Glossary 82 Important information 83 can use Santanders communication channels in All customers, shareholders and the general public all the countries in which the Bank operates. This report was approved by the Board of Directors on 21 July 2019, following a favourable report from the Audit Committee. Important information regarding this report can be found on pages 83 and 84.
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Key consolidated data
BALANCE SHEET (EUR million) | Jun-19 | Mar-19 | % | Jun-19 | Jun-18 | % | Dec-18 | |||||||||||||||||||||
Total assets |
1,512,096 | 1,506,151 | 0.4 | 1,512,096 | 1,433,833 | 5.5 | 1,459,271 | |||||||||||||||||||||
Loans and advances to customers |
908,235 | 910,195 | (0.2) | 908,235 | 862,092 | 5.4 | 882,921 | |||||||||||||||||||||
Customer deposits |
814,751 | 808,361 | 0.8 | 814,751 | 774,425 | 5.2 | 780,496 | |||||||||||||||||||||
Total funds |
1,032,769 | 1,019,878 | 1.3 | 1,032,769 | 981,363 | 5.2 | 980,562 | |||||||||||||||||||||
Total equity |
109,985 | 110,365 | (0.3) | 109,985 | 104,445 | 5.3 | 107,361 | |||||||||||||||||||||
Note: Total funds includes customer deposits, mutual funds, pension funds and managed portfolios. |
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INCOME STATEMENT (EUR million) | Q219 | Q119 | % | H119 | H118 | % | 2018 | |||||||||||||||||||||
Net interest income |
8,954 | 8,682 | 3.1 | 17,636 | 16,931 | 4.2 | 34,341 | |||||||||||||||||||||
Total income |
12,351 | 12,085 | 2.2 | 24,436 | 24,162 | 1.1 | 48,424 | |||||||||||||||||||||
Net operating income |
6,522 | 6,327 | 3.1 | 12,849 | 12,680 | 1.3 | 25,645 | |||||||||||||||||||||
Profit before tax |
2,929 | 3,602 | (18.7) | 6,531 | 6,899 | (5.3) | 14,201 | |||||||||||||||||||||
Attributable profit to the parent |
1,391 | 1,840 | (24.4) | 3,231 | 3,752 | (13.9) | 7,810 | |||||||||||||||||||||
Changes in constant euros: Q219 / Q119: NII: +3.9%; Total income: +3.0%; Net operating income: +4.0%; Attributable profit: -23.2% |
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H119 / H118: NII: +5.5%; Total income: +2.8%; Net operating income: +3.2%; Attributable profit: -11.7% |
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UNDERLYING INCOME STATEMENT (1) (EUR million) | Q219 | Q119 | % | H119 | H118 | % | 2018 | |||||||||||||||||||||
Net interest income |
8,954 | 8,682 | 3.1 | 17,636 | 16,931 | 4.2 | 34,341 | |||||||||||||||||||||
Total income |
12,351 | 12,085 | 2.2 | 24,436 | 24,162 | 1.1 | 48,424 | |||||||||||||||||||||
Net operating income |
6,522 | 6,327 | 3.1 | 12,849 | 12,680 | 1.3 | 25,645 | |||||||||||||||||||||
Profit before tax |
3,895 | 3,684 | 5.7 | 7,579 | 7,480 | 1.3 | 14,776 | |||||||||||||||||||||
Attributable profit to the parent |
2,097 | 1,948 | 7.6 | 4,045 | 4,052 | (0.2) | 8,064 | |||||||||||||||||||||
Variations in constant euros: Q219 / Q119: NII: +3.9%; Total income: +3.0%; Net operating income: +4.0%; Attributable profit: +8.7% |
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H119 / H118: NII: +5.5%; Total income: +2.8%; Net operating income: +3.2%; Attributable profit: +2.1% |
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EPS, PROFITABILITY AND EFFICIENCY (%) | Q219 | Q119 | % | H119 | H118 | % | 2018 | |||||||||||||||||||||
EPS (euro) |
0.076 | 0.104 | (26.7) | 0.181 | 0.216 | (16.4) | 0.449 | |||||||||||||||||||||
Underlying EPS (euros) (1) |
0.120 | 0.111 | 8.1 | 0.231 | 0.235 | (1.6) | 0.465 | |||||||||||||||||||||
RoE |
7.79 | 7.85 | 7.41 | 8.24 | 8.21 | |||||||||||||||||||||||
RoTE |
11.02 | 11.15 | 10.51 | 11.79 | 11.70 | |||||||||||||||||||||||
Underlying RoTE (1) |
12.03 | 11.31 | 11.68 | 12.24 | 12.08 | |||||||||||||||||||||||
RoA |
0.63 | 0.63 | 0.60 | 0.65 | 0.64 | |||||||||||||||||||||||
RoRWA |
1.56 | 1.54 | 1.48 | 1.55 | 1.55 | |||||||||||||||||||||||
Underlying RoRWA (1) |
1.67 | 1.56 | 1.62 | 1.60 | 1.59 | |||||||||||||||||||||||
Efficiency ratio |
47.2 | 47.6 | 47.4 | 47.5 | 47.0 | |||||||||||||||||||||||
SOLVENCY AND NPL RATIOS (%) | Jun-19 | Mar-19 | Jun-19 | Jun-18 | Dec-18 | |||||||||||||||||||||||
CET1 (2) |
11.30 | 11.23 | 11.30 | 10.80 | 11.30 | |||||||||||||||||||||||
Fully loaded Total ratio (2) |
14.80 | 14.82 | 14.80 | 14.24 | 14.77 | |||||||||||||||||||||||
NPL ratio |
3.51 | 3.62 | 3.51 | 3.92 | 3.73 | |||||||||||||||||||||||
Coverage ratio |
68 | 68 | 68 | 69 | 67 | |||||||||||||||||||||||
MARKET CAPITALISATION AND SHARES | Jun-19 | Mar-19 | % | Jun-19 | Jun-18 | % | Dec-18 | |||||||||||||||||||||
Shares (millions) |
16,237 | 16,237 | | 16,237 | 16,136 | 0.6 | 16,237 | |||||||||||||||||||||
Share price (euros) |
4.081 | 4.145 | (1.5) | 4.081 | 4.592 | (11.1) | 3.973 | |||||||||||||||||||||
Market capitalisation (EUR million) |
66,253 | 67,292 | (1.5) | 66,253 | 74,097 | (10.6) | 64,508 | |||||||||||||||||||||
Tangible book value per share (euros) |
4.30 | 4.30 | 4.30 | 4.10 | 4.19 | |||||||||||||||||||||||
Price / Tangible book value per share (X) |
0.95 | 0.96 | 0.95 | 1.12 | 0.95 | |||||||||||||||||||||||
P/E ratio (X) |
11.29 | 9.94 | 11.29 | 10.62 | 8.84 | |||||||||||||||||||||||
OTHER DATA | Jun-19 | Mar-19 | % | Jun-19 | Jun-18 | % | Dec-18 | |||||||||||||||||||||
Number of shareholders |
4,054,208 | 4,089,097 | (0.9) | 4,054,208 | 4,152,125 | (2.4) | 4,131,489 | |||||||||||||||||||||
Number of employees |
201,804 | 202,484 | (0.3) | 201,804 | 200,961 | 0.4 | 202,713 | |||||||||||||||||||||
Number of branches |
13,081 | 13,277 | (1.5) | 13,081 | 13,482 | (3.0) | 13,217 |
(1) In addition to financial information prepared in accordance with International Financial Reporting Standards (IFRS) and derived from our consolidated financial statements, this report contains certain financial measures that constitute alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015 and other non-IFRS measures, including the figures related to underlying results, as they are recorded in the separate line of net capital gains and provisions, above the line of attributable profit to the parent. Further details are provided on page 12 of this 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 IFRS, please see 2018 Annual Financial Report, published in the CNMV on 28 February 2019, our 20-F report for the year ending 31 December 2018 registered with the SEC in the United States as well as the Alternative performance measures section of the annex to this report.
(2) 2019 and 2018 data applying the IFRS 9 transitional arrangements. As indicated by the consolidating supervisor a pay-out of 50%, the maximum within the target range (40%- 50%), was applied for the calculation of the capital ratios in 2019. Previously, the average cash pay-out for the last three years was considered.
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SANTANDER VISION AND CORPORATE CULTURE
Our success is based on a clear purpose, aim and approach to business. | A digital Santander. To continue growing in a sustainable and profitable way and to accelerate execution, we will remain focused on our digital transformation. | |
We are building a more responsible bank |
Strong corporate culture.
The Santander Way is our global culture, fully aligned to our corporate strategy. It includes our purpose, our aim, and how we do business.
4 January - June 2019
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Generating confidence and operating responsibly, we contribute value to all our stakeholders
People At 30 June 2019 Grupo Santander had 201,804 professionals throughout the world, with an average age of 38, 55% of them women and 45% men.The aim of our human resources strategy is to be a reference employer, working on these strategic drivers: a common culture (the Santander Way), dynamic management of talent (Workday, the new central global platform for employees and their skills) and talent for the future (Strategic Workforce Planning).Significant progress is being made in various initiatives within the priorities of culture and commitment (such as Flexiworking, StarMeUp, commitment surveys); attraction and recruitment (such as remuneration plans that involve shares); retaining and developing talent (such as Young Leaders, learning platforms, succession plans, international mobility), as well as diversity and inclusion (gender salary equity, development of diversity and inclusion principles, etc.).Customers We continued to focus on improving customer loyalty and experience. Progress was reflected in the increase of 1.9 million loyal customers, greater penetration over active clients and 6.4 million digital customers in the last 12 monthsWith the creation of Santander Global Platform, we are taking a further step forward in our digital transformation, which aligns our reporting structure with our organisation and strategy We also continued to strengthen our traditional branches and develop new models (SMART, Súper Ágil and Work Café), while investing in new generation ATMs and in contact centres. Shareholders Extel recognised Banco Santander as one of the three best banks in Europe for investor relations, based on a survey of more than 14,000 investment professionals. IR Magazine awarded the Santander Investor Relations team its Best Crisis Management Prize.The Bank maintains a constant communication commitment with its investors and shareholders. In line with this strategy, analysts and investors in Spain and the UK took part in a survey to assess the rollout of the Groups corporate culture.The Bank launched the XI edition of the Universia Foundation Scholarships, which help university students with disabilities who are Santander shareholders or relatives of shareholders.Community The Group announced new responsible banking commitments for 2019-2025. These include, among other things: make available EUR 120,000 million of green financing, eliminate single use unnecessary plastic in all the Groups buildings, increase the consumption of renewable energy to 100% in those countries where it is possible to certify its origin and raise the number of women in senior management. Further details in page 46.Grupo Santander is classified as first in the Spanish ranking of sustainable debt issues, after acting as bookrunner in the majority of the green bond issues in Spain, according to Dealogic.Santander is also very actively involved in syndicated loans of sustainable bonds in Spain, and has a range of ESG mutual funds (Santander Sostenible) that make us the leader with a 66% market share.
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GROUP PERFORMANCE
6 January - June 2019
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GROUP PERFORMANCE
January - June 2019 7
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GRUPO SANTANDER RESULTS
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Second quarter attributable profit to the Parent of EUR 1,391 million, affected by EUR -706 million of net charges that are outside the ordinary course performance of our business, mainly restructuring costs. Excluding this charge, underlying profit was 8% higher (+9% excluding exchange rates).
First half attributable profit was 14% lower year-on-year at EUR 3,231 million (-12% in constant euros) after recording net results that are outside the ordinary course performance of our business, amounting to EUR -814 million in 2019 and EUR -300 million in 2018. Excluding these results, the underlying attributable profit was EUR 4,045 million, very similar to that in the same period of 2018 (+2% in constant euros).
At the end of June 2019, the results continued to reflect a solid underlying trend. Customer revenue increased and costs began to show the synergies obtained in various units. The efficiency ratio continued to be one of the best in the sector (47.4%).
The cost of credit remained at very low levels (0.98%) and profitability ratios were high: RoTE of 10.5% (underlying RoTE of 11.7%) and RoRWA of 1.48% (underlying RoRWA of 1.62%). | |
Grupo Santander. Summarised income statement
EUR million
Change | Change | |||||||||||||||||||||||||||||||
Q219 | Q119 | % | % excl. FX | H119 | H118 | % | % excl. FX | |||||||||||||||||||||||||
Net interest income | 8,954 | 8,682 | 3.1 | 3.9 | 17,636 | 16,931 | 4.2 | 5.5 | ||||||||||||||||||||||||
Net fee income (commission income minus commission expense) | 2,932 | 2,931 | 0.0 | 1.0 | 5,863 | 5,889 | (0.4) | 2.3 | ||||||||||||||||||||||||
Gains or losses on financial assets and liabilities and exchange differences (net) | 234 | 277 | (15.5) | (14.3) | 511 | 854 | (40.2) | (37.2) | ||||||||||||||||||||||||
Dividend income | 295 | 66 | 347.0 | 346.8 | 361 | 264 | 36.7 | 37.2 | ||||||||||||||||||||||||
Share of results of entities accounted for using the equity method | 153 | 153 | | 0.7 | 306 | 354 | (13.6) | (11.2) | ||||||||||||||||||||||||
Other operating income / expenses | (217) | (24) | 804.2 | 905.8 | (241) | (130) | 85.4 | 131.7 | ||||||||||||||||||||||||
Total income | 12,351 | 12,085 | 2.2 | 3.0 | 24,436 | 24,162 | 1.1 | 2.8 | ||||||||||||||||||||||||
Operating expenses | (5,829) | (5,758) | 1.2 | 1.8 | (11,587) | (11,482) | 0.9 | 2.4 | ||||||||||||||||||||||||
Administrative expenses |
(5,099) | (5,011) | 1.8 | 2.3 | (10,110) | (10,265) | (1.5) | (0.0) | ||||||||||||||||||||||||
Staff costs |
(3,074) | (3,006) | 2.3 | 2.7 | (6,080) | (5,960) | 2.0 | 3.3 | ||||||||||||||||||||||||
Other general administrative expenses |
(2,025) | (2,005) | 1.0 | 1.7 | (4,030) | (4,305) | (6.4) | (4.7) | ||||||||||||||||||||||||
Depreciation and amortisation |
(730) | (747) | (2.3) | (1.7) | (1,477) | (1,217) | 21.4 | 23.0 | ||||||||||||||||||||||||
Impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net) | (2,122) | (2,246) | (5.5) | (4.8) | (4,368) | (4,352) | 0.4 | 1.5 | ||||||||||||||||||||||||
o/w: net loan-loss provisions |
(2,141) | (2,172) | (1.4) | (0.7) | (4,313) | (4,297) | 0.4 | 1.4 | ||||||||||||||||||||||||
Impairment on other assets (net) | (7) | (20) | (65.0) | (69.2) | (27) | (96) | (71.9) | (72.6) | ||||||||||||||||||||||||
Provisions or reversal of provisions | (1,451) | (465) | 212.0 | 214.4 | (1,916) | (1,262) | 51.8 | 54.8 | ||||||||||||||||||||||||
Gain or losses on non financial assets and investments, net | 31 | 219 | (85.8) | (85.8) | 250 | 23 | 987.0 | 987.0 | ||||||||||||||||||||||||
Negative goodwill recognised in results | | | | | | | | | ||||||||||||||||||||||||
Gains or losses on non-current assets held for sale not classified as discontinued operations | (44) | (213) | (79.3) | (79.3) | (257) | (94) | 173.4 | 173.4 | ||||||||||||||||||||||||
Profit or loss before tax from continuing operations | 2,929 | 3,602 | (18.7) | (17.5) | 6,531 | 6,899 | (5.3) | (3.1) | ||||||||||||||||||||||||
Tax expense or income from continuing operations | (1,092) | (1,357) | (19.5) | (18.3) | (2,449) | (2,378) | 3.0 | 6.1 | ||||||||||||||||||||||||
Profit from the period from continuing operations | 1,837 | 2,245 | (18.2) | (17.1) | 4,082 | 4,521 | (9.7) | (7.9) | ||||||||||||||||||||||||
Profit or loss after tax from discontinued operations | | | | | | | | | ||||||||||||||||||||||||
Profit for the period | 1,837 | 2,245 | (18.2) | (17.1) | 4,082 | 4,521 | (9.7) | (7.9) | ||||||||||||||||||||||||
Attributable profit to non-controlling interests | (446) | (405) | 10.1 | 10.7 | (851) | (769) | 10.7 | 10.3 | ||||||||||||||||||||||||
Attributable profit to the parent | 1,391 | 1,840 | (24.4) | (23.2) | 3,231 | 3,752 | (13.9) | (11.7) | ||||||||||||||||||||||||
EPS (euros) | 0.076 | 0.104 | (26.7) | 0.181 | 0.216 | (16.4) | ||||||||||||||||||||||||||
Diluted EPS (euros) | 0.076 | 0.104 | (26.7) | 0.180 | 0.216 | (16.4) | ||||||||||||||||||||||||||
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Average total assets |
1,500,703 | 1,488,505 | 0.8 | 1,492,954 | 1,438,444 | 3.8 | ||||||||||||||||||||||||||
Average stockholders equity |
98,659 | 97,886 | 0.8 | 98,191 | 94,662 | 3.7 |
8 January - June 2019
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First half of 2019 results compared to the first half of 2018
The underlying trends of the P&L remained solid compared to the first half of 2018, with customer revenue growing, mainly net interest income, costs beginning to reflect the synergies obtained in various units and a cost of credit still at historically low levels.
This good performance, however, is not fully reflected in the year-on-year comparison for attributable profit because of the recording of a net negative amount of EUR 814 million for charges that are outside the ordinary course performance of our business, mainly restructuring costs for ongoing integrations, as set out on page 12 of this report. In addition, the comparison is also affected by the poorer performance of gains on financial transactions, implementing IFRS 16 and the high inflation adjustment in Argentina.
This performance is explained in detail below:
Revenue
| Our revenue structure, where net interest income and net fee income generate more than 96% of total income in 2019, well above the average of our competitors, enables us to grow consistently and recurrently, limiting the impact that bouts of high volatility could have on our results from financial operations. Total income grew 1% (+3% without the FX impact), as follows: |
| Net interest income rose 4%. Excluding the FX impact, growth was 6% and due to greater lending and deposits, mainly in developing countries where, overall, they increased at double-digit rates in constant euros, and management of spreads in a low interest rate environment in mature markets and which fell in some countries in the last 12 months. There was also a negative impact of around EUR 150 million from IFRS 16 application. |
All units rose in local currency terms, except the UK which was affected by the pressure of spreads in new mortgage loans and SVR balances (Standard Variable Rate), Portugal, due to low interest rates and the impact of ALCO portfolio sales, and Chile because of lower inflation. Mexico, Uruguay, Argentina and Poland increased at double digit rates and Brazil, and the US at around 7%. |
| Net fee income fell 0.4%. The increase without the FX impact was 2%, reflecting the greater customer loyalty combined with the growth strategy in services and higher value-added products. Of note was the growth in the most transactional businesses from cards, insurance, custody, foreign currency and cheques and transfers. On the other hand, decline in net fee income from advising operations and guarantees, affected by reduced activity in the markets. |
| Gains on financial transactions and other operating income (dividends, equity method income and others), which accounted for less than 4% of total income, fell 30% in euros and 29% without the FX impact because of lower activity in the first half of 2019, combined with a higher cost of foreign currency hedging compared to a very good first quarter in 2018 in the markets and higher income from the ALCO portfolio sales. |
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Costs
| Costs grew 1% in euros and 2% without the FX impact, as a result of investments in transformation and digitalisation, the improvements made to the distribution networks, the slight perimeter impact from the integration of the retail and SME businesses acquired from Deutsche Bank Polska and the impact on Argentina of high inflation. |
| In real terms (excluding inflation), costs were 2% lower (excluding the FX impact). The Groups aim is to improve our operational capacity and at the same time manage our costs more efficiently adapted to each area, via an exemplary execution of the integrations currently underway and fostering the use of shared services, mainly in Europe, where costs are beginning to reflect the first synergies of integrations, and fell 3% in real terms, underpinned by decreases in Spain (-9%), the UK (-3%) and Portugal (-5%). Of note among other countries was the US, where costs fell 2% in real terms backed by an improvement in operational leveraging, as well as Brazil and Chile whose costs were controlled despite the ongoing investment to improve the distribution capacity. |
The efficiency ratio continued to be a reference in the sector at 47.4%, virtually unchanged from 47.5% in the first half of 2018. |
Impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net)
| The impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net) amounted to EUR 4,368 million, 0.4% more year-on-year (1% without the FX impact). |
| As part of this item, loan-loss provisions were the same in euros and 1% higher without the FX impact. By units, Brazil, Portugal, SCF, Chile and the UK declined, while those that increased are linked mainly to countries with stronger growth in volumes. |
| The cost of credit inched down from 0.99% in June 2018 to 0.98% a year later. In year-on-year terms all units improved or remained stable, except for Argentina. |
Impairment on other assets (net)
| The impairment on other assets (net) in the first half of 2019 was EUR 27 million (EUR 96 million in the same period of 2018). |
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Provisions or reversal of provisions
| Provisions (net of reversal of provisions) amounted to EUR 1,916 million in the first half of 2019 (EUR 1,262 million in the same period of 2018). The increase was mainly due to restructuring charges in Spain, the UK and Poland, which are set out on page 12 of this report. |
Gains or losses on non-financial assets and investments (net)
| This item reflects a profit of EUR 250 million in 2019 (EUR 23 million in the first half of 2018). The increase was mainly due to the recording of capital gains from the sale of 51% our stake in Prisma Medios de Pago S.A. and the revaluation of the rest of the stake (49%), with a positive net tax impact in the first half of EUR 150 million. |
Gains or losses on non-current assets held for sale not classified as discontinued operations
| This item, which mainly includes the sale and deterioration of foreclosed assets recorded during the quarter, amounted to EUR -257 million in the first half (EUR -94 million in the same period of 2018).The difference was mainly due to the recording of capital losses from the sale of a portfolio of real estate to a subsidiary of Cerberus. |
Profit before tax
| First half profit before tax was EUR 6,531 million, 5% lower year-on-year. Excluding the FX impact, the fall was 3%, largely due to the non-recurring charges already mentioned. |
Income tax
| Income tax was EUR 2,449 million, 3% higher than in the first half of 2018. |
Attributable profit to non-controlling interests
| This amounted to EUR 851 million, 11% more year-on-year. Excluding the FX impact, it was 10% higher, mainly due to Brazil, the US, Mexico and Santander Consumer Finance. |
Attributable profit to the parent
| Profit attributed to the Parent was EUR 3,231 million, 14% less than in the first half of 2018. Excluding the FX impact it was 12% lower. |
| RoE was 7.4%, RoTE 10.5% and RoRWA 1.48% (8.2%, 11.8% and 1.55%, respectively, in the first half of 2018). Earnings per share were EUR 0.181 (EUR 0.216 in the first half of 2018). |
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Underlying attributable profit to the parent
| Underlying profit attributed to the parent was affected in 2019 and 2018 by the following net results, which are outside the ordinary course performance of our business and which distort year-on-year comparisons: |
First half 2019:
1. | Restructuring costs in Spain as part of the plan to integrate Banco Populars commercial networks amounting to EUR 600 million, recorded in the second quarter. |
2. | Charges in the UK of EUR 172 million were recorded in the first half for restructuring costs related to its optimisation plan and PPI provisions (of which EUR 106 million of were charged in the second quarter). |
3. | Net capital losses of EUR 180 million for the sale of real estate assets in the first quarter. |
4. | We also recorded restructuring costs of EUR 12 million in the first quarter for the integration process in Poland in the first quarter. |
5. | Lastly, capital gains from the sale of 51% of our stake in the Argentinian entity Prisma Medios de Pago S.A. and the revaluation of the remaining 49%, generating a capital gain of EUR 150 million in the first quarter. |
First half 2018:
1. | Positive results from the integration in Portugal (EUR 20 million), recorded in the second quarter. |
2. | Charges for restructuring costs: EUR -280 million in Spain and EUR -40 million in the Corporate Centre, both related to Populars integration, recorded in the second quarter. |
Excluding these results from the various P&L lines where they are recorded, and incorporating them separately in the line net capital gains and provisions, adjusted profit or underlying profit attributed to the parent was EUR 4,045 million in the first half of 2019, almost the same as a year earlier and 2% higher without the FX impact.
Seven of the 10 core units increased in their local currencies, and at double digit rates in Brazil, Mexico, the US and Portugal.
Profit decreased in the UK (mainly because of competitive pressure on revenue), in Poland (impacted by the higher contribution to the Bank Guarantee Fund and Banking Tax) and in Santander Consumer Finance, the last two falling 1% each in constant euros.
As a result, the Groups underlying RoTE was 11.7%, the underlying RoRWA 1.62% and underlying earnings per share EUR 0.231 (EUR 0.235 in the first half of 2018).
Summarised underlying income statement (EUR million)
Change | Change | |||||||||||||||||||||||||||||||
Q219 | Q119 | % | % excl. FX | H119 | H118 | % | % excl. FX | |||||||||||||||||||||||||
Net interest income |
8,954 | 8,682 | 3.1 | 3.9 | 17,636 | 16,931 | 4.2 | 5.5 | ||||||||||||||||||||||||
Net fee income |
2,932 | 2,931 | 0.0 | 1.0 | 5,863 | 5,889 | (0.4) | 2.3 | ||||||||||||||||||||||||
Gains (losses) on financial transactions (1) |
234 | 277 | (15.5) | (14.3) | 511 | 854 | (40.2) | (37.2) | ||||||||||||||||||||||||
Other operating income |
231 | 195 | 18.5 | 16.5 | 426 | 488 | (12.7) | (15.4) | ||||||||||||||||||||||||
Total income |
12,351 | 12,085 | 2.2 | 3.0 | 24,436 | 24,162 | 1.1 | 2.8 | ||||||||||||||||||||||||
Administrative expenses and amortisations |
(5,829) | (5,758) | 1.2 | 1.8 | (11,587) | (11,482) | 0.9 | 2.4 | ||||||||||||||||||||||||
Net operating income |
6,522 | 6,327 | 3.1 | 4.0 | 12,849 | 12,680 | 1.3 | 3.2 | ||||||||||||||||||||||||
Net loan-loss provisions |
(2,141) | (2,172) | (1.4) | (0.7) | (4,313) | (4,297) | 0.4 | 1.4 | ||||||||||||||||||||||||
Other gains (losses) and provisions |
(486) | (471) | 3.2 | 4.2 | (957) | (903) | 6.0 | 10.2 | ||||||||||||||||||||||||
Profit before tax |
3,895 | 3,684 | 5.7 | 6.8 | 7,579 | 7,480 | 1.3 | 3.4 | ||||||||||||||||||||||||
Tax on profit |
(1,353) | (1,326) | 2.0 | 3.4 | (2,679) | (2,659) | 0.8 | 3.2 | ||||||||||||||||||||||||
Profit from continuing operations |
2,542 | 2,358 | 7.8 | 8.8 | 4,900 | 4,821 | 1.6 | 3.6 | ||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | | | ||||||||||||||||||||||||
Consolidated profit |
2,542 | 2,358 | 7.8 | 8.8 | 4,900 | 4,821 | 1.6 | 3.6 | ||||||||||||||||||||||||
Non-controlling interests |
(445) | (410) | 8.5 | 9.0 | (855) | (769) | 11.2 | 10.8 | ||||||||||||||||||||||||
Underlying attributable profit to the parent |
2,097 | 1,948 | 7.6 | 8.7 | 4,045 | 4,052 | (0.2) | 2.1 | ||||||||||||||||||||||||
Net capital gains and provisions |
(706) | (108) | 553.7 | 536.6 | (814) | (300) | 171.3 | 171.3 | ||||||||||||||||||||||||
Attributable profit to the parent |
1,391 | 1,840 | (24.4) | (23.2) | 3,231 | 3,752 | (13.9) | (11.7) |
(1) Includes exchange differences.
12 January - June 2019
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Second quarter results compared to the first quarter of 2019
The second quarters attributable profit to the parent was 24% lower than the first quarters in euros and 23% lower without the FX impact. This comparison is conditioned by those amounts that are outside the ordinary course performance of our business (EUR -706 million), which are explained in previous pages.
Excluding these results, underlying attributable profit to the parent was 8% higher quarter-on-quarter in euros and 9% higher without the FX impact, as follows:
Total income increased 3% due to growth in customer revenue.
| Net interest income was 4% higher, mainly due to the good performance in Brazil, the recovery of inflation in Chile and rises at Santander Consumer Finance and the US because of larger volumes. |
| Net fee income increased 1% after absorbing the decrease derived from wholesale markets. The main increase was in Brazil. |
| Gains on financial transactions and other operating income remained virtually flat, after absorbing the contribution to the Single Resolution Fund (SRF) in the second quarter. |
| Operating expenses rose 2% driven by North America, South America (partly due to high inflation in Argentina) and Santander Global Platform (investments made in the initial phase), while Europe decreases, with falls in the UK, Spain and Portugal. |
| Loan-loss provisions decreased 1%, due to falls in Europe and the US. |
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Grupo Santander. Condensed balance sheet
EUR million
Assets | Jun-19 | Jun-18 | Absolute change |
% | Dec-18 | |||||||||||||||
Cash, cash balances at central banks and other demand deposits | 104,104 | 107,687 | (3,583) | (3.3) | 113,663 | |||||||||||||||
Financial assets held for trading | 102,574 | 112,947 | (10,373) | (9.2) | 92,879 | |||||||||||||||
Debt securities |
33,343 | 27,005 | 6,338 | 23.5 | 27,800 | |||||||||||||||
Equity instruments |
11,133 | 17,670 | (6,537) | (37.0) | 8,938 | |||||||||||||||
Loans and advances to customers |
300 | 5,103 | (4,803) | (94.1) | 202 | |||||||||||||||
Loans and advances to central banks and credit institutions |
| 7,172 | (7,172) | (100.0) | | |||||||||||||||
Derivatives |
57,798 | 55,997 | 1,801 | 3.2 | 55,939 | |||||||||||||||
Financial assets designated at fair value through profit or loss | 78,813 | 53,306 | 25,507 | 47.9 | 68,190 | |||||||||||||||
Loans and advances to customers |
23,407 | 20,289 | 3,118 | 15.4 | 23,796 | |||||||||||||||
Loans and advances to central banks and credit institutions |
46,915 | 25,131 | 21,784 | 86.7 | 32,325 | |||||||||||||||
Other (debt securities an equity instruments) |
8,491 | 7,886 | 605 | 7.7 | 12,069 | |||||||||||||||
Financial assets at fair value through other comprehensive income | 118,062 | 120,831 | (2,769) | (2.3) | 121,091 | |||||||||||||||
Debt securities |
111,891 | 116,520 | (4,629) | (4.0) | 116,819 | |||||||||||||||
Equity instruments |
2,789 | 2,766 | 23 | 0.8 | 2,671 | |||||||||||||||
Loans and advances to customers |
3,382 | 1,545 | 1,837 | 118.9 | 1,601 | |||||||||||||||
Loans and advances to central banks and credit institutions |
| | | | | |||||||||||||||
Financial assets measured at amortised cost | 981,046 | 922,948 | 58,098 | 6.3 | 946,099 | |||||||||||||||
Debt securities |
39,382 | 39,524 | (142) | (0.4) | 37,696 | |||||||||||||||
Loans and advances to customers |
881,146 | 835,155 | 45,991 | 5.5 | 857,322 | |||||||||||||||
Loans and advances to central banks and credit institutions |
60,518 | 48,269 | 12,249 | 25.4 | 51,081 | |||||||||||||||
Investments in subsidiaries, joint ventures and associates | 7,788 | 9,262 | (1,474) | (15.9) | 7,588 | |||||||||||||||
Tangible assets | 33,755 | 23,461 | 10,294 | 43.9 | 26,157 | |||||||||||||||
Intangible assets | 28,794 | 27,893 | 901 | 3.2 | 28,560 | |||||||||||||||
Goodwill |
25,613 | 25,035 | 578 | 2.3 | 25,466 | |||||||||||||||
Other intangible assets |
3,181 | 2,858 | 323 | 11.3 | 3,094 | |||||||||||||||
Other assets | 57,160 | 55,498 | 1,662 | 3.0 | 55,044 | |||||||||||||||
Total assets | 1,512,096 | 1,433,833 | 78,263 | 5.5 | 1,459,271 | |||||||||||||||
Liabilities and shareholders equity | ||||||||||||||||||||
Financial liabilities held for trading | 74,187 | 75,350 | (1,163) | (1.5) | 70,343 | |||||||||||||||
Customer deposits |
| 5,777 | (5,777) | (100.0) | | |||||||||||||||
Debt securities issued |
| | | | | |||||||||||||||
Deposits by central banks and credit institutions |
| 558 | (558) | (100.0) | | |||||||||||||||
Derivatives |
58,341 | 54,892 | 3,449 | 6.3 | 55,341 | |||||||||||||||
Other |
15,846 | 14,123 | 1,723 | 12.2 | 15,002 | |||||||||||||||
Financial liabilities designated at fair value through profit or loss | 60,237 | 58,153 | 2,084 | 3.6 | 68,058 | |||||||||||||||
Customer deposits |
37,849 | 31,881 | 5,968 | 18.7 | 39,597 | |||||||||||||||
Debt securities issued |
3,117 | 2,309 | 808 | 35.0 | 2,305 | |||||||||||||||
Deposits by central banks and credit institutions |
19,141 | 23,535 | (4,394) | (18.7) | 25,707 | |||||||||||||||
Other |
130 | 428 | (298) | (69.6) | 449 | |||||||||||||||
Financial liabilities measured at amortized cost | 1,224,194 | 1,153,918 | 70,276 | 6.1 | 1,171,630 | |||||||||||||||
Customer deposits |
776,902 | 736,767 | 40,135 | 5.4 | 740,899 | |||||||||||||||
Debt securities issued |
251,672 | 224,466 | 27,206 | 12.1 | 244,314 | |||||||||||||||
Deposits by central banks and credit institutions |
160,808 | 164,164 | (3,356) | (2.0) | 162,202 | |||||||||||||||
Other |
34,812 | 28,521 | 6,291 | 22.1 | 24,215 | |||||||||||||||
Liabilities under insurance contracts | 731 | 936 | (205) | (21.9) | 765 | |||||||||||||||
Provisions | 14,571 | 13,758 | 813 | 5.9 | 13,225 | |||||||||||||||
Other liabilities | 28,191 | 27,273 | 918 | 3.4 | 27,889 | |||||||||||||||
Total liabilities | 1,402,111 | 1,329,388 | 72,723 | 5.5 | 1,351,910 | |||||||||||||||
Shareholders equity | 120,054 | 117,935 | 2,119 | 1.8 | 118,613 | |||||||||||||||
Capital stock |
8,118 | 8,068 | 50 | 0.6 | 8,118 | |||||||||||||||
Reserves |
108,705 | 107,164 | 1,541 | 1.4 | 104,922 | |||||||||||||||
Attributable profit to the Group |
3,231 | 3,752 | (521) | (13.9) | 7,810 | |||||||||||||||
Less: dividends |
| (1,049) | 1,049 | (100.0) | (2,237) | |||||||||||||||
Other comprehensive income | (21,425) | (23,885) | 2,460 | (10.3) | (22,141) | |||||||||||||||
Minority interests | 11,356 | 10,395 | 961 | 9.2 | 10,889 | |||||||||||||||
Total equity | 109,985 | 104,445 | 5,540 | 5.3 | 107,361 | |||||||||||||||
Total liabilities and equity | 1,512,096 | 1,433,833 | 78,263 | 5.5 | 1,459,271 |
14 January - June 2019
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GRUPO SANTANDER BALANCE SHEET
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Compared to June 2018, gross loans and advances to customers (excluding reverse repos) as well as customer funds increased.
