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

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Santander Consumer Bank Nordic Group

February 2019

Q4 2018 Investor Presentation

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.

2

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

3

Source: SCB Group 2018 Annual Report and Management Figures 1) Adjusted for IFRS9 transitional rules 2) Headcount includes permanent and temporary employees 3) Return on Assets = PBT / ANEA

Q4 2018 | Key Figures

Gross Outstanding Loans

162.8

NOK Billion People2

1,535

Employees Core Capital CET11

15.7

Per cent Customers

1.53

Million Total Deposit

54.6

NOK Billion Return on Assets3

2.8

per cent Profit Before Tax

4,134

NOK Million Partners

5,051

Merchants

+5,600

Car Dealers

4

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

5

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.

6

Corporate Social Responsibility

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

7

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.

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

8

Gross lending and distribution by product

Total Auto and Unsecured

Source: SCB Group 2018 Annual Report and Management Figures

Auto SME

11%

Non Std. Auto

7%

Consumer Loan

18%

Credit Card

4%

Auto Private Persons

60%

Total Unsecured 21% Total Auto 79%

9

Partnerships a key success factor

5,051 merchants, 35 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

10

Financials

Q4 2018 | Santander Group key figures

12

Santander Group

Total assets 1.46 (€ trillion) Branches globally13,217 Headcount 202,713 Customers144 (million) Profit After Tax 7,810 (€ million)

Santander Consumer Finance Subgroup

Loans 106 (€ billion) European countries15 Headcount 15,772 Customers 20 (million) Profit After Tax 1,421 (€ million)

Source: Banco Santander and Santander Consumer Finance Q4 2018 Institutional Presentation

Q4 2018 | SCB Group overview

Portfolio and results by region

13

Source: SCB Group 2018 Annual Report (All figures in NOK)

36%

Norway

20%

Denmark

23%

Sweden

21%

Finland

% of Gross Outstanding Loans

Nordic Q4 2018 Result 163.4 Bn

Gross Outstanding

4,134 MM

Profit Before Tax

Finland

Auto Loans Unsecured Loans Profit Before Tax

31.4 Bn 2.8 Bn 664 MM Sweden

Auto Loans Unsecured Loans Profit Before Tax

22.8 Bn 14.4 Bn 1,010 MM Denmark

Auto Loans

26.0 Bn 6.2 Bn 854 MM Norway

Auto Loans Unsecured Loans Profit Before Tax

48.2 Bn 11.0 Bn 1,606 MM

Unsecured Loans Profit Before Tax

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 Q4 2018 Source Finland: Internal calculations based on data from Finnish Transportation Safety Agency (Trafi) as per YTD Q4 2018 Source Denmark: Internal calculations based on data from Finans og Leasing as per YTD Q4 2018 Source Sweden: Internal calculations based on data from Finansbolagens Förening as YTD Q4 2018

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

22%

market share

#1

27%

market share

#1

39%

market share

#4

9%

market share

14

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 2018 Annual Report 1) Gross lending

32%

11.4 Bn

18%

6.3 Bn

41%

14.6 Bn

9%

3.0 Bn

15

Steady loan growth in the Nordics

59,575

(mNOK)

71,891

(mNOK)

83,322

(mNOK)

116,297

(mNOK)

124,625

(mNOK)

143,615

(mNOK)

71 891 83 322 118 991 127 8521 147 9701 162 802

2013 2014 2015 2016 2017 2018 mNOK mNOK mNOK mNOK mNOK mNOK

16% 43% 7% 16% 10%

Source: SCB Group Annual Reports (2013 – 2018) 1) 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

16

Solid profitability

1 393 1 321 1 942 3 2502 3 9952 4 134

2013 2014 2015 2016 2017 2018

Source: SCB Annual Reports (2013 – 2018) 1) Compound Annual Growth Rate 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

mNOK mNOK mNOK mNOK mNOK mNOK

CAGR1 24%

17

Stable financial performance

4.6 4.4 4.7 5.3 4.9 4.6

2013 2014 2015 2016 2017 2018

42 44 50 38 40 44

2013 2014 2015 2016 2017 2018

2.1 1.7 1.8 2.7 3.0 2.8

2013 2014 2015 2016 2017 2018

Return on Assets1

Per cent

Net Interest Income Ratio2

Per cent

Cost / Income Ratio3

Per cent

Source: SCB Annual Reports (2013 – 2018) 1) ROA = PBT / ANEA 2) NII Ratio = Net Interest Income / ANEA 3) Cost/Income Ratio = OPEX / Gross Margin (OPEX: Total Operating Costs)

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

18

Group Balance Sheet summary

Healthy balance sheet driven by loan growth

Source: SCB Group 2018 Annual Report

Key changes year-on-year

• Deposits with external institutions: Reduction in reverse repo

transactions towards the end of 2018

• Loans to customers: Increase driven by portfolio growth, mainly

from the auto business

• Other financial assets: Increased liquidity portfolio due to net

purchase of bonds during 2018

• Other assets: Reduction as a result of reclassification of

consignment from the financial statement line “Consignment” to “Loans to customers” in 2018. Comparison figures are changed similarly.

