Presentation Santander Consumer Bank Nordic Group February 2020 - - PowerPoint PPT Presentation

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Santander Consumer Bank Nordic Group

February 2020

Q4 2019 Investor Presentation

• 1. SCB Nordic Overview 2019
• 2. Financials 2019
• 3. Capital and Funding 2019
• 4. Appendix: Santander Group
• 5. Appendix: Santander Consumer Finance

2

Index

SCB Nordic Overview 2019

01

4

Who we are

We are one of the largest Nordic banks providing loans and credits, credit cards, deposits and insurance to private and business customers. We work with the best people in an engaged, challenging and passionate organization, which provides great opportunities for professional growth. Santander Consumer Bank AS is a Nordic bank with more than 1,400 colleagues in Sweden, Norway, Denmark and Finland, with a long history in the Nordics, and with global strength through being a part of Banco Santander.

4

Regulated in Norway, owned by Banco Santander

SCB AS is regulated by the Norwegian FSA

Santander Consumer Finance S.A.

Fitch/Moody’s/S&P A-/A2/A- Santander Consumer Bank AS Fitch/Moody’s A-/A3

Santander Consumer Bank Denmark (Branch) Santander Consumer Finance Finland (Subsidiary) Santander Consumer Bank Sweden (Branch)

Banco Santander S.A.

Fitch/Moody’s/S&P A-/A2/A

5

Source: SCB Group 2019 Annual Report and Management Figures 1) Adjusted for IFRS9 transitional rules 2) Headcount includes permanent and temporary employees 3) NII Ratio = Net Interest Income (annualized) / ANEA

Key Figures

Gross Outstanding Loans

165.3

NOK Billion People2

1,484

Employees Core Capital CET11

18.1

Per cent Customers

1.60

Million Total Deposit

65.5

NOK Billion Net Interest Income Ratio3

4.4

per cent Profit Before Tax

3,611

NOK Million Partners

5,060

Merchants

+5,600

Car Dealers

6

2019 (vs. 2018)

(+2%) (+2.4) (+20%) (-13%) (-51) (+3.0%) (-0.2)

Loan growth in the Nordics

59,575

(mNOK)

71,891

(mNOK)

83,322

(mNOK)

116,297

(mNOK)

124,625

(mNOK)

143,615

(mNOK)

83 322 118 991 127 852 147 9702 162 8022 165 331

2014 2015 2016 2017 2018 2019

Source: SCB Annual Reports 2014 – 2019 1) Compound Annual Growth Rate 2014 – 2019 2) SCB Group has reclassified Consignment from the financial statement line “Consignment” to “Loans to customers” in 2018. Comparison figures are changed similarly. As of December 31 2018 the Consignment portfolio constitute NOK 4.2 billion of the financial statement line “Loans to customers”. Please see principle 6) on page 57 in the 2018 Annual Report for further details.

7

mNOK mNOK mNOK mNOK mNOK mNOK

CAGR1 15%

Solid profitability

1 321 1 942 3 250 3 9952 4 1342 3 611

2014 2015 2016 2017 2018 2019 mNOK

Source: SCB Annual Reports 2014 – 2019 1) Compound Annual Growth Rate 2014 – 2019 2) The Group reclassified issued AT1 capital of NOK 2.25 billion from liabilities to equity in 2017. Interest expenses for 2017 of NOK 169 million are consequently presented in equity instead of profit and loss, with related tax impact presented as part of other equity. Comparison figures are changed similarly. Please see principle 6) on page 40 in the 2017 Annual Report for further details.

8

mNOK mNOK mNOK mNOK mNOK

CAGR1 22%

2019 | SCB Group overview

Portfolio and results by region

9

Source: SCB Group 2019 Annual Report (All figures in NOK)

