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Presentation Santander Consumer Bank Nordic Group May 2019 Who we - - PowerPoint PPT Presentation

v Q1 2019 Investor Presentation Santander Consumer Bank Nordic Group May 2019 Who we are Santander Consumer Bank AS is a Nordic bank with more than 1,500 colleagues in Sweden, Norway, Denmark and Finland, with a long history in the Nordics,


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v

Santander Consumer Bank Nordic Group

May 2019

Q1 2019 Investor Presentation

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SLIDE 2

Who we are

Santander Consumer Bank AS is a Nordic bank with more than 1,500 colleagues in Sweden, Norway, Denmark and Finland, with a long history in the Nordics, and with global strength by being a part

  • f Banco Santander.

We are one of the largest Nordic banks providing loans and credits, credit cards, deposits and insurance to private customers. We work with the best people in an engaged, challenging and passionate organization, which provides great opportunities for professional growth.

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Regulated in Norway, owned by Banco Santander

SCB AS is regulated by the Norwegian FSA

Santander Consumer Finance S.A. Fitch/Moody’s/S&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

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SLIDE 4

Source: SCB Group Q1 2019 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

Q1 2019 | Key Figures

Gross Outstanding Loans

160.8

NOK Billion People2

1,546

Employees Core Capital CET11

15.8

Per cent Customers

1.63

Million Total Deposit

58.3

NOK Billion Net Interest Income Ratio3

4.5

per cent Profit Before Tax

800

NOK Million Partners

5,076

Merchants

+5,600

Car Dealers

4

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SLIDE 5

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 160 752

2014 2015 2016 2017 2018 Q1 2019

Source: SCB Group Annual Reports (2013 – 2018) and Q1 2019 Report 1) Compound Annual Growth Rate 2013 – Q1 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.

Driven by organic growth, particularly in the Auto portfolio

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mNOK mNOK mNOK mNOK mNOK mNOK

CAGR1 17%

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SLIDE 6

Solid profitability

1 321 1 942 3 250 3 9952 4 1342 800

2014 2015 2016 2017 2018 Q1 2019 mNOK

Source: SCB Annual Reports (2013 – 2018) and Q1 2019 Report 1) Compound Annual Growth Rate 2013 – 2018 2) The Group reclassified issued AT1 capital of NOK 2.25 billion from liabilities to equity in 2017. Interest expenses for 2017 of NOK 169 million are consequently presented in equity instead of profit and loss, with related tax impact presented as part of other equity. Comparison figures are changed similarly. Please see principle 6) on page 40 in the 2017 Annual Report for further details.

Year-on-year growth in margins

CAGR1 33%

6

mNOK mNOK mNOK mNOK mNOK

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SLIDE 7

Q1 2019 | SCB Group overview

Portfolio and results by region

7

Source: SCB Group Q1 2019 Report (All figures in NOK)

37%

Norway

20%

Denmark

22%

Sweden

21%

Finland

% of Gross Outstanding Loans

Nordic Q1 2019 Result 160.8 Bn

Gross Outstanding

800 MM

Profit Before Tax

Finland

Auto Loans Unsecured Loans Profit Before Tax

30.3 Bn 3.3 Bn 205 MM Sweden

Auto Loans Unsecured Loans Profit Before Tax

21.9 Bn 14.1 Bn 76 MM Denmark

Auto Loans

25.1 Bn 6.5 Bn 207 MM Norway

Auto Loans Unsecured Loans Profit Before Tax

48.4 Bn 11.2 Bn 312 MM

Unsecured Loans Profit Before Tax

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SLIDE 8

History

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

1963 2004 2005 2006/07 2009 2012/13 2015

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

2017

Solidified position in sales finance with the onboarding of Elkjøp/Elgiganten, Power and Media Markt

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Executive Committee

Bo Jakobsen

MD Denmark

Bo joined Santander in 2007 and was key to start up the business in Denmark the same year. Previously, he held several leadership roles within the financial industry.

Michael Hvidsten

CEO

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

  • management. He

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

Anders Bruun-Olsen

Nordic Chief Financial Officer

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

  • Handelsbanken. He joined

Santander in 2011.

Knut Øvernes

MD Norway

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

Juan Calvera

IT & Ops Director

Juan has held various leadership positions within IT and Operations since joined Santander in 2011.

Peter Sjöberg

MD Finland

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

Andres Diez

Chief Risk Officer

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

Martin Brage

MD Sweden

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.

