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 February, 2018
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.
Item |
||
1 | Press Release regarding January - December 2017 Results | |
2 | January - December 2017 Financial Report | |
3 | January - December 2017 Earnings Presentation |
Santander attributable profit for 2017 reaches 6,619 million - up 7%
Underlying profit before tax for 2017 increased by 20% to 13,550 million
Madrid, 31 January 2018 - PRESS RELEASE
∎ | In the fourth quarter the Group generated an attributable profit of 1,542 million, down 4% compared to Q4 2016 after a 382 million net charge for capital gains and provisions. Underlying profit before tax for the fourth quarter increased by 19% to 3,375 million. |
∎ | The Group maintained its position among the most profitable and efficient banks in the world with underlying Return on Tangible Equity (RoTE) increasing by 70 basis points in the year to 11.8% and cost-to-income ratio improving by 73 basis points to 47%. |
∎ | Total income for the year increased by 10% to 48,392 million with further improvements in the quality and recurrence of Group earnings and particularly strong revenue growth in Latin America. |
∎ | The Group continued to help people and businesses prosper, earning the loyalty of a further 2 million customers and increasing lending and funds by 2% and 8% respectively during the year, excluding Popular. |
∎ | Digital customers increased by 21% during the year to 25 million, with the proportion of sales taking place through digital channels increasing to 31%, excluding Popular. |
∎ | The Group has delivered on all strategic targets for 2017 and remains confident it will achieve all targets for 2018. |
Banco Santander Group Executive Chairman, Ana Botín, said:
2017 has been another very strong year, and the results announced today demonstrate the strength of our scale and diversification.
The Groups focus on earning customer loyalty, combined with the great execution of our teams, has allowed us to generate a 20% increase in underlying profit before tax, reinforcing our position as one of the most profitable, efficient and predictable banks in the world.
Our recurrent profitability allows us to lend more to customers, increase dividend per share, while generating more than 3 billion in capital through organic growth alone.
Throughout the year we have seen strong growth in Latin America, with our businesses in Brazil and Mexico performing exceptionally well. But it has also been a year of great progress in Europe, and particularly in Spain where the acquisition of Popular has helped accelerate our strategy while providing important certainty and stability for Populars customers.
We have delivered all our targets for 2017, and importantly, we have done this in a responsible way: achieving a top three position for customer satisfaction in most markets and being recognised as a top employer. Furthermore, Santander is the worlds largest corporate contributor to education and we are leaders in supporting micro-entrepreneurs and financial inclusion.
Corporate Communications | 1 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
Looking ahead, we see significant opportunities for further organic growth within our 133 million customer base. The economies in all our core markets are expected to grow in the year ahead and we are investing together in new digital platforms, allowing us to serve more customers in a better and more efficient way.
We are well positioned to continue helping the people and businesses we serve to prosper and I am confident we will deliver on all targets for 2018.
Summary Income Statement
FY17 (m)
|
FY17 v FY16
|
FY17 v FY16
|
Q417 (m)
|
Q417 v Q416
|
Q417 v Q416 (EX FX)
| |||||||||
GROSS INCOME | 48,392
|
+10% | +10% | 12,062 | +7% | +12% | ||||||||
OPERATING EXPENSES | -22,918
|
+9% | +9% | -5,961 | +9% | +14% | ||||||||
NET OPERATING INCOME | 25,473
|
+12% | +11% | 6,101 | +5% | +11% | ||||||||
NET LOAN-LOSS PROVISIONS | -9,111
|
-4% | -6% | -2,181 | -9% | -4% | ||||||||
PROFIT BEFORE TAX | 13,550
|
+20% | +21% | 3,375 | +19% | +26% | ||||||||
UNDERLYING PROFIT | 7,516
|
+14% | +14% | 1,924 | +9% | +15% | ||||||||
NET CAPITAL GAINS AND PROVISIONS | -897
|
+115% | +117% | -382 | +127% | +144% | ||||||||
ATTRIBUTABLE PROFIT | 6,619
|
+7% | +7% | 1,542 | -4% | 2% |
Results Summary (2017 v 2016)
Banco Santander, S.A. (Santander) increased attributable profit by 7% to 6,619 million during 2017 after 897 million of net capital gains and provisions, with growth driven by further improvements in the quality and recurrence of revenues, combined with good cost control and an overall strengthening in credit quality.
The Group continued to see positive trends across its businesses, with revenues increasing in eight of its ten core markets. Total income increased by 10% to 48,392 million with net interest income and fee income increasing by 10% and 14% respectively. Operating expenses increased at a lower rate than revenues, leading to a 12% increase in net operating income.
In addition to the integration costs and other items announced in the third quarter, the Group took a further 752 million charge in the fourth quarter relating primarily to the impairment of goodwill for the Groups investment in Santander Consumer USA (SCUSA) announced on 28th November 2017. This was partially offset by 297 million of capital gains generated by the sale of All Funds Bank and a 73 million gain relating to US fiscal reforms, resulting in a overall net charge for the fourth quarter of 382 million for capital gains and provisions and 897 million for the full year.
Corporate Communications | 2 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
Excluding this charge, underlying attributable profit increased by 14% in the year to 7,516 million and underlying profit before tax increased by 20% to 13,550 million.
Santander continued to help people and businesses prosper, with the number of loyal customers (people who see Santander as their main bank) growing by 2 million during the year to 17.3 million, without including new customers gained through the acquisition of Popular. Excluding Popular, lending and customer funds increased by 2% and 8% respectively in constant euros over the same period.
The number of customers using digital services increased by 21% during the year to 25.4 million (excl. Popular), helping reduce the cost per transaction by 22% during the year. The launch of a number of new digital platforms including OpenBank, SuperDigital and Santander Pay, helped increase the proportion of sales completed through digital channels to 31%.
This progress in digital transformation, combined with strong cost discipline, allowed Santander to maintain its position as one of the most efficient banks in the world. The Groups cost/income ratio, a key measure of efficiency, improved by 73 basis points to 47%. This compares to a global peer average of c.64%.
A balanced presence across both mature and emerging markets remains one of Santanders key strengths, with underlying profit increasing in nine of the Groups ten core markets. During 2017 Europe contributed 52% of Group profit and the Americas 48%. The lending book also remains well diversified across business segments and geographies.
1. | Excluding corporate centre, and Spain real estate activities. 2. Loans excluding repos. 3. Popular included (3%). |
Credit quality continued to improve with the non-performing loan (NPL) ratio reducing to 4.08%, down 129 basis points since 30 June 2017 due primarily to the agreement to sell a 51% stake in the 30 billion Popular real estate asset portfolio. Excluding Popular the NPL ratio reduced by 55 basis points during the year to 3.38%.
Over the last 12 months underlying return on tangible equity, a key measure of profitability, has increased by 70 basis points to 11.8% incl. Popular, among the best of our peers. Tangible net asset value per share remained stable at 4.15, and earnings per share increased by 1% to 0.404 (+8% on an underlying basis).
Corporate Communications | 3 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
Santander strengthened its capital further during the year, increasing its fully loaded CET 1 ratio by 29 basis points to 10.84%. The Group generated more than 3 billion (53 basis points) of capital through organic growth alone in 2017 and remains committed to achieving a fully loaded CET1 ratio above 11% in 2018.
As a result the Group has achieved all strategic targets for 2017 and has reiterated its targets for 2018.
Attributable profit
|
FY17 (m)
|
FY17 v FY16
|
FY17 v FY16 (EX FX)
|
Q417 (m)
|
Q417 v Q416
|
Q417 v Q416 (EX FX)
| ||||||||
Brasil |
2,544
|
+42% | +34% | 642 | +26% | +34% | ||||||||
UK |
1,498
|
-9% | -3% | 297 | -12% | -11% | ||||||||
Spain |
1,180
|
+46% | +46% | 265 | +12% | +12% | ||||||||
SCF |
1,168
|
+4% | +4% | 311 | +15% | +17% | ||||||||
Mexico |
710
|
+13% | +16% | 178 | +6% | +10% | ||||||||
Chile |
586
|
+14% | +12% | 146 | +7% | +11% | ||||||||
Portugal |
440
|
+10% | +10% | 104 | -2% | -2% | ||||||||
Argentina |
359
|
0% | +14% | 96 | -12% | +7% | ||||||||
USA |
332
|
-8% | -7% | -5 | -73% | -98% | ||||||||
Poland |
300
|
0% | -3% | 81 | +28% | +24% | ||||||||
Popular |
-37
|
| | 85 | | |
Country Summary (FY17 v FY16)
In Brazil attributable profit increased by 42% to 2,544 million (+34% in constant euros). Greater customer activity (lending and funds up year-on-year by 7% and 24% respectively) and improved operational efficiency drove growth in income well above competitor average. Santander Brazil made significant progress in its commercial transformation, with loyal customers increasing from 3.7 million to 4.2 million in the year and digital customers growing by over 34% to 8.6 million. As a result, underlying RoTE increased during the year from 13.8% to 16.9%. Credit quality also improved with the NPL ratio reducing by 61 basis points to 5.29% during the year.
In the UK attributable profit fell by 9% to 1,498 million (-3% in constant euros) in part due to extraordinary gains made in 2016 from the disposal of the stake in Visa Europe. The underlying business performance remained robust, with revenues increasing year-on-year by 5% in constant euros to 5,716 million driven by good growth in retail current account balances, mortgages, and loans and deposits to UK companies. Loan loss provisions normalised during the year, however, overall credit quality remains solid. Underlying RoTE remained ahead of peer average at 10.3%.
Corporate Communications | 4 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
In Spain (excluding Popular) attributable profit increased by 46% to 1,180 million as the 1|2|3 strategy helped increase the number of loyal customer by 600,000 to 1.9 million. The Banks digital transformation helped increase the number of digital customers by 15% with Santander now the leading player in mobile payments in Spain. Excluding the impact of non-recurring charges incurred in 2016, underlying profit increased by 15%. Higher fee income, combined with good cost control and lower loan loss provisions helped increase underlying RoTE to 10%, up 122 basis points.
Banco Popular generated an attributable loss of 37 million, in part due to a charge of 300 million taken in the third quarter for planned integration costs. Since the acquisition, the Group has actively managed execution risks, while preserving Populars customer base and market share in Spain. Santander has achieved a number of important milestones related to the acquisition: completing a 7,072 million rights issues - subscribed by investors eight times over; agreeing to sell 51% of a real estate loan portfolio with an aggregate gross book value of approximately 30 billion to Blackstone the largest ever real estate transaction in Spain; confirming a 78% take up in the Banco Popular loyalty bond; completing the sale of Populars US franchise, TotalBank; and reaching agreement with unions for the integration of headquarters in Spain. Santander continues to expect the acquisition to generate a Return on Investment (RoI) of 13%-14% in 2020.
Santander Consumer Finance increased attributable profit by 4% during the period to 1,168 million, after 85 million of restructuring costs incurred in the third quarter. Excluding this item profit increased by 15%. This was driven by an increase in new lending across all main countries and historically low NPLs and cost of credit. As a result the business maintained a best-in-class underlying RoTE of 16.4%.
In Mexico attributable profit increased by 13% to 710 million (+16% in constant euros) as higher interest rates, combined with an increase in commercial activity stimulated strong growth in revenues. A focus on multichannel innovation, digital, and new commercial initiatives, including Santander Plus, helped the Bank earn the loyalty of almost 400,000 customers. This helped increase underlying RoTE by 405 basis points to 19.5%.
In Chile attributable profit increased by 14% to 586 million (+12% in constant euros) as revenues increased due to improving customer satisfaction and loyalty, and loan loss provisions fell. During the year the business launched the first 100% digital on-boarding system in Chile.
In Portugal (excluding Popular), Santander Totta achieved an increase in attributable profit of 10% to 440 million as lending and deposit volumes increased while costs and loan loss provisions reduced. The ongoing digital transformation enabled an increase in sales through digital channels, as well as helping drive an increase in customer loyalty. Following the acquisition of Popular, Santander Totta becomes the leading private sector bank in the country by both assets and loans.
In Argentina attributable profit remained stable at 359 million (+14% in constant euros) as market share gains in consumer loans and mortgages, combined with strong growth in customer deposits, fuelled strong growth in recurrent revenues. Underlying Return on Tangible Equity remained high at 32%.
In the US (excluding Popular), attributable profit fell by 8% to 332 million (-7% in constant euros) due, in part, to the impact of the hurricanes in Dallas, Florida and Puerto Rico. Santander Bank continued to deliver improved profitability, increasing its net interest margin and achieving better efficiency. During the year the business reached a number of important milestones, including passing the Federal Reserve CCAR assessment and paying a dividend to Group for the first time in 6 years.
Corporate Communications | 5 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
In Poland attributable profit remained in line with the previous year at 300 million (-3% in constant euros) after the business benefited in 2016 from a gain relating to the sale of the stake in Visa Europe. Underlying profit increased by 10% (+8% in constant euros) fuelled by good loan growth, strong cost control and lower provisions. The acquisition of Deutsche Bank Polskas retail and private banking business, announced in December 2017, will further strengthen the Groups franchise in key customer segments.
About Banco Santander
Banco Santander is the largest bank in the Eurozone with a market capitalisation of 88,410 million at 31 December 2017. It has a strong and focused presence in 10 core markets across Europe and the Americas with more than 4 million shareholders and 200,000 employees serving 133 million customers.
Corporate Communications | 6 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
KEY CONSOLIDATED DATA (Including Banco Popular)
Balance sheet ( million) | Dec17 | Dec16 | % | Dec15 | ||||||||||||
Total assets |
1,444,305 | 1,339,125 | 7.9 | 1,340,260 | ||||||||||||
Net customer loans |
848.914 | 790,470 | 7.4 | 790,848 | ||||||||||||
Customer deposits |
777,730 | 691,111 | 12.5 | 683,142 | ||||||||||||
Total customer funds |
985,703 | 873,618 | 12.8 | 849,403 | ||||||||||||
Total equity |
106,832 | 102,699 | 4.0 | 98,753 | ||||||||||||
Note: Total customer funds included customer deposits, mutual funds, pension funds, managed portfolios and insurance premiums
|
| |||||||||||||||
Income statement ( million) | 2017 | 2016 | % | 2015 | ||||||||||||
Net interest income |
34,296 | 31,089 | 10.3 | 32,189 | ||||||||||||
Gross income |
48,392 | 43.853 | 10.3 | 45,272 | ||||||||||||
Net operating income |
25,473 | 22,766 | 11.9 | 23.702 | ||||||||||||
Underlying profit before taxes* |
13,550 | 11,288 | 20.0 | 10,939 | ||||||||||||
Underlying attributable profit to the Group* |
7,516 | 6,621 | 13.5 | 6,566 | ||||||||||||
Attributable profit to the Group |
6,619 | 6,204 | 6.7 | 5,966 | ||||||||||||
Variations w/o exchange rate: NI I: +.1o.z%; Gross income: +1o.2%; Net operating iricom+u.4,,i.; Underlying attributable profit +14396;.Attribut able profit: +7_4%
|
| |||||||||||||||
EPS, profitability and efficiency (%) | 2017 | 2016 | % | 2015 | ||||||||||||
Underlying EPS (euros)* |
0.463 | 0.429 | 7.8 | 0.438 | ||||||||||||
EPS (euros) |
0.404 | 0.401 | 0.9 | 0.397 | ||||||||||||
RoE |
7.14 | 6.99 | 6.57 | |||||||||||||
Underlying RoTE* |
11.82 | 11.08 | 10.99 | |||||||||||||
RoTE |
10.41 | 10.38 | 9.99 | |||||||||||||
RoA |
0.58 | 0.56 | 0.54 | |||||||||||||
Underlying RORWA* |
1.48 | 1.36 | 1.30 | |||||||||||||
RoRWA |
1.35 | 1.29 | 1.20 | |||||||||||||
Efficiency ratio (with amortisations) |
47.4 | 48.1 | 47.6 | |||||||||||||
Solvency and NPL ratio (%) | Dec17 | Dec16 | Dec15 | |||||||||||||
CETI fully-loaded |
10.84 | 10.55 | 10,05 | |||||||||||||
CETI phased - in |
12.26 | 12.53 | 12.55 | |||||||||||||
NPL ratio |
4.08 | 3.93 | 4.36 | |||||||||||||
Coverage ratio |
65.2 | 73.8 | 73.1 | |||||||||||||
Market capitalisation and shares | Dec17 | Dec16 | % | Dec15 | ||||||||||||
Shares (millions) |
16,136 | 14,582 | 10.7 | 14,434 | ||||||||||||
Share price (euros)** |
5.479 | 4.877 | 12.3 | 4.483 | ||||||||||||
Market capitalisation ( million) |
88,410 | 72,314 | 22.3 | 65,792 | ||||||||||||
Tangible book value per share (euros)** |
4.15 | 4.15 | 4.00 | |||||||||||||
Price / Tangible book value per share (X) ** |
1.32 | 1.17 | 1.12 | |||||||||||||
P/E ratio (X) ** |
13.56 | 12.18 | 11.30 | |||||||||||||
Other data | Dec17 | Dec16 | % | Dec15 | ||||||||||||
Number of shareholders |
4,029,630 | 3,928,950 | 2.6 | 3,573,277 | ||||||||||||
Number of employees |
202,251 | 188,492 | 7.3 | 193,863 | ||||||||||||
Number of branches |
13,697 | 12,235 | 11.9 | 13,030 |
(*) | Excluding net capital gains and provisions |
(**) | Data including the capital increase in July 2017 |
Note: The financial information in this report has been approved by the Banks Board of Directors following a favourable report from the Audit Committee. In addition to the financial information prepared under International Reporting Standards, this press release includes certain Alternative Performance Measures as defined in the Guidance on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415es). For further details please see Important information section of this report, and 2017 4Q Financial Report, published as Relevant Fact on January 31 2018 and available on web page of Banco Santander, S.A. (www.santander.com)
Corporate Communications | 7 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
Important Information:
In addition to the financial information prepared under International Financial Reporting Standards (IFRS), this press release includes certain alternative performance measures as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415es) as well as non-IFRS measures (Non-IFRS Measures) . The APMs and Non-IFRS Measures are performance measures that have been calculated using the financial information from the Santander Group but that are not defined or detailed in the applicable financial information framework and therefore have neither been audited nor are capable of being completely audited. These APMs and Non-IFRS Measures are been used to allow for a better understanding of the financial performance of the Santander Group but should be considered only as additional information and in no case as a replacement of the financial information prepared under IFRS. Moreover, the way the Santander Group defines and calculates these APMs and Non-IFRS Measures may differ to the way these are calculated by other companies that use similar measures, and therefore they may not be comparable. For further details of the APMs and Non-IFRS Measures used, including its definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFR, please see 2017 4Q Financial Report, published as Relevant Fact on 31 January 2018, Section 26 of the Documento de Registro de Acciones for Banco Santander filed with the CNMV on July 4, 2017 and Item 3A of the Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on March 31, 2017 (the Form 20-F). These documents are available on Banco Santanders website (www.bancosantander.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.
Banco Santander, S.A. (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. These factors include, but are not limited to: (1) general market, macro-economic, industry, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. Numerous factors, including those reflected in the Annual Report on Form 20-F filed with the Securities and Exchange Commission of the United States of America (the Form 20-F and the SEC, respectively) on March 31, 2017 and the Periodic Report on Form 6-K for the six months ended June 30, 2017 filed with the SEC on October 5, 2017 (the Form 6-K) under Key Information-Risk Factors- and in the Documento de Registro de Acciones filed with the Spanish Securities Market Commission (the CNMV) under Factores de Riesgo- could affect the future results of Santander and could result in other results deviating materially from those anticipated in the 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
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 the press release. No investment activity should be undertaken only 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.
Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this press release should be construed as a profit forecast.
Corporate Communications | 8 | |||
Ciudad Grupo Santander, edificio Arrecife, pl. 2 | ||||
28660 Boadilla del Monte (Madrid) Tel.: +34 91 2895211 | ||||
[email protected] | ||||
www.santander.com - Twitter: @bancosantander |
JANUARY - DECEMBER » Santander aim
SANTANDER AIM
2 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Key consolidated data
KEY CONSOLIDATED DATA
(including Banco Popular)
Balance sheet ( million) | Dec17 | Sep17 | % | Dec17 | Dec16 | % | Dec15 | |||||||||||||||||||||||
Total assets |
1,444,305 | 1,468,030 | (1.6) | 1,444,305 | 1,339,125 | 7.9 | 1,340,260 | |||||||||||||||||||||||
Net customer loans |
848,914 | 854,686 | (0.7) | 848,914 | 790,470 | 7.4 | 790,848 | |||||||||||||||||||||||
Customer deposits |
777,730 | 778,852 | (0.1) | 777,730 | 691,111 | 12.5 | 683,142 | |||||||||||||||||||||||
Total customer funds |
985,703 | 988,386 | (0.3) | 985,703 | 873,618 | 12.8 | 849,403 | |||||||||||||||||||||||
Total equity |
106,832 | 108,723 | (1.7) | 106,832 | 102,699 | 4.0 | 98,753 | |||||||||||||||||||||||
Note: Total customer funds included customer deposits, mutual funds, pension funds, managed portfolios and insurance premiums |
||||||||||||||||||||||||||||||
Income statement ( million) | 4Q17 | 3Q17 | % | 2017 | 2016 | % | 2015 | |||||||||||||||||||||||
Net interest income |
8,607 | 8,681 | (0.9) | 34,296 | 31,089 | 10.3 | 32,189 | |||||||||||||||||||||||
Gross income |
12,062 | 12,252 | (1.5) | 48,392 | 43,853 | 10.3 | 45,272 | |||||||||||||||||||||||
Net operating income |
6,101 | 6,486 | (5.9) | 25,473 | 22,766 | 11.9 | 23,702 | |||||||||||||||||||||||
Underlying profit before taxes* |
3,375 | 3,591 | (6.0) | 13,550 | 11,288 | 20.0 | 10,939 | |||||||||||||||||||||||
Underlying attributable profit to the Group* |
1,924 | 1,976 | (2.7) | 7,516 | 6,621 | 13.5 | 6,566 | |||||||||||||||||||||||
Attributable profit to the Group |
1,542 | 1,461 | 5.5 | 6,619 | 6,204 | 6.7 | 5,966 |
Variations w/o exchange rate: | 4Q17/ 3Q17: NII: +0.3%; Gross income: -0.4%; Net operating income: -4.5%; Underlying attributable profit: -1.4%; Attributable profit: +6.9% 2017/2016: NII: +10.2%; Gross income: +10.2%; Net operating income: +11.4%; Underlying attributable profit: +14.3%; Attributable profit: +7.4% |
EPS, profitability and efficiency (%) | 4Q17 | 3Q17 | % | 2017 | 2016 | % | 2015 | |||||||||||||||||||||||
Underlying EPS (euros)* |
0.113 | 0.118 | (4.5) | 0.463 | 0.429 | 7.8 | 0.438 | |||||||||||||||||||||||
EPS (euros) |
0.088 | 0.084 | 5.1 | 0.404 | 0.401 | 0.9 | 0.397 | |||||||||||||||||||||||
RoE |
7.81 | 7.87 | 7.14 | 6.99 | 6.57 | |||||||||||||||||||||||||
Underlying RoTE* |
11.79 | 12.10 | 11.82 | 11.08 | 10.99 | |||||||||||||||||||||||||
RoTE |
11.21 | 11.31 | 10.41 | 10.38 | 9.99 | |||||||||||||||||||||||||
RoA |
0.61 | 0.61 | 0.58 | 0.56 | 0.54 | |||||||||||||||||||||||||
Underlying RoRWA* |
1.48 | 1.50 | 1.48 | 1.36 | 1.30 | |||||||||||||||||||||||||
RoRWA |
1.44 | 1.42 | 1.35 | 1.29 | 1.20 | |||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
49.4 | 47.1 | 47.4 | 48.1 | 47.6 | |||||||||||||||||||||||||
Solvency and NPL ratio (%) | Dec17 | Sep17 | Dec17 | Dec16 | Dec15 | |||||||||||||||||||||||||
CET1 fully-loaded |
10.84 | 10.80 | 10.84 | 10.55 | 10.05 | |||||||||||||||||||||||||
CET1 phased-in |
12.26 | 12.18 | 12.26 | 12.53 | 12.55 | |||||||||||||||||||||||||
NPL ratio |
4.08 | 4.24 | 4.08 | 3.93 | 4.36 | |||||||||||||||||||||||||
Coverage ratio |
65.2 | 65.8 | 65.2 | 73.8 | 73.1 | |||||||||||||||||||||||||
Market capitalisation and shares | Dec17 | Sep17 | % | Dec17 | Dec16 | % | Dec15 | |||||||||||||||||||||||
Shares (millions) |
16,136 | 16,041 | 0.6 | 16,136 | 14,582 | 10.7 | 14,434 | |||||||||||||||||||||||
Share price (euros)** |
5.479 | 5.907 | (7.2) | 5.479 | 4.877 | 12.3 | 4.483 | |||||||||||||||||||||||
Market capitalisation ( million) |
88,410 | 94,752 | (6.7) | 88,410 | 72,314 | 22.3 | 65,792 | |||||||||||||||||||||||
Tangible book value per share (euros)** |
4.15 | 4.20 | 4.15 | 4.15 | 4.00 | |||||||||||||||||||||||||
Price / Tangible book value per share (X)** |
1.32 | 1.41 | 1.32 | 1.17 | 1.12 | |||||||||||||||||||||||||
P/E ratio (X)** |
13.56 | 12.77 | 13.56 | 12.18 | 11.30 | |||||||||||||||||||||||||
Other data | Dec17 | Sep17 | % | Dec17 | Dec16 | % | Dec15 | |||||||||||||||||||||||
Number of shareholders |
4,029,630 | 4,070,187 | (1.0) | 4,029,630 | 3,928,950 | 2.6 | 3,573,277 | |||||||||||||||||||||||
Number of employees |
202,251 | 200,949 | 0.6 | 202,251 | 188,492 | 7.3 | 193,863 | |||||||||||||||||||||||
Number of branches |
13,697 | 13,704 | (0.1) | 13,697 | 12,235 | 11.9 | 13,030 |
(*) Excluding net capital gains and provisions.
(**) Data adjusted to capital increase of July 2017.
Note: | The financial information in this report was approved by the Board of Directors, following a favourable report from the Audit Committee |
In accordance with the Guidelines on Alternative Performance Measures published by the European Securities and Markets Authority on 5 October 2015, we have included a glossary at the end of this document, called Alternative Performance Measures, with the definitions and the conciliation with the items presented in the income statement of certain alternative performance measures used in this document. |
FINANCIAL REPORT 2017 | 3 |
JANUARY - DECEMBER » Consolidated financial report
Grupo Santander income statement (including Banco Popular)
million
Change |
Change |
|||||||||||||||||||||||||||||||||||||||||||
4Q17 | 3Q17 | % | % w/o FX | 2017 | 2016 | % | % w/o FX | |||||||||||||||||||||||||||||||||||||
Net interest income |
8,607 | 8,681 | (0.9) | 0.3 | 34,296 | 31,089 | 10.3 | 10.2 | ||||||||||||||||||||||||||||||||||||
Net fee income |
2,949 | 2,888 | 2.1 | 3.2 | 11,597 | 10,180 | 13.9 | 13.4 | ||||||||||||||||||||||||||||||||||||
Gains (losses) on financial transactions |
421 | 422 | (0.3) | 0.5 | 1,703 | 1,723 | (1.1) | 0.4 | ||||||||||||||||||||||||||||||||||||
Other operating income |
85 | 260 | (67.4) | (65.9) | 796 | 862 | (7.6) | (6.5) | ||||||||||||||||||||||||||||||||||||
Dividends |
75 | 31 | 144.6 | 139.7 | 384 | 413 | (7.1) | (7.9) | ||||||||||||||||||||||||||||||||||||
Income from equity-accounted method |
223 | 188 | 19.0 | 19.9 | 704 | 444 | 58.5 | 57.3 | ||||||||||||||||||||||||||||||||||||
Other operating income/expenses |
(213) | 42 | | | (291) | 5 | | | ||||||||||||||||||||||||||||||||||||
Gross income |
12,062 | 12,252 | (1.5) | (0.4) | 48,392 | 43,853 | 10.3 | 10.2 | ||||||||||||||||||||||||||||||||||||
Operating expenses |
(5,961) | (5,766) | 3.4 | 4.2 | (22,918) | (21,088) | 8.7 | 9.0 | ||||||||||||||||||||||||||||||||||||
General administrative expenses |
(5,267) | (5,161) | 2.1 | 2.9 | (20,325) | (18,723) | 8.6 | 8.8 | ||||||||||||||||||||||||||||||||||||
Personnel |
(3,116) | (3,000) | 3.9 | 4.6 | (11,972) | (10,997) | 8.9 | 9.0 | ||||||||||||||||||||||||||||||||||||
Other general administrative expenses |
(2,151) | (2,161) | (0.5) | 0.5 | (8,353) | (7,727) | 8.1 | 8.6 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortisation |
(694) | (605) | 14.7 | 15.2 | (2,593) | (2,364) | 9.7 | 9.9 | ||||||||||||||||||||||||||||||||||||
Net operating income |
6,101 | 6,486 | (5.9) | (4.5) | 25,473 | 22,766 | 11.9 | 11.4 | ||||||||||||||||||||||||||||||||||||
Net loan-loss provisions |
(2,181) | (2,250) | (3.1) | (1.4) | (9,111) | (9,518) | (4.3) | (5.6) | ||||||||||||||||||||||||||||||||||||
Impairment losses on other assets |
(230) | (54) | 325.9 | 320.0 | (414) | (247) | 67.7 | 68.9 | ||||||||||||||||||||||||||||||||||||
Other income |
(315) | (591) | (46.7) | (44.5) | (2,398) | (1,712) | 40.0 | 38.2 | ||||||||||||||||||||||||||||||||||||
Underlying profit before taxes |
3,375 | 3,591 | (6.0) | (4.7) | 13,550 | 11,288 | 20.0 | 20.7 | ||||||||||||||||||||||||||||||||||||
Tax on profit |
(1,090) | (1,243) | (12.3) | (10.9) | (4,587) | (3,396) | 35.1 | 36.0 | ||||||||||||||||||||||||||||||||||||
Underlying profit from continuing operations |
2,285 | 2,347 | (2.6) | (1.4) | 8,963 | 7,892 | 13.6 | 14.1 | ||||||||||||||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | 0 | (100.0) | (100.0) | ||||||||||||||||||||||||||||||||||||
Underlying consolidated profit |
2,285 | 2,347 | (2.6) | (1.4) | 8,963 | 7,893 | 13.6 | 14.1 | ||||||||||||||||||||||||||||||||||||
Minority interests |
362 | 371 | (2.5) | (1.3) | 1,447 | 1,272 | 13.8 | 13.1 | ||||||||||||||||||||||||||||||||||||
Underlying attributable profit to the Group |
1,924 | 1,976 | (2.7) | (1.4) | 7,516 | 6,621 | 13.5 | 14.3 | ||||||||||||||||||||||||||||||||||||
Net capital gains and provisions |
(382) | (515) | (25.7) | (25.7) | (897) | (417) | 115.2 | 117.0 | ||||||||||||||||||||||||||||||||||||
Attributable profit to the Group |
1,542 | 1,461 | 5.5 | 6.9 | 6,619 | 6,204 | 6.7 | 7.4 | ||||||||||||||||||||||||||||||||||||
Underlying EPS (euros)* |
0.113 | 0.118 | (4.5) | 0.463 | 0.429 | 7.8 | ||||||||||||||||||||||||||||||||||||||
Underlying diluted EPS (euros)* |
0.111 | 0.119 | (6.3) | 0.461 | 0.428 | 7.8 | ||||||||||||||||||||||||||||||||||||||
EPS (euros)* |
0.088 | 0.084 | 5.1 | 0.404 | 0.401 | 0.9 | ||||||||||||||||||||||||||||||||||||||
Diluted EPS (euros)* |
0.087 | 0.085 | 2.7 | 0.403 | 0.399 | 0.9 | ||||||||||||||||||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||||||||||||||||||
Average total assets |
1,460,976 | 1,458,196 | 0.2 | 1,407,681 | 1,337,661 | 5.2 | ||||||||||||||||||||||||||||||||||||||
Average stockholders equity |
93,628 | 93,855 | (0.2) | 92,638 | 88,744 | 4.4 |
(*) Data adjusted to capital increase of July 2017.
