BANCO SANTANDER, SA

Otras Comunicaciones #27532 - 31/10/2008 11:41

Presentación relativa a Santander Brasil.

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GRUPO
SANTANDER BRASIL
Integration for
leadership
São Paulo. 31 October 2008



Fabio Barbosa,
Grupo Santander Brasil
Disclaimer                                                                                                                               2

Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements within the meaning of the
US Private Securities Litigation Reform Act of 1995. These forward-looking statements are found in various places throughout this
presentation and include, without limitation, statements concerning our future business development and economic
performance. While these forward-looking statements represent our judgment and future expectations concerning the development
of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ
materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental
and regulatory trends; (2) movements in local and international securities markets, currency exchange rates, and interest rates; (3)
competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our
customers, obligors and counterparties. The risk factors and other key factors that we have indicated in our past and future filings
and reports, including those with the Securities and Exchange Commission of the United States of America (the “SEC”), could
adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ
materially from those in the forward-looking statements.

The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available
information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring
securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its
purpose and only on such information as is contained in such public information having taken all such professional or other advice
as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation.

In making this presentation available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in
shares in Santander or in any other securities or investments whatsoever.

No offering of Securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as
amended, or an exemption there from.

Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the
purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.

Note: Statements as to historical performance, historical share price or financial accretion are not intended to mean that future
performance, historical share price or future earnings (including earnings per share) for any period will necessarily match or exceed
those of any prior year. Nothing in this presentation should be construed as a profit forecast.

Note: The results information contained in this presentation has been prepared according to Spanish accounting criteria and
regulation in a manner applicable to all subsidiaries of the Santander Group and as a result it may differ from the one disclosed
locally.
Index                                                                     3




  Strategic vision: to become the best retail
  bank in Brazil

  Brazil: growing economy with great potential for further growth and
  bancarisation


  Grupo Santander Brazil: Santander + Real, an excellent starting point


  A well defined strategy for success:
   – Integration Plan: underway …
   – … compatible with Profitable Commercial Growth


  Conclusions: Business Plan 2008 – 2010
Santander in Brazil: strategic vision                           4


            Brazil =
 a country with great potential
    Stable macroeconomic
    fundamentals and growing
    economy                       Defined
    Investment-grade              strategy          Grupo
                                                    Grupo
    Bancarisation                 Integration     Santander
                                                  Santander
                                                    Brazil
                                                    Brazil
                                      +
     Santander + Real =                           The best
                                                  The best
                                  Profitable      retail bank
                                                  retail bank
   excellent starting point       commercial
                                  growth
    Critical mass
    Complementary businesses
    With room for growth                         First stage:
                                                Business Plan
                                                 2008 – 2010
                                                                            5
First stage: Business Plan 2008-2010

                   Targets 2008-2010
% growth in Brazilian Reales


   Businesses:              15-20% CAGR
   Customer             ~
   revenues:            = 15%    CAGR                        Attributable
                                                             Attributable
   Expenses:                < 0% in 2009 and 2010
                                                             profit: >25%
                                                             profit: >25%
                                                             CAGR 08-10
                                                             CAGR 08-10
                            Cost synergies*: R$ 2,400 mln.
   Provisions:              growing in line with the
                            lending portfolio and the
                            business mix

(*) Cost synergies in 2011
Index                                                                     6



  Strategic vision: to become the best retail bank in Brazil



  Brazil: growing economy with great potential
  for further growth and bancarisation

  Grupo Santander Brazil: Santander + Real, an excellent starting point


  A well defined strategy for success:
   – Integration Plan: underway …
   – … compatible with Profitable Commercial Growth


  Conclusions: Business Plan 2008 – 2010
Brazil a country with great economic potential ...                                                7




                                          Inhabitants (mln.)                 GDP (ppp)
         Population: 189 mln.                                        US$ thousand per capita
       Area: 5th largest country                   +18 mln. 207                   +4.8%    12.9
                                             189                                  CAGR
                                                                           9.7