Gross loans and advances to customers excluding reverse repos rose 4% year-on-year, both in euros and in constant euros, with growth in seven of the 10 core countries, particularly in developing markets (+12%).
Customer funds increased 7% year-on-year in euros. In constant euros up 6%, with rises in the 10 core units. Deposits (excluding repos) grew in all units and mutual funds in most of them, due to the better performance in recent months (+4% in constant euros in the quarter and 9% since December 2018). |
Loans and advances to customers
Gross loans and advances to customers rose to EUR 908,234 million, 5% growth year-on-year.
The Group uses gross loans and advances to customers excluding reverse repos for the purpose of analysing traditional commercial banking loans.
| Compared to June 2018, gross loans and advances to customers excluding reverse repos and the exchange rate impact increased 4%, with the following evolution by countries: |
| Increase in seven of the 10 core units, particularly all developing countries, which overall grew 12%: Poland (+26%), partly because of the increased perimeter, Argentina (+14%), due to peso balances as well as the impact of the currencys depreciation on dollar balances, Brazil (+9%), Mexico (+8%) and Chile (+7%). |
| As regards mature markets, notable growth in the United States (+10%, with growth in SC USA and SBNA) and Santander Consumer Finance (+7%), with rises in all countries that comprise it. The UKs balances remained stable, as mortgage and other retail loan growth was partially offset by the reduction of commercial real estate exposure. |
| The only declines were in Portugal and Spain, markets that continued to deleverage and where gross loans and advances to customers excluding reverse repos fell by 1% and 4%, respectively. Portugal was affected by the sale of non-productive portfolios, and Spain was affected by lower wholesale balances and with institutions. |
| Quarter-on-quarter, gross loans and advances to customers excluding reverse repos increased 2%. Growth of 3% in Santander Consumer Finance and in the US, 2% in Poland, Mexico and Chile and around 1% in the UK and Brazil. Spain remained stable in the quarter and Argentina decreased 2%. |
| Loans and advances to customers maintained a balanced structure at the end of the semester: individuals (46%), consumer credit (17%), SMEs and companies (25%) and SCIB (12%). |
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Customer funds
Customer deposits amounted to EUR 814,751 million, 5% growth in the last 12 months.
The Group uses customer funds (customer deposits excluding repos, and including mutual funds) for the purpose of analysing traditional retail banking funds.
| Compared to June 2018, customer funds increased 7%. Excluding the exchange rate impact, growth was 6%, as follows: |
| By units, funds rose in all of them, particularly Argentina (+40%), Poland (+22%), Brazil (+11%) and the US (+10%). More moderate growth of between 3% and 5% in Santander Consumer Finance, Spain and Chile. Balances in the UK and Mexico rose 2%. |
| Demand deposits increased 7%, with growth in all units except Mexico. Time deposits rose 5% mainly due to the US and South American countries, particularly Brazil, which grew 14% under its strategy of replacing letras financeiras with customer deposits in order to optimise the cost of funds. Mutual funds rose 5%, recovering growth in 2019 in most of the units after the fall in markets in 2018. |
| In the second quarter, customer funds increased 2% (+3% excluding exchange rate impacts). Deposits grew 3% and mutual funds grew 4%. By countries, and in local currency, there was an increase in the 10 core units, with the following detail by product: |
| As regards deposits, without repos, notable growth in Brazil (+8%), Argentina (+6%), and the US (+4%). Rises in all of them in demand as well as time deposits. |
| Mutual funds grew strongly in all the units. |
| Customer funds continued to be well diversified by products: 60% are demand deposits, 22% time deposits and 18% mutual funds. |
As well as capturing customer deposits, Grupo Santander, for strategic reasons, maintains a selective policy of issuing securities in the international fixed income markets and strives to adapt the frequency and volume of its market operations to the structural liquidity needs of each unit, as well as to the receptiveness of each market.
In the first half, the Group issued:
| Medium- and long-term senior debt amounting to EUR 12,254 million and covered bonds placed in the market of EUR 4,511 million. |
| There were EUR 7,885 million of securitisations placed in the market. |
| Issuances to meet the TLAC (Total Loss-Absorbing Capacity) requirement amounting to EUR 1,947 million, in order to strengthen the Groups situation (senior non-preferred: EUR 885 million, preferred: EUR 1,062 million). |
| Maturities of medium- and long-term debt of EUR 13,918 million. |
| The net loan-to-deposit ratio was 111% (111% in June 2018). The ratio of deposits plus medium- and long-term funding to the Groups loans was 115%, underscoring the comfortable funding structure. |
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SOLVENCY RATIOS
The CET1 ratio reached 11.30% following the organic generation of 11 bps in the quarter and absorbing -20 basis points of regulatory impacts and restructuring costs.
Tangible equity per share was EUR 4.30.
The fully loaded leverage ratio was 5.0%, almost the same quarter-on-quarter. |
At the end of June 2019, the total phased-in capital ratio stood at 14.83% and the CET1 ratio (phased-in and fully loaded) at 11.30%, comfortably meeting the minimum levels required by the European Central Bank on a consolidated basis (13.187% for the total capital ratio and 9.687% for the CET1 ratio).
In the quarter, we continued to generate capital organically, +11 basis points, as a result of underlying profits and the active management of risk weighted assets. As such, the organic generation in the first half of the year was 29 basis points.
This, together with favourable market movements benefiting the held to collect and sell portfolio (due to falling interest rates), compensated the negative accounting and regulatory impacts registered in the year to date (-36 basis points, principally due to IFRS 16 application and TRIM), as well as the negative 13 basis point impact from restructuring costs, mainly in Spain.
Had the IFRS 9 transitional arrangement not been applied, the total impact on the CET1 would have been -23 basis points.
In April 2019, the European Central Bank published the aggregate result of its Supervisory Review and Evaluation Process (SREP) carried out in 2018. Santander has lower capital requirements than the average of SSM banks. This positive differential was wider in 2018 than in 2017.
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RISK MANAGEMENT
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Santander maintained its medium-low risk profile in the second quarter with an enhanced credit quality, low risk market activity focused on our customers and limited exposure to operational risk events.
The Groups credit quality improved: NPL ratio decreased to 3.51% and cost of credit is still below 1%. Coverage remained stable at 68%.
Market risk exposure remained at low levels despite continued volatility and uncertainty.
The operational risk profile remained stable, with a similar distribution of losses by category in the quarter. |
Credit risk management
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Non-performing loans by quarter | ||||||||||||||||||||||||
EUR million | ||||||||||||||||||||||||
Q118 | Q218 | Q318 | Q418 | Q119 | Q219 | |||||||||||||||||||
Balance at beginning of period |
37,596 | 37,407 | 36,654 | 36,332 | 35,692 | 35,590 | ||||||||||||||||||
Net additions |
2,340 | 2,906 | 2,528 | 3,136 | 2,147 | 2,511 | ||||||||||||||||||
Increase in scope of consolidation |
| | | 177 | | | ||||||||||||||||||
Exchange rate differences and other |
361 | (409) | (140) | (130) | 479 | (162) | ||||||||||||||||||
Write-offs |
(2,890) | (3,250) | (2,710) | (3,823) | (2,728) | (3,518) | ||||||||||||||||||
Balance at period-end |
37,407 | 36,654 | 36,332 | 35,692 | 35,590 | 34,421 |
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Structural and liquidity risk
| With regards to structural exchange rate risk, Santanders CET1 ratio coverage remained around 100% in order to protect it from foreign currency movements. |
| In structural interest rate risk, during the second quarter a positive impact was generated in the value of the structural debt portfolio that was close to EUR 800 million, given the downward pressure on interest rates due to trade disputes, greater geopolitical tensions and increased expectations of new stimuli by the ECB and the Fed, as well as implementation of the economic reforms proposed in Brazil. |
| In liquidity risk during the second quarter, the Group maintained a comfortable position, supported by a robust and diversified liquidity buffer, with ratios well above regulatory limits. |
Operational risk
| The operational risk profile remained stable in the second quarter, although the volume of losses increased slightly due to the PPI claims in the UK, given that the deadline to present claims is approaching. Nevertheless, accumulated losses in the first half are lower than in the previous half year. |
| In relative terms, levels of losses by Basel categories were similar, mainly those derived from civil claims with customers and external fraud. |
| Specific risk-monitoring frameworks continued to improve such as those for suppliers or the most significant change management processes, as well as implementing measures to mitigate fraud in the main units (Mexico, UK and Brazil). |
| Cybersecurity, a key area for the Group, continues to improve. Progress continued to be made in the first half of 2019 in our cybersecurity transformation programme in order to strengthen the detection, response and protection mechanisms. |
20 January - June 2019
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GENERAL BACKGROUND
Economic activity slowed in the second quarter of 2019, particularly in mature economies, as a result of trade tensions which hit exports and investment and some one-off factors. Growth was noticeably slower in EU countries. The forecast for global growth in 2019 is around 3.25% (3.6% in 2018).
Slower growth together with downside risks and inflation generally below target produced a downward change in markets expectations on official interest rates reinforced by central banks which now discount cuts in the Feds and ECBs benchmark rates. Latin American central banks thus have greater leeway.
Country | GDP change 1 |
Economic performance | ||||
|
Eurozone |
+1.2% |
Growth weakened, affected by idiosyncratic factors in some countries combined with a weakening of global trade and greater uncertainties. Inflation fell to 1.2% in June as a result of lower energy prices. The European Central Bank held its very soft monetary policy and is contemplating, if necessary, expansive measures.
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Spain |
+2.4% |
Economic growth remained stronger than the Eurozones, despite weakening a little. Job creation was still notable. The unemployment rate continued to fall. Inflation slipped to 0.4% in June.
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Poland |
+4.7% |
GDP growth in the first quarter was brisk and based on solid foundations. The jobless rate is close to a historic low (3.9% in the first quarter). Inflation was 2.6% in June, exceeding the 2.5% inflation target for the first time in seven years. The benchmark rate, however, remained at 1.5%.
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Portugal |
+1.8% |
Growth quickened slightly in the first quarter, but was not enough to keep on reducing the unemployment rate which is 6.8%, due to lower employment growth. Inflation was low at 0.4% in June. The fiscal deficit fell to 0.5% in 2018.
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United Kingdom |
+1.8% |
The economy grew strongly in the first quarter (+0.5% over Q418). Inflation was 2.0% in June, in line with the Bank of Englands target and the unemployment rate inched down to 3.8%. The base rate remained at 0.75%, pending the outcome of Brexit.
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Brazil |
+0.5% |
Growth slowed in the first quarter, due to weaker investment. Inflation eased to 3.4% in June, after rising in the first quarter and is expected to be below the 4.25% target. The central bank held its key rate at 6.50% (a historic low) but introduced a downward bias at its June meeting. The pension reform was passed the first vote in Congress.
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Mexico |
+1.2% |
The economy slowed in the first quarter. Inflation was 3.9% in June and the expectations are anchored at around 3.5%. The central bank held its key rate at 8.25%, but at its June meeting a member of the monetary committee voted to cut it by 25 bps.
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Chile |
+1.6% |
GDP growth decelerated in the first quarter, due to lower growth in investment and a fall in exports. The central bank cut its benchmark rate by 25 bps in June to 2.5% and left the bias neutral, suggesting stability. Inflation remained low (2.3% in June).
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Argentina |
-5.8% |
The economy continued its adjustment process in order to reduce inflation and the fiscal and external imbalances. Activity seems to have reached a cyclical low in the first quarter, as Aprils indicators suggest. Inflation shows incipient signs of easing in the second quarter, underpinned by a stable exchange rate.
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United States |
+3.2% |
GDP growth gathered pace due to temporary factors in the first quarter. The unemployment rate was 3.7% in June and inflation remained below the Feds target (underlying rate of 1.6% in May), which kept interest rates stable at 2.25-2.5%, but gave a downward bias to its messages.
|
(1) Year-on-year change Q119.
January - June 2019 21
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DESCRIPTION OF SEGMENTS
The segment reporting is based on financial information presented to the chief operating decision maker, which excludes certain items included in the statutory results that distort year-on-year comparisons and are not considered for management reporting purposes. This financial information (underlying basis) is computed by adjusting reported results for the effects of certain gains and losses (e.g.: capital gains, write-downs, impairment of goodwill, etc.). These gains and losses are items that management and investors ordinarily identify and consider separately to better understand the underlying trends in the business.
The Group has aligned the information in this operating segment section in a manner consistent with the underlying information used internally for management reporting purposes and with that presented throughout the Groups other public documents.
The Group executive committee has been determined to be the chief operating decision maker for the Group. The Groups operating segments reflect the organisational and management structures. The Group executive committee reviews the internal reporting based on these segments in order to assess performance and allocate resources.
The segments are differentiated by the geographic area where profits are earned, and by type of business. The financial information of each reportable segment is prepared by aggregating the figures for the Groups various geographic areas and business units. The information relates to both the accounting data of the units integrated in each segment and that provided by management information systems. In all cases, the same general principles as those used in the Group are applied.
The businesses included in each of the business areas in this report and the accounting principles under which their results are presented here may differ from the businesses included and accounting principles applied in the financial information separately prepared and disclosed by our subsidiaries (some of which are publicly listed) which in name or geographical description may seem to correspond to the business areas covered in this report. Accordingly, the results of operations and trends shown for our business areas in this document may differ materially from those of such subsidiaries.
At the beginning of July 2019, we announced that, starting with the financial information for the first half of 2019, we would carry out a change in our reported segments to reflect our current organisational and management structure.
This change in our reported segments aims to align the segment information to how segments and units are managed and has no impact on accounting figures at the Group level. The main changes, which have been applied to segment information for all periods included in the consolidated financial statements, are the following:
Primary segments
1. | Creation of the new geographic segment Europe that includes the existing units under the previous Continental Europe segment (Spain, Portugal, Poland and Santander Consumer Finance) plus the UK (that was previously a segment on its own and is now a unit under the segment Europe). |
| The UK is aligned with the ring-fencing structure, including products and services distributed to our retail customers and the majority of our business customers. The businesses excluded are now incorporated in the rest of Europe. |
| Spain now includes the Real Estate Activity Spain unit, previously included in the rest of Europe, and it excludes some treasury businesses now reported in the rest of Europe and the online bank Openbank is now incorporated in the new digital segment (Santander Global Platform). |
| Rest of Europe, included within the Europe segment, comprises mainly (i) CIB businesses such as Banco Santander, S.A. branches outside of Spain (including the businesses excluded from the UK as a result of ring-fencing) as well as Spains treasury business and (ii) Private Bankings Wealth Management & Insurance businesses in Switzerland, mutual funds in Luxemburg and Insurance in Zurich. |
2. | Creation of the new geographic segment North America that comprises the existing units under the previous US segment plus Mexico. |
3. | Creation of the new geographic segment South America that comprises the existing units under the previous Latin America segment except for Mexico. |
4. | Creation of a new reporting unit segment, Santander Global Platform, which includes our global digital services under a single unit: |
| Our fully digital native bank Openbank and Open Digital Services. |
| Global Payments Services: payments platform to better serve our customers with value propositions developed globally, including Superdigital, Pago FX and our recently launched global businesses (Global Merchant Services and Global Trade Services). |
| Digital Assets: common digital assets and Centres of Digital Expertise which help our banks in their digital transformation. |
Secondary segments
5. | The Real Estate Activity Spain unit, that was previously a segment reported on its own, is now included in Retail Banking. |
6. | The insurance business, previously included in Retail Banking, is now included in the Wealth Management segment, which was renamed Wealth Management & Insurance. |
22 January - June 2019
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7. | The new digital segment (Santander Global Platform) is also incorporated as a secondary segment. |
8. | Finally, the change in reported segments also includes adjustments of the clients of the Global Customer Relationship Model between Retail Banking and Santander Corporate & Investment Banking and between Retail Banking and Wealth Management & Insurance. |
The changes in the secondary segments have no impact on the primary segments.
To allow better quarter-on-quarter and year-on-year comparability, and as was published in the Relevant Fact in July 2019, the Group has provided the quarterly 2018 and first quarter of 2019 data on a new basis, in accordance with the new structure of the Group.
After these changes, the operating business areas are structured in two levels:
Primary segments
This primary level of segmentation, which is based on the Groups management structure, comprises five reportable segments: four operating areas plus the Corporate Centre. The operating areas are:
Europe: which comprises all the business activities carried out in the region. Detailed financial information is provided on Spain, Portugal, Poland, Santander Consumer Finance (which incorporates all the regions business, including the three countries mentioned herewith) and the UK.
North America: which comprises all the business activities carried out in Mexico and the US, which includes the holding company (SHUSA) and the businesses of Santander Bank, Santander Consumer USA, Banco Santander Puerto Rico, the specialised unit Banco Santander International and the New York branch.
South America: includes all the financial activities carried out by the Group through its banks and subsidiary banks in the region. Detailed information is provided on Brazil, Chile, Argentina, Uruguay, Peru and Colombia.
Santander Global Platform: includes our fully digital bank Openbank and Open Digital Services, Global Payments Services (Superdigital, Pago FX, Global Merchant Services, Global Trade Services) and Digital Assets (Centres of Digital Expertise, InnoVentures and Digital Assets).
Secondary segments
At this secondary level of segment reporting, the Group is structured into Retail Banking, Santander Corporate & Investment Banking, Wealth Management & Insurance and Santander Global Platform.
Retail Banking: this covers all customer banking businesses, including consumer finance, except those of corporate banking, which are managed through Santander Corporate & Investment Banking, and asset management, private banking and insurance, which are managed by Wealth Management & Insurance. The results of the hedging positions in each country are also included, conducted within the sphere of each ones assets and liabilities committee.
Santander Corporate & Investment Banking (SCIB): This business reflects revenue from global corporate banking, investment banking and markets worldwide including treasuries managed globally (always after the appropriate distribution with Retail Banking customers), as well as equity business.
Wealth Management & Insurance: Includes the asset management business (Santander Asset Management), the corporate unit of Private Banking and International Private Banking in Miami and Switzerland and the insurance business (Santander Insurance).
Santander Global Platform: includes our fully digital bank Openbank and Open Digital Services, Global Payments Services (Superdigital, Pago FX, Global Merchant Services, Global Trade Services) and Digital Assets (Centres of Digital Expertise, InnoVentures and Digital Assets).
In addition to these operating units, which report by geographic area and businesses, the Group continues to maintain the area of Corporate Centre, that includes the centralised activities relating to equity stakes in financial companies, financial management of the structural exchange rate position, assumed within the sphere of the Groups assets and liabilities committee, as well as management of liquidity and of shareholders equity via issuances.
As the Groups holding entity, this area manages all capital and reserves and allocations of capital and liquidity with the rest of businesses. It also incorporates amortisation of goodwill but not the costs related to the Groups central services (charged to the areas), except for corporate and institutional expenses related to the Groups functioning.
As described on the previous page, the results of our business areas presented below are provided on the basis of underlying results only and including the impact of foreign exchange rate fluctuations. However, for a better understanding of the actual changes in the performance of our business areas, we provide and discuss the year-on-year changes to our results excluding such impact. |
On the other hand, certain figures contained in this report, including financial information, have been subject to rounding to enhance their presentation. Accordingly, in certain instances, the sum of the numbers in a column or a row in tables contained in this report may not conform exactly to the total figure given for that column or row. |
January - June 2019 23
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First half 2019
Main items of the underlying income statement
EUR million
Primary segments | Net interest income |
Net fee income |
Total income |
Net operating income |
Profit before tax |
Underlying attributable profit to the parent |
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EUROPE |
7,141 | 2,630 | 10,413 | 4,822 | 3,549 | 2,354 | ||||||||||||||||||
Spain |
2,018 | 1,247 | 3,706 | 1,661 | 936 | 694 | ||||||||||||||||||
Santander Consumer Finance |
1,911 | 415 | 2,321 | 1,286 | 1,117 | 658 | ||||||||||||||||||
United Kingdom |
1,919 | 423 | 2,388 | 946 | 792 | 582 | ||||||||||||||||||
Portugal |
429 | 197 | 712 | 400 | 379 | 260 | ||||||||||||||||||
Poland |
565 | 230 | 817 | 467 | 293 | 150 | ||||||||||||||||||
Other |
299 | 118 | 469 | 62 | 33 | 10 | ||||||||||||||||||
NORTH AMERICA |
4,403 | 901 | 5,672 | 3,286 | 1,594 | 889 | ||||||||||||||||||
US |
2,860 | 479 | 3,734 | 2,154 | 891 | 465 | ||||||||||||||||||
Mexico |
1,543 | 423 | 1,938 | 1,132 | 703 | 424 | ||||||||||||||||||
SOUTH AMERICA |
6,647 | 2,355 | 9,134 | 5,825 | 3,661 | 1,961 | ||||||||||||||||||
Brazil |
4,979 | 1,855 | 6,864 | 4,637 | 2,846 | 1,482 | ||||||||||||||||||
Chile |
940 | 200 | 1,255 | 731 | 560 | 311 | ||||||||||||||||||
Argentina |
511 | 241 | 720 | 289 | 127 | 73 | ||||||||||||||||||
Other |
217 | 60 | 295 | 168 | 128 | 94 | ||||||||||||||||||
SANTANDER GLOBAL PLATFORM |
46 | 2 | 39 | (69) | (70) | (51) | ||||||||||||||||||
CORPORATE CENTRE |
(600) | (27) | (822) | (1,015) | (1,155) | (1,108) | ||||||||||||||||||
TOTAL GROUP |
17,636 | 5,863 | 24,436 | 12,849 | 7,579 | 4,045 | ||||||||||||||||||
Secondary segments | ||||||||||||||||||||||||
RETAIL BANKING |
16,553 | 4,583 | 21,528 | 11,816 | 6,776 | 3,856 | ||||||||||||||||||
CORPORATE & INVESTMENT BANKING |
1,354 | 730 | 2,606 | 1,488 | 1,396 | 889 | ||||||||||||||||||
WEALTH MANAGEMENT & INSURANCE |
283 | 574 | 1,085 | 630 | 632 | 459 | ||||||||||||||||||
SANTANDER GLOBAL PLATFORM |
46 | 2 | 39 | (69) | (70) | (51) | ||||||||||||||||||
CORPORATE CENTRE |
(600) | (27) | (822) | (1,015) | (1,155) | (1,108) | ||||||||||||||||||
TOTAL GROUP |
17,636 | 5,863 | 24,436 | 12,849 | 7,579 | 4,045 |
24 January - June 2019
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First half 2018
Main items of the underlying income statement
EUR million
Primary segments | Net interest income |
Net fee income |
Total income |
Net operating income |
Profit before tax |
Underlying attributable profit to the parent |
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EUROPE |
7,010 | 2,754 | 10,524 | 4,858 | 3,610 | 2,422 | ||||||||||||||||||
Spain |
1,995 | 1,340 | 3,746 | 1,540 | 871 | 661 | ||||||||||||||||||
Santander Consumer Finance |
1,843 | 403 | 2,266 | 1,248 | 1,096 | 667 | ||||||||||||||||||
United Kingdom |
2,052 | 459 | 2,590 | 1,150 | 944 | 665 | ||||||||||||||||||
Portugal |
435 | 189 | 688 | 363 | 324 | 229 | ||||||||||||||||||
Poland |
487 | 227 | 731 | 414 | 280 | 155 | ||||||||||||||||||
Other |
198 | 137 | 504 | 142 | 95 | 45 | ||||||||||||||||||
NORTH AMERICA |
3,802 | 809 | 4,947 | 2,766 | 1,265 | 690 | ||||||||||||||||||
US |
2,501 | 434 | 3,248 | 1,773 | 676 | 334 | ||||||||||||||||||
Mexico |
1,301 | 376 | 1,699 | 993 | 589 | 357 | ||||||||||||||||||
SOUTH AMERICA |
6,557 | 2,340 | 9,151 | 5,790 | 3,499 | 1,846 | ||||||||||||||||||
Brazil |
4,906 | 1,792 | 6,768 | 4,499 | 2,603 | 1,317 | ||||||||||||||||||
Chile |
985 | 227 | 1,282 | 751 | 568 | 307 | ||||||||||||||||||
Argentina |
447 | 263 | 807 | 381 | 198 | 136 | ||||||||||||||||||
Other |
218 | 58 | 294 | 160 | 129 | 85 | ||||||||||||||||||
SANTANDER GLOBAL PLATFORM |
38 | 2 | 34 | (28) | (29) | (23) | ||||||||||||||||||
CORPORATE CENTRE |
(477) | (17) | (494) | (706) | (866) | (884) | ||||||||||||||||||
TOTAL GROUP |
16,931 | 5,889 | 24,162 | 12,680 | 7,480 | 4,052 | ||||||||||||||||||
Secondary segments | ||||||||||||||||||||||||
RETAIL BANKING |
15,972 | 4,502 | 21,029 | 11,302 | 6,430 | 3,677 | ||||||||||||||||||
CORPORATE & INVESTMENT BANKING |
1,141 | 819 | 2,561 | 1,523 | 1,360 | 858 | ||||||||||||||||||
WEALTH MANAGEMENT & INSURANCE |
256 | 583 | 1,032 | 589 | 584 | 424 | ||||||||||||||||||
SANTANDER GLOBAL PLATFORM |
38 | 2 | 34 | (28) | (29) | (23) | ||||||||||||||||||
CORPORATE CENTRE |
(477) | (17) | (494) | (706) | (866) | (884) | ||||||||||||||||||
TOTAL GROUP |
16,931 | 5,889 | 24,162 | 12,680 | 7,480 | 4,052 |
January - June 2019 25
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EUROPE
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Highlights (changes in constant euros)
Given the current macroeconomic environment characterised by lower for longer interest rates, we are working on our franchise to simplify our structures and operate in a more integrated way in the medium-term.
In terms of volumes, growth was moderate (+2%) in gross loans and advances to customers (excluding reverse repos) and +5% customer funds.
Underlying attributable profit for the period amounted to EUR 2,354 million, down 3% compared to first half of 2018, due to lower gains on financial transactions (markets) and net fee income (mainly CIB). Conversely, net interest income increased and costs and provisions fell. |
26 January - June 2019
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Highlights
The integration of Banco Popular with the migration of all offices and customers to the Santander platform was successfully completed. The process of optimising the commercial network, which will be gradually carried out over the coming months, begun.
Positive evolution of the levels of customer satisfaction in the migration, particularly in transparency, accompanying customers and communication.
We completed the reorganisation of the strategic insurance business, with the end of the agreement with Allianz and the creation of new joint ventures with Aegon and Mapfre1.
The first half underlying profit was 5% higher year-on-year at EUR 694 million, mainly due to lower costs. | |||
(1) Transactions pending regulatory authorisation and other customary conditions. |
January - June 2019 27
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Santander Consumer Finance
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Highlights (changes in constant euros)
SCF continues to be the European consumer finance leader, with critical mass and among the Top 3 in its markets in Europe. Gross loans and advances to customers (excluding reverse repos) rose 7% and new lending 4% year-on-year.
Total income increased 3%, largely due to net interest income and net fee income, which together with cost control pushed up net operating income by 3%.
First half underlying attributable profit was EUR 658 million, virtually unchanged year-on-year due to the good performance of revenue, operating expenses and the cost of credit (still at low levels for this business).
Continued high profitability: RoTE of around 15% and RoRWA of more than 2%. |
28 January - June 2019
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Highlights (changes in constant euros)
Business performance remained solid: switcher1 levels above market average, strong increase in digital customers and amongst the best in customer satisfaction.
In terms of volumes, growth in mortgages due to the strengthening of our activity in a competitive market. Solid trend in customer funds, especially in savings deposits, underpinned by the success of an ISA campaign.
Underlying attributable profit fell 13%, reflecting the continued competitive pressure on mortgage margins and SVR attrition. On the other hand, the costs and provisions trend improved. |
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Highlights
The Bank continued its commercial and digital transformation, marketing new products for companies and SMEs and making the granting of new mortgages simpler and faster.
Market shares in new lending to companies and mortgages reached around 20%, in a market that is still deleveraging.
Underlying attributable profit increased 14% year-on-year, reflecting revenue growth, lower costs from optimising the structure and a very low cost of credit. |
30 January - June 2019
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Poland
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Highlights (changes in constant euros)
As at end of the first half of 2019, Santander is the second largest bank in Poland in terms of assets following the integration of Deutsche Bank Polskas retail and SME business in 2018.
The main management priorities are increasing revenue in a competitive environment and achieving synergies from the integration.
In earnings, net operating income (after provisions) increased 12%, which is not reflected in underlying profit (-1%) due to the higher BFG and Banking Tax contribution, the latter adding to fiscal pressures as it is not tax deductible. |
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Highlights (changes in constant euros)
In North America, the US and Mexico are managed according to their local strategic priorities, while increasing coordination and cooperation between the two units.
Volumes grew both in the quarter and over the past twelve months.
Underlying attributable profit increased 21% year-on-year, driven by total revenue and improved efficiency. |
32 January - June 2019
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Highlights (changes in constant euros)
The strategy is focused on improving customer satisfaction at SBNA and at SC USA on the relationship with distributors to increase originations.
Following the strong gains in the quarter, the year-on-year volume trend in both gross loans and advances to customers (excluding reverse repos) and customer deposits (excluding repos) was more pronounced.
Underlying attributable profit increased by 30% in the first half compared to the same period of 2018, due to a strong top line performance, with total revenue up 7% and costs remaining flat. |
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Mexico
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Highlights (changes in constant euros)
The strategy continued to focus on the digital and operational transformation, reflected in greater customer attraction and increased loyalty.
Faster growth in gross loans and advances to customers (excluding reverse repos), notably to large companies (+15%) and payroll (+15%). The rise in customer funds continued to be spurred by deposits from individuals and SMEs.
Underlying attributable profit was up 12%, underpinned by the good performance of net interest income, net fee income and loan-loss provisions, which more than offset the rise in costs. |
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SOUTH AMERICA
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Highlights (changes in constant euros)
In South America, the focus is to accelerate profitable growth and lead the retail financial industry. To this end, we have a strategy that seeks to strengthen a more connected regional network and facilitate the expansion of successful businesses to other countries in the region.
In activity, there was a volume growth in the last 12 months. Increases in all countries, where we are capturing new business opportunities.
Regarding results, underlying attributable profit increased by 15% year-on-year, boosted by revenue and an improvement in the cost of credit. |
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Brazil
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Highlights (changes in constant euros)
Generating results supported by a business model focused on improving customer attention and loyalty leading to profitable market share gains.
Strong revenue, underpinned by increased volumes, while costs remained under control thereby achieving the best efficiency among our local peers.
Prudent risk management produced growth in gross loans and advances (excluding reverse repos) and a controlled cost of credit.
Profit growing sustainably reaching EUR 1,482 million in the first half of the year (+18% year-on-year), with RoTE of 22%. |
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Chile
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Highlights (changes in constant euros)
We continued the commercial and branch network transformation, based on technological developments in order to attract new customers and boost loyalty. Loyal customers already account for 46% of total active clients.
Growth in business volumes at a faster pace, mainly with individuals, companies and institutions.
Underlying attributable profit increased 4% year-on-year, benefiting from the performance of markets and lower provisions. Higher inflation in the second quarter spurred net interest income.
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Highlights (changes in constant euros)
The Bank announced the change of its commercial brand from Santander Río to Santander.
We continued to focus on our four strategic pillars: growth, risk control, efficiency and customer experience.
Santander is the largest privately-owned bank in Argentina by volume of business (loans + deposits + mutual funds).
First half underlying profit of EUR 73 million after earning EUR 63 million in the second quarter. The year-on-year comparison is impacted by the adjustment for inflation included starting from the third quarter of 2018.
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Highlights (changes in constant euros)
The Group is the countrys leading privately-owned bank, doing business with all segments and with a strategy focused on retail banking, improving efficiency and enhancing the quality of service.
Underlying attributable profit rose 13%, spurred by the good performance of customer revenue and improved efficiency. | |
Commercial activity and business performance
| Santander continued to focus on improving customer satisfaction and increasing loyalty. Loyal customers rose 19% and now account for 24% of active clients. |
| We continued to advance in our digital transformation strategy and in modernising channels. The number of digital customers increased 9% (digital penetration of 48%, up from 45% in June 2018) while transactions via digital channels rose 36% year-on-year. |
| The Groups consumer finance companies now lead the local market, with a market share of more than 22%. Commercial activity continued to grow briskly, with significant growth in the customer base. In line with our strategy of innovation and contributing to peoples progress, we launched Prosperá, which provides microcredits to small businesses. |
| Gross loans and advances to customer (excluding reverse repos) grew in target segments, products and currencies: +14% in consumer credit and cards and +19% in the national currency portfolio. Customer deposits (excluding repos) in pesos grew 11% and foreign currency deposits increased 4% year-on-year. |
Results
First half of 2019 underlying attributable profit of EUR 71 million, 13% higher year-on-year.
| Gross income rose 15%, driven by customer revenue, with increases in both net interest income and net fee income. |
| Operating expenses rose at a slower pace than total income, improving the efficiency ratio to 43% (-63 bps year-on-year). |
| Loan-loss provisions increased 9%, however the NPL ratio remained at a low level (3.46%), coverage was high (109%) and the cost of credit was 2.60%. |
Peru Highlights (changes in constant euros)
| The strategy remained focused on the corporate segment, the countrys large companies and the Groups global customers. |
| The auto loan financial entity continued to expand its business within the Groups strategy of increasing its presence in this business. |
| First half underlying attributable profit of EUR 19 million (+8% year-on-year). Total income rose 23% underpinned by higher net interest income, net fee income and gains on financial transactions. Operating expenses increased 12% and the efficiency ratio was 33.3% (-3.3 pp year-on-year). |
| The NPL ratio was 0.81%, coverage was very high and the cost of credit only 0.30%. |
Colombia Highlights (changes in constant euros)
| Activity in Colombia remained focused on SCIB clients, large companies and corporates, contributing solutions in treasury, risk hedging, foreign trade, confirming, custody and development of investment banking products supporting the countrys infrastructure plan. |
| Auto finance is also increasing. The origination share reached 2.3% (+60 bps in 12 months), in line with the strategy to attain the critical mass needed to consolidate ourselves in this market. We signed an alliance with Chekar.co, a fully digital platform for buying and selling vehicles. We will begin to grant consumer loans in the coming quarters. |
| Gross loans and advances to customers (excluding reverse repos) more than doubled, with growth in all business segments. Of note was the fivefold rise in auto finance. Customer deposits (excluding repos) rose 75%. |
| The first half underlying attributable profit was EUR 5 million (EUR 2 million in the same period of 2018). Total income grew 66%, underpinned by net interest income and net fee income, thanks to greater commercial activity. |
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SANTANDER GLOBAL PLATFORM (SGP)
| |||
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Highlights
With the creation of Santander Global Platform, we are taking a further step forward in our digital transformation, which aligns our reporting structure with our organisation and strategy.