35%

Norway

20%

Denmark

23%

Sweden

22%

Finland

% of Gross Outstanding Loans

Nordic 2019 Result 165.3 Bn

Gross Outstanding

3,611 MM

Profit Before Tax

Finland

Auto Loans Unsecured Loans Profit Before Tax

32.1 Bn 3.7 Bn 519 MM Sweden

Auto Loans Unsecured Loans Profit Before Tax

23.3 Bn 15.2 Bn 592 MM Denmark

Auto Loans

25.8 Bn 7.0 Bn 929 MM Norway

Auto Loans Unsecured Loans Profit Before Tax

47.9 Bn 10.3 Bn 1,571 MM

Unsecured Loans Profit Before Tax

History

Bankia Bank acquired (credit cards) ELCON Finance becomes Santander Consumer Bank AS (SCB) ELCON Finance A leading Norwegian company within equipment leasing, factoring and auto financing Santander Consumer Finance S.A. acquires ELCON Finance Company demerges and auto finance is retained in Norway and Sweden Launch consumer loans Norway Skandiabanken Bilfinans acquired in Denmark (auto finance) Start up auto finance in Finland GE Finland acquired (auto finance, consumer loans) Consumer loans in Sweden (2012) and Denmark (2013) Deposits launched in Norway and Sweden (2013) Deposits launched in Denmark (2014)

1963 2004 2005 2006/07 2009 2012/13 2015

SCB merges with GE Money Bank SCB becomes leader within car finance and unsecured loans in the Nordic region

2017

Solidified position in sales finance with the

• nboarding of

Elkjøp/Elgiganten, Power and Media Markt

10

Forso Nordic AB SCB agrees to acquire the captive finance operation of Ford in the Nordics1

2019

Source: SCB Group 2019 Annual Report 1) Forso Nordic AB, the captive finance operation of Ford Motor Company in the Nordics, have agreed to an acquisition by Santander Consumer Bank AS. Part of the transaction is a long-term agreement on retail and wholesale finance to Ford dealers under the Ford brand. The transaction is subject to regulatory approval.

Executive Committee

Michael Hvidsten

CEO

Michael started in GE (first in GE Capital, later in GE Money Bank) in 2000, where he held various key position within risk

• management. He

joined Santander in 2005 as Nordic Chief Risk Officer, and was appointed Nordic CEO in 2012.

Anders Bruun-Olsen

CFO

Anders has held several senior positions within banking institutions like DNB, Eksportfinans and

• Handelsbanken. He joined

Santander in 2011.

Knut Øvernes

MD Norway Commercial B2B

Knut has held various business management positions in GE Money Bank and Santander since he started in 1996.

Peter Sjöberg

MD Finland Strategy and M&A

Peter has 20 years experience from banking and financial services. He has held several leadership positions in SCB. Joined Santander in 2010.

Andres Diez

Chief Risk Officer

Andres has held different leadership positions within Risk and Credit. Joined Santander in 2007.

Martin Brage

MD Sweden Commercial B2C

Martin joined GE in 1999. With his long and extensive experience within the financial sector and Santander, he has built up years of experience within auto and unsecured.

11

Tina Krogsrud Fjeld

IT & Ops Director

Tina has vast experience within commercial, business development, compliance, group strategy and Non Financial Risk. She joined Santander in 2019.

12

Internal environment Inclusive and sustainable growth

Ensuring we have the right culture, skills, governance, digital and business practices Supporting to create new jobs and helping people access finance, supporting the financing

• f the low carbon economy and fostering

sustainable consumption

Responsible procurement Stakeholder value Risk focus Responsible business practices Strong corporate culture Talented and motivated team

SUSTAINABLE GROWTH INCLUSIVE GROWTH

Responsible Banking Strategy

Creation of a holistic bank culture centered on responsible banking principles

13

Pursuing active contribution to the UN SDGs

Overview of other highly relevant SDGs for SCB AS:

GOAL 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

• SCB AS is a Gold partner supporting “Right To Play”, an organization

that protects, educates and empowers children to rise above adversity using the power of play

• Right To Play focus in five key areas: quality education, gender equality,

health & well being, child protection and peaceful communities

• The partnership with Right To Play for us means something more than

contributing financially. We actively participate involving employees and partners contributing

GOAL 3: Ensure healthy lives and promote well-being for all

• Across the Nordics, SCB AS encourages a broad base of people to

physical activity:

• Partnering “Team Rynkeby”, a charity cycling team that raise money

for children with critical illnesses

• Engaging employees in “Kræftens Bekæmpelse”, the Danish Cancer

Society

• Supporting the Football Association to make “3v3” kid’s soccer

tournaments – an inclusive sports variety where every team member is part of the active play and gets equal playing time

• Promoting health and well-being initiatives internally

GOAL 7: Ensure access to affordable, reliable, sustainable and modern energy

• We engage in collaborations to innovate new and more environmental

friendly mobility solutions, and we add the commercial strength to bring them to the market