           The world’s
           The world’s
           9th largest
            9th largest                    2007               2013         2007            2013
              GDP*
               GDP*
                               Eurozone 12          +7 mln.                   CAGR +3.4%



  One of the largest food producers worldwide:
     – 1st producer of coffee and sugar cane, 2nd of soy and 3rd of corn
     – 1st exporter of beef
  2nd largest producer of ethanol and 8th largest of steel. 1st exporter of iron ore
  17th in oil reserves worldwide (with the new discoveries it could be 3rd)
  Almost 75% of energy production in Brazil is hydroelectric

* 2007 in p.p.p.
Source: IMF and World Bank.
... growing well above developed countries ...                                        8




                        GDP % year-on-year growth

                 5.7%                                                  ... and will
                                                                       ... and will
                                            5.4%      5.3%           continue to do
                                                                     continue to do
       Brazil                                                               so
                                                                            so
                                                                        4.3%
                 3.6%              3.8%
                                                              3.5%
                            3.2%   2.8%
         USA                                2.6%
                                                                        2.3%
                          2.9%     2.8%               1.6%
    Eurozone
                 2.1%                       2.0%                        2.2%
                          1.6%                                0.2%
                                                      1.3%
                                                                 0.1%
                 2004     2005     2006     2007    2008(e) 2009 (e) 2013 (e)


  Source: IMF. World Economic Outlook Report (October 2008)
Moreover, it is a healthy growth (without macroeconomic                                                                   9

imbalances) which contributes to improve towards...
  International Reserves and External Debt                           Commercial balance – (US$ Bill.)
US$ Bill.
                                                                         Imports                                  195
            201        External debt
                                          194    205.1                   Exports                     161
                        169      172                  203                                138
                                         180.3                                  118                                 166
                                                                 97
                                 85.8                                                                  121
            52.9        53.8                                                               91
  Int’l.                                                         63                 74
Reserves
            2004        2005     2006     2007   Aug-08        2004            2005      2006       2007       Sep-08


                   Public debt (% of GDP)                                      Country risk (EMBI+)
                                                                     Basic points
                       67%                                    2500
     65%                        65%       64%
                                                   59%        2000                          … investment
                                                                                            … investment
                                                              1500
                                                                                           grade standards
                                                                                           grade standards
     47%               47%      45%       43%                 1000
                                                   40%
                                                               500
            Net debt               Gross debt
                                                                 0
                                                                Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08
   2004             2005       2006      2007    Aug-08



Source: Brazil Central Bank and Ministerio do Desenvolvimento Indústria e Comércio (MDIC)
                                                                                                                            10
Economic growth and better income distribution ...



      Unemployment and salary                                              Gini* index (%)
                    10.0%                                   0.572
                                                                                0.566
      9.8%                        9.3%          990 (e)
                                                                                                  0.552
                            960
                    932
                                               7.7%                                 Worse                          0.534
      869
                                                                                    Better


      2005          2006          2007         2008E          2001      2002     2003    2004     2005     2006      2007
                                                          Source: IBGE/PNAD
                                                          (*) varies from 0 to 1, corresponding to equal distribution and
Source: IBGE/PNAD             Average real salary in R$   absolute income concentration respectively.
... spur the bancarisation process                                                                                       11



      Bancarisation on the rise ...                             ... providing sustained growth of the
                                                                          financial system ...
    Var.                      +60%          +145%                                                          Loans
               +44%
  6 years                                                                      28%                         Savings¹
                                              93                                           26%
                                                                 21% 21%             23%
                                82
                77                                                                               17%     15%-20%
  Stock
  (mill.)