Net capital gains and provisions
million net of tax
4 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Consolidated financial report
Quarterly income statement (including Popular)
million
2016 | 2017 | |||||||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||||||||||||||
Net interest income |
7,624 | 7,570 | 7,798 | 8,096 | 8,402 | 8,606 | 8,681 | 8,607 | ||||||||||||||||||||||||||||
Net fee income |
2,397 | 2,549 | 2,597 | 2,637 | 2,844 | 2,916 | 2,888 | 2,949 | ||||||||||||||||||||||||||||
Gains (losses) on financial transactions |
504 | 366 | 440 | 412 | 573 | 286 | 422 | 421 | ||||||||||||||||||||||||||||
Other operating income |
204 | 270 | 245 | 142 | 211 | 240 | 260 | 85 | ||||||||||||||||||||||||||||
Dividends |
44 | 209 | 37 | 124 | 41 | 238 | 31 | 75 | ||||||||||||||||||||||||||||
Income from equity-accounted method |
83 | 112 | 119 | 130 | 133 | 160 | 188 | 223 | ||||||||||||||||||||||||||||
Other operating income/expenses |
78 | (51) | 90 | (112) | 37 | (157) | 42 | (213) | ||||||||||||||||||||||||||||
Gross income |
10,730 | 10,755 | 11,080 | 11,288 | 12,029 | 12,049 | 12,252 | 12,062 | ||||||||||||||||||||||||||||
Operating expenses |
(5,158) | (5,227) | (5,250) | (5,453) | (5,543) | (5,648) | (5,766) | (5,961) | ||||||||||||||||||||||||||||
General administrative expenses |
(4,572) | (4,632) | (4,692) | (4,828) | (4,915) | (4,983) | (5,161) | (5,267) | ||||||||||||||||||||||||||||
Personnel |
(2,683) | (2,712) | (2,726) | (2,876) | (2,912) | (2,943) | (3,000) | (3,116) | ||||||||||||||||||||||||||||
Other general administrative expenses |
(1,889) | (1,920) | (1,966) | (1,952) | (2,002) | (2,039) | (2,161) | (2,151) | ||||||||||||||||||||||||||||
Depreciation and amortisation |
(586) | (595) | (558) | (626) | (629) | (665) | (605) | (694) | ||||||||||||||||||||||||||||
Net operating income |
5,572 | 5,528 | 5,831 | 5,835 | 6,486 | 6,401 | 6,486 | 6,101 | ||||||||||||||||||||||||||||
Net loan-loss provisions |
(2,408) | (2,205) | (2,499) | (2,406) | (2,400) | (2,280) | (2,250) | (2,181) | ||||||||||||||||||||||||||||
Impairment losses on other assets |
(44) | (29) | (16) | (159) | (68) | (63) | (54) | (230) | ||||||||||||||||||||||||||||
Other income |
(389) | (515) | (376) | (432) | (707) | (785) | (591) | (315) | ||||||||||||||||||||||||||||
Underlying profit before taxes |
2,732 | 2,779 | 2,940 | 2,838 | 3,311 | 3,273 | 3,591 | 3,375 | ||||||||||||||||||||||||||||
Tax on profit |
(810) | (915) | (904) | (767) | (1,125) | (1,129) | (1,243) | (1,090) | ||||||||||||||||||||||||||||
Underlying profit from continuing operations |
1,922 | 1,864 | 2,036 | 2,071 | 2,186 | 2,144 | 2,347 | 2,285 | ||||||||||||||||||||||||||||
Net profit from discontinued operations |
| 0 | (0) | 0 | | | | | ||||||||||||||||||||||||||||
Underlying consolidated profit |
1,922 | 1,864 | 2,036 | 2,072 | 2,186 | 2,144 | 2,347 | 2,285 | ||||||||||||||||||||||||||||
Minority interests |
288 | 338 | 341 | 305 | 319 | 395 | 371 | 362 | ||||||||||||||||||||||||||||
Underlying attributable profit to the Group |
1,633 | 1,526 | 1,695 | 1,766 | 1,867 | 1,749 | 1,976 | 1,924 | ||||||||||||||||||||||||||||
Net capital gains and provisions* |
| (248) | | (169) | | | (515) | (382) | ||||||||||||||||||||||||||||
Attributable profit to the Group |
1,633 | 1,278 | 1,695 | 1,598 | 1,867 | 1,749 | 1,461 | 1,542 | ||||||||||||||||||||||||||||
Underlying EPS (euros)** |
0.106 | 0.099 | 0.110 | 0.114 | 0.120 | 0.112 | 0.118 | 0.113 | ||||||||||||||||||||||||||||
Underlying diluted EPS (euros)** |
0.106 | 0.098 | 0.110 | 0.114 | 0.120 | 0.111 | 0.119 | 0.111 | ||||||||||||||||||||||||||||
EPS (euros)** |
0.106 | 0.082 | 0.110 | 0.103 | 0.120 | 0.112 | 0.084 | 0.088 | ||||||||||||||||||||||||||||
Diluted EPS (euros)** |
0.106 | 0.081 | 0.110 | 0.103 | 0.120 | 0.111 | 0.085 | 0.087 |
(*) Including :
| In 2Q16, capital gains from the disposal of the stake in VISA Europe (227 million) and restructuring costs (-475 million). |
| In 4Q16 PPI UK (-137 million) and restatement Santander Consumer USA (-32 million). |
| In 3Q17, integration costs (Popular: -300 million and Germany -85 million) and charge for equity stakes and intangible assets (-130 million). |
| In 4Q17, capital gains from the disposal of the stake in Allfunds Bank (297 million), USA fiscal reform (73 million), goodwill charges (-603 million) and in the US provisions for hurricanes, increased stake in Santander Consumer USA and other (-149 million). |
(**) Data adjusted to capital increase of July 2017.
FINANCIAL REPORT 2017 | 5 |
JANUARY - DECEMBER » Consolidated financial report
Grupo Santander income statement (excluding Popular)
million
Change | Change | |||||||||||||||||||||||||||||||||||||||||||
4Q17 | 3Q17 | % | % w/o FX | 2017 | 2016 | % | % w/o FX | |||||||||||||||||||||||||||||||||||||
Net interest income |
8,169 | 8,225 | (0.7) | 0.5 | 33,293 | 31,089 | 7.1 | 7.0 | ||||||||||||||||||||||||||||||||||||
Net fee income |
2,820 | 2,760 | 2.2 | 3.3 | 11,308 | 10,180 | 11.1 | 10.6 | ||||||||||||||||||||||||||||||||||||
Gains (losses) on financial transactions |
429 | 413 | 4.0 | 4.6 | 1,702 | 1,723 | (1.2) | 0.4 | ||||||||||||||||||||||||||||||||||||
Other operating income |
108 | 220 | (50.9) | (49.6) | 779 | 862 | (9.6) | (8.6) | ||||||||||||||||||||||||||||||||||||
Dividends |
71 | 30 | 135.3 | 130.5 | 378 | 413 | (8.4) | (9.2) | ||||||||||||||||||||||||||||||||||||
Income from equity-accounted method |
182 | 140 | 30.3 | 31.3 | 609 | 444 | 37.2 | 36.2 | ||||||||||||||||||||||||||||||||||||
Other operating income/expenses |
(145) | 50 | | | (209) | 5 | | | ||||||||||||||||||||||||||||||||||||
Gross income |
11,526 | 11,617 | (0.8) | 0.4 | 47,082 | 43,853 | 7.4 | 7.3 | ||||||||||||||||||||||||||||||||||||
Operating expenses |
(5,571) | (5,379) | 3.6 | 4.4 | (22,045) | (21,088) | 4.5 | 4.8 | ||||||||||||||||||||||||||||||||||||
General administrative expenses |
(4,912) | (4,822) | 1.9 | 2.8 | (19,544) | (18,723) | 4.4 | 4.7 | ||||||||||||||||||||||||||||||||||||
Personnel |
(2,917) | (2,823) | 3.3 | 4.1 | (11,551) | (10,997) | 5.0 | 5.2 | ||||||||||||||||||||||||||||||||||||
Other general administrative expenses |
(1,994) | (1,999) | (0.2) | 0.8 | (7,993) | (7,727) | 3.4 | 3.9 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortisation |
(660) | (557) | 18.5 | 19.0 | (2,501) | (2,364) | 5.8 | 6.0 | ||||||||||||||||||||||||||||||||||||
Net operating income |
5,955 | 6,239 | (4.5) | (3.1) | 25,038 | 22,766 | 10.0 | 9.5 | ||||||||||||||||||||||||||||||||||||
Net loan-loss provisions |
(2,114) | (2,212) | (4.4) | (2.7) | (8,997) | (9,518) | (5.5) | (6.8) | ||||||||||||||||||||||||||||||||||||
Impairment losses on other assets |
(228) | (54) | 322.3 | 316.5 | (413) | (247) | 67.1 | 68.3 | ||||||||||||||||||||||||||||||||||||
Other income |
(309) | (598) | (48.4) | (46.2) | (2,380) | (1,712) | 39.0 | 37.2 | ||||||||||||||||||||||||||||||||||||
Underlying profit before taxes |
3,305 | 3,375 | (2.1) | (0.7) | 13,248 | 11,288 | 17.4 | 18.0 | ||||||||||||||||||||||||||||||||||||
Tax on profit |
(1,104) | (1,194) | (7.5) | (6.1) | (4,548) | (3,396) | 33.9 | 34.8 | ||||||||||||||||||||||||||||||||||||
Underlying profit from continuing operations |
2,200 | 2,180 | 0.9 | 2.2 | 8,700 | 7,892 | 10.2 | 10.8 | ||||||||||||||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | 0 | (100.0) | (100.0) | ||||||||||||||||||||||||||||||||||||
Underlying consolidated profit |
2,200 | 2,180 | 0.9 | 2.2 | 8,700 | 7,893 | 10.2 | 10.8 | ||||||||||||||||||||||||||||||||||||
Minority interests |
361 | 371 | (2.7) | (1.4) | 1,447 | 1,272 | 13.8 | 13.0 | ||||||||||||||||||||||||||||||||||||
Underlying attributable profit to the Group |
1,839 | 1,809 | 1.7 | 2.9 | 7,253 | 6,621 | 9.5 | 10.3 | ||||||||||||||||||||||||||||||||||||
Net capital gains and provisions* |
(382) | (215) | 77.9 | 77.9 | (597) | (417) | 43.3 | 44.4 | ||||||||||||||||||||||||||||||||||||
Attributable profit to the Group |
1,457 | 1,594 | (8.6) | (6.9) | 6,656 | 6,204 | 7.3 | 8.0 |
(*) In 2017:
| in 4Q, capital gains from the disposal of the stake in Allfunds Bank (297 million), USA fiscal reform (73 million), goodwill charges (-603 million) and in the US provisions for hurricanes, increased stake in Santander Consumer USA and other (-149 million) |
| in 3Q, integration costs in Germany (-85 million) and charges for equity stakes and intangible assets (-130 million). |
In 2016, capital gains from the disposal of the stake in VISA Europe (227 million), restructuring costs (-475 million), PPI in the UK (-137 million) and restatement of Santander Consumer USA (-32 million).
6 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Consolidated financial report
Quarterly income statement (excluding Popular)
million
2016 | 2017 | |||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||||||||
Net interest income |
7,624 | 7,570 | 7,798 | 8,096 | 8,402 | 8,497 | 8,225 | 8,169 | ||||||||||||||||||||||
Net fee income |
2,397 | 2,549 | 2,597 | 2,637 | 2,844 | 2,885 | 2,760 | 2,820 | ||||||||||||||||||||||
Gains (losses) on financial transactions |
504 | 366 | 440 | 412 | 573 | 287 | 413 | 429 | ||||||||||||||||||||||
Other operating income |
204 | 270 | 245 | 142 | 211 | 240 | 220 | 108 | ||||||||||||||||||||||
Dividends |
44 | 209 | 37 | 124 | 41 | 237 | 30 | 71 | ||||||||||||||||||||||
Income from equity-accounted method |
83 | 112 | 119 | 130 | 133 | 154 | 140 | 182 | ||||||||||||||||||||||
Other operating income/expenses |
78 | (51) | 90 | (112) | 37 | (151) | 50 | (145) | ||||||||||||||||||||||
Gross income |
10,730 | 10,755 | 11,080 | 11,288 | 12,029 | 11,910 | 11,617 | 11,526 | ||||||||||||||||||||||
Operating expenses |
(5,158) | (5,227) | (5,250) | (5,453) | (5,543) | (5,552) | (5,379) | (5,571) | ||||||||||||||||||||||
General administrative expenses |
(4,572) | (4,632) | (4,692) | (4,828) | (4,915) | (4,896) | (4,822) | (4,912) | ||||||||||||||||||||||
Personnel |
(2,683) | (2,712) | (2,726) | (2,876) | (2,912) | (2,899) | (2,823) | (2,917) | ||||||||||||||||||||||
Other general administrative expenses |
(1,889) | (1,920) | (1,966) | (1,952) | (2,002) | (1,997) | (1,999) | (1,994) | ||||||||||||||||||||||
Depreciation and amortisation |
(586) | (595) | (558) | (626) | (629) | (656) | (557) | (660) | ||||||||||||||||||||||
Net operating income |
5,572 | 5,528 | 5,831 | 5,835 | 6,486 | 6,358 | 6,239 | 5,955 | ||||||||||||||||||||||
Net loan-loss provisions |
(2,408) | (2,205) | (2,499) | (2,406) | (2,400) | (2,272) | (2,212) | (2,114) | ||||||||||||||||||||||
Impairment losses on other assets |
(44) | (29) | (16) | (159) | (68) | (63) | (54) | (228) | ||||||||||||||||||||||
Other income |
(389) | (515) | (376) | (432) | (707) | (765) | (598) | (309) | ||||||||||||||||||||||
Underlying profit before taxes |
2,732 | 2,779 | 2,940 | 2,838 | 3,311 | 3,258 | 3,375 | 3,305 | ||||||||||||||||||||||
Tax on profit |
(810) | (915) | (904) | (767) | (1,125) | (1,125) | (1,194) | (1,104) | ||||||||||||||||||||||
Underlying profit from continuing operations |
1,922 | 1,864 | 2,036 | 2,071 | 2,186 | 2,133 | 2,180 | 2,200 | ||||||||||||||||||||||
Net profit from discontinued operations |
| 0 | (0) | 0 | | | | | ||||||||||||||||||||||
Underlying consolidated profit |
1,922 | 1,864 | 2,036 | 2,072 | 2,186 | 2,133 | 2,180 | 2,200 | ||||||||||||||||||||||
Minority interests |
288 | 338 | 341 | 305 | 319 | 395 | 371 | 361 | ||||||||||||||||||||||
Underlying attributable profit to the Group |
1,633 | 1,526 | 1,695 | 1,766 | 1,867 | 1,738 | 1,809 | 1,839 | ||||||||||||||||||||||
Net capital gains and provisions* |
| (248) | | (169) | | | (215) | (382) | ||||||||||||||||||||||
Attributable profit to the Group |
1,633 | 1,278 | 1,695 | 1,598 | 1,867 | 1,738 | 1,594 | 1,457 |
(*) Including :
| In 2Q16, capital gains from the disposal of the stake in VISA Europe (227 million) and restructuring costs (-475 million). |
| In 4Q16 PPI UK (-137 million) and restatement Santander Consumer USA (-32 million). |
| In 3Q17, integration costs in Germany (-85 million) and charge for equity stakes and intangible assets (-130 million). |
| In 4Q17, capital gains from the disposal of the stake in Allfunds Bank (297 million), USA fiscal reform (73 million), goodwill charges (-603 million) and in the US provisions for hurricanes, increased stake in Santander Consumer USA and other (-149 million). |
FINANCIAL REPORT 2017 | 7 |
JANUARY - DECEMBER » Consolidated financial report
Net fee income. Consolidated
million
4Q17 | 3Q17 | Chg. % | 2017 | 2016 | Chg. % | |||||||||||||||||||
Fees from services |
1,791 | 1,756 | 2.0 | 7,142 | 6,261 | 14.1 | ||||||||||||||||||
Mutual & pension funds |
193 | 183 | 5.3 | 762 | 757 | 0.6 | ||||||||||||||||||
Securities and custody |
259 | 262 | (0.9) | 1,079 | 913 | 18.2 | ||||||||||||||||||
Insurance |
577 | 560 | 3.1 | 2,325 | 2,249 | 3.4 | ||||||||||||||||||
Group net fee income (Ex-Popular) |
2,820 | 2,760 | 2.2 | 11,308 | 10,180 | 11.1 | ||||||||||||||||||
Popular |
129 | 128 | 288 | |||||||||||||||||||||
Group net fee income |
2,949 | 2,888 | 2.1 | 11,597 | 10,180 | 13.9 |
Operating expenses. Consolidated
million
4Q17 | 3Q17 | Chg.% | 2017 | 2016 | Chg.% | |||||||||||||||||||
Personnel expenses |
2,917 | 2,823 | 3.3 | 11,551 | 10,997 | 5.0 | ||||||||||||||||||
General expenses |
1,994 | 1,999 | (0.2) | 7,993 | 7,727 | 3.4 | ||||||||||||||||||
Information technology |
340 | 263 | 29.2 | 1,219 | 1,094 | 11.4 | ||||||||||||||||||
Communications |
120 | 141 | (15.0) | 513 | 499 | 2.8 | ||||||||||||||||||
Advertising |
204 | 187 | 9.2 | 740 | 691 | 7.2 | ||||||||||||||||||
Buildings and premises |
419 | 442 | (5.3) | 1,743 | 1,708 | 2.0 | ||||||||||||||||||
Printed and office material |
33 | 31 | 4.5 | 131 | 146 | (10.2) | ||||||||||||||||||
Taxes (other than profit tax) |
139 | 117 | 18.3 | 507 | 484 | 4.7 | ||||||||||||||||||
Other expenses |
740 | 817 | (9.3) | 3,140 | 3,105 | 1.1 | ||||||||||||||||||
Personnel and general expenses |
4,912 | 4,822 | 1.9 | 19,544 | 18,723 | 4.4 | ||||||||||||||||||
Depreciation and amortisation |
660 | 557 | 18.5 | 2,501 | 2,364 | 5.8 | ||||||||||||||||||
Group operating expenses (Ex-Popular) |
5,571 | 5,379 | 3.6 | 22,045 | 21,088 | 4.5 | ||||||||||||||||||
Popular |
390 | 388 | 873 | |||||||||||||||||||||
Group operating expenses |
5,961 | 5,766 | 3.4 | 22,918 | 21,088 | 8.7 |
8 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Consolidated financial report
Operating means. Consolidated
Employees | Branches | |||||||||||||||||||||||
31.12.17 | 31.12.16 | Chg. | 31.12.17 | 31.12.16 | Chg. | |||||||||||||||||||
Continental Europe |
56,640 | 57,259 | (619) | 4,538 | 4,805 | (267) | ||||||||||||||||||
o/w: Spain |
22,916 | 23,017 | (101) | 2,843 | 2,911 | (68) | ||||||||||||||||||
Santander Consumer Finance |
15,131 | 14,928 | 203 | 546 | 567 | (21) | ||||||||||||||||||
Poland |
11,572 | 12,001 | (429) | 576 | 658 | (82) | ||||||||||||||||||
Portugal |
5,895 | 6,306 | (411) | 563 | 657 | (94) | ||||||||||||||||||
United Kingdom |
25,971 | 25,688 | 283 | 808 | 844 | (36) | ||||||||||||||||||
Latin America |
88,713 | 86,312 | 2,401 | 5,891 | 5,818 | 73 | ||||||||||||||||||
o/w: Brazil |
47,135 | 46,728 | 407 | 3,465 | 3,431 | 34 | ||||||||||||||||||
Mexico |
18,557 | 17,608 | 949 | 1,401 | 1,389 | 12 | ||||||||||||||||||
Chile |
11,675 | 11,999 | (324) | 439 | 435 | 4 | ||||||||||||||||||
United States |
17,560 | 17,509 | 51 | 683 | 768 | (85) | ||||||||||||||||||
Operating areas |
188,884 | 186,768 | 2,116 | 11,920 | 12,235 | (315) | ||||||||||||||||||
Corporate Centre |
1,784 | 1,724 | 60 | |||||||||||||||||||||
Total Group (Ex-Popular) |
190,668 | 188,492 | 2,176 | 11,920 | 12,235 | (315) | ||||||||||||||||||
Popular |
11,583 | 1,777 | ||||||||||||||||||||||
Total Group |
202,251 | 188,492 | 13,759 | 13,697 | 12,235 | 1,462 |
Net loan-loss provisions. Consolidated
million
4Q17 | 3Q17 | Chg. % | 2017 | 2016 | Chg. % | |||||||||||||||||||
Non performing loans |
2,473 | 2,463 | 0.4 | 10,612 | 11,097 | (4.4) | ||||||||||||||||||
Country-risk |
(0) | 2 | | 5 | 3 | 69.0 | ||||||||||||||||||
Recovery of written-off assets |
(359) | (254) | 41.5 | (1,621) | (1,582) | 2.5 | ||||||||||||||||||
Group net loan-loss provisions (Ex-Popular) |
2,114 | 2,212 | (4.4) | 8,997 | 9,518 | (5.5) | ||||||||||||||||||
Popular |
68 | 38 | 114 | |||||||||||||||||||||
Group net loan-loss provisions |
2,181 | 2,250 | (3.1) | 9,111 | 9,518 | (4.3) |
Exchange rates: 1 euro / currency parity
Average (income statement) | Period-end (balance sheet) | |||||||||||||||||||||||
2017 | 2016 | 31.12.17 | 30.09.17 | 31.12.16 | ||||||||||||||||||||
US dollar |
1.127 | 1.106 | 1.199 | 1.181 | 1.054 | |||||||||||||||||||
Pound sterling |
0.876 | 0.817 | 0.887 | 0.882 | 0.856 | |||||||||||||||||||
Brazilian real |
3.594 | 3.831 | 3.973 | 3.764 | 3.431 | |||||||||||||||||||
Mexican peso |
21.291 | 20.637 | 23.661 | 21.461 | 21.772 | |||||||||||||||||||
Chilean peso |
731.538 | 747.500 | 736.922 | 754.533 | 707.612 | |||||||||||||||||||
Argentine peso |
18.566 | 16.316 | 22.637 | 20.729 | 16.705 | |||||||||||||||||||
Polish zloty |
4.256 | 4.362 | 4.177 | 4.304 | 4.410 |
FINANCIAL REPORT 2017 | 9 |
JANUARY - DECEMBER » Consolidated financial report
Balance sheet (including Banco Popular)
million
Assets | 31.12.17 | 31.12.16 | Change amount |
% | 31.12.15 | |||||||||||||||
Cash, cash balances at central banks and other demand deposits |
110,995 | 76,454 | 34,541 | 45.2 | 77,751 | |||||||||||||||
Financial assets held for trading |
125,458 | 148,187 | (22,729) | (15.3) | 146,346 | |||||||||||||||
Debt securities |
36,351 | 48,922 | (12,571) | (25.7) | 43,964 | |||||||||||||||
Equity instruments |
21,353 | 14,497 | 6,856 | 47.3 | 18,225 | |||||||||||||||
Loans and advances to customers |
8,815 | 9,504 | (689) | (7.3) | 6,081 | |||||||||||||||
Loans and advances to central banks and credit institutions |
1,696 | 3,221 | (1,525) | (47.3) | 1,352 | |||||||||||||||
Derivatives |
57,243 | 72,043 | (14,800) | (20.5) | 76,724 | |||||||||||||||
Financial assets designated at fair value |
34,781 | 31,609 | 3,172 | 10.0 | 45,043 | |||||||||||||||
Loans and advances to customers |
20,475 | 17,596 | 2,879 | 16.4 | 14,293 | |||||||||||||||
Loans and advances to central banks and credit institutions |
9,889 | 10,069 | (180) | (1.8) | 26,403 | |||||||||||||||
Other (debt securities an equity instruments) |
4,417 | 3,944 | 473 | 12.0 | 4,347 | |||||||||||||||
Available-for-sale financial assets |
133,271 | 116,774 | 16,497 | 14.1 | 122,036 | |||||||||||||||
Debt securities |
128,481 | 111,287 | 17,194 | 15.5 | 117,187 | |||||||||||||||
Equity instruments |
4,790 | 5,487 | (697) | (12.7) | 4,849 | |||||||||||||||
Loans and receivables |
903,013 | 840,004 | 63,009 | 7.5 | 836,156 | |||||||||||||||
Debt securities |
17,543 | 13,237 | 4,306 | 32.5 | 10,907 | |||||||||||||||
Loans and advances to customers |
819,625 | 763,370 | 56,255 | 7.4 | 770,474 | |||||||||||||||
Loans and advances to central banks and credit institutions |
65,845 | 63,397 | 2,448 | 3.9 | 54,775 | |||||||||||||||
Held-to-maturity investments |
13,491 | 14,468 | (977) | (6.8) | 4,355 | |||||||||||||||
Investments in subsidaries. joint ventures and associates |
6,184 | 4,836 | 1,348 | 27.9 | 3,251 | |||||||||||||||
Tangible assets |
22,975 | 23,286 | (311) | (1.3) | 25,320 | |||||||||||||||
Intangible assets |
28,683 | 29,421 | (738) | (2.5) | 29,430 | |||||||||||||||
o/w: goodwill |
25,769 | 26,724 | (955) | (3.6) | 26,960 | |||||||||||||||
Other assets |
65,454 | 54,086 | 11,368 | 21.0 | 50,572 | |||||||||||||||
Total assets |
1,444,305 | 1,339,125 | 105,180 | 7.9 | 1,340,260 | |||||||||||||||
Liabilities and shareholders equity |
||||||||||||||||||||
Financial liabilities held for trading |
107,624 | 108,765 | (1,141) | (1.0) | 105,218 | |||||||||||||||
Customer deposits |
28,179 | 9,996 | 18,183 | 181.9 | 9,187 | |||||||||||||||
Debt securities issued |
| | | | | |||||||||||||||
Deposits by central banks and credit institutions |
574 | 1,395 | (821) | (58.9) | 2,255 | |||||||||||||||
Derivatives |
57,892 | 74,369 | (16,477) | (22.2) | 76,414 | |||||||||||||||
Other |
20,979 | 23,005 | (2,026) | (8.8) | 17,362 | |||||||||||||||
Financial liabilities designated at fair value |
59,617 | 40,263 | 19,354 | 48.1 | 54,768 | |||||||||||||||
Customer deposits |
28,945 | 23,345 | 5,600 | 24.0 | 26,357 | |||||||||||||||
Debt securities issued |
3,056 | 2,791 | 265 | 9.5 | 3,373 | |||||||||||||||
Deposits by central banks and credit institutions |
27,027 | 14,127 | 12,900 | 91.3 | 25,037 | |||||||||||||||
Other |
589 | | 589 | | 1 | |||||||||||||||
Financial liabilities measured at amortized cost |
1,126,069 | 1,044,240 | 81,829 | 7.8 | 1,039,343 | |||||||||||||||
Customer deposits |
720,606 | 657,770 | 62,836 | 9.6 | 647,598 | |||||||||||||||
Debt securities issued |
214,910 | 226,078 | (11,168) | (4.9) | 222,787 | |||||||||||||||
Deposits by central banks and credit institutions |
162,714 | 133,876 | 28,838 | 21.5 | 148,081 | |||||||||||||||
Other |
27,839 | 26,516 | 1,323 | 5.0 | 20,877 | |||||||||||||||
Liabilities under insurance contracts |
1,117 | 652 | 465 | 71.4 | 627 | |||||||||||||||
Provisions |
14,490 | 14,459 | 31 | 0.2 | 14,494 | |||||||||||||||
Other liabilities |
28,556 | 28,047 | 509 | 1.8 | 27,057 | |||||||||||||||
Total liabilities |
1,337,472 | 1,236,426 | 101,046 | 8.2 | 1,241,507 | |||||||||||||||
Shareholders equity |
116,265 | 105,977 | 10,288 | 9.7 | 102,402 | |||||||||||||||
Capital stock |
8,068 | 7,291 | 777 | 10.7 | 7,217 | |||||||||||||||
Reserves |
103,608 | 94,149 | 9,459 | 10.0 | 90,765 | |||||||||||||||
Attributable profit to the Group |
6,619 | 6,204 | 415 | 6.7 | 5,966 | |||||||||||||||
Less: dividends |
(2,029) | (1,667) | (362) | 21.7 | (1,546) | |||||||||||||||
Accumulated other comprehensive income |
(21,777) | (15,039) | (6,738) | 44.8 | (14,362) | |||||||||||||||
Minority interests |
12,344 | 11,761 | 583 | 5.0 | 10,713 | |||||||||||||||
Total equity |
106,832 | 102,699 | 4,133 | 4.0 | 98,753 | |||||||||||||||
Total liabilities and equity |
1,444,305 | 1,339,125 | 105,180 | 7.9 | 1,340,260 |
10 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Consolidated financial report
Customer loans. Consolidated
million
31.12.17 | 31.12.16 | Change amount |
% | 31.12.15 | ||||||||||||||||
Commercial bills |
25,680 | 23,894 | 1,786 | 7.5 | 18,486 | |||||||||||||||
Secured loans |
434,384 | 454,676 | (20,291) | (4.5) | 481,221 | |||||||||||||||
Other term loans |
233,762 | 232,289 | 1,473 | 0.6 | 217,829 | |||||||||||||||
Finance leases |
26,569 | 25,357 | 1,212 | 4.8 | 22,900 | |||||||||||||||
Receivable on demand |
5,081 | 8,102 | (3,020) | (37.3) | 8,504 | |||||||||||||||
Credit cards receivable |
21,792 | 21,363 | 428 | 2.0 | 20,270 | |||||||||||||||
Impaired assets |
27,175 | 32,573 | (5,398) | (16.6) | 36,133 | |||||||||||||||
Gross customer loans (w/o repos) |
774,443 | 798,254 | (23,811) | (3.0) | 805,341 | |||||||||||||||
Repos |
18,378 | 16,609 | 1,769 | 10.7 | 12,024 | |||||||||||||||
Gross customer loans |
792,821 | 814,863 | (22,041) | (2.7) | 817,366 | |||||||||||||||
Loan-loss allowances |
19,424 | 24,393 | (4,969) | (20.4) | 26,517 | |||||||||||||||
Group net customer loans (Ex-Popular) |
773,398 | 790,470 | (17,072) | (2.2) | 790,848 | |||||||||||||||
Popular |
75,516 | |||||||||||||||||||
Group net customer loans |
848,914 | 790,470 | 58,444 | 7.4 | 790,848 |
Non-performing loans by quarter (excluding Popular)
million
2016 | 2017 | |||||||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||||||||||||||
Balance at beginning of period |
37,094 | 36,148 | 36,291 | 34,646 | 33,643 | 32,158 | 29,745 | 29,434 | ||||||||||||||||||||||||||||
Net additions |
1,668 | 2,221 | 1,763 | 1,710 | 1,583 | 2,255 | 2,324 | 2,263 | ||||||||||||||||||||||||||||
Increase in scope of consolidation |
13 | 664 | 21 | 36 | 18 | | | | ||||||||||||||||||||||||||||
Exchange rate differences and other |
72 | 869 | (44) | 315 | 536 | (854) | (150) | (305) | ||||||||||||||||||||||||||||
Write-offs |
(2,699) | (3,612) | (3,385) | (3,063) | (3,623) | (3,813) | (2,485) | (3,288) | ||||||||||||||||||||||||||||
Balance at period-end |
36,148 | 36,291 | 34,646 | 33,643 | 32,158 | 29,745 | 29,434 | 28,104 |
FINANCIAL REPORT 2017 | 11 |
JANUARY - DECEMBER » Consolidated financial report
12 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Consolidated financial report
Customer funds. Consolidated
million
31.12.17 | 31.12.16 | Change amount |
% | 31.12.15 | ||||||||||||||||
Demand deposits |
486,716 | 467,261 | 19,455 | 4.2 | 443,096 | |||||||||||||||
Time deposits |
173,046 | 181,089 | (8,043) | (4.4) | 202,666 | |||||||||||||||
Mutual funds |
155,794 | 147,416 | 8,378 | 5.7 | 129,077 | |||||||||||||||
Customer deposits w/o repos + Mutual funds |
815,556 | 795,766 | 19,790 | 2.5 | 774,839 | |||||||||||||||
Pension funds |
11,566 | 11,298 | 268 | 2.4 | 11,376 | |||||||||||||||
Managed portfolios |
24,203 | 23,793 | 410 | 1.7 | 25,808 | |||||||||||||||
Subtotal |
851,326 | 830,858 | 20,468 | 2.5 | 812,023 | |||||||||||||||
Repos |
53,009 | 42,761 | 10,248 | 24.0 | 37,380 | |||||||||||||||
Group customer funds (Ex-Popular) |
904,334 | 873,618 | 30,716 | 3.5 | 849,403 | |||||||||||||||
Popular |
81,369 | |||||||||||||||||||
Group customer funds |
985,703 | 873,618 | 112,085 | 12.8 | 849,403 |
FINANCIAL REPORT 2017 | 13 |
JANUARY - DECEMBER » Consolidated financial report
Eligible capital (fully loaded)*
million |
| |||||||||||||||||||
31.12.17 | 31.12.16 | Change amount |
% | 31.12.15 | ||||||||||||||||
Capital stock and reserves |
111,362 | 101,437 | 9,925 | 9.8 | 98,193 | |||||||||||||||
Attributable profit |
6,619 | 6,204 | 415 | 6.7 | 5,966 | |||||||||||||||
Dividends |
(2,998) | (2,469) | (529) | 21.4 | (2,268) | |||||||||||||||
Other retained earnings |
(23,108) | (16,116) | (6,992) | 43.4 | (15,448) | |||||||||||||||
Minority interests |
7,228 | 6,784 | 443 | 6.5 | 6,148 | |||||||||||||||
Goodwill and intangible assets |
(28,537) | (28,405) | (132) | 0.5 | (28,254) | |||||||||||||||
Other deductions |
(5,004) | (5,368) | 365 | (6.8) | (5,633) | |||||||||||||||
Core CET1 |
65,563 | 62,068 | 3,495 | 5.6 | 58,705 | |||||||||||||||
Preferred shares and other eligible T1 |
7,730 | 5,767 | 1,964 | 34.1 | 5,504 | |||||||||||||||
Tier 1 |
73,293 | 67,834 | 5,458 | 8.0 | 64,209 | |||||||||||||||
Generic funds and eligible T2 instruments |
14,295 | 13,749 | 546 | 4.0 | 11,996 | |||||||||||||||
Eligible capital |
87,588 | 81,584 | 6,004 | 7.4 | 76,205 | |||||||||||||||
Risk-weighted assets |
605,064 | 588,088 | 16,976 | 2.9 | 583,917 | |||||||||||||||
CET1 capital ratio |
10.84 | 10.55 | 0.29 | 10.05 | ||||||||||||||||
T1 capital ratio |
12.11 | 11.53 | 0.58 | 11.00 | ||||||||||||||||
Total capital ratio |
14.48 | 13.87 | 0.61 | 13.05 |
(*) 31.12.17 including Popular
14 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » The Santander share
FINANCIAL REPORT 2017 | 15 |
JANUARY - DECEMBER » Business information
» DESCRIPTION OF THE BUSINESSES
In 2017 Grupo Santander is maintaining the same general criteria applied in 2016, as well as the business segments, with the following exceptions:
| In the second quarter of 2016, and in order to make it comparable with the same period of 2015, the contribution to the Single Resolution Fund (SRF) of 120 million net was reclassified to Net capital gains and provisions from Other operating results. In the fourth quarter, this reclassification was reversed. In the information presented here, and in order to facilitate the quarterly comparison, the contribution to the SRF is recorded in Other operating results. This change affects the composition of the consolidated Group accounts, Spain, Santander Consumer Finance and Portugal, but not the attributable profit. |
| Assigning to the various countries and global segments the capital gains and non-recurring provisions that were being presented in the Corporate Centre. They relate to the second and fourth quarters of 2016 and affect the attributable profit of the units of Spain (-216 million), Santander Consumer Finance (+25 million), Poland (+29 million), United Kingdom (-30 million), United States (-32 million) and, as a counterpart of all of them, the Corporate Centre itself (+231 million). The Groups total attributable profit does not change. |
| Annual adjustment of the perimeter of the Global Customer Relationship Model between Retail Banking and Santander Global Corporate Banking. This change has no impact on the geographic businesses. |
The financial statements of each business unit have been drawn up by aggregating the Groups basic operating units. The information relates to both the accounting data of the units integrated in each segment, as well as that provided by the management information systems. In all cases, the same general principles as those used in the Group are applied.