Trond Debes

HR & Legal Director

Trond started in GE Money Bank in 2002. He has been responsible for Legal, Communications, Compliance and HR in various leadership positions.

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Corporate Social Responsibility

We engage in a broad spectrum of activities that contribute to UN’s Sustainable Development Goals

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Ensure healthy lives and promote well-being for all Ensure access to affordable, reliable, sustainable and modern energy Take action to combat climate change and its impacts by regulating emissions and promoting developments in renewable energy Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

  • SCB has for a long time been a Gold partner supporting Right

To Play, an organization that protects, educates and empowers children to rise above adversity using the power of

  • play. Right To Play plays for change in five key areas; Quality

education, gender equality, health & well -being, child protection and peaceful communities.

  • Right To Play partners with Ministries of Education and local
  • rganizations to incorporate play-based learning into the

education system, allowing more children to rise. Across the Nordics SCB supports people, events and

  • rganizations that encourages, inspires and invites a broad base
  • f people to physical activity and camaraderie.
  • “Team Rynkeby” a charity cycling team that raise money for

children with critical illnesses

  • Engaging employees in “Kræftens Bekæmpelse”, the Danish

Cancer Society.

  • Supporting the Finnish “Icehearts”, an organization that uses

team sports as a tool for engaging children with social work. We engage in collaborations to innovate new and more environmental friendly mobility solutions, and we add the commercial strength to bring them to the market.

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

Finland, speeding up renewal of one of the oldest car parks in Europe.

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

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

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

retiring carbon credits and a platform for climate action, battling the core problem of climate change – emissions from big polluters

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

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

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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 and car dealers

Products

11

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Gross lending and distribution by product

Total Auto and Unsecured

Source: SCB Group Q1 2019 Report and Management Figures

Auto SME

11%

Non Std. Auto

8%

Consumer Loan

17%

Credit Card

4%

Auto Private Persons

60%

Total Unsecured 21% Total Auto 79%

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Auto market share and products

Position and market share in the Nordics

Source Norway: Internal calculations based on data from Finansieringsselskapenes Forening as per Q1 2019 Source Finland: Internal calculations based on data from Finnish Transportation Safety Agency (Trafi) as per Q1 2019 Source Denmark: Internal calculations based on data from Finans og Leasing as per Q1 2019 Source Sweden: Internal calculations based on data from Finansbolagens Förening as Q1 2019

Auto Loans & Hire Purchase

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

Customers

  • Private Customers
  • Business Customers

Distribution

  • Online direct distribution
  • Indirect distribution with

dealers and importers

  • Cross sale

Auto Leasing

Customers

  • Private Customers
  • Business Customers

Distribution

  • Dealers direct
  • SME direct

Stock & Demo Financing

Customers

  • Inventory financing for

dealers Distribution

  • New cars: Importer

agreements

  • Used Cars: Direct to

dealers

Auto & Leisure

#1

23%

market share

#1

23%

market share

#1

34%

market share

#4

9%

market share

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We are responding to mobility trends through digital strategy

14

All in one Auto Direct Platform Magasinet Subscription models

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SHFT – A convenient all-inclusive subscription service

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The customer will be offered a car subscription ensuring a predictable and fixed cost.

PREDICTABLE

A safeguard against decreasing vehicle value combined with the ability to drive a reliable and safe car, fit for purpose

FUTUREPROOF

Is offered the opportunity to change the primary car to support temporary or unpredicted transportation

  • needs. Increasing the

transport flexibility throughout the subscription

FLEXIBLE

A simplified car “ownership” that includes direct and indirect cost of ownership

SIMPLE

A shorter period of contract binding and a lower step-in threshold compared to

  • ther financial products
  • ffered to car buyers

LIBERATING

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Unsecured products and portfolio

Sales finance Credit cards Direct loans

Unsecured

Loans, credit cards and sales finance services offered to private customers

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

Distribution of Unsecured portfolio¹

Source: SCB Group Q1 2019 Report 1) Gross outstanding loans

32%

11.2 Bn

19%

6.5 Bn

40%

14.1 Bn

9%

3.3 Bn

16

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We are launching new services and building strong partnerships to stay competitive in Unsecured

17

ApplePay Sandrine Chatbot Moneybit Digital Wallets Key Partnerships Santander Commerce Universe Push-To-Pull Content marketing

How Who What

Source: SCB Group Q1 2019 Report and Management Figures

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Partnerships a key success factor