               Current        Savings        Cards
              accounts                                            2006          2007       2008 (e)    2009 / 2010 (e)



                … and there is still considerable room for improvement

               Deposits / GDP*                                              Mortgage loans / GDP
                                           112%
                                                                                                           39%
                                54%
      26%            30%                                                                    15%
                                                                                 9%
                                                                   2%

     Mexico          Brazil     Chile     Eurozone                 Brazil       Mexico      Chile       Eurozone



* Source: IMF (2007 data), Brazil Central Bank (aug/08 data).
¹ Deposits + Assets under management
Index                                                                   12



  Strategic vision: to become the best retail bank in Brazil


  Brazil: growing economy with great potential for further growth and
  bancarisation



  Grupo Santander Brazil: Santander + Real,
  an excellent starting point

  A well defined strategy for success:
   – Integration Plan: underway …
   – … compatible with Profitable Commercial Growth


  Conclusions: Business Plan 2008 – 2010
Grupo Santander Brazil: with critical mass in a sizeable                                                  13

Financial System
 Financial System - June / 2008                                      Grupo Santander Brazil
                                                          Market share – Jun/08 (%)

  Assets (R$ Bn.)                      2,574                         11.3
  Loans¹ (R$ Bn.)                      1,068                         11.8                        Market
                                                                                                 Market
                                                                                                 share
                                                                                                 share
  Savings (R$ Bn.)                     2,052                         10.2
                                                                                                 > 10%
                                                                                                 > 10%
  -   Branches                        16,372                         12.4
  -   Employees                      545,253                         10.0
                                                                                                 Top 3
                                                                                                 Top 3
  -   ATMs²                          166,773                         10.5


  Attrib. profit (R$ Bn.)                26                           6.4

  BIS (%)                                14%



Source: Banco Central do Brazil. ¹ Market share of unrestricted loans (does not includes rural
loans, mortgage loans and BNDES loans). ² 2007 data from Febraban. Taking into account
the public banks, we rank 5th by assets. Using the same criteria for loans, we rank 4th.
Strong distribution capacity ...                                                                    14



      2,042 branches with focus on
       South/Southeast (74% GDP)                             Additional channels
 North: 4% GDP                 Northeast: 13% GDP      1,509 banking points in companies (PABs)
Market share: 5%                Market share: 7%
                                                       17,978 ATMs
                                                       2,511 electronic service points (outside
                                                       branches) (PAEs)
                                                       Internet (85 million transactions / month)
                                                       Contact Centers (18 million calls / month)
Center-West: 9% GDP
  Market share: 6%

                                                             Specialised networks
                               Southeast: 57% GDP
                                                        Consumer Finance
                                Market share: 16%
                                                        High income
      South: 17% GDP
      Market share: 10%



Data on branches as of September 2008               PABs: Banking service points (basically at firms)
                                                                                                               15
... to offer banking services to a large customer base

                      Account-holders (Correntistas) / Corporate clients
                                                                                                ASSET
     RETAIL                 COMPANIES                 GB&M                   PRIVATE
                                                                                             MANAGEMENT


 >8 million active       > 3,500 active                                 > 5 thousand        > 460 thousand
                                               > 1,200 groups
 account holder              groups                                      customers             customers


Credit portfolio of                                                    R$ 23 billion in
                            Credit portfolio of R$ 47 billion                               R$ 85 billion in
  R$ 79 billion                                                         assets under
                                                                                            managed funds
                                                                        management

                            Account-holders / Non account-holders
                 CARDS                FINANCING              INSURANCE                 MORTGAGE


              > 7 million           > 2.1 million            > 7.0 million         > 50 thousand
              accounts            active customers             policies              customers


          Loan portfolio of       Loan portfolio of     Issued premiums            Loan portfolio
            R$ 6 billion           R$ 27 billion          R$ 750 million            R$ 6 billion


September 2008
The new Bank has a more balanced business portfolio                                                                16



            Loans: R$ 133 Bn.                                   Savings – R$ 208 Bn.
                                         Sep08 - R$ Bn.                                           Sep08 - R$ Bn.