The operating business areas are structured into two levels:
Global businesses. The activity of the operating units is distributed by the type of business: Retail Banking, Santander Global Corporate Banking and Spain Real Estate Activity. |
Retail Banking. This covers all customer banking businesses, including consumer finance, except those of corporate banking, which are managed through the Global Customer Relationship Model. The results of the hedging positions in each country are also included, conducted within the sphere of each ones Assets and Liabilities Committee. |
Santander Global Corporate Banking (SGCB). This business reflects the revenues from global corporate banking, investment banking and markets worldwide including treasuries managed globally (always after the appropriate distribution with commercial banking customers), as well as equities business. |
The acquired perimeter of Banco Popular is temporarily presented separately.
In addition to these operating units, which report by geographic area and by businesses, the Group continues to maintain the area of Corporate Centre. This area incorporates 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 issues.
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.
The figures of the Groups various units have been drawn up in accordance with these criteria, and so do not coincide individually with those published by each unit.
16 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
Net operating income | / 3Q17 | / 2016 | ||||||||||||||||||||||||||
million | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||
Continental Europe |
1,506 | (8.9) | (8.8) | 6,338 | 5.2 | 4.9 | ||||||||||||||||||||||
o/w: Spain |
528 | (15.0) | (15.0) | 2,434 | 5.3 | 5.3 | ||||||||||||||||||||||
Santander Consumer Finance |
625 | (3.9) | (3.5) | 2,506 | 6.3 | 6.2 | ||||||||||||||||||||||
Poland |
218 | 4.5 | 3.9 | 814 | 10.8 | 8.1 | ||||||||||||||||||||||
Portugal |
143 | (14.9) | (14.9) | 595 | (4.0) | (4.0) | ||||||||||||||||||||||
United Kingdom |
623 | (11.3) | (12.3) | 2,855 | 0.2 | 7.4 | ||||||||||||||||||||||
Latin America |
3,361 | (2.4) | 0.4 | 13,779 | 24.4 | 20.6 | ||||||||||||||||||||||
o/w: Brazil |
2,223 | (3.3) | (0.5) | 9,193 | 34.3 | 26.0 | ||||||||||||||||||||||
Mexico |
485 | (9.6) | (3.5) | 2,078 | 7.8 | 11.2 | ||||||||||||||||||||||
Chile |
382 | 8.9 | 7.4 | 1,498 | 4.4 | 2.1 | ||||||||||||||||||||||
United States |
824 | (4.3) | (4.2) | 3,761 | (13.2) | (11.6) | ||||||||||||||||||||||
Operating areas |
6,314 | (5.2) | (3.8) | 26,734 | 10.1 | 9.7 | ||||||||||||||||||||||
Corporate Centre |
(359) | (14.3) | (14.3) | (1,696) | 11.9 | 11.9 | ||||||||||||||||||||||
Total Group (Excluding Popular) |
5,955 | (4.6) | (3.1) | 25,038 | 10.0 | 9.5 | ||||||||||||||||||||||
Popular |
146 | 436 | ||||||||||||||||||||||||||
Total Group |
6,101 | (5.9) | (4.5) | 25,473 | 11.9 | 11.4 | ||||||||||||||||||||||
Attributable profit to the Group | / 3Q17 | / 2016 | ||||||||||||||||||||||||||
million | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||
Continental Europe* |
735 | (2.0) | (1.9) | 2,953 | 13.6 | 13.4 | ||||||||||||||||||||||
o/w: Spain* |
265 | (14.8) | (14.8) | 1,180 | 15.4 | 15.4 | ||||||||||||||||||||||
Santander Consumer Finance* |
311 | 0.6 | 1.0 | 1,254 | 14.7 | 14.6 | ||||||||||||||||||||||
Poland* |
81 | 6.7 | 6.1 | 300 | 10.4 | 7.7 | ||||||||||||||||||||||
Portugal |
104 | 0.5 | 0.5 | 440 | 10.2 | 10.2 | ||||||||||||||||||||||
United Kingdom* |
297 | (21.2) | (22.0) | 1,498 | (10.9) | (4.4) | ||||||||||||||||||||||
Latin America |
1,114 | 4.2 | 6.7 | 4,284 | 26.5 | 24.0 | ||||||||||||||||||||||
o/w: Brazil |
642 | (2.6) | 0.2 | 2,544 | 42.5 | 33.7 | ||||||||||||||||||||||
Mexico |
178 | (2.0) | 4.1 | 710 | 12.9 | 16.5 | ||||||||||||||||||||||
Chile |
146 | 2.3 | 1.2 | 586 | 14.1 | 11.7 | ||||||||||||||||||||||
United States* |
71 | (24.4) | (23.5) | 408 | 3.2 | 5.2 | ||||||||||||||||||||||
Operating areas* |
2,217 | (3.2) | (2.1) | 9,143 | 13.4 | 14.1 | ||||||||||||||||||||||
Corporate Centre* |
(378) | (21.3) | (21.3) | (1,889) | 31.3 | 31.3 | ||||||||||||||||||||||
Total Group (Excluding Popular)* |
1,839 | 1.7 | 2.9 | 7,253 | 9.5 | 10.3 | ||||||||||||||||||||||
Popular* |
85 | 263 | ||||||||||||||||||||||||||
Total Group* |
1,924 | (2.7) | (1.4) | 7,516 | 13.5 | 14.3 | ||||||||||||||||||||||
Net capital gains and provisions |
(382) | (25.7) | (25.7) | (897) | 115.2 | 117.0 | ||||||||||||||||||||||
Total Group |
1,542 | 5.5 | 6.9 | 6,619 | 6.7 | 7.4 | ||||||||||||||||||||||
(*) In the units, underlying attributable profit (excluding net capital gains and provisions) |
||||||||||||||||||||||||||||
Gross customer loans w/o repos | / 3Q17 | / 2016 | ||||||||||||||||||||||||||
million | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||
Continental Europe |
307,340 | 1.1 | 1.0 | 307,340 | 1.6 | 1.6 | ||||||||||||||||||||||
o/w: Spain |
148,585 | (0.2) | (0.2) | 148,585 | (1.6) | (1.6) | ||||||||||||||||||||||
Santander Consumer Finance |
92,431 | 3.9 | 4.4 | 92,431 | 5.3 | 6.2 | ||||||||||||||||||||||
Poland |
22,974 | 3.4 | 0.3 | 22,974 | 11.0 | 5.1 | ||||||||||||||||||||||
Portugal |
31,296 | 0.3 | 0.3 | 31,296 | 7.8 | 7.8 | ||||||||||||||||||||||
United Kingdom |
235,783 | 0.0 | 0.7 | 235,783 | (2.8) | 0.8 | ||||||||||||||||||||||
Latin America |
151,542 | (2.1) | 2.3 | 151,542 | (4.8) | 6.7 | ||||||||||||||||||||||
o/w: Brazil |
74,341 | (1.7) | 3.8 | 74,341 | (7.4) | 7.2 | ||||||||||||||||||||||
Mexico |
26,962 | (8.1) | 1.3 | 26,962 | (3.8) | 4.6 | ||||||||||||||||||||||
Chile |
38,249 | 2.6 | 0.2 | 38,249 | (1.4) | 2.7 | ||||||||||||||||||||||
United States |
75,389 | (1.7) | (0.2) | 75,389 | (15.9) | (4.3) | ||||||||||||||||||||||
Operating areas |
770,054 | (0.2) | 1.0 | 770,054 | (3.0) | 1.7 | ||||||||||||||||||||||
Total Group (Excluding Popular) |
774,443 | (0.4) | 0.8 | 774,443 | (3.0) | 1.7 | ||||||||||||||||||||||
Popular |
79,533 | (0.0) | (0.0) | 79,533 | ||||||||||||||||||||||||
Total Group |
853,976 | (0.4) | 0.7 | 853,976 | 7.0 | 12.1 | ||||||||||||||||||||||
Customer funds (deposits w/o repos + mutual funds) | / 3Q17 | / 2016 | ||||||||||||||||||||||||||
million | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||
Continental Europe |
352,726 | 3.3 | 3.1 | 352,726 | 9.3 | 9.0 | ||||||||||||||||||||||
o/w: Spain |
251,196 | 4.6 | 4.6 | 251,196 | 11.7 | 11.7 | ||||||||||||||||||||||
Santander Consumer Finance |
35,398 | (1.1) | (0.6) | 35,398 | 1.0 | 1.7 | ||||||||||||||||||||||
Poland |
27,803 | 3.6 | 0.6 | 27,803 | 7.4 | 1.7 | ||||||||||||||||||||||
Portugal |
32,213 | 0.6 | 0.6 | 32,213 | 2.5 | 2.5 | ||||||||||||||||||||||
United Kingdom |
210,305 | 1.2 | 1.8 | 210,305 | (0.1) | 3.5 | ||||||||||||||||||||||
Latin America |
193,264 | (4.6) | 0.3 | 193,264 | 3.1 | 16.4 | ||||||||||||||||||||||
o/w: Brazil |
106,959 | (5.4) | (0.1) | 106,959 | 7.2 | 24.2 | ||||||||||||||||||||||
Mexico |
35,548 | (8.0) | 1.4 | 35,548 | (2.4) | 6.0 | ||||||||||||||||||||||
Chile |
33,104 | (0.3) | (2.7) | 33,104 | (4.2) | (0.2) | ||||||||||||||||||||||
United States |
59,329 | (2.6) | (1.1) | 59,329 | (20.0) | (9.0) | ||||||||||||||||||||||
Operating areas |
815,624 | 0.3 | 1.8 | 815,624 | 2.6 | 7.6 | ||||||||||||||||||||||
Total Group (Excluding Popular) |
815,849 | 0.3 | 1.8 | 815,849 | 2.5 | 7.5 | ||||||||||||||||||||||
Popular |
74,286 | (6.3) | (6.3) | 74,286 | ||||||||||||||||||||||||
Total Group |
890,135 | (0.2) | 1.1 | 890,135 | 11.9 | 17.3 |
FINANCIAL REPORT 2017 | 17 |
JANUARY - DECEMBER » Business information by geographic area
Continental Europe (Excluding Popular) ( million)
/ 3Q17 | / 2016 |
|||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||
Net interest income |
2,066 | (0.5) | (0.3) | 8,267 | 1.3 | 1.0 | ||||||||||||||||||||||
Net fee income |
1,003 | 3.5 | 3.4 | 3,882 | 11.0 | 10.7 | ||||||||||||||||||||||
Gains (losses) on financial transactions |
157 | (10.1) | (10.2) | 625 | (23.5) | (23.7) | ||||||||||||||||||||||
Other operating income |
49 | (55.8) | (55.7) | 379 | 14.6 | 15.4 | ||||||||||||||||||||||
Gross income |
3,275 | (1.6) | (1.6) | 13,154 | 2.7 | 2.5 | ||||||||||||||||||||||
Operating expenses |
(1,769) | 5.4 | 5.5 | (6,815) | 0.5 | 0.3 | ||||||||||||||||||||||
General administrative expenses |
(1,646) | 5.4 | 5.5 | (6,343) | 0.0 | (0.2) | ||||||||||||||||||||||
Personnel |
(837) | 3.4 | 3.5 | (3,277) | 0.6 | 0.4 | ||||||||||||||||||||||
Other general administrative expenses |
(808) | 7.6 | 7.7 | (3,066) | (0.6) | (0.8) | ||||||||||||||||||||||
Depreciation and amortisation |
(123) | 5.4 | 5.5 | (472) | 7.7 | 7.3 | ||||||||||||||||||||||
Net operating income |
1,506 | (8.9) | (8.8) | 6,338 | 5.2 | 4.9 | ||||||||||||||||||||||
Net loan-loss provisions |
(221) | (15.4) | (15.4) | (995) | (25.9) | (26.1) | ||||||||||||||||||||||
Other income |
(119) | (36.3) | (36.3) | (726) | 8.2 | 7.9 | ||||||||||||||||||||||
Underlying profit before taxes |
1,166 | (3.2) | (3.1) | 4,617 | 15.1 | 14.7 | ||||||||||||||||||||||
Tax on profit |
(331) | (6.4) | (6.3) | (1,283) | 18.4 | 18.1 | ||||||||||||||||||||||
Underlying profit from continuing operations |
835 | (1.9) | (1.8) | 3,334 | 13.9 | 13.5 | ||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||
Underlying consolidated profit |
835 | (1.9) | (1.8) | 3,334 | 13.9 | 13.5 | ||||||||||||||||||||||
Minority interests |
100 | (1.2) | (1.3) | 381 | 15.5 | 14.4 | ||||||||||||||||||||||
Underlying attributable profit to the Group |
735 | (2.0) | (1.9) | 2,953 | 13.6 | 13.4 | ||||||||||||||||||||||
Net capital gains and provisions* |
(0) | (99.7) | (99.7) | (85) | (49.5) | (49.3) | ||||||||||||||||||||||
Attributable profit to the Group |
735 | 10.5 | 10.6 | 2,868 | 18.0 | 17.7 | ||||||||||||||||||||||
(*) In 2017, integration costs in Germany. In 2016, capital gains from the disposal of the stake in VISA Europe. |
||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||
Customer loans |
307,339 | 1.4 | 1.3 | 307,339 | 3.4 | 3.5 | ||||||||||||||||||||||
Cash, central banks and credit institutions |
114,658 | 0.9 | 0.9 | 114,658 | 48.5 | 49.0 | ||||||||||||||||||||||
Debt securities |
82,893 | 2.5 | 2.3 | 82,893 | 2.8 | 2.5 | ||||||||||||||||||||||
o/w: available for sale |
56,820 | 0.9 | 0.6 | 56,820 | 4.3 | 3.9 | ||||||||||||||||||||||
Other financial assets |
38,234 | 3.4 | 3.4 | 38,234 | (6.0) | (6.0) | ||||||||||||||||||||||
Other assets |
26,300 | 1.5 | 1.5 | 26,300 | 8.0 | 8.6 | ||||||||||||||||||||||
Total assets |
569,424 | 1.6 | 1.5 | 569,424 | 9.5 | 9.6 | ||||||||||||||||||||||
Customer deposits |
289,605 | 2.6 | 2.4 | 289,605 | 7.3 | 7.0 | ||||||||||||||||||||||
Central banks and credit institutions |
135,901 | 1.0 | 1.1 | 135,901 | 29.2 | 30.2 | ||||||||||||||||||||||
Debt securities issued |
50,704 | 3.7 | 4.1 | 50,704 | (4.4) | (4.0) | ||||||||||||||||||||||
Other financial liabilities |
43,558 | (6.9) | (7.0) | 43,558 | (11.2) | (11.2) | ||||||||||||||||||||||
Other liabilities |
13,713 | 6.1 | 6.0 | 13,713 | 45.1 | 44.7 | ||||||||||||||||||||||
Total liabilities |
533,480 | 1.5 | 1.5 | 533,480 | 9.6 | 9.7 | ||||||||||||||||||||||
Total equity |
35,944 | 1.7 | 1.6 | 35,944 | 7.3 | 7.4 | ||||||||||||||||||||||
Other managed and marketed customer funds |
85,557 | 5.0 | 4.8 | 85,557 | 16.2 | 16.1 | ||||||||||||||||||||||
Mutual funds |
64,401 | 5.8 | 5.6 | 64,401 | 19.2 | 18.9 | ||||||||||||||||||||||
Pension funds |
11,566 | 1.9 | 1.9 | 11,566 | 2.4 | 2.4 | ||||||||||||||||||||||
Managed portfolios |
9,590 | 3.5 | 3.6 | 9,590 | 15.3 | 16.8 | ||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||
Loans w/o repos |
307,340 | 1.1 | 1.0 | 307,340 | 1.6 | 1.6 | ||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
352,726 | 3.3 | 3.1 | 352,726 | 9.3 | 9.0 | ||||||||||||||||||||||
Ratios (%) and operating means |
||||||||||||||||||||||||||||
Underlying RoTE |
9.53 | (0.33) | 9.83 | 1.32 | ||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
54.0 | 3.6 | 51.8 | (1.1) | ||||||||||||||||||||||||
NPL ratio |
4.50 | (0.45) | 4.50 | (1.42) | ||||||||||||||||||||||||
NPL coverage |
58.0 | (0.1) | 58.0 | (2.0) | ||||||||||||||||||||||||
Number of employees |
56,640 | (0.1) | 56,640 | (1.1) | ||||||||||||||||||||||||
Number of branches |
4,538 | (1.2) | 4,538 | (5.6) |
18 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
Spain (Excluding Popular) ( million)
P&L | 4Q17 | % / 3Q17 | 2017 | % / 2016 | ||||||||||||
Net interest income |
686 | (5.5) | 2,909 | (5.5) | ||||||||||||
Net fee income |
562 | 10.3 | 2,067 | 16.1 | ||||||||||||
Gains (losses) on financial transactions |
121 | 0.9 | 429 | (28.0) | ||||||||||||
Other operating income |
(0) | | 289 | 87.0 | ||||||||||||
Gross income |
1,368 | (4.7) | 5,694 | 1.5 | ||||||||||||
Operating expenses |
(841) | 3.2 | (3,259) | (1.1) | ||||||||||||
General administrative expenses |
(792) | 2.7 | (3,080) | (2.4) | ||||||||||||
Personnel |
(398) | (0.7) | (1,597) | (2.1) | ||||||||||||
Other general administrative expenses |
(394) | 6.4 | (1,482) | (2.7) | ||||||||||||
Depreciation and amortisation |
(49) | 11.3 | (180) | 28.1 | ||||||||||||
Net operating income |
528 | (15.0) | 2,434 | 5.3 | ||||||||||||
Net loan-loss provisions |
(110) | 5.8 | (513) | (12.3) | ||||||||||||
Other income |
(23) | (59.2) | (207) | (22.6) | ||||||||||||
Underlying profit before taxes |
395 | (14.3) | 1,714 | 17.5 | ||||||||||||
Tax on profit |
(128) | (12.0) | (518) | 24.4 | ||||||||||||
Underlying profit from continuing operations |
267 | (15.4) | 1,197 | 14.7 | ||||||||||||
Net profit from discontinued operations |
| | | | ||||||||||||
Underlying consolidated profit |
267 | (15.4) | 1,197 | 14.7 | ||||||||||||
Minority interests |
2 | (57.4) | 17 | (18.2) | ||||||||||||
Underlying attributable profit to the Group |
265 | (14.8) | 1,180 | 15.4 | ||||||||||||
Net capital gains and provisions* |
| | | (100.0) | ||||||||||||
Attributable profit to the Group |
265 | (14.8) | 1,180 | 46.4 | ||||||||||||
(*) In 2016, capital gains from the disposal of the stake in VISA Europe and restructuring costs. |
||||||||||||||||
Balance sheet |
||||||||||||||||
Customer loans |
153,632 | (0.0) | 153,632 | 0.5 | ||||||||||||
Cash, central banks and credit institutions |
89,585 | 6.6 | 89,585 | 65.3 | ||||||||||||
Debt securities |
61,836 | 2.5 | 61,836 | 6.5 | ||||||||||||
o/w: available for sale |
42,780 | 0.5 | 42,780 | 10.5 | ||||||||||||
Other financial assets |
35,391 | 3.7 | 35,391 | (6.2) | ||||||||||||
Other assets |
10,354 | (0.0) | 10,354 | 9.3 | ||||||||||||
Total assets |
350,798 | 2.4 | 350,798 | 12.3 | ||||||||||||
Customer deposits |
193,639 | 3.9 | 193,639 | 9.5 | ||||||||||||
Central banks and credit institutions |
79,146 | 4.3 | 79,146 | 52.0 | ||||||||||||
Debt securities issued |
16,713 | 1.8 | 16,713 | (19.9) | ||||||||||||
Other financial liabilities |
41,168 | (7.8) | 41,168 | (12.3) | ||||||||||||
Other liabilities |
7,883 | 12.0 | 7,883 | 88.3 | ||||||||||||
Total liabilities |
338,549 | 2.5 | 338,549 | 12.5 | ||||||||||||
Total equity |
12,249 | 1.5 | 12,249 | 6.5 | ||||||||||||
Other managed and marketed customer funds |
77,221 | 4.9 | 77,221 | 15.9 | ||||||||||||
Mutual funds |
58,438 | 5.7 | 58,438 | 18.4 | ||||||||||||
Pension funds |
10,563 | 1.5 | 10,563 | 2.0 | ||||||||||||
Managed portfolios |
8,221 | 3.3 | 8,221 | 18.6 | ||||||||||||
Pro memoria: |
||||||||||||||||
Loans w/o repos |
148,585 | (0.2) | 148,585 | (1.6) | ||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
251,196 | 4.6 | 251,196 | 11.7 | ||||||||||||
Ratios (%) and operating means |
||||||||||||||||
Underlying RoTE |
8.83 | (1.70) | 10.11 | 1.22 | ||||||||||||
Efficiency ratio (with amortisations) |
61.4 | 4.7 | 57.2 | (1.5) | ||||||||||||
NPL ratio |
4.72 | (0.27) | 4.72 | (0.69) | ||||||||||||
NPL coverage |
45.9 | 0.7 | 45.9 | (2.4) | ||||||||||||
Number of employees |
22,916 | 0.1 | 22,916 | (0.4) | ||||||||||||
Number of branches |
2,843 | (0.5) | 2,843 | (2.3) |
FINANCIAL REPORT 2017 | 19 |
JANUARY - DECEMBER » Business information by geographic area
Santander Consumer Finance ( million)
/ 3Q17 |
/ 2016 |
|||||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||||
Net interest income |
906 | 0.9 | 1.3 | 3, 571 | 5.3 | 5.2 | ||||||||||||||||||||||||
Net fee income |
204 | (8.7) | (8.6) | 878 | 1.9 | 1.8 | ||||||||||||||||||||||||
Gains (losses) on financial transactions |
3 | | | 3 | | | ||||||||||||||||||||||||
Other operating income |
19 | 29.2 | 27.4 | 32 | 41.0 | 45.8 | ||||||||||||||||||||||||
Gross income |
1,132 | (0.3) | 0.1 | 4,484 | 5.2 | 5.1 | ||||||||||||||||||||||||
Operating expenses |
(506) | 4.6 | 4.9 | (1,978) | 3.9 | 3.8 | ||||||||||||||||||||||||
General administrative expenses |
(461) | 4.9 | 5.2 | (1,798) | 4.6 | 4.5 | ||||||||||||||||||||||||
Personnel |
(220) | 7.3 | 7.6 | (848) | 4.7 | 4.6 | ||||||||||||||||||||||||
Other general administrative expenses |
(240) | 2.8 | 3.1 | (951) | 4.5 | 4.4 | ||||||||||||||||||||||||
Depreciation and amortisation |
(46) | 1.5 | 1.9 | (180) | (3.0) | (3.1) | ||||||||||||||||||||||||
Net operating income |
625 | (3.9) | (3.5) | 2,506 | 6.3 | 6.2 | ||||||||||||||||||||||||
Net loan-loss provisions |
(58) | (34.9) | (34.7) | (266) | (31.4) | (31.5) | ||||||||||||||||||||||||
Other income |
(55) | 85.1 | 85.1 | (157) | (6.4) | (6.5) | ||||||||||||||||||||||||
Underlying profit before taxes |
512 | (3.6) | (3.3) | 2,083 | 15.5 | 15.4 | ||||||||||||||||||||||||
Tax on profit |
(138) | (13.9) | (13.5) | (588) | 12.9 | 12.8 | ||||||||||||||||||||||||
Underlying profit from continuing operations |
373 | 0.8 | 1.1 | 1,495 | 16.6 | 16.5 | ||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||||
Underlying consolidated profit |
373 | 0.8 | 1.1 | 1,495 | 16.6 | 16.5 | ||||||||||||||||||||||||
Minority interests |
62 | 1.9 | 1.8 | 241 | 27.9 | 27.5 | ||||||||||||||||||||||||
Underlying attributable profit to the Group |
311 | 0.6 | 1.0 | 1,254 | 14.7 | 14.6 | ||||||||||||||||||||||||
Net capital gains and provisions* |
(0) | (99.7) | (99.7) | (85) | | | ||||||||||||||||||||||||
Attributable profit to the Group |
311 | 38.6 | 39.1 | 1,168 | 4.5 | 4.4 | ||||||||||||||||||||||||
(*) In 2017, integration costs in Germany. In 2016, capital gains from the disposal of the stake in VISA Europe. |
||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||
Customer loans |
90,091 | 4.0 | 4.6 | 90,091 | 5.8 | 6.7 | ||||||||||||||||||||||||
Cash, central banks and credit institutions |
4,895 | (8.4) | (7.6) | 4,895 | (31.5) | (30.3) | ||||||||||||||||||||||||
Debt securities |
3,220 | (10.5) | (10.4) | 3,220 | (18.0) | (17.1) | ||||||||||||||||||||||||
o/w: available for sale |
3,220 | (9.1) | (8.9) | 3,220 | (15.8) | (14.9) | ||||||||||||||||||||||||
Other financial assets |
22 | (8.0) | (7.5) | 22 | (43.5) | (41.8) | ||||||||||||||||||||||||
Other assets |
3,508 | (0.5) | (0.3) | 3,508 | 5.2 | 5.7 | ||||||||||||||||||||||||
Total assets |
101,735 | 2.7 | 3.2 | 101,735 | 2.1 | 3.0 | ||||||||||||||||||||||||
Customer deposits |
35,443 | (1.1) | (0.6) | 35,443 | 1.1 | 1.8 | ||||||||||||||||||||||||
Central banks and credit institutions |
23,342 | 6.5 | 6.9 | 23,342 | (0.1) | 0.9 | ||||||||||||||||||||||||
Debt securities issued |
28,694 | 5.4 | 6.0 | 28,694 | 2.9 | 4.0 | ||||||||||||||||||||||||
Other financial liabilities |
996 | 11.3 | 11.2 | 996 | 14.5 | 14.4 | ||||||||||||||||||||||||
Other liabilities |
3,637 | (3.8) | (3.6) | 3,637 | 10.9 | 11.3 | ||||||||||||||||||||||||
Total liabilities |
92,112 | 2.7 | 3.2 | 92,112 | 1.8 | 2.7 | ||||||||||||||||||||||||
Total equity |
9,623 | 2.0 | 2.7 | 9,623 | 5.1 | 6.3 | ||||||||||||||||||||||||
Other managed and marketed customer funds |
8 | 2.6 | 2.6 | 8 | 4.9 | 4.9 | ||||||||||||||||||||||||
Mutual funds |
2 | (0.5) | (0.5) | 2 | (13.4) | (13.4) | ||||||||||||||||||||||||
Pension funds |
6 | 3.3 | 3.3 | 6 | 10.6 | 10.6 | ||||||||||||||||||||||||
Managed portfolios |
| | | | | | ||||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||||
Loans w/o repos |
92,431 | 3.9 | 4.4 | 92,431 | 5.3 | 6.2 | ||||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
35,398 | (1.1) | (0.6) | 35,398 | 1.0 | 1.7 | ||||||||||||||||||||||||
Ratios (%) and operating means |
||||||||||||||||||||||||||||||
Underlying RoTE |
15.72 | (0.25) | 16.44 | 1.60 | ||||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
44.7 | 2.1 | 44.1 | (0.6) | ||||||||||||||||||||||||||
NPL ratio |
2.50 | (0.10) | 2.50 | (0.18) | ||||||||||||||||||||||||||
NPL coverage |
101.4 | (2.9) | 101.4 | (7.7) | ||||||||||||||||||||||||||
Number of employees |
15,131 | 0.6 | 15,131 | 1.4 | ||||||||||||||||||||||||||
Number of branches |
546 | (0.5) | 546 | (3.7) |
20 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
Poland ( million)
/ 3Q17 |
/ 2016 |
|||||||||||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||||||||||
Net interest income |
243 | 3.2 | 2.6 | 928 | 11.4 | 8.6 | ||||||||||||||||||||||||||||||
Net fee income |
116 | 1.9 | 1.3 | 443 | 10.8 | 8.1 | ||||||||||||||||||||||||||||||
Gains (losses) on financial transactions |
13 | (1.3) | (1.9) | 52 | (38.2) | (39.7) | ||||||||||||||||||||||||||||||
Other operating income |
5 | | | (3) | 39.8 | 36.4 | ||||||||||||||||||||||||||||||
Gross income |
378 | 5.5 | 4.9 | 1,419 | 8.0 | 5.4 | ||||||||||||||||||||||||||||||
Operating expenses |
(160) | 6.8 | 6.2 | (605) | 4.5 | 1.9 | ||||||||||||||||||||||||||||||
General administrative expenses |
(145) | 7.9 | 7.3 | (548) | 5.1 | 2.5 | ||||||||||||||||||||||||||||||
Personnel |
(82) | 2.8 | 2.2 | (319) | 5.4 | 2.9 | ||||||||||||||||||||||||||||||
Other general administrative expenses |
(63) | 15.4 | 14.8 | (229) | 4.6 | 2.0 | ||||||||||||||||||||||||||||||
Depreciation and amortisation |
(14) | (3.2) | (3.8) | (58) | (0.8) | (3.2) | ||||||||||||||||||||||||||||||
Net operating income |
218 | 4.5 | 3.9 | 814 | 10.8 | 8.1 | ||||||||||||||||||||||||||||||
Net loan-loss provisions |
(40) | 11.0 | 10.4 | (137) | (5.2) | (7.5) | ||||||||||||||||||||||||||||||
Other income |
(19) | (33.6) | (34.2) | (96) | 16.8 | 13.9 | ||||||||||||||||||||||||||||||
Underlying profit before taxes |
159 | 10.3 | 9.7 | 581 | 14.3 | 11.6 | ||||||||||||||||||||||||||||||
Tax on profit |
(43) | 26.6 | 26.0 | (148) | 22.7 | 19.8 | ||||||||||||||||||||||||||||||
Underlying profit from continuing operations |
116 | 5.3 | 4.7 | 432 | 11.7 | 9.0 | ||||||||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||||||||||
Underlying consolidated profit |
116 | 5.3 | 4.7 | 432 | 11.7 | 9.0 | ||||||||||||||||||||||||||||||
Minority interests |
35 | 2.1 | 1.5 | 132 | 14.8 | 12.1 | ||||||||||||||||||||||||||||||
Underlying attributable profit to the Group |
81 | 6.7 | 6.1 | 300 | 10.4 | 7.7 | ||||||||||||||||||||||||||||||
Net capital gains and provisions* |
| | | | (100.0) | (100.0) | ||||||||||||||||||||||||||||||
Attributable profit to the Group |
81 | 6.7 | 6.1 | 300 | (0.4) | (2.8) | ||||||||||||||||||||||||||||||
(*) In 2016, capital gains from the disposal of the stake in VISA Europe and restructuring costs. |
| |||||||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||
Customer loans |
22,220 | 3.4 | 0.4 | 22,220 | 11.2 | 5.3 | ||||||||||||||||||||||||||||||
Cash, central banks and credit institutions |
1,661 | (10.0) | (12.6) | 1,661 | (17.8) | (22.2) | ||||||||||||||||||||||||||||||
Debt securities |
6,786 | 14.0 | 10.6 | 6,786 | 7.7 | 2.0 | ||||||||||||||||||||||||||||||
o/w: available for sale |
5,959 | 7.6 | 4.5 | 5,959 | 3.2 | (2.3) | ||||||||||||||||||||||||||||||
Other financial assets |
491 | (14.5) | (17.0) | 491 | (8.5) | (13.3) | ||||||||||||||||||||||||||||||
Other assets |
1,014 | 10.4 | 7.1 | 1,014 | 7.8 | 2.1 | ||||||||||||||||||||||||||||||
Total assets |
32,171 | 4.5 | 1.4 | 32,171 | 8.0 | 2.3 | ||||||||||||||||||||||||||||||
Customer deposits |
24,255 | 4.7 | 1.6 | 24,255 | 6.5 | 0.8 | ||||||||||||||||||||||||||||||
Central banks and credit institutions |
952 | (2.6) | (5.5) | 952 | 15.5 | 9.4 | ||||||||||||||||||||||||||||||
Debt securities issued |
821 | 16.6 | 13.2 | 821 | 62.8 | 54.2 | ||||||||||||||||||||||||||||||