• Debt to credit institutions: Increased levels of intragroup funding

due to weaker credit markets in Q4

• Deposits from customers: Increase in deposits in accordance

with funding strategy

• Debt established by issuing securities: increase in senior

unsecured and commercial paper issuances throughout 2018

NOK million Q4 2018 Q4 2017 Δ 18/17 % Deposits with external institutions 3 047 3 291

• 244
• 7 %

Loans to customers (net) 159 284 145 148 14 135 10 % Other financial assets 10 453 7 132 3 321 47 % Other assets 3 325 3 528

• 204
• 6 %

Total assets 176 108 159 100 17 008 11 % Debt to credit institutions 40 253 31 020 9 233 30 % Deposits from customers 54 645 50 617 4 028 8 % Debt established by issuing securities 52 929 51 270 1 659 3 % Other liabilities 3 213 3 260

• 47
• 1 %

Subordinated loan capital 1 731 1 753

• 22
• 1 %

Total equity 23 336 21 179 2 157 10 % Total liabilities and equity 176 108 159 100 17 008 11 %

19

Group Income Statement summary

P&L showing steady growth with increasing profits

Source: SCB Group 2018 Annual Report

Key changes year-on-year

• Net Interest Income: Increased due to higher volumes and

lower cost of funding

• Other product and funding related income and cost:

Increase mainly due to value change and gains on FX

• Salaries personnel and administrative expenses: Due to

restructuring provision of NOK 200 million in Q4 2018 and closing of defined benefit plan in Norway of NOK 113 million in 2017

• Other income and losses: Increase mainly due to recognition
• f loss allowance on off-balance exposure
• Total losses: Lower impairment losses due to increased bad

debt sales in 2018

NOK million FY 2018 FY 2017 Δ 18/17 % Interest income and similar income 8 158 7 850 308 4 % Interest expenses and similar expenses

• 1 239
• 1 243

4 0 % Net interest income 6 919 6 607 312 5 % Commissions and fees 429 442

• 13
• 3 %

Other product and funding related income and cost 36

• 60

96

• 159 %

Gross margin 7 384 6 989 395 6 % Salaries and personnel expenses

• 1 538
• 1 125
• 412

37 % Administrative expenses

• 1 545
• 1 587

42

• 3 %

Depreciations and amortisation

• 162
• 106
• 55

52 % Net operating income 4 139 4 171

• 32
• 1 %

Other incomes and costs

• 189
• 63
• 126

201 % Total losses on loans, guarantees etc. 184

• 113

297

• 263 %

Profit before tax 4 134 3 995 139 3 % Income tax

• 995
• 941
• 54

6 % Profit after tax 3 139 3 055 84 3 %

20

Credit Risk Performance

Favourable product mix and stable customer behaviour

Source: SCB Group Risk Department 1) NPL ratio = Non-performing loans / Gross loans 2) Coverage Ratio = Loan Loss Reserves (Write Downs) / NPL Risk Portfolio - Total (mNOK) 2015 2016 2017 2018 Current 110 186 92,4 % 118 837 92,7 % 136 821 92,2 % 150 284 92,5 % 5-30 dpd 5 127 4,3 % 5 451 4,2 % 6 806 4,6 % 7 258 4,5 % 31-60 dpd 1 066 0,9 % 1 041 0,8 % 1 329 0,9 % 1 218 0,7 % 61-90 dpd 423 0,4 % 393 0,3 % 510 0,3 % 462 0,3 % NPL 2 444 2,0 % 2 577 2,0 % 2 912 2,0 % 3 320 2,0 % Total 119 246 100,0 % 128 299 100,0 % 148 378 100,0 % 162 541 100,0 %