Our goal is to extend the benefits of the talent and scale of the Group to the payment and digital businesses with higher growth, building platforms only once for all of our banks which allow us to offer the best digital services aimed at retail customers, merchants and SMEs.
In making our Santander Global Platform results public, we are improving the transparency around our digital investments and accelerate the execution of our initiatives.
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CORPORATE CENTRE | |||
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Highlights
The Corporate Centres objective is to aid the operating units by contributing value and carrying out the corporate function of oversight and control. It also carries out functions related to financial and capital management.
The underlying attributable loss was higher compared to the first half of 2018, mainly due to higher costs related to foreign currency hedging and increased stock of issuances.
|
Strategy and functions
The Corporate Centre contributes value to the Group in various ways:
| It makes the Groups governance more solid, through global control frameworks and supervision. |
| Fostering the exchange of best practices in management of costs and generating economies of scale. This enables us to be one of the most efficient banks. |
| The Corporate Centre contributes to the Groups revenue growth, by sharing the best commercial practices, launching global commercial initiatives and accelerating the digital transformation simultaneously in all countries. |
It also coordinates the relationship with European regulators and develops functions related to financial and capital management, as follows:
| Financial Management functions |
| Structural management of liquidity risk associated with funding the Groups recurring activity, stakes of a financial nature and management of net liquidity related to the needs of some business units. |
| This activity is carried out by the different funding sources (issuances and other), always maintaining an adequate profile in volumes, maturities and costs. The price at which these operations are made with other Group units is the market rate (Euribor or mid-swap) plus the premium, which in liquidity terms, the Group supports by immobilising funds during the term of the operation. |
| Interest rate risk is also actively managed in order to soften the impact of interest rate changes on net interest income, conducted via high credit quality, very liquid and low capital consumption derivatives. |
| Strategic management of the exposure to exchange rates in equity and dynamic in the countervalue of the units annual results in euros. Net investments in equity are currently covered by EUR 24,990 million (mainly Brazil, the UK, Mexico, Chile, the US, Poland and Norway) with different instruments (spot, fx, forwards). |
| Management of total capital and reserves: capital allocated to each of the units. |
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RETAIL BANKING | |||
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Highlights (changes in constant euros)
The Group continued to focus on customer loyalty, with new products and services that cover the current needs of our customers. At end of June 2019, the Group had 142 million customers, more than 20 million of whom are loyal.
Underlying attributable profit of EUR 3,856 million in the first half, 6% higher than in the same period of 2018 due to the positive customer revenue dynamics and controlled costs.
Santander was named the Best Bank in Latin America and the Best SME Bank in Western Europe by Euromoney. |
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CORPORATE & INVESTMENT BANKING
| |||
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Highlights (changes in constant euros)
Santander is among the leaders in Latin America and Europe, particularly in export & agency finance, and structured financing.
In capital markets, we are one of the main bookrunners of green bonds in Spain and Europe.
We continued to advance in our mission to help our global customers in their capital issuances, providing them with financing solutions and transaction services. We also continued to adapt our offer of products to the Banks digital transformation.
Underlying attributable profit was 10% higher year-on-year, driven by growth in revenue and lower loan-loss provisions. |
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WEALTH MANAGEMENT & INSURANCE
| |||
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Highlights (changes in constant euros)
Insurance business was incorporated into this Division during the second quarter, having restated previous periods for comparison purposes.
The first half underlying attributable profit was 10% higher than in the same period of 2018.
Total contribution (net profit + fee income) amounted to EUR 1,227 million, 8% more than in the first half of 2018.
Assets under management amounted to EUR 377,000 million, +3% year-on-year. |
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RESPONSIBLE BANKING
In 2018, the responsible banking, sustainability & culture committee (RBSCC) was created to ensure that, wherever we operate, our manage teams are aware of the need to be responsible in all that we do and in the management of the challenges we face. We have identified two challenges: adapt to the new business environment and support inclusive and sustainable growth.
Santander is helping to address todays main global challenges | ||
Our activity and investments help us to address a number of the United Nations Sustainable Development Goals, and support the Paris Agreements aim to combat climate change and adapt to its effects. We are: |
| Promoting the UNEP FI Principles for Responsible Banking, embedding sustainability across all its business areas and contributing to develop methods to align with the Paris Agreement. |
| Incorporating the UN Global Compact principles into our policies and procedures, fulfilling our fundamental responsibilities in the areas of human rights, labour, environment and anticorruption. |
| Supporting the Task Force for Climate-related Financial Disclosure (TCFD) recommendations, identifying and assessing risk and opportunities developing a forward looking climate strategy and disclosing to stakeholders. |
| Included in various sustainability indices, providing non-financial information to markets, investors and analysts on ESG: |
Two key challenges have been identified and we have recently published our commitments regarding these challenges: |
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1. | According to a well-known external source in each country (Great Place to Work, Top Employer, Merco, etc.). |
2. | Senior positions represent 1% of total workforce. |
3. | Calculation of equal pay gap compares employees of the same job, level and function. |
4. | Financially empowered people (mostly unbanked and underbanked), through products and services and social investment initiatives, to get access to the financial system, receive tailored finance and increase their knowledge and resilience through financial education. |
5. | Includes Santander overall contribution to green finance: project finance, syndicated loans, green bonds, capital finance, export finance, advisory, structuring and other products to help our clients in the transition to a low carbon economy. Commitment from 2019 to 2030 is EUR 220 billion. |
6. | In those countries where it is possible to certify renewable sourced electricity for the properties occupied by the Group. |
7. | People supported through Santander Universities initiative (students who will receive a Santander scholarship, will achieve an internship in an SME or participate in entrepreneurship programmes supported by the bank). |
8. | People helped through our community investment programmes (excluded Santander Universities and financial education initiatives). |
First half 2019 highlights
| ||
|
SCIB financed Accionas first ESG loan in the Chilean market in May 2019 for USD 30 million. In Spain, Santander is classified as first in the Spanish ranking of sustainable debt issues according to Dealogic, after participating as a joint bookrunner in Telefónica, Iberdrola, Adif, ICO and the Basque Country government. | |
|
Santander Wealth Management & Insurance has a range of ESG mutual funds (Santander Sostenible) that make us the leader with a 66% market share. |
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CORPORATE GOVERNANCE
Extraordinary General Meeting of Shareholders |
An extraordinary general meeting was called on 21 June for 23 July 2019 (second call) in order to submit for shareholders approval the capital increases needed to carry out the offer to acquire all the share capital of Banco Santander México, S.A., Institución de Banca Multiple, Grupo Financiero Santander México, which are not owned by Grupo Santander, as announced on 12 April 2019.
In order to facilitate the informed participation of shareholders at this meeting, all the proposed agreements, relevant administrator reports and the necessary legal documentation were published on the Groups website (www.santander.com) when the meeting was called. The contents of our website are not incorporated into this report.
Changes in the board in the second quarter |
As of 1 May 2019, Mr. Rodrigo Echenique Gordillo no longer exercises his executive functions in the Group and ceases to be a deputy chairman of the board and a member of its executive committee. As such, he becomes a non-executive director (neither proprietary nor independent).
On 19 June 2019, authorisation was received from the European Central Bank to appoint Mr. Henrique de Castro as a director of the Bank, who will join the Board on 17 July 2019.
Changes to the composition of the boards committees in the second quarter |
As of 1 May 2019, Mr. Rodrigo Echenique Gordillo is a member of the appointments committee.
On 23 July 2019, Mr. Henrique de Castro will join the innovation and technology committee.
Changes to the Groups senior management in the second quarter |
Ms. Mónica López-Monis Gallego was appointed on 7 May 2019 the new head of supervisory and regulatory relations.
SIGNIFICANT EVENTS SINCE QUARTER END
From 1 July 2019 until the approval date of the interim financial statements for the six-month period ended 30 June 2019, no significant events other than those indicated in the interim financial statements have occurred.
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Net fee income. Consolidated |
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EUR million |
||||||||||||||||||||||||
Q219 | Q119 | Chg. % | H119 | H118 | Chg. % | |||||||||||||||||||
Fees from services |
1,734 | 1,779 | (2.5) | 3,513 | 3,603 | (2.5) | ||||||||||||||||||
Wealth management and marketing of customer funds |
962 | 936 | 2.8 | 1,898 | 1,840 | 3.2 | ||||||||||||||||||
Securities and custody |
236 | 216 | 9.3 | 452 | 446 | 1.3 | ||||||||||||||||||
Net fee income |
2,932 | 2,931 | 0.0 | 5,863 | 5,889 | (0.4) | ||||||||||||||||||
Operating expenses. Consolidated |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
Q219 | Q119 | Chg. % | H119 | H118 | Chg. % | |||||||||||||||||||
Staff costs |
3,074 | 3,006 | 2.3 | 6,080 | 5,960 | 2.0 | ||||||||||||||||||
Other general administrative expenses |
2,025 | 2,005 | 1.0 | 4,030 | 4,305 | (6.4) | ||||||||||||||||||
Information technology |
562 | 551 | 2.0 | 1,113 | 763 | 46.0 | ||||||||||||||||||
Communications |
132 | 132 | | 264 | 262 | 0.9 | ||||||||||||||||||
Advertising |
168 | 157 | 7.0 | 325 | 310 | 4.8 | ||||||||||||||||||
Buildings and premises |
218 | 211 | 3.3 | 429 | 927 | (53.7) | ||||||||||||||||||
Printed and office material |
31 | 32 | (3.1) | 63 | 62 | 2.3 | ||||||||||||||||||
Taxes (other than tax on profits) |
138 | 126 | 9.5 | 264 | 287 | (7.9) | ||||||||||||||||||
Other expenses |
776 | 796 | (2.5) | 1,572 | 1,695 | (7.3) | ||||||||||||||||||
Administrative expenses |
5,099 | 5,011 | 1.8 | 10,110 | 10,265 | (1.5) | ||||||||||||||||||
Depreciation and amortisation |
730 | 747 | (2.3) | 1,477 | 1,217 | 21.4 | ||||||||||||||||||
Operating expenses |
5,829 | 5,758 | 1.2 | 11,587 | 11,482 | 0.9 |
(1) In H119, impact of the IFRS 16 application.
Operating means. Consolidated |
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Employees | Branches | |||||||||||||||||||||||||||
Jun-19 | Jun-18 | Var. | Jun-19 | Jun-18 | Var. | |||||||||||||||||||||||
Europe |
91,488 | 92,521 | (1,033) | 6,427 | 6,912 | (485) | ||||||||||||||||||||||
Spain |
30,682 | 31,393 | (711) | 4,247 | 4,468 | (221) | ||||||||||||||||||||||
Santander Consumer Finance |
14,494 | 15,083 | (589) | 424 | 442 | (18) | ||||||||||||||||||||||
United Kingdom |
25,761 | 25,829 | (68) | 659 | 779 | (120) | ||||||||||||||||||||||
Portugal |
6,736 | 6,940 | (204) | 553 | 672 | (119) | ||||||||||||||||||||||
Poland |
11,488 | 11,494 | (6) | 532 | 540 | (8) | ||||||||||||||||||||||
Other |
2,327 | 1,782 | 545 | 12 | 11 | 1 | ||||||||||||||||||||||
North America |
36,917 | 36,270 | 647 | 2,062 | 2,072 | (10) | ||||||||||||||||||||||
US |
17,381 | 17,191 | 190 | 646 | 670 | (24) | ||||||||||||||||||||||
Mexico |
19,536 | 19,079 | 457 | 1,416 | 1,402 | 14 | ||||||||||||||||||||||
South America |
71,158 | 69,997 | 1,161 | 4,591 | 4,497 | 94 | ||||||||||||||||||||||
Brazil |
48,118 | 46,672 | 1,446 | 3,643 | 3,490 | 153 | ||||||||||||||||||||||
Chile |
11,797 | 12,023 | (226) | 380 | 420 | (40) | ||||||||||||||||||||||
Argentina |
9,183 | 9,222 | (39) | 469 | 482 | (13) | ||||||||||||||||||||||
Other |
2,060 | 2,080 | (20) | 99 | 105 | (6) | ||||||||||||||||||||||
Santander Global Platform |
597 | 427 | 170 | 1 | 1 | | ||||||||||||||||||||||
Corporate Centre |
1,644 | 1,746 | (102) | |||||||||||||||||||||||||
Total Group |
201,804 | 200,961 | 843 | 13,081 | 13,482 | (401) |
Impairment or reversal of impairment of financial assets not measured at fair value through profit or loss (net) |
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EUR million |
||||||||||||||||||||||||
Q219 | Q119 | Chg. % | H119 | H118 | Chg. % | |||||||||||||||||||
Net loan-loss provisions |
2,141 | 2,172 | (1.4) | 4,313 | 4,297 | 0.4 | ||||||||||||||||||
Non-performing loans |
2,637 | 2,515 | 4.9 | 5,152 | 5,112 | 0.8 | ||||||||||||||||||
Country-risk |
(2) | 1 | | (1) | 9 | | ||||||||||||||||||
Recovery of written-off assets |
(494) | (344) | 43.6 | (838) | (823) | 1.8 | ||||||||||||||||||
Other impairment |
(19) | 74 | (125.7) | 55 | 55 | (134.8) | ||||||||||||||||||
Total |
2,122 | 2,246 | (5.5) | 4,368 | 4,352 | (51.2) |
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Loans and advances to customers. Consolidated |
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EUR million |
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Change | ||||||||||||||||||||
Jun-19 | Jun-18 | Absolute | % | Dec-18 | ||||||||||||||||
Commercial bills |
34,275 | 30,301 | 3,974 | 13.1 | 33,301 | |||||||||||||||
Secured loans |
495,091 | 475,428 | 19,663 | 4.1 | 478,068 | |||||||||||||||
Other term loans |
270,244 | 261,538 | 8,706 | 3.3 | 265,696 | |||||||||||||||
Finance leases |
34,534 | 29,804 | 4,730 | 15.9 | 30,758 | |||||||||||||||
Receivable on demand |
8,689 | 9,936 | (1,247) | (12.6) | 8,794 | |||||||||||||||
Credit cards receivable |
23,031 | 20,728 | 2,303 | 11.1 | 23,083 | |||||||||||||||
Impaired assets |
33,045 | 35,150 | (2,105) | (6.0) | 34,218 | |||||||||||||||
Gross loans and advances to customers (excl. reverse repos) |
898,909 | 862,885 | 36,024 | 4.2 | 873,918 | |||||||||||||||
Reverse repos |
32,049 | 23,523 | 8,526 | 36.2 | 32,310 | |||||||||||||||
Gross loans and advances to customers |
930,958 | 886,408 | 44,550 | 5.0 | 906,228 | |||||||||||||||
Loan-loss allowances |
22,723 | 24,316 | (1,593) | (6.6) | 23,307 | |||||||||||||||
Loans and advances to customers |
908,235 | 862,092 | 46,143 | 5.4 | 882,921 | |||||||||||||||
Total funds. Consolidated |
||||||||||||||||||||
EUR million |
||||||||||||||||||||
Change | ||||||||||||||||||||
Jun-19 | Jun-18 | Absolute | % | Dec-18 | ||||||||||||||||
Demand deposits |
573,079 | 535,084 | 37,995 | 7.1 | 548,711 | |||||||||||||||
Time deposits |
206,431 | 196,154 | 10,277 | 5.2 | 199,025 | |||||||||||||||
Mutual funds |
174,294 | 163,790 | 10,504 | 6.4 | 157,888 | |||||||||||||||
Customer funds |
953,804 | 895,028 | 58,776 | 6.6 | 905,624 | |||||||||||||||
Pension funds |
15,602 | 15,900 | (298) | (1.9) | 15,393 | |||||||||||||||
Managed portfolios |
28,122 | 27,248 | 874 | 3.2 | 26,785 | |||||||||||||||
Repos |
35,241 | 43,187 | (7,946) | (18.4) | 32,760 | |||||||||||||||
Total funds |
1,032,769 | 981,363 | 51,406 | 5.2 | 980,562 | |||||||||||||||
Eligible capital (fully loaded) |
||||||||||||||||||||
EUR million |
||||||||||||||||||||
Change | ||||||||||||||||||||
Jun-19* | Jun-18 | Absolute | % | Dec-18 | ||||||||||||||||
Capital stock and reserves |
117,699 | 116,371 | 1,327 | 1.1 | 114,147 | |||||||||||||||
Attributable profit |
3,231 | 3,752 | (521) | (13.9) | 7,810 | |||||||||||||||
Dividends |
(1,615) | (1,635) | 19 | (1.2) | (3,292) | |||||||||||||||
Other retained earnings |
(22,937) | (25,341) | 2,404 | (9.5) | (23,606) | |||||||||||||||
Minority interests |
6,893 | 6,567 | 325 | 5.0 | 6,981 | |||||||||||||||
Goodwill and intangible assets |
(28,810) | (28,726) | (84) | 0.3 | (28,644) | |||||||||||||||
Other deductions |
(6,054) | (6,741) | 687 | (10.2) | (6,492) | |||||||||||||||
Core CET1 |
68,406 | 64,248 | 4,158 | 6.5 | 66,904 | |||||||||||||||
Preferred shares and other eligible T1 |
8,690 | 8,824 | (134) | (1.5) | 8,934 | |||||||||||||||
Tier 1 |
77,096 | 73,072 | 4,024 | 5.5 | 75,838 | |||||||||||||||
Generic funds and eligible T2 instruments |
12,544 | 11,646 | 897 | 7.7 | 11,669 | |||||||||||||||
Eligible capital |
89,640 | 84,718 | 4,921 | 5.8 | 87,506 | |||||||||||||||
Risk-weighted assets |
605,470 | 594,754 | 10,716 | 1.8 | 592,319 | |||||||||||||||
|
||||||||||||||||||||
CET1 capital ratio |
11.30 | 10.80 | 0.50 | 11.30 | ||||||||||||||||
T1 capital ratio |
12.73 | 12.29 | 0.44 | 12.80 | ||||||||||||||||
Total capital ratio |
14.80 | 14.24 | 0.56 | 14.77 |
(*) Applying a 50% pay-out in the calculation of the capital ratios.
52 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
EUROPE |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
3,580 | 0.5 | 0.5 | 7,141 | 1.9 | 1.8 | ||||||||||||||||||
Net fee income |
1,304 | (1.7) | (1.8) | 2,630 | (4.5) | (4.6) | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
146 | (21.1) | (21.3) | 332 | (31.1) | (31.3) | ||||||||||||||||||
Other operating income |
158 | 4.1 | 4.2 | 310 | 11.5 | 11.3 | ||||||||||||||||||
Total income |
5,188 | (0.7) | (0.7) | 10,413 | (1.1) | (1.1) | ||||||||||||||||||
Administrative expenses and amortisations |
(2,789) | (0.5) | (0.5) | (5,591) | (1.3) | (1.5) | ||||||||||||||||||
Net operating income |
2,399 | (1.0) | (1.0) | 4,822 | (0.7) | (0.7) | ||||||||||||||||||
Net loan-loss provisions |
(387) | (15.3) | (15.4) | (844) | (1.8) | (1.7) | ||||||||||||||||||
Other gains (losses) and provisions |
(231) | 17.0 | 17.0 | (429) | 10.5 | 10.5 | ||||||||||||||||||
Profit before tax |
1,781 | 0.7 | 0.7 | 3,549 | (1.7) | (1.7) | ||||||||||||||||||
Tax on profit |
(475) | (3.5) | (3.5) | (967) | (0.9) | (0.9) | ||||||||||||||||||
Profit from continuing operations |
1,306 | 2.3 | 2.3 | 2,583 | (2.0) | (2.0) | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
1,306 | 2.3 | 2.3 | 2,583 | (2.0) | (2.0) | ||||||||||||||||||
Non-controlling interests |
(116) | 2.1 | 1.9 | (229) | 7.4 | 8.0 | ||||||||||||||||||
Underlying attributable profit to the parent |
1,191 | 2.4 | 2.4 | 2,354 | (2.8) | (2.8) | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
650,061 | (0.9) | 0.9 | 650,061 | 2.4 | 2.8 | ||||||||||||||||||
Cash, central banks and credit institutions |
200,873 | 10.6 | 12.5 | 200,873 | 13.2 | 13.7 | ||||||||||||||||||
Debt instruments |
113,844 | (1.8) | (0.4) | 113,844 | (2.7) | (2.5) | ||||||||||||||||||
Other financial assets |
51,503 | (5.4) | (2.6) | 51,503 | (11.3) | (10.7) | ||||||||||||||||||
Other asset accounts |
42,961 | (4.1) | (3.1) | 42,961 | (8.1) | (8.0) | ||||||||||||||||||
Total assets |
1,059,243 | 0.6 | 2.4 | 1,059,243 | 2.4 | 2.8 | ||||||||||||||||||
Customer deposits |
589,590 | 0.4 | 2.0 | 589,590 | 3.3 | 3.6 | ||||||||||||||||||
Central banks and credit institutions |
204,741 | 1.4 | 3.3 | 204,741 | 0.1 | 0.4 | ||||||||||||||||||
Marketable debt securities |
129,654 | 0.4 | 2.7 | 129,654 | 4.9 | 5.6 | ||||||||||||||||||
Other financial liabilities |
63,161 | 4.8 | 7.3 | 63,161 | 3.4 | 4.4 | ||||||||||||||||||
Other liabilities accounts |
17,466 | (5.2) | (4.2) | 17,466 | (15.1) | (15.0) | ||||||||||||||||||
Total liabilities |
1,004,613 | 0.7 | 2.6 | 1,004,613 | 2.4 | 2.9 | ||||||||||||||||||
Total equity |
54,629 | (1.8) | (0.5) | 54,629 | 2.1 | 2.2 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
638,237 | (0.2) | 1.5 | 638,237 | 2.0 | 2.3 | ||||||||||||||||||
Customer funds |
658,498 | 0.9 | 2.3 | 658,498 | 4.7 | 5.0 | ||||||||||||||||||
Customer deposits (3) |
573,618 | 0.7 | 2.2 | 573,618 | 5.1 | 5.4 | ||||||||||||||||||
Mutual funds |
84,880 | 2.6 | 3.0 | 84,880 | 2.6 | 2.6 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
9.80 | 0.19 | 9.72 | (0.76) | ||||||||||||||||||||
Efficiency ratio |
53.7 | 0.1 | 53.7 | (0.2) | ||||||||||||||||||||
NPL ratio |
3.48 | (0.13) | 3.48 | (0.49) | ||||||||||||||||||||
NPL coverage |
49.9 | 0.4 | 49.9 | (3.0) | ||||||||||||||||||||
Number of employees |
91,488 | (1.7) | 91,488 | (1.1) | ||||||||||||||||||||
Number of branches |
6,427 | (4.0) | 6,427 | (7.0) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 53
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Spain |
||||||||||||||||
EUR million |
||||||||||||||||
/ Q119 | s/ H118 | |||||||||||||||
Underlying income statement | Q219 | % | H119 | % | ||||||||||||
Net interest income |
1,009 | (0.0) | 2,018 | 1.1 | ||||||||||||
Net fee income |
624 | 0.1 | 1,247 | (6.9) | ||||||||||||
Gains (losses) on financial transactions (1) |
214 | 79.1 | 333 | 22.8 | ||||||||||||
Other operating income |
2 | (97.6) | 107 | (23.0) | ||||||||||||
Total income |
1,849 | (0.4) | 3,706 | (1.1) | ||||||||||||
Administrative expenses and amortisations |
(1,020) | (0.5) | (2,044) | (7.3) | ||||||||||||
Net operating income |
829 | (0.3) | 1,661 | 7.9 | ||||||||||||
Net loan-loss provisions |
(228) | (6.0) | (470) | 7.7 | ||||||||||||
Other gains (losses) and provisions |
(143) | 28.1 | (255) | 9.7 | ||||||||||||
Profit before tax |
458 | (4.1) | 936 | 7.4 | ||||||||||||
Tax on profit |
(120) | (0.9) | (242) | 15.4 | ||||||||||||
Profit from continuing operations |
338 | (5.2) | 694 | 4.9 | ||||||||||||
Net profit from discontinued operations |
| | | | ||||||||||||
Consolidated profit |
338 | (5.2) | 694 | 4.9 | ||||||||||||
Non-controlling interests |
0 | 110.6 | 0 | | ||||||||||||
Underlying attributable profit to the parent |
338 | (5.1) | 694 | 5.0 | ||||||||||||
Balance sheet | ||||||||||||||||
Loans and advances to customers |
194,417 | 0.1 | 194,417 | (3.9) | ||||||||||||
Cash, central banks and credit institutions |
87,193 | 8.3 | 87,193 | 14.7 | ||||||||||||
Debt instruments |
39,289 | (6.3) | 39,289 | (24.2) | ||||||||||||
Other financial assets |
1,469 | (23.7) | 1,469 | (53.6) | ||||||||||||
Other asset accounts |
22,464 | (9.1) | 22,464 | (14.8) | ||||||||||||
Total assets |
344,831 | 0.4 | 344,831 | (4.1) | ||||||||||||
Customer deposits |
252,057 | 3.9 | 252,057 | 5.8 | ||||||||||||
Central banks and credit institutions |
38,002 | (18.6) | 38,002 | (41.5) | ||||||||||||
Marketable debt securities |
24,841 | 6.2 | 24,841 | 2.7 | ||||||||||||
Other financial liabilities |
8,842 | 10.2 | 8,842 | 19.2 | ||||||||||||
Other liabilities accounts |
6,090 | (18.7) | 6,090 | (38.7) | ||||||||||||
Total liabilities |
329,833 | 0.5 | 329,833 | (4.3) | ||||||||||||
Total equity |
14,999 | (1.5) | 14,999 | 0.3 | ||||||||||||
Memorandum items: |
||||||||||||||||
Gross loans and advances to customers (2) |
201,058 | (0.1) | 201,058 | (4.5) | ||||||||||||
Customer funds |
317,169 | 3.4 | 317,169 | 4.8 | ||||||||||||
Customer deposits (3) |
251,170 | 3.8 | 251,170 | 5.7 | ||||||||||||
Mutual funds |
65,999 | 1.7 | 65,999 | 1.6 | ||||||||||||
Ratios (%) and operating means | ||||||||||||||||
Underlying RoTE |
8.99 | (0.62) | 9.31 | 0.66 | ||||||||||||
Efficiency ratio |
55.2 | (0.0) | 55.2 | (3.7) | ||||||||||||
NPL ratio |
7.02 | (0.27) | 7.02 | (0.60) | ||||||||||||
NPL coverage |
42.9 | (0.4) | 42.9 | (4.6) | ||||||||||||
Number of employees |
30,682 | (2.1) | 30,682 | (2.3) | ||||||||||||
Number of branches |
4,247 | (2.7) | 4,247 | (4.9) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
54 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Santander Consumer Finance |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
971 | 3.1 | 3.0 | 1,911 | 3.7 | 4.1 | ||||||||||||||||||
Net fee income |
201 | (6.1) | (6.1) | 415 | 2.9 | 3.0 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
(1) | | | 1 | (95.1) | (95.1) | ||||||||||||||||||
Other operating income |
(17) | | | (6) | | | ||||||||||||||||||
Total income |
1,154 | (1.2) | (1.3) | 2,321 | 2.4 | 2.8 | ||||||||||||||||||
Administrative expenses and amortisations |
(527) | 3.6 | 3.5 | (1,035) | 1.7 | 2.0 | ||||||||||||||||||
Net operating income |
627 | (4.9) | (4.9) | 1,286 | 3.0 | 3.4 | ||||||||||||||||||
Net loan-loss provisions |
(59) | (51.3) | (51.4) | (181) | (4.3) | (4.3) | ||||||||||||||||||
Other gains (losses) and provisions |
(12) | | | 12 | (68.4) | (68.5) | ||||||||||||||||||
Profit before tax |
556 | (1.0) | (1.1) | 1,117 | 1.9 | 2.3 | ||||||||||||||||||
Tax on profit |
(155) | (2.7) | (2.7) | (314) | 5.5 | 5.9 | ||||||||||||||||||
Profit from continuing operations |
401 | (0.3) | (0.4) | 803 | 0.6 | 1.0 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
401 | (0.3) | (0.4) | 803 | 0.6 | 1.0 | ||||||||||||||||||
Non-controlling interests |
(67) | (14.0) | (14.0) | (145) | 10.6 | 10.8 | ||||||||||||||||||
Underlying attributable profit to the parent |
334 | 3.0 | 2.9 | 658 | (1.4) | (1.0) | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
98,395 | 2.7 | 2.7 | 98,395 | 7.1 | 7.3 | ||||||||||||||||||
Cash, central banks and credit institutions |
6,799 | 7.9 | 8.0 | 6,799 | 30.8 | 31.3 | ||||||||||||||||||
Debt instruments |
3,288 | (4.5) | (4.6) | 3,288 | 2.0 | 1.8 | ||||||||||||||||||
Other financial assets |
38 | 14.2 | 14.3 | 38 | 78.1 | 78.6 | ||||||||||||||||||
Other asset accounts |
4,102 | 10.0 | 10.1 | 4,102 | 14.6 | 14.7 | ||||||||||||||||||
Total assets |
112,622 | 3.1 | 3.1 | 112,622 | 8.4 | 8.6 | ||||||||||||||||||
Customer deposits |
37,896 | 2.7 | 2.7 | 37,896 | 3.1 | 3.2 | ||||||||||||||||||
Central banks and credit institutions |
25,104 | 1.4 | 1.4 | 25,104 | (0.3) | (0.2) | ||||||||||||||||||
Marketable debt securities |
33,946 | 5.8 | 5.9 | 33,946 | 24.2 | 24.4 | ||||||||||||||||||
Other financial liabilities |
1,395 | 16.8 | 16.8 | 1,395 | 40.3 | 40.0 | ||||||||||||||||||
Other liabilities accounts |
3,905 | 4.0 | 4.0 | 3,905 | 5.9 | 6.0 | ||||||||||||||||||
Total liabilities |
102,247 | 3.6 | 3.6 | 102,247 | 8.8 | 8.9 | ||||||||||||||||||
Total equity |
10,375 | (2.1) | (2.2) | 10,375 | 4.8 | 4.9 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
100,752 | 2.7 | 2.7 | 100,752 | 6.8 | 7.0 | ||||||||||||||||||
Customer funds |
37,896 | 2.8 | 2.8 | 37,896 | 3.2 | 3.3 | ||||||||||||||||||
Customer deposits (3) |