• In 2013 Santander pioneered the All-in-One product suite in Finland,

speeding up renewal of one of the oldest car parks in Europe

• We developed the IT solution to enable online sales of the all electric

Nissan Leaf - helping it to be last year's single most sold car model in Norway

GOAL 13: Take action to combat climate change and its impacts by regulating emissions and promoting developments in renewable energy

• In 2018, SCB AS partnered with CHOOOSE, a global leader in

retiring carbon credits and a platform for climate action, battling the issue of emissions from big polluters

• SCB has been certified as “Miljøfyrtårn” since 2009, meaning that

we are compliant with all requirements regarding health, environment and safety, procurement, transportation, waste handling and energy consumption

• We educate employees on sustainability

Through its general business activity and its community work, SCB AS directly contributes to the achievement of UN SDG 3, 4, 7, 13

Auto & Leisure Unsecured Insurance Deposits

Saving products with high interest rates provided to private customers Insurance products related to payment protection, auto, health and travel, offered to private customers Loans, credit cards and sales finance services

• ffered to private customers

Loans and financial services provided to private customers, SMEs and car dealers

Products

14

Gross outstanding loans and distribution by product

Total Auto and Unsecured

Source: SCB Group 2019 Annual Report and Management Figures

Auto SME

10%

Non Std. Auto

8%

Consumer Loan

18%

Credit Card

4%

Auto Private Persons

60%

Total Unsecured 22% Total Auto 78%

15

Auto market share and products

Position and market share in the Nordics¹

Source: Based on internal calculations by SCB

• Norway: Data from Finansieringsselskapenes Forening as per YTD Q4 2019
• Finland: Data from Finnish Transportation Safety Agency (Trafi) as per YTD Q4 2019
• Denmark: Data from Finans og Leasing as per YTD Q4 2019
• Sweden: Data from Finansbolagens Förening as YTD Q4 2019

#1

18%

market share

#1

24%

market share

#1

30%

market share

#4

9%

market share

16

Auto Loans & Hire Purchase

Customers

• Private Customers
• Business Customers

Distribution

• Online direct distribution
• Indirect distribution with

dealers and importers

• Cross sale

Auto Leasing

Customers

• Private Customers
• Business Customers

Distribution

• Dealers direct
• SME direct

Stock & Demo Financing

Customers

• Inventory financing for

dealers Distribution

• New cars: Importer

agreements

• Used Cars: Direct to

dealers

Responding to mobility trends through digital strategy

17

SHFT

A subscription marketplace for cars, powered by Santander. Cars provided by partner dealerships

eCOMMERCE

Quotation and checkout service connected to OEMs, dealerships and marketplaces

All In-1

Platorm to enable bundling of 3rd party services in one invoice to the customer

Ford credit acquisition

18

• The transaction represents an exclusive long term strategic partnership

agreement and presents SCB with new opportunities through extended service

• ffering for our customers and provides a major growth opportunity for our

company across the region.

• By establishing a closer relationship to the manufacturers SCB aims to position

itself as a strategic partner going forward During 2019, the Group continued to develop its commercial footprint in the Nordic region, through the acquisition of Forso Nordic AB (“Ford Credit”). The agreement will allow SCB to offer financial services to Ford dealers and customers, and will secure and strengthen the Bank’s position as the market leader within auto financing in the Nordic region. The acquisition is subject to regulatory approval and is expected to come into effect in Q1 2020.

Transaction highlights

• Ford Credit is headquartered in Sweden, Gothenburg, with a subsidiary in Finland

and branches in Norway and Denmark.

• The total outstanding portfolio, consisting of auto loans and leasing contracts, is

approximately EUR 1,300 MM, which is 8% of the total balance of The Group.

• The acquisition will be fully financed through an intra group loan from the parent

company of Santander Consumer Bank AS.