5,076 merchants, 34 brokers, +5,600 car dealers and 22 Brands

“I’ve seen Santander work in a way that is not typical to a bank. You always take and run with our targets”

— Stefan Andström, Sales Director, Nissan Nordic, Helsinki On the high score on the MRF2018 Dealer survey:

“Kia Finance have developed many new products, which have positively impacted the score”

— Peter Himmer, MD Kia Motors Sweden AB

18

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Financials

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Q1 2019 | Santander Group key figures

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Santander Group

Total assets 1.51 (€ trillion) Branches globally13,277 Headcount 202,484 Customers144 (million) Profit After Tax 1,840 (€ million)

Santander Consumer Finance Subgroup

Loans 109 (€ billion) European countries15 Headcount 15,701 Customers 20 (million) Profit After Tax 358 (€ million)

Source: Banco Santander and Santander Consumer Finance Q1 2019 Institutional Presentation

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Stable financial performance

4.5 4.4 4.7 5.3 4.9 4.6

2014 2015 2016 2017 2018 Q1 2019

41 44 50 38 40 44

2014 2015 2016 2017 2018 Q1 2019

2.0 1.7 1.8 2.7 3.0 2.8

2014 2015 2016 2017 2018 Q1 2019

Return on Assets1

Per cent

Net Interest Income Ratio2

Per cent

Cost / Income Ratio3

Per cent

Source: SCB Annual Reports (2013 – 2018) and Q1 2019 report 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 Auto portfolio

21

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Group Balance Sheet summary

Healthy balance sheet driven by loan growth

Source: SCB Group Q1 2019 Report

Key changes year-on-year

  • Deposits with external institutions: Increase in reverse repo

transactions as a result of strong deposits inflow

  • Loans to customers: All countries showing growth in local

currency, but slight decrease consolidated due to impact of stronger NOK vs SEK/DKK/EUR

  • Other financial assets: Decreased liquidity portfolio because of

net maturities of bonds during 2019

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

intragroup funding owing to deposits balance growth

  • Deposits from customers: Particularly strong growth in in Norway

and Sweden following increased deposit interest rates

  • Debt established by issuing securities: Decrease QoQ mainly

related to large maturities and stronger NOK vs SEK/DKK/EUR

NOK million Q1 2019 Q4 2018 Δ 19/18 Deposits with external institutions 4 399 3 047 1 352 Loans to customers (net) 157 203 159 284

  • 2 081

Other financial assets 9 294 10 453

  • 1 159

Other assets 3 732 3 325 408 Total assets 174 628 176 108

  • 1 480

Debt to credit institutions 38 351 40 253

  • 1 902

Deposits from customers 58 349 54 645 3 704 Debt established by issuing securities 49 958 52 929

  • 2 971

Other liabilities 3 421 3 213 208 Subordinated loan capital 1 701 1 731

  • 30

Total equity 22 848 23 336

  • 488

Total liabilities and equity 174 628 176 108

  • 1 480

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Group Income Statement summary

P&L showing stable growth with increasing profits

Source: SCB Group Q1 2019 Report

Key changes year-on-year

  • Net Interest Income: Higher lending volumes in all segments and

lower cost of funding across the Nordics, but lower lending margins

  • verall, mainly due to a shift towards more secured financing in the

portfolio product mix

  • Commissions and fees: Growth in income both from insurance

and banking services

  • Other income and costs: Decrease caused largely by reduced

loss allowance on off-balance exposures

  • Total losses: Lower impairment losses following LLR model

update, resulting in lower loan reserves. Reduced realized losses caused by change in write-off policy and lower amount of recoveries as no bad debt sales was carried out in Q1

NOK million Q1 2019 Q1 2018 Δ 19/18 Interest income and similar income 2 110 2 036 74 Interest expenses and similar expenses

  • 340
  • 340

Net interest income 1 770 1 696 74 Commissions and fees 121 105 16 Other product and funding related income and cost 29 27 2 Gross margin 1 920 1 828 92 Salaries and personnel expenses