37,896 | 2.8 | 2.8 | 37,896 | 3.2 | 3.3 | ||||||||||||||||||
Mutual funds |
| | | | (100.0) | (100.0) | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
15.83 | 0.98 | 15.36 | (1.64) | ||||||||||||||||||||
Efficiency ratio |
45.6 | 2.1 | 44.6 | (0.3) | ||||||||||||||||||||
NPL ratio |
2.24 | (0.09) | 2.24 | (0.20) | ||||||||||||||||||||
NPL coverage |
105.9 | 0.6 | 105.9 | (1.8) | ||||||||||||||||||||
Number of employees |
14,494 | (2.0) | 14,494 | (3.9) | ||||||||||||||||||||
Number of branches |
424 | (2.1) | 424 | (4.1) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 55
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information |
United Kingdom |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
944 | (3.2) | (2.9) | 1,919 | (6.5) | (7.2) | ||||||||||||||||||
Net fee income |
207 | (4.3) | (4.0) | 423 | (7.7) | (8.4) | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
20 | | | 20 | (66.3) | (66.6) | ||||||||||||||||||
Other operating income |
12 | (16.4) | (16.2) | 26 | 36.7 | 35.7 | ||||||||||||||||||
Total income |
1,183 | (1.9) | (1.7) | 2,388 | (7.8) | (8.4) | ||||||||||||||||||
Administrative expenses and amortisations |
(703) | (4.8) | (4.5) | (1,442) | 0.1 | (0.6) | ||||||||||||||||||
Net operating income |
479 | 2.6 | 2.8 | 946 | (17.7) | (18.3) | ||||||||||||||||||
Net loan-loss provisions |
(19) | (67.9) | (67.7) | (80) | (21.7) | (22.3) | ||||||||||||||||||
Other gains (losses) and provisions |
(25) | (50.2) | (50.0) | (75) | (27.4) | (27.9) | ||||||||||||||||||
Profit before tax |
435 | 21.9 | 22.2 | 792 | (16.2) | (16.8) | ||||||||||||||||||
Tax on profit |
(102) | 5.2 | 5.5 | (199) | (25.2) | (25.8) | ||||||||||||||||||
Profit from continuing operations |
333 | 28.2 | 28.4 | 593 | (12.6) | (13.3) | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
333 | 28.2 | 28.4 | 593 | (12.6) | (13.3) | ||||||||||||||||||
Non-controlling interests |
(5) | 2.5 | 2.7 | (11) | (20.6) | (21.2) | ||||||||||||||||||
Underlying attributable profit to the parent |
327 | 28.7 | 29.0 | 582 | (12.5) | (13.1) | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
251,543 | (4.6) | (0.3) | 251,543 | 1.0 | 2.2 | ||||||||||||||||||
Cash, central banks and credit institutions |
40,536 | 7.3 | 12.1 | 40,536 | (23.8) | (22.9) | ||||||||||||||||||
Debt instruments |
23,609 | (0.4) | 4.0 | 23,609 | (10.8) | (9.7) | ||||||||||||||||||
Other financial assets |
1,092 | 44.9 | 51.3 | 1,092 | (84.7) | (84.6) | ||||||||||||||||||
Other asset accounts |
10,328 | 0.7 | 5.1 | 10,328 | 1.7 | 2.9 | ||||||||||||||||||
Total assets |
327,109 | (2.7) | 1.7 | 327,109 | (5.5) | (4.3) | ||||||||||||||||||
Customer deposits |
211,025 | (2.7) | 1.7 | 211,025 | (3.6) | (2.5) | ||||||||||||||||||
Central banks and credit institutions |
24,521 | (2.9) | 1.5 | 24,521 | 2.0 | 3.2 | ||||||||||||||||||
Marketable debt securities |
65,236 | (3.4) | 0.9 | 65,236 | (2.0) | (0.8) | ||||||||||||||||||
Other financial liabilities |
4,875 | 10.3 | 15.2 | 4,875 | (68.7) | (68.4) | ||||||||||||||||||
Other liabilities accounts |
4,470 | (2.2) | 2.1 | 4,470 | 4.4 | 5.7 | ||||||||||||||||||
Total liabilities |
310,128 | (2.7) | 1.7 | 310,128 | (5.9) | (4.8) | ||||||||||||||||||
Total equity |
16,981 | (2.6) | 1.8 | 16,981 | 2.7 | 4.0 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
232,150 | (3.4) | 0.9 | 232,150 | (0.9) | 0.3 | ||||||||||||||||||
Customer funds |
205,064 | (2.3) | 2.1 | 205,064 | 0.5 | 1.7 | ||||||||||||||||||
Customer deposits (3) |
196,925 | (2.3) | 2.1 | 196,925 | 0.6 | 1.8 | ||||||||||||||||||
Mutual funds |
8,139 | (1.7) | 2.7 | 8,139 | (3.0) | (1.9) | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
8.68 | 1.76 | 7.81 | (2.12) | ||||||||||||||||||||
Efficiency ratio |
59.5 | (1.8) | 60.4 | 4.8 | ||||||||||||||||||||
NPL ratio |
1.13 | (0.04) | 1.13 | | ||||||||||||||||||||
NPL coverage |
31.9 | 1.0 | 31.9 | (1.9) | ||||||||||||||||||||
Number of employees |
25,761 | 1.1 | 25,761 | (0.3) | ||||||||||||||||||||
Number of branches |
659 | (12.6) | 659 | (15.4) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
56 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Portugal |
||||||||||||||||
EUR million |
||||||||||||||||
/ Q119 | s/ H118 | |||||||||||||||
Underlying income statement | Q219 | % | H119 | % | ||||||||||||
Net interest income |
213 | (1.2) | 429 | (1.4) | ||||||||||||
Net fee income |
99 | 0.8 | 197 | 4.1 | ||||||||||||
Gains (losses) on financial transactions (1) |
42 | (15.4) | 91 | 58.6 | ||||||||||||
Other operating income |
0 | | (6) | | ||||||||||||
Total income |
354 | (0.9) | 712 | 3.5 | ||||||||||||
Administrative expenses and amortisations |
(154) | (1.9) | (312) | (3.8) | ||||||||||||
Net operating income |
200 | (0.1) | 400 | 10.0 | ||||||||||||
Net loan-loss provisions |
(1) | | 12 | | ||||||||||||
Other gains (losses) and provisions |
(13) | (34.9) | (33) | 6.1 | ||||||||||||
Profit before tax |
186 | (3.9) | 379 | 16.9 | ||||||||||||
Tax on profit |
(60) | 3.4 | (118) | 25.9 | ||||||||||||
Profit from continuing operations |
126 | (7.0) | 261 | 13.3 | ||||||||||||
Net profit from discontinued operations |
| | | | ||||||||||||
Consolidated profit |
126 | (7.0) | 261 | 13.3 | ||||||||||||
Non-controlling interests |
(1) | 17.2 | (1) | (24.6) | ||||||||||||
Underlying attributable profit to the parent |
125 | (7.1) | 260 | 13.5 | ||||||||||||
Balance sheet | ||||||||||||||||
Loans and advances to customers |
35,734 | 0.9 | 35,734 | 0.5 | ||||||||||||
Cash, central banks and credit institutions |
4,025 | (4.0) | 4,025 | (7.7) | ||||||||||||
Debt instruments |
13,238 | 0.3 | 13,238 | 12.2 | ||||||||||||
Other financial assets |
1,809 | (1.7) | 1,809 | (6.5) | ||||||||||||
Other asset accounts |
1,941 | (1.6) | 1,941 | (20.9) | ||||||||||||
Total assets |
56,747 | 0.2 | 56,747 | 1.1 | ||||||||||||
Customer deposits |
38,975 | 1.9 | 38,975 | 5.1 | ||||||||||||
Central banks and credit institutions |
8,064 | (1.1) | 8,064 | (10.8) | ||||||||||||
Marketable debt securities |
3,426 | (19.0) | 3,426 | (20.9) | ||||||||||||
Other financial liabilities |
326 | 14.1 | 326 | 24.2 | ||||||||||||
Other liabilities accounts |
1,701 | 20.0 | 1,701 | 14.3 | ||||||||||||
Total liabilities |
52,491 | 0.3 | 52,491 | 0.6 | ||||||||||||
Total equity |
4,256 | (0.7) | 4,256 | 8.4 | ||||||||||||
Memorandum items: |
||||||||||||||||
Gross loans and advances to customers (2) |
36,691 | 0.6 | 36,691 | (1.0) | ||||||||||||
Customer funds |
41,784 | 3.8 | 41,784 | 6.6 | ||||||||||||
Customer deposits (3) |
38,975 | 1.9 | 38,975 | 5.1 | ||||||||||||
Mutual funds |
2,809 | 40.5 | 2,809 | 32.0 | ||||||||||||
Ratios (%) and operating means | ||||||||||||||||
Underlying RoTE |
11.96 | (1.09) | 12.54 | 0.98 | ||||||||||||
Efficiency ratio |
43.6 | (0.4) | 43.8 | (3.3) | ||||||||||||
NPL ratio |
5.00 | (0.77) | 5.00 | (2.55) | ||||||||||||
NPL coverage |
52.9 | 2.2 | 52.9 | 0.2 | ||||||||||||
Number of employees |
6,736 | 0.0 | 6,736 | (2.9) | ||||||||||||
Number of branches |
553 | (1.4) | 553 | (17.7) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 57
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Poland |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
284 | 1.0 | 0.6 | 565 | 16.0 | 18.0 | ||||||||||||||||||
Net fee income |
117 | 2.7 | 2.3 | 230 | 1.5 | 3.2 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
21 | 12.1 | 11.6 | 39 | 102.7 | 106.2 | ||||||||||||||||||
Other operating income |
18 | | | (18) | 756.6 | 771.2 | ||||||||||||||||||
Total income |
440 | 16.6 | 16.1 | 817 | 11.7 | 13.6 | ||||||||||||||||||
Administrative expenses and amortisations |
(176) | 1.8 | 1.3 | (349) | 10.2 | 12.0 | ||||||||||||||||||
Net operating income |
263 | 29.2 | 28.7 | 467 | 12.9 | 14.8 | ||||||||||||||||||
Net loan-loss provisions |
(64) | 47.1 | 46.5 | (107) | 23.0 | 25.1 | ||||||||||||||||||
Other gains (losses) and provisions |
(34) | 1.4 | 0.9 | (68) | 42.7 | 45.1 | ||||||||||||||||||
Profit before tax |
166 | 30.6 | 30.0 | 293 | 4.7 | 6.5 | ||||||||||||||||||
Tax on profit |
(36) | (3.8) | (4.3) | (73) | 23.3 | 25.4 | ||||||||||||||||||
Profit from continuing operations |
130 | 44.9 | 44.4 | 219 | (0.4) | 1.3 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
130 | 44.9 | 44.4 | 219 | (0.4) | 1.3 | ||||||||||||||||||
Non-controlling interests |
(41) | 46.2 | 45.7 | (69) | 6.2 | 8.0 | ||||||||||||||||||
Underlying attributable profit to the parent |
89 | 44.3 | 43.8 | 150 | (3.1) | (1.5) | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
29,345 | 3.3 | 2.0 | 29,345 | 29.9 | 26.3 | ||||||||||||||||||
Cash, central banks and credit institutions |
2,987 | 11.8 | 10.5 | 2,987 | 84.7 | 79.5 | ||||||||||||||||||
Debt instruments |
10,367 | (8.0) | (9.0) | 10,367 | 23.4 | 19.9 | ||||||||||||||||||
Other financial assets |
565 | 3.9 | 2.7 | 565 | 0.9 | (1.9) | ||||||||||||||||||
Other asset accounts |
1,326 | 1.3 | 0.1 | 1,326 | 29.6 | 26.0 | ||||||||||||||||||
Total assets |
44,591 | 0.9 | (0.3) | 44,591 | 30.4 | 26.7 | ||||||||||||||||||
Customer deposits |
32,758 | 1.0 | (0.2) | 32,758 | 27.6 | 24.0 | ||||||||||||||||||
Central banks and credit institutions |
3,243 | (3.2) | (4.3) | 3,243 | 89.7 | 84.3 | ||||||||||||||||||
Marketable debt securities |
2,091 | 16.6 | 15.2 | 2,091 | 107.0 | 101.2 | ||||||||||||||||||
Other financial liabilities |
814 | 8.6 | 7.3 | 814 | 90.3 | 84.9 | ||||||||||||||||||
Other liabilities accounts |
894 | 9.1 | 7.8 | 894 | 16.6 | 13.3 | ||||||||||||||||||
Total liabilities |
39,800 | 1.7 | 0.5 | 39,800 | 34.5 | 30.7 | ||||||||||||||||||
Total equity |
4,791 | (5.3) | (6.4) | 4,791 | 4.0 | 1.1 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
30,278 | 3.3 | 2.0 | 30,278 | 29.5 | 25.8 | ||||||||||||||||||
Customer funds |
36,060 | 2.5 | 1.3 | 36,060 | 25.4 | 21.9 | ||||||||||||||||||
Customer deposits (3) |
31,867 | 2.4 | 1.2 | 31,867 | 27.5 | 23.9 | ||||||||||||||||||
Mutual funds |
4,193 | 3.1 | 1.8 | 4,193 | 11.6 | 8.4 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
11.44 | 3.68 | 9.61 | (1.32) | ||||||||||||||||||||
Efficiency ratio |
40.1 | (5.8) | 42.8 | (0.6) | ||||||||||||||||||||
NPL ratio |
4.21 | (0.18) | 4.21 | (0.37) | ||||||||||||||||||||
NPL coverage |
69.7 | 2.1 | 69.7 | (2.4) | ||||||||||||||||||||
Number of employees |
11,488 | (8.5) | 11,488 | (0.1) | ||||||||||||||||||||
Number of branches |
532 | (6.8) | 532 | (1.5) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
58 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
|
Other Europe |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % w/o FX | H119 | % | % w/o FX | ||||||||||||||||||
Net interest income |
159 | 14.4 | 14.3 | 299 | 50.8 | 49.0 | ||||||||||||||||||
Net fee income |
56 | (8.6) | (8.9) | 118 | (13.7) | (15.4) | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
(149) | | | (153) | | | ||||||||||||||||||
Other operating income |
142 | 122.8 | 122.7 | 205 | 79.0 | 78.4 | ||||||||||||||||||
Total income |
209 | (20.1) | (20.3) | 469 | (6.8) | (8.2) | ||||||||||||||||||
Administrative expenses and amortisations |
(208) | 4.2 | 4.0 | (408) | 12.8 | 11.1 | ||||||||||||||||||
Net operating income |
0 | (99.2) | (99.3) | 62 | (56.7) | (57.3) | ||||||||||||||||||
Net loan-loss provisions |
(16) | 612.4 | 612.5 | (18) | (50.5) | (50.7) | ||||||||||||||||||
Other gains (losses) and provisions |
(4) | (37.5) | (37.5) | (11) | (5.1) | (8.3) | ||||||||||||||||||
Profit before tax |
(19) | | | 33 | (65.1) | (65.6) | ||||||||||||||||||
Tax on profit |
(2) | (91.9) | (91.9) | (20) | (58.1) | (58.5) | ||||||||||||||||||
Profit from continuing operations |
(21) | | | 13 | (72.5) | (73.1) | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
(21) | | | 13 | (72.5) | (73.1) | ||||||||||||||||||
Non-controlling interests |
(1) | 12.7 | 11.9 | (3) | 141.0 | 127.1 | ||||||||||||||||||
Underlying attributable profit to the parent |
(22) | | | 10 | (78.1) | (78.5) | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
40,627 | 5.6 | 7.5 | 40,627 | 21.5 | 21.8 | ||||||||||||||||||
Cash, central banks and credit institutions |
59,334 | 18.2 | 21.9 | 59,334 | 60.0 | 60.8 | ||||||||||||||||||
Debt instruments |
24,053 | 7.3 | 11.1 | 24,053 | 57.5 | 59.0 | ||||||||||||||||||
Other financial assets |
46,529 | (5.7) | (2.7) | 46,529 | 2.9 | 3.7 | ||||||||||||||||||
Other asset accounts |
2,801 | (0.2) | 0.6 | 2,801 | (12.1) | (13.0) | ||||||||||||||||||
Total assets |
173,344 | 6.2 | 9.2 | 173,344 | 29.1 | 29.9 | ||||||||||||||||||
Customer deposits |
16,880 | (17.1) | (15.3) | 16,880 | 19.5 | 19.9 | ||||||||||||||||||
Central banks and credit institutions |
105,808 | 12.8 | 16.3 | 105,808 | 33.0 | 33.5 | ||||||||||||||||||
Marketable debt securities |
114 | 11.0 | 11.9 | 114 | (16.2) | (17.9) | ||||||||||||||||||
Other financial liabilities |
46,909 | 2.9 | 5.8 | 46,909 | 29.0 | 30.4 | ||||||||||||||||||
Other liabilities accounts |
405 | 8.1 | 9.9 | 405 | (3.0) | (3.0) | ||||||||||||||||||
Total liabilities |
170,116 | 6.2 | 9.2 | 170,116 | 30.2 | 31.0 | ||||||||||||||||||
Total equity |
3,228 | 6.5 | 8.1 | 3,228 | (10.5) | (11.1) | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
37,309 | 10.2 | 11.8 | 37,309 | 40.3 | 40.3 | ||||||||||||||||||
Customer funds |
20,525 | (12.7) | (11.2) | 20,525 | 18.2 | 18.5 | ||||||||||||||||||
Customer deposits (3) |
16,785 | (16.3) | (14.5) | 16,785 | 20.8 | 21.2 | ||||||||||||||||||
Mutual funds |
3,739 | 7.8 | 7.8 | 3,739 | 7.8 | 7.8 | ||||||||||||||||||
Resources | ||||||||||||||||||||||||
Number of employees |
2,327 | 7.3 | 2,327 | 30.6 |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 59
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
NORTH AMERICA |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
2,230 | 2.6 | 1.4 | 4,403 | 15.8 | 8.3 | ||||||||||||||||||
Net fee income |
463 | 5.5 | 4.3 | 901 | 11.4 | 4.2 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
50 | 312.8 | 310.4 | 62 | (44.4) | (47.9) | ||||||||||||||||||
Other operating income |
176 | 35.5 | 34.4 | 306 | 36.9 | 27.7 | ||||||||||||||||||
Total income |
2,918 | 6.0 | 4.8 | 5,672 | 14.7 | 7.2 | ||||||||||||||||||
Administrative expenses and amortisations |
(1,214) | 3.5 | 2.3 | (2,386) | 9.4 | 2.3 | ||||||||||||||||||
Net operating income |
1,705 | 7.8 | 6.6 | 3,286 | 18.8 | 11.1 | ||||||||||||||||||
Net loan-loss provisions |
(793) | (1.4) | (2.5) | (1,597) | 13.0 | 5.7 | ||||||||||||||||||
Other gains (losses) and provisions |
(31) | (51.5) | (52.3) | (95) | 7.8 | 0.8 | ||||||||||||||||||
Profit before tax |
881 | 23.5 | 22.1 | 1,594 | 26.0 | 17.9 | ||||||||||||||||||
Tax on profit |
(217) | 15.7 | 14.4 | (405) | 21.4 | 13.5 | ||||||||||||||||||
Profit from continuing operations |
664 | 26.2 | 24.8 | 1,189 | 27.6 | 19.4 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
664 | 26.2 | 24.8 | 1,189 | 27.6 | 19.4 | ||||||||||||||||||
Non-controlling interests |
(161) | 15.4 | 14.0 | (300) | 24.1 | 16.1 | ||||||||||||||||||
Underlying attributable profit to the parent |
503 | 30.1 | 28.7 | 889 | 28.8 | 20.6 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
126,478 | 1.7 | 2.8 | 126,478 | 20.9 | 17.3 | ||||||||||||||||||
Cash, central banks and credit institutions |
25,352 | (22.5) | (21.8) | 25,352 | 1.5 | (2.1) | ||||||||||||||||||
Debt instruments |
26,739 | 8.8 | 9.9 | 26,739 | 0.3 | (3.2) | ||||||||||||||||||
Other financial assets |
9,483 | 12.0 | 13.0 | 9,483 | (9.6) | (13.0) | ||||||||||||||||||
Other asset accounts |
21,451 | 6.1 | 7.4 | 21,451 | 33.5 | 29.8 | ||||||||||||||||||
Total assets |
209,503 | (0.4) | 0.7 | 209,503 | 14.6 | 11.0 | ||||||||||||||||||
Customer deposits |
98,362 | (2.2) | (1.1) | 98,362 | 12.7 | 9.0 | ||||||||||||||||||
Central banks and credit institutions |
28,072 | 20.1 | 21.3 | 28,072 | 28.8 | 24.6 | ||||||||||||||||||
Marketable debt securities |
41,825 | (10.4) | (9.3) | 41,825 | 21.4 | 18.0 | ||||||||||||||||||
Other financial liabilities |
11,912 | 9.2 | 10.1 | 11,912 | (0.5) | (4.4) | ||||||||||||||||||
Other liabilities accounts |
5,884 | 4.5 | 5.6 | 5,884 | 1.5 | (1.8) | ||||||||||||||||||
Total liabilities |
186,055 | (0.6) | 0.5 | 186,055 | 15.3 | 11.6 | ||||||||||||||||||
Total equity |
23,447 | 0.9 | 2.0 | 23,447 | 9.1 | 5.9 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
122,869 | 1.9 | 3.0 | 122,869 | 13.0 | 9.6 | ||||||||||||||||||
Customer funds |
111,544 | 1.8 | 2.8 | 111,544 | 10.2 | 6.6 | ||||||||||||||||||
Customer deposits (3) |
90,533 | 1.4 | 2.5 | 90,533 | 10.1 | 6.6 | ||||||||||||||||||
Mutual funds |
21,011 | 3.5 | 4.4 | 21,011 | 10.4 | 6.4 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
10.56 | 2.11 | 9.54 | 1.28 | ||||||||||||||||||||
Efficiency ratio |
41.6 | (1.0) | 42.1 | (2.0) | ||||||||||||||||||||
NPL ratio |
2.29 | (0.04) | 2.29 | (0.53) | ||||||||||||||||||||
NPL coverage |
150.3 | (3.1) | 150.3 | 3.8 | ||||||||||||||||||||
Number of employees |
36,917 | (0.6) | 36,917 | 1.8 | ||||||||||||||||||||
Number of branches |
2,062 | (0.4) | 2,062 | (0.5) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
60 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
United States |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
1,453 | 3.3 | 2.2 | 2,860 | 14.3 | 6.8 | ||||||||||||||||||
Net fee income |
244 | 4.4 | 3.3 | 479 | 10.4 | 3.1 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
23 | 46.8 | 45.5 | 39 | (0.0) | (6.7) | ||||||||||||||||||
Other operating income |
199 | 26.3 | 25.1 | 357 | 30.3 | 21.7 | ||||||||||||||||||
Total income |
1,920 | 5.8 | 4.7 | 3,734 | 15.0 | 7.4 | ||||||||||||||||||
Administrative expenses and amortisations |
(805) | 3.8 | 2.7 | (1,581) | 7.2 | 0.1 | ||||||||||||||||||
Net operating income |
1,115 | 7.3 | 6.2 | 2,154 | 21.5 | 13.4 | ||||||||||||||||||
Net loan-loss provisions |
(568) | (7.1) | (8.1) | (1,178) | 15.0 | 7.4 | ||||||||||||||||||
Other gains (losses) and provisions |
(26) | (55.3) | (56.1) | (84) | 15.7 | 8.0 | ||||||||||||||||||
Profit before tax |
521 | 40.8 | 39.6 | 891 | 31.9 | 23.1 | ||||||||||||||||||
Tax on profit |
(138) | 24.9 | 23.7 | (248) | 21.1 | 13.1 | ||||||||||||||||||
Profit from continuing operations |
383 | 47.7 | 46.3 | 643 | 36.5 | 27.5 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
383 | 47.7 | 46.3 | 643 | 36.5 | 27.5 | ||||||||||||||||||
Non-controlling interests |
(99) | 27.2 | 26.0 | (178) | 29.6 | 21.0 | ||||||||||||||||||
Underlying attributable profit to the parent |
284 | 56.4 | 55.1 | 465 | 39.4 | 30.2 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
93,133 | 2.0 | 3.3 | 93,133 | 22.2 | 19.3 | ||||||||||||||||||
Cash, central banks and credit institutions |
13,790 | (23.7) | (22.7) | 13,790 | 18.3 | 15.4 | ||||||||||||||||||
Debt instruments |
13,849 | 3.1 | 4.4 | 13,849 | (3.5) | (5.8) | ||||||||||||||||||
Other financial assets |
3,913 | 10.3 | 11.8 | 3,913 | (9.3) | (11.5) | ||||||||||||||||||
Other asset accounts |
17,888 | 5.5 | 6.9 | 17,888 | 34.4 | 31.2 | ||||||||||||||||||
Total assets |
142,572 | (0.5) | 0.8 | 142,572 | 19.0 | 16.2 | ||||||||||||||||||
Customer deposits |
64,373 | (0.7) | 0.5 | 64,373 | 19.2 | 16.4 | ||||||||||||||||||
Central banks and credit institutions |
17,495 | 34.1 | 35.8 | 17,495 | 31.0 | 27.9 | ||||||||||||||||||
Marketable debt securities |
35,261 | (13.6) | (12.5) | 35,261 | 23.6 | 20.7 | ||||||||||||||||||
Other financial liabilities |
4,277 | 17.4 | 18.9 | 4,277 | 8.1 | 5.5 | ||||||||||||||||||
Other liabilities accounts |
3,722 | 0.9 | 2.2 | 3,722 | 2.5 | 0.1 | ||||||||||||||||||
Total liabilities |
125,129 | (0.7) | 0.5 | 125,129 | 20.9 | 18.1 | ||||||||||||||||||
Total equity |
17,443 | 1.1 | 2.4 | 17,443 | 6.7 | 4.1 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
89,636 | 2.1 | 3.5 | 89,636 | 12.7 | 10.0 | ||||||||||||||||||
Customer funds |
69,967 | 2.9 | 4.3 | 69,967 | 12.5 | 9.8 | ||||||||||||||||||
Customer deposits (3) |
60,470 | 2.7 | 4.0 | 60,470 | 12.5 | 9.8 | ||||||||||||||||||
Mutual funds |
9,497 | 4.4 | 5.8 | 9,497 | 12.6 | 9.9 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
7.65 | 2.58 | 6.38 | 1.27 | ||||||||||||||||||||
Efficiency ratio |
41.9 | (0.8) | 42.3 | (3.1) | ||||||||||||||||||||
NPL ratio |
2.32 | (0.09) | 2.32 | (0.59) | ||||||||||||||||||||
NPL coverage |
158.4 | (2.6) | 158.4 | 1.5 | ||||||||||||||||||||
Number of employees |
17,381 | 0.6 | 17,381 | 1.1 | ||||||||||||||||||||
Number of branches |
646 | (2.0) | 646 | (3.6) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 61
Responsible banking |
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Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Mexico |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
777 | 1.4 | (0.1) | 1,543 | 18.6 | 11.2 | ||||||||||||||||||
Net fee income |
218 | 6.9 | 5.4 | 423 | 12.5 | 5.6 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
27 | | | 23 | (68.4) | (70.4) | ||||||||||||||||||
Other operating income |
(23) | (17.2) | (18.5) | (51) | 1.1 | (5.1) | ||||||||||||||||||
Total income |
999 | 6.4 | 4.9 | 1,938 | 14.0 | 7.0 | ||||||||||||||||||
Administrative expenses and amortisations |
(409) | 3.0 | 1.5 | (806) | 14.1 | 7.1 | ||||||||||||||||||
Net operating income |
590 | 8.8 | 7.3 | 1,132 | 14.0 | 6.9 | ||||||||||||||||||
Net loan-loss provisions |
(225) | 16.7 | 15.2 | (419) | 7.7 | 1.1 | ||||||||||||||||||
Other gains (losses) and provisions |
(5) | (11.2) | (12.6) | (10) | (30.3) | (34.6) | ||||||||||||||||||
Profit before tax |
360 | 4.7 | 3.3 | 703 | 19.2 | 11.9 | ||||||||||||||||||
Tax on profit |
(79) | 2.7 | 1.2 | (156) | 21.7 | 14.2 | ||||||||||||||||||
Profit from continuing operations |
280 | 5.3 | 3.9 | 547 | 18.5 | 11.2 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
280 | 5.3 | 3.9 | 547 | 18.5 | 11.2 | ||||||||||||||||||
Non-controlling interests |
(61) | 0.2 | (1.3) | (122) | 17.0 | 9.8 | ||||||||||||||||||
Underlying attributable profit to the parent |
219 | 6.9 | 5.4 | 424 | 19.0 | 11.6 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
33,345 | 0.9 | 1.5 | 33,345 | 17.3 | 11.8 | ||||||||||||||||||
Cash, central banks and credit institutions |
11,563 | (21.1) | (20.6) | 11,563 | (13.2) | (17.2) | ||||||||||||||||||
Debt instruments |
12,890 | 15.7 | 16.4 | 12,890 | 4.7 | (0.2) | ||||||||||||||||||
Other financial assets |
5,570 | 13.3 | 13.9 | 5,570 | (9.8) | (14.0) | ||||||||||||||||||
Other asset accounts |
3,563 | 9.1 | 9.7 | 3,563 | 29.0 | 23.0 | ||||||||||||||||||
Total assets |
66,930 | (0.2) | 0.4 | 66,930 | 6.2 | 1.3 | ||||||||||||||||||
Customer deposits |
33,989 | (4.8) | (4.2) | 33,989 | 2.0 | (2.7) | ||||||||||||||||||
Central banks and credit institutions |
10,576 | 2.4 | 3.0 | 10,576 | 25.4 | 19.6 | ||||||||||||||||||
Marketable debt securities |
6,565 | 12.5 | 13.2 | 6,565 | 10.7 | 5.5 | ||||||||||||||||||
Other financial liabilities |
7,635 | 5.1 | 5.7 | 7,635 | (4.7) | (9.2) | ||||||||||||||||||
Other liabilities accounts |
2,161 | 11.3 | 12.0 | 2,161 | (0.3) | (4.9) | ||||||||||||||||||
Total liabilities |
60,927 | (0.2) | 0.4 | 60,927 | 5.3 | 0.4 | ||||||||||||||||||
Total equity |
6,004 | 0.4 | 1.0 | 6,004 | 16.8 | 11.4 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
33,234 | 1.1 | 1.7 | 33,234 | 13.8 | 8.5 | ||||||||||||||||||
Customer funds |
41,577 | (0.1) | 0.5 | 41,577 | 6.5 | 1.6 | ||||||||||||||||||
Customer deposits (3) |
30,063 | (1.2) | (0.6) | 30,063 | 5.7 | 0.8 | ||||||||||||||||||
Mutual funds |
11,514 | 2.7 | 3.3 | 11,514 | 8.8 | 3.7 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
20.71 | 0.60 | 20.47 | 0.60 | ||||||||||||||||||||
Efficiency ratio |
40.9 | (1.3) | 41.6 | 0.0 | ||||||||||||||||||||
NPL ratio |
2.21 | 0.09 | 2.21 | (0.37) | ||||||||||||||||||||
NPL coverage |
126.9 | (3.2) | 126.9 | 10.8 | ||||||||||||||||||||
Number of employees |
19,536 | (1.7) | 19,536 | 2.4 | ||||||||||||||||||||
Number of branches |
1,416 | 0.3 | 1,416 | 1.0 |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
62 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
SOUTH AMERICA |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
3,425 | 6.3 | 9.2 | 6,647 | 1.4 | 9.4 | ||||||||||||||||||
Net fee income |
1,178 | (0.0) | 2.9 | 2,355 | 0.6 | 10.9 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
130 | (18.8) | (16.5) | 289 | 13.1 | 40.7 | ||||||||||||||||||
Other operating income |
(85) | 18.1 | 21.7 | (157) | | | ||||||||||||||||||
Total income |
4,647 | 3.6 | 6.5 | 9,134 | (0.2) | 8.7 | ||||||||||||||||||
Administrative expenses and amortisations |
(1,664) | 1.1 | 4.0 | (3,309) | (1.6) | 9.1 | ||||||||||||||||||
Net operating income |
2,984 | 5.0 | 7.9 | 5,825 | 0.6 | 8.5 | ||||||||||||||||||
Net loan-loss provisions |
(956) | 5.9 | 8.8 | (1,859) | (5.1) | 2.4 | ||||||||||||||||||
Other gains (losses) and provisions |
(151) | (1.7) | 1.8 | (306) | (8.2) | 4.6 | ||||||||||||||||||
Profit before tax |
1,876 | 5.1 | 8.0 | 3,661 | 4.6 | 12.3 | ||||||||||||||||||
Tax on profit |
(672) | (2.9) | (0.1) | (1,363) | 1.9 | 8.9 | ||||||||||||||||||
Profit from continuing operations |
1,205 | 10.2 | 13.0 | 2,297 | 6.3 | 14.4 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
1,205 | 10.2 | 13.0 | 2,297 | 6.3 | 14.4 | ||||||||||||||||||
Non-controlling interests |
(169) | 1.3 | 3.7 | (336) | 7.0 | 11.5 | ||||||||||||||||||
Underlying attributable profit to the parent |
1,035 | 11.8 | 14.7 | 1,961 | 6.2 | 14.9 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
124,950 | 1.3 | 1.4 | 124,950 | 8.3 | 9.5 | ||||||||||||||||||
Cash, central banks and credit institutions |
49,995 | 12.5 | 12.2 | 49,995 | 12.4 | 13.0 | ||||||||||||||||||
Debt instruments |
48,204 | 4.8 | 4.2 | 48,204 | 9.5 | 7.7 | ||||||||||||||||||
Other financial assets |
11,508 | 28.4 | 28.3 | 11,508 | 36.2 | 34.6 | ||||||||||||||||||
Other asset accounts |
16,456 | 4.5 | 4.1 | 16,456 | 16.9 | 15.8 | ||||||||||||||||||
Total assets |
251,113 | 5.3 | 5.1 | 251,113 | 10.9 | 11.2 | ||||||||||||||||||
Customer deposits |
116,739 | 4.7 | 4.7 | 116,739 | 7.6 | 9.2 | ||||||||||||||||||
Central banks and credit institutions |
37,872 | (2.4) | (2.8) | 37,872 | (0.7) | (2.0) | ||||||||||||||||||
Marketable debt securities |
31,983 | 3.2 | 3.0 | 31,983 | 12.9 | 12.1 | ||||||||||||||||||
Other financial liabilities |
31,372 | 21.1 | 20.5 | 31,372 | 34.9 | 33.5 | ||||||||||||||||||
Other liabilities accounts |
10,320 | 15.8 | 15.3 | 10,320 | 34.0 | 32.4 | ||||||||||||||||||
Total liabilities |
228,286 | 5.6 | 5.4 | 228,286 | 10.8 | 11.2 | ||||||||||||||||||
Total equity |
22,827 | 2.3 | 2.1 | 22,827 | 11.7 | 11.4 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
130,953 | 1.5 | 1.5 | 130,953 | 8.4 | 9.5 | ||||||||||||||||||
Customer funds |
173,298 | 5.7 | 5.4 | 173,298 | 10.6 | 11.4 | ||||||||||||||||||
Customer deposits (3) |
105,299 | 5.8 | 5.8 | 105,299 | 10.5 | 12.9 | ||||||||||||||||||
Mutual funds |
67,999 | 5.5 | 4.9 | 67,999 | 10.7 | 9.2 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
21.98 | 2.40 | 20.76 | 0.95 | ||||||||||||||||||||
Efficiency ratio |
35.8 | (0.9) | 36.2 | (0.5) | ||||||||||||||||||||
NPL ratio |
4.81 | (0.02) | 4.81 | (0.01) | ||||||||||||||||||||
NPL coverage |
93.0 | (1.1) | 93.0 | (1.4) | ||||||||||||||||||||
Number of employees |
71,158 | 1.7 | 71,158 | 1.7 | ||||||||||||||||||||
Number of branches |
4,591 | 1.8 | 4,591 | 2.1 |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 63
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Brazil |
||||||||||||||||||||||||
EUR million | ||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
2,520 | 2.5 | 5.5 | 4,979 | 1.5 | 6.6 | ||||||||||||||||||
Net fee income |
924 | (0.7) | 2.3 | 1,855 | 3.5 | 8.7 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