    58.8                                                                          90.2
                                                             85.4
                               46.6
                                                             35.3                  53.2
     39.5                      19.1
                  20.1
                                          7.5                                                     32.5
                  14.8         27.5                          50.1                                  20.2
     19.3                                 3.9                                      37.0
                  5.3                     3.6                                                      12.3
  Individuals     SMEs     Corporates Real Estate         Mutual funds         Time Deposits   Demand Dep &
                                       & other                                                   Savings




            Grupo Santander - Loans                             Grupo Santander - Savings
                                      PF Loans                                                   Mutual
                  6%                                                                             funds

                                      SMEs Business                      16%
                         44%                                                        41%          Time
            35%                                                                                  deposits
                                      Corporates
                                                                         43%
                                                                                                 Demand
                  15%                 Real Estate &                                              Dep. +
                                      Others                                                     Savings
The new Bank has a low risk profile                                                              17


                        Independent credit risk management...

                 ...with improved risk processes...
                Specific experience in some businesses:
                SAN-Cards; Real-External channel vehicles        Loan portfolio profile
Admission       Advanced decision models                           Medium / Low ...
                High automation level: Real’s corporate
                valuation example
                                                                         Other
                Advanced alert system for Santander’s                       8%
 Mgmt. &        Corporate segment to be used also by Real   GB&M                       Secured
monitoring      Commercial proximity: Risk “promontorios”   Loans                       loans
                                                                    18%          42%
                Preventive action on collections
Collections     Viewing collections as a business unit
                Take advantage of Real’s IT systems         Short term    32%
                                                              loans


                ...and the IT systems
  Technological renewal Santander benefits Real – GARRA
  Technological improvements: Data Warehouse – MIS and
  companies pre-classification system
The new Bank has a low risk profile                                                       18




  Management of interest rate risk                    Management of forex risk


                                              -   Hedging of expected results
  Without interest rates Carry Trade
                                                  –   In 2008: Santander is hedged in
  Management of net interest income with              Brazil against US$; Banco Real is
  ALCO portfolios solely consisting of                hedged by the parent company
  government bonds
                                                  –   (Moreover the parent company in
  81% of the public securities portfolio is           Spain hedges EUR / USD)
  used to cover regulatory requirements           Without forex Carry Trade
The new Bank has a low risk profile                                                                19



                     Grupo Santander Brazil: a “liquid” balance sheet
         R$ billion – Sep 08

                                                 -                                        Sound
                                                                                         Balance
                                                                                          Sheet
                Loans + Similars
                                          113            120        Deposits




          Compulsory + Restricted                                  Debts + onlendings
                Securities                 45             20
                                                                   Shareholders equity
                                                          30         + Tier II Capital

             Non-interest earning                                  Other non-interest
                    assets                 68             60       bearing liabilities

          Institutional Compulsory
                                           4                       Institutional* CDB
              Securities / Repo                           20
                                           36                           Repo
                                                          17
                                        ASSETS       LIABILITIES


                        Assets under Management: R$ 85 billion
* Customer deposits with greater flexibility
                                                      20
In short, an excellent starting point

     GRUPO SANTANDER Brazil

       Critical mass

       Distribution network                Offer
                                        strong and
       Customer base
                                         profitable
       Balanced businesses                growth
                                         potential
       Low risk profile: good
       management of risks and
       liquidity
Index                                                                     21



  Strategic vision: to become the best retail bank in Brazil


  Brazil: growing economy with great potential for further growth and
  bancarisation


  Grupo Santander Brazil: Santander + Real, an excellent starting point


  A well defined strategy for success:
   – Integration Plan: underway …

   – … compatible with Profitable Commercial Growth


  Conclusions: Business Plan 2008 – 2010
The integration process is already underway.                                      22

Key aspects
        1st Stage                    2nd Stage                  3rd Stage
     Costs reduction               Integration I              Integration II


I
    Efficiency good practice

                II
                       Technological integration

                III
                        Operational Integration

                       IV
                            Central Services Integration

                                                   V
                                                           Complete Integration
                                                            / Unified networks
Technology as the basic pillar of integration                                            23


     IT model focused on the customer and adjusted to the Group’s model:
      converging towards a single technological and operational platform