Other financial liabilities |
523 | (2.4) | (5.3) | 523 | 2.3 | (3.1) | ||||||||||||||||||||||||||||||
Other liabilities |
684 | (4.9) | (7.7) | 684 | (25.4) | (29.3) | ||||||||||||||||||||||||||||||
Total liabilities |
27,235 | 4.3 | 1.3 | 27,235 | 6.7 | 1.0 | ||||||||||||||||||||||||||||||
Total equity |
4,936 | 5.6 | 2.5 | 4,936 | 16.4 | 10.2 | ||||||||||||||||||||||||||||||
Other managed and marketed customer funds |
4,007 | 5.6 | 2.5 | 4,007 | 25.2 | 18.5 | ||||||||||||||||||||||||||||||
Mutual funds |
3,900 | 5.4 | 2.3 | 3,900 | 25.1 | 18.5 | ||||||||||||||||||||||||||||||
Pension funds |
| | | | | | ||||||||||||||||||||||||||||||
Managed portfolios |
108 | 12.7 | 9.4 | 108 | 28.4 | 21.7 | ||||||||||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||||||||||
Loans w/o repos |
22,974 | 3.4 | 0.3 | 22,974 | 11.0 | 5.1 | ||||||||||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
27,803 | 3.6 | 0.6 | 27,803 | 7.4 | 1.7 | ||||||||||||||||||||||||||||||
Ratios (%) and operating means |
||||||||||||||||||||||||||||||||||||
Underlying RoTE |
11.95 | 0.32 | 11.56 | (0.00) | ||||||||||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
42.2 | 0.5 | 42.6 | (1.4) | ||||||||||||||||||||||||||||||||
NPL ratio |
4.57 | (0.13) | 4.57 | (0.85) | ||||||||||||||||||||||||||||||||
NPL coverage |
68.2 | 0.6 | 68.2 | 7.2 | ||||||||||||||||||||||||||||||||
Number of employees |
11,572 | (1.0) | 11,572 | (3.6) | ||||||||||||||||||||||||||||||||
Number of branches |
576 | (2.7) | 576 | (12.5) |
FINANCIAL REPORT 2017 | 21 |
JANUARY - DECEMBER » Business information by geographic area
Portugal (Excluding Popular) ( million) |
P&L | 4Q17 | % / 3Q17 | 2017 | % / 2016 | ||||||||||||||||||
Net interest income |
181 | 2.0 | 697 | (4.9) | ||||||||||||||||||
Net fee income |
84 | (0.2) | 341 | 8.7 | ||||||||||||||||||
Gains (losses) on financial transactions |
8 | (75.8) | 84 | (25.4) | ||||||||||||||||||
Other operating income |
8 | (27.9) | 24 | (53.2) | ||||||||||||||||||
Gross income |
281 | (7.8) | 1,145 | (5.3) | ||||||||||||||||||
Operating expenses |
(138) | 0.9 | (550) | (6.7) | ||||||||||||||||||
General administrative expenses |
(128) | 0.8 | (512) | (7.1) | ||||||||||||||||||
Personnel |
(80) | (1.6) | (326) | (3.9) | ||||||||||||||||||
Other general administrative expenses |
(49) | 5.1 | (186) | (12.3) | ||||||||||||||||||
Depreciation and amortisation |
(9) | 1.9 | (38) | 0.3 | ||||||||||||||||||
Net operating income |
143 | (14.9) | 595 | (4.0) | ||||||||||||||||||
Net loan-loss provisions |
12 | | 12 | | ||||||||||||||||||
Other income |
(1) | (87.3) | (35) | 3.0 | ||||||||||||||||||
Underlying profit before taxes |
155 | 8.8 | 573 | 7.5 | ||||||||||||||||||
Tax on profit |
(50) | 31.3 | (130) | (0.4) | ||||||||||||||||||
Underlying profit from continuing operations |
105 | 0.6 | 442 | 10.1 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | ||||||||||||||||||
Underlying consolidated profit |
105 | 0.6 | 442 | 10.1 | ||||||||||||||||||
Minority interests |
1 | 25.0 | 2 | (5.0) | ||||||||||||||||||
Underlying attributable profit to the Group |
104 | 0.5 | 440 | 10.2 | ||||||||||||||||||
Net capital gains and provisions |
| | | | ||||||||||||||||||
Attributable profit to the Group |
104 | 0.5 | 440 | 10.2 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||
Customer loans |
30,210 | 1.2 | 30,210 | 10.5 | ||||||||||||||||||
Cash, central banks and credit institutions |
4,517 | (9.3) | 4,517 | 83.7 | ||||||||||||||||||
Debt securities |
10,018 | (0.5) | 10,018 | (13.8) | ||||||||||||||||||
o/w: available for sale |
4,066 | 3.4 | 4,066 | (28.5) | ||||||||||||||||||
Other financial assets |
1,602 | 0.1 | 1,602 | (3.9) | ||||||||||||||||||
Other assets |
1,855 | 4.2 | 1,855 | 6.4 | ||||||||||||||||||
Total assets |
48,202 | (0.2) | 48,202 | 7.5 | ||||||||||||||||||
Customer deposits |
30,269 | 0.2 | 30,269 | 0.9 | ||||||||||||||||||
Central banks and credit institutions |
8,452 | (3.0) | 8,452 | 25.4 | ||||||||||||||||||
Debt securities issued |
4,477 | (0.4) | 4,477 | 17.7 | ||||||||||||||||||
Other financial liabilities |
327 | 3.6 | 327 | (6.2) | ||||||||||||||||||
Other liabilities |
1,008 | 13.8 | 1,008 | 70.9 | ||||||||||||||||||
Total liabilities |
44,534 | (0.2) | 44,534 | 7.3 | ||||||||||||||||||
Total equity |
3,668 | 0.5 | 3,668 | 10.1 | ||||||||||||||||||
Other managed and marketed customer funds |
3,423 | 7.0 | 3,423 | 23.6 | ||||||||||||||||||
Mutual funds |
1,944 | 8.3 | 1,944 | 35.4 | ||||||||||||||||||
Pension funds |
998 | 5.7 | 998 | 6.9 | ||||||||||||||||||
Managed portfolios |
482 | 4.4 | 482 | 19.9 | ||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||
Loans w/o repos |
31,296 | 0.3 | 31,296 | 7.8 | ||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
32,213 | 0.6 | 32,213 | 2.5 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||
Underlying RoTE |
11.32 | (0.47) | 12.70 | (0.34) | ||||||||||||||||||
Efficiency ratio (with amortisations) |
49.0 | 4.2 | 48.0 | (0.7) | ||||||||||||||||||
NPL ratio |
5.71 | (1.22) | 5.71 | (3.10) | ||||||||||||||||||
NPL coverage |
59.1 | (1.3) | 59.1 | (4.6) | ||||||||||||||||||
Number of employees |
5,895 | (2.1) | 5,895 | (6.5) | ||||||||||||||||||
Number of branches |
563 | (4.1) | 563 | (14.3) |
22 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
United Kingdom ( million)
/ 3Q17 | / 2016 | |||||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||||
Net interest income |
1,048 | (2.2) | (3.3) | 4,363 | (0.9) | 6.2 | ||||||||||||||||||||||||
Net fee income |
243 | (1.1) | (2.3) | 1,003 | (2.8) | 4.3 | ||||||||||||||||||||||||
Gains (losses) on financial transactions |
30 | (51.9) | (52.1) | 282 | (11.5) | (5.1) | ||||||||||||||||||||||||
Other operating income |
23 | 33.0 | 31.7 | 68 | 11.1 | 19.2 | ||||||||||||||||||||||||
Gross income |
1,344 | (3.8) | (4.9) | 5,716 | (1.7) | 5.4 | ||||||||||||||||||||||||
Operating expenses |
(721) | 3.9 | 2.6 | (2,861) | (3.6) | 3.4 | ||||||||||||||||||||||||
General administrative expenses |
(626) | 2.9 | 1.6 | (2,513) | (5.4) | 1.5 | ||||||||||||||||||||||||
Personnel |
(339) | 2.3 | 1.1 | (1,358) | (4.3) | 2.6 | ||||||||||||||||||||||||
Other general administrative expenses |
(287) | 3.6 | 2.3 | (1,156) | (6.6) | 0.1 | ||||||||||||||||||||||||
Depreciation and amortisation |
(95) | 10.5 | 9.2 | (348) | 11.9 | 20.0 | ||||||||||||||||||||||||
Net operating income |
623 | (11.3) | (12.3) | 2,855 | 0.2 | 7.4 | ||||||||||||||||||||||||
Net loan-loss provisions |
(81) | 22.6 | 22.4 | (205) | 251.3 | 276.7 | ||||||||||||||||||||||||
Other income |
(101) | 13.5 | 10.9 | (466) | 37.5 | 47.4 | ||||||||||||||||||||||||
Underlying profit before taxes |
441 | (19.5) | (20.2) | 2,184 | (10.9) | (4.5) | ||||||||||||||||||||||||
Tax on profit |
(137) | (16.8) | (17.7) | (662) | (10.1) | (3.6) | ||||||||||||||||||||||||
Underlying profit from continuing operations |
304 | (20.6) | (21.4) | 1,523 | (11.3) | (4.8) | ||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||||
Underlying consolidated profit |
304 | (20.6) | (21.4) | 1,523 | (11.3) | (4.8) | ||||||||||||||||||||||||
Minority interests |
7 | 23.3 | 21.2 | 25 | (30.3) | (25.3) | ||||||||||||||||||||||||
Underlying attributable profit to the Group |
297 | (21.2) | (22.0) | 1,498 | (10.9) | (4.4) | ||||||||||||||||||||||||
Net capital gains and provisions* |
| | | | (100.0) | (100.0) | ||||||||||||||||||||||||
Attributable profit to the Group |
297 | (21.2) | (22.0) | 1,498 | (9.2) | (2.7) | ||||||||||||||||||||||||
(*) In 2016, capital gains from the disposal of the stake in VISA Europe, restructuring costs and PPI. |
|
|||||||||||||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||||||||
Customer loans |
243,617 | (1.3) | (0.7) | 243,617 | (3.0) | 0.5 | ||||||||||||||||||||||||
Cash, central banks and credit institutions |
56,762 | 7.5 | 8.2 | 56,762 | 54.9 | 60.5 | ||||||||||||||||||||||||
Debt securities |
26,188 | 1.1 | 1.8 | 26,188 | (6.6) | (3.2) | ||||||||||||||||||||||||
o/w: available for sale |
9,887 | (4.8) | (4.2) | 9,887 | (19.0) | (16.1) | ||||||||||||||||||||||||
Other financial assets |
24,690 | 7.1 | 7.8 | 24,690 | (7.9) | (4.6) | ||||||||||||||||||||||||
Other assets |
9,974 | (2.5) | (1.9) | 9,974 | (18.3) | (15.3) | ||||||||||||||||||||||||
Total assets |
361,230 | 0.7 | 1.3 | 361,230 | 1.8 | 5.5 | ||||||||||||||||||||||||
Customer deposits |
230,504 | 1.4 | 2.0 | 230,504 | 8.7 | 12.6 | ||||||||||||||||||||||||
Central banks and credit institutions |
27,833 | (0.3) | 0.3 | 27,833 | 28.9 | 33.6 | ||||||||||||||||||||||||
Debt securities issued |
61,112 | 0.5 | 1.2 | 61,112 | (14.1) | (10.9) | ||||||||||||||||||||||||
Other financial liabilities |
21,167 | (3.7) | (3.1) | 21,167 | (24.2) | (21.4) | ||||||||||||||||||||||||
Other liabilities |
4,310 | 2.7 | 3.4 | 4,310 | (17.4) | (14.5) | ||||||||||||||||||||||||
Total liabilities |
344,926 | 0.8 | 1.4 | 344,926 | 2.1 | 5.8 | ||||||||||||||||||||||||
Total equity |
16,304 | (2.2) | (1.6) | 16,304 | (4.2) | (0.7) | ||||||||||||||||||||||||
Other managed and marketed customer funds |
8,657 | 2.2 | 2.8 | 8,657 | 1.1 | 4.7 | ||||||||||||||||||||||||
Mutual funds |
8,543 | 2.2 | 2.8 | 8,543 | 1.1 | 4.8 | ||||||||||||||||||||||||
Pension funds |
| | | | | | ||||||||||||||||||||||||
Managed portfolios |
114 | (0.4) | 0.2 | 114 | (2.8) | 0.7 | ||||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||||
Loans w/o repos |
235,783 | 0.0 | 0.7 | 235,783 | (2.8) | 0.8 | ||||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
210,305 | 1.2 | 1.8 | 210,305 | (0.1) | 3.5 | ||||||||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||||||||
Underlying RoTE |
8.22 | (2.37) | 10.26 | (0.30) | ||||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
53.6 | 3.9 | 50.1 | (1.0) | ||||||||||||||||||||||||||
NPL ratio |
1.33 | 0.01 | 1.33 | (0.08) | ||||||||||||||||||||||||||
NPL coverage |
32.0 | 0.5 | 32.0 | (0.9) | ||||||||||||||||||||||||||
Number of employees |
25,971 | 1.0 | 25,971 | 1.1 | ||||||||||||||||||||||||||
Number of branches |
808 | (1.5) | 808 | (4.3) |
FINANCIAL REPORT 2017 | 23 |
JANUARY - DECEMBER » Business information by geographic area
Latin America ( million) |
/ 3Q17 | / 2016 | |||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||
Net interest income |
4,005 | 0.6 | 3.4 | 15,944 | 19.5 | 15.8 | ||||||||||||||||||
Net fee income |
1,368 | 3.2 | 5.8 | 5,490 | 19.8 | 16.7 | ||||||||||||||||||
Gains (losses) on financial transactions |
202 | (20.1) | (17.2) | 1,012 | 25.5 | 26.5 | ||||||||||||||||||
Other operating income |
(26) | | | 27 | (14.4) | (27.6) | ||||||||||||||||||
Gross income |
5,550 | (0.7) | 2.0 | 22,473 | 19.8 | 16.4 | ||||||||||||||||||
Operating expenses |
(2,189) | 2.0 | 4.6 | (8,694) | 13.0 | 10.3 | ||||||||||||||||||
General administrative expenses |
(1,984) | 1.9 | 4.5 | (7,877) | 12.4 | 9.7 | ||||||||||||||||||
Personnel |
(1,104) | 2.5 | 5.0 | (4,366) | 12.4 | 9.5 | ||||||||||||||||||
Other general administrative expenses |
(880) | 1.3 | 4.0 | (3,511) | 12.5 | 10.0 | ||||||||||||||||||
Depreciation and amortisation |
(205) | 2.6 | 5.2 | (817) | 19.3 | 15.8 | ||||||||||||||||||
Net operating income |
3,361 | (2.4) | 0.4 | 13,779 | 24.4 | 20.6 | ||||||||||||||||||
Net loan-loss provisions |
(1,165) | (5.1) | (2.1) | (4,973) | 1.3 | (2.6) | ||||||||||||||||||
Other income |
(243) | (24.3) | (20.9) | (1,329) | 69.3 | 60.6 | ||||||||||||||||||
Underlying profit before taxes |
1,953 | 3.2 | 5.7 | 7,477 | 39.1 | 36.2 | ||||||||||||||||||
Tax on profit |
(623) | 0.5 | 3.2 | (2,380) | 74.6 | 70.8 | ||||||||||||||||||
Underlying profit from continuing operations |
1,330 | 4.5 | 6.9 | 5,097 | 27.0 | 24.5 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||
Underlying consolidated profit |
1,330 | 4.5 | 6.9 | 5,097 | 27.0 | 24.5 | ||||||||||||||||||
Minority interests |
216 | 5.7 | 7.9 | 814 | 29.5 | 26.9 | ||||||||||||||||||
Underlying attributable profit to the Group |
1,114 | 4.2 | 6.7 | 4,284 | 26.5 | 24.0 | ||||||||||||||||||
Net capital gains and provisions |
| | | | | | ||||||||||||||||||
Attributable profit to the Group |
1,114 | 4.2 | 6.7 | 4,284 | 26.5 | 24.0 | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||
Customer loans |
146,133 | (2.1) | 2.2 | 146,133 | (4.0) | 7.6 | ||||||||||||||||||
Cash, central banks and credit institutions |
55,934 | 0.2 | 5.9 | 55,934 | (17.0) | (5.3) | ||||||||||||||||||
Debt securities |
57,364 | (7.7) | (2.1) | 57,364 | (9.4) | 2.5 | ||||||||||||||||||
o/w: available for sale |
32,475 | (8.9) | (3.6) | 32,475 | 11.1 | 24.5 | ||||||||||||||||||
Other financial assets |
14,226 | 0.1 | 6.2 | 14,226 | (23.9) | (15.4) | ||||||||||||||||||
Other assets |
17,160 | (3.2) | 2.1 | 17,160 | (10.5) | 2.0 | ||||||||||||||||||
Total assets |
290,818 | (2.8) | 2.2 | 290,818 | (9.3) | 2.2 | ||||||||||||||||||
Customer deposits |
141,543 | (3.4) | 1.5 | 141,543 | (1.5) | 11.2 | ||||||||||||||||||
Central banks and credit institutions |
39,212 | (4.1) | 1.3 | 39,212 | (17.6) | (7.6) | ||||||||||||||||||
Debt securities issued |
34,434 | (1.7) | 2.4 | 34,434 | (27.4) | (18.5) | ||||||||||||||||||
Other financial liabilities |
36,084 | 1.3 | 7.1 | 36,084 | (12.8) | (1.4) | ||||||||||||||||||
Other liabilities |
10,994 | (3.5) | 1.7 | 10,994 | (2.6) | 10.3 | ||||||||||||||||||
Total liabilities |
262,267 | (2.7) | 2.3 | 262,267 | (10.0) | 1.4 | ||||||||||||||||||
Total equity |
28,550 | (3.8) | 1.0 | 28,550 | (2.6) | 10.1 | ||||||||||||||||||
Other managed and marketed customer funds |
80,779 | (5.6) | (0.7) | 80,779 | (0.9) | 12.7 | ||||||||||||||||||
Mutual funds |
74,482 | (5.5) | (0.4) | 74,482 | (0.7) | 13.1 | ||||||||||||||||||
Pension funds |
| | | | | | ||||||||||||||||||
Managed portfolios |
6,297 | (6.1) | (3.9) | 6,297 | (2.8) | 7.7 | ||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||
Loans w/o repos |
151,542 | (2.1) | 2.3 | 151,542 | (4.8) | 6.7 | ||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
193,264 | (4.6) | 0.3 | 193,264 | 3.1 | 16.4 | ||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||
Underlying RoTE |
18.80 | 0.66 | 18.04 | 2.48 | ||||||||||||||||||||
Efficiency ratio (with amortisations) |
39.4 | 1.0 | 38.7 | (2.3) | ||||||||||||||||||||
NPL ratio |
4.50 | 0.05 | 4.50 | (0.31) | ||||||||||||||||||||
NPL coverage |
84.8 | (5.1) | 84.8 | (2.5) | ||||||||||||||||||||
Number of employees |
88,713 | 1.3 | 88,713 | 2.8 | ||||||||||||||||||||
Number of branches |
5,891 | 1.3 | 5,891 | 1.3 |
24 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
Brazil ( million) |
/ 3Q17 | / 2016 |
|||||||||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||||||||
Net interest income |
2,530 | 0.3 | 2.9 | 10,078 | 25.0 | 17.3 | ||||||||||||||||||||||||||||
Net fee income |
929 | 7.0 | 9.3 | 3,640 | 23.8 | 16.2 | ||||||||||||||||||||||||||||
Gains (losses) on financial transactions |
75 | (31.7) | (28.0) | 510 | 114.2 | 100.9 | ||||||||||||||||||||||||||||
Other operating income |
(22) | | | 46 | (42.6) | (46.2) | ||||||||||||||||||||||||||||
Gross income |
3,512 | (0.8) | 1.8 | 14,273 | 26.1 | 18.3 | ||||||||||||||||||||||||||||
Operating expenses |
(1,289) | 3.6 | 6.1 | (5,080) | 13.5 | 6.5 | ||||||||||||||||||||||||||||
General administrative expenses |
(1,165) | 4.0 | 6.5 | (4,571) | 13.0 | 6.0 | ||||||||||||||||||||||||||||
Personnel |
(635) | 0.4 | 3.0 | (2,565) | 13.9 | 6.8 | ||||||||||||||||||||||||||||
Other general administrative expenses |
(530) | 8.7 | 11.1 | (2,006) | 11.9 | 4.9 | ||||||||||||||||||||||||||||
Depreciation and amortisation |
(124) | (0.1) | 2.5 | (509) | 18.7 | 11.4 | ||||||||||||||||||||||||||||
Net operating income |
2,223 | (3.3) | (0.5) | 9,193 | 34.3 | 26.0 | ||||||||||||||||||||||||||||
Net loan-loss provisions |
(814) | (0.6) | 2.0 | (3,395) | 0.5 | (5.7) | ||||||||||||||||||||||||||||
Other income |
(211) | (21.3) | (18.1) | (1,186) | 70.3 | 59.7 | ||||||||||||||||||||||||||||
Underlying profit before taxes |
1,198 | (1.0) | 1.8 | 4,612 | 66.4 | 56.1 | ||||||||||||||||||||||||||||
Tax on profit |
(460) | (0.9) | 1.9 | (1,725) | 123.2 | 109.4 | ||||||||||||||||||||||||||||
Underlying profit from continuing operations |
738 | (1.1) | 1.7 | 2,887 | 44.4 | 35.5 | ||||||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||||||||
Underlying consolidated profit |
738 | (1.1) | 1.7 | 2,887 | 44.4 | 35.5 | ||||||||||||||||||||||||||||
Minority interests |
97 | 10.0 | 12.5 | 343 | 60.7 | 50.8 | ||||||||||||||||||||||||||||
Underlying attributable profit to the Group |
642 | (2.6) | 0.2 | 2,544 | 42.5 | 33.7 | ||||||||||||||||||||||||||||
Net capital gains and provisions |
| | | | | | ||||||||||||||||||||||||||||
Attributable profit to the Group |
642 | (2.6) | 0.2 | 2,544 | 42.5 | 33.7 | ||||||||||||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||||||||||||
Customer loans |
70,454 | (1.3) | 4.2 | 70,454 | (6.7) | 8.1 | ||||||||||||||||||||||||||||
Cash, central banks and credit institutions |
34,920 | (6.5) | (1.3) | 34,920 | (15.6) | (2.2) | ||||||||||||||||||||||||||||
Debt securities |
38,693 | (10.9) | (5.9) | 38,693 | (9.0) | 5.4 | ||||||||||||||||||||||||||||
o/w: available for sale |
21,321 | (13.0) | (8.2) | 21,321 | 31.0 | 51.7 | ||||||||||||||||||||||||||||
Other financial assets |
5,798 | (4.0) | 1.4 | 5,798 | (31.7) | (20.9) | ||||||||||||||||||||||||||||
Other assets |
11,825 | (4.8) | 0.5 | 11,825 | (13.5) | 0.1 | ||||||||||||||||||||||||||||
Total assets |
161,690 | (5.2) | 0.1 | 161,690 | (10.9) | 3.2 | ||||||||||||||||||||||||||||
Customer deposits |
70,074 | (5.6) | (0.4) | 70,074 | (3.3) | 12.0 | ||||||||||||||||||||||||||||
Central banks and credit institutions |
23,591 | (5.8) | (0.6) | 23,591 | (13.4) | 0.3 | ||||||||||||||||||||||||||||
Debt securities issued |
20,056 | (6.2) | (1.0) | 20,056 | (36.7) | (26.7) | ||||||||||||||||||||||||||||
Other financial liabilities |
23,783 | (1.6) | 3.8 | 23,783 | (4.8) | 10.3 | ||||||||||||||||||||||||||||
Other liabilities |
7,536 | (6.0) | (0.8) | 7,536 | (0.3) | 15.4 | ||||||||||||||||||||||||||||
Total liabilities |
145,040 | (5.1) | 0.1 | 145,040 | (11.5) | 2.5 | ||||||||||||||||||||||||||||
Total equity |
16,650 | (5.9) | (0.7) | 16,650 | (5.3) | 9.7 | ||||||||||||||||||||||||||||
Other managed and marketed customer funds |
58,479 | (6.0) | (0.7) | 58,479 | (1.9) | 13.6 | ||||||||||||||||||||||||||||
Mutual funds |
54,779 | (5.7) | (0.5) | 54,779 | (1.7) | 13.8 | ||||||||||||||||||||||||||||
Pension funds |
| | | | | | ||||||||||||||||||||||||||||
Managed portfolios |
3,700 | (9.1) | (4.0) | 3,700 | (5.1) | 9.9 | ||||||||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||||||||
Loans w/o repos |
74,341 | (1.7) | 3.8 | 74,341 | (7.4) | 7.2 | ||||||||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
106,959 | (5.4) | (0.1) | 106,959 | 7.2 | 24.2 | ||||||||||||||||||||||||||||
Ratios (%) and operating means | ||||||||||||||||||||||||||||||||||
Underlying RoTE |
17.19 | (0.42) | 16.91 | 3.07 | ||||||||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
36.7 | 1.6 | 35.6 | (3.9) | ||||||||||||||||||||||||||||||
NPL ratio |
5.29 | (0.03) | 5.29 | (0.61) | ||||||||||||||||||||||||||||||
NPL coverage |
92.6 | (5.0) | 92.6 | (0.5) | ||||||||||||||||||||||||||||||
Number of employees |
47,135 | 1.9 | 47,135 | 0.9 | ||||||||||||||||||||||||||||||
Number of branches |
3,465 | 1.3 | 3,465 | 1.0 |
FINANCIAL REPORT 2017 | 25 |
JANUARY - DECEMBER » Business information by geographic area
Mexico ( million) |
/ 3Q17 | / 2016 | |||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||
Net interest income |
630 | (7.8) | (1.8) | 2,601 | 9.1 | 12.5 | ||||||||||||||||||||||
Net fee income |
181 | (7.5) | (1.5) | 749 | 5.4 | 8.7 | ||||||||||||||||||||||
Gains (losses) on financial transactions |
39 | 56.1 | 65.9 | 150 | 0.4 | 3.6 | ||||||||||||||||||||||
Other operating income |
(20) | 73.3 | 78.7 | (40) | (6.7) | (3.8) | ||||||||||||||||||||||
Gross income |
830 | (7.0) | (0.9) | 3,460 | 8.0 | 11.5 | ||||||||||||||||||||||
Operating expenses |
(345) | (3.1) | 3.0 | (1,382) | 8.4 | 11.9 | ||||||||||||||||||||||
General administrative expenses |
(316) | (2.6) | 3.5 | (1,258) | 7.7 | 11.1 | ||||||||||||||||||||||
Personnel |
(178) | 9.3 | 15.6 | (653) | 7.7 | 11.1 | ||||||||||||||||||||||
Other general administrative expenses |
(138) | (14.6) | (8.8) | (606) | 7.8 | 11.2 | ||||||||||||||||||||||
Depreciation and amortisation |
(30) | (7.7) | (1.8) | (124) | 16.5 | 20.2 | ||||||||||||||||||||||
Net operating income |
485 | (9.6) | (3.5) | 2,078 | 7.8 | 11.2 | ||||||||||||||||||||||
Net loan-loss provisions |
(187) | (22.1) | (16.2) | (905) | 8.8 | 12.3 | ||||||||||||||||||||||
Other income |
(24) | 469.4 | 484.7 | (39) | 31.1 | 35.2 | ||||||||||||||||||||||
Underlying profit before taxes |
274 | (6.3) | (0.2) | 1,134 | 6.3 | 9.7 | ||||||||||||||||||||||
Tax on profit |
(49) | (18.9) | (13.0) | (230) | (6.9) | (3.9) | ||||||||||||||||||||||
Underlying profit from continuing operations |
225 | (2.9) | 3.2 | 904 | 10.3 | 13.8 | ||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||
Underlying consolidated profit |
225 | (2.9) | 3.2 | 904 | 10.3 | 13.8 | ||||||||||||||||||||||
Minority interests |
46 | (6.3) | (0.1) | 194 | 1.7 | 5.0 | ||||||||||||||||||||||
Underlying attributable profit to the Group |
178 | (2.0) | 4.1 | 710 | 12.9 | 16.5 | ||||||||||||||||||||||
Net capital gains and provisions |
| | | | | | ||||||||||||||||||||||
Attributable profit to the Group |
178 | (2.0) | 4.1 | 710 | 12.9 | 16.5 | ||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||
Customer loans |
26,462 | (9.0) | 0.4 | 26,462 | (3.1) | 5.3 | ||||||||||||||||||||||
Cash, central banks and credit institutions |
9,956 | 11.6 | 23.0 | 9,956 | (25.5) | (19.0) | ||||||||||||||||||||||
Debt securities |
13,676 | (2.5) | 7.5 | 13,676 | (3.2) | 5.2 | ||||||||||||||||||||||
o/w: available for sale |
6,971 | (5.7) | 3.9 | 6,971 | (1.6) | 6.9 | ||||||||||||||||||||||
Other financial assets |
5,627 | (4.6) | 5.1 | 5,627 | (27.1) | (20.8) | ||||||||||||||||||||||
Other assets |
2,481 | (3.7) | 6.2 | 2,481 | (4.2) | 4.1 | ||||||||||||||||||||||
Total assets |
58,203 | (3.8) | 6.1 | 58,203 | (10.6) | (2.9) | ||||||||||||||||||||||
Customer deposits |
30,392 | (3.0) | 6.9 | 30,392 | 5.1 | 14.2 | ||||||||||||||||||||||
Central banks and credit institutions |
8,247 | (16.2) | (7.6) | 8,247 | (26.8) | (20.5) | ||||||||||||||||||||||
Debt securities issued |
5,168 | 4.8 | 15.5 | 5,168 | (4.2) | 4.1 | ||||||||||||||||||||||
Other financial liabilities |
7,680 | 7.2 | 18.2 | 7,680 | (39.3) | (34.0) | ||||||||||||||||||||||
Other liabilities |
1,779 | (2.0) | 8.0 | 1,779 | (12.7) | (5.1) | ||||||||||||||||||||||
Total liabilities |
53,267 | (3.3) | 6.6 | 53,267 | (11.6) | (3.9) | ||||||||||||||||||||||
Total equity |
4,936 | (8.7) | 0.6 | 4,936 | 1.7 | 10.5 | ||||||||||||||||||||||
Other managed and marketed customer funds |
9,919 | (5.9) | 3.8 | 9,919 | (3.2) | 5.3 | ||||||||||||||||||||||
Mutual funds |
9,919 | (5.9) | 3.8 | 9,919 | (3.2) | 5.3 | ||||||||||||||||||||||
Pension funds |
| | | | | | ||||||||||||||||||||||
Managed portfolios |
| | | | | | ||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||
Loans w/o repos |
26,962 | (8.1) | 1.3 | 26,962 | (3.8) | 4.6 | ||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
35,548 | (8.0) | 1.4 | 35,548 | (2.4) | 6.0 | ||||||||||||||||||||||
Ratios (%) and operating means |
||||||||||||||||||||||||||||
Underlying RoTE |
19.45 | 0.07 | 19.50 | 4.05 | ||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
41.6 | 1.7 | 39.9 | 0.1 | ||||||||||||||||||||||||
NPL ratio |
2.69 | 0.13 | 2.69 | (0.07) | ||||||||||||||||||||||||
NPL coverage |
97.5 | (12.8) | 97.5 | (6.3) | ||||||||||||||||||||||||
Number of employees |
18,557 | 1.9 | 18,557 | 5.4 | ||||||||||||||||||||||||
Number of branches |
1,401 | | 1,401 | 0.9 |
26 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
Chile ( million) |
/ 3Q17 | / 2016 | |||||||||||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||||||||||
Net interest income |
