Presentation Santander Consumer Bank Nordic Group November 2019 - - PowerPoint PPT Presentation

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Presentation Santander Consumer Bank Nordic Group November 2019 - - PowerPoint PPT Presentation

v Q3 2019 Investor Presentation Santander Consumer Bank Nordic Group November 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


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v

Santander Consumer Bank Nordic Group

November 2019

Q3 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 Q3 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

YTD Q3 2019 | Key Figures

Gross Outstanding Loans

165.6

NOK Billion People2

1,502

Employees Core Capital CET11

16.1

Per cent Customers

1.56

Million Total Deposit

64.6

NOK Billion Net Interest Income Ratio3

4.5

per cent Profit Before Tax

2,976

NOK Million Partners

5,060

Merchants

+5,600

Car Dealers

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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 165 574

2014 2015 2016 2017 2018 Q3 2019

Source: SCB Group Annual Reports (2013 – 2018) and Q3 2019 Report 1) Compound Annual Growth Rate 2014 – Q3 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 16%

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SLIDE 6

Solid profitability

1 321 1 942 3 250 3 9952 4 1342 2 976

2014 2015 2016 2017 2018 Q3 2019 mNOK

Source: SCB Annual Reports (2013 – 2018) and Q3 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%

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mNOK mNOK mNOK mNOK mNOK

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SLIDE 7

YTD Q3 2019 | SCB Group overview

Portfolio and results by region

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Source: SCB Group Q3 2019 Report (All figures in NOK)

35%

Norway

20%

Denmark

23%

Sweden

22%

Finland

% of Gross Outstanding Loans

Nordic Q3 2019 Result 165.6 Bn

Gross Outstanding

2,976 MM

Profit Before Tax

Finland

Auto Loans Unsecured Loans Profit Before Tax

32.3 Bn 3.6 Bn 442 MM Sweden

Auto Loans Unsecured Loans Profit Before Tax

22.8 Bn 14.7 Bn 516 MM Denmark

Auto Loans

26.1 Bn 7.0 Bn 751 MM Norway

Auto Loans Unsecured Loans Profit Before Tax

48.6 Bn 10.4 Bn 1,267 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

  • nboarding of

Elkjøp/Elgiganten, Power and Media Markt

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

2019

Source: SCB Group Q3 2019 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.

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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 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 is about something

more than contributing financially. We actively participate involving employees and partners contributing.

  • “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.

  • In Norway, we have partnered with the Football Association to

make “3v3” kid’s football tournaments – an inclusive sports variety where every team member is part of the active play and everyone gets equal playing time. 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

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SLIDE 12

Gross outstanding loans and distribution by product

Total Auto and Unsecured

Source: SCB Group Q3 2019 Report and Management Figures

Auto SME

11%

Non Std. Auto

7%

Consumer Loan

17%

Credit Card

4%

Auto Private Persons

61%

Total Unsecured 21% Total Auto 79%

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SLIDE 13

Auto market share and products

Position and market share in the Nordics

Source Norway: Internal calculations based on data from Finansieringsselskapenes Forening as per YTD Q3 2019 Source Finland: Internal calculations based on data from Finnish Transportation Safety Agency (Trafi) as per YTD Q3 2019 Source Denmark: Internal calculations based on data from Finans og Leasing as per YTD Q2 2019 Source Sweden: Internal calculations based on data from Finansbolagens Förening as YTD Q3 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

21%

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

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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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SLIDE 16

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 Q3 2019 Report 1) Gross outstanding loans

29%

10.4 Bn

20%

7.0 Bn

41%

14.7 Bn

10%

3.6 Bn

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SLIDE 17

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

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

How Who What Source: SCB Group Q3 2019 Report and Management Figures

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SLIDE 18

Partnerships a key success factor

5,060 merchants, 36 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

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Financials

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YTD Q3 2019 | Santander Group key figures

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Santander Group

Total assets 1.52 (€ trillion) Branches globally12,691 Headcount 201,017 Customers144 (million) Profit After Tax 6,180 (€ million)

Santander Consumer Finance Subgroup

Loans 112 (€ billion) European countries15 Headcount 15,403 Customers 20 (million) Profit After Tax 1,103 (€ million)

Source: Banco Santander and Santander Consumer Finance Q3 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 Q3 2019