45 | (22.0) | (19.4) | 103 | 24.0 | 30.2 | ||||||||||||||||||
Other operating income |
(36) | (2.0) | 1.0 | (72) | 456.3 | 484.2 | ||||||||||||||||||
Total income |
3,453 | 1.2 | 4.2 | 6,864 | 1.4 | 6.5 | ||||||||||||||||||
Administrative expenses and amortisations |
(1,102) | (2.0) | 1.0 | (2,227) | (1.8) | 3.1 | ||||||||||||||||||
Net operating income |
2,351 | 2.8 | 5.9 | 4,637 | 3.1 | 8.2 | ||||||||||||||||||
Net loan-loss provisions |
(761) | 7.1 | 10.2 | (1,471) | (6.4) | (1.7) | ||||||||||||||||||
Other gains (losses) and provisions |
(153) | (8.8) | (6.0) | (320) | (1.4) | 3.6 | ||||||||||||||||||
Profit before tax |
1,438 | 2.1 | 5.1 | 2,846 | 9.3 | 14.8 | ||||||||||||||||||
Tax on profit |
(581) | (1.9) | 1.1 | (1,173) | 4.8 | 10.1 | ||||||||||||||||||
Profit from continuing operations |
856 | 4.9 | 8.0 | 1,673 | 12.7 | 18.3 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
856 | 4.9 | 8.0 | 1,673 | 12.7 | 18.3 | ||||||||||||||||||
Non-controlling interests |
(94) | (1.4) | 1.6 | (190) | 14.0 | 19.7 | ||||||||||||||||||
Underlying attributable profit to the parent |
762 | 5.7 | 8.8 | 1,482 | 12.6 | 18.2 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
73,175 | 2.0 | 1.2 | 73,175 | 12.1 | 8.7 | ||||||||||||||||||
Cash, central banks and credit institutions |
37,661 | 13.0 | 12.1 | 37,661 | 8.8 | 5.5 | ||||||||||||||||||
Debt instruments |
42,738 | 4.1 | 3.3 | 42,738 | 11.9 | 8.5 | ||||||||||||||||||
Other financial assets |
6,822 | 20.3 | 19.3 | 6,822 | 24.5 | 20.7 | ||||||||||||||||||
Other asset accounts |
12,474 | 5.2 | 4.4 | 12,474 | 9.1 | 5.8 | ||||||||||||||||||
Total assets |
172,869 | 5.6 | 4.8 | 172,869 | 11.5 | 8.1 | ||||||||||||||||||
Customer deposits |
74,698 | 6.3 | 5.5 | 74,698 | 10.7 | 7.3 | ||||||||||||||||||
Central banks and credit institutions |
28,908 | (2.6) | (3.4) | 28,908 | (5.7) | (8.5) | ||||||||||||||||||
Marketable debt securities |
20,584 | 2.9 | 2.1 | 20,584 | 15.5 | 12.0 | ||||||||||||||||||
Other financial liabilities |
24,148 | 13.5 | 12.6 | 24,148 | 30.5 | 26.5 | ||||||||||||||||||
Other liabilities accounts |
8,620 | 19.2 | 18.2 | 8,620 | 36.3 | 32.2 | ||||||||||||||||||
Total liabilities |
156,958 | 5.7 | 4.9 | 156,958 | 11.5 | 8.1 | ||||||||||||||||||
Total equity |
15,912 | 4.7 | 3.9 | 15,912 | 12.2 | 8.8 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
77,835 | 2.0 | 1.1 | 77,835 | 12.0 | 8.6 | ||||||||||||||||||
Customer funds |
121,485 | 6.8 | 5.9 | 121,485 | 14.5 | 11.0 | ||||||||||||||||||
Customer deposits (3) |
63,417 | 8.6 | 7.8 | 63,417 | 16.7 | 13.1 | ||||||||||||||||||
Mutual funds |
58,069 | 4.8 | 4.0 | 58,069 | 12.2 | 8.7 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
22.40 | 1.42 | 21.65 | 1.76 | ||||||||||||||||||||
Efficiency ratio |
31.9 | (1.0) | 32.4 | (1.1) | ||||||||||||||||||||
NPL ratio |
5.27 | 0.01 | 5.27 | 0.01 | ||||||||||||||||||||
NPL coverage |
105.5 | (2.2) | 105.5 | (3.2) | ||||||||||||||||||||
Number of employees |
48,118 | 2.8 | 48,118 | 3.1 | ||||||||||||||||||||
Number of branches |
3,643 | 2.3 | 3,643 | 4.4 |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
64 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Chile | ||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
500 | 13.5 | 15.0 | 940 | (4.6) | (1.7) | ||||||||||||||||||
Net fee income |
97 | (5.9) | (4.5) | 200 | (12.1) | (9.4) | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
59 | 7.9 | 9.4 | 113 | 96.0 | 101.9 | ||||||||||||||||||
Other operating income |
0 | (82.6) | (81.7) | 2 | (80.7) | (80.1) | ||||||||||||||||||
Total income |
656 | 9.4 | 10.8 | 1,255 | (2.1) | 0.9 | ||||||||||||||||||
Administrative expenses and amortisations |
(269) | 5.4 | 6.8 | (524) | (1.3) | 1.7 | ||||||||||||||||||
Net operating income |
387 | 12.3 | 13.8 | 731 | (2.6) | 0.3 | ||||||||||||||||||
Net loan-loss provisions |
(105) | 2.8 | 4.2 | (208) | (12.0) | (9.4) | ||||||||||||||||||
Other gains (losses) and provisions |
(1) | | | 37 | (31.8) | (29.8) | ||||||||||||||||||
Profit before tax |
281 | 0.5 | 1.9 | 560 | (1.5) | 1.5 | ||||||||||||||||||
Tax on profit |
(43) | (28.0) | (26.8) | (103) | (10.0) | (7.3) | ||||||||||||||||||
Profit from continuing operations |
237 | 8.3 | 9.8 | 456 | 0.7 | 3.7 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
237 | 8.3 | 9.8 | 456 | 0.7 | 3.7 | ||||||||||||||||||
Non-controlling interests |
(74) | 4.9 | 6.3 | (145) | (0.7) | 2.3 | ||||||||||||||||||
Underlying attributable profit to the parent |
163 | 9.9 | 11.4 | 311 | 1.3 | 4.4 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
40,081 | 1.1 | 2.3 | 40,081 | 4.8 | 7.0 | ||||||||||||||||||
Cash, central banks and credit institutions |
4,742 | 18.4 | 19.8 | 4,742 | 21.8 | 24.4 | ||||||||||||||||||
Debt instruments |
3,949 | 4.4 | 5.7 | 3,949 | (5.8) | (3.8) | ||||||||||||||||||
Other financial assets |
4,551 | 43.7 | 45.5 | 4,551 | 55.1 | 58.4 | ||||||||||||||||||
Other asset accounts |
2,880 | (0.9) | 0.3 | 2,880 | 57.4 | 60.8 | ||||||||||||||||||
Total assets |
56,203 | 5.0 | 6.3 | 56,203 | 10.0 | 12.4 | ||||||||||||||||||
Customer deposits |
27,122 | 1.4 | 2.7 | 27,122 | 2.2 | 4.4 | ||||||||||||||||||
Central banks and credit institutions |
5,586 | (6.6) | (5.5) | 5,586 | 6.6 | 8.8 | ||||||||||||||||||
Marketable debt securities |
11,076 | 3.5 | 4.8 | 11,076 | 11.5 | 13.9 | ||||||||||||||||||
Other financial liabilities |
6,417 | 72.0 | 74.2 | 6,417 | 64.7 | 68.2 | ||||||||||||||||||
Other liabilities accounts |
1,025 | (3.3) | (2.1) | 1,025 | 13.7 | 16.1 | ||||||||||||||||||
Total liabilities |
51,226 | 6.2 | 7.5 | 51,226 | 10.2 | 12.5 | ||||||||||||||||||
Total equity |
4,977 | (6.0) | (4.9) | 4,977 | 8.6 | 10.9 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
41,182 | 0.9 | 2.2 | 41,182 | 4.5 | 6.8 | ||||||||||||||||||
Customer funds |
35,215 | 3.1 | 4.3 | 35,215 | 3.2 | 5.4 | ||||||||||||||||||
Customer deposits (3) |
26,964 | 1.1 | 2.3 | 26,964 | 1.8 | 3.9 | ||||||||||||||||||
Mutual funds |
8,251 | 10.3 | 11.6 | 8,251 | 8.1 | 10.3 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
18.75 | 2.41 | 17.63 | (0.56) | ||||||||||||||||||||
Efficiency ratio |
41.0 | (1.6) | 41.8 | 0.3 | ||||||||||||||||||||
NPL ratio |
4.52 | (0.15) | 4.52 | (0.34) | ||||||||||||||||||||
NPL coverage |
59.1 | (0.6) | 59.1 | (0.9) | ||||||||||||||||||||
Number of employees |
11,797 | (0.8) | 11,797 | (1.9) | ||||||||||||||||||||
Number of branches |
380 | | 380 | (9.5) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 65
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Argentina | ||||||||||||||||||||||||
EUR million | ||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
298 | 39.6 | 43.8 | 511 | 14.2 | 113.4 | ||||||||||||||||||
Net fee income |
125 | 8.1 | 11.8 | 241 | (8.4) | 71.3 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
14 | (61.9) | (59.5) | 52 | (44.8) | 3.3 | ||||||||||||||||||
Other operating income |
(47) | 34.1 | 38.2 | (83) | | | ||||||||||||||||||
Total income |
389 | 17.7 | 21.5 | 720 | (10.7) | 66.9 | ||||||||||||||||||
Administrative expenses and amortisations |
(229) | 13.0 | 16.7 | (431) | 1.1 | 89.0 | ||||||||||||||||||
Net operating income |
161 | 25.1 | 29.0 | 289 | (24.0) | 42.1 | ||||||||||||||||||
Net loan-loss provisions |
(70) | (2.9) | 0.5 | (143) | 14.7 | 114.5 | ||||||||||||||||||
Other gains (losses) and provisions |
3 | | | (19) | (66.4) | (37.1) | ||||||||||||||||||
Profit before tax |
94 | 178.5 | 185.1 | 127 | (35.9) | 19.7 | ||||||||||||||||||
Tax on profit |
(30) | 31.7 | 35.7 | (54) | (12.3) | 64.0 | ||||||||||||||||||
Profit from continuing operations |
63 | 502.8 | 515.0 | 74 | (46.5) | 0.1 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
63 | 502.8 | 515.0 | 74 | (46.5) | 0.1 | ||||||||||||||||||
Non-controlling interests |
(0) | 84.1 | 89.1 | (0) | (60.1) | (25.4) | ||||||||||||||||||
Underlying attributable profit to the parent |
63 | 508.4 | 520.8 | 73 | (46.4) | 0.3 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
5,755 | (5.2) | (6.0) | 5,755 | (23.8) | 9.8 | ||||||||||||||||||
Cash, central banks and credit institutions |
5,198 | 7.9 | 7.1 | 5,198 | 42.5 | 105.3 | ||||||||||||||||||
Debt instruments |
917 | 114.3 | 112.7 | 917 | (2.6) | 40.4 | ||||||||||||||||||
Other financial assets |
125 | 10.2 | 9.4 | 125 | 411.2 | 636.6 | ||||||||||||||||||
Other asset accounts |
909 | 12.1 | 11.3 | 909 | 58.5 | 128.4 | ||||||||||||||||||
Total assets |
12,903 | 5.4 | 4.6 | 12,903 | 1.3 | 46.0 | ||||||||||||||||||
Customer deposits |
9,384 | 6.4 | 5.6 | 9,384 | 0.5 | 44.8 | ||||||||||||||||||
Central banks and credit institutions |
992 | 2.9 | 2.2 | 992 | (0.5) | 43.4 | ||||||||||||||||||
Marketable debt securities |
257 | 4.2 | 3.5 | 257 | (52.1) | (31.0) | ||||||||||||||||||
Other financial liabilities |
762 | (10.6) | (11.3) | 762 | (6.9) | 34.1 | ||||||||||||||||||
Other liabilities accounts |
415 | 4.9 | 4.1 | 415 | 74.5 | 151.5 | ||||||||||||||||||
Total liabilities |
11,809 | 4.7 | 4.0 | 11,809 | (1.0) | 42.7 | ||||||||||||||||||
Total equity |
1,094 | 12.9 | 12.0 | 1,094 | 35.4 | 95.1 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
5,858 | (0.8) | (1.6) | 5,858 | (21.0) | 13.8 | ||||||||||||||||||
Customer funds |
11,030 | 6.2 | 5.4 | 11,030 | (2.6) | 40.3 | ||||||||||||||||||
Customer deposits (3) |
9,384 | 6.4 | 5.6 | 9,384 | 0.5 | 44.8 | ||||||||||||||||||
Mutual funds |
1,646 | 5.0 | 4.2 | 1,646 | (17.2) | 19.3 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
27.09 | 22.01 | 16.95 | (13.90) | ||||||||||||||||||||
Efficiency ratio |
58.7 | (2.4) | 59.8 | 7.0 | ||||||||||||||||||||
NPL ratio |
3.79 | 0.29 | 3.79 | 1.39 | ||||||||||||||||||||
NPL coverage |
126.4 | 7.8 | 126.4 | 4.9 | ||||||||||||||||||||
Number of employees |
9,183 | (0.9) | 9,183 | (0.4) | ||||||||||||||||||||
Number of branches |
469 | 0.2 | 469 | (2.7) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
66 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
Other South America | ||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % w/o FX | H119 | % | % w/o FX | ||||||||||||||||||
Net interest income |
108 | (1.3) | 2.4 | 217 | (0.4) | 4.5 | ||||||||||||||||||
Net fee income |
32 | 10.8 | 14.8 | 60 | 3.2 | 9.2 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
12 | 14.3 | 17.2 | 22 | 0.9 | 5.6 | ||||||||||||||||||
Other operating income |
(2) | 4.2 | 8.8 | (5) | 22.3 | 32.6 | ||||||||||||||||||
Total income |
149 | 2.0 | 5.8 | 295 | 0.2 | 5.2 | ||||||||||||||||||
Administrative expenses and amortisations |
(64) | 1.1 | 5.0 | (127) | (6.1) | (1.3) | ||||||||||||||||||
Net operating income |
85 | 2.7 | 6.4 | 168 | 5.4 | 10.7 | ||||||||||||||||||
Net loan-loss provisions |
(20) | 9.5 | 13.5 | (38) | 45.4 | 59.1 | ||||||||||||||||||
Other gains (losses) and provisions |
(1) | (31.2) | (27.0) | (3) | (40.6) | (37.5) | ||||||||||||||||||
Profit before tax |
64 | 1.7 | 5.2 | 128 | (1.0) | 3.1 | ||||||||||||||||||
Tax on profit |
(17) | 1.9 | 5.2 | (33) | (23.2) | (21.6) | ||||||||||||||||||
Profit from continuing operations |
48 | 1.6 | 5.2 | 95 | 10.1 | 15.9 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
48 | 1.6 | 5.2 | 95 | 10.1 | 15.9 | ||||||||||||||||||
Non-controlling interests |
(0) | (2.5) | (3.7) | (1) | 30.3 | 24.4 | ||||||||||||||||||
Underlying attributable profit to the parent |
47 | 1.6 | 5.3 | 94 | 10.0 | 15.8 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
5,939 | 1.4 | 4.8 | 5,939 | 37.2 | 44.6 | ||||||||||||||||||
Cash, central banks and credit institutions |
2,395 | 5.4 | 10.7 | 2,395 | 2.8 | 9.2 | ||||||||||||||||||
Debt instruments |
601 | (18.3) | (14.3) | 601 | (12.4) | (4.9) | ||||||||||||||||||
Other financial assets |
10 | 9.9 | 12.7 | 10 | 5.2 | 12.2 | ||||||||||||||||||
Other asset accounts |
193 | 6.9 | 11.7 | 193 | (18.9) | (15.2) | ||||||||||||||||||
Total assets |
9,137 | 0.9 | 4.9 | 9,137 | 20.4 | 27.5 | ||||||||||||||||||
Customer deposits |
5,535 | (2.5) | 2.3 | 5,535 | 7.5 | 15.1 | ||||||||||||||||||
Central banks and credit institutions |
2,386 | 8.8 | 10.3 | 2,386 | 90.6 | 94.6 | ||||||||||||||||||
Marketable debt securities |
67 | 12.5 | 12.9 | 67 | 30.8 | 28.2 | ||||||||||||||||||
Other financial liabilities |
46 | (3.9) | 0.7 | 46 | 23.8 | 34.5 | ||||||||||||||||||
Other liabilities accounts |
260 | 17.0 | 22.6 | 260 | 9.1 | 15.9 | ||||||||||||||||||
Total liabilities |
8,293 | 1.2 | 5.2 | 8,293 | 23.3 | 30.7 | ||||||||||||||||||
Total equity |
844 | (1.8) | 2.4 | 844 | (2.7) | 2.5 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
6,079 | 1.3 | 4.8 | 6,079 | 36.1 | 43.4 | ||||||||||||||||||
Customer funds |
5,567 | (2.4) | 2.4 | 5,567 | 7.6 | 15.1 | ||||||||||||||||||
Customer deposits (3) |
5,535 | (2.5) | 2.3 | 5,535 | 7.5 | 15.1 | ||||||||||||||||||
Mutual funds |
32 | (1.5) | 5.0 | 32 | 10.4 | 20.9 | ||||||||||||||||||
Resources | ||||||||||||||||||||||||
Number of employees |
2,060 | 1.9 | 2,060 | (1.0) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 67
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
SANTANDER GLOBAL PLATFORM | ||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
Underlying income statement | Q219 | Q119 | % | H119 | H118 | % | ||||||||||||||||||
Net interest income |
23 | 22 | 5.3 | 46 | 38 | 19.4 | ||||||||||||||||||
Net fee income |
1 | 2 | (52.0) | 2 | 2 | (0.4) | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
(0) | (1) | (67.6) | (2) | 0 | | ||||||||||||||||||
Other operating income |
(4) | (4) | (4.4) | (7) | (7) | 6.8 | ||||||||||||||||||
Total income |
20 | 19 | 7.6 | 39 | 34 | 14.5 | ||||||||||||||||||
Administrative expenses and amortisations |
(67) | (41) | 62.4 | (108) | (62) | 75.0 | ||||||||||||||||||
Net operating income |
(47) | (22) | 108.3 | (69) | (28) | 149.2 | ||||||||||||||||||
Net loan-loss provisions |
(0) | (0) | 114.6 | (0) | 0 | | ||||||||||||||||||
Other gains (losses) and provisions |
(0) | (1) | (56.8) | (1) | (1) | (21.1) | ||||||||||||||||||
Profit before tax |
(47) | (23) | 103.8 | (70) | (29) | 145.0 | ||||||||||||||||||
Tax on profit |
7 | 12 | (41.9) | 19 | 6 | 216.8 | ||||||||||||||||||
Profit from continuing operations |
(40) | (11) | 266.6 | (51) | (23) | 125.6 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
(40) | (11) | 266.6 | (51) | (23) | 125.6 | ||||||||||||||||||
Non-controlling interests |
| | | | | | ||||||||||||||||||
Underlying attributable profit to the parent |
(40) | (11) | 266.6 | (51) | (23) | 125.6 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
515 | 417 | 23.5 | 515 | 193 | 166.8 | ||||||||||||||||||
Cash, central banks and credit institutions |
8,938 | 8,673 | 3.1 | 8,938 | 7,567 | 18.1 | ||||||||||||||||||
Debt instruments |
| | | | | | ||||||||||||||||||
Other financial assets |
147 | 152 | (3.0) | 147 | 139 | 5.7 | ||||||||||||||||||
Other asset accounts |
132 | 129 | 2.6 | 132 | 91 | 45.7 | ||||||||||||||||||
Total assets |
9,732 | 9,370 | 3.9 | 9,732 | 7,990 | 21.8 | ||||||||||||||||||
Customer deposits |
9,106 | 8,804 | 3.4 | 9,106 | 7,477 | 21.8 | ||||||||||||||||||
Central banks and credit institutions |
130 | 75 | 73.2 | 130 | 83 | 57.6 | ||||||||||||||||||
Marketable debt securities |
| | | | | | ||||||||||||||||||
Other financial liabilities |
67 | 41 | 65.0 | 67 | 45 | 48.0 | ||||||||||||||||||
Other liabilities accounts |
81 | 60 | 34.1 | 81 | 131 | (38.0) | ||||||||||||||||||
Total liabilities |
9,384 | 8,980 | 4.5 | 9,384 | 7,736 | 21.3 | ||||||||||||||||||
Total equity |
348 | 390 | (10.9) | 348 | 254 | 36.8 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
518 | 420 | 23.4 | 518 | 196 | 164.4 | ||||||||||||||||||
Customer funds |
9,500 | 9,183 | 3.5 | 9,500 | 8,082 | 17.5 | ||||||||||||||||||
Customer deposits (3) |
9,106 | 8,804 | 3.4 | 9,106 | 7,477 | 21.8 | ||||||||||||||||||
Mutual funds |
394 | 379 | 3.9 | 394 | 605 | (34.9) | ||||||||||||||||||
Resources | ||||||||||||||||||||||||
Number of employees |
597 | 545 | 9.5 | 597 | 427 | 39.8 |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
68 January - June 2019
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
CORPORATE CENTRE |
||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||
Underlying income statement | Q219 | Q119 | % | H119 | H118 | % | ||||||||||||||||||
Net interest income |
(304) | (296) | 2.9 | (600) | (477) | 25.8 | ||||||||||||||||||
Net fee income |
(13) | (14) | (6.1) | (27) | (17) | 53.8 | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
(92) | (79) | 15.7 | (171) | 5 | | ||||||||||||||||||
Other operating income |
(14) | (11) | 31.8 | (25) | (5) | 422.9 | ||||||||||||||||||
Total income |
(423) | (399) | 5.9 | (822) | (494) | 66.4 | ||||||||||||||||||
Administrative expenses and amortisations |
(96) | (97) | (1.5) | (193) | (212) | (9.1) | ||||||||||||||||||
Net operating income |
(519) | (497) | 4.4 | (1,015) | (706) | 43.7 | ||||||||||||||||||
Net loan-loss provisions |
(5) | (8) | (38.8) | (13) | (67) | (81.1) | ||||||||||||||||||
Other gains (losses) and provisions |
(72) | (55) | 31.4 | (127) | (93) | 36.5 | ||||||||||||||||||
Profit before tax |
(595) | (559) | 6.5 | (1,155) | (866) | 33.3 | ||||||||||||||||||
Tax on profit |
3 | 33 | (90.1) | 36 | (18) | | ||||||||||||||||||
Profit from continuing operations |
(592) | (526) | 12.5 | (1,118) | (884) | 26.5 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
(592) | (526) | 12.5 | (1,118) | (884) | 26.5 | ||||||||||||||||||
Non-controlling interests |
1 | 10 | (94.1) | 10 | 0 | | ||||||||||||||||||
Underlying attributable profit to the parent |
(592) | (517) | 14.5 | (1,108) | (884) | 25.4 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Loans and advances to customers |
6,231 | 6,138 | 1.5 | 6,231 | 7,012 | (11.1) | ||||||||||||||||||
Cash, central banks and credit institutions |
31,895 | 26,755 | 19.2 | 31,895 | 39,060 | (18.3) | ||||||||||||||||||
Debt instruments |
952 | 954 | (0.2) | 952 | 351 | 171.4 | ||||||||||||||||||
Other financial assets |
2,446 | 2,207 | 10.9 | 2,446 | 2,240 | 9.2 | ||||||||||||||||||
Other asset accounts |
132,086 | 132,551 | (0.4) | 132,086 | 120,821 | 9.3 | ||||||||||||||||||
Total assets |
173,610 | 168,605 | 3.0 | 173,610 | 169,484 | 2.4 | ||||||||||||||||||
Customer deposits |
953 | 163 | 485.9 | 953 | 231 | 311.9 | ||||||||||||||||||
Central banks and credit institutions |
14,650 | 16,920 | (13.4) | 14,650 | 29,012 | (49.5) | ||||||||||||||||||
Marketable debt securities |
51,326 | 43,441 | 18.2 | 51,326 | 40,421 | 27.0 | ||||||||||||||||||
Other financial liabilities |
2,617 | 2,321 | 12.8 | 2,617 | 1,622 | 61.3 | ||||||||||||||||||
Other liabilities accounts |
9,743 | 8,356 | 16.6 | 9,743 | 7,763 | 25.5 | ||||||||||||||||||
Total liabilities |
79,290 | 71,201 | 11.4 | 79,290 | 79,050 | 0.3 | ||||||||||||||||||
Total equity |
94,320 | 97,404 | (3.2) | 94,320 | 90,433 | 4.3 | ||||||||||||||||||
Memorandum items: |
||||||||||||||||||||||||
Gross loans and advances to customers (2) |
6,331 | 6,414 | (1.3) | 6,331 | 7,134 | (11.3) | ||||||||||||||||||
Customer funds |
964 | 176 | 449.3 | 964 | 238 | 304.7 | ||||||||||||||||||
Customer deposits (3) |
953 | 163 | 485.9 | 953 | 231 | 311.9 | ||||||||||||||||||
Mutual funds |
11 | 13 | (15.8) | 11 | 7 | 59.2 | ||||||||||||||||||
Resources | ||||||||||||||||||||||||
Number of employees |
1,644 | 1,757 | (6.4) | 1,644 | 1,746 | (5.8) |
(1) Includes exchange differences.
(2) Excluding reverse repos.
(3) Excluding repos.
January - June 2019 69
Responsible banking |
||||||||||||||||
Santander vision and |
Group financial |
Financial information |
Corporate governance |
|||||||||||||
corporate culture |
|
information |
|
by segments |
|
Santander share |
|
Appendix | ||||||||
|
|
|
|
Financial information by segments |
RETAIL BANKING |
||||||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||||||
Net interest income |
8,390 | 2.8 | 3.5 | 16,553 | 3.6 | 4.8 | ||||||||||||||||||||||
Net fee income |
2,269 | (2.0) | (0.9) | 4,583 | 1.8 | 5.2 | ||||||||||||||||||||||
Gains (losses) on financial transactions (1) |
180 | 91.8 | 89.3 | 273 | (9.9) | (8.1) | ||||||||||||||||||||||
Other operating income |
42 | (44.8) | (48.8) | 118 | (53.0) | (56.4) | ||||||||||||||||||||||
Total income |
10,881 | 2.2 | 2.9 | 21,528 | 2.4 | 3.9 | ||||||||||||||||||||||
Administrative expenses and amortisations |
(4,882) | 1.1 | 1.7 | (9,712) | (0.2) | 1.5 | ||||||||||||||||||||||
Net operating income |
5,999 | 3.1 | 4.0 | 11,816 | 4.5 | 5.9 | ||||||||||||||||||||||
Net loan-loss provisions |
(2,090) | (3.3) | (2.6) | (4,251) | 3.6 | 4.7 | ||||||||||||||||||||||
Other gains (losses) and provisions |
(397) | 1.3 | 2.4 | (789) | 2.8 | 7.6 | ||||||||||||||||||||||
Profit before tax |
3,512 | 7.6 | 8.5 | 6,776 | 5.4 | 6.5 | ||||||||||||||||||||||
Tax on profit |
(1,073) | (1.9) | (0.6) | (2,166) | 3.6 | 5.4 | ||||||||||||||||||||||
Profit from continuing operations |
2,439 | 12.4 | 13.1 | 4,610 | 6.2 | 7.1 | ||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||
Consolidated profit |
2,439 | 12.4 | 13.1 | 4,610 | 6.2 | 7.1 | ||||||||||||||||||||||
Non-controlling interests |
(386) | 5.1 | 5.4 | (754) | 13.6 | 12.7 | ||||||||||||||||||||||
Underlying attributable profit to the parent |
2,053 | 13.9 | 14.7 | 3,856 | 4.9 | 6.0 |
(1) Includes exchange differences.
CORPORATE & INVESTMENT BANKING |
||||||||||||||||||||||||||||
EUR million |
||||||||||||||||||||||||||||
/ Q119 | / H118 | |||||||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||||||
Net interest income |
701 | 7.3 | 8.0 | 1,354 | 18.6 | 22.5 | ||||||||||||||||||||||
Net fee income |
377 | 6.8 | 7.6 | 730 | (10.9) | (9.3) | ||||||||||||||||||||||
Gains (losses) on financial transactions (1) |
113 | (51.0) | (49.4) | 343 | (31.6) | (26.6) | ||||||||||||||||||||||
Other operating income |
123 | 115.7 | 115.7 | 180 | 80.5 | 83.4 | ||||||||||||||||||||||
Total income |
1,313 | 1.6 | 2.5 | 2,606 | 1.8 | 5.3 | ||||||||||||||||||||||
Administrative expenses and amortisations |
(559) | (0.1) | 0.3 | (1,119) | 7.8 | 9.1 | ||||||||||||||||||||||
Net operating income |
754 | 2.9 | 4.2 | 1,488 | (2.3) | 2.6 | ||||||||||||||||||||||
Net loan-loss provisions |
(46) | 379.0 | 375.1 | (55) | (56.2) | (55.7) | ||||||||||||||||||||||
Other gains (losses) and provisions |
(16) | (25.5) | (25.1) | (36) | (1.8) | (1.8) | ||||||||||||||||||||||
Profit before tax |
693 | (1.4) | (0.1) | 1,396 | 2.6 | 8.4 | ||||||||||||||||||||||
Tax on profit |
(212) | 2.0 | 3.5 | (420) | (0.6) | 5.4 | ||||||||||||||||||||||
Profit from continuing operations |
481 | (2.8) | (1.5) | 976 | 4.1 | 9.7 | ||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||
Consolidated profit |
481 | (2.8) | (1.5) | 976 | 4.1 | 9.7 | ||||||||||||||||||||||
Non-controlling interests |
(47) | 15.5 | 16.9 | (87) | 9.2 | 11.3 | ||||||||||||||||||||||
Underlying attributable profit to the parent |
434 | (4.4) | (3.2) | 889 | 3.6 | 9.5 |
(1) Includes exchange differences.
70 January - June 2019
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WEALTH MANAGEMENT & INSURANCE | ||||||||||||||||||||||||
EUR million |
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/ Q119 | / H118 | |||||||||||||||||||||||
Underlying income statement | Q219 | % | % excl. FX | H119 | % | % excl. FX | ||||||||||||||||||
Net interest income |
144 | 3.1 | 3.4 | 283 | 10.6 | 10.7 | ||||||||||||||||||
Net fee income |
298 | 8.1 | 8.5 | 574 | (1.5) | (0.8) | ||||||||||||||||||
Gains (losses) on financial transactions (1) |
34 | (0.0) | 0.5 | 67 | 51.1 | 53.4 | ||||||||||||||||||
Other operating income |
84 | 9.8 | 10.7 | 160 | 8.2 | 10.2 | ||||||||||||||||||
Total income |
560 | 6.5 | 6.9 | 1,085 | 5.2 | 5.9 | ||||||||||||||||||
Administrative expenses and amortisations |
(226) | (1.7) | (1.7) | (455) | 2.8 | 2.3 | ||||||||||||||||||
Net operating income |
334 | 12.9 | 13.7 | 630 | 6.9 | 8.7 | ||||||||||||||||||
Net loan-loss provisions |
(0) | | | 7 | | | ||||||||||||||||||
Other gains (losses) and provisions |
(1) | (55.6) | (54.7) | (4) | (7.2) | (8.0) | ||||||||||||||||||
Profit before tax |
332 | 10.9 | 11.6 | 632 | 8.2 | 10.1 | ||||||||||||||||||
Tax on profit |
(79) | 11.9 | 12.7 | (149) | 10.7 | 12.6 | ||||||||||||||||||
Profit from continuing operations |
254 | 10.5 | 11.3 | 483 | 7.4 | 9.3 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Consolidated profit |
254 | 10.5 | 11.3 | 483 | 7.4 | 9.3 | ||||||||||||||||||
Non-controlling interests |
(13) | 9.5 | 11.6 | (24) | (6.3) | (3.1) | ||||||||||||||||||
Underlying attributable profit to the parent |
241 | 10.6 | 11.3 | 459 | 8.3 | 10.1 |
(1) Includes exchange differences.
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ALTERNATIVE PERFORMANCE MEASURES (APM)
Reconciliation of underlying results to statutory results
EUR million
First half 2019 | ||||||||||||
Underlying results |
Adjustments | Statutory results |
||||||||||
Net interest income |
17,636 | | 17,636 | |||||||||
Net fee income |
5,863 | | 5,863 | |||||||||
Gains (losses) on financial transactions (1) |
511 | | 511 | |||||||||
Other operating income |
426 | | 426 | |||||||||
Total income |
24,436 | | 24,436 | |||||||||
Administrative expenses and amortisations |
(11,587) | | (11,587) | |||||||||
Net operating income |
12,849 | | 12,849 | |||||||||
Net loan-loss provisions |
(4,313) | | (4,313) | |||||||||
Other gains (losses) and provisions |
(957) | (1,048) | (2,005) | |||||||||
Profit before tax |
7,579 | (1,048) | 6,531 | |||||||||
Tax on profit |
(2,679) | 230 | (2,449) | |||||||||
Profit from continuing operations |
4,900 | (818) | 4,082 | |||||||||
Net profit from discontinued operations |
| | | |||||||||
Consolidated profit |
4,900 | (818) | 4,082 | |||||||||
Non-controlling interests |
(855) | 4 | (851) | |||||||||
Attributable profit to the parent |
4,045 | (814) | 3,231 |
(1) | Includes exchange differences. |
Explanation of adjustments:
Net capital gains from the sale of our stake in Prisma of EUR 150 million, net capital losses of EUR 180 million for the sale of real estate assets, restructuring costs in the United Kingdom, Poland and Spain for a net impact of EUR 704 million and PPI provisions for a net amount of EUR 80 million.
72 January - June 2019
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Reconciliation of underlying results to statutory results |
| |||||||||||
EUR million | ||||||||||||
First half 2018 | ||||||||||||
Underlying results |
Adjustments | Statutory results |
||||||||||
Net interest income |
16,931 | | 16,931 | |||||||||
Net fee income |
5,889 | | 5,889 | |||||||||
Gains (losses) on financial transactions (1) |
854 | | 854 | |||||||||
Other operating income |
488 | | 488 | |||||||||
Total income |
24,162 | | 24,162 | |||||||||
Administrative expenses and amortisations |
(11,482) | | (11,482) | |||||||||
Net operating income |
12,680 | | 12,680 | |||||||||
Net loan-loss provisions |
(4,297) | | (4,297) | |||||||||
Other gains (losses) and provisions |
(903) | (581) | (1,484) | |||||||||
Profit before tax |
7,480 | (581) | 6,899 | |||||||||
Tax on profit |
(2,659) | 281 | (2,378) | |||||||||
Profit from continuing operations |
4,821 | (300) | 4,521 | |||||||||
Net profit from discontinued operations |
| | | |||||||||
Consolidated profit |
4,821 | (300) | 4,521 | |||||||||
Non-controlling interests |
(769) | | (769) | |||||||||
Attributable profit to the parent |
4,052 | (300) | 3,752 | |||||||||
(1) Includes exchange differences. |
Explanation of adjustments:
Restructuring costs: The net impact of EUR -300 million on profit relates to restructuring costs in connection with the integration of Grupo Banco Popular, as follows EUR -280 million in Spain, EUR -40 million in Corporate Centre and EUR 20 million in Portugal.