492 | 11.7 | 10.0 | 1,907 | 2.3 | 0.1 | ||||||||||||||||||||||||||||||
Net fee income |
91 | (2.2) | (3.4) | 391 | 10.9 | 8.6 | ||||||||||||||||||||||||||||||
Gains (losses) on financial transactions |
43 | (35.8) | (35.6) | 213 | 3.6 | 1.4 | ||||||||||||||||||||||||||||||
Other operating income |
4 | 14.0 | 13.2 | 12 | | | ||||||||||||||||||||||||||||||
Gross income |
630 | 4.3 | 2.9 | 2,523 | 4.2 | 2.0 | ||||||||||||||||||||||||||||||
Operating expenses |
(248) | (2.2) | (3.3) | (1,025) | 3.9 | 1.7 | ||||||||||||||||||||||||||||||
General administrative expenses |
(218) | (4.4) | (5.4) | (918) | 2.5 | 0.3 | ||||||||||||||||||||||||||||||
Personnel |
(144) | 0.7 | (0.4) | (574) | 2.9 | 0.7 | ||||||||||||||||||||||||||||||
Other general administrative expenses |
(74) | (13.0) | (13.8) | (344) | 1.9 | (0.3) | ||||||||||||||||||||||||||||||
Depreciation and amortisation |
(30) | 17.4 | 15.8 | (108) | 17.9 | 15.4 | ||||||||||||||||||||||||||||||
Net operating income |
382 | 8.9 | 7.4 | 1,498 | 4.4 | 2.1 | ||||||||||||||||||||||||||||||
Net loan-loss provisions |
(110) | 1.9 | 0.5 | (462) | (10.1) | (12.0) | ||||||||||||||||||||||||||||||
Other income |
3 | (72.7) | (71.8) | 23 | | | ||||||||||||||||||||||||||||||
Underlying profit before taxes |
276 | 8.3 | 6.9 | 1,059 | 18.4 | 15.9 | ||||||||||||||||||||||||||||||
Tax on profit |
(57) | 26.5 | 24.5 | (200) | 25.7 | 23.0 | ||||||||||||||||||||||||||||||
Underlying profit from continuing operations |
218 | 4.3 | 3.1 | 859 | 16.9 | 14.4 | ||||||||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||||||||||
Underlying consolidated profit |
218 | 4.3 | 3.1 | 859 | 16.9 | 14.4 | ||||||||||||||||||||||||||||||
Minority interests |
72 | 8.5 | 7.2 | 273 | 23.2 | 20.6 | ||||||||||||||||||||||||||||||
Underlying attributable profit to the Group |
146 | 2.3 | 1.2 | 586 | 14.1 | 11.7 | ||||||||||||||||||||||||||||||
Net capital gains and provisions |
| | | | | | ||||||||||||||||||||||||||||||
Attributable profit to the Group |
146 | 2.3 | 1.2 | 586 | 14.1 | 11.7 | ||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||
Customer loans |
37,153 | 2.5 | 0.1 | 37,153 | (1.4) | 2.7 | ||||||||||||||||||||||||||||||
Cash, central banks and credit institutions |
4,321 | 8.3 | 5.8 | 4,321 | (27.4) | (24.4) | ||||||||||||||||||||||||||||||
Debt securities |
4,143 | 23.6 | 20.7 | 4,143 | (22.5) | (19.3) | ||||||||||||||||||||||||||||||
o/w: available for sale |
3,490 | 28.4 | 25.4 | 3,490 | (27.1) | (24.1) | ||||||||||||||||||||||||||||||
Other financial assets |
2,789 | 24.1 | 21.2 | 2,789 | 12.7 | 17.4 | ||||||||||||||||||||||||||||||
Other assets |
1,949 | 5.4 | 2.9 | 1,949 | (5.6) | (1.7) | ||||||||||||||||||||||||||||||
Total assets |
50,355 | 5.6 | 3.1 | 50,355 | (5.9) | (2.0) | ||||||||||||||||||||||||||||||
Customer deposits |
26,043 | 0.9 | (1.5) | 26,043 | (4.7) | (0.7) | ||||||||||||||||||||||||||||||
Central banks and credit institutions |
5,491 | 29.5 | 26.5 | 5,491 | (23.4) | (20.3) | ||||||||||||||||||||||||||||||
Debt securities issued |
8,967 | 5.6 | 3.2 | 8,967 | (11.9) | (8.2) | ||||||||||||||||||||||||||||||
Other financial liabilities |
3,598 | 9.0 | 6.5 | 3,598 | 28.8 | 34.1 | ||||||||||||||||||||||||||||||
Other liabilities |
1,222 | 7.4 | 4.9 | 1,222 | (0.3) | 3.8 | ||||||||||||||||||||||||||||||
Total liabilities |
45,321 | 5.4 | 3.0 | \45,321 | (6.9) | (3.0) | ||||||||||||||||||||||||||||||
Total equity |
5,034 | 6.9 | 4.4 | 5,034 | 4.4 | 8.7 | ||||||||||||||||||||||||||||||
Other managed and marketed customer funds |
9,761 | (4.3) | (6.5) | 9,761 | (1.4) | 2.6 | ||||||||||||||||||||||||||||||
Mutual funds |
7,163 | (5.3) | (7.5) | 7,163 | (2.2) | 1.9 | ||||||||||||||||||||||||||||||
Pension funds |
| | | | | | ||||||||||||||||||||||||||||||
Managed portfolios |
2,597 | (1.4) | (3.7) | 2,597 | 0.6 | 4.8 | ||||||||||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||||||||||
Loans w/o repos |
38,249 | 2.6 | 0.2 | 38,249 | (1.4) | 2.7 | ||||||||||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
33,104 | (0.3) | (2.7) | 33,104 | (4.2) | (0.2) | ||||||||||||||||||||||||||||||
Ratios (%) and operating means |
||||||||||||||||||||||||||||||||||||
Underlying RoTE |
17.62 | (0.61) | 17.89 | 0.72 | ||||||||||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
39.3 | (2.6) | 40.6 | (0.1) | ||||||||||||||||||||||||||||||||
NPL ratio |
4.96 | 0.01 | 4.96 | (0.09) | ||||||||||||||||||||||||||||||||
NPL coverage |
58.2 | (0.3) | 58.2 | (0.9) | ||||||||||||||||||||||||||||||||
Number of employees |
11,675 | 0.0 | 11,675 | (2.7) | ||||||||||||||||||||||||||||||||
Number of branches |
439 | 8.1 | 439 | 0.9 |
FINANCIAL REPORT 2017 | 27 |
JANUARY - DECEMBER » Business information by geographic area
United States (Excluding Popular) ( million)
/ 3Q17 | / 2016 | |||||||||||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||||||||||
Net interest income |
1,273 | (3.5) | (3.3) | 5,569 | (5.9) | (4.1) | ||||||||||||||||||||||||||||||
Net fee income |
222 | (1.4) | (1.3) | 971 | (11.9) | (10.2) | ||||||||||||||||||||||||||||||
Gains (losses) on financial transactions |
10 | | | 9 | (58.0) | (57.2) | ||||||||||||||||||||||||||||||
Other operating income |
91 | 13.4 | 11.8 | 410 | (16.6) | (15.0) | ||||||||||||||||||||||||||||||
Gross income |
1,596 | (0.5) | (0.5) | 6,959 | (7.6) | (5.8) | ||||||||||||||||||||||||||||||
Operating expenses |
(773) | 4.0 | 3.9 | (3,198) | (0.0) | 1.9 | ||||||||||||||||||||||||||||||
General administrative expenses |
(693) | 4.1 | 4.0 | (2,875) | (0.3) | 1.6 | ||||||||||||||||||||||||||||||
Personnel |
(396) | (0.0) | 0.1 | (1,664) | 1.7 | 3.7 | ||||||||||||||||||||||||||||||
Other general administrative expenses |
(298) | 10.2 | 9.7 | (1,211) | (2.9) | (1.0) | ||||||||||||||||||||||||||||||
Depreciation and amortisation |
(79) | 3.0 | 3.0 | (324) | 2.4 | 4.4 | ||||||||||||||||||||||||||||||
Net operating income |
824 | (4.3) | (4.2) | 3,761 | (13.2) | (11.6) | ||||||||||||||||||||||||||||||
Net loan-loss provisions |
(638) | 0.5 | 0.4 | (2,780) | (13.4) | (11.7) | ||||||||||||||||||||||||||||||
Other income |
(31) | | | (90) | (0.4) | 1.5 | ||||||||||||||||||||||||||||||
Underlying profit before taxes |
155 | (31.1) | (29.8) | 892 | (13.9) | (12.3) | ||||||||||||||||||||||||||||||
Tax on profit |
(45) | (35.8) | (34.1) | (256) | (27.9) | (26.5) | ||||||||||||||||||||||||||||||
Underlying profit from continuing operations |
109 | (29.0) | (27.8) | 636 | (6.6) | (4.9) | ||||||||||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||||||||||
Underlying consolidated profit |
109 | (29.0) | (27.8) | 636 | (6.6) | (4.9) | ||||||||||||||||||||||||||||||
Minority interests |
39 | (36.1) | (34.5) | 228 | (20.3) | (18.7) | ||||||||||||||||||||||||||||||
Underlying attributable profit to the Group |
71 | (24.4) | (23.5) | 408 | 3.2 | 5.2 | ||||||||||||||||||||||||||||||
Net capital gains and provisions* |
(76) | | | (76) | 133.6 | 138.1 | ||||||||||||||||||||||||||||||
Attributable profit to the Group |
(5) | | | 332 | (8.4) | (6.7) | ||||||||||||||||||||||||||||||
(*) In 2017, fiscal reform, provisions for hurricanes, increased stake in Santander Consumer USA and other. In 2016, restatement of Santander Consumer USA. |
| |||||||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||
Customer loans |
71,963 | (1.7) | (0.2) | 71,963 | (15.7) | (4.1) | ||||||||||||||||||||||||||||||
Cash, central banks and credit institutions |
13,300 | 1.6 | 3.2 | 13,300 | (21.6) | (10.8) | ||||||||||||||||||||||||||||||
Debt securities |
13,843 | (15.2) | (13.9) | 13,843 | (22.8) | (12.2) | ||||||||||||||||||||||||||||||
o/w: available for sale |
11,775 | (17.9) | (16.6) | 11,775 | (23.7) | (13.2) | ||||||||||||||||||||||||||||||
Other financial assets |
3,368 | 16.6 | 18.4 | 3,368 | (5.5) | 7.5 | ||||||||||||||||||||||||||||||
Other assets |
11,914 | (3.8) | (2.2) | 11,914 | (11.9) | 0.2 | ||||||||||||||||||||||||||||||
Total assets |
114,388 | (3.0) | (1.5) | 114,388 | (16.7) | (5.3) | ||||||||||||||||||||||||||||||
Customer deposits |
51,189 | (3.2) | (1.7) | 51,189 | (20.6) | (9.6) | ||||||||||||||||||||||||||||||
Central banks and credit institutions |
15,884 | 1.3 | 2.9 | 15,884 | (28.7) | (18.8) | ||||||||||||||||||||||||||||||
Debt securities issued |
26,176 | (3.0) | (1.5) | 26,176 | (0.6) | 13.1 | ||||||||||||||||||||||||||||||
Other financial liabilities |
2,503 | (8.0) | (6.5) | 2,503 | (13.9) | (2.0) | ||||||||||||||||||||||||||||||
Other liabilities |
3,437 | (19.1) | (17.8) | 3,437 | (27.9) | (18.0) | ||||||||||||||||||||||||||||||
Total liabilities |
99,189 | (3.2) | (1.7) | 99,189 | (17.8) | (6.5) | ||||||||||||||||||||||||||||||
Total equity |
15,199 | (1.4) | 0.1 | 15,199 | (8.7) | 3.9 | ||||||||||||||||||||||||||||||
Other managed and marketed customer funds |
16,432 | (4.1) | (2.6) | 16,432 | (12.7) | (0.7) | ||||||||||||||||||||||||||||||
Mutual funds |
8,367 | 0.4 | 2.0 | 8,367 | (15.9) | (4.3) | ||||||||||||||||||||||||||||||
Pension funds |
| | | | | | ||||||||||||||||||||||||||||||
Managed portfolios |
8,065 | (8.4) | (6.9) | 8,065 | (9.2) | 3.3 | ||||||||||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||||||||||
Loans w/o repos |
75,389 | (1.7) | (0.2) | 75,389 | (15.9) | (4.3) | ||||||||||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
59,329 | (2.6) | (1.1) | 59,329 | (20.0) | (9.0) | ||||||||||||||||||||||||||||||
Ratios (%) and operating means |
||||||||||||||||||||||||||||||||||||
Underlying RoTE |
1.69 | (1.31) | 3.12 | 0.01 | ||||||||||||||||||||||||||||||||
Efficiency ratio (with amortisations) |
48.4 | 2.1 | 46.0 | 3.5 | ||||||||||||||||||||||||||||||||
NPL ratio |
2.79 | 0.23 | 2.79 | 0.51 | ||||||||||||||||||||||||||||||||
NPL coverage |
170.2 | (17.3) | 170.2 | (44.2) | ||||||||||||||||||||||||||||||||
Number of employees |
17,560 | (0.0) | 17,560 | 0.3 | ||||||||||||||||||||||||||||||||
Number of branches |
683 | (1.6) | 683 | (11.1) |
28 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
Corporate Centre ( million)
P&L | 4Q17 | 3Q17 | % | 2017 | 2016 | % | ||||||||||||||||||
Net interest income |
(223) | (220) | 1.2 | (851) | (739) | 15.1 | ||||||||||||||||||
Net fee income |
(17) | (7) | 158.2 | (38) | (31) | 21.3 | ||||||||||||||||||
Gains (losses) on financial transactions |
30 | (56) | | (227) | (243) | (6.6) | ||||||||||||||||||
Other operating income |
(28) | (17) | 65.3 | (104) | (52) | 99.5 | ||||||||||||||||||
Gross income |
(239) | (300) | (20.5) | (1,220) | (1,066) | 14.5 | ||||||||||||||||||
Operating expenses |
(120) | (118) | 1.5 | (476) | (450) | 5.8 | ||||||||||||||||||
Net operating income |
(359) | (419) | (14.3) | (1,696) | (1,516) | 11.9 | ||||||||||||||||||
Net loan-loss provisions |
(8) | (22) | (62.2) | (45) | 2 | | ||||||||||||||||||
Other income |
(43) | (54) | (21.2) | (181) | (75) | 142.8 | ||||||||||||||||||
Underlying profit before taxes |
(410) | (494) | (17.1) | (1,923) | (1,589) | 21.0 | ||||||||||||||||||
Tax on profit |
32 | 14 | 128.6 | 32 | 141 | (77.1) | ||||||||||||||||||
Underlying profit from continuing operations |
(378) | (481) | (21.4) | (1,890) | (1,448) | 30.5 | ||||||||||||||||||
Net profit from discontinued operations |
| | | | 0 | (100.0) | ||||||||||||||||||
Underlying consolidated profit |
(378) | (481) | (21.4) | (1,890) | (1,448) | 30.6 | ||||||||||||||||||
Minority interests |
(0) | (0) | (35.1) | (1) | (9) | (86.0) | ||||||||||||||||||
Underlying attributable profit to the Group |
(378) | (480) | (21.3) | (1,889) | (1,439) | 31.3 | ||||||||||||||||||
Net capital gains and provisions* |
(306) | (130) | 135.7 | (436) | (186) | 134.9 | ||||||||||||||||||
Attributable profit to the Group |
(684) | (610) | 12.1 | (2,326) | (1,625) | 43.1 | ||||||||||||||||||
(*) In 2017, charge for equity stakes an intangible assets, capital gains from the disposal of the stake in Allfunds Bank and goodwill charges. In 2016, restructuring costs. |
| |||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||
Debt securities |
1,768 | 1,488 | 18.8 | 1,768 | 1,374 | 28.7 | ||||||||||||||||||
Goodwill |
25,769 | 25,855 | (0.3) | 25,769 | 26,724 | (3.6) | ||||||||||||||||||
Capital assigned to Group areas |
83,045 | 85,441 | (2.8) | 83,045 | 78,537 | 5.7 | ||||||||||||||||||
Other financial assets |
7,841 | 9,140 | (14.2) | 7,841 | 9,872 | (20.6) | ||||||||||||||||||
Other assets |
14,929 | 14,485 | 3.1 | 14,929 | 15,648 | (4.6) | ||||||||||||||||||
Total assets |
133,353 | 136,408 | (2.2) | 133,353 | 132,154 | 0.9 | ||||||||||||||||||
Debt securities issued |
35,030 | 36,213 | (3.3) | 35,030 | 30,922 | 13.3 | ||||||||||||||||||
Other financial liabilities |
3,381 | 856 | 294.8 | 3,381 | 4,042 | (16.4) | ||||||||||||||||||
Other liabilities |
8,092 | 9,088 | (11.0) | 8,092 | 12,422 | (34.9) | ||||||||||||||||||
Total liabilities |
46,502 | 46,157 | 0.7 | 46,502 | 47,387 | (1.9) | ||||||||||||||||||
Total equity |
86,850 | 90,251 | (3.8) | 86,850 | 84,768 | 2.5 | ||||||||||||||||||
Other managed and marketed customer funds |
2 | 3 | (40.9) | 2 | | | ||||||||||||||||||
Mutual funds |
2 | 3 | (40.9) | 2 | | | ||||||||||||||||||
Pension funds |
0 | 0 | | 0 | | | ||||||||||||||||||
Managed portfolios |
| | | | | | ||||||||||||||||||
Operating means |
||||||||||||||||||||||||
Number of employees |
1,784 | 1,709 | 4.4 | 1,784 | 1,724 | 3.5 |
FINANCIAL REPORT 2017 | 29 |
JANUARY - DECEMBER » Business information by geographic area
Retail Banking ( million)
/ 3Q17 | / 2016 | |||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||
Net interest income |
7,812 | (0.4) | 0.7 | 31,701 | 8.0 | 7.9 | ||||||||||||||||||||
Net fee income |
2,444 | 3.2 | 4.3 | 9,718 | 10.4 | 9.8 | ||||||||||||||||||||
Gains (losses) on financial transactions |
214 | 94.8 | 92.7 | 706 | 0.8 | 3.4 | ||||||||||||||||||||
Other operating income |
50 | (77.5) | (75.5) | 631 | 14.0 | 17.1 | ||||||||||||||||||||
Gross income |
10,520 | (0.2) | 0.9 | 42,755 | 8.5 | 8.4 | ||||||||||||||||||||
Operating expenses |
(4,874) | 3.3 | 4.2 | (19,374) | 4.7 | 4.9 | ||||||||||||||||||||
Net operating income |
5,646 | (3.1) | (1.8) | 23,381 | 11.9 | 11.5 | ||||||||||||||||||||
Net loan-loss provisions |
(1,872) | (9.2) | (7.3) | (8,174) | (6.0) | (7.2) | ||||||||||||||||||||
Other income |
(425) | (19.8) | (18.2) | (2,387) | 41.5 | 39.8 | ||||||||||||||||||||
Underlying profit before taxes |
3,349 | 3.5 | 4.4 | 12,820 | 22.0 | 22.7 | ||||||||||||||||||||
Tax on profit |
(1,038) | 1.5 | 2.6 | (3,914) | 35.6 | 36.5 | ||||||||||||||||||||
Underlying profit from continuing operations |
2,311 | 4.4 | 5.3 | 8,906 | 16.9 | 17.5 | ||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||
Underlying consolidated profit |
2,311 | 4.4 | 5.3 | 8,906 | 16.9 | 17.5 | ||||||||||||||||||||
Minority interests |
331 | 2.0 | 3.1 | 1,282 | 16.2 | 15.9 | ||||||||||||||||||||
Underlying attributable profit to the Group |
1,980 | 4.8 | 5.7 | 7,624 | 17.0 | 17.8 | ||||||||||||||||||||
Net capital gains and provisions* |
(76) | (10.6) | (10.6) | (161) | (6.8) | (5.0) | ||||||||||||||||||||
Attributable profit to the Group |
1,904 | 5.5 | 6.4 | 7,463 | 17.6 | 18.4 | ||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||
Loans w/o repos |
681,191 | 0.5 | 1.6 | 681,191 | (1.6) | 3.1 | ||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
739,935 | 0.7 | 2.0 | 739,935 | 1.6 | 6.5 |
(*) | In 2017, integration costs, USA fiscal reform and increased stake in Santander Consumer USA. In 2016, capital gains from the disposal of the stake in VISA Europe, restructuring costs, PPI in the UK and restatement of Santander Consumer USA. |
Global Corporate Banking ( million)
/ 3Q17 | / 2016 | |||||||||||||||||||||||||||
P&L | 4Q17 | % | % w/o FX | 2017 | % | % w/o FX | ||||||||||||||||||||||
Net interest income |
587 | (3.8) | (2.0) | 2,478 | (2.0) | (2.5) | ||||||||||||||||||||||
Net fee income |
393 | (1.0) | 0.1 | 1,627 | 15.7 | 15.9 | ||||||||||||||||||||||
Gains (losses) on financial transactions |
186 | (48.3) | (46.1) | 1,224 | (2.6) | (1.9) | ||||||||||||||||||||||
Other operating income |
72 | 874.4 | 727.7 | 224 | (22.7) | (23.9) | ||||||||||||||||||||||
Gross income |
1,239 | (9.9) | (8.4) | 5,552 | 1.3 | 1.2 | ||||||||||||||||||||||
Operating expenses |
(519) | 5.3 | 6.0 | (1,988) | 3.7 | 4.8 | ||||||||||||||||||||||
Net operating income |
719 | (18.3) | (16.5) | 3,564 | 0.0 | (0.7) | ||||||||||||||||||||||
Net loan-loss provisions |
(207) | 82.3 | 81.8 | (690) | 4.9 | 0.8 | ||||||||||||||||||||||
Other income |
(29) | 28.8 | 29.6 | (70) | (7.5) | (7.3) | ||||||||||||||||||||||
Underlying profit before taxes |
484 | (35.1) | (32.9) | 2,804 | (0.9) | (0.9) | ||||||||||||||||||||||
Tax on profit |
(133) | (39.3) | (36.8) | (802) | 1.9 | 2.3 | ||||||||||||||||||||||
Underlying profit from continuing operations |
350 | (33.3) | (31.2) | 2,002 | (2.0) | (2.1) | ||||||||||||||||||||||
Net profit from discontinued operations |
| | | | | | ||||||||||||||||||||||
Underlying consolidated profit |
350 | (33.3) | (31.2) | 2,002 | (2.0) | (2.1) | ||||||||||||||||||||||
Minority interests |
30 | (38.4) | (35.4) | 181 | 3.8 | 0.9 | ||||||||||||||||||||||
Underlying attributable profit to the Group |
320 | (32.8) | (30.8) | 1,821 | (2.5) | (2.4) | ||||||||||||||||||||||
Net capital gains and provisions* |
| | | | (100.0) | (100.0) | ||||||||||||||||||||||
Attributable profit to the Group |
320 | (32.8) | (30.8) | 1,821 | 0.7 | 0.8 | ||||||||||||||||||||||
Pro memoria: |
||||||||||||||||||||||||||||
Loans w/o repos |
87,015 | (4.3) | (2.5) | 87,015 | (10.8) | (5.4) | ||||||||||||||||||||||
Funds (customer deposits w/o repos + mutual funds) |
75,642 | (2.9) | (0.8) | 75,642 | 13.8 | 19.9 |
(*) | In 2016, restructuring costs. |
30 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Business information by geographic area
Popular ( million)
P&L | 4Q17 | % / 3Q17 | 2017* | |||||||||
Net interest income |
438 | (4.0) | 1,003 | |||||||||
Net fee income |
129 | 0.5 | 288 | |||||||||
Gains (losses) on financial transactions |
(8) | | 1 | |||||||||
Other operating income |
(23) | | 17 | |||||||||
Gross income |
536 | (15.6) | 1,309 | |||||||||
Operating expenses |
(390) | 0.5 | (873) | |||||||||
General administrative expenses |
(355) | 4.8 | (781) | |||||||||
Personnel |
(199) | 12.3 | (421) | |||||||||
Other general administrative expenses |
(156) | (3.5) | (360) | |||||||||
Depreciation and amortisation |
(34) | (29.2) | (92) | |||||||||
Net operating income |
146 | (40.9) | 436 | |||||||||
Net loan-loss provisions |
(68) | 77.0 | (114) | |||||||||
Other income |
(8) | | (20) | |||||||||
Underlying profit before taxes |
71 | (67.3) | 302 | |||||||||
Tax on profit |
14 | | (39) | |||||||||
Underlying profit from continuing operations |
85 | (49.1) | 263 | |||||||||
Net profit from discontinued operations |
| | | |||||||||
Underlying consolidated profit |
85 | (49.1) | 263 | |||||||||
Minority interests |
0 | | 0 | |||||||||
Underlying attributable profit to the Group |
85 | (49.5) | 263 | |||||||||
Net capital gains and provisions** |
| (100.0) | (300) | |||||||||
Attributable profit to the Group |
85 | | (37) | |||||||||
(*) Results consolidated into Grupo Santander as of 7 June 2017. (**) Restructuring costs. |
||||||||||||
Balance sheet |
||||||||||||
Customer loans |
75,516 | (0.3) | ||||||||||
Cash, central banks and credit institutions |
14,025 | (8.9) | ||||||||||
Debt securities |
17,457 | (7.2) | ||||||||||
o/w: available for sale |
16,171 | (3.1) | ||||||||||
Other financial assets |
1,709 | (2.6) | ||||||||||
Other assets |
18,246 | (0.1) | ||||||||||
Total assets |
126,953 | (2.3) | ||||||||||
Customer deposits |
64,960 | (7.0) | ||||||||||
Central banks and credit institutions |
37,279 | 5.5 | ||||||||||
Debt securities issued |
10,661 | (1.8) | ||||||||||
Other financial liabilities |
2,460 | 15.3 | ||||||||||
Other liabilities |
3,666 | (27.1) | ||||||||||
Total liabilities |
119,026 | (3.4) | ||||||||||
Total equity |
7,927 | 16.8 | ||||||||||
Other managed and marketed customer funds |
16,409 | (2.6) | ||||||||||
Mutual funds |
9,619 | (1.1) | ||||||||||
Pension funds |
4,600 | (2.0) | ||||||||||
Managed portfolios |
2,190 | (9.9) | ||||||||||
Pro memoria: |
||||||||||||
Loans w/o repos |
79,533 | (0.0) | ||||||||||
Funds (customer deposits w/o repos + mutual funds) |
74,286 | (6.3) |
FINANCIAL REPORT 2017 | 31 |
JANUARY - DECEMBER » Consolidated summarised financial statements
NOTE: | The financial information for the 2017 and 2016 corresponds to that included in the consolidated summarised financial statements at these dates, drawn up 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 4/2004 of the Bank of Spain and the International Financial Reporting Standards issued by the International Accounting Standards Board (IFRS-IASB). |
Consolidated income statement ( million)
2017 | 2016 | |||||||
Interest income |
56,041 | 55,156 | ||||||
Interest expense |
(21,745) | (24,067) | ||||||
NET INTEREST INCOME |
34,296 | 31,089 | ||||||
Dividend income |
384 | 413 | ||||||
Share of results of entities accounted for using the equity method |
704 | 444 | ||||||
Commission income |
14,579 | 12,943 | ||||||
Commission expense |
(2,982) | (2,763) | ||||||
Gain or losses on financial assets and liabilities not measured at fair value through profit or loss. net |
404 | 869 | ||||||
Gain or losses on financial assets and liabilities held for trading. net |
1,252 | 2,456 | ||||||
Gain or losses on financial assets and liabilities measured at fair value through profit or loss. net |
(85) | 426 | ||||||
Gain or losses from hedge accounting. net |
(11) | (23) | ||||||
Exchange rate differences. net |
105 | (1,627) | ||||||
Other operating income |
1,618 | 1,919 | ||||||
Other operating expenses |
(1,966) | (1,977) | ||||||
Income from assets under insurance and reinsurance contracts |
2,546 | 1,900 | ||||||
Expenses from liabilities under insurance and reinsurance contracts |
(2,489) | (1,837) | ||||||
GROSS INCOME |
48,355 | 44,232 | ||||||
Administrative expenses |
(20,400) | (18,737) | ||||||
Staff costs |
(12,047) | (11,004) | ||||||
Other general administrative expenses |
(8,353) | (7,733) | ||||||
Depreciation and amortisation cost |
(2,593) | (2,364) | ||||||
Provisions. net |
(3,058) | (2,508) | ||||||
Impairment or reversal of impairment of financial assets measured at fair value through profit or loss. net |
(9,259) | (9,626) | ||||||
Financial assets measured at cost |
(8) | (52) | ||||||
Financial assets available-for-sale |
(10) | 11 | ||||||
Loans and receivables |
(9,241) | (9,557) | ||||||
Held-to-maturity investments |
| (285) | ||||||
PROFIT FROM OPERATIONS |
13,045 | 10,997 | ||||||
Impairment of investments in subsidiaries. joint ventures and associates. net |
(13) | (17) | ||||||
Impairment on non-financial assets. net |
(1,260) | (123) | ||||||
Tangible assets |
(72) | (55) | ||||||
Intangible assets |
(1,073) | (61) | ||||||
Others |
(115) | (7) | ||||||
Gain or losses on non financial assets and investments. net |
522 | 30 | ||||||
Negative goodwill recognized in results |
| 22 | ||||||
Gains or losses on non-current assets held for sale classified as discontinued operations |
(203) | (141) | ||||||
PROFIT OR LOSS BEFORE TAX FROM CONTINUING OPERATIONS |
12,091 | 10,768 | ||||||
Tax expense or income from continuing operations |
(3,884) | (3,282) | ||||||
PROFIT OR LOSS AFTER TAX FROM CONTINUING OPERATIONS |
8,207 | 7,486 | ||||||
Profit or loss after tax from discontinued operations |
| | ||||||
PROFIT FOR THE PERIOD |
8,207 | 7,486 | ||||||
Profit attributable to non-controlling interests |
1,588 | 1,282 | ||||||
Profit attributable to the parent |
6,619 | 6,204 | ||||||
EARNINGS PER SHARE (euros) |
||||||||
Basic |
0.40 | 0.40 | ||||||
Diluted |
0.40 | 0.40 |
NOTE: | The financial information in this report was approved by the Banks Board of Directors. following a favourable report from the Audit Committee |
32 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Consolidated summarised financial statements
Consolidated balance sheet ( million)