21

NPL ratio1

Coverage ratio2

1.61 1.48 2.05 2.01 1.96 2.03

2013 2014 2015 2016 2017 2018

98.6 126.9 107.7 113.6 96.9 109.7

2013 2014 2015 2016 2017 2018 Per cent Per cent

Risk Portfolio - Secured (mNOK) 2015 2016 2017 2018 Current 82 783 94,3 % 91 510 94,3 % 106 859 93,9 % 119 752 93,9 % 5-30 dpd 3 356 3,8 % 3 720 3,8 % 4 787 4,2 % 5 389 4,2 % 31-60 dpd 586 0,7 % 615 0,6 % 753 0,7 % 691 0,5 % 61-90 dpd 177 0,2 % 170 0,2 % 231 0,2 % 226 0,2 % NPL 887 1,0 % 1 052 1,1 % 1 211 1,1 % 1 435 1,1 % Total 87 789 100,0 % 97 067 100,0 % 113 841 100,0 % 127 492 100,0 % Risk Portfolio - Unsecured (mNOK) 2015 2016 2017 2018 Current 27 403 87,1 % 27 327 87,5 % 29 963 86,8 % 30 532 87,1 % 5-30 dpd 1 770 5,6 % 1 731 5,5 % 2 019 5,8 % 1 869 5,3 % 31-60 dpd 480 1,5 % 426 1,4 % 576 1,7 % 526 1,5 % 61-90 dpd 246 0,8 % 224 0,7 % 279 0,8 % 237 0,7 % NPL 1 557 4,9 % 1 525 4,9 % 1 700 4,9 % 1 885 5,4 % Total 31 456 100,0 % 31 233 100,0 % 34 537 100,0 % 35 049 100,0 %

Capital and Funding

Strict capital requirements in Norway

Ensuring strong capitalization of the bank

Source: SCB Group 2018 Annual Report

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 2.3% by the Norwegian FSA, applicable from January 2018.

• During 2019, the Countercyclical buffer

requirement for SCB Group will increase to 1.37%. Denmark, Sweden and Norway will increase with 50bps, from 0% to 0.5% in Denmark and from 2% to 2.5% in Sweden and Norway. Finland will maintain the buffer at 0%.

Group CET1-ratio requirement for 2018

~11.1% Pillar 1 CET1-requirement 2.3% Pillar 2 CET1-requirement

~13.4% Minimum CET1 requirement 4.5% Conservation buffer 2.5% Countercyclical buffer 1.14% Systemic risk buffer 3% ~11.1%

23

Strong Capital Position

CET1 ratio of 15.7%

2018 Capital developments

• SCB Group is using the transitional rules for

IFRS9 capital impact when calculating capital ratios

• SCB Group had a CET1-ratio of 15.7% per

financial year-end using transitional rules for

• IFRS9. The CET1-ratio is 229bps 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 2018 Annual Report

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

CET 1 Tier 1 Tier 2 Leverage ratio

24

Self-funding is a strategic focus

Three pillars approach provides funding flexibility

2011 2012 2013 2014 2015 2016 2017 2018

Unsecured Bonds Deposits Securitization Parent funding

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

2011 2012 2013 2014 2015 2016 2017 2018

Funding Composition1 Self-funding ratio

27% 25% 37% 11% Source: SCB Group 2018 Annual Report 1) Outstanding amounts/transactions as per Q4 2018

• In Norway deposits are guaranteed up to NOK 2

million

• In EU countries the guarantee is up to EUR 100,000
• NOK 54.6 billion in total deposits across Norway,

Sweden and Denmark

Deposits

• NOK 9.701 billion outstanding in the bond market

including NOK 900 million in Commercial Paper

• SEK 7.075 billion outstanding in the bond market

market including SEK 875 million in Commercial Paper

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

transactions

Unsecured

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

Securitization

25

Deposits at a glance

Consolidated total balance: NOK 54.6 billion

26

Distribution of Deposit portfolio and products

40%

• f total balance
• Savings account

32%

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

28%

• f total balance
• Savings account
• Notification product

N/A

Source: SCB Group 2018 Annual 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 4,9 14,4 11,9 15,4 15,4 3,2 8,0 10,5 14,3 17,2 2014 2015 2016 2017 2018

Norway Sweden Denmark

Unsecured Senior & Commercial Paper Funding

2018 summary

Source: Bloomberg 1) Outstanding amounts as per Q4 2018

• New Issuances Volume
• New Issuances #
• Taps #
• Maturities
• Outstanding Volume¹
• Outstanding bonds #
• Format
• Preferred Tenor

2,200 million 2 6 1,600 million 8,801 million 8 FRN 3 – 5 year 2,750 million 5 1 1,000 million 6,200 million 8 FRN 3 – 5 year 500 million 1

• 750 million

2,000 million 4 FXD 3 – 5 year

NOK SEK EUR

500 million 1

• 500 million

1 FRN 3 - 5 year

DKK 2018

1,750 million 8

• 1,750 million

900 million 4 FXD/FRN 6 – 12 months

NOK

875 million 5 1

• 875 million

6 FXD 3 – 6 months

SEK

Senior Unsecured Commercial Paper

27

28

Unsecured Funding

Maturity profile 2019 – 2023 for Senior Unsecured and Commercial Paper

Total Maturity

(EUR MM)