Forso Nordic summary

Source: SCB Group 2019 Annual Report and Management Figures

Unsecured products and portfolio

Distribution of Unsecured portfolio¹

Source: SCB Group 2019 Annual Report 1) Gross outstanding loans

29%

10.3 Bn

19%

7.0 Bn

42%

15.2 Bn

10%

3.7 Bn

19

Sales finance Credit cards Direct loans

Distribution Online Stores Cross sale Portfolio Management Distribution Online Stores Cross sale Distribution Online Agents Cross sale

Partnerships are a key success factor

20

5,060 merchants 37 brokers +5,600 car dealers 22 brands

Financials

02

2019 | Santander Group key figures

22

Santander Group

Total assets 1.52 (€ trillion) Branches globally11,952 Headcount 196,419 Customers145 (million) Profit After Tax 8,252 (€ million)

Santander Consumer Finance Subgroup

Loans 116 (€ billion) European countries15 Headcount 15,364 Customers 20 (million) Profit After Tax 1,470 (€ million)

Source: Banco Santander and Santander Consumer Finance Q4 2019 Institutional Presentation

Stable financial performance

4.4 4.4 4.7 5.3 4.9 4.6

2014 2015 2016 2017 2018 2019

42 44 50 38 40 44

2014 2015 2016 2017 2018 2019

2.2 1.7 1.8 2.7 3.0 2.8

2014 2015 2016 2017 2018 2019

Return on Assets1

Per cent

Net Interest Income Ratio2

Per cent

Cost / Income Ratio3

Per cent

Source: SCB Annual Reports 2014 – 2019 1) ROA = PBT (annualized) / ANEA 2) NII Ratio = Net Interest Income (annualized) / ANEA 3) Cost/Income Ratio = OPEX / Gross Margin (OPEX: Total Operating Costs)

Normalised KPI’s as a results of higher growth in the Auto portfolio

23

Group Income Statement summary

Source: SCB Group 2019 Annual Report

Key changes year-on-year

• Net Interest Income: Increase in interest income as a result of

higher lending volumes, albeit slightly offset by higher cost of funding due to higher market rates. Negative overall effect on net interest income from lower lending margins, as the product portfolio mix is shifting more towards auto financing which carries a lower yield

• Commissions and fees: Decrease driven partly by lower

insurance sales due to the introduction of IDD in Denmark, but also a slowdown in new business for Auto in Norway

• Other income and costs: Decrease caused largely by reduced

loss allowance on off-balance exposures

• Total losses: Lower recoveries on portfolio sale, resulting in

decrease compared to 2018. During Q2 portfolios of non- performing and written-off loans were sold, resulting in a net gain

• f approximately NOK 875 million

NOK million 2019 2018 Δ 19/18 Interest income and similar income 8 596 8 158 438 Interest expenses and similar expenses

• 1 422
• 1 239
• 183

Net interest income 7 174 6 919 255 Commissions and fees 366 429

• 63

Other product and funding related income and cost 56 35 21 Gross margin 7 595 7 384 211 Salaries and personnel expenses

• 1 274
• 1 538

264 Administrative expenses

• 1 647
• 1 545
• 102

Depreciations and amortisation

• 257
• 162
• 95

Net operating income 4 418 4 139 279 Other incomes and costs 13

• 189

202 Total losses on loans, guarantees etc.

• 820

184

• 1004

Profit before tax 3 611 4 134

• 523

Income tax

• 742
• 995

253 Profit after tax 2 869 3 139

• 270

24

Group Balance Sheet summary

Source: SCB Group 2019 Annual Report

Key changes year-to-date

• Deposits with external institutions: Increase in the reverse repo and

cash placement as a result of deposit growth

• Loans to customers: Sweden, Denmark and Finland showing growth

in local currency, but slightly offset consolidated due to stronger NOK compared to Q4 2018. Overall growth is driven by good market conditions with sharper focus on financing as a tool to improve car sales and customer loyalty

• Other financial assets: Increased liquidity portfolio in preparation for

larger funding maturities during Q1 2020

• Debt to credit institutions: Reduced levels of short-term intragroup

funding owing to deposits balance growth, reflecting our self-funding strategy

• Deposits from customers: Particularly strong growth in Norway and

Sweden following increased deposit interest rates

• Debt established by issuing securities: Increased due to net

issuance of securities, particularly the EUR 799.2 MM KIMI 8 transaction

NOK million 2019 2018 Δ 19/18 Deposits with external institutions 4 034 3 047 987 Loans to customers (net) 161 392 159 284 2 108 Other financial assets 11 604 10 453 1 151 Other assets 3 911 3 324 587 Total assets 180 941 176 108 4 833 Debt to credit institutions 30 174 40 253