Experience of                                 Auto
                   Branches    Call Center                Internet        ALHAMBRA:
Multichannel                                 Service
                                                                     • Service quality
  customer
                                                                     • CRM based on
                                                                       customer
                              MULTICHANNEL ARCHITECTURE                preferences
                                                                     • ”Lean” channels


 The customer
                                     Customer DB                              ALTAIR:
is at the centre
  of the model                                                       • Group’s model for
                                                                       applications
                                                                       implemented in Latin
  Complete                                                             America.
    product                                                          • Efficiency
  catalogue                                                          • Agility
differentiated
                                                                     • Operational control
by customer
Main milestones of the integration                                                                             24

The technological and operational integration plan of the business and
                  support areas is perfectly defined
                                             2008                  2009                       2010
                                        Q3
                                        3T          Q4
                                                    4T   Q1
                                                         1T   Q2
                                                              2T          Q3
                                                                          3T   Q4
                                                                               4T   Q1
                                                                                    1T   Q2
                                                                                         2T          Q3
                                                                                                     3T   Q4
                                                                                                          4T

       Organisational merger
       Fusión Organizacional

       HHRR y Contabilidad
       RRHH and Accounting

       Legal merger
       Fusión Jurídica

       Private Banking
       Asset Management
       Credit de Crédito
       TarjetaCards

       Aymoré

             Customer integration
             Integración Clientes
  GB&M




             Markets
             Mercados
             Foreign trade
             Comercio Exterior
             Cash Management

             Call Center
    Retail
  Varejo




             CRM
             Cash Management
       Corp. – Customer integration
       Empresas – Integración Cliente

       Commercial model - Call Centre
       Modelo Comercial Call Center

       Internet Banking
Integration Plan at Central Services                                                                        25



  Back-office reduction will allow us to increase sales personnel at
          the branches (more revenues) and reduce costs


            Personnel distribution                               Streamlining Premises

                             +5,000                               2008                     2011
                           dedicated to
                              sales
   Central         24%
                                            15%            15 BUILDINGS¹              3 BUILDINGS
  services                                                • 7 owned (103 th m²)    • 2 owned (108 mil m²)
                                                           • 8 rented (85 th m²)    • 1 rented (10mil m²)


Commercial                                  85%
                  76%
 network                                                  188 thousand                   118 thousand
                                                           m² occupied                    m² occupied


                  2008                     2010
                                                             Potential gains > R$ 250 million




¹ Not including Nasbe nor Torre JK (vacant as of today)
At the end of the integration process: single brand                               26

and network
During the process:             … converging                   … ending with a
 two independent                  toward an                    single brand and
    networks …                optimised model …                    network

      2008                            2009-2010                 End integration




                            integration project

                                     Technology


                                      Systems
                      Organisation                Operations
We will obtain R$ 2,700 million of synergies from the                                                        27

whole process
         R$2,400 million in costs and R$300 million in revenues
Our synergies – R$ million
                                                                           300        2,700
                                                      150      2,400
                                           350
                                1,100                                                             This new
                                                                                                 estimate is
                                                                                                 25% higher
                                                                                                than the one
                                                                                                announced at
                       350
                                                                                               the time of the
             300                                                                                  purchase
   150

  Good Technology Operations Operational Sourcing   Premises   Subtotal   Revenues     Total
 practice                    integration                                  synergies


                     Costs synergies


     Moreover, the initiatives and attainment periods are defined
Initiatives to obtain cost synergies                                                                                 28



                            Cost synergies: R$ 2,400 million

Macroprojects         Synergies R$ mln)                                Initiatives
                                                 Best practices (i.e. branches fitting, documentation ... )
  Best practice       150                        Processes reengineering
                                                 Use of SAN global models (i.e. forex, derivatives ...)