ASSETS | 31.12.17 | 31.12.16 | ||||||
Cash, cash balances at central banks and other demand deposits |
110,995 | 76,454 | ||||||
Financial assets held for trading |
125,458 | 148,187 | ||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
50,891 | 38,145 | ||||||
Financial assets measured at fair value |
34,782 | 31,609 | ||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
5,766 | 2,025 | ||||||
Financial assets available for sale |
133,271 | 116,774 | ||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
43,079 | 23,980 | ||||||
Loans and receivables |
903,013 | 840,004 | ||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
8,147 | 7,994 | ||||||
Investments held, to-maturity |
13,491 | 14,468 | ||||||
Memorandum items: lent or delivered as guarantee with disposal or pledge rights |
6,996 | 2,489 | ||||||
Hedging derivates |
8,537 | 10,377 | ||||||
Changes in fair value of hedged items in portfolio hedges of interest rate risk |
1,287 | 1,481 | ||||||
Investments |
6,184 | 4,836 | ||||||
Associated companies |
1,987 | 1,594 | ||||||
Controlled entities |
4,197 | 3,242 | ||||||
Reinsurance assets |
341 | 331 | ||||||
Tangible assets |
22,974 | 23,286 | ||||||
Property. plant and equipment |
20,650 | 20,770 | ||||||
For own-use |
8,279 | 7,860 | ||||||
Leased out under an operating lease |
12,371 | 12,910 | ||||||
Investment property |
2,324 | 2,516 | ||||||
Of which: leased out under an operating lease |
1,332 | 1,567 | ||||||
Memorandum ítems: acquired in financial lease |
96 | 115 | ||||||
Intangible assets |
28,683 | 29,421 | ||||||
Goodwill |
25,769 | 26,724 | ||||||
Other intangible assets |
2,914 | 2,697 | ||||||
Tax assets |
30,243 | 27,678 | ||||||
Current tax assets |
7,033 | 6,414 | ||||||
Deferred tax assets |
23,210 | 21,264 | ||||||
Other assets |
9,766 | 8,447 | ||||||
Insurance contracts linked to pensions |
239 | 269 | ||||||
Inventories |
1,964 | 1,116 | ||||||
Other |
7,563 | 7,062 | ||||||
Non-current assets held for sale |
15,280 | 5,772 | ||||||
TOTAL ASSETS |
1,444,305 | 1,339,125 |
FINANCIAL REPORT 2017 | 33 |
JANUARY - DECEMBER » Consolidated summarised financial statements
Consolidated balance sheet ( million)
LIABILITIES AND EQUITY | 31.12.17 | 31.12.16 | ||||||
Financial liabilities held for trading |
107,624 | 108,765 | ||||||
Financial liabilities designated at fair value through profit or loss |
59,616 | 40,263 | ||||||
Memorandum ítems: subordinated liabilities |
| | ||||||
Financial liabilities at amortised cost |
1,126,069 | 1,044,240 | ||||||
Memorandum ítems: subordinated liabilities |
21,510 | 19,902 | ||||||
Hedging derivatives |
8,044 | 8,156 | ||||||
Changes in fair value of hedged items in portfolio hedges of interest rate risk |
330 | 448 | ||||||
Liabilities under insurance contracts |
1,117 | 652 | ||||||
Provisions |
14,489 | 14,459 | ||||||
Pensions and other post-retirement obligations |
6,345 | 6,576 | ||||||
Other long term employee benefits |
1,686 | 1,712 | ||||||
Taxes and other legal contingencies |
3,181 | 2,994 | ||||||
Contingent liabilities and commitments |
617 | 459 | ||||||
Other provisions |
2,660 | 2,718 | ||||||
Tax liabilities |
7,592 | 8,373 | ||||||
Current tax liabilities |
2,755 | 2,679 | ||||||
Deferred tax liabilities |
4,837 | 5,694 | ||||||
Other lialibities |
12,591 | 11,070 | ||||||
Liabilities associated with non-current assets held for sale |
| | ||||||
TOTAL LIABILITIES |
1,337,472 | 1,236,426 | ||||||
Sharehoders equity |
116,265 | 105,977 | ||||||
Capital |
8,068 | 7,291 | ||||||
Unpaid capital which has been called up |
| | ||||||
Memorandum ítems: uncalled up capital |
| | ||||||
Share premium |
51,053 | 44,912 | ||||||
Equity instruments issued other than capital |
525 | | ||||||
Equity component of compound financial instruments |
| | ||||||
Other equity instruments |
525 | | ||||||
Other equity |
216 | 240 | ||||||
Accumulated retained profit |
53,437 | 49,953 | ||||||
Revaluation reserves |
| | ||||||
Other reserves |
(1,602) | (949) | ||||||
(-) Own shares |
(22) | (7) | ||||||
Profit attributable to shareholders of the parent |
6,619 | 6,204 | ||||||
(-) Interim Dividends |
(2,029) | (1,667) | ||||||
Other accumulated results |
(21,776) | (15,039) | ||||||
Items not reclassified to profit or loss |
(4,034) | (3,933) | ||||||
Actuarial gains or losses on defined benefit pension plans |
(4,033) | (3,931) | ||||||
Non-current assets classified as held for sale |
| | ||||||
Other recognised income and expense of investments in subsidaries, joint ventures and associates |
(1) | (2) | ||||||
Other valuation adjustments |
| | ||||||
Items that may be reclassified to profit or loss |
(17,742) | (11,106) | ||||||
Hedge of net investments in foreign operations (effective portion) |
(4,311) | (4,925) | ||||||
Exchange rate differences |
(15,430) | (8,070) | ||||||
Hedging derivatives, Cash flow hedges (effective portion) |
152 | 469 | ||||||
Available-for-sale financial assets |
2,068 | 1,571 | ||||||
Debt instruments |
1,154 | 423 | ||||||
Equity instruments |
914 | 1,148 | ||||||
Non-current assets classified as held for sale |
| | ||||||
Other recognised income and expense of investments in subsidaries. joint ventures and associates |
(221) | (151) | ||||||
Non-controlling interest |
12,344 | 11,761 | ||||||
Other accumulated results |
(1,436) | (853) | ||||||
Other items |
13,780 | 12,614 | ||||||
TOTAL EQUITY |
106,833 | 102,699 | ||||||
TOTAL LIABILITIES AND EQUITY |
1,444,305 | 1,339,125 | ||||||
Memorandum items |
||||||||
Contingent liabilities |
49,117 | 44,434 | ||||||
Contingent commitments |
237,970 | 231,962 |
34 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Alternative performance measures
» Alternative performance measures (APM)
Below we set out information on alternative performance measures in order to comply with the guidelines published by the European Securities and Markets Authority, ESMA (Guidelines on Alternative Performance Measures).
| The Group uses the following indicators for managing its business. They enable profitability and efficiency, credit portfolio quality, the volume of tangible equity per share and the net loan-to-deposit ratio to be measured, analysing their evolution and comparing them with those of our competitors. |
| 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. |
| The credit risk indicators measure the quality of the credit portfolio and the percentage of non-performing loans covered by provisions. |
| The capitalisation indicator provides information on the volume of tangible equity per share. |
| Other indicators are also included. The loan-to-deposit ratio (LTD) identifies the relationship between net customer loans and advances and customer deposits, assessing the proportion of loans and advances granted by the Group that are funded by customer deposits. The Group also uses gross customer loan magnitudes excluding reverse repurchase agreements (repos) and customer deposits excluding repos. In order to analyse the evolution of the traditional commercial banking business of granting loans and capturing deposits, repos and reverse repos are excluded as they are mainly treasury business products and highly volatile. |
Impact of exchange rate movements on profit and loss accounts
The Group presents, at both the Group level as well as the business unit level, the real changes in the income statement as well as the changes excluding the exchange rate effect, as it considers the latter facilitates analysis since it enables businesses movements to be identified without taking into account the impact of converting each local currency into euros.
Said variations excluding the impact of exchange rate movements are calculated by converting P&L lines for the different business units comprising the Group into our presentation currency, the euro, applying the average 2017 exchange rate for all periods contemplated in the analysis. The average exchange rates for the main currencies in which the Group operates used are set out on page 9.
Impact of exchange rate movements on the balance sheet
The Group presents, at both the Group level as well as the business unit level, the real changes in the balance sheet as well as the changes excluding the exchange rate effect for loans and advances to customers excluding reverse repos and customer funds (which comprise deposits and mutual funds) excluding repos. As with the income statement, the reason is to facilitate analysis by isolating the changes in the balance sheet that are not caused by converting each local currency into euros.
These changes excluding the impact of exchange rate movements are calculated by converting loans and advances to customers excluding reverse repos and customer funds excluding repos, into our presentation currency, the euro, applying the closing exchange rate on the last working day of 2017 to all periods contemplated in the analysis. The end-of-period exchange rates for the main currencies in which the Group operates used are set out on page 9.
Impact of non-recurring items on the consolidated profit and loss accounts
With regard to the results, a summary of the consolidated profit and loss accounts for 2016 and 2017 can be found on page 32. In these accounts, results are included in their corresponding accounting item, even when, in the Groups opinion, they distort the comparison between periods.
Therefore, summarised profit and loss accounts for management purposes (rather than for accounting purposes) for the last two quarters of 2017 and the full year 2016 and 2017 results are presented on page 4. In these accounts, balances of said distorting items, net of tax and minority interests, are included in a separate line which the Group calls net capital gains and provisions just above the Groups attributable profit. The Group believes that this statement explains more clearly the changes in the income statement. Those capital gains and provisions considered as non-recurring are subtracted from each of the income statement lines where they were naturally recorded.
FINANCIAL REPORT 2017 | 35 |
JANUARY - DECEMBER » Alternative performance measures
Additionally, the following table reconciles attributable profit by isolating the non-recurring impacts in 2016 and 2017 and the impact of Banco Popular as of its acquisition on 7 June 2017. Additional information regarding net capital gains and provisions is included on page 4.
Adjusted attributable profit to the Group. Twelve months ended December 31
EUR million
2017 | 2016 | % change between periods |
||||||||||
Unadjusted attributable profit to the Santander Group |
6,619 | 6,204 | +7% | |||||||||
(-) Net capital gains and provisions |
(897) | (417) | +115% | |||||||||
Adjusted attributable profit to the Santander Group |
7,516 | 6,621 | +14% | |||||||||
(-) Adjusted attributable profit Banco Popular |
263 | | | |||||||||
Adjusted attributable profit to the Group w/o Banco Popular |
7,253 | 6,621 | +10% |
The definitions of each of the previously-mentioned indicators and how they are calculated are given below:
Profitability and Efficiency
Ratio |
Formula |
Relevance of the metric | ||
RoE (Return on equity) |
Groups attributable profit Average stockholders equity* (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) |
Groups attributable profit Average stockholders equity* (excl. minority interests) - intangibles assets |
This is a very common indicator, used to evaluate the profitability of the company as a percentage of a 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 | Groups underlying attributable profit Average stockholders equity* (excl. minority interests) - intangibles assets |
This indicator measures the profitability of the tangible equity of a company arising from ordinary activities, i.e. excluding net capital gains and provisions. | ||
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 net capital gains and provisions) to the banks risk weighted assets. | ||
Efficiency | Operating expenses** Gross 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 operating income. |
36 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER » Alternative performance measures
Credit Risk
|
||||
Ratio |
Formula |
Relevance of the metric | ||
NPL ratio (Non-performing loans) |
Non-performing loans and advances to customers and guarantees and non-performing contingent liabilities (without country risk) Total Risk*** |
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, guarantees and contingent liabilities Non-performing loans and advances to customers, guarantees and non-performing contingent liabilities |
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. | ||
Market Capitalisation
|
||||
Ratio |
Formula |
Relevance of the metric | ||
TNAV per share (Tangible net asset value per share) |
Tangible book value**** 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. | ||
Other indicators
|
||||
Ratio |
Formula |
Relevance of the metric | ||
LtD (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. |
(*) Stockholders equity = Capital and Reserves + Accumulated other comprehensive income + Group Attributable profit + Dividends
(**) Operating expenses: General administrative expenses + Depreciation and amortisation
(***) Total risk = Total loans & advances and guarantees to customers (performing and non-performing) + non-performing contingent liabilities
(****) Tangible book value = Shareholders equity + Accumulated other comprehensive income - Intangible assets
FINANCIAL REPORT 2017 | 37 |
JANUARY - DECEMBER » Alternative performance measures
Finally, below the numerical value of each indicator is given. For indicators related to credit risk, capitalisation and others, the fourth quarter data coincide with year-end since they are concepts relating to end of reference period balances.
Profitability and efficiency | 4Q 17 | 3Q 17 | 2017 with |
|||||||||||||||||
RoE |
7.81% | 7.87% | 7.14% | 6.99% | ||||||||||||||||
Attributable profit to the Group |
7,313 | 7,391 | 6,619 | 6,204 | ||||||||||||||||
Average stockholders equity* (excluding minority interests) |
93,628 | 93,855 | 92,638 | 88,744 | ||||||||||||||||
RoTE |
11.21% | 11.31% | 10.41% | 10.38% | ||||||||||||||||
Attributable profit to the Group |
7,313 | 7,391 | 6,619 | 6,204 | ||||||||||||||||
Average stockholders equity* (excl. minority interests)intangible assets |
65,253 | 65,363 | 63,594 | 59,771 | ||||||||||||||||
Underlying RoTE |
11.79% | 12.10% | 11.82% | 11.08% | ||||||||||||||||
Underlying attributable profit to the Group |
7,696 | 7,906 | 7,516 | 6,621 | ||||||||||||||||
Average stockholders equity* (excl. minority interests)intangible assets |
65,253 | 65,363 | 63,594 | 59,771 | ||||||||||||||||
RoA |
0.61% | 0.61% | 0.58% | 0.56% | ||||||||||||||||
Consolidated profit |
8,899 | 8,875 | 8,205 | 7,508 | ||||||||||||||||
Average total assets |
1,460,975 | 1,458,196 | 1,407,681 | 1,337,661 | ||||||||||||||||
RoRWA |
1.44% | 1.42% | 1.35% | 1.29% | ||||||||||||||||
Consolidated profit |
8,899 | 8,875 | 8,205 | 7,508 | ||||||||||||||||
Average risk weighted assets |
616,761 | 624,895 | 606,308 | 580,777 | ||||||||||||||||
Underlying RoRWA |
1.48% | 1.50% | 1.48% | 1.36% | ||||||||||||||||
Underlying consolidated profit |
9,142 | 9,390 | 8,963 | 7,893 | ||||||||||||||||
Average risk weighted assets |
616,761 | 624,895 | 606,308 | 580,777 | ||||||||||||||||
Efficiency ratio (with amortisations) |
49.4% | 47.1% | 47.4% | 48.1% | ||||||||||||||||
Operating expenses** |
5,961 | 5,766 | 22,918 | 21,088 | ||||||||||||||||
Gross income |
12,062 | 12,252 | 48,392 | 43,853 | ||||||||||||||||
|
||||||||||||||||||||
2017 | ||||||||||||||||||||
Credit risk | w/o Popular |
with Popular |
2016 | |||||||||||||||||
NPL ratio |
3.38% | 4.08% | 3.93% | |||||||||||||||||
Non-performing loans and advances to customers and guarantees and non-performing contingent liabilities |
28,104 | 37,596 | 33,643 | |||||||||||||||||
Total risk*** |
832,655 | 920,968 | 855,510 | |||||||||||||||||
Coverage ratio |
70.8% | 65.2% | 73.8% | |||||||||||||||||
Provisions to cover impairment losses on loans and advances to customers, guarantees and contingent liabilities |
19,906 | 24,529 | 24,835 | |||||||||||||||||
Non-performing loans and advances to customers, guarantees and non-performing contingent liabilities |
28,104 | 37,596 | 33,643 | |||||||||||||||||
Cost of credit |
1.12% | 1.07% | 1.18% | |||||||||||||||||
Allowances for loan loss provisions over the last 12 months |
8,997 | 9,111 | 9,518 | |||||||||||||||||
Average loans and advances to customers over the last 12 months |
803,488 | 853,479 | 806,595 | |||||||||||||||||
|
||||||||||||||||||||
2017 | ||||||||||||||||||||
Market capitalisation | with Popular |
2016 | ||||||||||||||||||
TNAV (tangible book value) per share |
4.15 | 4.15 | ||||||||||||||||||
Tangible book value**** |
66,985 | 61,517 | ||||||||||||||||||
Number of shares w/o treasury stock (million)***** |
16,132 | 14,825 | ||||||||||||||||||
|
||||||||||||||||||||
2017 | ||||||||||||||||||||
Others | w/o Popular |
with Popular |
2016 | |||||||||||||||||
Loan-to-deposit ratio |
109% | 109% | 114% | |||||||||||||||||
Net loans and advances to customers |
773,398 | 848,914 | 790,470 | |||||||||||||||||
Customer deposits |
712,770 | 777,730 | 691,111 |
(*).- | Stockholders equity = Capital and Reserves + Accumulated other comprehensive income + Attributable profit to the Group + Dividends |
(**).- | Operating expenses: General administrative expenses + Depreciation and amortisation |
(***).- | Total risk = Total loans & advances and guarantees to customers (performing and non-performing) + non-performing contingent liabilities |
(****).- | Tangible book value = Shareholders equity + Accumulated other comprehensive income-Intangible assets |
(*****).- | In 2016, data adjusted to capital increase of July 2017. |
Notes:
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 September to December in 4Q and June to September in 3Q and 13 months in the case of annual figures (December to December). |
2) | For periods less than one year, and if there are results which distort period-on-period business comparisons, the profit used to calculate RoE and RoTE is the annualised underlying attributable profit to which said distorting results are added without annualising. |
3) | For periods less than one year, and if there are results which distort period-on-period business comparisons, the profit used to calculate RoA and RoRWA is the consolidated annualised profit, to which said distorting 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). |
38 | FINANCIAL REPORT 2017 |
JANUARY - DECEMBER »
NOTE
Important information
Banco Santander. S,A, (Santander) cautions that this financial 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, These factors include. but are not limited to: (1) general market. macro-economic. industry. governmental and regulatory trends; (2) movements in local and international securities markets. currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers. obligors and counterparties, Numerous factors. including those reflected in the Annual Report on Form 20-F filed with the Securities and Exchange Commission of the United States of America (the SEC) under Key Information-Risk Factors- and in the Documento de Registro de Acciones filed with the Spanish Securities Market Commission (the CNMV) under Factores de Riesgo- could affect the future results of Santander and could result in other results deviating materially from those anticipated in the 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 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,
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,
Note: Statements as to historical performance or financial accretion are not intended to mean that future performance. share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year, Nothing in this report should be construed as a profit forecast,
The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable accounting principles of our public subsidiaries in such geographies, Accordingly. the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries,
FINANCIAL REPORT 2017 | 39 |
31 January 2018 2017 Earnings Presentation Ana Botín, Group Executive Chairman José Antonio Álvarez, Group CEO
Important Information Banco Santander, S.A. (Santander) cautions that this presentation contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 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 presentation and include, without limitation, statements concerning our future business development and economic performance and our shareholder remuneration policy. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, industry, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. Numerous factors, including those reflected in the Annual Report on Form 20-F filed with the Securities and Exchange Commission of the United States of America (the SEC) under Key Information-Risk Factors- and in the Documento de Registro de Acciones filed with the Spanish Securities Market Commission (the CNMV) under Factores de Riesgo- could affect the future results of Santander and could result in other results deviating materially from those anticipated in the 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 presentation and are based on the knowledge, information available and views taken on such date; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such 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 the presentation. No investment activity should be undertaken on the basis of the information contained in this presentation. In making this presentation available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever. Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000. Note: Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast. The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable accounting principles of our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries.
Important Information In addition to the financial information prepared under International Financial Reporting Standards (IFRS), this presentation includes certain alternative performance measures as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415es) as well as Non-IFRS measures. The APMs and Non-IFRS Measures are performance measures that have been calculated using the financial information from the Santander Group but that are not defined or detailed in the applicable financial information framework and therefore have neither been audited nor are capable of being completely audited. These APMs and Non-IFRS Measures are been used to allow for a better understanding of the financial performance of the Santander Group but should be considered only as additional information and in no case as a replacement of the financial information prepared under IFRS. Moreover, the way the Santander Group defines and calculates these APMs and Non-IFRS Measures may differ to the way these are calculated by other companies that use similar measures, and therefore they may not be comparable. For further details of the APMs and Non-IFRS Measures used, including its definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFR, see Section 26 of the Documento de Registro de Acciones for Banco Santander filed with the CNMV on July 4, 2017 (available on the Web page of the CNMV -www.cnmv.es- and at Banco Santander -www.santander.com), Item 3A of the Annual Report on Form 20-F for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission on March 31, 2017 (the Form 20-F) and section Alternative Performance Measures of the Financial Report 4th Quarter 2017 (available at Banco Santander www.santander.com). For a discussion of the accounting principles used in translation of foreign currency-denominated assets and liabilities to euros, see note 2(a) to our consolidated financial statements on Form 20-F and to our consolidated financial statements available on the CNMVs website (www.cnmv.es) and on Banco Santanders website (www.santander.com).