41 44 50 38 40 44

2014 2015 2016 2017 2018 Q3 2019

2.5 1.7 1.8 2.7 3.0 2.8

2014 2015 2016 2017 2018 Q3 2019

Return on Assets1

Per cent

Net Interest Income Ratio2

Per cent

Cost / Income Ratio3

Per cent

Source: SCB Annual Reports (2013 – 2018) and Q3 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

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Group Balance Sheet summary

Healthy balance sheet driven by loan and deposit growth

Source: SCB Group Q3 2019 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 Q4 2019

  • 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: Decrease mainly related

to net repayments of issued securities

NOK million Q3 2019 Q4 2018 Δ 19/18 Deposits with external institutions 4 023 3 047 976 Loans to customers (net) 161 975 159 284 2 691 Other financial assets 12 020 10 453 1 567 Other assets 4 007 3 324 683 Total assets 182 024 176 108 5 917 Debt to credit institutions 38 175 40 253

  • 2 078

Deposits from customers 64 613 54 645 9 968 Debt established by issuing securities 49 122 52 929

  • 3 807

Other liabilities 3 962 3 213 749 Subordinated loan capital 1 698 1 731

  • 33

Total equity 24 455 23 336 1 119 Total liabilities and equity 182 024 176 108 5 917

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Group Income Statement summary

P&L showing stable growth with increasing profits

Source: SCB Group Q3 2019 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 by lower insurance

sales 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 Q3 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 Q3 2019 Q3 2018 Δ 19/18 Interest income and similar income 6 440 6 118 322 Interest expenses and similar expenses

  • 1 068
  • 982
  • 86

Net interest income 5 372 5 136 236 Commissions and fees 290 324

  • 34

Other product and funding related income and cost 48 38 10 Gross margin 5 710 5 498 212 Salaries and personnel expenses

  • 1 024
  • 989
  • 35

Administrative expenses

  • 1 193
  • 1 111
  • 82

Depreciations and amortisation

  • 149
  • 128
  • 21

Net operating income 3 345 3 269 76 Other incomes and costs 7

  • 203

210 Total losses on loans, guarantees etc.

  • 376
  • 274
  • 102

Profit before tax 2 976 2 792 184 Income tax

  • 727
  • 691
  • 36

Profit after tax 2 250 2 101 149

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SLIDE 24

Credit Risk Performance

Favourable product mix and stable customer behaviour

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Risk Portfolio - Total (mNOK) 2016 2017 2018 Q3 2019 Current 118 837 92.7 % 136 821 92.2 % 150 284 92.5 % 153 958 92,5 % 5-30 dpd 5 451 4.2 % 6 806 4.6 % 7 258 4.5 % 6 675 4,0 % 31-60 dpd 1 041 0.8 % 1 329 0.9 % 1 218 0.7 % 1 480 0,9 % 61-90 dpd 393 0.3 % 510 0.3 % 462 0.3 % 621 0,4 % NPL 2 577 2.0 % 2 912 2.0 % 3 320 2.0 % 3 688 2,2 % Total 128 299 100.0 % 148 378 100.0 % 162 541 100.0 % 166 421 100,0 % Risk Portfolio - Secured (mNOK) 2016 2017 2018 Q3 2019 Current 91 510 94.3 % 106 859 93.9 % 119 752 93.9 % 123 205 94,3 % 5-30 dpd 3 720 3.8 % 4 787 4.2 % 5 389 4.2 % 4 772 3,7 % 31-60 dpd 615 0.6 % 753 0.7 % 691 0.5 % 850 0,7 % 61-90 dpd 170 0.2 % 231 0.2 % 226 0.2 % 313 0,2 % NPL 1 052 1.1 % 1 211 1.1 % 1 435 1.1 % 1 558 1,2 % Total 97 067 100.0 % 113 841 100.0 % 127 492 100.0 % 130 698 100,0 % Risk Portfolio - Unsecured (mNOK) 2016 2017 20183 Q3 20193 Current 27 327 87.5 % 29 963 86.8 % 30 532 87.1 % 30 753 86,1 % 5-30 dpd 1 731 5.5 % 2 019 5.8 % 1 869 5.3 % 1 902 5,3 % 31-60 dpd 426 1.4 % 576 1.7 % 526 1.5 % 630 1,8 % 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 % 2 130 6,0 % Total 31 233 100.0 % 34 537 100.0 % 35 049 100.0 % 35 723 100,0 %