                                                 Altair implementation
   Technology           300                      Consolidation of data centres, servers, call centres, internet...
                                                 Optimization of telecommunications, IP in branches ...
                                                 Rationalization of banking operations
   Operations                 350                Back Office optimization
                                                 Adaptation / unification of models and operational policies

                                                 Workforce optimization
Operational integr.                  1,100       Personnel transfer from Central Services (back office)
                                                 to branches

                                                 Negotiation of contracts based on larger volumes
    Sourcing                            350      Unification of contracts
                                                 Usage of Santander’s global purchasing capabilities

                                                 Fewer administrative buildings
    Premises                             150     Optimization of buildings usage, based on global
                                                 banking models


      Total                              2,400
Initiatives to obtain revenue synergies                                                            29



                  Revenues synergies: R$ 300 million

                                                   Initiatives

                 Pricing Policies (overdraft account and funds)

                                                                  Cross sell of additional
 Quick - wins           Sale of Personal Loans at                 services to cards customers
                        complementary channels                    Increase insurance penetration
                                                                  linked to banking products




 Share best             Strong relationship with                  Strong Retail banking,
                        large companies                           specially in SMEs business
  practices                                                       and high income



Synergies with          Credit Cards                        Asset Management
 Global Units           Insurance                           GB&M
Synergies and restructuring costs calendar                                           30



              During the first year we will obtain synergies of R$ 900 million

              Expected synergies                    Expected restructuring costs
 R$ million                                      R$ million
                                 2,700



                       1,700

                                                                     1,440   1,500
                                 2,400
     Total     900
                                                              877
 Revenues
                        1,500
 Expenses      800                                     289


               2009     2010      2011                 2008   2009   2010    2011
Index                                                                     31



  Strategic vision: to become the best retail bank in Brazil


  Brazil: growing economy with great potential for further growth and
  bancarisation


  Grupo Santander Brazil: Santander + Real, an excellent starting point


  A well defined strategy for success:
   – Integration Plan: underway …

   – … compatible with Profitable Commercial Growth


  Conclusions: Business Plan 2008 – 2010
Basic target of Santander Brazil                                                                                         32


                                                      Combine integration and growth
                      1st Stage                    2nd Stage                  3rd Stage
                   Costs reduction               Integration I              Integration II



                                                                                                High costs synergies
Integration




              I
                  Efficiency good practice

                              II
                                     Technological integration                                  More efficiency and
                              III                                                               productivity
                                      Operational Integration
                                                                                                (tools)
                                     IV
                                          Central Services Integration

                                                                 V
                                                                                                Greater sales capacity
                                                                         Complete Integration
                                                                          / Unified networks




                                    Basic leverages
                                                            1. Retail
Growth




                         Customers                          2. Corporations                         Differentiated
                                                            3. GBM                                  strategies and
                                           Products                                                     targets

                           Channels / Networks
                                                                                                              33
    Customer strategy
    1                Retail banking has a well defined segmentation, guaranteeing
                            differentiated value proposals for the customer ...
                 Individual customers
                 •                                                       Business and corporations
                                                                         •



                 Monthly income/ net wealth for Private Banking              Annual turnover

        > R$ 3 million Private
        •                        •




                                   High
                                     •                        R$ 5 MM – R$ 30 MM
                                                              •
                                                                                                Business 2
            > R$ 4,000
            •

                                 income

    R$ 1,200 –
    •
                             Medium
                             •


    R$ 4,000
    •
                             income
                                                          R$ 0.5 MM – R$ 5 MM
                                                          •
                                                                                                Business 1


R$ < 1,200
•                        Low income
                         •
                                                                  Up to R$ 0.5 MM
                                                                  •
                                                                                                 Corp. +
                                                                                               shareholders



                … toward single management models in 2010 for both individual
                          customers and business and corporations
Customer strategy                                                                                                34

1
                    Retail Banking. Value proposals adjusted to the segment
    Millions of actives account-holder customers for individuals and thousands for business

                                        1.5      Medium income         3.1                            3.2
                   High income                                                  Low income
                    Differentiated places
     Individuals




                    (branches and Van             Efficient processes (focus      Simpler processes
                    Gogh)                         on remote channels)
                                                                                  Remote channels
                    Pro-active offer              Personal attention for
                                                  specific customer groups        Specific products
                    Preferential manager