1 |
|
Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix |
2017 key achievements Growth Profitability Strength Loyal customers Underlying RoTE FL CET1 17Mn (+13%) 1 % (+70 bps) 10.8 % (+29 bps) Customer revenues Cos t income NPL ratio 45,892Mn (+11%) 4 % 70 bps) 4.0 % (+15 bps) Note: All metrics include Popular, except ´loyal customers´ 5
Growth: Underlying PBT +20% YoY and attributable profit +7% YoY €Mn 2017 2016 Change Net interest income 34,296 31,089 +10% Net fees 11,597 10,180 +14% Customer revenues 45,892 41,268 +11% Other income 2,499 2,585 -3% Net capital gains & provisions Gross income 48,392 43,853 +10% Allfunds +297 Operating expenses -22,918 -21,088 +9% Integration processes -385 Net operating income 25,473 22,766 +12% Goodwill -603 Net loan-loss provisions -9,111 -9,518 -4% Other -206 Underlying PBT 13,550 11,288 +20% Total -897 Attributable profit 6,619 6,204 +7% 6
Growth: Building loyalty & deeper relationships Loyal Digital Net fees customers customers 17.3Mn 25.4Mn €11.6Bn +13% +21% +14% YoY growth YoY growth YoY growth Note: Customer metrics exclude Popular 7
Profitability: RoTE improves +70bps YoY to c.12% Europe Underlying RoTE Local peers avg. 12% 8% c.12% (YoY) (+1pp) 9% Americas Local peers avg. 17% 17% Global (YoY) (+2pp) Peers Source: Company data and Bloomberg Note: RoTE as of 9M´17 for peers. Global Peers included in the average are Wells Fargo, JP Morgan, Bank of America, UBS, BBVA, ING, BNP Paribas, HSBC, Unicredit, Lloyds, Citibank, Intesa Sanpaolo, Société Générale, Standard Chartered, and Deutsche Bank. Santander vs peers average based on ROTEs in local criteria 8
Profitability: Our cost-to-income improves by 70bps YoY to c.47% Cost-to-income Top 3 in customer satisfaction 64% c.47% Global Peers Source: Cost to income company data and Bloomberg. Note: Cost-to-income as of 9M´17 for peers. Peers included for average are Wells Fargo, JP Morgan, Bank of America, UBS, BBVA, ING, BNP Paribas, HSBC, Unicredit, Lloyds, Citibank, Intesa Sanpaolo, Société Générale, Note: Local criteria (1) Brazil local peers include only private banks 9 Standard Chartered, Deutsche Bank and Barclays
Strength: Focused on profitable growth & disciplined capital allocation Organic growth CET1 FL (YoY) 2016 2017 1 +29 bps RoTE c.11% c.12% RoRWA1 1.4% 1.5% +53 bps (organic) -5 bps Inorganic growth (other) 10.84% -19 bps 10.55% (perimeter) Acquisitions Poland Argentina 2016 2017 Disposals Real Estate (1) Underlying, including PSA operations 10
Strength: Priority for SAN Spain/Popular is responsible and profitable growth Key challenges addressed in the while managing integration first 60 da deposits mkt share un/Oct) 51% Popular Real estate disposal revenues (YoY)* Loyalty bond from RoTE (YoY)* acceptance in a responsible way Customer Wages satisfaction * Excluding Popular. 11
2017 2017 Targets Delivered all Loyal customers (Mn) 17 17 strategic Digital customers (Mn) 25 25 Fee income1 13% Increase targets ahead Cost of credit risk 1.07% Improve of plan Cost-to-income 47.4% Broadly stable EPS (€) 0.40 Increase DPS (€) 2 0.22 Increase FL CET1 (organic per year) +53bps +40bps RoTE 3 11.8% Increase Note: Customer metrics exclude Popular (1) % change (constant euros) (2) Total dividends charged to 2017 earnings 12 are subject to the Board and AGM approval (3) Underlying
and growing the underlying EPS by 8% €/share 2016 2017 +11% 0.19 Cash DPS 0.17 TNAV/ share 4.15 4.15 +8% 0.463 Underlying EPS 0.429 Note: 2016 metrics have been re-stated to reflect the capital increase 13
Embedding our common culture in the day to day of all our teams Rewarding people for Making solid progress in the Becoming the best place doing things right Santander Way to work 60% What? Top 3 in 5 countries SIMPLE | PERSONAL | FAIR (+2 YoY) 40% How? 2018 target achieved ? 1 year ahead c.100k employees 81% (+9pp) employees agree evaluated with new we behave in a SPF way methodology 14
Fulfilling our purpose of helping people and businesses prosper Promoting social and financial inclusion Santander invests in numerous social Microcredits programs to support communities > 200K micro- People helped 1.9Mn entrepreneurs supported 1.7Mn 1.2Mn 2016 2017E 2015 Santander Universities Supporting education Supporting entrepreneurship Santander Santander, the worlds largest corporate The biggest university contributor to education entrepreneurship ecosystem in the world 15
1 |
|
Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 16 |
2017 Key achievements Growth Profitability Strength Customer revenues Underlying PBT FL CET1 45,892Mn (+11%) 13,550 n (+20%) 10.84% (+29 bps) Loans1 Underlying RoTE NPL ratio +12% (+2% Pop) 12% (+70 bps) 4.08% 15 bps) Customer funds1 EPS Cost of credit 17% (+8% Pop) 0.404 (+1%) 1.07% 11 bps) (1) % change in constant euros 17
Excellent quality and strong top-line growth with performance sustained QoQ 2017 % vs. 2016 Underlying attributable profit €Mn Euros Constant €Mn euros Excluding Popular Net interest income 34,296 10 10 Net fees 11,597 14 13 Customer revenues 45,892 11 11 2,022 1,993 Other income 2,499 -3 -2 Gross income 48,392 10 10 1,790 1,909 Operating expenses -22,918 9 9 1,711 1,734 1,854 Net operating income 25,473 12 11 1,679 1,638 Net loan-loss provisions -9,111 -4 -6 1,700 1,523 Underlying PBT 13,550 20 21 Underlying attrib. profit 7,516 14 14 Net capital gains and provisions -897 115 117 1Q16 2Q 3Q 4Q 1Q17 2Q 3Q 4Q Attributable Profit 6,619 7 7 Note: Contribution to the SRF (net of tax) recorded in 2Q16 (-€120Mn) and 2Q17 (-€146Mn). Contribution to the DGF (net of tax) in 4Q6 (-€131Mn) and 4Q17 (-€186Mn) 18
Results impacted by several one-offs, mainly related to integrations and goodwill 2017 % vs. 2016 €Mn Euros euros Net interest income 34,296 10 10 Net fees 11,597 14 13 (€Mn, net of tax) Customer revenues 45,892 11 11 Other income 2,499 -3 -2 Allfunds +297 Gross income 48,392 10 10 Integration processes -385 Operating expenses -22,918 9 9 Goodwill -603 Net operating income 25,473 12 11 Net loan-loss provisions -9,111 -4 -6 Other -206 Underlying PBT 13,550 20 21 Underlying attrib. profit 7,516 14 14 Total -897 Net capital gains and provisions1 -897 115 117 Attributable Profit 6,619 7 7 (1) Details of Net capital gains and provisions on slide 56 19
Revenues: sustained growth QoQ €Mn excluding Popular driven by strong recurring customer revenues Net interest income 8,342 8,458 7,969 7,632 Fee income 2,836 2,913 2,582 2,608 Other income1 635 535 519 560 1Q16 2Q 3Q 4Q 1Q17 2Q 3Q 4Q Note: Constant euros. (1) Other income includes gains on financial transactions, income from the equity accounted method, dividends and other operating results. Contribution to the SRF recorded in 2Q16 and 2Q17. Contribution to the DGF in 4Q16 and 4Q17 20
Costs: flat in the Group in real terms Chg. 2017 / 2016 (%) ?Revenues Nominal In real terms1 vs. costs 6.5 3.0? 3.4 0.7? 3.8 0.2? -1.1 -3.1? with cost-to-income stable or 11.9 5.8? improving in 8 geographies 1.7 -0.5? -6.7 -8.0? 1.9 -0.2 - 48.9 4.4 -1.9 0.0? C.C. 5.8 3.9 - Note: Constant euros. (1) Excluding inflation and perimeter 21
Loan-loss provisions: lower even though the loan portfolio increased Cost of credit (%) Better cost of credit at Group level and in most geographies 1.18 1.07 2016 2017 22
NPL ratio: The Groups ratio improved YoY for the 4th straight year (ex-Popular) NPL ratio (%) Group NPL ratio improving YoY backed by 8 geographies Including Popular 5.37 4.24 4.08 3.93 3.74 3.55 3.51 3.38 D16 M17 J17 S17 D17 23
Continuing the reduction of real estate exposure Real estate exposure1 Net value €Bn €Bn Dec17 41.1 29.4 Real estate assets 4.7 Foreclosed assets 3.5 Rental assets 1.2 11.7 RE non-performing loans (NPLs) 1.0 6.0 5.7 RE assets + RE non-performing loans 5.7 Gross value Blackstone Gross value Provisions Net value Jun17 transaction Dec17 Dec17 and other (1) Santander Real estate Activity in Spain and Banco Popular 24
Progress in reaching our target of fully-loaded CET1 >11% in 2018 In the quarter, high organic capital generation FL CET1 (%) YoY Dec17 change +0.27 10.80 10.84 10.55 -0.15 -0.08 +61 bps FL Total capital ratio 14.48% FL Tier 1 capital ratio 12.11% +58 bps Leverage ratio 5.0% stable Expected to organically generate 1 c.40 bps in FL CET1 per year after CET1 CET1 Organic Perimeter Other CET1 D16 S17 D17 paying dividends and growing loans reaching an organic annual growth of 53 bps (+29 bps net of perimeter and other) (1) Including SAM+ Allfunds (-10 bps) and SCUSA settlement (-5 bps) 25
Funding plan focused on TLAC-eligible instruments: Parent Bank and rest of units met 2017 plan Parent Bank funding plan 2017 (€Bn) Target Issuances Issuances 2017: Senior Non 9.9 12-14 €27Bn (c.€19Bn TLAC-eligible) preferred Diversified issuers: Senior preferred - 0.7 Parent bank, SCF, UK and USA Diversified currencies: AT1 1.7 EUR, USD, GBP 2-3 Hybrids T2 1.1 Popular: Additional need for €750Mn AT1 and €1Bn T2 Total 14-17 13.5 Santander in line with MREL requirements1 (1) Based on current available information 26
Breakdown by geographies 27
Solid profit growth across the board with results well diversified by geography 2017 Underlying attributable profit Underlying attributable profit in core geographies Americas Europe €Mn and % chg. / 2016 in constant euros 2,544 +34% 48% 52% 1,498 -4% 1,254 +15% Other Latam, 1% Argentina, 4% Chile, 6% UK, 16% 1,180 +15% 710 +16% 586 +12% Spain1; 15% Brazil, 26% 440 +10% 408 +5% 359 +14% SCF, 13% Mexico, 7% 300 +8% USA, 4% Portugal, 5% Poland, 3% 263 n.a. (*) Excluding Corporate Centre and Real Estate Activity Spain (1) Popular included (3%) 28
BRAZIL KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 2,530 2.9 10,078 17.3 Loyal customers (million) 3.7 4.2 Fee income 929 9.3 3,640 16.2 Digital customers (million) 6.4 8.6 Gross income 3,512 1.8 14,273 18.3 NPL ratio (%) 5.90 5.29 Operating expenses -1,289 6.1 -5,080 6.5 LLPs -814 2.0 -3,395 -5.7 Cost of credit (%) 4.89 4.36 PBT 1,198 1.8 4,612 56.1 Efficiency ratio (%) 39.5 35.6 Underlying att. profit 642 0.2 2,544 33.7 Non-recurring 0 0 RoTE (%) 13.8 16.9 Attributable profit 642 0.2 2,544 33.7 (1) €Mn and % change in constant euros ACTIVITY Volumes in €Bn Business expanded, with greater operational efficiency, driving top-line growth, Yield on loans well above the average of our competitors (RoTE: 17%) 107 16.63% 17.08% 16.74% 16.20% 15.66% 74 0% Strong growth in revenues: NII supported by higher volumes and management QoQ of spreads; fee income driven by greater loyalty and customer activity +4% QoQ Cost of deposits +24% 8.86% 8.19% Consistent improvement in efficiency ratio reflected higher productivity +7% YoY 6.83% 6.43% YoY 5.64% Loans Funds 4Q16 1Q17 2Q 3Q 4Q Market share gain in loans while improving cost of credit Note: % change in constant euros. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds 29
UNITED KINGDOM KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 1,048 -3.3 4,363 6.2 Loyal customers (million) 4.0 4.2 Fee income 243 -2.3 1,003 4.3 Digital customers (million) 4.6 5.0 Gross income 1,344 -4.9 5,716 5.4 NPL ratio (%) 1.41 1.33 Operating expenses -721 2.6 -2,861 3.4 LLPs -81 22.4 -205 276.7 Cost of credit (%) 0.02 0.08 PBT 441 -20.2 2,184 -4.5 Efficiency ratio (%) 51.0 50.1 Underlying att. profit 297 -22.0 1,498 -4.4 Non-recurring2 0 0 -100.0 RoTE (%) 10.6 10.3 Attributable profit 297 -22.0 1,498 -2.7 (1) €Mn and % change in constant euros (2) 2016 profit included -€30Mn related to capital gains from the disposal of the stake in VISA Europe, restructuring costs and PPI ACTIVITY Volumes in €Bn Growth in retail c/a balances, mortgages and with UK companies excluding CRE 236 Yield on loans 210 3.08% Revenues up driven by retail liability margin improvement and fee income 3.01% 2.91% 2.83% 2.78% +1% +2% QoQ QoQ Digitalisation supports operational e?ciency and improved customer experience Cost of deposits +1% +3% Credit quality remains solid, excluding single name exposure 0.87% 0.69% 0.66% 0.63% YoY YoY 0.62% Loans Funds 4Q16 1Q17 2Q 3Q 4Q QoQ: asset margin pressure in NII and single name charge in LLPs Note: % change in constant euros. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. Underlying RoTE in 2016 30
SANTANDER CONSUMER FINANCE KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 906 1.3 3,571 5.2 Active customers (million) 17.9 19.9 Fee income 204 -8.6 878 1.8 NPL ratio (%) 2.68 2.50 Gross income 1,132 0.1 4,484 5.1 Operating expenses -506 4.9 -1,978 3.8 Cost of credit (%) 0.47 0.30 LLPs -58 -34.7 -266 -31.5 PBT 512 -3.3 2,083 15.4 Efficiency ratio (%) 44.7 44.1 Underlying att. profit 311 1.0 1,254 14.6 RoTE (%) 14.8 16.4 Non-recurring2 -0 -99.7 -85 Attributable profit 311 39.1 1,168 4.4 (1) €Mn and % change in constant euros (2) 2016 profit included €25Mn related to capital gains from the disposal of the stake in VISA Europe and 2017 profit included -€85Mn related to integration costs ACTIVITY Volumes in €Bn High diversification and leadership in Europe 92 Yield on loans Increased new lending: auto loans (+11%) and credit cards (+9%) +4% QoQ 40 5.33% 5.32% 5.23% 5.21% 5.16% +4% Best-in-class profitability: underlying profit up, boosted by higher NII and QoQ +6% historically low NPLs and cost of credit YoY +9% YoY Loans New lending Main contribution to underlying profit: Germany (€364Mn), Nordic countries 2017 4Q16 1Q17 2Q 3Q 4Q (€318Mn) and Spain (€241Mn) Note: % change in constant euros. Loans excluding repos. Underlying RoTE Excluding Santander Consumer UK profit, recorded in Santander UK results. Including it, 2017 underlying attributable profit: €1,373Mn (+12% vs. 2016); 4Q17: €343Mn (+1% vs. 3Q17) 31
SPAIN excl. Popular KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 686 -5.5 2,909 -5.5 Loyal customers (million) 1.3 1.9 Fee income 562 10.3 2,067 16.1 Digital customers (million) 2.7 3.2 Gross income 1,368 -4.7 5,694 1.5 NPL ratio (%) 5.41 4.72 Operating expenses -841 3.2 -3,259 -1.1 LLPs -110 5.8 -513 -12.3 Cost of credit (%) 0.37 0.33 PBT 395 -14.3 1,714 17.5 Efficiency ratio (%) 58.8 57.2 Underlying att. profit 265 -14.8 1,180 15.4 Non-recurring2 0 0 -100.0 RoTE (%) 8.9 10.1 Attributable profit 265 -14.8 1,180 46.4 (1) €Mn (2) 2016 profit included -€216Mn related to capital gains from the disposal of the stake in VISA Europe and restructuring costs ACTIVITY Volumes in €Bn 251 Building lasting relations with customers and ongoing digital transformation Yield on loans Market share gain in mortgages and corporates. Leaders in mobile payments 2.10% 2.04% 2.04% 1.96% 1.96% and GCB 149 +5% QoQ 0% QoQ Cost of deposits Profit backed by fee income (more than offsets pressure on NII), cost control +12% and LLPs. NII + Fee income:+2.4% -2% YoY 0.47% 0.46% 0.46% 0.46% 0.48% YoY QoQ impacted by DGF and higher costs (POS integration perimeter and hardware Loans Funds 4Q16 1Q17 2Q 3Q 4Q depreciation) Note: Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. Underlying RoTE in 2016 32
POPULAR ACTIVITY P&L1 3Q17 4Q17 20172 NII 456 438 1,003 Customer deposits in Spain (€Bn) Fee income 128 129 288 Gross income 634 536 1,309 -28% Operating expenses -388 -390 -873 +15% LLPs -38 -68 -114 71 51 58 PBT 216 71 302 Underlying att. profit 168 85 263 Non-recurring3 -300 - -300 Attributable profit -132 85 -37 Dec16 7Jun17 Dec17 (1) €Mn (2) From 7 June 2017 (3) Integration costs Loans in Spain (excluding real estate) (€Bn) BANCO POPULARS MEASURES IN 4Q17 Loyalty bonds: €764Mn subscribed, 78% of the total amount -4% -2% Agreement to sell TotalBank: estimated positive impact in capital (+5 bps) 73 70 68 Real Estate disposal expected to be completed in 1Q18 Agreement with Labour Unions for the Corporate Centre integration Dec16 7Jun17 Dec17 QoQ profit impacted by the contribution to the DGF (~€63Mn) Note: Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. 33
UNDERLYING ATTRIBUTABLE PROFIT (DETAIL BY MARKETS IN THE APPENDIX) Good performance in other markets: larger customer base, higher profits and better credit quality Mexico 710Mn +16% ? Significant investment in multichannel, digitalisation and commercial initiatives € ; ? Profit up driven by NII and fee income, resulting in a 400 bps higher RoTE. Solid credit quality Chile ? Focus on customer satisfaction, loyalty and digital initiatives €586Mn; +12% ? Profit up driven by commercial revenues, cost control and lower cost of credit ? The commercial transformation programme continues to boost loyal and digital customers Portugal1 €440Mn; +10% ? Profit up due to lower costs and LLPs. Strong improvement in asset quality ? After Popular acquisition Santander Totta is the leading2 privately owned bank ? SBNA: increasing profitability by improving NIM and cost control US1 €408Mn; +5% ? SC USA: good profitability (RoTE: 13%). Focus on enhancing the loan mix and reduce the cost of funding ? Additionally, 4Q17 profit impacted by hurricanes, the SC USA settlement and tax reform Argentina 359 ? Integration of Citibanks retail business completed in August (in 5 months) € Mn; +14% ? Market share gains and profit driven by customer revenues, absorbing integration charges Poland ? Agreement for the acquisition of the retail and private banking businesses of Deutsche Bank Polska €300Mn; +8% ? PBT spurred by NII, fee income, LLPs and cost control. Profit affected by regulatory impacts Note: % change over 2016 in constant euros. (1) Excl. Popular (2) By domestic assets and loans 34
CORPORATE CENTRE P&L €Mn 2016 2017 Higher losses in NII due to increased issuances (TLAC) NII -739 -851 Gains/Losses on FT -243 -227 Negative gains on financial transactions due to cost of hedging, Operating expenses -450 -476 offset by the positive FX impact in the business areas Provisions -73 -227 Tax and minority interests 149 33 Underlying attrib. Profit -1,439 -1,889 Operating expenses account for just 2% of Groups total costs Non-recurring1 -186 -436 Attributable profit -1,625 -2,326 (1) 2017 including a charge for equity stakes and intangible assets, goodwill and a positive impact of Allfunds gains. 2016 includes restructuring costs. 35
1 |
|
Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 36 |
Our vision Our aim To be the best open Our purpose digital financial To help people and services platform, businesses prosper earning the lasting loyalty of our people, customers, shareholders and communities SIMPLE A bank that is | PERSONAL | FAIR 37
Our key assets support the path to long-term success Scale Predictable Innovation growth 38
Scale: We have in-market scale and have proven we can deliver profitable organic growth Ranking in loans market share1 1,000Mn #1 Total population 17Mn Loyal customers 133Mn #3 #5 2 Total customers 25Mn 3%3 Digital customers Latest available data Note*: Santanders market share for the respective countries are: Mexico (13%), Chile (19%), Argentina (10%), Brazil (9%), Portugal (16%, including Popular), UK (10%), Spain (18%, including Popular), SCF (10% in new car loans, including PSA operations and not considering brands financial captive) and Poland (10%) Note**: Customer metrics exclude Popular (1) Only private banks for Portugal, Argentina and Brazil (2) UK mortgages (excluding Social Housing), Consumer credit and commercial loans (excluding Financial Institutions) (3) SBNA 3% market share in the states where the Group operates. SCUSA 3% market share. 39
Predictable growth: Diversified business across Europe & Americas Mature Emerging YoY Growth markets 1 markets 2 Loan portfolio by business Loans +14% +7% Other (0%)3 Global individuals Funds +18% +14% Corporate (+5%)3 Banking Mortgages Customer revenues +7% +16% Corporate (+1%)3 Total SMEs Consumer customers +4%3 +10% Loyal customers +13%3 +14% Note: % change in constant euros (1) Mature markets include Portugal, UK, Spain, SCF and US. (2) Emerging markets include Mexico, Brazil, Argentina, Chile and Poland (3) Excluding Popular. 40
Predictable growth: Over the last 20 years earnings have increased 4x with the lowest volatility amongst peers Quarterly reported EPS volatility (Jan99-9M´17) 711% 358% 128% 113% 92% 78% 52% 46% 44% 32% 9% 1x 9x 1x 1x 5x 2x 3x 2x 1x 6x 4x Net income increase 1999-2016 Source: Bloomberg; Note: GAAP criteria Note: Standard deviation of the quarterly EPS starting from the first available data since Jan99 41
Predictable growth: Cash DPS & customer revenues grew in 2017 by 11% and CET1 by €3.5Bn Top tier profitability allows us to equally: Pay Finance Accumulate dividends usiness capital growth +11% Cash dividend +11% customer +29bps per share revenues 10.84% FL CET1 (2017 vs. 2016) (2017 vs. 2016) (2017 vs. 2016) 42
Innovation: Our priority is to improve customer experience efficiently Distributed Data & A.I ledger technology Platforms & Payments Services 43
Innovation: Same day mobile international payments in 3 clicks & 40 seconds for our retail customers using distributed ledger technology Going live in 4 countries Digital wallet 1Q´2018 Full transparency on fees Personal Finance Manager and FX upfront We expect to be one of the Same day international first global banks to roll Payments out Distributed Ledger Technology based payments for individuals P2P payments €10Bn target market for international retail payments1 Initial investment in September 2015 (1) International retail payments volume (ex-interbank) in Santanders natural markets (Western Europe, Latam, North America and Eastern Europe 44
Innovation: Unique customer insights deliver better experience & bottom line GLOBAL MACHINE LEARNING Increasing both: PLATFORM ? Open source platform and a team of >100 data scientists Customer loyalty? Learning from >5Bn transactions? Results obtained on >10Mn customers Operational 15-30% lower acquisition costs excellence 10-30% increase in loyalty 10-60% lower churn 45
Innovation: Superdigital a digital platform for the unbanked >1Mn ? Can receive transfers customers from third parties IN (Charge)? Top-ups from current account? Transfers from other Super customers ? ATM withdrawals (in any entity) OUT? Payments (Internet and physical) +2.4x ? Transfers to other Super Revenues customers and other banks (2016-17) 46
Innovation: Openbank and Santander Cash Nexus Openbank 100% Digital Santander Cash Nexus (YoY) Global Treasury Services for multinationals +26% Loyal customers Single entry point +20% Deposits growth Up to 75% workload reduction Number of multinationals -27% Deposits cost +25% 154 123 2016 2017 €4.1Bn monthly payments value 47
Innovation: New simple and personal solutions Growing our digital being where our customers customer base are in the digital world Smart watch Pay First bank to offer smart watch Payments c.41% of our active customers Santander App Speak directly or set up a meeting with your banker from your App c.2x more profitable Facebook ChatBot Real time assistant through Facebook Messenger 48
Innovation: Growing the number of digital contacts per customer while reducing our cost per transaction # digital transactions Digital sales share 10,326Mn Over total volume of sales (Dec´17) + 31% 050Mn Costs per transaction 3,791M Transaction costs for every 1,000 transactions (2016-17) -22% 2015 2016 2017 Note: Average of monthly digital transactions (web and mobile) within the Group´s 10 core geographies 49
1 |
|
Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 50 |
Committed to delivering PROFITABILITY improving and GROWTH in a sustainable, above peers. Priorities remain predictable and responsible way operational excellence and customer loyalty +20% Underlying Underlying c.12% PBT RoTE Organic capital growth and low Commercial transformation & volatility earnings, signs of INNOVATION delivering ahead of STRENGTH plan. Highly confident 10.84% CET1 FL meet 2018 targe 51
1 |
|
Delivering ahead of plan 2 Group and business areas review 3 2018 Strategic priorities 4 Key takeaways 5 Appendix 52 |
Appendix Santander Group (with and w/o Popular) and non-recurring items detail Other geographies results Global segments results Liquidity NPL and coverage ratios, and cost of credit Quarterly income statements Glossary 53
Santander Group (with and w/o Popular) and non-recurring items detail 54
Excellent quality and strong top-line growth, with and without Popular 2017 P&L P&L breakdown 2017 % vs. 2016 2017 % vs. 2016 Euros Total Group Euros ant €Mn euros €Mn euros excl. Popular Net interest income 34,296 10 10 Net interest income 33,293 7 7 Net fees 11,597 14 13 Net fees 11,308 11 11 Customer revenues 45,892 11 11 Customer revenues 44,601 8 8 Other income 2,499 -3 -2 Other income 2,481 -4 -3 Gross income 48,392 10 10 Gross income 47,082 7 7 Operating expenses -22,918 9 9 Operating expenses -22,045 5 5 Net operating income 25,473 12 11 Net operating income 25,038 10 10 Net loan-loss provisions -9,111 -4 -6 Net loan-loss provisions -8,997 -5 -7 Underlying PBT 13,550 20 21 Underlying PBT 13,248 17 18 Underlying attrib. profit 7,516 14 14 Underlying attrib. profit 7,253 10 10 Net capital gains and provisions -897 115 117 Net capital gains and provisions -597 43 44 Attributable Profit 6,619 7 7 Attributable Profit 6,656 7 8 55
2016 and 2017 profit impacted by several non-recurring items P&L Net capital gains and provisions 2016 2017 €Mn net of tax €Mn net of tax -1,267 130 Equity stakes and 85 intangible assets Germany integration costs -897 300 Popular integration costs -417 -644 149 USA (hurricanes + increased stake in SC USA + other) 32 SC USA Restatement 137 PPI 370 USA tax 73 reform 603 Goodwill (SC USA and other) 227 475 Restructuring costs Allfunds 297 VISA Europe capital gains capital gains Non-recurring Non-recurring Non-recurring Non-recurring positive results negative results positive results negative results 4Q17 3Q17 56
Highly diversified balance sheet, by geography and product 2017 BALANCE SHEET Volumes performance excluding Popular Loan portfolio: growth supported by developing markets Customer funds: growth in 8 core units Mature markets Developing markets Mature markets Developing markets Dec17 €Bn YoY change Dec17 €Bn YoY change Dec17 €Bn YoY change Dec17 €Bn YoY change Spain 149 -2% Poland 23 5% Spain 251 12% Poland 28 2% UK 236 1% Brazil 74 7% UK 210 3% Brazil 107 24% USA 75 -4% Mexico 27 5% USA 59 -9% Mexico 36 6% SCF 92 6% Chile 38 3% SCF 35 2% Chile 33 0% Portugal 31 8% Argentina 8 44% Portugal 32 2% Argentina 13 53% Other individuals, 11% Individuals demand deposits, 38% GCB, 9% GCB, 11% Home mortgages, 36% Loan portfolio Corporates, 13% Customer funds Corporates, 15% by businesses by businesses SMEs, 9% Individuals time deposits, 13% SMEs, 9% Consumer, 4% Consumer, 18% Individuals mutual funds, 14% Note: Loans excluding repos. Customer funds: deposits excluding repos + marketed mutual funds. % change in constant euros 57
Other geographies results 58
MEXICO KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 630 -1.8 2,601 12.5 Loyal customers (thousands) 1,608 1,993 Fee income 181 -1.5 749 8.7 Digital customers (thousands) 1,282 1,948 Gross income 830 -0.9 3,460 11.5 NPL ratio (%) 2.76 2.69 Operating expenses -345 3.0 -1,382 11.9 LLPs -187 -16.2 -905 12.3 Cost of credit (%) 2.86 3.08 PBT 274 -0.2 1,134 9.7 Efficiency ratio (%) 39.8 39.9 Underlying att. profit 178 4.1 710 16.5 Non-recurring 0 0 RoTE (%) 15.5 19.5 Attributable profit 178 4.1 710 16.5 (1) €Mn and % change in constant euros ACTIVITY 2 Significant investment in multichannel, digitalisation and commercial initiatives Volumes in €Bn 36 Yield on loans Efforts made to retain customers (customer churn: -52%), attract payrolls 11.28% 11.79% 12.02% 12.02% (market share: +83 bps YoY) and increase in digital customers (+52%) 27 10.67% +1% +1% QoQ Profit up due to strong NII and fee income, resulting in a 400 bps higher RoTE QoQ Cost of deposits +5% +6% 3.37% 3.39% Solid credit quality: NPL ratio improved, coverage ratio ~100% and cost of 2.30% 2.67% 3.04% YoY YoY credit around 3% Loans Funds 4Q16 1Q17 2Q 3Q 4Q Note: % change in constant euros. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. (2) Santander Plus, Santander-Aeromexico, Super Connect, Super Digital among others 59
CHILE KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 492 10.0 1,907 0.1 Loyal customers (thousands) 604 622 Fee income 91 -3.4 391 8.6 Digital customers (thousands) 959 1,012 Gross income 630 2.9 2,523 2.0 NPL ratio (%) 5.05 4.96 Operating expenses -248 -3.3 -1,025 1.7 LLPs -110 0.5 -462 -12.0 Cost of credit (%) 1.43 1.21 PBT 276 6.9 1,059 15.9 Efficiency ratio (%) 40.7 40.6 Underlying att. profit 146 1.2 586 11.7 Non-recurring 0 0 RoTE (%) 17.2 17.9 Attributable profit 146 1.2 586 11.7 (1) €Mn and % change in constant euros ACTIVITY Santander is the main privately owned bank in Chile by assets and customers Volumes in €Bn 38 Yield on loans 33 Focus on customer satisfaction, loyalty and digital initiatives: launch of 7.51% 7.53% 7.95% 7.33% 7.33% Digital Onboarding and Santander Life (new model for mass market) 0% -3% QoQ QoQ Cost of deposits Profit up driven by commercial revenues, cost control and lower cost of credit +3% 0% YoY YoY 2.21% 2.10% 1.94% 1.81% 1.87% QoQ profit impacted by volatile local environment Loans Funds 4Q16 1Q17 2Q 3Q 4Q Note: % change in constant euros. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. 60
PORTUGAL excl. Popular KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 181 2.0 697 -4.9 Loyal customers (thousands) 636 686 Fee income 84 -0.2 341 8.7 Digital customers (thousands) 502 558 Gross income 281 -7.8 1,145 -5.3 NPL ratio (%) 8.81 5.71 Operating expenses -138 0.9 -550 -6.7 LLPs 12 12 Cost of credit (%) 0.18 -0.04 PBT 155 8.8 573 7.5 Efficiency ratio (%) 48.7 48.0 Underlying att. profit 104 0.5 440 10.2 Non-recurring 0 0 RoTE (%) 13.0 12.7 Attributable profit 104 0.5 440 10.2 (1) €Mn ACTIVITY Digital transformation boosted sales and loyal and digital customers Volumes in €Bn 31 32 Strong market share in new lending: corporates (17%) and mortgages (21%) Yield on loans 0% +1% Profit up due to lower costs and LLPs. Strong improvement in asset quality QoQ 2.01% 1.97% 1.90% 1.86% 1.84% QoQ +8% +2% Cost of deposits QoQ: Profit hit by lower trading gains and the higher tax charge YoY YoY 0.35% 0.30% 0.25% 0.22% 0.19% After Popular acquisition Santander Totta is the leading2 privately owned bank Loans Funds 4Q16 1Q17 2Q 3Q 4Q Note: Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds (2) By domestic assets and loans, as of Sep17 61
UNITED STATES excl. Popular KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 1,273 -3.3 5,569 -4.1 Loyal customers (thousands) 280 303 Fee income 222 -1.3 971 -10.2 Digital customers (thousands) 778 814 Gross income 1,596 -0.5 6,959 -5.8 NPL ratio (%) 2.28 2.79 Operating expenses -773 3.9 -3,198 1.9 LLPs -638 0.4 -2,780 -11.7 Cost of credit (%) 3.68 3.42 PBT 155 -29.8 892 -12.3 Efficiency ratio (%) 42.5 46.0 Underlying att. profit 71 -23.5 408 5.2 Non-recurring2 -76 -76 138.1 RoTE (%) 3.1 3.1 Attributable profit -5 332 -6.7 (1) €Mn and % change in constant euros (2) 2016 profit included -€32Mn related to SC USA Restatement and in 2017 profit included -€76Mn related to hurricane provisions, SC USA settlement, tax reform and other. ACTIVITY Volumes in €Bn 4Q17 profit impacted by hurricanes, SC USA settlement and tax reform Santander Bank Santander Consumer USA 40 Santander Bank: increasing profitability by improving NIM and efficiency ratio 43 44 -1% -1% 33 QoQ -2% QoQ +1% QoQ SC USA: Good profitability (RoTE:13%). Focus on enhancing the loan mix and QoQ -6% -8% reduce the cost of funding YoY YoY +1% -6% YoY YoY Loans Funds Loans2 Managed SHUSA paid its first dividend to the Group in 6 years assets Note: % change in constant euros. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. Santander Banks customers (2) Includes leasing 62