Profitability and efficiency ratios
The purpose of the profitability and efficiency ratios is to measure the ratio of profit to capital, to tangible capital, to assets and to risk weighted assets, while the efficiency ratio measures how much general administrative expenses (personnel and other) and amortisation costs are needed to generate revenue.
Ratio |
Formula |
Relevance of the metric | ||
RoE (Return on equity) |
Attributable profit to the parent Average stockholders equity (1) (excl. minority interests) |
This ratio measures the return that shareholders obtain on the funds invested in the entity and as such measures the companys ability to pay shareholders. | ||
RoTE (Return on tangible equity) |
Attributable profit to the parent Average stockholders equity (1) (excl. minority interests) - intangible assets |
This is a very common indicator, used to evaluate the profitability of the company as a percentage of its tangible equity. Its measured as the return that shareholders receive as a percentage of the funds invested in the entity less intangible assets. | ||
Underlying RoTE |
Attributable profit to the parent Average stockholders equity(1) (excl. minority interests) - intangible assets |
This indicator measures the profitability of the tangible equity of a company arising from ordinary activities, i.e. excluding results from non-recurring operations. | ||
RoA (Return on assets) |
Consolidated profit Average total assets |
This metric, commonly used by analysts, measures the profitability of a company as a percentage of its total assets. It is an indicator that reflects the efficiency of the companys total funds in generating profit over a given period. | ||
RoRWA (Return on risk weighted assets) |
Consolidated profit Average risk weighted assets |
The return adjusted for risk is an derivative of the RoA metric. The difference is that RoRWA measures profit in relation to the banks risk weighted assets. | ||
Underlying RoRWA |
Underlying consolidated profit Average risk weighted assets |
This relates the underlying profit (excluding non-recurring results) to the banks risk weighted assets. | ||
Efficiency ratio |
Operating expenses (2) Total income |
One of the most commonly used indicators when comparing productivity of different financial entities. It measures the amount of funds used to generate the banks total income. |
(1) | Stockholders equity = Capital and Reserves + Accumulated other comprehensive income + Attributable profit to the parent + Dividends. |
(2) | Operating expenses = Administrative expenses + amortisations. |
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Alternative performance measures |
Profitability and efficiency (1) (2) (3) (4) | Q219 | Q119 | H119 | H118 | ||||||||||||
RoE |
7.79 | % | 7.85 | % | 7.41 | % | 8.24 | % | ||||||||
Attributable profit to the parent |
7,681 | 7,684 | 7,276 | 7,804 | ||||||||||||
Average stockholders equity (excluding minority interests) |
98,659 | 97,886 | 98,191 | 94,662 | ||||||||||||
RoTE |
11.02 | % | 11.15 | % | 10.51 | % | 11.79 | % | ||||||||
Attributable profit to the parent |
7,681 | 7,684 | 7,276 | 7,804 | ||||||||||||
Average stockholders equity (excluding minority interests) |
98,659 | 97,886 | 98,191 | 94,662 | ||||||||||||
(-) Average intangible assets |
28,965 | 28,978 | 28,952 | 28,472 | ||||||||||||
Average stockholders equity (excl. minority interests) - intangible assets |
69,694 | 68,908 | 69,239 | 66,190 | ||||||||||||
Underlying RoTE |
12.03 | % | 11.31 | % | 11.68 | % | 12.24 | % | ||||||||
Attributable profit to the parent |
7,681 | 7,684 | 7,276 | 7,804 | ||||||||||||
(-) Management adjustments |
(706) | (108) | (814) | (300) | ||||||||||||
Underlying attributable profit to the parent |
8,388 | 7,792 | 8,090 | 8,104 | ||||||||||||
Average stockholders equity (excl. minority interests) - intangible assets |
69,694 | 68,908 | 69,239 | 66,190 | ||||||||||||
RoA |
0.63 | % | 0.63 | % | 0.60 | % | 0.65 | % | ||||||||
Consolidated profit |
9,464 | 9,318 | 8,981 | 9,342 | ||||||||||||
Average total assets |
1,500,703 | 1,488,505 | 1,492,954 | 1,438,444 | ||||||||||||
RoRWA |
1.56 | % | 1.54 | % | 1.48 | % | 1.55 | % | ||||||||
Consolidated profit |
9,464 | 9,318 | 8,986 | 9,342 | ||||||||||||
Average risk weighted assets |
608,697 | 603,340 | 605,979 | 603,424 | ||||||||||||
Underlying RoRWA |
1.67 | % | 1.56 | % | 1.62 | % | 1.60 | % | ||||||||
Consolidated profit |
9,464 | 9,318 | 8,986 | 9,342 | ||||||||||||
(-) Management adjustments |
(701) | (113) | (814) | (300) | ||||||||||||
Underlying consolidated profit |
10,169 | 9,431 | 9,800 | 9,642 | ||||||||||||
Average risk weighted assets |
608,697 | 603,340 | 605,979 | 603,424 | ||||||||||||
Efficiency ratio |
47.2 | % | 47.6 | % | 47.4 | % | 47.5 | % | ||||||||
Underlying operating expenses |
5,829 | 5,758 | 11,587 | 11,482 | ||||||||||||
Operating expenses |
5,829 | 5,758 | 11,587 | 11,482 | ||||||||||||
Management adjustments impact in operating expenses |
| | | | ||||||||||||
Underlying total income |
12,351 | 12,085 | 24,436 | 24,162 | ||||||||||||
Total income |
12,351 | 12,085 | 24,436 | 24,162 | ||||||||||||
Management adjustments impact in total income |
| | | |
(1) | Averages included in the RoE, RoTE, RoA and RoRWA denominators are calculated using 4 months worth of data in the case of quarterly figures (from March to June in Q2 and December to March in Q1) and 7 months in the case of H1 data (from December to June). |
(2) | For periods less than one year, and if there are results in the net capital gains and provisions line, the profit used to calculate RoE and RoTE is the annualised underlying attributable profit to which said results are added without annualising. |
(3) | For periods less than one year, and if there are results in the net capital gains and provisions line, the profit used to calculate RoA and RoRWA is the annualised underlying consolidated profit, to which said results are added without annualising. |
(4) | The risk weighted assets included in the denominator of the RoRWA metric are calculated in line with the criteria laid out in the CRR (Capital Requirements Regulation). |
Efficiency ratio |
| |||||||||||||||||||||||
H119 |
H118 |
|||||||||||||||||||||||
% | Total income |
Operating expenses |
% | Total income |
Operating expenses |
|||||||||||||||||||
Europe |
53.7 | 10,413 | 5,591 | 53.8 | 10,524 | 5,666 | ||||||||||||||||||
Spain |
55.2 | 3,706 | 2,044 | 58.9 | 3,746 | 2,205 | ||||||||||||||||||
Santander Consumer Finance |
44.6 | 2,321 | 1,035 | 44.9 | 2,266 | 1,018 | ||||||||||||||||||
United Kingdom |
60.4 | 2,388 | 1,442 | 55.6 | 2,590 | 1,440 | ||||||||||||||||||
Portugal |
43.8 | 712 | 312 | 47.2 | 688 | 324 | ||||||||||||||||||
Poland |
42.8 | 817 | 349 | 43.4 | 731 | 317 | ||||||||||||||||||
North America |
42.1 | 5,672 | 2,386 | 44.1 | 4,947 | 2,181 | ||||||||||||||||||
US |
42.3 | 3,734 | 1,581 | 45.4 | 3,248 | 1,475 | ||||||||||||||||||
Mexico |
41.6 | 1,938 | 806 | 41.6 | 1,699 | 706 | ||||||||||||||||||
South America |
36.2 | 9,134 | 3,309 | 36.7 | 9,151 | 3,361 | ||||||||||||||||||
Brazil |
32.4 | 6,864 | 2,227 | 33.5 | 6,768 | 2,269 | ||||||||||||||||||
Chile |
41.8 | 1,255 | 524 | 41.5 | 1,282 | 531 | ||||||||||||||||||
Argentina |
59.8 | 720 | 431 | 52.8 | 807 | 426 |
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Underlying RoTE |
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H119 |
H118 |
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% | Underlying attributable profit to the parent |
Average minority interests) - |
% | Underlying attributable profit to the parent |
Average minority interests) - |
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Europe |
9.72 | 4,707 | 48,442 | 10.48 | 4,844 | 46,225 | ||||||||||||||||||
Spain |
9.31 | 1,388 | 14,915 | 8.65 | 1,322 | 15,288 | ||||||||||||||||||
Santander Consumer Finance |
15.36 | 1,316 | 8,565 | 17.00 | 1,335 | 7,851 | ||||||||||||||||||
United Kingdom |
7.81 | 1,164 | 14,901 | 9.93 | 1,330 | 13,390 | ||||||||||||||||||
Portugal |
12.54 | 520 | 4,150 | 11.56 | 459 | 3,967 | ||||||||||||||||||
Poland |
9.61 | 300 | 3,119 | 10.93 | 309 | 2,831 | ||||||||||||||||||
North America |
9.54 | 1,779 | 18,637 | 8.26 | 1,381 | 16,713 | ||||||||||||||||||
US |
6.38 | 930 | 14,578 | 5.11 | 667 | 13,054 | ||||||||||||||||||
Mexico |
20.47 | 849 | 4,145 | 19.87 | 713 | 3,589 | ||||||||||||||||||
South America |
20.76 | 3,922 | 18,894 | 19.81 | 3,693 | 18,643 | ||||||||||||||||||
Brazil |
21.65 | 2,965 | 13,696 | 19.89 | 2,634 | 13,247 | ||||||||||||||||||
Chile |
17.63 | 623 | 3,532 | 18.19 | 615 | 3,379 | ||||||||||||||||||
Argentina |
16.95 | 146 | 863 | 30.86 | 273 | 884 |
Credit risk indicators
The credit risk indicators measure the quality of the credit portfolio and the percentage of non-performing loans covered by provisions.
Ratio |
Formula |
Relevance of the metric | ||
NPL ratio (Non-performing loans) |
Non-performing loans and advances to customers, customer guarantees and customer commitments granted Total Risk (1) |
The NPL ratio is an important variable regarding financial institutions activity since it gives an indication of the level of risk the entities are exposed to. It calculates risks that are, in accounting terms, declared to be non-performing as a percentage of the total outstanding amount of customer credit and contingent liabilities. | ||
Coverage ratio |
Provisions to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments granted Non-performing loans and advances to customers, customer guarantees and customer commitments granted |
The coverage ratio is a fundamental metric in the financial sector. It reflects the level of provisions as a percentage of the non-performing assets (credit risk). Therefore it is a good indicator of the entitys solvency against client defaults both present and future. | ||
Cost of Credit |
Allowances for loan-loss provisions over the last 12 months Average loans and advances to customers over the last 12 months |
This ratio quantifies loan-loss provisions arising from credit risk over a defined period of time for a given loan portfolio. As such, it acts as an indicator of credit quality. |
(1) | Total risk = Total loans and advances and guarantees to customers (performing and non-performing) + non-performing contingent liabilities. |
Credit risk | Jun-19 | Mar-19 | Jun-19 | Jun-18 | ||||||||||||
NPL ratio |
3.51 | % | 3.62 | % | 3.51 | % | 3.92 | % | ||||||||
Non-performing loans and advances to customers customer guarantees and customer commitments granted |
34,421 | 35,590 | 34,421 | 36,654 | ||||||||||||
Total risk |
980,885 | 983,790 | 980,885 | 934,388 | ||||||||||||
Coverage ratio |
68 | % | 68 | % | 68 | % | 69 | % | ||||||||
Provisions to cover impairment losses on loans and advances to customers, customer guarantees and customer commitments granted |
23,432 | 24,129 | 23,432 | 25,148 | ||||||||||||
Non-performing loans and advances to customers customer guarantees and customer commitments granted |
34,421 | 35,590 | 34,421 | 36,654 | ||||||||||||
Cost of credit |
0.98 | % | 0.97 | % | 0.98 | % | 0.99 | % | ||||||||
Allowances for loan-loss provisions over the last 12 months |
8,889 | 8,762 | 8,889 | 8,729 | ||||||||||||
Average loans and advances to customers over the last 12 months |
910,753 | 899,201 | 910,753 | 880,329 |
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Jun-19 |
Jun-18 |
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% | Non- performing loans and advances to customers customer guarantees and customer commitments granted |
Total risk | % | Non- performing loans and advances to customers customer guarantees and customer commitments granted |
Total risk | |||||||||||||||||||
Europe |
3.48 | 24,156 | 694,083 | 3.97 | 27,042 | 681,565 | ||||||||||||||||||
Spain |
7.02 | 15,619 | 222,449 | 7.62 | 17,778 | 233,356 | ||||||||||||||||||
Santander Consumer Finance |
2.24 | 2,263 | 100,974 | 2.44 | 2,307 | 94,473 | ||||||||||||||||||
United Kingdom |
1.13 | 2,863 | 253,953 | 1.13 | 2,842 | 252,124 | ||||||||||||||||||
Portugal |
5.00 | 1,916 | 38,362 | 7.55 | 2,938 | 38,907 | ||||||||||||||||||
Poland |
4.21 | 1,353 | 32,129 | 4.58 | 1,129 | 24,631 | ||||||||||||||||||
North America |
2.29 | 3,120 | 136,013 | 2.82 | 3,183 | 112,858 | ||||||||||||||||||
US |
2.32 | 2,317 | 99,660 | 2.91 | 2,375 | 81,551 | ||||||||||||||||||
Mexico |
2.21 | 803 | 36,353 | 2.58 | 808 | 31,307 | ||||||||||||||||||
South America |
4.81 | 6,909 | 143,638 | 4.82 | 6,399 | 132,635 | ||||||||||||||||||
Brazil |
5.27 | 4,571 | 86,736 | 5.26 | 4,093 | 77,797 | ||||||||||||||||||
Chile |
4.52 | 1,969 | 43,537 | 4.86 | 2,024 | 41,659 | ||||||||||||||||||
Argentina |
3.79 | 231 | 6,102 | 2.40 | 188 | 7,853 | ||||||||||||||||||
Coverage ratio | ||||||||||||||||||||||||
Jun-19 |
Jun-18 |
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% | Provisions to cover |
Non- performing loans and advances to customers customer guarantees and customer commitments granted |
% | Provisions to cover and advances to customers, |
Non- performing loans and advances to customers customer guarantees and customer commitments granted |
|||||||||||||||||||
Europe |
49.9 | 12,047 | 24,156 | 52.9 | 14,318 | 27,042 | ||||||||||||||||||
Spain |
42.9 | 6,699 | 15,619 | 47.5 | 8,450 | 17,778 | ||||||||||||||||||
Santander Consumer Finance |
105.9 | 2,397 | 2,263 | 107.7 | 2,484 | 2,307 | ||||||||||||||||||
United Kingdom |
31.9 | 914 | 2,863 | 33.8 | 962 | 2,842 | ||||||||||||||||||
Portugal |
52.9 | 1,015 | 1,916 | 52.7 | 1,550 | 2,938 | ||||||||||||||||||
Poland |
69.7 | 942 | 1,353 | 72.1 | 815 | 1,129 | ||||||||||||||||||
North America |
150.3 | 4,689 | 3,120 | 146.5 | 4,665 | 3,183 | ||||||||||||||||||
US |
158.4 | 3,670 | 2,317 | 156.9 | 3,727 | 2,375 | ||||||||||||||||||
Mexico |
126.9 | 1,019 | 803 | 116.1 | 938 | 808 | ||||||||||||||||||
South America |
93.0 | 6,429 | 6,909 | 94.4 | 6,039 | 6,399 | ||||||||||||||||||
Brazil |
105.5 | 4,821 | 4,571 | 108.7 | 4,449 | 4,093 | ||||||||||||||||||
Chile |
59.1 | 1,165 | 1,969 | 60.0 | 1,215 | 2,024 | ||||||||||||||||||
Argentina |
126.4 | 292 | 231 | 121.5 | 229 | 188 |
76 January - June 2019
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Alternative performance measures |
Other indicators
Ratio |
Formula | Relevance of the metric | ||
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TNAV per share (Tangible equity net asset value per share) |
Tangible book value (1) Number of shares excluding treasury stock |
This is a very commonly used ratio used to measure the companys accounting value per share having deducted the intangible assets. It is useful in evaluating the amount each shareholder would receive if the company were to enter into liquidation and had to sell all the companys tangible assets. | ||
Price / tangible book value per share (X) | Share price TNAV per share |
Is one of the most commonly used ratios by market participants for the valuation of listed companies both in absolute terms and relative to other entities. This ratio measures the relationship between the price paid for a company and its accounting equity value. | ||
LTD ratio (Loan-to-deposit) | Net loans and advances to customers Customer deposits |
This is an indicator of the banks liquidity. It measures the total (net) loans and advances to customers as a percentage of customer funds. | ||
Loans and advances (excl. reverse repos) | Gross loans and advances to customers excluding reverse repos | In order to aid analysis of the commercial banking activity, reverse repos are excluded as they are highly volatile treasury products. | ||
Deposits (excl. repos) | Customer deposits excluding repos | In order to aid analysis of the commercial banking activity, repos are excluded as they are highly volatile treasury products. | ||
PAT + After tax fees paid to SAN (in Wealth Management & Insurance) | Net profit + fees paid from Santander Asset Management to Santander, net of taxes, excluding Private Banking customers | Metric to assess Wealth Management & Insurances total contribution to Grupo Santander profit. |
(1) | Tangible book value = Stockholders equity - intangible assets |
Others | Jun-19 | Mar-19 | Jun-19 | Jun-18 | ||||||||||||
TNAV (tangible book value) per share |
4.30 | 4.30 | 4.30 | 4.10 | ||||||||||||
Tangible book value |
69,835 | 69,731 | 69,835 | 66,157 | ||||||||||||
Number of shares excl. treasury stock (million) |
16,233 | 16,235 | 16,233 | 16,125 | ||||||||||||
Price / Tangible book value per share (X) |
0.95 | 0.96 | 0.95 | 1.12 | ||||||||||||
Share price (euros) |
4.08 | 4.14 | 4.08 | 4.59 | ||||||||||||
TNAV (tangible book value) per share |
4.30 | 4.30 | 4.30 | 4.10 | ||||||||||||
Loan-to-deposit ratio |
111 | % | 113 | % | 111 | % | 111 | % | ||||||||
Net loans and advances to customers |
908,235 | 910,195 | 908,235 | 862,092 | ||||||||||||
Customer deposits |
814,751 | 808,361 | 814,751 | 774,425 | ||||||||||||
Q219 | Q119 | H119 | H118 | |||||||||||||
PAT + After tax fees paid to SAN (in WM&I) (Constant EUR million) |
628 | 599 | 1,227 | 1,136 | ||||||||||||
Profit after tax |
254 | 229 | 483 | 442 | ||||||||||||
Net fee income net of tax |
374 | 370 | 744 | 694 |
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Exchange rates: 1 euro / currency parity | ||||||||||||||||||||||||
Average (Income statement) | Period-end (balance sheet) | |||||||||||||||||||||||
H119 | H118 | Jun-19 | Mar-19 | Jun-18 | ||||||||||||||||||||
US dollar |
1.130 | 1.210 | 1.138 | 1.124 | 1.166 | |||||||||||||||||||
Pound sterling |
0.873 | 0.880 | 0.897 | 0.858 | 0.886 | |||||||||||||||||||
Brazilian real |
4.341 | 4.134 | 4.351 | 4.387 | 4.488 | |||||||||||||||||||
Mexican peso |
21.647 | 23.073 | 21.820 | 21.691 | 22.882 | |||||||||||||||||||
Chilean peso |
762.804 | 740.383 | 773.897 | 764.435 | 757.828 | |||||||||||||||||||
Argentine peso |
46.643 | 25.832 | 48.291 | 48.659 | 33.517 | |||||||||||||||||||
Polish zloty |
4.292 | 4.220 | 4.250 | 4.301 | 4.373 |
78 January - June 2019
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by segments |
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Santander share |
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Appendix | ||||||||
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Interim condensed consolidated financial statements |
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
CONSOLIDATED INCOME STATEMENT
NOTE: | The financial information for the first half 2019 and 2018 (attached herewith) corresponds to that included in the interim condensed consolidated financial statements at these dates, prepared in accordance with the International Accounting Standards (IAS) 34, Interim Financial Information. The accounting policies and methods used are those established by the International Financial Reporting Standards adopted by the European Union (IFRS-EU), Circular 4/2017 of the Bank of Spain, and subsequent modifications, and the International Financial Reporting Standards issued by the International Accounting Standards Board (IFRS-IASB). |
Interim condensed consolidated balance sheet
EUR million
Assets | Jun-19 | Dec-18 | Jun-18 | |||||||||
Cash, cash balances at central banks and other deposits on demand |
104,104 | 113,663 | 107,687 | |||||||||
Financial assets held for trading |
102,574 | 92,879 | 112,947 | |||||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
28,424 | 23,495 | 30,793 | |||||||||
Non-trading financial assets mandatorily at fair value through profit or loss |
5,393 | 10,730 | 5,263 | |||||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
| | | |||||||||
Financial assets designated at fair value through profit or loss |
73,420 | 57,460 | 48,043 | |||||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
8,221 | 6,477 | 5,831 | |||||||||
Financial assets at fair value through other comprehensive income |
118,062 | 121,091 | 120,831 | |||||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
26,458 | 35,558 | 32,499 | |||||||||
Financial assets at amortised cost |
981,046 | 946,099 | 922,948 | |||||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
20,466 | 18,271 | 23,176 | |||||||||
Hedging derivatives |
8,451 | 8,607 | 8,348 | |||||||||
Changes in the fair value of hedged items in portfolio hedges of interest risk |
1,621 | 1,088 | 1,143 | |||||||||
Investments |
7,788 | 7,588 | 9,262 | |||||||||
Joint ventures companies |
962 | 979 | 2,047 | |||||||||
Associated entities |
6,826 | 6,609 | 7,215 | |||||||||
Assets under insurance or reinsurance contracts |
311 | 324 | 345 | |||||||||
Tangible assets |
33,755 | 26,157 | 23,461 | |||||||||
Property, plant and equipment |
32,651 | 24,594 | 21,792 | |||||||||
For own-use |
14,522 | 8,150 | 7,787 | |||||||||
Leased out under an operating lease |
18,129 | 16,444 | 14,005 | |||||||||
Investment property |
1,104 | 1,563 | 1,669 | |||||||||
Of which: Leased out under an operating lease |
794 | 1,195 | 1,272 | |||||||||
Memorandum items: acquired in financial lease |
6,608 | 98 | 96 | |||||||||
Intangible assets |
28,794 | 28,560 | 27,893 | |||||||||
Goodwill |
25,613 | 25,466 | 25,035 | |||||||||
Other intangible assets |
3,181 | 3,094 | 2,858 | |||||||||
Tax assets |
30,102 | 30,251 | 30,051 | |||||||||
Current tax assets |
6,502 | 6,993 | 6,403 | |||||||||
Deferred tax assets |
23,600 | 23,258 | 23,648 | |||||||||
Other assets |
12,140 | 9,348 | 10,068 | |||||||||
Insurance contracts linked to pensions |
207 | 210 | 223 | |||||||||
Inventories |
5 | 147 | 164 | |||||||||
Other |
11,928 | 8,991 | 9,681 | |||||||||
Non-current assets held for sale |
4,535 | 5,426 | 5,543 | |||||||||
TOTAL ASSETS |
1,512,096 | 1,459,271 | 1,433,833 |
January - June 2019 79
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Interim condensed consolidated financial statements |
Interim condensed consolidated balance sheet
EUR million
Liabilities | Jun-19 | Dec-18 | Jun-18 | |||||||||
Financial liabilities held for trading |
74,187 | 70,343 | 75,350 | |||||||||
Financial liabilities designated at fair value through profit or loss |
60,237 | 68,058 | 58,153 | |||||||||
Memorandum items: subordinated liabilities |
| | | |||||||||
Financial liabilities at amortised cost |
1,224,194 | 1,171,630 | 1,153,918 | |||||||||
Memorandum items: subordinated liabilities |
21,419 | 23,820 | 23,939 | |||||||||
Hedging derivatives |
7,267 | 6,363 | 6,728 | |||||||||
Changes in the fair value of hedged items in portfolio hedges of interest rate risk |
296 | 303 | 317 | |||||||||
Liabilities under insurance or reinsurance contracts |
731 | 765 | 936 | |||||||||
Provisions |
14,571 | 13,225 | 13,758 | |||||||||
Pensions and other post-retirement obligations |
6,216 | 5,558 | 5,465 | |||||||||
Other long term employee benefits |
1,708 | 1,239 | 1,525 | |||||||||
Taxes and other legal contingencies |
3,153 | 3,174 | 3,084 | |||||||||
Contingent liabilities and commitments |
728 | 779 | 855 | |||||||||
Other provisions |
2,766 | 2,475 | 2,829 | |||||||||
Tax liabilities |
9,838 | 8,135 | 7,659 | |||||||||
Current tax liabilities |
3,230 | 2,567 | 2,481 | |||||||||
Deferred tax liabilities |
6,608 | 5,568 | 5,178 | |||||||||
Other liabilities |
10,790 | 13,088 | 12,569 | |||||||||
Liabilities associated with non-current assets held for sale |
| | | |||||||||
TOTAL LIABILITIES |
1,402,111 | 1,351,910 | 1,329,388 | |||||||||
EQUITY |
||||||||||||
Shareholders equity |
120,054 | 118,613 | 117,935 | |||||||||
Capital |
8,118 | 8,118 | 8,068 | |||||||||
Called up paid capital |
8,118 | 8,118 | 8,068 | |||||||||
Unpaid capital which has been called up |
| | | |||||||||
Share premium |
50,993 | 50,993 | 51,053 | |||||||||
Equity instruments issued other than capital |
581 | 565 | 542 | |||||||||
Equity component of the compound financial instrument |
| | | |||||||||
Other equity instruments issued |
581 | 565 | 542 | |||||||||
Other equity |
155 | 234 | 215 | |||||||||
Accumulated retained earnings |
61,049 | 56,756 | 56,967 | |||||||||
Revaluation reserves |
| | | |||||||||
Other reserves |
(4,061) | (3,567) | (1,552) | |||||||||
(-) Own shares |
(12) | (59) | (61) | |||||||||
Profit attributable to shareholders of the parent |
3,231 | 7,810 | 3,752 | |||||||||
(-) Interim dividends |
| (2,237) | (1,049) | |||||||||
Other comprehensive income |
(21,425) | (22,141) | (23,885) | |||||||||
Items not reclassified to profit or loss |
(3,625) | (2,936) | (2,751) | |||||||||
Items that may be reclassified to profit or loss |
(17,800) | (19,205) | (21,134) | |||||||||
Non-controlling interest |
11,356 | 10,889 | 10,395 | |||||||||
Other comprehensive income |
(1,149) | (1,292) | (1,377) | |||||||||
Other elements |
12,505 | 12,181 | 11,772 | |||||||||
TOTAL EQUITY |
109,985 | 107,361 | 104,445 | |||||||||
TOTAL LIABILITIES AND EQUITY |
1,512,096 | 1,459,271 | 1,433,833 | |||||||||
MEMORANDUM ITEMS |
||||||||||||
Loans commitment granted |
223,954 | 218,083 | 210,977 | |||||||||
Financial guarantees granted |
12,077 | 11,723 | 13,247 | |||||||||
Other commitments granted |
94,785 | 74,389 | 73,061 |
80 January - June 2019
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Interim condensed consolidated financial statements |
Interim condensed consolidated income statement
EUR million
H119 | H118 | |||||||
Interest income |
28,669 | 26,904 | ||||||
Financial assets at fair value through other comprehensive income |
2,020 | 2,548 | ||||||
Financial assets at amortised cost |
24,396 | 23,011 | ||||||
Other interest income |
2,253 | 1,345 | ||||||
Interest expense |
(11,033) | (9,973) | ||||||
Net interest income |
17,636 | 16,931 | ||||||
Dividend income |
361 | 264 | ||||||
Share of results of entities accounted for using the equity method |
306 | 354 | ||||||
Commission income |
7,502 | 7,475 | ||||||
Commission expense |
(1,639) | (1,586) | ||||||
Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net |
350 | 326 | ||||||
Financial assets at amortised cost |
105 | 16 | ||||||
Other financial assets and liabilities |
245 | 310 | ||||||
Gain or losses on financial assets and liabilities held for trading, net |
(12) | 1,197 | ||||||
Reclassification of financial assets at fair value through other comprehensive income |
| | ||||||
Reclassification of financial assets at amortised cost |
| | ||||||
Other gains (losses) |
(12) | 1,197 | ||||||
Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss |
215 | 56 | ||||||
Reclassification of financial assets at fair value through other comprehensive income |
| | ||||||
Reclassification of financial assets at amortised cost |
| | ||||||
Other gains (losses) |
215 | 56 | ||||||
Gain or losses on financial assets and liabilities measured at fair value through profit or loss, net |
(207) | 132 | ||||||
Gain or losses from hedge accounting, net |
(26) | 33 | ||||||
Exchange differences, net |
191 | (890) | ||||||
Other operating income |
855 | 813 | ||||||
Other operating expenses |
(1,136) | (979) | ||||||
Income from assets under insurance and reinsurance contracts |
1,630 | 1,756 | ||||||
Expenses from liabilities under insurance and reinsurance contracts |
(1,590) | (1,720) | ||||||
Total income |
24,436 | 24,162 | ||||||
Administrative expenses |
(10,110) | (10,265) | ||||||
Staff costs |
(6,080) | (5,960) | ||||||
Other general administrative expenses |
(4,030) | (4,305) | ||||||
Depreciation and amortisation cost |
(1,477) | (1,217) | ||||||
Provisions or reversal of provisions, net |
(1,916) | (1,262) | ||||||
Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss, net |
(4,368) | (4,352) | ||||||
Financial assets at fair value with changes in other comprehensive income |
(6) | (1) | ||||||
Financial assets at amortised cost |
(4,362) | (4,351) | ||||||
Impairment of investments in subsidiaries, joint ventures and associates, net |
| | ||||||
Impairment on non-financial assets, net |
(27) | (96) | ||||||
Tangible assets |
(19) | (33) | ||||||
Intangible assets |
(2) | (64) | ||||||
Others |
(6) | 1 | ||||||
Gain or losses on non financial assets and investments, net |
250 | 23 | ||||||
Negative goodwill recognised in results |
| | ||||||
Gains or losses on non-current assets held for sale not classified as discontinued operations |
(257) | (94) | ||||||
Profit or loss before tax from continuing operations |
6,531 | 6,899 | ||||||
Tax expense or income from continuing operations |
(2,449) | (2,378) | ||||||
Profit for the period from continuing operations |
4,082 | 4,521 | ||||||
Profit or loss after tax from discontinued operations |
| | ||||||
Profit for the period |
4,082 | 4,521 | ||||||
Profit attributable to non-controlling interests |
851 | 769 | ||||||
Profit attributable to the parent |
3,231 | 3,752 | ||||||
Earnings per share |
||||||||
Basic |
0.181 | 0.216 | ||||||
Diluted |
0.180 | 0.216 |
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Glossary |
GLOSSARY
82 January - June 2019
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Important information |
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Important information |
Non-IFRS and alternative performance measures
In addition to the financial information prepared in accordance with International Financial Reporting Standards (IFRS), this report contains certain financial measures that constitute alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015 (ESMA/2015/1415en) and other non-IFRS measures (Non-IFRS Measures). The financial measures contained in this report that qualify as APMs and non-IFRS measures have been calculated using the financial information from Santander Group but are not defined or detailed in the applicable financial reporting framework and have neither been audited nor reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period. While we believe that these APMs and non-IFRS measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute of IFRS measures. In addition, other companies, including companies in our industry, may calculate or use such measures differently, which reduces their usefulness as comparative measures. 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 IFRS, please see 2018 Annual Financial Report, published in the CNMV on 28 February 2019, our 20-F report for the year ending 31 December 2018 registered with the SEC in the United States as well as the section Alternative performance measures of the annex to this report.
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.
Forward-looking statements
Santander cautions that this report contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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 report 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. The following important factors, in addition to those discussed elsewhere in this report, and in our annual report on Form 20-F for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission, could affect our future results and could cause outcomes to differ materially from those anticipated in any forward-looking statement: (1) general economic or industry conditions in areas in which we have significant business activities or investments, including a worsening of the economic environment, increasing in the volatility of the capital markets, inflation or deflation, and changes in demographics, consumer spending, investment or saving habits; (2) exposure to various types of market risks, principally including interest rate risk, foreign exchange rate risk, equity price risk and risks associated with the replacement of benchmark indices; (3) potential losses associated with prepayment of our loan and investment portfolio, declines in the value of collateral securing our loan portfolio, and counterparty risk; (4) political stability in Spain, the UK, other European countries, Latin America and the US (5) changes in laws, regulations or taxes, including changes in regulatory capital and liquidity requirements, including as a result of the UK exiting the European Union and increased regulation in light of the global financial crisis; (6) our ability to integrate successfully our acquisitions and the challenges inherent in diverting managements focus and resources from other strategic opportunities and from operational matters while we integrate these acquisitions; and (7) changes in our ability to access liquidity and funding on acceptable terms, including as a result of changes in our credit spreads or a downgrade in our credit ratings or those of our more significant subsidiaries. Numerous factors could affect the future results of Santander and could result in those results deviating materially from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.
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Important information |
Forward-looking statements speak only as of the date of this report 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.
No offer
The information contained in this report 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 persons 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 this report. No investment activity should be undertaken on the basis of the information contained in this report. In making this report 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 report 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 report 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.
Historical performance is not indicative of future results
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 period. Nothing in this report should be construed as a profit forecast.
This document is a translation of a document originally issued in Spanish. Should there be any discrepancies between the English and the Spanish versions, only the original Spanish version should be binding.