437 211 136 191 227 98 195 49 122 1000 500 500 67

2019 2020 2021 2022 2023

DKK EUR SEK NOK

1000 500 500

2019 2020 2021 2022 2023

4351 2100 1350 1900

2019 2020 2021 2022 2023

Commercial Paper Senior

2325 1000 2000 500 1250

2019 2020 2021 2022 2023

Commercial Paper Senior

NOK million SEK million EUR million

Source: Bloomberg, Management Figures (outstanding amounts as per Q4 2018) FX: EURNOK 9.9483 | EURSEK 10.2548 | EURDKK 7.4673

500

2019 2020 2021 2022 2023

DKK million Total Maturity (EUR million)

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

29

Santander & Santander Consumer Finance

Appendix

Section divider

• 1. Santander

Santander, a leading financial group

32

Headcount 202,713 Branches (units) 13,217 Shareholders (millions) 4.13 Customers (millions) 144 Total assets (trill. €) 1.46

Key Figures Dec’18

Attributable Profit 2017 (mill. €) 6,619 Attributable Profit 2018 (mill. €) 7,810

Well diversified between Europe and the Americas

33

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

Americas Europe

48% 52% 2018 Underlying attributable profit1

With leading positions in its core markets

34

(1) Lending (2) UK mortgages (excluding Social Housing), Consumer credit and commercial lending (excluding Financial Institutions) (3) Including Santander Consumer Finance business (SCF) (4) In the states where the Group operates (5) Countries in Europe, including UK Data: Jun-18 or latest available. Branches do not include Santander Consumer Finance business

• Mkt. share1: 18%

Branches: 672

Portugal United Kingdom

• Mkt. share2: 10%

Branches: 780

• Mkt. share1: 18%

Branches: 4,469

Spain

• Mkt. share1,3: 10%

Branches: 540

Poland United States

• Mkt. share1,4: 3%

Branches: 670

Argentina

• Mkt. share1: 11%

Branches: 482

Brazil

• Mkt. share1: 9%

Branches: 3,490

• Mkt. share1: 19%

Branches: 420

Chile

• Mkt. share1: 13%

Branches: 1,402

Mexico

Americas Europe

Nº of countries5: 15 Points of sale: >130,000

SCF

2018 was an excellent year

35

Group performance 2018

Strong results in a sustainable way

36

Group performance 2018

(1) Constant euros

Successfully completed the 3 year plan

37

Group performance 2018

(1) % change (constant euros), 2018 figure relates to 2015-18 CAGR (2) 2018 figure relates to 2015-18 average (3) Total dividend charged to 2018 earnings is subject to the Board and 2019 AGM approval (4) Underlying RoTE 2015: 11.0%. Underlying RoTE 2018 12.1% Note: 2015 metrics have been re-stated to reflect the capital increase

Section divider

• 2. Santander Consumer Finance

39

PoS partners (thousand) >130 Market positions1 Top 3 Loans (bill. €) 106 Deposits (bill. €) 37 European countries 15 Underlying Attrib. Profit 2018 (mill. €) 1,421 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’18

Santander Consumer Finance, European leader in the consumer finance industry

Underlying Attrib. Profit 2017 (mill. €) 1,373

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

40

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

41

Significant contributor to Santander’s results, representing 13% of the Group’s profit1 in 2018

SCF, 13%

SCF excluding SCUK. Including SCUK, SCF represents 14% of SAN profit1. (1) Percentage over SAN underlying attributable profit in 2018, excluding Corporate Centre and Spain Real Estate Activity

2018 Underlying attributable profit1

42

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

SCF Portfolio: €106 bn

Dec’18

• 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: 72%

• Consumer lending (durables financing,

cash loans and credit cards): 20%

SCF: Management perimeter (i.e. including SCUK). NOTE: SCF’s portfolio also includes mortgages (6%), corporate loans (1%) and other loans (1%).

43

Advanced car financing platform and strong foothold in consumer finance

• TOP retail chain agreements throughout

Europe

• >55,000 POS partners
• >4 MM consumer loans per year
• TOP 3 in core geographies
• Digital direct business platforms

Strong foothold in consumer finance

Consumer Finance: 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

44

Sound risk metrics

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

3,02% 6,26% 2,14% 0,99% 2,53% 0,39%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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

• 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

45

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

Dec’18 31% 4% 12% 7% 21% 3% 22%

Retail Deposits Non Retail Deposits Secured funding ECB Interbank Short Term Unsecured Issuances M/L Term Unsecured Issuances

46

Clear strategic priorities

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

Thank You.

Nordics