                                            31                         170      Businesses            270
                   Business 2                    Business 1
                                                                                + owners
      Business




                    Personalised relationship                                     Integrated relationship
                    model                         Relationship model              model businesses +
                    Manager + product             Offers based on CRM             owners
                    specialist                                                    Integrated offers




              More Retail customers....          + 6% active account holder (CAGR 2008-10)
              ...and greater linkage             1,2x until 2010 in basic net margin per active account holder
Customer strategy                                                                                               35

2    Corporations: service throughout the whole country by means of
     regional platforms and with support from global units (synergies)

      Well segmented customer base
    Number of active customers (thousands)
                                                                               More customers ...
                                                                          Active customer base
                          Turnover > R$ 150MM
                          •
                                                            0.7           (thousands)      CAGR
                                                                                            8%
                                                                                 3.9                  4.5


                              R$ 30MM > Turnover >
                              •
                                                                                2008                 2010
                              R$ 150MM

                                                                             ... and greater linkage
                          Agro business / Mortgage
                          •

                                                                          Basic net margin per account-holder
                          Specific knowledge of the sector.
                          •
                                                                    3.2
                          Example: rural loans and structuring of
                          mortgage transactions                                          x 1.1
                          •   Multinational companies
                          Knowledge of products such as trade
                          •


                          finance, forex and SGC / Derivatives
                                                                                2008               2010
Customer strategy                                                                                    36

 3
       GB&M, global business specialised in the largest industries
      Customers
                        Value proposal/Coverage
                                                               Leverage by SAN GBM global
                  489    Industry vision / sector                   business potential
                          –   Services & TMT
      Global              –   Energy                             Five axis of specialised products
                          –   Infrastructure & Agro business         GTB
(Turnover >US$500M                                                                    Rates
                          –   Resources & FIG ...
 excluding Multinat.                                                 CIB
   auto business)        Team based in São Paulo                                      Equity
                                                                     Credit Markets
                  529
     Regional            Regional coverage with limited
                         sector specialisation                      Greater customer net
  (companies of          Teams distributed in platforms                  revenues
domestic capital with
    turnover of
                         according to scale conditions         Commercial margin net of provisions
  US$ 200-500M)
                                                                              CAGR
                  236                                                         ~ 15%
                          SAN Global Relationship Model                       =
                              –   Global manager
Multinational                 –   Country managers
   (Multinat. auto.;          –   Product specialists team
 foreign capital US$                                                   2008             2010
                          Size according to each
200-500M; SAN global
customer  7,000 assistants
                      2,442                > 18 million calls / month
             400
                                             Internet Banking
   2,042                                         > 1.5 mm users
                                        > 85 million transactions / month

   2008                2011
                                                    ATMs
                                                     > 17,500
                                        > 55 million transactions / month
In short, Santander aims to grow above the market in                                        40

revenues and below it in costs...

                                 “Jaws” performance


                                                               Gross revenues¹   Expenses
                                                >15 p.p.             ~ 15%
                                                           SAN       =            <0%
                                       4 p.p.
                                                           Market2    14%         10%




                          2008              2010



             SAN “jaws”               Consensus “jaws”

¹ Gross revenues: Margin + Commissions
² Market consensus (Summer 2008 analysis)
 ... which will allow us to close the gap with our                                                                  41

 competitors ...
   After the integration, the new Bank will be one of the main players in the
                Financial System, with an initial profitability Gap
June’08. Local criteria
           Account-holders                    Total Assets                           Net profit
              (million)¹                       (R$ billion)                         (R$ billion)

        Bank 1                  21.2                              416.5                                  4.0


        Bank 2                 18.1                               403.2                                  4.1



        Bank 3           9.6                                  343.8                                      4.0
                                                                                                               2x
      GRUPO
  SANTANDER             9.3                                 296.9                            1.9
        Brazil


        Bank 5        4.9                                 264.3                                    2.5