ARGENTINA KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 261 10.0 985 57.8 Loyal customers (thousands) 1,118 1,340 Fee income 138 -0.7 596 43.1 Digital customers (thousands) 1,511 1,957 Gross income 449 7.6 1,747 44.3 NPL ratio (%) 1.49 2.50 Operating expenses -244 5.3 -970 48.9 LLPs -41 -8.2 -159 69.4 Cost of credit (%) 1.72 1.85 PBT 141 30.2 526 19.1 Efficiency ratio (%) 53.8 55.5 Underlying att. profit 96 34.1 359 13.8 Non-recurring 0 0 RoTE (%) 35.5 32.0 Attributable profit 96 34.1 359 13.8 (1) €Mn and % change in constant euros ACTIVITY Volumes in €Bn Integration of Citibanks retail business completed in August (in 5 months) 13 Yield on loans Market share gains in consumer loans, mortgages and deposits 19.01% 18.44% 17.77% 17.76% 8 +10% 16.27% QoQ Profit driven by customer revenues, absorbing integration charges +1% QoQ +53% Cost of deposits +44% YoY Cost of credit remains low with comfortable coverage (100%) YoY 5.53% 4.72% 4.39% 4.36% 4.64% Loans Funds 4Q16 1Q17 2Q 3Q 4Q Note: % change in constant euros. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds (*) Excluding Citibank customers 63
POLAND KEY DATA 2016 2017 P&L1 4Q17 %3Q17 2017 %2016 NII 243 2.6 928 8.6 Loyal customers (thousands) 1,350 1,387 Fee income 116 1.3 443 8.1 Digital customers (thousands) 1,979 2,089 Gross income 378 4.9 1,419 5.4 NPL ratio (%) 5.42 4.57 Operating expenses -160 6.2 -605 1.9 LLPs -40 10.4 -137 -7.5 Cost of credit (%) 0.70 0.62 PBT 159 9.7 581 11.6 Efficiency ratio (%) 44.1 42.6 Underlying att. profit 81 6.1 300 7.7 Non-recurring2 0 0 -100.0 RoTE (%) 11.6 11.6 Attributable profit 81 6.1 300 -2.8 (1) €Mn and % change in constant euros (2) 2016 profit included €29Mn related to capital gains from the disposal of the stake in VISA Europe and restructuring costs ACTIVITY Volumes in €Bn Agreement for the acquisition of the retail and private banking businesses of 28 Yield on loans Deutsche Bank Polska, S.A. 23 4.02% 4.06% 4.12% 4.14% 4.15% Loan growth fuelled by corporates and individuals. Deposit base stable with +1% significant growth in demand and saving accounts 0% QoQ QoQ Cost of PBT spurred by NII, fee income, LLPs and cost control. Profit affected by deposits +5% +2% regulatory impacts3 YoY YoY 0.83% 0.80% 0.81% 0.78% 0.72% Strong credit quality improvement: lower NPL ratio and better cost of credit Loans Funds 4Q16 1Q17 2Q 3Q 4Q Note: % change in constant euros. Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. Underlying RoTE in 2016 (3) Tax on assets, contribution to BFG and new consideration of BFG as non-tax deductible 64
OTHER LATIN AMERICAN COUNTRIES Attributable profit Constant € million Uruguay Peru +19% +7% 103 40 38 86 2016 2017 2016 2017 Focusing on loyalty, transactions and target segments Uruguays profit driven by higher revenues and cost control Perus profit driven by higher revenues and release of provisions 65
Global segments results 66
RETAIL BANKING ACTIVITY P&L1 4Q17 %3Q17 2017 %2016 €Bn and % change in constant euros NII 7,812 0.7 31,701 7.9 Fee income 2,444 4.3 9,718 9.8 740 Gross income 10,520 0.9 42,755 8.4 681 Operating expenses -4,874 4.2 -19,374 4.9 +2% +2% QoQ QoQ LLPs -1,872 -7.3 -8,174 -7.2 PBT 3,349 4.4 12,820 22.7 +3% +7% Underl. attrib. Profit 1,980 5.7 7,624 17.8 YoY YoY Non-recurring2 -76 -10.6 -161 -5.0 Loans Funds Attributable profit 1,904 6.4 7,463 18.4 (1) €Mn and % change in constant euros (2) In 2017 hurricane provisions, SC USA settlement, tax reform and other. In 2016 capital gains from VISA Europe disposal and restructuring costs The retail banking model continued to be transformed into an increasingly Simple, Personal and Fair model Focused on three main priorities: customer loyalty, digital transformation and operational excellence Further development of the multi-channel model, centred on digital channels Progress in achieving our targets. 17.3 million loyal customers (+13% from December 2016) and 25.4 million digital customers (+21% from December 2016) Note: Loans excluding repos. Funds: deposits excluding repos + marketed mutual funds. 67
GLOBAL CORPORATE BANKING GROSS INCOME P&L1 4Q17 %3Q17 2017 %2016 Constant €Mn NII 587 -2.0 2,478 -2.5 +1% 5,552 Fee income 393 0.1 1,627 15.9 TOTAL 5,486 Capital & Other 655 -6% 617 Gross income 1,239 -8.4 5,552 1.2 Operating expenses -519 6.0 -1,988 4.8 Global Markets 1,715 0% 1,721 LLPs -207 81.8 -690 0.8 PBT 484 -32.9 2,804 -0.9 Financing Customers 1,297 +7% 1,383 +2% Solutions & Advisory Underl. attrib. Profit 320 -30.8 1,821 -2.4 Non-recurring2 0 0 -100.0 Global Transaction 1,820 +1% 1,832 Attributable profit 320 -30.8 1,821 0.8 Banking (1) €Mn and % change in constant euros (2) In 2016 restructuring costs 2016 2017 Improved quality of customer revenues, driven by value-added business and higher fee income that offset lower use of the balance sheet Better positioning in value-added businesses. Drive in low capital consumption businesses (export finance, agent finance and trade finance) Continued improvement in services to retail network customers through digitalisation and tailored products Attributable profit up 1% and accounting 20% of the operating areas 68
Liquidity 69
We made good headway YTD in our funding plan to enhance the Groups TLAC position and optimise its cost of capital Group excl. Popular Key liquidity ratios Funding plan - issuances Dec17 Jan-Dec17 Net Loan-to-Deposit ratio (LTD): 109% Group issuances €27bn (~€19bn TLAC-eligible) Deposits + M/LT funding / net loans: 117% Diversified issuers Parent bank, SCF, UK and USA Liquidity Coverage Ratio (LCR)1: 133% Diversified currencies EUR, USD, GBP Comfortable liquidity position Focus on TLAC-eligible instruments, following (Group and subsidiaries) our decentralised liquidity and funding model (1) Provisional data 70
NPL, coverage ratios and cost of credit 71
NPL ratio % 31.03.16 30.06.16 30.09.16 31.12.16 31.03.17 30.06.17 30.09.17 31.12.17 Continental Europe 7.08 6.84 6.43 5.92 5.62 5.11 4.95 4.50 Spain 6.36 6.06 5.82 5.41 5.22 4.99 4.99 4.72 Santander Consumer Finance 3.28 2.95 2.86 2.68 2.62 2.61 2.60 2.50 Poland 5.93 5.84 5.71 5.42 5.20 4.66 4.70 4.57 Portugal 8.55 10.46 9.40 8.81 8.47 7.67 6.93 5.71 United Kingdom 1.49 1.47 1.47 1.41 1.31 1.23 1.32 1.33 Latin America 4.88 4.98 4.94 4.81 4.50 4.44 4.45 4.50 Brazil 5.93 6.11 6.12 5.90 5.36 5.36 5.32 5.29 Mexico 3.06 3.01 2.95 2.76 2.77 2.58 2.56 2.69 Chile 5.45 5.28 5.12 5.05 4.93 5.00 4.95 4.96 USA 2.19 2.24 2.24 2.28 2.43 2.64 2.56 2.79 Operating Areas 4.36 4.32 4.19 3.95 3.77 3.57 3.53 3.39 Total Group 4.33 4.29 4.15 3.93 3.74 3.55 3.51 3.38 NOTE. Total Group including Popular: 5.37% in Jun 2017 ; 4.24% in Sep 2017 ; 4.08% in Dec 2017 72
Coverage ratio % 31.03.16 30.06.16 30.09.16 31.12.16 31.03.17 30.06.17 30.09.17 31.12.17 Continental Europe 65.4 61.3 61.3 60.0 60.6 58.7 58.1 58.0 Spain 50.2 47.6 47.6 48.3 49.1 46.0 45.2 45.9 Santander Consumer Finance 111.9 110.6 110.7 109.1 108.9 106.5 104.3 101.4 Poland 67.0 65.8 68.9 61.0 61.2 67.5 67.6 68.2 Portugal 87.7 61.9 57.8 63.7 61.7 59.8 60.4 59.1 United Kingdom 36.5 36.5 36.0 32.9 33.8 32.6 31.5 32.0 Latin America 79.7 81.4 84.5 87.3 90.5 89.1 89.9 84.8 Brazil 83.7 85.3 89.3 93.1 98.1 95.5 97.6 92.6 Mexico 97.5 102.3 101.9 103.8 104.8 113.8 110.3 97.5 Chile 54.6 55.5 58.1 59.1 58.9 58.2 58.5 58.2 USA 221.1 220.6 216.2 214.4 202.4 183.1 187.5 170.2 Operating Areas 73.3 72.0 72.8 73.5 74.6 72.6 72.1 70.7 Total Group 74.0 72.5 72.7 73.8 74.6 72.7 72.3 70.8 NOTE. Total Group including Popular: 67.7% in Jun 2017 ; 65.8% in Sep 2017 ; 65.2% in Dec 2017 73
Non-performing loans and loan-loss allowances. December 2017 Group excl. Popular Non-performing loans Loan-loss allowances 100%: €28,104Mn 100%: €19,906Mn Other, 6% Other, 6% Spain, 19% USA, 8% Spain, 29% Chile, 7% USA, 18% Mexico, 3% Chile, 6% SCF*, 12% Brazil, 16% SCF*, 8% Mexico, 4% Poland, 4% Portugal, 6% Poland, 4% Brazil, 20% UK, 12% Portugal, UK, 5% 7% Percentage over Groups total (*) Excluding SCF UK 74
Cost of credit % 31.03.16 30.06.16 30.09.16 31.12.16 31.03.17 30.06.17 30.09.17 31.12.17 Continental Europe 0.60 0.51 0.46 0.44 0.38 0.37 0.34 0.32 Spain 0.54 0.45 0.41 0.37 0.33 0.33 0.31 0.33 Santander Consumer Finance 0.64 0.55 0.49 0.47 0.39 0.37 0.34 0.30 Poland 0.82 0.75 0.76 0.70 0.66 0.65 0.61 0.62 Portugal 0.28 0.21 0.17 0.18 0.07 0.03 0.03 (0.04) United Kingdom 0.01 0.03 0.05 0.02 0.03 0.02 0.03 0.08 Latin America 3.39 3.41 3.42 3.37 3.36 3.37 3.27 3.17 Brazil 4.63 4.71 4.87 4.89 4.84 4.79 4.55 4.36 Mexico 2.95 2.96 2.86 2.86 2.94 3.01 3.14 3.08 Chile 1.58 1.59 1.55 1.43 1.42 1.37 1.27 1.21 USA 3.85 3.77 3.80 3.68 3.63 3.65 3.57 3.42 Operating Areas 1.24 1.20 1.20 1.19 1.18 1.19 1.15 1.12 Total Group 1.22 1.19 1.19 1.18 1.17 1.19 1.15 1.12 NOTE. Total Group including Popular: 1.17% in Jun 2017 ; 1.12% in Set 2017 ; 1.07% in Dec 2017 75
Quarterly income statements 76
Grupo Santander (with Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,021 10,119 10,395 10,734 11,246 11,522 11,569 11,556 41,268 45,892 Gross income 10,730 10,755 11,080 11,288 12,029 12,049 12,252 12,062 43,853 48,392 Operating expenses (5,158) (5,227) (5,250) (5,453) (5,543) (5,648) (5,766) (5,961) (21,088) (22,918) Net operating income 5,572 5,528 5,831 5,835 6,486 6,401 6,486 6,101 22,766 25,473 Net loan-loss provisions (2,408) (2,205) (2,499) (2,406) (2,400) (2,280) (2,250) (2,181) (9,518) (9,111) Other (433) (544) (392) (591) (775) (848) (645) (544) (1,960) (2,812) Underlying profit before taxes 2,732 2,779 2,940 2,838 3,311 3,273 3,591 3,375 11,288 13,550 Underlying consolidated profit 1,922 1,864 2,036 2,072 2,186 2,144 2,347 2,285 7,893 8,963 Underlying attributable profit 1,633 1,526 1,695 1,766 1,867 1,749 1,976 1,924 6,621 7,516 Net capital gains and provisions* (248) (169) (515) (382) (417) (897) Attributable profit 1,633 1,278 1,695 1,598 1,867 1,749 1,461 1,542 6,204 6,619 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs in 4Q16 PPI and restatement Santander Consumer USA in 3Q17 charges for integration costs and equity stakes and intangible assets in 4Q17 Allfunds capital gains, USA fiscal reform, goodwill charges and in the US, provisions for hurricanes, increased stake in Santander Consumer USA and other 77
Grupo Santander (with Popular) Constant € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,227 10,214 10,330 10,577 10,820 11,318 11,817 11,938 41,349 45,892 Gross income 10,921 10,849 11,014 11,111 11,570 11,836 12,519 12,466 43,897 48,392 Operating expenses (5,204) (5,235) (5,214) (5,381) (5,357) (5,555) (5,880) (6,126) (21,034) (22,918) Net operating income 5,717 5,614 5,800 5,731 6,213 6,281 6,639 6,340 22,862 25,473 Net loan-loss provisions (2,520) (2,271) (2,501) (2,362) (2,285) (2,236) (2,311) (2,279) (9,655) (9,111) Other (459) (556) (381) (585) (747) (834) (663) (568) (1,980) (2,812) Underlying profit before taxes 2,739 2,787 2,918 2,784 3,181 3,211 3,665 3,494 11,228 13,550 Underlying consolidated profit 1,932 1,867 2,019 2,036 2,099 2,099 2,399 2,366 7,854 8,963 Underlying attributable profit 1,638 1,523 1,679 1,734 1,790 1,711 2,022 1,993 6,574 7,516 Net capital gains and provisions* (259) 3 (157) (515) (382) (414) (897) Attributable profit 1,638 1,264 1,682 1,577 1,790 1,711 1,507 1,611 6,161 6,619 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs in 4Q16 PPI and restatement Santander Consumer USA in 3Q17 charges for integration costs and equity stakes and intangible assets in 4Q17 Allfunds capital gains, USA fiscal reform, goodwill charges and in the US, provisions for hurricanes, increased stake in Santander Consumer USA and other 78
Grupo Santander (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,021 10,119 10,395 10,734 11,246 11,382 10,984 10,989 41,268 44,601 Gross income 10,730 10,755 11,080 11,288 12,029 11,910 11,617 11,526 43,853 47,082 Operating expenses (5,158) (5,227) (5,250) (5,453) (5,543) (5,552) (5,379) (5,571) (21,088) (22,045) Net operating income 5,572 5,528 5,831 5,835 6,486 6,358 6,239 5,955 22,766 25,038 Net loan-loss provisions (2,408) (2,205) (2,499) (2,406) (2,400) (2,272) (2,212) (2,114) (9,518) (8,997) Other (433) (544) (392) (591) (775) (828) (652) (537) (1,960) (2,792) Underlying profit before taxes 2,732 2,779 2,940 2,838 3,311 3,258 3,375 3,305 11,288 13,248 Underlying consolidated profit 1,922 1,864 2,036 2,072 2,186 2,133 2,180 2,200 7,893 8,700 Underlying attributable profit 1,633 1,526 1,695 1,766 1,867 1,738 1,809 1,839 6,621 7,253 Net capital gains and provisions* (248) (169) (215) (382) (417) (597) Attributable profit (Ex-Popular) 1,633 1,278 1,695 1,598 1,867 1,738 1,594 1,457 6,204 6,656 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs in 4Q16 PPI and restatement Santander Consumer USA in 3Q17 charges for integration costs and equity stakes and intangible assets in 4Q17 Allfunds capital gains, USA fiscal reform, goodwill charges and in the US, provisions for hurricanes, increased stake in Santander Consumer USA and other 79
Grupo Santander (w/o Popular) Constant € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,227 10,214 10,330 10,577 10,820 11,178 11,232 11,371 41,349 44,601 Gross income 10,921 10,849 11,014 11,111 11,570 11,697 11,885 11,931 43,897 47,082 Operating expenses (5,204) (5,235) (5,214) (5,381) (5,357) (5,459) (5,493) (5,736) (21,034) (22,045) Net operating income 5,717 5,614 5,800 5,731 6,213 6,238 6,392 6,194 22,862 25,038 Net loan-loss provisions (2,520) (2,271) (2,501) (2,362) (2,285) (2,228) (2,273) (2,211) (9,655) (8,997) Other (459) (556) (381) (585) (747) (814) (670) (560) (1,980) (2,792) Underlying profit before taxes 2,739 2,787 2,918 2,784 3,181 3,196 3,449 3,423 11,228 13,248 Underlying consolidated profit 1,932 1,867 2,019 2,036 2,099 2,089 2,232 2,281 7,854 8,700 Underlying attributable profit 1,638 1,523 1,679 1,734 1,790 1,700 1,854 1,909 6,574 7,253 Net capital gains and provisions* (259) 3 (157) (215) (382) (414) (597) Attributable profit (Ex-Popular) 1,638 1,264 1,682 1,577 1,790 1,700 1,639 1,526 6,161 6,656 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs in 4Q16 PPI and restatement Santander Consumer USA in 3Q17 charges for integration costs and equity stakes and intangible assets in 4Q17 Allfunds capital gains, USA fiscal reform, goodwill charges and in the US, provisions for hurricanes, increased stake in Santander Consumer USA and other 80
Spain (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,243 1,232 1,185 1,198 1,206 1,287 1,235 1,248 4,858 4,976 Gross income 1,543 1,343 1,398 1,324 1,539 1,351 1,435 1,368 5,608 5,694 Operating expenses (837) (834) (824) (802) (798) (806) (815) (841) (3,297) (3,259) Net operating income 706 509 574 522 741 545 621 528 2,311 2,434 Net loan-loss provisions (231) (129) (140) (85) (163) (137) (104) (110) (585) (513) Other (37) (82) (51) (97) (64) (64) (55) (23) (267) (207) Underlying profit before taxes 438 298 382 340 514 344 461 395 1,459 1,714 Underlying consolidated profit 312 213 274 243 367 246 316 267 1,043 1,197 Underlying attributable profit 307 208 270 237 362 241 311 265 1,022 1,180 Net capital gains and provisions* (216) (216) Attributable profit 307 (8) 270 237 362 241 311 265 806 1,180 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs 81
Santander Consumer Finance € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,041 1,061 1,099 1,052 1,121 1,096 1,121 1,110 4,253 4,449 Gross income 1,045 1,051 1,106 1,060 1,118 1,099 1,135 1,132 4,262 4,484 Operating expenses (483) (468) (467) (486) (502) (485) (484) (506) (1,904) (1,978) Net operating income 562 583 639 574 616 614 650 625 2,357 2,506 Net loan-loss provisions (114) (70) (116) (87) (61) (57) (90) (58) (387) (266) Other (39) (41) (36) (52) (37) (35) (30) (55) (168) (157) Underlying profit before taxes 410 472 487 434 518 522 531 512 1,803 2,083 Underlying consolidated profit 293 324 346 319 370 382 370 373 1,282 1,495 Underlying attributable profit 251 282 291 269 314 319 309 311 1,093 1,254 Net capital gains and provisions* 25 (85) (0) 25 (85) Attributable profit 251 307 291 269 314 319 224 311 1,119 1,168 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe in 3Q17 charges for integration costs 82
Santander Consumer Finance Constant € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,047 1,063 1,100 1,049 1,116 1,096 1,122 1,114 4,258 4,449 Gross income 1,051 1,053 1,106 1,057 1,113 1,099 1,136 1,136 4,267 4,484 Operating expenses (485) (469) (467) (485) (500) (485) (485) (508) (1,906) (1,978) Net operating income 565 584 639 572 613 614 651 628 2,360 2,506 Net loan-loss provisions (115) (70) (116) (87) (60) (57) (89) (58) (388) (266) Other (39) (42) (36) (52) (37) (35) (30) (55) (168) (157) Underlying profit before taxes 412 472 487 433 515 522 532 514 1,804 2,083 Underlying consolidated profit 295 325 345 318 368 381 371 375 1,283 1,495 Underlying attributable profit 253 282 291 268 312 319 310 313 1,094 1,254 Net capital gains and provisions* 26 (0) (0) (85) (0) 25 (85) Attributable profit 253 308 291 268 312 319 225 313 1,119 1,168 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe in 3Q17 charges for integration costs 83
Poland € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 292 298 321 323 318 343 350 360 1,233 1,371 Gross income 311 345 330 329 321 363 358 378 1,314 1,419 Operating expenses (145) (146) (149) (139) (146) (150) (149) (160) (579) (605) Net operating income 166 199 181 190 175 212 209 218 735 814 Net loan-loss provisions (33) (34) (43) (35) (27) (34) (36) (40) (145) (137) Other (22) (29) (6) (25) (23) (27) (28) (19) (83) (96) Underlying profit before taxes 111 136 132 129 125 152 144 159 508 581 Underlying consolidated profit 88 108 100 91 86 120 110 116 387 432 Underlying attributable profit 64 75 69 63 59 83 76 81 272 300 Net capital gains and provisions* 29 29 Attributable profit 64 104 69 63 59 83 76 81 301 300 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs 84
Poland PLN million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,275 1,301 1,391 1,412 1,374 1,449 1,489 1,522 5,379 5,835 Gross income 1,357 1,507 1,430 1,440 1,386 1,532 1,525 1,599 5,733 6,041 Operating expenses (632) (638) (647) (609) (630) (634) (636) (675) (2,527) (2,576) Net operating income 724 869 783 831 756 898 889 924 3,207 3,465 Net loan-loss provisions (144) (149) (186) (153) (116) (142) (155) (171) (632) (585) Other (97) (126) (25) (111) (100) (112) (119) (78) (360) (410) Underlying profit before taxes 483 593 573 566 539 644 614 674 2,215 2,471 Underlying consolidated profit 384 471 434 399 372 506 470 492 1,688 1,840 Underlying attributable profit 281 327 300 277 257 351 324 344 1,185 1,276 Net capital gains and provisions* 128 (0) 0 128 Attributable profit 281 455 300 277 257 351 324 344 1,313 1,276 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs 85
Portugal (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 273 262 260 251 261 249 262 266 1,047 1,038 Gross income 337 281 287 304 294 265 305 281 1,209 1,145 Operating expenses (154) (149) (142) (143) (139) (137) (137) (138) (589) (550) Net operating income 183 132 145 161 155 128 168 143 620 595 Net loan-loss provisions (22) (6) (16) (9) 10 6 (16) 12 (54) 12 Other (2) (21) (5) (5) (14) (9) (11) (1) (34) (35) Underlying profit before taxes 158 104 124 146 151 125 142 155 533 573 Underlying consolidated profit 122 81 93 106 126 108 104 105 402 442 Underlying attributable profit 121 80 92 106 125 107 103 104 399 440 Net capital gains and provisions Attributable profit 121 80 92 106 125 107 103 104 399 440 86
United Kingdom € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,434 1,393 1,302 1,307 1,349 1,409 1,317 1,291 5,436 5,366 Gross income 1,513 1,501 1,377 1,425 1,432 1,544 1,397 1,344 5,816 5,716 Operating expenses (794) (788) (703) (683) (723) (723) (694) (721) (2,967) (2,861) Net operating income 719 713 675 742 709 821 703 623 2,850 2,855 Net loan-loss provisions (7) (68) (44) 61 (15) (42) (66) (81) (58) (205) Other (59) (71) (85) (124) (105) (171) (89) (101) (339) (466) Underlying profit before taxes 654 574 545 679 588 608 547 441 2,452 2,184 Underlying consolidated profit 462 401 370 483 423 414 382 304 1,716 1,523 Underlying attributable profit 453 390 364 474 416 408 377 297 1,681 1,498 Net capital gains and provisions* 107 (137) (30) Attributable profit 453 497 364 338 416 408 377 297 1,651 1,498 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe and restructuring costs in 4Q16 PPI 87
United Kingdom £ million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,105 1,096 1,108 1,133 1,160 1,213 1,183 1,146 4,442 4,702 Gross income 1,166 1,180 1,172 1,234 1,231 1,329 1,255 1,193 4,752 5,008 Operating expenses (611) (619) (599) (594) (622) (622) (623) (639) (2,424) (2,507) Net operating income 554 561 573 640 609 706 632 554 2,328 2,502 Net loan-loss provisions (5) (53) (37) 48 (13) (36) (59) (72) (48) (179) Other (45) (56) (71) (104) (90) (147) (81) (90) (277) (408) Underlying profit before taxes 504 452 465 583 506 524 492 392 2,004 1,914 Underlying consolidated profit 356 316 316 414 364 356 344 270 1,402 1,334 Underlying attributable profit 349 307 311 407 358 351 339 265 1,373 1,313 Net capital gains and provisions* 83 2 (110) (24) Attributable profit 349 390 313 297 358 351 339 265 1,349 1,313 (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe and restructuring costs in 4Q16 PPI 88
Brazil € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 2,365 2,583 2,899 3,155 3,455 3,413 3,392 3,458 11,002 13,718 Gross income 2,381 2,703 3,050 3,187 3,717 3,502 3,542 3,512 11,321 14,273 Operating expenses (947) (1,046) (1,177) (1,305) (1,314) (1,233) (1,244) (1,289) (4,475) (5,080) Net operating income 1,434 1,657 1,873 1,882 2,403 2,269 2,298 2,223 6,845 9,193 Net loan-loss provisions (720) (753) (951) (953) (910) (852) (819) (814) (3,377) (3,395) Other (177) (193) (134) (193) (358) (349) (268) (211) (696) (1,186) Underlying profit before taxes 536 711 788 736 1,135 1,068 1,211 1,198 2,772 4,612 Underlying consolidated profit 399 481 544 575 713 689 747 738 1,999 2,887 Underlying attributable profit 359 429 488 510 634 610 659 642 1,786 2,544 Net capital gains and provisions Attributable profit 359 429 488 510 634 610 659 642 1,786 2,544 89
Brazil R$ million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 10,161 10,216 10,500 11,271 11,561 12,036 12,567 13,139 42,147 49,304 Gross income 10,227 10,708 11,067 11,364 12,438 12,367 13,129 13,367 43,366 51,301 Operating expenses (4,068) (4,138) (4,266) (4,671) (4,397) (4,355) (4,613) (4,895) (17,143) (18,259) Net operating income 6,159 6,570 6,801 6,693 8,041 8,013 8,516 8,472 26,223 33,042 Net loan-loss provisions (3,093) (2,972) (3,473) (3,398) (3,045) (3,008) (3,045) (3,105) (12,937) (12,203) Other (762) (763) (457) (686) (1,198) (1,231) (1,007) (825) (2,668) (4,261) Underlying profit before taxes 2,304 2,835 2,870 2,609 3,798 3,773 4,464 4,543 10,619 16,578 Underlying consolidated profit 1,716 1,908 1,979 2,055 2,386 2,431 2,757 2,802 7,658 10,376 Underlying attributable profit 1,540 1,704 1,774 1,821 2,121 2,152 2,432 2,438 6,840 9,143 Net capital gains and provisions Attributable profit 1,540 1,704 1,774 1,821 2,121 2,152 2,432 2,438 6,840 9,143 90
Mexico € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 767 768 767 794 804 856 879 811 3,096 3,350 Gross income 792 786 796 828 824 914 892 830 3,203 3,460 Operating expenses (322) (317) (311) (325) (319) (361) (356) (345) (1,274) (1,382) Net operating income 470 469 486 503 505 553 536 485 1,928 2,078 Net loan-loss provisions (221) (214) (194) (203) (233) (246) (240) (187) (832) (905) Other (6) (11) (5) (8) (4) (6) (4) (24) (30) (39) Underlying profit before taxes 243 244 288 293 267 301 292 274 1,067 1,134 Underlying consolidated profit 187 192 223 217 211 238 231 225 820 904 Underlying attributable profit 143 146 172 169 163 187 182 178 629 710 Net capital gains and provisions Attributable profit 143 146 172 169 163 187 182 178 629 710 91
Mexico Million pesos 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 15,253 15,690 16,028 16,922 17,348 17,505 18,399 18,076 63,893 71,327 Gross income 15,745 16,054 16,647 17,645 17,779 18,706 18,677 18,508 66,093 73,671 Operating expenses (6,402) (6,479) (6,497) (6,922) (6,894) (7,386) (7,460) (7,683) (26,300) (29,423) Net operating income 9,343 9,576 10,151 10,723 10,886 11,320 11,218 10,825 39,792 44,248 Net loan-loss provisions (4,399) (4,364) (4,062) (4,337) (5,032) (5,019) (5,015) (4,201) (17,162) (19,267) Other (123) (233) (98) (161) (90) (131) (89) (522) (615) (832) Underlying profit before taxes 4,821 4,979 5,990 6,225 5,764 6,170 6,113 6,102 22,015 24,149 Underlying consolidated profit 3,724 3,919 4,643 4,629 4,548 4,865 4,841 4,996 16,915 19,250 Underlying attributable profit 2,839 2,979 3,577 3,589 3,523 3,829 3,808 3,963 12,983 15,123 Net capital gains and provisions Attributable profit 2,839 2,979 3,577 3,589 3,523 3,829 3,808 3,963 12,983 15,123 92
Chile € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 509 534 561 613 592 589 534 583 2,216 2,298 Gross income 556 577 616 672 645 644 604 630 2,422 2,523 Operating expenses (235) (237) (249) (265) (264) (260) (253) (248) (986) (1,025) Net operating income 321 339 368 407 381 383 351 382 1,435 1,498 Net loan-loss provisions (109) (127) (146) (131) (122) (122) (108) (110) (514) (462) Other 1 (1) 6 (35) 2 7 11 3 (27) 23 Underlying profit before taxes 213 211 228 241 261 267 255 276 894 1,059 Underlying consolidated profit 173 181 187 195 214 218 209 218 735 859 Underlying attributable profit 122 126 129 137 147 149 143 146 513 586 Net capital gains and provisions Attributable profit 122 126 129 137 147 149 143 146 513 586 93
Chile Ch$ billion 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 393 409 414 441 413 430 403 434 1,657 1,681 Gross income 430 441 455 484 450 470 456 470 1,810 1,846 Operating expenses (182) (182) (184) (191) (184) (190) (191) (185) (737) (750) Net operating income 248 260 272 293 266 280 265 285 1,073 1,096 Net loan-loss provisions (84) (98) (108) (94) (85) (89) (81) (82) (384) (338) Other 1 (0) 5 (26) 1 5 8 2 (20) 17 Underlying profit before taxes 165 162 169 173 182 195 192 205 668 775 Underlying consolidated profit 134 138 138 140 149 159 158 163 550 629 Underlying attributable profit 94 96 95 98 103 109 108 109 384 429 Net capital gains and provisions Attributable profit 94 96 95 98 103 109 108 109 384 429 94
United States (w/o Popular) € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 1,831 1,755 1,724 1,708 1,763 1,738 1,545 1,495 7,019 6,540 Gross income 1,968 1,888 1,867 1,809 1,879 1,880 1,604 1,596 7,532 6,959 Operating expenses (777) (774) (784) (864) (837) (845) (743) (773) (3,198) (3,198) Net operating income 1,191 1,114 1,083 946 1,042 1,035 861 824 4,334 3,761 Net loan-loss provisions (861) (704) (776) (867) (811) (697) (634) (638) (3,208) (2,780) Other (66) (13) (3) (8) (32) (24) (2) (31) (90) (90) Underlying profit before taxes 264 397 304 71 199 314 225 155 1,036 892 Underlying consolidated profit 160 253 213 54 138 235 154 109 681 636 Underlying attributable profit 82 159 141 14 95 149 93 71 395 408 Net capital gains and provisions* (32) (76) (32) (76) Attributable profit 82 159 141 (19) 95 149 93 (5) 363 332 (*).- Including: in 4Q16 restatement Santander Consumer USA in 4Q 17 fiscal reform, provisions for hurricanes, increased stake in Santander Consumer USA and other 95
United States (w/o Popular) $ million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 2,018 1,983 1,925 1,838 1,877 1,912 1,820 1,765 7,764 7,373 Gross income 2,168 2,133 2,085 1,945 2,001 2,068 1,893 1,884 8,332 7,845 Operating expenses (856) (874) (875) (932) (891) (929) (875) (909) (3,538) (3,605) Net operating income 1,312 1,259 1,210 1,013 1,109 1,138 1,018 975 4,794 4,240 Net loan-loss provisions (949) (797) (867) (935) (863) (768) (749) (753) (3,548) (3,134) Other (72) (16) (3) (8) (34) (27) (4) (36) (99) (101) Underlying profit before taxes 291 446 340 69 212 343 265 186 1,146 1,006 Underlying consolidated profit 177 285 238 54 147 257 182 132 754 717 Underlying attributable profit 90 178 157 12 101 163 111 85 437 460 Net capital gains and provisions* (36) (85) (36) (85) Attributable profit 90 178 157 (24) 101 163 111 (0) 401 374 (*).- Including: in 4Q16 restatement Santander Consumer USA in 4Q 17 fiscal reform, provisions for hurricanes, increased stake in Santander Consumer USA and other 96
Banco Popular € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income 140 584 567 1,291 Gross income 139 634 536 1,309 Operating expenses (96) (388) (390) (873) Net operating income 43 247 146 436 Net loan-loss provisions (8) (38) (68) (114) Other (20) 8 (8) (20) Underlying profit before taxes 15 216 71 302 Underlying consolidated profit 11 167 85 263 Underlying attributable profit 11 168 85 263 Net capital gains and provisions* (300) (300) Attributable profit 11 (132) 85 (37) (*).- Including: in 3Q17 charges for integration costs 98
Corporate Centre € million 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 2016 2017 NII + Fee income (173) (192) (201) (204) (198) (223) (227) (240) (771) (889) Gross income (223) (244) (316) (282) (341) (340) (300) (239) (1,066) (1,220) Operating expenses (126) (120) (104) (99) (119) (118) (118) (120) (450) (476) Net operating income (349) (365) (421) (381) (460) (458) (419) (359) (1,516) (1,696) Net loan-loss provisions 1 (5) 5 0 (5) (11) (22) (8) 2 (45) Other (5) (55) (59) 44 (32) (53) (54) (43) (75) (181) Underlying profit before taxes (353) (424) (474) (337) (497) (522) (494) (410) (1,589) (1,923) Underlying consolidated profit (317) (418) (414) (298) (471) (561) (481) (378) (1,448) (1,890) Underlying attributable profit (311) (418) (412) (299) (468) (563) (480) (378) (1,439) (1,889) Net capital gains and provisions* (186) (130) (306) (186) (436) Attributable profit (311) (604) (412) (299) (468) (563) (610) (684) (1,625) (2,326) (*).- Including: in 2Q16 capital gains from the disposal of the stake in Visa Europe, and restructuring costs in 3Q17 equity stakes and intangible assets in 4Q17 goodwill charges 97
Glossary 99
Glossary - Acronyms AFS: Available for sale P&L: Profit and loss Bn: Billion RoRWA: Return on risk-weighted assets CET1: Common equity tier 1 RWA: Risk-weighted assets C&I: Commercial and Industrial RoTE: Return on tangible equity DGF: Deposit guarantee fund SCF: Santander Consumer Finance FL: Fully-loaded SC USA: Santander Consumer USA EPS: Earning per share SGCB: Santander Global Corporate Banking GoFT: Gains on financial transactions SMEs: Small and Medium Enterprises LTV: Loan to Value SRF: Single Resolution Fund LLPs: Loan-loss provisions ST: Short term MXN: Mexican Pesos SVR: Standard variable rate NII: Net interest income TNAV: Tangible net asset value NIM: Net interest margin UF: Unidad de fomento (Chile) NPL: Non-performing loans y-o-y: Year on Year n.m.: Non meaningful UK: United Kingdom PBT: Profit before tax US: United States 100
Thank you Our purpose is to help people and businesses prosper. Our culture is based on the belief that everything we do should be Simple personal fair Sow jones sustainability indices
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: February 2, 2018 | By: | /s/ José García Cantera | ||||
Name: José García Cantera | ||||||
Title: Chief Financial Officer |