  • 339
  • 315
  • 24

Administrative expenses

  • 403
  • 369
  • 34

Depreciations and amortisation

  • 49
  • 28
  • 21

Net operating income 1 129 1 116 13 Other incomes and costs 32

  • 1

33 Total losses on loans, guarantees etc.

  • 361
  • 372

11 Profit before tax 800 744 56 Income tax

  • 198
  • 187
  • 11

Profit after tax 602 557 45

23

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Credit Risk Performance

Favourable product mix and stable customer behaviour

24

Risk Portfolio - Total (mNOK) 2016 2017 2018 Q1 2019 Current 118 837 92.7 % 136 821 92.2 % 150 284 92.5 % 149 940 92.9 % 5-30 dpd 5 451 4.2 % 6 806 4.6 % 7 258 4.5 % 6 014 3.7 % 31-60 dpd 1 041 0.8 % 1 329 0.9 % 1 218 0.7 % 1 374 0.9 % 61-90 dpd 393 0.3 % 510 0.3 % 462 0.3 % 578 0.4 % NPL 2 577 2.0 % 2 912 2.0 % 3 320 2.0 % 3 561 2.2 % Total 128 299 100.0 % 148 378 100.0 % 162 541 100.0 % 161 467 100.0 % Risk Portfolio - Secured (mNOK) 2016 2017 2018 Q1 2019 Current 91 510 94.3 % 106 859 93.9 % 119 752 93.9 % 119 702 94.6 % 5-30 dpd 3 720 3.8 % 4 787 4.2 % 5 389 4.2 % 4 284 3.4 % 31-60 dpd 615 0.6 % 753 0.7 % 691 0.5 % 812 0.6 % 61-90 dpd 170 0.2 % 231 0.2 % 226 0.2 % 273 0.2 % NPL 1 052 1.1 % 1 211 1.1 % 1 435 1.1 % 1 448 1.1 % Total 97 067 100.0 % 113 841 100.0 % 127 492 100.0 % 126 520 100.0 % Risk Portfolio - Unsecured (mNOK) 2016 2017 20183 Q1 20193 Current 27 327 87.5 % 29 963 86.8 % 30 532 87.1 % 30 238 86.5 % 5-30 dpd 1 731 5.5 % 2 019 5.8 % 1 869 5.3 % 1 731 5.0 % 31-60 dpd 426 1.4 % 576 1.7 % 526 1.5 % 562 1.6 % 61-90 dpd 224 0.7 % 279 0.8 % 237 0.7 % 304 0.9 % NPL 1 525 4.9 % 1 700 4.9 % 1 885 5.4 % 2 112 6.0 % Total 31 233 100.0 % 34 537 100.0 % 35 049 100.0 % 34 946 100.0 %

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 due to the change in write-off policy in Sweden, Denmark and Finland during Oct 2018. 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 96.9 109.7 102.0

2013 2014 2015 2016 2017 2018 Q1 2019

1.61 1.48 2.05 2.01 1.96 2.03 2.21

2013 2014 2015 2016 2017 2018 Q1 2019

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Capital and Funding

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Strict capital requirements in Norway

Ensuring strong capitalization of the bank

Source: SCB Group Q1 2019 Report 1) Includes increase in Norwegian countercyclical buffer to 2.5% applicable from 31 December 2019

Capital requirements in Norway

  • Strict requirements in Norway with the

inclusion of additional buffer requirements and a high countercyclical buffer requirement

  • Pillar 2 requirement for SCB Group was set

to 2.6% by the Norwegian FSA, applicable from March 2019

  • During 2019, the Countercyclical buffer

requirement for SCB Group will increase to 1.62%1. Norway and Sweden will increase by 50bps from 2% to 2.5% while Denmark will increase from 0% to 1%. Finland will maintain the buffer at 0%.

Group CET1-ratio requirement for 20191

~11.6% Pillar 1 CET1-requirement 2.6% Pillar 2 CET1-requirement

~14.2% Minimum CET1 requirement 4.5% Conservation buffer 2.5% Countercyclical buffer 1.62% Systemic risk buffer 3% ~11.62%

26

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Strong Capital Position

CET1 ratio of 15.8%

Recent Capital developments

  • SCB Group is using the transitional rules for

IFRS9 capital impact when calculating capital ratios

  • SCB Group had a CET1-ratio of 15.8% per Q1

2019 using transitional rules for IFRS9. The CET1-ratio is 160 bps higher than the regulatory requirement

  • SCB Group had a strong Leverage Ratio of

12.0%

  • In October 2018, SCB Group called its existing

Hybrid loan of NOK 2.25 billion and replaced it with three new Hybrid loans of NOK 750 million each