• 10 079

Deposits from customers 65 484 54 645 10 839 Debt established by issuing securities 53 403 52 929 474 Other liabilities 4 368 3 213 1 155 Subordinated loan capital 2 421 1 731 690 Total equity 25 090 23 336 1 754 Total liabilities and equity 180 941 176 108 4 833

25

Credit Risk Performance

26

Risk Portfolio - Total (mNOK) 2016 2017 2018 2019 Current 118 837 92.7 % 136 821 92.2 % 150 284 92.5 % 152 639 91.8 % 5-30 dpd 5 451 4.2 % 6 806 4.6 % 7 258 4.5 % 7 090 4.3 % 31-60 dpd 1 041 0.8 % 1 329 0.9 % 1 218 0.7 % 1 495 0.9 % 61-90 dpd 393 0.3 % 510 0.3 % 462 0.3 % 672 0.4 % NPL 2 577 2.0 % 2 912 2.0 % 3 320 2.0 % 4 320 2.6 % Total 128 299 100.0 % 148 378 100.0 % 162 541 100.0 % 166 217 100.0 % Risk Portfolio - Secured (mNOK) 2016 2017 2018 2019 Current 91 510 94.3 % 106 859 93.9 % 119 752 93.9 % 121 727 93.6 % 5-30 dpd 3 720 3.8 % 4 787 4.2 % 5 389 4.2 % 5 311 4.1 % 31-60 dpd 615 0.6 % 753 0.7 % 691 0.5 % 917 0.7 % 61-90 dpd 170 0.2 % 231 0.2 % 226 0.2 % 365 0.3 % NPL 1 052 1.1 % 1 211 1.1 % 1 435 1.1 % 1 710 1.3 % Total 97 067 100.0 % 113 841 100.0 % 127 492 100.0 % 130 029 100.0 % Risk Portfolio - Unsecured (mNOK) 2016 2017 20183 20193 Current 27 327 87.5 % 29 963 86.8 % 30 532 87.1 % 30 912 85.4 % 5-30 dpd 1 731 5.5 % 2 019 5.8 % 1 869 5.3 % 1 780 4.9 % 31-60 dpd 426 1.4 % 576 1.7 % 526 1.5 % 578 1.6 % 61-90 dpd 224 0.7 % 279 0.8 % 237 0.7 % 308 0.9 % NPL 1 525 4.9 % 1 700 4.9 % 1 885 5.4 % 2 610 7.2 % Total 31 233 100.0 % 34 537 100.0 % 35 049 100.0 % 36 188 100.0 %

Source: SCB Group Risk Department 1) NPL ratio = Non-performing loans / Gross loans 2) Coverage Ratio = Loan Loss Reserves (Write Downs) / NPL 3) The increases in NPL ratio for unsecured is mainly due to the change in write-off policy in Sweden, Denmark and Finland during Oct 2018 and Norway in July 2019. The policy extends the time before contracts get written off from 180 to 720 days past due

NPL ratio1

Coverage ratio2

98.6 126.9 107.7 113.6 96.9 109.7 93.5

2013 2014 2015 2016 2017 2018 2019

1.61 1.48 2.05 2.01 1.96 2.03 2.60

2013 2014 2015 2016 2017 2018 2019

Capital and Funding

03

Strict capital requirements in Norway

Ensuring strong capitalization of the bank

Source: SCB Group 2019 Annual Report

• Strict requirements in Norway with higher Pillar 2

and countercyclical buffer requirements.

• Pillar 2 requirement for SCB Group was set to

3.3% by the Norwegian FSA. In addition, a Pillar 2 Guidance of 1.0% was introduced. Both are applicable from 31.12.2019.

• During 2020, the Countercyclical buffer

requirement for SCB Group will increase to ~ 1.84%. Denmark will increase with 100bps, from 1% to 2%. Norway, Sweden and Finland will maintain their Countercyclical buffer at 2.5%, 2.5% and 0%, respectively.

• Systemic risk buffer expected to reduce capital

requirements from Dec-2020 with ~1.48% as it will enable banks to use the system risk buffer in the jurisdiction where it operates.