Source: SCB Group Risk Department 1) NPL ratio = Non-performing loans / Gross loans 2) Coverage Ratio = Loan Loss Reserves (Write Downs) / NPL 3) The NPL ratio increase for unsecured is due to 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 96.9 109.7 100.2

2013 2014 2015 2016 2017 2018 Q3 2019

1.61 1.48 2.05 2.01 1.96 2.03 2.22

2013 2014 2015 2016 2017 2018 Q3 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 Q3 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%

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Strong Capital Position

CET1 ratio of 16.1%

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 16.1% per Q3

2019 using transitional rules for IFRS9. The CET1-ratio is 200 bps higher than the regulatory requirement

  • SCB Group has a strong Leverage Ratio of

11.92%

  • 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 Q3 2019 Report The capital ratios include half year capital profits, based on a 50% payout ratio

15.3 15.1 15.5 15.7 16.1 17.8 17.4 17.5 17.6 17.9 19.1 18.7 19.1 19.0 19.3 11.4 11.5 12.0 12.0 11.9 2015 2016 2017 2018 Q3 2019

CET 1 Tier 1 Tier 2 Leverage ratio

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SLIDE 28

Self-funding is a strategic focus

Three pillars approach provides funding flexibility

2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019

Unsecured Bonds Deposits Securitization Parent funding

22% 28% 50% 62% 70% 70% 77% 73% 75%

2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019

Funding Composition1 Self-funding ratio

25% 25% 43% 7% Source: SCB Group Q3 2019 Report 1) Outstanding amounts/transactions as per Q3 2019

  • In Norway deposits are guaranteed up to NOK 2

million

  • In EU countries the guarantee is up to EUR 100,000
  • NOK 64.6 billion in total deposits across Norway,

Sweden and Denmark

Deposits

  • NOK 8,050 billion outstanding in the bond market

including NOK 900 million in Commercial Paper

  • SEK 9,775 billion outstanding in the bond market

market including SEK 1,720 million in Commercial Paper

  • DKK 1,250 million outstanding in the bond market
  • EUR 2,000 million outstanding from four benchmark

transactions

Unsecured

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

Securitization

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Deposits at a glance

Consolidated total balance: NOK 64.6 billion

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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 Q3 2019 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 19.4 8.0 10.5 14.3 17.2 18.7

2015 2016 2017 2018 Q3 2019

Norway Sweden Denmark

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SLIDE 30

Unsecured Senior & Commercial Paper Funding

YTD Q3 2019 summary

Source: Bloomberg 1) Outstanding amounts as per Q3 2019

New Issuances Volume New Issuances # Taps # Maturities Outstanding Volume¹ Outstanding bonds # Format Preferred Tenor 1,800 million 2 1 3,451 million 7,150 million 8 FRN 3 – 5 year 1,855 million 2 3

  • 8,055 million

10 FRN 3 – 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 - 5 year

DKK YTD Q3 2019

650 million 3

  • 650 million

900 million 4 FXD/FRN 4 – 12 months

NOK

3,012 million 24

  • 2,167 million

1,720 million 9 FXD 3 – 6 months

SEK

Senior Unsecured Commercial Paper

30

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SLIDE 31

31

Unsecured Funding

Maturity profile Q3 2019 – 2024 for Senior Unsecured and Commercial Paper

Total Maturity

(EUR MM)

66 237 136 293 81 262 128 210 103 117 93 500 500 500 500 67 100

2019 2020 2021 2022 2023 2024 2025

DKK EUR SEK NOK

500 500 500 500

2019 2020 2021 2022 2023 2024 2025

2 350 1 350 2 900 800 650

2019 2020 2021 2022 2023 2024 2025

Commercial Paper Senior

2 250 1 105 1 250 1000 2 800 1 370

2019 2020 2021 2022 2023 2024 2025

Commercial Paper Senior

NOK million SEK million EUR million

Source: Bloomberg, Management Figures (outstanding amounts as per Q3 2019) FX: EURNOK 9.8953 | EURSEK 10.6958 | EURDKK 7.4662