  • SCB Group paid a dividend for 2018 of NOK 1

billion to its parent

Capital ratios evolution SCB Group

Per cent

Source: SCB Group Q1 2019 Report

15.3 15.1 15.5 15.7 15.8 17.8 17.4 17.5 17.6 17.7 19.1 18.7 19.1 19.0 19.1 11.4 11.5 12.0 12.0 12.0 2015 2016 2017 2018 Q1 2019

CET 1 Tier 1 Tier 2 Leverage ratio

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Self-funding is a strategic focus

Three pillars approach provides funding flexibility

2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019

Unsecured Bonds Deposits Securitization Parent funding

22% 28% 50% 62% 70% 70% 77% 73% 74%

2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019

Funding Composition1 Self-funding ratio

26% 25% 40% 9% Source: SCB Group Q1 2019 Report 1) Outstanding amounts/transactions as per Q1 2019

  • In Norway deposits are guaranteed up to NOK 2

million

  • In EU countries the guarantee is up to EUR 100,000
  • NOK 58.3 billion in total deposits across Norway,

Sweden and Denmark

Deposits

  • NOK 9.501 billion outstanding in the bond market

including NOK 900 million in Commercial Paper

  • SEK 7.722 billion outstanding in the bond market

market including SEK 1,272 million in Commercial Paper

  • DKK 500 million outstanding in the bond market
  • EUR 2.00 billion outstanding from four Benchmark

transactions

Unsecured

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

Securitization

28

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Deposits at a glance

Consolidated total balance: NOK 58.3 billion

29

Distribution of Deposit portfolio and products

40%

  • f total balance
  • Savings account

30%

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

30%

  • f total balance
  • Savings account
  • Notification product

N/A

Source: SCB Group Q1 2019 Report Deposit guarantees: Norway NOK 2 million | Sweden SEK 950,000 | Denmark EUR 100,000 equivalent

Deposit balance development

NOK billion

9.9 14.9 18.6 20.9 22.1 23.1 4.9 14.4 11.9 15.4 15.4 17.6 3.2 8.0 10.5 14.3 17.2 17.6

2014 2015 2016 2017 2018 Q1 2019

Norway Sweden Denmark

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Unsecured Senior & Commercial Paper Funding

Q1 2019 summary

Source: Bloomberg 1) Outstanding amounts as per Q1 2019

New Issuances Volume New Issuances # Taps # Maturities Outstanding Volume¹ Outstanding bonds # Format Preferred Tenor 1,500 million 2

  • 1,700 million

8,601 million 9 FRN 3 – 5 year 250 million

  • 1
  • 6,450 million

8 FRN 3 – 5 year 500 million 1

  • 500 million

2,000 million 4 FXD 3 – 5 year

NOK SEK EUR

  • 500 million

1 FRN 3 - 5 year

DKK Q1 2019

  • 900 million

4 FXD/FRN 6 – 12 months

NOK

1,022 million 10 1

  • 1,272 million

11 FXD 3 – 6 months

SEK

Senior Unsecured Commercial Paper

30

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SLIDE 31

31

Unsecured Funding

Maturity profile Q1 2019 – 2023 for Senior Unsecured and Commercial Paper

Total Maturity

(EUR MM)

266 211 136 292 50 265 98 219 49 122 500 500 500 500 67

2019 2020 2021 2022 2023 2024

DKK EUR SEK NOK

500 500 500 500

2019 2020 2021 2022 2023 2024

2651 2100 1350 2900 500

2019 2020 2021 2022 2023 2024

Commercial Paper Senior

2722 1000 2250 500 1250

2019 2020 2021 2022 2023 2024

Commercial Paper Senior

NOK million SEK million EUR million

Source: Bloomberg, Management Figures (outstanding amounts as per Q1 2019) FX: EURNOK 9.6590 | EURSEK 10.3980 | EURDKK 7.4652

500

2019 2020 2021 2022 2023 2024

DKK million Total Maturity (EUR million)

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SLIDE 32

Key takeaways

  • Anchored by a global

banking franchise

  • Sustained market

leader in auto

  • Building out position in

unsecured space

  • Robust financial results
  • Stable credit risk

32

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SLIDE 33

Appendix

Santander Group & Santander Consumer Finance

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SLIDE 34

Section divider

Santander Group

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SLIDE 35

Santander, a leading financial group

35

Headcount 202,484 Branches (units) 13,277 Shareholders (millions) 4.09 Customers (millions) 144 Total assets (trill. €) 1.51

Key Figures Q1’19

Attributable Profit 2018 (mill. €) 7,810 Attributable Profit Q1’19 (mill. €) 1,840