Group CET1-ratio requirement from Dec-2019

~11.6% Pillar 1 CET1-requirement 4.3% Pillar 2 CET1-requirement

~15.9% Minimum CET1 requirement 4.5% Conservation buffer 2.5% Countercyclical buffer 1.6% Systemic risk buffer 3% ~11.6%

28

Pillar 2 Requirement 3.3% Pillar 2 Guidance 1% ~4.3%

Capital requirements in Norway

Strong Capital Position

CET1 ratio of 18.1%

2019 Capital developments

• SCB Group is using the transitional rules for

IFRS9 capital impact when calculating capital ratios

• SCB Group had a CET1-ratio of 18.1% per

financial year-end using transitional rules for

• IFRS9. The CET1-ratio is 219bps higher than

the regulatory requirement

• SCB Group improved its strong Leverage Ratio

to 13.1%

• In December 2019, SCB Group issued two new

Subordinated loans of SEK 750 million each

• No dividend payment to the parent in 2020 due

to capital planning for the Forso Nordic AB acquisition

Capital ratios evolution SCB Group (%)

Source: SCB Group 2019 Annual Report

15,1 15,5 15,7 18,1 17,4 17,5 17,6 20,0 18,7 19,1 19,0 22,0 11,5 12,0 12,0 13,1 2016 2017 2018 2019

CET 1 Tier 1 Tier 2 Leverage ratio

29

Self-funding is a strategic focus

Three pillars approach provides funding flexibility

22% 28% 50% 62% 70% 70% 77% 73% 80%

2011 2012 2013 2014 2015 2016 2017 2018 2019

Self-funding ratio

Source: SCB Group 2019 Annual Report 1) Outstanding amounts/transactions as per Q4 2019

• In Norway deposits are guaranteed up to NOK 2

million

• In EU countries the guarantee is up to EUR 100,000
• NOK 65.5 billion in total deposits across Norway,

Sweden and Denmark

Deposits

• NOK 8,091 billion outstanding in the bond market

including NOK 750 million in Commercial Paper

• SEK 8,425 billion outstanding in the bond market

including SEK 1,320 million in Commercial Paper

• Green bond framework published in Dec’19
• DKK 1,250 million outstanding in the bond market
• EUR 2,000 million outstanding from four benchmark

transactions

Unsecured

• 6 outstanding transactions across Nordics
• Represents a low-cost and stable funding source

Securitization

30

37,5 Bn

25 %

65,5 Bn

44 %

15,9 Bn

11 %

30,0 Bn

20 %

Unsecured Bonds Deposits Securitization Parent Funding

Funding Composition1

NOK billion

Deposits at a glance

Consolidated total balance: NOK 65.5 billion

31

Distribution of Deposit portfolio and products

41%

• f total balance
• Savings account

29%

• f total balance
• Savings account
• Notification product
• Term deposits

30%

• f total balance
• Savings account
• Notification product

N/A

Source: SCB Group 2019 Annual Report Deposit guarantees: Norway NOK 2 million | Sweden EUR 100,000 | Denmark EUR 100,000 equivalent

Deposit balance development

NOK billion

14.9 18.6 20.9 22.1 26.5 14.4 11.9 15.4 15.4 19.8 8.0 10.5 14.3 17.2 19.2

2015 2016 2017 2018 2019

Norway Sweden Denmark

SCB AS Green Bond Framework

Defining an ambitious Framework, in line with best practices and standards

32

Use of Proceeds Rationale for issuing Green Bond Following best practice and latest market developments SCB AS Green Bond Framework description Project Evaluation and Selection Management of proceeds Reporting External Review

• Financing and / or refinancing of new and existing retail

loan and lease contracts for electric passenger vehicles (EVs only) SCB AS Green Bond Framework:

• Is in line with the ICMA Green Bond Principles 2018
• Follows the recommendations of draft EU Taxonomy and of CBI

Low Carbon Transport Standards

• Will be updated to reflect emerging good practices, such as the

EU Green Bond Standard SCB AS intends to:

• Align its sustainability strategy to its funding strategy
• Contribute to the development of a sustainable financial market,

while playing a role in the transition to a low carbon economy

• Contribute to the achievement of the UN SDGs
• Diversify the investor base targeting SRI and dark green

investors, while fostering the relationship with existing investors

• In accordance with the Eligibility Criteria and carried out

by the Green Bond Working Group (‘GBWG’)

• Green Bonds net proceeds managed in a portfolio

approach

• Allocation reporting annually until full allocation
• Pre-issuance impact reporting. Impact calculation by

expert consultant Multiconsult

• SPO by Sustainalytics and CBI Certification for the

upcoming transaction

• Auditor limited assurance report on the allocation report

SCB AS Green Bond Framework is aligned with ICMA GBP 2018 and Eligibility Criteria comply with the recommendation of the draft Technical Expert Group (TEG) report on the EU Taxonomy