¹ Customers under Banco Central’s criteria. Total Assets and Net Profit according to published
balance sheets
                                                                             42
... and achieve the targets of the 2008-2010 plan
                   Targets 2008-2010
% growth in Brazilian Reales

   Businesses:               15-20% CAGR
   Customer
                        ~
   revenues:             =15%     CAGR
                                                              Attributable
                                                              Attributable
   Expenses:                 < 0% in 2009 and 2010            profit: >25%
                                                              profit: >25%
                             Cost synergies*: R$ 2,400 mln.   CAGR 08-10
                                                              CAGR 08-10
   Provisions:               growing in line with the
                             lending portfolio and the
                             business mix
(*) Cost synergies in 2011

        We expect a R$ 7.9bn net profit (for both banks
                     combined) in 2010
Index                                                                     43



  Strategic vision: to become the best retail bank in Brazil


  Brazil: growing economy with great potential for further growth and
  bancarisation


  Grupo Santander Brazil: Santander + Real, an excellent starting point

  A well defined strategy for success:

   – Integration Plan: underway …
   – … compatible with Profitable Commercial Growth


  Conclusions: Business Plan 2008 – 2010
Conclusions                                                              44


    Brazil is a growing country
     – Maintaining a growth differential compared with other economies
     – With solid macroeconomic fundamentals

    The new Grupo Santander is well positioned
     – Market share within the Group’s standards
     – Present throughout the country with potential for development
     – Distribution capacity
     – Diversified portfolio with strong capital and liquidity

    Execution plan defined to obtain good results
     – Synergies and management structure are defined
     – Implementation timing defined and underway
     – Towards a single brand and network


   The organisation is prepared, defined and structured to make
                    Grupo Santander Brazil ...
    Conclusions                                                      45




•    Market leader in                             Market leader in
                                                   •



     REVENUES and                         QUALITY: more satisfied
     PROFITABILITY                     customers and more linkage




                              … the BEST
                               bank in
                                 Brazil
•    Leader in employment :                    • Market leader in
     the best place to WORK                   BRAND recognition
                                               and attractiveness
Results. Spanish GAAP                                                              47


     +
  R$ MM                                     9M08         9M07         Y-o-Y (%)
  Net interest income                         14,246       11,956           19%
  Net fees                                     4,857        4,496            8%
  Insurance Activity                               191          244         -53%
  Gain (losses) on financial transactions      1,631        2,169           -25%
  Gross operating income                      20,925       18,864           11%
  Other operating income                       (189)        (102)           85%
  Operating expenses                          (8,527)      (7,793)           9%
    Personnel                                 (4,352)      (3,901)          12%
    Other administrative expenses             (4,175)      (3,892)           7%
  Amortization                                 (622)        (533)           17%
  Net operating incomel                       11,588       10,437           11%
  Provision                                   (4,719)      (3,463)          36%
  Other income                                (1,145)       (847)           35%
  Profit before taxes                          5,725        6,127            -7%
  Tax on profit                               (1,916)      (2,103)           -9%
  Net profit                                   3,809        4,024            -5%

  Net profit (USD)                             2,262        2,013           12%
Balance Sheet. Spanish GAAP                                                           48


    +
        R$ MM                                 30.09.08      30.09.07      Y-o-Y (%)
        Cash                                      55,653        47,127         18%
        Gross loans                              133,409       108,550         23%
        Provision                                 (6,638)       (4,435)       50%
        Securities and derivatives                43,185        37,519         15%
        Permanent assets                            6,012        3,949        52%
        Other assets                              37,980        47,575        -20%
        Total Assets                             269,601       240,285         12%
        Deposits                                 122,785        93,514        31%
           Savings                                13,472        12,986          4%
           Demand                                 19,109        15,240         25%
           Time                                   90,204        65,288         38%
        Financial Intermediate                    58,554        47,858         22%
        Insurance liabilities                       2,712        2,642          3%
        Other payables                            61,181        72,704        -16%
        Stockholders’ equity                      24,369        23,567          3%
        Total Liabilities and stockholder’s      269,601       240,285         12%


Fuente: CNMV

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