500 750

2019 2020 2021 2022 2023 2024 2025

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 201,017 Branches (units) 12,691 Shareholders (millions) 4.03 Customers (millions) 144 Total assets (trill. €) 1.52

Key Figures Sep’19

Underlying Profit 2018 (mill. €) 8,064 Underlying Profit 9M’19 (mill. €) 6,180

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SLIDE 36

Well diversified between Europe and the Americas

36

(1) Excluding Corporate Centre and Santander Global Platform NOTE: SCF excluding SCUK

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SLIDE 37

With leading positions in its core markets

37

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

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SLIDE 38

Santander vision: The Santander Way

38

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SLIDE 39

Santander vision: building a responsible bank

39

Our activity helps us to address today’s main global challenges, a number of the United Nations’ Sustainable Development Goals, and support the Paris Agreement’s aim to tackle climate change and adapt to its effects. We are building a more responsible bank …

(1) This appointment will be submitted for ratification at the next General Shareholders’ Meeting (2) H1’19

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SLIDE 40

9M’19 Highlights

40

Note: Changes in constant euros (1) Last three dividends paid + one announced

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SLIDE 41

9M’19 Underlying P&L YoY performance

41

(1) 2019 details on the next page

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SLIDE 42

9M’19 Net capital gains and provisions

EUR million

42

(1) PPI: Payment protection insurance Note: Pending accounting of capital gain from custody transaction: EUR 700 million. The amount is estimated and on the proviso that the transaction is carried out in Q4

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Resilient underlying profit in a challenging environment (+4% vs. Q2’19 and vs. Q3’18)

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Note: Contribution to the SRF (net of tax) recorded in Q2’18 (EUR -187 mn) and Q2'19 (EUR -162 mn). Contribution to the DGF in Spain (net of tax) recorded in Q4’18 (EUR -158 mn).

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On track to achieve our medium-term goals while building a responsible bank

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(1) Cumulative number of people whom we serve with our financial empowerment and inclusion initiatives in any of our geographies during the period 2019-2025. Initiatives target underbanked and vulnerable groups. (2) CSAT: Customer Satisfaction internal benchmark of active customers’ experience and satisfaction audited by Stiga / Deloitte. In the medium term we will be also following NPS as indicator; Ex US; (3) Active customer who receive most of their financial services from the Group according to the commercial segment that they belong to. (4) Every physical or legal person, that, being part of a commercial bank, has logged in its personal area of internet banking or mobile phone or both in the last 30 days. (5) The percentage of new business carried out through digital channels in the period

Customers Shareholders

  • Loyal customers3: c.26 Mn
  • Digital customers4: c.50 Mn
  • Top 3 in customer satisfaction: All

markets2

  • Digital sales5: >50%
  • C/I: 42 - 45%
  • FL CET1: 11% - 12%
  • RoTE: 13% - 15%
  • RoRWA: 1.8% - 2.0%
  • Dividend pay-out: 40% - 50%

Communities

  • Financially empowered

people1: 10 Mn

People

  • Top 10 company to work: 6

geographies

Shareholders Customers Communities People

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Section divider

  • 2. Santander Consumer Finance
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PoS partners (thousand) >130 Market positions1 Top 3 Loans (bill. €) 112 Deposits (bill. €) 39 European countries 15 Underlying Att. Profit 9M’19 (mill. €) 1,103 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 Sep’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

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

Underlying Attributable Profit

€ Million

9M’19 Underlying Attrib. Profit

€1,103 million

(+1% YoY)

CAGR: R: +13% 3%

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Recurrent profits through the cycle … growing faster than portfolio

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

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Significant contributor to Santander’s results, representing 13% of the Group’s profit1 in 9M’19

SCF, 13%

SCF excluding SCUK. Including SCUK, SCF represents 14% of SAN profit1. (1) Percentage over SAN underlying attributable profit in 9M’19, 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: €112 bn

Sep’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: 74%

  • 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 (2%)

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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

4,56% 6,26% 2,03%

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

1,73% 2,53% 0,43% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 9M'19

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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)

Sep’19 Retail Deposits 31% Non Retail Deposits 4% Secured funding 11% ECB 7% Interbank 18% ECPs & Pagares 8% MTNs & other M/L Term Unsc. 18% Subordinated Debt 1%

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With clear strategic priorities

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Sharing with Santander the same way of doing things

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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