Unsecured Senior & Commercial Paper Funding

2019 summary

Source: Bloomberg 1) Outstanding amounts as per Q4 2019

New Issuances Volume New Issuances # Taps # Maturities Outstanding Volume¹ Outstanding bonds # Format Issued Tenor 2,300 million 3 1 3,760 million 7,341 million 9 FRN 3 – 5 year 2,355 million 2 4 1,450 million 7,105 million 10 FRN 3 – 5,5 year 1,000 million 2

• 1,000 million

2,000 million 4 FXD 3 – 5 year

NOK SEK EUR

750 million 1

• 1250 million

2 FRN 3 year

DKK 2019

1,150 million 6

• 1,300 million

750 million 4 FXD/FRN 4 – 6 months

NOK

3,962 million 30 4 3,517 million 1,320 million 11 FXD 3 – 6 months

SEK

Senior Unsecured Commercial Paper

33

34

Unsecured Funding

Maturity profile Q4 2019 – 2024 for Senior Unsecured and Commercial Paper

Total Maturity

(EUR MM)

258 137 294 132 222 215 154 120 96 500 500 500 500 67 100

2020 2021 2022 2023 2024 2025

DKK EUR SEK NOK

500 500 500 500

2020 2021 2022 2023 2024 2025

2 541 1 350 2 900 1 300

2020 2021 2022 2023 2024 2025

Commercial Paper Senior

2 250 1 605 1 250 1000 2 320

2020 2021 2022 2023 2024 2025

Commercial Paper Senior

NOK million SEK million EUR million

Source: Bloomberg, Management Figures (outstanding amounts as per Q4 2019) FX: EURNOK 9.8638 | EURSEK 10.4468 | EURDKK 7.4715

500 750

2020 2021 2022 2023 2024 2025

DKK million Total Maturity (EUR million)

Key takeaways

• Anchored by a global banking

franchise

• Sustained market leader in auto

and strengthening position through acquisitions

• Building out position in

unsecured space through new digital offerings and strong partnership

• Robust financial results
• Prudent credit risk

35

Appendix

Santander Group & Santander Consumer Finance

Section divider

04

Santander Group

Santander, a leading financial group

38

Headcount 196,419 Branches (units) 11,952 Shareholders (millions) 3.99 Customers (millions) 145 Total assets (trill. €) 1.52

Key Figures Dec’19

Underlying Profit 2018 (mill. €) 8,064 Underlying Profit 2019 (mill. €) 8,252

Well diversified between Europe and the Americas

39

(*) As a % of operating areas. Excluding Corporate Centre and Santander Global Platform. NOTE: SCF excluding SCUK

With leading positions in its core markets

40

Data: Market-share as at Jun-19 and SCF and the US latest available. (1) Includes London Branch (2) Including SCF business in Poland (3) In all states where Santander Bank operates (4) Includes debenture, LCA (agribusiness notes), LCI (real estate credit notes), financial bills (letras financieras) and COE (certificates of structured operations) (5) Countries in Europe, including the UK. Top 3 in retail car finance in its key markets

Nº of countries: 15 Top 3

SCF5 Brazil

Loans: 10% Deposits4: 11%

Argentina

Loans: 10% Deposits: 12%

North America Europe

Loans: 17% Deposits: 19%

Spain United Kingdom1

Loans: 10% Deposits: 9% Loans: 18% Deposits: 16%

Portugal

Loans: 12% Deposits: 12%

Poland2

Loans: 18% Deposits: 17%

Chile

Loans: 13% Deposits: 14%

Mexico United States3

Loans: 3% Deposits: 3%

South America

Santander vision: The Santander Way

41

Santander vision: building a responsible bank

42

Continuing to do business in a more responsible and sustainable way

Note: figures as of 2019 (not audited yet) and changes on a YoY basis (2019 vs. 2018) 1) Source: Mercer benchmark 2) Dow Jones Sustainability index 2019 3) Microentrepreneurs are already included in the people financially empowered metric