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84 January - June 2019
Investor Relations
Ciudad Grupo Santander Edificio Pereda, 2nd floor Avda de Cantabria s/n 28660 Boadilla del Monte Madrid (Spain) Tel: +34 91 259 65 14 / +34 91 259 65 20 Fax: +34 91 257 02 45 e-mail: [email protected]
Legal Head Office: Paseo Pereda 9-12, Santander (Spain) Tel: +34 (942) 20 61 00 |
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Operational Head Office: Ciudad Grupo Santander Avda. de Cantabria s/n 28660 Boadilla del Monte, Madrid (Spain)
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www.santander.com |
23 July 2019 H119 Earnings Presentation Here to help you prosper
Important Information Non-IFRS and alternative performance measures In addition to the financial information prepared in accordance with International Financial Reporting Standards (IFRS) and derived from our financial
statements, this document contains certain financial measures that constitute alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets
Authority (ESMA) on 5 October 2015 (ESMA/2015/1415en) and other non-IFRS measures (Non-IFRS Measures). The financial measures contained in this document
that qualify as APMs and non-IFRS measures have been calculated using the financial information from Santander Group but are not defined or detailed in the applicable financial reporting framework and have
neither been audited nor reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and
non-IFRS measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period. While we believe that these APMs and
non-IFRS measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute of IFRS measures. In addition, other companies,
including companies in our industry, may calculate or use such measures differently, which reduces their usefulness as comparative measures. 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 IFRS, please see 2019 2Q Financial Report, published as Relevant Fact
on 23 July 2019 and 2018 Annual Financial Report, filed with the Comisión Nacional del Mercado de Valores of Spain (CNMV) on 28 February 2019. These documents are available on Santanders website (www.santander.com). 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 Forward-looking statements Santander cautions that this document contains statements that
constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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 document 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. The following important factors, in addition to those discussed elsewhere in this document, could affect our future results and could cause outcomes to
differ materially from those anticipated in any forward-looking statement: (1) general economic or industry conditions in areas in which we have significant business activities or investments, including a worsening of the economic environment,
increasing in the volatility of the capital markets, inflation or deflation, and changes in demographics, consumer spending, investment or saving habits; (2) exposure to various types of market risks, principally including interest rate risk,
foreign exchange rate risk, equity price risk and risks associated with the replacement of benchmark indices; (3) potential losses associated with prepayment of our loan and investment portfolio, declines in the value of collateral securing our
loan portfolio, and counterparty risk; (4) political stability in Spain, the UK, other European countries, Latin America and the US (5) changes in laws, regulations or taxes, including changes in regulatory capital and liquidity
requirements, including as a result of the UK exiting the European Union and increased regulation in light of the global financial crisis; (6) our ability to integrate successfully our acquisitions and the challenges inherent in diverting
managements focus and resources from other strategic opportunities and from operational matters while we integrate these acquisitions; and (7) changes in our ability to access liquidity and funding on acceptable terms, including as a
result of changes in our credit spreads or a downgrade in our credit ratings or those of our more significant subsidiaries. Numerous factors could affect the future results of Santander and could result in those results deviating materially from
those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.
2
Important Information Forward-looking statements speak only as of the date of this document 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. No offer The information contained in this document 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 persons 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 this document. No investment activity should be undertaken on the basis of the information contained in this document. In making this document 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 document 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 document 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. Historical performance is not indicative of future results 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 period. Nothing in this document should be construed as a profit forecast.
Index Highlights Group performance H119 Business areas performance H119 Concluding remarks Appendix Glossary
Group performance H119 01
Highlights QoQ strong growth in volumes (+2% loans ; +3% customer funds), underlying profit (+8%) and continued generation of capital organically (+11 bps) Our loyal and digital customer base continues double digit growth, increasing digital activity Activity Volumes increased1: loans (+2% QoQ; +4% YoY) and customer funds (+3% QoQ; +6% YoY) Q219 attributable profit: EUR 1,391 mn impacted by a EUR 706 mn charge, mainly restructuring costs Results Q219 underlying profit of EUR 2,097 mn up 8% QoQ. Excluding the SRF contribution: +16% H119 underlying profit: EUR 4,045 mn backed by higher customer revenue, cost control and lower cost of credit We continued to generate capital organically in Q2: +11 bps (+29 bps YTD) Profitability CET1 Jun-19: 11.30% impacted by regulatory effects and restructuring costs (-20 bps in Q2; -49 bps YTD) and solvency High profitability: 11.7% underlying RoTE A new, simplified organisational structure into 3 regions to accelerate the execution of our strategy New reporting UK aligned with ring-fencing structure and Spain with the local customer related business structure With the creation of Santander Global Platform (SGP), we are taking a further step forward in our digital transformation (1) QoQ and YoY volume changes in constant euros
Highlights Growth Profitability Strength Loyal: +10% Customer revenue: +5% CET1: 11.30% (+50 bps) Customers Results Solvency Digital: +22% Underlying att. profit: +2% TNAVps: 4.30 (+5%) Loans: +4% RoTE: 11.7% NPL: 3.51% (-41 bps) Profitability Credit Volumes Customer funds: +6% ratios1 RoRWA: 1.62% quality Cost of credit: 0.98% (-1 bp) Note: YoY changes. Results and volume changes in constant euros. Loans excluding reverse repos. Customer funds: deposits excluding repos + marketed mutual funds (1) Underlying
Business activity
Our successful commercial and digital transformation strategy is reflected in a larger customer base, increased loyalty ratio
as well as in an increased number of digital customers and activity Note: YoY changes. (1) Data as of 30 June. Every natural or legal person that, being part of a commercial bank, has logged in to their personal area of internet banking or mobile phone (or both) in the last 30 days. Digital customers in the last 90 days: 38.4 mn. 10 Private accesses. Logins of banks customers on Santander internet banking or apps. ATM accesses by mobile are not includ ed. Customer interaction through mobile or internet banking which resulted in a change of balance (monetary and voluntary). ATM transactions are not included.
Continued widespread growth: loans (+2% QoQ; +4% YoY) and customer funds (+3% QoQ; +6% YoY), boosted by developing markets
Results, profitability and solvency
H119 underlying P&L YoY performance H119 H118 % vs. H118 EUR million Constant Euros euros Higher customer revenue due to Net interest income 17,636 16,931 4 6 increased business volumes and spread management Net fee income 5,863 5,889 0 2 Lower market revenue and Gains on fin. trans. and other 937 1,342 -30 -29 higher cost of FX hedging Total income 24,436 24,162 1 3 Operating expenses -11,587 -11,482 1 2 Cost control with an individualised and targeted cost management across the board Net operating income 12,849 12,680 1 3 Loan-loss provisions -4,313 -4,297 0 1 Good credit quality evolution, Other results -957 -903 6 10 with low cost of credit and better NPL ratio Underlying PBT 7,579 7,480 1 3 Taxes -2,679 -2,659 1 3 Minority interests -855 -769 11 11 Underlying attributable profit 4,045 4,052 0 2 Net capital gains and provisions1 -814 -300 171 171 Mainly restructuring costs Attributable profit 3,231 3,752 -14 -12 (1) Details on the next page 13
Net capital gains and provisions EUR million
Q2 underlying profit strongest since 2011 Group underlying attributable profit Constant EUR million 1,983 1,977 2,096 2,021 1,938 2,107 9% growth QoQ (in constant euros) despite the annual SRF contribution in Q219 Excluding this effect, 17% QoQ (in constant euros) Q118 Q2 Q3 Q4 Q119 Q2 Note: Contribution to the SRF (net of tax) recorded in Q218 (EUR -187 mn) and Q219 (EUR -162 mn) 15
Customer revenue growth QoQ (+3%) and YoY (+6%) driven by stronger YoY growth due to higher volumes and spread management, with improvements in 7 of our 10 core markets QoQ increase backed by South America and North America, particularly Brazil, Chile, the US and Argentina YoY increase in the majority of our main markets QoQ improvement boosted by Brazil and Mexico H119 vs H118 affected by lower ALCO portfolio sales and FX hedges Q219 recorded the annual SRF contribution Very low weight as a percentage of total income (<4%) Note: Constant euros (1) Other revenue includes gains/losses on financial transactions, income from the equity accounted method, dividends and other operating results.Contribution to the SRF recorded in Q218 and Q219. Contribution to the DGF in Spain recorded in Q418
Higher NII due to increased business volumes and wider spreads in mature markets Note: YoY change in constant euros. Average volumes 17
Higher net fee income driven by Retail Banking and WM&I contribution. SCIB still affected by markets (1) YoY change in constant euros (2) Considering the total fee generated by insurance and asset management, including those transferred to the commercial network (Retail Banking) 18
Costs (-1.8% YoY in real terms) reflect the first integration synergies, maintaining a best-in-class cost-to-income ratio and high quality customer service Cost evolution H119 vs. H118, % Nominal In real terms1 Targeted cost management by geographies: -7.3 -8.8 Europe: -3.2% cost reduction in real terms, enhancing SCF 2.0 0.3 operating efficiency -0.6 -2.8 Better operational leverage in the US, while we are 12.0 10.32 investing to update distribution capacity in Mexico -3.8 -4.7 Costs under control in the South American markets 0.1 -2.0 SGP up EUR 46 mn due to the higher ongoing 7.1 2.6 investments in its initial stage 3.1 -1.2 1.7 -0.8 Costs in real terms Cost-to-income 89.0 41.3 -1.8% YoY 47.4% in H119 -9.1 -10.6 Note: Constant euros(1) Excluding inflation (2) Impacted by DB Polska integration. Poland efficiency ratio improved 0.6 pp
The positive trend in credit quality continued, underpinned by the good evolution of the NPL ratio, coverage and cost of credit ratios Note: Exposure and coverage ratio by stage in appendix, page 64 20
Continued to generate capital organically (+11 bps QoQ; +29 bps YTD) CET1 ratio impacted by regulatory effects and restructuring costs. CET1 ratio YoY % Jun-19 change 11.30 +0.29 +0.15 11.30 10.80 10.94 FL Total capital ratio 14.80% +56 bps -0.08 -0.36 FL Tier 1 capital ratio 12.73% +44 bps Leverage ratio 5.0% -9 bps Santander currently complies with MREL requirement3 Jun-18 Dec-18 Regulatory Organic Perimeter and Market Jun-19 impacts1 generation restructuring and others costs2 (1) IFRS 16 (-19 bps); models and TRIM (-15 bps); Other (-2 bps) (2) Restructuring costs (-13 bps); Prisma (+2 bps); Other (+3 bps) (3) Parent bank. Preliminary data 21 2019 data applying the IFRS 9 transitional arrangements.As indicated by the consolidating supervisor a pay-out of 50%, the maximum within the target range (40%-50%), was applied for the calculation of the capital ratios in 2019. Previously, the average cash pay-out for the last three years was considered.
Creating shareholder value whilst maintaining high profitability TNAV per share Profitability ratios EUR Underlying RoTE1 Underlying RoRWA1 4.30 12.1% 11.7% 1.59% 1.62% 4.19 Dec-18 Jun-19 2018 H119 2018 H119 (1) Statutory RoTE 2018 11.7% and H119 10.5%. Statutory RoRWA 2018 1.55% and H119 1.48% Notes: The averages for the H1 RoTE and RoRWA denominators are calculated on the basis of 7 months from December to June. For periods of less than a year, and in the event of non-recurring results existing, the profit used to calculate the statutory RoTE is the annualised underlying attributable profit (excluding non-recurring results), to which are added non-recurring results without annualising them. 22 For periods of less than a year, and in the event of non-recurring results existing, the profit used to calculate the statutory RoRWA is the annualised underlying consolidated result (excluding non-recurring results), to which is added non-recurring results without annualising them.
New reporting aligned with our organisational structure
Adapting our reporting to the new organisational structure and according to IFRS 8 requirements 3 regions: Europe, North America and South America Converging the business model, the IT&Ops and shared services UK aligned with ring-fencing structure and Spain with the local customer related business To accelerate progress towards being the best open financial services platform Our digital services are consolidated under a single unit: Note: Digital Services definitions on page 48 24
1 A new, simplified management structure Total customers Loans Customer funds Underlying profit RoTE (EUR million) (EUR billion) (EUR billion) (EUR billion) (%) (1) Adjusted for excess of capital in the US. Otherwise 9.5% .
A SGPOpenbank and Open Digital Services (ODS) Openbank One of the largest full service digital banks in Europe, with best in class UX and a profitable business model Open Digital Services (ODS) BaaS model A technology company developing a Banking as a Service state-of-the-art platform to be used Large customer ï Total customers: 1.2 mn base in Spain ï # products per loyal customer: 4.6 by Openbank in its international expansion reflected in transactionality ï # transactions1: +29% YoY From to in the first phase3: and high growth ï Loans: +164%; Deposits: +22% YoY and productivity ï Business2: EUR 36,200 per loyal customer Attract, engage and retain customers and become the leading Banking as without a branch network, a Service platform to serve third parties best user experience and profitability BaaS = Banking as a Service UX = user experience 26 (1) Monetary total transactions through all channels, including ATMs (2) Per month (3) Tentative agenda
B SGPGlobal Payments ServicesGlobal value propositions Payments platform to better serve existing and new customers with best-in-class value propositions developed globally
C SGPDigital AssetsCommon solutions (built once, used by many) Our common digital assets and Centres of Digital Expertise help our banks in their digital transformation Centres of Digital Expertise - Global capabilities Digital Assets - Technology projects & solutions1 Main centres Globile -mobile platform. All countries and business collaborating Programmes Markets to develop and reuse global App components (agile projects) Contact Centre 33 9 >20 components implemented across 6 countries Conversion Rate Optimisation >30 9 Open Platform - common services Machine Learning 21 9 Modern cloud-native, mobile first technology infrastructure Continue leveraging the Groups scale and ensuring all countries have access to the most innovative technology Santander InnoVentures - Investments in fintech c. USD 100 mn invested in 24 companies from 7 countries (1) Software as a Service (SaaS)
Business areas Performance H119 02
Increased weight of the Americas (55%) in Group profit H119 Underlying attributable profit1 H119 Underlying attributable profit in core markets EUR mn and % change vs. H118 in constant euros
Brazil: YoY double-digit profit growth, higher RoTE (22%) and better customer service and satisfaction. QoQ strong customer revenue growth P&L* Q219 % Q119 H119 % H118 NII 2,520 5.5 4,979 6.6 22% +33% Net fee income 924 2.3 1,855 8.7 Loyal/active Digital Total income 3,453 4.2 6,864 6.5 customers customers Operating expenses -1,102 1.0 -2,227 3.1 LLPs -761 10.2 -1,471 -1.7 PBT 1,438 5.1 2,846 14.8 Underlying att. profit 762 8.8 1,482 18.2 3.84% 5.27% (-46 bps) (*) EUR mn and % change in constant euros (+1 bp) Cost of NPL ratio credit ACTIVITY Volumes in EUR bn and % change in constant euros
Spain: revenue affected by lower fee income (CIB) and IFRS 16 impact. Cost improvement reflects first integration synergies. QoQ evolution impacted by the SRF contribution P&L* Q219 % Q119 H119 % H118 NII 1,009 0.0 2,018 1.1 +4% 31% +21% Net fee income 1 624 0.1 1,247 -6.9 Loyal/active Digital customers customers Total income 1,849 -0.4 3,706 -1.1 Operating expenses -1,020 -0.5 -2,044 -7.3 -6% LLPs -228 -6.0 -470 7.7 PBT 458 -4.1 936 7.4 Underlying att. profit 338 -5.1 694 5.0 +8% 0.41% 7.02% (+5 bps) (*) EUR mn Changes excluding IFRS 16 impact (-60 bps) Cost of NPL ratio credit ACTIVITY Volumes in EUR bn 317 201 2.00% 2.03% 2.05% 2.06% 2.08% +3% Yield on loans 55.2% 0% QoQ 9% 1.70% 1.92% Efficiency QoQ 1.94% ratio RoTE +5% -4% Cost of deposits YoY 0.29% YoY 0.22% 0.19% 0.14% 0.14% Q218 Q3 Q4 Q119 Q2 Loans Funds Note: Loans excluding reverse repos. Funds: deposits excluding repos + marketed mutual funds 32 Customers and credit quality ratios YoY change. Underlying RoTE
SCF: leadership in Europe with best-in-class profitability (RoRWA: 2.3%) and efficiency. Historically low NPL ratio and cost of credit (Q2 portfolio sales) P&L* Q219 % Q119 H119 % H118 NII 971 3.0 1,911 4.1 19.2 mn 44.6% Net fee income 201 -6.1 415 3.0 Total Efficiency customers ratio Total income 1,154 -1.3 2,321 2.8 Operating expenses -527 3.5 -1,035 2.0 LLPs -59 -51.4 -181 -4.3 PBT 556 -1.1 1,117 2.3 Underlying att. profit 334 2.9 658 -1.0 0.36% 2.24% (-1 bp) (*) EUR mn and % change in constant euros Cost of (-20 bps) credit NPL ratio ACTIVITY Volumes in EUR bn and % change in constant euros
UK: results reflect continued competitive pressure on revenue. Cost improvement and resilient credit quality performance P&L* Q219 % Q119 H119 % H118 NII 944 -2.9 1,919 -7.2 31% +8% Net fee income 207 -4.0 423 -8.4 Loyal/active Digital Total income 1,183 -1.7 2,388 -8.4 customers customers Operating expenses -703 -4.5 -1,442 -0.6 LLPs -19 -67.7 -80 -22.3 PBT 435 22.2 792 -16.8 Underlying att. profit 327 29.0 582 -13.1 0.06% 1.13% (-4 bps) (*) EUR mn and % change in constant euros (0 bps) Cost of NPL ratio credit ACTIVITY Volumes in EUR bn and % change in constant euros
Note: Volumes in EUR bn; % change YoY in constant euros. Underlying RoTE 35 (1) Adjusted RoTE for excess capital. Otherwise 6%
EUR QoQ strong NII growth favoured by higher inflation (UF) and faster volume growth. YoY profit increased 311 mn 18% driven by good market results and lower provisions, while the NII was affected by lower inflation +4% Profit virtually unchanged in constant euros, as the high inflation adjustment of EUR -74 million was EUR offset by a rise in revenue higher than inflation 73 mn 17% Customer revenue boosted by NII (public securities, higher interest rates and BCRA2 is now 0% considered an equivalent supervisor) and fees (foreign currency transactions and cash deposits) Note: % change YoY in constant euros. Underlying RoTE 36 Adjusted RoTE for excess capital. Otherwise 10% BCRA: Banco Central de la República Argentina
Corporate Centre P&L* H119 H118 NII -600 -477 Gains/Losses on FT -171 5 Operating expenses -193 -212 Provisions and other income -139 -160 Tax and minority interests 46 -18 Underlying att. profit -1,108 -884 (*) EUR mn Higher loss in NII due to higher stock of issuances and IFRS 16 impact FX hedging cost reflected in results from financial transactions Operating expenses reflect the streamlining and simplification measures 37
Concluding remarks 03
Santander Group continued to deliver good results in a challenging market Larger customer base, increased loyalty ratio, the number of digital customers and their activity Volumes growth higher than in 2018, especially in customer funds Revenue up (+3% with NII +6%), costs reflecting the first synergies (in real terms Group: -2%; Europe -3%) and low levels of cost of credit (<1%) Continued to generate capital organically in Q2, creating shareholder value with a TNAVps +5% YoY, whilst maintaining high profitability A new, simplified organisational structure in 3 regions to accelerate the execution of our strategy With the creation of Santander Global Platform, we are furthering our digital transformation, extending the Groups talent and scale to high growth payments and digital businesses, targeting retail customers, merchants and SMEs. 39
New geographical areas. Key metrics H119 and mid-term targets Key metrics Europe North America Medium-term Medium-term Medium-term Commercial H119 targets H119 targets H119 targets Loyal / Active 35% 40% 29% 31% 26% 31% customers Digital customers 13 mn c.16 mn 4 mn c.7 mn 16 mn c.20 mn # of countries top3 2 All (4) 1* 1* 3 All (4) in CSAT Financial C/I 54% 47-49% 42% 39-41% 36% 33-35% RoTE2 10% 12-14% 10%1 14-16%1 21% 20-22% RoRWA2 1.5% c.2% 2.2% c.2% 3.4% c.3.5% Targets published in the Investor Day adapted to the new geographic areas only. Group targets without any change. (*) US (SBNA) medium-term target: average peers. In H119: 7th (In H218: 9th) (1) Adjusted for excess of capital in the US. Otherwise 9.5% in H119. 40 (2) Underlying
RoTE H119 and medium-term target by countries -RoTE (%) H119-Medium-term targets 22%->20% 9%-14-16% 15%-14-15% 8%-9-11% 20%-19-21% 11%1-11-13%1 18%-19-20% 13%-13-15% 17%2-14-16%2 Note: underlying RoTE (1) Adjusted for excess of capital. Otherwise, RoTE in H119 at 6% 41 (2) Adjusted for excess of capital. Otherwise, RoTE in H119 at 10% and medium-term goal 12-14%
We confirm our medium-term goals for the Group Medium-term goals RoTE1 FL CET1 13-15% 11-12% Dividend Efficiency pay-out ratio 42-45% 40-50%
Appendix 04
Appendix Primary segments Secondary segments Other countries Liquidity NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements
Europe: in a low interest rate and low growth environment, results reflect revenue pressure, cost control and good credit quality. Working to simplify and integrate our structure
North America: double digit profit improvement in the US and Mexico, while increasing coordination between both countries P&L* Q219 % Q119 H119 % H118 NII 2,230 1.4 4,403 8.3 29% +43% Net fee income 463 4.3 901 4.2 Loyal/active Digital customers customers Total income 2,918 4.8 5,672 7.2 Operating expenses -1,214 2.3 -2,386 2.3 LLPs -793 -2.5 -1,597 5.7 PBT 881 22.1 1,594 17.9 Underlying att. profit 503 28.7 889 20.6 2.95% 2.29% (-1 bp) (*) EUR mn and % change in constant euros (-53 bps) Cost of NPL ratio credit ACTIVITY EUR bn and % change in constant euros 123 112 +3% 42.1% 1 +3% 10% QoQ QoQ Efficiency RoTE +10% ratio YoY +7% YoY Loans Funds Note: Loans excluding reverse repos. Funds: deposits excluding repos + marketed mutual funds 46 Customers and credit quality ratios YoY change. (1) Adjusted for excess of capital in the US. Otherwise 9.5%
South America: strong growth in profit and volumes. Focus on accelerating profitable growth, strengthening a more connected regional network P&L* Q219 % Q119 H119 % H118 NII 3,425 9.2 6,647 9.4 26% +26% Net fee income 1,178 2.9 2,355 10.9 Loyal/active Digital customers customers Total income 4,647 6.5 9,134 8.7 Operating expenses -1,664 4.0 -3,309 9.1 LLPs -956 8.8 -1,859 2.4 PBT 1,876 8.0 3,661 12.3 2.87% Underlying att. profit 1,035 14.7 1,961 14.9 (-23 bps) 4.81% (*) EUR mn and % change in constant euros (-1 bp) Cost of NPL ratio credit ACTIVITY EUR bn and % change in constant euros 173 131 +2% +5% 36.2% 21% QoQ QoQ Efficiency RoTE ratio +9% +11% YoY YoY Loans Funds Note: Loans excluding reverse repos. Funds: deposits excluding repos + marketed mutual funds 47 Customers and credit quality ratios YoY change. Underlying RoTE
One of the largest full service digital bank in Europe, with best in class UX and a profitable business model To attract, engage and retain customers without a branch network, best user experience and profitability Global Payments Services SuperdigitalBanking without a bankplatform that allows customers to open a digital payments account Pago FX- App for the open market with low cost, transparent, same day or next day international transfers Global Merchant ServicesCreate a single global merchant services (acquiring) business platform across our footprint. It will also serve multinational merchants as a single point of interaction and potentially non-group entities Global Trade ServicesStrategic initiative to leverage Santanders strength in trade and cross-border services, to develop a leading service platform in international business (Trade Finance, Supply chain, FX payments products ) A technology company developing a new banking platform to be used by Openbank in its international expansion. In addition, to become the leading Banking as a Service platform to serve third parties Digital Assets Centres of Digital ExpertiseGlobal capabilities to drive digital transformation: Contact Centre, Conversion Rate Optimisation and Machine Learning Santander InnoVenturesOur venture capital investments in the fintech ecosystem, positioning Santander as an innovative bank and benchmark for the sector and leveraging digital capabilities for our customers Digital AssetsGroup-wide technology projects and solutions for our banks and third parties under a Software as a Service (SaaS) model. Globile and Open Platform as examples 48
Appendix Primary segments Secondary segments Other countries Liquidity NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements 49
Retail Banking: continued focus on customer loyalty and digital transformation. We continued to launch new products and services that cover the needs of our customers P&L* Q219 % Q119 H119 % H118 ACTIVITY NII 8,390 3.5 16,553 4.8 EUR bn and % change in constant euros Net fee income 2,269 -0.9 4,583 5.2 769 700 Total income 10,881 2.9 21,528 3.9 +1% +4% Operating expenses -4,882 1.7 -9,712 1.5 QoQ QoQ LLPs -2,090 -2.6 -4,251 4.7 +3% +7% PBT 3,512 8.5 6,776 6.5 YoY YoY Underlying att. profit 2,053 14.7 3,856 6.0 Loans Funds (*) EUR mn and % change in constant euros 74% +10% +22% 45.1% Weight of profit Loyal Digital Efficiency / operating customers customers areas YoY YoY ratio 50
Corporate & Investment Banking: profit growth YoY with good evolution of value-added businesses, offset by reduced activity in markets P&L* Q219 % Q119 H119 % H118 NII 701 8.0 1,354 22.5 Net fee income 377 7.6 730 -9.3 Total income 1,313 2.5 2,606 5.3 Operating expenses -559 0.3 -1,119 9.1 LLPs -46 375.1 -55 -55.7 PBT 693 -0.1 1,396 8.4 Underlying att. profit 434 -3.2 889 9.5 (*) EUR mn and % change in constant euros 17% +17% Weight of profit / operating Collaboration areas revenue (1) YoY changes in constant euros 1.9% 42.9% RoRWA Efficiency ratio 51
Wealth Management & Insurance: strategic initiatives focused on the development of Private Bankings global and digital platform and strengthening SAM and Insurances value proposition ACTIVITY P&L* Q219 % Q119 H119 % H118 EUR bn and % change YoY in constant euros NII 144 3.4 283 10.7 Total AUM 377 +3% Net fee income 298 8.5 574 -0.8(**) Funds and investments* 233 +3% Total income 560 6.9 1,085 5.9 Operating expenses -226 -1.7 -455 2.3 - SAM 195 +3% LLPs 0 7 - Private Banking 64 +2% PBT 332 11.6 632 10.1 Custody of customer funds 89 +1% Underlying att. profit 241 11.3 459 10.1 (*) EUR mn and % change in constant euros Customer deposits 55 +7% (**) Including total fee income generated by asset management and insurance transferred to the commercial network: +4% YoY Customer loans 15 +9% (*) Total adjusted for funds from private banking customers managed by SAM Note: Total assets marketed and/or managed in 2019 and 2018
Appendix Primary segments Secondary segments Other countries Liquidity NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements
USA: another positive quarter for Santander US, with strong business volumes and profit growth. YoY NII and LLP comparison impacted by reclassification of TDRs P&L* Q219 % Q119 H119 % H118 NII 1,453 2.2 2,860 6.8 19% +9% Net fee income 244 3.3 479 3.1 Loyal/active Digital customers customers Total income 1,920 4.7 3,734 7.4 Operating expenses -805 2.7 -1,581 0.1 LLPs -568 -8.1 -1,178 7.4 PBT 521 39.6 891 23.1 Underlying att. profit 284 55.1 465 30.2 3.09% 2.32% (+7 bps) (-59 bps) (*) EUR mn and % change in constant euros Cost of NPL ratio credit ACTIVITY Volumes in EUR bn and % change in constant euros
Mexico: continued to increase customer base, volumes and profitability. Double-digit profit growth due to higher customer revenue and lower cost of credit P&L* Q219 % Q119 H119 % H118 NII 777 -0.1 1,543 11.2 31% +57% Net fee income 218 5.4 423 5.6 Loyal/active Digital Total income 999 4.9 1,938 7.0 customers customers Operating expenses -409 1.5 -806 7.1 LLPs -225 15.2 -419 1.1 PBT 360 3.3 703 11.9 Underlying att. profit 219 5.4 424 11.6 2.61% 2.21% (-17 bps) (*) EUR mn and % change in constant euros (-37 bps) Cost of NPL ratio credit ACTIVITY Volumes in EUR bn and % change in constant euros
Chile: QoQ strong NII growth favoured by higher inflation (UF) and faster volume growth. YoY profit increased driven by good market results and lower provisions. NII affected by lower inflation P&L* Q219 % Q119 H119 % H118 NII 500 15.0 940 -1.7 46% +12% Net fee income 97 -4.5 200 -9.4 Loyal/active Digital Total income 656 10.8 1,255 0.9 customers customers Operating expenses -269 6.8 -524 1.7 LLPs -105 4.2 -208 -9.4 PBT 281 1.9 560 1.5 Underlying att. profit 163 11.4 311 4.4 1.10% 4.52% (-8 bps) (*) EUR mn and % change in constant euros (-34 bps) Cost of NPL ratio credit ACTIVITY Volumes in EUR bn and % change in constant euros
Portugal: Profit growth thanks to ALCO portfolio sales, lower costs due to integration synergies and LLP releases (strong improvement in credit quality) P&L* Q219 % Q119 H119 % H118 NII 213 -1.2 429 -1.4 45% +13% Net fee income 99 0.8 197 4.1 Loyal/active Digital customers customers Total income 354 -0.9 712 3.5 Operating expenses -154 -1.9 -312 -3.8 LLPs -1 12 PBT 186 -3.9 379 16.9 Underlying att. profit 125 -7.1 260 13.5 0.03% 5.00% (-7 bps) (*) EUR mn (-255 bps) Cost of NPL ratio credit ACTIVITY Volumes in EUR bn 42 37
Poland: strong top line growth not reflected in underlying profit due to higher BFG and Banking Tax contribution. QoQ growth from dividend income and the non-repeat of BFG and Banking Tax P&L* Q219 % Q119 H119 % H118 NII 284 0.6 565 18.0 52% +13% Net fee income 117 2.3 230 3.2 Loyal/active Digital customers customers Total income 440 16.1 817 13.6 Operating expenses -176 1.3 -349 12.0 LLPs -64 46.5 -107 25.1 PBT 166 30.0 293 6.5 Underlying att. profit 89 43.8 150 -1.5 0.66% 4.21% (-5 bps) (*) EUR mn and % change in constant euros (-37 bps) Cost of NPL ratio credit ACTIVITY Volumes in EUR bn and % change in constant euros BFG: Bank Guarantee Fund. FY2019 paid in Q119. Higher contribution to BFG and Banking Tax YoY due to DBP integration Adjusted for excess capital. Otherwise, 10%
Argentina: profit virtually unchanged in constant euros, as the high inflation adjustment of EUR -74 million was offset by a rise in revenue higher than inflation
Uruguay and Andean Region. Underlying attributable profit 29% 18% 7% RoTE RoTE RoTE Note: Constant EUR mn and underlying RoTE 60
Appendix Primary segments Secondary segments Other countries Liquidity NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements 61
Well-funded, prudent and highly liquid balance sheet with high contribution from customer deposits and diversified wholesale instruments Financial assets 206 Fixed assets & other 100 12 month average, provisional UK Ring-fenced bank. Spain Parent bank
Appendix Primary segments Secondary segments Other countries Liquidity NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements
Appendix Coverage ratio by stage Exposure1 Coverage EUR bn Jun-19 Jun-19 Jun-18 Stage 1 870 0.5% 0.6% Stage 2 53 8.5% 8.5% Stage 3 34 42.8% 43.2% (1) Exposure subject to impairment expressed in EUR bn. Additionally, there are EUR 24 bn in customer loans not subject to impairment recorded at mark to market 64 with changes through P&L
Appendix NPL ratio % Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 EUROPE 4.08 3.97 3.90 3.67 3.61 3.48 Spain 7.74 7.62 7.55 7.32 7.29 7.02 Santander Consumer Finance 2.48 2.44 2.45 2.29 2.33 2.24 United Kingdom 1.17 1.13 1.12 1.08 1.17 1.13 Portugal 8.29 7.55 7.43 5.94 5.77 5.00 Poland 4.77 4.58 4.23 4.28 4.39 4.21 NORTH AMERICA 2.80 2.82 2.83 2.79 2.33 2.29 US 2.86 2.91 3.00 2.92 2.41 2.32 Mexico 2.68 2.58 2.41 2.43 2.12 2.21 SOUTH AMERICA 4.83 4.82 4.83 4.81 4.83 4.81 Brazil 5.26 5.26 5.26 5.25 5.26 5.27 Chile 5.00 4.86 4.78 4.66 4.67 4.52 Argentina 2.54 2.40 2.47 3.17 3.50 3.79 TOTAL GROUP 4.02 3.92 3.87 3.73 3.62 3.51 65