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SLIDE 36

Well diversified between Europe and the Americas

36

(1) Excluding Corporate Centre and Real Estate Activity Spain NOTE: SCF excluding SCUK

Americas Europe

52% 48%

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SLIDE 37

With leading positions in its core markets

37

Data: Market-share as at Dec-18 or latest available. (1) Loans include household (mortgages and consumer credit) plus corporate loans. Deposits include household deposits (with banks and NS&I) and corporate deposits, excluding cash holdings (2) Including Santander Consumer Finance business (SCF) (3) In all states where Santander Bank operates (4) Includes demand, savings and time deposits, LCA (agribusiness notes) and LCI (real estate credit notes) (5) Other Resident Sectors in Spain (6) Countries in Europe, including the UK. Top 3 in retail car finance in its key markets

Nº of countries: 15 Top 3

SCF6 Brazil

Loans: 9% Deposits4: 11%

Argentina

Loans: 10% Deposits: 13%

Americas Europe

Loans: 18% Deposits5: 18%

Spain United Kingdom1

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

Portugal

Loans: 12% Deposits: 12%

Poland2

Loans: 19% Deposits: 18%

Chile

Loans: 13% Deposits: 13%

Mexico United States3

Loans: 3% Deposits: 3%

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SLIDE 38

Q1’19 Highlights

38

Note: YoY changes in constant euros (1) Prisma sale (EUR 150 mn), real estate disposal (EUR -180 mn) and restructuring costs in the UK and Poland (EUR -78 mn) (2) Data calculated using the IFRS 9 transitional arrangements

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SLIDE 39

Q1’19 Highlights

YoY changes

39

Note: Results and volume changes in constant euros. Loans excluding reverse repos. Customer funds: deposits excluding repos + marketed mutual funds (1) Underlying (2) Data calculated using the IFRS 9 transitional arrangements

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SLIDE 40

Q1’19 P&L YoY performance

40

(1) Capital gains due to the sale of part of our stake in Prisma in Argentina (2) Santander sold a Spanish portfolio of residential properties to Cerberus

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SLIDE 41

Making progress towards our medium-term goals

41

(1) Underlying.

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SLIDE 42

Section divider

Santander Consumer Finance

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SLIDE 43

43

PoS partners (thousand) >130 Market positions1 Top 3 Loans (bill. €) 109 Deposits (bill. €) 38 European countries 15 Underlying Attrib. Profit Q1’19 (mill. €) 358 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 Q1’19

Santander Consumer Finance, European leader in the consumer finance industry

Underlying Attrib. Profit 2018 (mill. €) 1,421

SCF: Management perimeter (i.e. including SCUK) Attributable profit without non-recurring (provisions or capital gains) (1) In its main geographies by market share in New Business car loans or durables

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Recurrent profits through the cycle

SCF: Management perimeter (i.e. including SCUK) Attributable profit without non-recurring (provisions or capital gains)

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

472 555 744 825 895 908 1 093 1 238 1 373 1 421

Underlying Attributable Profit

€ Million

Q1’19 Underlying Attrib. Profit

€358 million

(+2% YoY)

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Significant contributor to Santander’s results, representing 13% of the Group’s profit1 in Q1’19

SCF, 13%

SCF excluding SCUK. Including SCUK, SCF represents 14% of SAN profit1. (1) Percentage over SAN underlying attributable profit in Q1’19, excluding Corporate Centre and Spain Real Estate Activity

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

SCF Portfolio: €109 bn

Mar’19

  • Well spread across 15 European

countries

  • Important foothold in the largest

economies

  • 74% portfolio in AAA & AA countries
  • Car financing represents the biggest

share of the portfolio: 71%

  • Consumer lending (durables financing,

cash loans and credit cards): 19%

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

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Advanced car financing platform and strong foothold in consumer lending

  • TOP retail chain agreements throughout

Europe

  • >55,000 POS partners
  • >4 MM consumer loans per 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 100 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

SCF Key Risk Metrics

4,56% 6,26% 2,11% 1,73% 2,53% 0,49%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q'19

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

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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 in

many countries

  • Increasing long-term finance vs

short term

Q1’19

Retail Deposits 31% Non Retail Deposits 4% Secured funding 12% ECB 7% Interbank 21% ECPs & Pagares 7% MTNs & other M/L Term Unsc. 17% Subordinated Debt 1%

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Clear strategic priorities

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

Thank You.

Nordics