2019 Highlights

43

Delivering Growth, Profitability and Strength in a responsible way

1) Excluding RWA inflation coming from TRIM and other regulatory impacts, otherwise +2bps increase 2) Board intends to propose to the 2020 AGM that the total payment of the remuneration against 2019 results will be 0.23 euros per share split in (1) a dividend in cash of 0.20 euros per share and (2) a scrip dividend that will entail the payment in cash, for those shareholders who so choose, of 0.03 euros per share

2019 Highlights. P&L

44

Profitable growth and solid organic capital generation

Note: Net capital gains and provisions amount to -€1,737mn in 2019 (in constant €)

On track to deliver our medium-term goals

45

(1) Active customer who receive most of their financial services from the Group according to the commercial segment that they belong to (2) Log ins to personal area of internet banking or mobile phone or both in the last 30 days (3) The percentage of new business carried out through digital channels in the period (4) 2019-22 underlying EPS CAGR

05

Santander Consumer Finance

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PoS partners (thousand) >130 Market positions1 Top 3 Loans (bill. €) 116 Deposits (bill. €) 40 European countries 15 Underlying Att. Profit 2019 (mill. €) 1,470 Customers (million) 20

• Grupo Santander is the

main and unique shareholder of SCF ...

• … and at the same time,

SCF acts as a holding for its subsidiaries through a banking license

• Operations are mainly

done through points-of- sale (dealers and retailers)

Key Figures Dec’19

Santander Consumer Finance, European leader in the consumer finance industry

Underlying Att. Profit 2018 (mill. €) 1,418

SCF: Management perimeter (i.e. including SCUK) (1) In retail car finance in its key markets NOTE: Underlying Attributable Profit 2018 restated in Q3-19 (digitalization expenses)

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Recurrent profits through the cycle

SCF: Management perimeter (i.e. including SCUK) NOTE: Underlying Attributable Profit 2018 restated in Q3-19 (digitalization expenses)

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

472 555 744 825 895 908 1 093 1 238 1 373 1 418 1 470

Underlying Attributable Profit

€ Million

CAGR: R: +12% 2%

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Significant contributor to Santander’s results, representing 13% of the Group’s profit* in 2019

SCF, 13%

SCF excluding SCUK. Including SCUK, SCF represents 14% of SAN profit* (*) As a % of operating areas. Excluding Corporate Centre and Santander Global Platform

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Well spread across Europe and well balanced between car loans and consumer lending

SCF Portfolio: €116 bn

Dec’19

• Well spread across 15 European

countries

• Important foothold in the largest

economies

• 73% portfolio in AAA & AA countries
• Car financing represents the biggest

share of the portfolio: 74%

• Consumer lending (durables financing,

cash loans and credit cards): 18%

SCF: Management perimeter (i.e. including SCUK). NOTE: SCF’s portfolio also includes mortgages (5%) and corporate loans & others (3%)

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Advanced car financing platform and strong foothold in consumer lending

• TOP retail chain agreements

throughout Europe

• >55,000 POS partners
• >5.7 MM consumer loans during last

year

• TOP positions in core geographies
• Digital direct business platforms

Strong foothold in consumer lending

Consumer Lending: Durable financing, Personal loans and Credit Cards

• Presence in all main European markets
• TOP positions in its geographies,

including the 5 biggest European auto markets: Germany, France, UK, Italy and Spain

• >75,000 POS (captive and non-captive)
• The longest European captive

agreements base: more than 115 agreements with 15 manufacturers

Advanced car financing platform

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Sound risk metrics

SCF: Management perimeter (i.e. including SCUK)

• Risk KPIs better than sector average
• Strong capacity to balance adverse

economic cycles across geographies

• Low cost of risk, despite important

increase in SCF’s loan portfolio

• Adaptation of risk management for the

growing digital business while being involved in the ecosystem platforms initiatives

4,6% 6,3% 2,1%

Cost of Risk (LLPs over ANEAS %) NPL Ratio (%)

1,73% 2,53% 0,47% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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Funding diversification

SCF’s funding structure (%)

• High diversification of funding

sources

• Capacity to do issuances in all

countries

• Diversification of deposits.

Different initiatives to develop retail deposits

• Increasing long-term finance vs

short term

SCF: Management perimeter (i.e. including SCUK)

Dec’19

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With clear strategic priorities

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Sharing with the Group the same way of doing things

Our purpose is to help people and business prosper. Our culture is based on believing that everything we do should be:

Thank You.

Nordics