Appendix Coverage ratio % Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 EUROPE 54.4 52.9 52.1 50.1 49.5 49.9 Spain 49.8 47.5 46.4 43.7 43.3 42.9 Santander Consumer Finance 107.2 107.7 106.4 106.4 105.3 105.9 United Kingdom 34.4 33.8 33.0 32.9 30.9 31.9 Portugal 53.9 52.7 53.4 50.5 50.7 52.9 Poland 72.0 72.1 71.6 67.1 67.6 69.7 NORTH AMERICA 153.5 146.5 139.4 137.4 153.4 150.3 US 169.1 156.9 145.5 142.8 161.0 158.4 Mexico 113.5 116.1 120.5 119.7 130.1 126.9 SOUTH AMERICA 96.5 94.4 94.1 94.6 94.1 93.0 Brazil 110.4 108.7 109.1 106.9 107.7 105.5 Chile 61.0 60.0 59.6 60.6 59.7 59.1 Argentina 121.3 121.5 124.0 135.0 118.6 126.4 TOTAL GROUP 70.0 68.6 67.9 67.4 67.8 68.1
Appendix Non-performing loans and loan-loss allowances. June 2019 Non-performing loans Loan-loss allowances 100%: EUR 34,185 million 100%: EUR 23,165 million Percentage over Groups total 67
Appendix Cost of credit % Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 EUROPE 0.24 0.25 0.26 0.24 0.24 0.24 Spain 0.35 0.36 0.41 0.38 0.40 0.41 Santander Consumer Finance 0.36 0.37 0.40 0.38 0.38 0.36 United Kingdom 0.11 0.10 0.09 0.07 0.07 0.06 Portugal 0.08 0.10 0.03 0.09 0.03 0.03 Poland 0.69 0.71 0.69 0.65 0.61 0.66 NORTH AMERICA 3.22 2.96 2.92 3.12 2.97 2.95 US 3.29 3.02 3.00 3.27 3.11 3.09 Mexico 2.95 2.78 2.72 2.75 2.62 2.61 SOUTH AMERICA 3.15 3.10 3.00 2.99 2.89 2.87 Brazil 4.35 4.30 4.17 4.06 3.88 3.84 Chile 1.22 1.18 1.18 1.19 1.13 1.10 Argentina 2.06 2.47 2.92 3.45 4.02 4.33 TOTAL GROUP 1.04 0.99 0.98 1.00 0.97 0.98
Appendix Primary segments Secondary segments Other countries Liquidity NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements
Santander Responsible Banking Adapting to the new business environment We are facing a new business environment that requires a motivated, skilled workforce that can deliver what customers need and harness the power of new technology while we face new regulations and laws Our task is to exceed our stakeholders expectations, and do the basics brilliantly, every day. Key to this is having a strong culturea business in which all we do is Simple, Personal and Fair We will continue supporting inclusive and sustainable growth Inclusive: meeting all our customers needs; helping companies to create jobs; helping people to be financially empowered, and get the education and skills they need. Sustainable: supporting the transition to a low carbon economy; and helping financing renewable energy, smart and sustainable infrastructures, while taking into account social and environmental risks and opportunities Our activity helps us to address a number of the United Nations Sustainable Development Goals, and support the Paris Agreements aim to combat climate change and adapt to its effects. We are: embedding sustainability-UNEP FI across business areas and-contributing to develop-Principles for methods to align with the-Responsible Paris Agreement and-Banking contribute to the SDGs.- fulfilling our fundamental- responsibilities in the-UN Global areas of human rights,-Compact labour, environment and-principles anticorruption.- identifying and-assessing risk and-Task Force for opportunities developing a-Climate-related forward looking climate-Financial strategy and disclosing to-Disclosure stakeholders.-
(1) According to a well-known external source in each country (e.g. Great Place to Work, Merco); (2) Senior positions represent 1% of total workforce; (3) Compares employees of the same job, level and function; (4) Mostly unbanked and underbanked, empowered through products, services and social investment initiatives to get access to the financial system, receive tailored finance and increase knowledge and resilience through financial 71 education; (5) Includes SAN overall contribution to green finance: project finance, syndicated loans, green bonds, capital finance, export finance, advisory, structuring and other products to help our clients transition to a low carbon economy. Commitment from 2019 to 2030 is 220Bn; (6) For countries where it is possible to certify the source of the electricity for the Groups properties; (7) Supported through SAN Universities (students who receive a Santander scholarship, are interns in an SME or participate in entrepreneurship programmes supported by SAN); (8) Excluding people helped through SAN Universities and financial education initiatives
Appendix Primary segments Secondary segments Other countries Liquidity NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements
Appendix GRUPO SANTANDER EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 8,454 8,477 8,349 9,061 8,682 8,954 16,931 17,636 Net fee income 2,955 2,934 2,640 2,956 2,931 2,932 5,889 5,863 Gains (losses) on financial transactions and other 742 600 731 525 472 465 1,342 937 Total income 12,151 12,011 11,720 12,542 12,085 12,351 24,162 24,436 Operating expenses (5,764) (5,718) (5,361) (5,936) (5,758) (5,829) (11,482) (11,587) Net operating income 6,387 6,293 6,359 6,606 6,327 6,522 12,680 12,849 Net loan-loss provisions (2,282) (2,015) (2,121) (2,455) (2,172) (2,141) (4,297) (4,313) Other gains (losses) and provisions (416) (487) (488) (605) (471) (486) (903) (957) Underlying profit before tax 3,689 3,791 3,750 3,546 3,684 3,895 7,480 7,579 Underlying consolidated profit 2,409 2,412 2,356 2,369 2,358 2,542 4,821 4,900 Underlying attributable profit 2,054 1,998 1,990 2,022 1,948 2,097 4,052 4,045 Net capital gains and provisions* (300) 46 (108) (706) (300) (814) Attributable profit 2,054 1,698 1,990 2,068 1,840 1,391 3,752 3,231 (*) Including: in Q218, costs associated to integrations (mainly restructuring costs), net of tax impacts, in Spain, Corporate Centre and P ortugal in Q418, badwill in Poland for the integration of Deutsche Bank Polskas retail and SMEs businesses 73 in Q119, capital gains from Prisma, capital losses due to property sales and restructuring costs in Q219, restructuring costs in Spain and UK and PPI
Appendix GRUPO SANTANDER Constant EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 8,278 8,438 8,722 8,987 8,650 8,986 16,716 17,636 Net fee income 2,843 2,886 2,802 2,883 2,917 2,946 5,729 5,863 Gains (losses) on financial transactions and other 735 582 782 534 472 465 1,317 937 Total income 11,855 11,906 12,307 12,404 12,039 12,397 23,762 24,436 Operating expenses (5,641) (5,671) (5,626) (5,827) (5,742) (5,845) (11,312) (11,587) Net operating income 6,214 6,235 6,681 6,577 6,297 6,552 12,449 12,849 Net loan-loss provisions (2,249) (2,004) (2,237) (2,444) (2,164) (2,149) (4,253) (4,313) Other gains (losses) and provisions (398) (470) (522) (600) (469) (488) (868) (957) Underlying profit before tax 3,567 3,761 3,922 3,533 3,664 3,915 7,328 7,579 Underlying consolidated profit 2,336 2,396 2,470 2,371 2,347 2,553 4,732 4,900 Underlying attributable profit 1,983 1,977 2,096 2,021 1,938 2,107 3,960 4,045 Net capital gains and provisions* (300) 46 (111) (703) (300) (814) Attributable profit 1,983 1,677 2,096 2,067 1,827 1,404 3,660 3,231 (*) Including: in Q218, costs associated to integrations (mainly restructuring costs), net of tax impacts, in Spain, Corporate Centre and P ortugal in Q418, badwill in Poland for the integration of Deutsche Bank Polskas retail and SMEs businesses 74 in Q119, capital gains from Prisma, capital losses due to property sales and restructuring costs in Q219, restructuring costs in Spain and UK and PPI
Appendix EUROPE EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 3,502 3,508 3,562 3,631 3,561 3,580 7,010 7,141 Net fee income 1,372 1,382 1,354 1,327 1,327 1,304 2,754 2,630 Gains (losses) on financial transactions and other 477 282 503 355 337 304 759 642 Total income 5,352 5,173 5,419 5,314 5,225 5,188 10,524 10,413 Operating expenses (2,841) (2,825) (2,735) (2,764) (2,802) (2,789) (5,666) (5,591) Net operating income 2,510 2,348 2,684 2,550 2,423 2,399 4,858 4,822 Net loan-loss provisions (457) (403) (406) (306) (457) (387) (859) (844) Other gains (losses) and provisions (195) (194) (205) (435) (198) (231) (388) (429) Underlying profit before tax 1,859 1,751 2,072 1,809 1,768 1,781 3,610 3,549 Underlying consolidated profit 1,359 1,276 1,498 1,339 1,276 1,306 2,635 2,583 Underlying attributable profit 1,260 1,162 1,384 1,242 1,163 1,191 2,422 2,354 75
Appendix EUROPE Constant EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 3,506 3,507 3,583 3,646 3,561 3,580 7,013 7,141 Net fee income 1,373 1,383 1,359 1,331 1,327 1,304 2,756 2,630 Gains (losses) on financial transactions and other 480 282 505 356 337 304 762 642 Total income 5,359 5,172 5,448 5,333 5,225 5,188 10,531 10,413 Operating expenses (2,847) (2,827) (2,752) (2,775) (2,802) (2,789) (5,674) (5,591) Net operating income 2,511 2,345 2,696 2,558 2,423 2,399 4,857 4,822 Net loan-loss provisions (456) (403) (407) (308) (457) (387) (859) (844) Other gains (losses) and provisions (195) (193) (206) (436) (198) (231) (389) (429) Underlying profit before tax 1,860 1,750 2,083 1,814 1,768 1,781 3,610 3,549 Underlying consolidated profit 1,360 1,274 1,506 1,343 1,276 1,306 2,634 2,583 Underlying attributable profit 1,261 1,161 1,391 1,246 1,163 1,191 2,422 2,354 76
Appendix Spain EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 969 1,026 1,044 1,054 1,009 1,009 1,995 2,018 Net fee income 669 671 651 633 623 624 1,340 1,247 Gains (losses) on financial transactions and other 247 163 370 117 224 216 411 440 Total income 1,885 1,860 2,065 1,804 1,857 1,849 3,746 3,706 Operating expenses (1,112) (1,093) (1,065) (1,068) (1,025) (1,020) (2,205) (2,044) Net operating income 773 767 1,000 737 832 829 1,540 1,661 Net loan-loss provisions (217) (220) (213) (140) (242) (228) (437) (470) Other gains (losses) and provisions (131) (102) (132) (60) (112) (143) (233) (255) Underlying profit before tax 425 446 655 537 478 458 871 936 Underlying consolidated profit 326 335 486 408 356 338 661 694 Underlying attributable profit 326 335 486 408 356 338 661 694
Appendix Santander Consumer Finance EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 915 928 937 943 941 971 1,843 1,911 Net fee income 215 188 206 189 214 201 403 415 Gains (losses) on financial transactions and other 10 10 13 56 13 (18) 21 (5) Total income 1,140 1,126 1,157 1,187 1,167 1,154 2,266 2,321 Operating expenses (510) (508) (476) (495) (508) (527) (1,018) (1,035) Net operating income 630 618 681 692 659 627 1,248 1,286 Net loan-loss provisions (120) (69) (124) (47) (122) (59) (189) (181) Other gains (losses) and provisions 24 13 5 (166) 24 (12) 36 12 Underlying profit before tax 534 562 561 479 561 556 1,096 1,117 Underlying consolidated profit 388 411 405 357 402 401 799 803 Underlying attributable profit 322 345 331 295 324 334 667 658
Appendix Santander Consumer Finance Constant EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 912 925 935 942 941 970 1,836 1,911 Net fee income 214 188 206 189 214 201 402 415 Gains (losses) on financial transactions and other 11 10 14 56 13 (18) 21 (5) Total income 1,136 1,123 1,155 1,186 1,168 1,153 2,259 2,321 Operating expenses (508) (507) (475) (495) (508) (526) (1,015) (1,035) Net operating income 628 616 680 691 659 627 1,244 1,286 Net loan-loss provisions (120) (69) (124) (47) (122) (59) (189) (181) Other gains (losses) and provisions 24 13 5 (166) 24 (12) 37 12 Underlying profit before tax 532 560 561 478 561 555 1,092 1,117 Underlying consolidated profit 386 409 404 357 402 401 796 803 Underlying attributable profit 321 344 331 294 324 334 664 658
Appendix United Kingdom EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 1,023 1,029 1,016 1,011 975 944 2,052 1,919 Net fee income 219 240 230 224 216 207 459 423 Gains (losses) on financial transactions and other 29 50 55 8 15 32 79 46 Total income 1,270 1,319 1,300 1,242 1,206 1,183 2,590 2,388 Operating expenses (725) (715) (697) (700) (739) (703) (1,440) (1,442) Net operating income 545 605 603 542 467 479 1,150 946 Net loan-loss provisions (66) (36) (26) (43) (61) (19) (102) (80) Other gains (losses) and provisions (59) (44) (63) (155) (50) (25) (103) (75) Underlying profit before tax 420 524 514 344 357 435 944 792 Underlying consolidated profit 297 382 364 254 260 333 678 593 Underlying attributable profit 290 375 358 249 254 327 665 582
Appendix United Kingdom GBP million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 904 901 907 896 850 825 1,805 1,676 Net fee income 193 210 205 198 189 181 404 370 Gains (losses) on financial transactions and other 25 44 49 7 13 28 69 40 Total income 1,122 1,156 1,160 1,101 1,052 1,034 2,278 2,086 Operating expenses (641) (626) (622) (620) (644) (615) (1,267) (1,259) Net operating income 481 530 538 481 407 419 1,011 826 Net loan-loss provisions (58) (32) (24) (38) (53) (17) (90) (70) Other gains (losses) and provisions (52) (39) (56) (137) (43) (22) (91) (65) Underlying profit before tax 371 460 458 306 311 380 831 691 Underlying consolidated profit 262 335 325 225 227 291 597 518 Underlying attributable profit 257 328 319 221 222 286 585 508 81
Appendix Portugal EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 222 213 211 211 216 213 435 429 Net fee income 98 91 92 96 98 99 189 197 Gains (losses) on financial transactions and other 22 42 20 26 44 42 63 86 Total income 341 346 323 334 357 354 688 712 Operating expenses (159) (165) (157) (162) (157) (154) (324) (312) Net operating income 182 181 165 171 200 200 363 400 Net loan-loss provisions (8) (0) (11) (12) 13 (1) (8) 12 Other gains (losses) and provisions (9) (22) 13 36 (20) (13) (31) (33) Underlying profit before tax 166 159 166 195 193 186 324 379 Underlying consolidated profit 127 103 115 136 135 126 231 261 Underlying attributable profit 127 103 114 136 135 125 229 260
Appendix Poland EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 247 240 243 265 281 284 487 565 Net fee income 112 114 111 115 113 117 227 230 Gains (losses) on financial transactions and other (26) 44 13 10 (18) 39 17 22 Total income 333 398 367 390 377 440 731 817 Operating expenses (154) (163) (157) (165) (173) (176) (317) (349) Net operating income 178 236 210 224 204 263 414 467 Net loan-loss provisions (46) (41) (33) (41) (43) (64) (87) (107) Other gains (losses) and provisions (13) (34) (26) (61) (34) (34) (48) (68) Underlying profit before tax 119 160 151 122 127 166 280 293 Underlying consolidated profit 89 131 114 88 89 130 220 219 Underlying attributable profit 63 92 80 61 61 89 155 150
Appendix Poland PLN million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 1,031 1,025 1,047 1,139 1,209 1,216 2,055 2,425 Net fee income 469 487 478 493 488 499 957 987 Gains (losses) on financial transactions and other (110) 183 54 41 (76) 168 73 92 Total income 1,390 1,695 1,579 1,674 1,622 1,883 3,085 3,505 Operating expenses (646) (693) (676) (710) (745) (755) (1,339) (1,500) Net operating income 745 1,002 904 963 877 1,128 1,746 2,005 Net loan-loss provisions (191) (175) (143) (177) (186) (272) (366) (458) Other gains (losses) and provisions (55) (146) (113) (261) (145) (146) (201) (291) Underlying profit before tax 499 681 648 525 546 710 1,180 1,256 Underlying consolidated profit 371 557 489 379 385 556 928 941 Underlying attributable profit 262 391 344 263 264 379 653 643
Appendix Other Europe EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 127 71 111 147 139 159 198 299 Net fee income 60 77 64 71 62 56 137 118 Gains (losses) on financial transactions and other 196 (27) 32 139 60 (7) 169 53 Total income 382 122 207 357 261 209 504 469 Operating expenses (181) (181) (182) (174) (200) (208) (361) (408) Net operating income 202 (59) 24 183 61 0 142 62 Net loan-loss provisions 0 (36) 1 (24) (2) (16) (36) (18) Other gains (losses) and provisions (7) (4) (0) (28) (7) (4) (11) (11) Underlying profit before tax 194 (99) 25 131 52 (19) 95 33 Underlying consolidated profit 132 (86) 15 96 33 (21) 46 13 Underlying attributable profit 132 (87) 15 94 32 (22) 45 10
Appendix Other Europe Constant EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 129 72 111 147 139 159 200 299 Net fee income 61 78 65 71 62 56 140 118 Gains (losses) on financial transactions and other 197 (26) 33 139 60 (7) 171 53 Total income 387 124 208 358 261 208 511 469 Operating expenses (184) (183) (184) (174) (200) (208) (367) (408) Net operating income 203 (59) 25 183 61 0 144 62 Net loan-loss provisions (0) (36) 1 (24) (2) (16) (36) (18) Other gains (losses) and provisions (8) (4) (0) (28) (7) (4) (12) (11) Underlying profit before tax 196 (99) 25 131 53 (19) 96 33 Underlying consolidated profit 133 (86) 15 96 34 (21) 47 13 Underlying attributable profit 133 (87) 16 94 32 (22) 46 10
Appendix NORTH AMERICA EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 1,869 1,933 2,065 2,286 2,173 2,230 3,802 4,403 Net fee income 402 408 407 399 439 463 809 901 Gains (losses) on financial transactions and other 138 197 194 178 142 226 335 368 Total income 2,409 2,538 2,666 2,863 2,753 2,918 4,947 5,672 Operating expenses (1,078) (1,103) (1,134) (1,173) (1,172) (1,214) (2,181) (2,386) Net operating income 1,331 1,435 1,532 1,690 1,581 1,705 2,766 3,286 Net loan-loss provisions (779) (634) (876) (1,159) (804) (793) (1,413) (1,597) Other gains (losses) and provisions (26) (62) (74) (40) (64) (31) (88) (95) Underlying profit before tax 526 739 581 491 713 881 1,265 1,594 Underlying consolidated profit 397 535 423 383 526 664 932 1,189 Underlying attributable profit 298 393 318 296 386 503 690 889 87
Appendix NORTH AMERICA Constant EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 2,018 2,047 2,120 2,341 2,186 2,217 4,066 4,403 Net fee income 432 432 416 409 441 460 865 901 Gains (losses) on financial transactions and other 151 208 200 180 143 225 359 368 Total income 2,601 2,688 2,735 2,930 2,770 2,902 5,289 5,672 Operating expenses (1,165) (1,167) (1,162) (1,198) (1,179) (1,207) (2,332) (2,386) Net operating income 1,437 1,521 1,573 1,732 1,590 1,695 2,957 3,286 Net loan-loss provisions (843) (669) (903) (1,191) (809) (788) (1,511) (1,597) Other gains (losses) and provisions (28) (66) (77) (40) (64) (31) (94) (95) Underlying profit before tax 566 786 592 501 718 876 1,352 1,594 Underlying consolidated profit 427 569 431 392 529 660 996 1,189 Underlying attributable profit 320 418 324 303 389 500 737 889
Appendix United States EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 1,221 1,281 1,337 1,553 1,407 1,453 2,501 2,860 Net fee income 214 219 208 217 234 244 434 479 Gains (losses) on financial transactions and other 143 170 190 196 174 222 313 396 Total income 1,578 1,670 1,735 1,967 1,815 1,920 3,248 3,734 Operating expenses (736) (738) (749) (796) (775) (805) (1,475) (1,581) Net operating income 842 931 986 1,171 1,039 1,115 1,773 2,154 Net loan-loss provisions (579) (445) (649) (945) (611) (568) (1,024) (1,178) Other gains (losses) and provisions (23) (50) (69) (57) (58) (26) (73) (84) Underlying profit before tax 240 436 268 169 370 521 676 891 Underlying consolidated profit 173 297 174 122 260 383 471 643 Underlying attributable profit 124 209 124 91 181 284 334 465
Appendix United States USD million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 1,500 1,526 1,555 1,780 1,598 1,633 3,026 3,231 Net fee income 263 261 241 248 266 275 525 541 Gains (losses) on financial transactions and other 176 203 222 225 197 250 379 447 Total income 1,940 1,990 2,018 2,252 2,061 2,158 3,929 4,219 Operating expenses (905) (879) (869) (908) (881) (905) (1,784) (1,786) Net operating income 1,035 1,111 1,148 1,344 1,180 1,253 2,145 2,433 Net loan-loss provisions (712) (528) (758) (1,092) (694) (637) (1,239) (1,331) Other gains (losses) and provisions (28) (60) (81) (65) (66) (29) (88) (95) Underlying profit before tax 295 523 308 187 420 586 818 1,007 Underlying consolidated profit 213 356 200 135 295 431 570 726 Underlying attributable profit 153 251 143 101 206 319 404 525
Appendix Mexico EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 649 653 728 733 766 777 1,301 1,543 Net fee income 187 188 199 181 204 218 376 423 Gains (losses) on financial transactions and other (5) 27 3 (18) (32) 4 22 (28) Total income 831 868 931 897 939 999 1,699 1,938 Operating expenses (342) (364) (385) (378) (397) (409) (706) (806) Net operating income 489 504 546 519 542 590 993 1,132 Net loan-loss provisions (200) (189) (227) (215) (193) (225) (389) (419) Other gains (losses) and provisions (3) (12) (5) 17 (6) (5) (15) (10) Underlying profit before tax 286 303 313 321 343 360 589 703 Underlying consolidated profit 224 237 249 261 266 280 461 547 Underlying attributable profit 173 183 194 205 205 219 357 424
AppendixMexicoMXN millionQ118Q218Q318Q418Q119Q219H118H119Net interest income14,94515,08016,08616,57316,70316,69430,02633,397Net fee income4,3124,3554,3904,0984,4554,6958,6669,149Gains (losses) on financial transactions and other(114)62371(407)(687)83509(604)Total income19,14320,05820,54620,26420,47121,47139,20141,942Operating expenses(7,870)(8,418)(8,504)(8,534)(8,655)(8,786)(16,289)(17,441)Net operating income11,27311,64012,04311,73011,81612,68522,91324,501Net loan-loss provisions(4,610)(4,357)(5,020)(4,853)(4,211)(4,850)(8,967)(9,062)Other gains (losses) and provisions(72)(272)(115)383(120)(105)(344)(225)Underlying profit before tax6,5917,0116,9087,2597,4857,72913,60115,214Underlying consolidated profit 5,1555,4845,4915,8925,8046,02810,63911,832Underlying attributable profit 3,9954,2334,2814,6264,4724,7138,2289,185
AppendixSOUTH AMERICAEUR millionQ118Q218Q318Q418Q119Q219H118H119Net interest income3,2983,2592,9523,3823,2223,4256,5576,647Net fee income1,1891,1519031,2541,1781,1782,3402,355Gains (losses) on financial transactions and other1231312848845254132Total income4,6104,5413,8834,6404,4874,6479,1519,134Operating expenses(1,716)(1,645)(1,353)(1,843)(1,645)(1,664)(3,361)(3,309)Net operating income2,8942,8962,5302,7972,8422,9845,7905,825Net loan-loss provisions(1,010)(948)(810)(968)(903)(956)(1,958)(1,859)Other gains (losses) and provisions(152)(181)(153)(177)(154)(151)(333)(306)Underlying profit before tax1,7321,7671,5661,6521,7851,8763,4993,661Underlying consolidated profit 1,0771,0848951,0201,0931,2052,1612,297Underlying attributable profit 9209267478589261,0351,8461,961
AppendixSOUTH AMERICAConstant EUR millionQ118Q218Q318Q418Q119Q219H118H119Net interest income2,9693,1073,2503,2393,1773,4706,0766,647Net fee income1,0451,0781,0501,1681,1611,1952,1232,355Gains (losses) on financial transactions and other10110271108745203132Total income4,1154,2874,3724,4174,4244,7108,4029,134Operating expenses(1,501)(1,532)(1,574)(1,699)(1,622)(1,687)(3,033)(3,309)Net operating income2,6142,7552,7982,7182,8023,0235,3695,825Net loan-loss provisions(914)(902)(899)(925)(890)(969)(1,816)(1,859)Other gains (losses) and provisions(132)(161)(183)(170)(151)(154)(292)(306)Underlying profit before tax1,5691,6921,7161,6241,7601,9003,2613,661Underlying consolidated profit 9741,0359931,0091,0781,2192,0092,297Underlying attributable profit 8268818408469131,0481,7071,961
AppendixBrazilEUR millionQ118Q218Q318Q418Q119Q219H118H119Net interest income2,4822,4242,3772,4752,4592,5204,9064,979Net fee income9208727769299319241,7921,855Gains (losses) on financial transactions and other422727(8)2197030Total income3,4453,3233,1803,3963,4113,4536,7686,864Operating expenses(1,169)(1,100)(1,036)(1,196)(1,125)(1,102)(2,269)(2,227)Net operating income2,2762,2242,1452,2012,2862,3514,4994,637Net loan-loss provisions(822)(750)(665)(726)(710)(761)(1,571)(1,471)Other gains (losses) and provisions(154)(170)(174)(198)(167)(153)(325)(320)Underlying profit before tax1,3001,3031,3061,2761,4091,4382,6032,846Underlying consolidated profit 7587266957498168561,4841,673Underlying attributable profit 6746436156597217621,3171,482
AppendixBrazilBRL millionQ118Q218Q318Q418Q119Q219H118H119Net interest income9,89810,38310,87410,74710,51611,09520,28221,611Net fee income3,6703,7383,5774,0323,9804,0707,4088,050Gains (losses) on financial transactions and other169119128(32)9141288132Total income13,73714,24114,57914,74714,58715,20627,97829,793Operating expenses(4,662)(4,716)(4,756)(5,188)(4,810)(4,857)(9,378)(9,666)Net operating income9,0759,5259,8239,5599,77710,35018,59920,127Net loan-loss provisions(3,276)(3,220)(3,070)(3,155)(3,037)(3,347)(6,496)(6,384)Other gains (losses) and provisions(615)(727)(793)(859)(716)(673)(1,342)(1,390)Underlying profit before tax5,1845,5785,9605,5456,0246,33010,76212,354Underlying consolidated profit 3,0213,1143,1853,2503,4913,7696,1357,261Underlying attributable profit 2,6872,7582,8222,8633,0823,3535,4456,435
AppendixChileEUR millionQ118Q218Q318Q418Q119Q219H118H119Net interest income490495481477440500985940Net fee income1111171019510397227200Gains (losses) on financial transactions and other40304949565970115Total income6406426326226006561,2821,255Operating expenses(259)(273)(257)(259)(255)(269)(531)(524)Net operating income381369374363344387751731Net loan-loss provisions(121)(115)(117)(120)(102)(105)(236)(208)Other gains (losses) and provisions2232193137(1)5437Underlying profit before tax282287276274279281568560Underlying consolidated profit 222231220226219237453456Underlying attributable profit 150157152153148163307311
AppendixChileCLP millionQ118Q218Q318Q418Q119Q219H118H119Net interest income362,502366,847370,827370,410333,439383,545729,349716,985Net fee income81,75886,55678,31873,95978,01074,473168,315152,483Gains (losses) on financial transactions and other29,30422,19337,69938,13142,71345,38751,49688,100Total income473,564475,595486,844482,500454,162503,405949,159957,567Operating expenses(191,398)(202,047)(198,556)(200,524)(193,440)(206,641)(393,445)(400,081)Net operating income282,166273,549288,288281,976260,722296,763555,715557,485Net loan-loss provisions(89,852)(84,920)(90,252)(93,034)(77,584)(80,828)(174,772)(158,412)Other gains (losses) and provisions16,03423,79014,61723,61428,393(417)39,82427,976Underlying profit before tax208,348212,419212,652212,555211,531215,518420,767427,049Underlying consolidated profit 164,447171,185169,725174,910165,949182,169335,632348,119Underlying attributable profit 111,006116,570117,196118,562112,355125,176227,576237,531
AppendixArgentinaEUR millionQ118Q218Q318Q418Q119Q219H118H119Net interest income214234(6)327213298447511Net fee income129133(6)192116125263241Gains (losses) on financial transactions and other3463(58)(46)2(33)97(31)Total income377430(70)472331389807720Operating expenses(219)(208)(1)(324)(202)(229)(426)(431)Net operating income158222(71)148129161381289Net loan-loss provisions(49)(75)(7)(99)(73)(70)(125)(143)Other gains (losses) and provisions(17)(41)49(22)3(58)(19)Underlying profit before tax92107(73)583494198127Underlying consolidated profit 6671(71)17106313774Underlying attributable profit 6671(71)17106313673
AppendixArgentinaARS millionQ118Q218Q318Q418Q119Q219H118H119Net interest income5,1726,3857,8208,50710,11714,54811,55724,665Net fee income3,1213,6604,4725,0225,4866,1316,78111,616Gains (losses) on financial transactions and other8241,683(799)(1,972)102(1,596)2,507(1,494)Total income9,11711,72911,49211,55715,70419,08320,84634,787Operating expenses(5,291)(5,722)(7,738)(8,523)(9,602)(11,210)(11,014)(20,812)Net operating income3,8266,0063,7553,0346,1027,8729,83213,975Net loan-loss provisions(1,196)(2,021)(2,546)(2,615)(3,441)(3,459)(3,218)(6,900)Other gains (losses) and provisions(411)(1,077)(849)721(1,067)131(1,488)(936)Underlying profit before tax2,2182,9083601,1401,5944,5445,1266,138Underlying consolidated profit 1,6001,950(644)994973,0563,5503,553Underlying attributable profit 1,5891,935(649)1074903,0433,5253,534
Appendix Other South America (Uruguay and Andean Region) EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 112 106 100 103 109 108 218 217 Net fee income 29 29 31 38 29 32 58 60 Gains (losses) on financial transactions and other 7 11 9 8 8 9 18 17 Total income 148 146 141 150 146 149 294 295 Operating expenses (70) (65) (59) (65) (63) (64) (135) (127) Net operating income 78 81 81 84 83 85 160 168 Net loan-loss provisions (17) (9) (22) (22) (18) (20) (26) (38) Other gains (losses) and provisions (3) (2) (2) (18) (2) (1) (5) (3) Underlying profit before tax 59 71 58 44 63 64 129 128 Underlying consolidated profit 31 55 51 29 47 48 86 95 Underlying attributable profit 31 55 51 29 47 47 85 94
Appendix Other South America (Uruguay and Andean Region) Constant EUR million Q118 Q218 Q318 Q418 Q119 Q219 H118 H119 Net interest income 106 101 97 101 107 110 208 217 Net fee income 27 28 31 38 28 32 55 60 Gains (losses) on financial transactions and other 7 11 9 8 8 9 17 17 Total income 140 140 137 147 143 152 280 295 Operating expenses (66) (62) (57) (64) (62) (65) (128) (127) Net operating income 74 78 79 83 82 87 152 168 Net loan-loss provisions (16) (7) (21) (22) (18) (20) (24) (38) Other gains (losses) and provisions (2) (2) (2) (18) (2) (1) (4) (3) Underlying profit before tax 56 68 57 44 62 66 124 128 Underlying consolidated profit 29 53 50 29 46 49 82 95 Underlying attributable profit 29 53 50 28 46 48 81 94
AppendixSANTANDER GLOBAL PLATFORMEUR millionQ118Q218Q318Q418Q119Q219H118H119Net interest income1820202022233846Net fee income11142122Gains (losses) on financial transactions and other(4)(3)(3)(2)(5)(4)(7)(9)Total income1618192119203439Operating expenses(23)(39)(32)(49)(41)(67)(62)(108)Net operating income(7)(21)(13)(28)(22)(47)(28)(69)Net loan-loss provisions0(0)(0)(0)(0)(0)0(0)Other gains (losses) and provisions(1)(0)(1)(0)(1)(0)(1)(1)Underlying profit before tax(7)(21)(13)(28)(23)(47)(29)(70)Underlying consolidated profit (9)(14)(10)(22)(11)(40)(23)(51)Underlying attributable profit (9)(14)(10)(22)(11)(40)(23)(51)
AppendixCORPORATE CENTREEUR millionQ118Q218Q318Q418Q119Q219H118H119Net interest income(234)(243)(251)(259)(296)(304)(477)(600)Net fee income(9)(9)(24)(28)(14)(13)(17)(27)Gains (losses) on financial transactions and other7(7)9(10)(90)(106)(0)(196)Total income(236)(258)(266)(297)(399)(423)(494)(822)Operating expenses(105)(107)(107)(106)(97)(96)(212)(193)Net operating income(341)(365)(373)(403)(497)(519)(706)(1,015)Net loan-loss provisions(37)(30)(28)(21)(8)(5)(67)(13)Other gains (losses) and provisions(43)(50)(55)47(55)(72)(93)(127)Underlying profit before tax(420)(446)(456)(377)(559)(595)(866)(1,155)Underlying consolidated profit (416)(468)(450)(351)(526)(592)(884)(1,118)Underlying attributable profit (415)(469)(450)(352)(517)(592)(884)(1,108)
Glossary
Glossary -Acronyms 05 AFS: Available for sale AuM: Assets under Management bn: Billion CET1: Common equity tier 1 C&I: Commercial and Industrial CIB: Corporate & Investment Bank DGF: Deposit guarantee fund GDP: Gross domestic product FL: Fully-loaded FX: Foreign exchange EPS: Earning per share ESG: Environmental, social and governance LTV: Loan to Value LLPs: Loan-loss provisions M/LT: Medium- and long-term mn: million MXN: Mexican Pesos n.a.: Not available NII: Net interest income NIM: Net interest margin n.m.: Not meaningful NPL: Non-performing loans PBT: Profit before tax P&L: Profit and loss PPP: Pre-provision profit QoQ: Quarter-on-Quarter RE: Real Estate Repos: Repurchase agreements ROF: Gains on financial transactions RoRWA: Return on risk-weighted assets RoTE: Return on tangible equity RWA: Risk-weighted assets SBNA: Santander Bank NA SCF: Santander Consumer Finance SC USA: Santander Consumer USA SME: Small and Medium Enterprises SRF: Single Resolution Fund ST: Short term SVR: Standard variable rate TDR: Troubled debt restructuring TLAC: Total loss absorbing capacity TNAV: Tangible net asset value UF: Unidad de fomento (Chile) YoY: Year-on-Year UX: User experience 106
Glossary definitions PROFITABILITY AND EFFICIENCY RoTE: Return on tangible capital: Group attributable profit / average of: net equity (excluding minority interests) intangible assets (including goodwill) RoRWA: Return on risk-weighted assets: consolidated profit / average risk-weighted assets Efficiency: Operating expenses / gross income. Operating expenses defined as general administrative expenses + amortisations CREDIT RISK NPL ratio: Non-performing loans and customer advances, customer guarantees and contingent liabilities / total risk. Total risk is defined as: normal and non-performing balances of customer loans and advances, customer guarantees and contingent liabilities NPL coverage ratio: Provisions to cover losses due to impairment of customer loans and advances, customer guarantees and contingent liabilities / non-performing balances of customer loans and advances, customer guarantees and contingent liabilities 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 CAPITALISATION Tangible net asset value per share TNAVps: Tangible stockholders equity / number of shares (excluding treasury shares). Tangible stockholders equity calculated as shareholders equity + accumulated other comprehensive incomeintangible assets Notes: 1) The averages for the RoTE and RoRWA denominators are calculated on the basis of 7 months from December to June. 2) For periods of less than a year, and in the event of non-recurring results existing, the profit used to calculate the RoTE is the annualised underlying attributable profit (excluding non-recurring results), to which are added non-recurring results without annualising them. 3) For periods of less than a year, and in the event of non-recurring results existing, the profit used to calculate the RoRWA is the annualised underlying consolidated result (excluding non-recurring results), to which is added non-recurring results without annualising them. 4) The risk-weighted assets included in the RoRWA denominator are calculated in accordance with the criteria defined by the Capital Requirements Regulation (CRR).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Banco Santander, S.A. | ||||||||
Date: July 24, 2019 | By: | /s/ José García Cantera | ||||||
Name: | José García Cantera | |||||||
Title: | Chief Financial Officer |