BANCO SANTANDER, SA
Otras Comunicaciones #27537 - 31/10/2008 17:20
Presentación relativa a Santander Brasil
PDF Adjunto:
GRUPO
SANTANDER BRASIL
Integration for
leadership
São Paulo. 31 October 2008
Global Banking and Markets 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.
3
Our Objective in Brazil
• Market leader in Market leader in
•
REVENUES and QUALITY: more satisfied
PROFITABILITY customers and more linkage
To be the
BEST bank
in Brazil
• Leader in employment : • Market leader in
the best place to WORK BRAND recognition
and attractiveness
4
Index
Wholesale Market in Brazil
GB&M Brazil Positioning
Strategy 2008-10
5
Higher credit volume given to corporate, increasing spreads,
increasing tenor and decreasing delinquency rates.
YoY Credit Growth to Corporate(1) (%) Spread (%)
44 14.7
13.5
11.9
30
17
2006 2007 Sep-08 2006 2007 Sep-08
Tenor (running days) Delinquency Rate (%)
303 5.2
275
234 4.2
3.5
2006 2007 Sep-08 2006 2007 Sep-08
Source: Brazil Central Bank; (1) Free Funds - This resources are based in Referential Credits of Interest Average.
Excluding Leasing and Others Free Funds.
6
Four models are predominant in the Brazilian Wholesale
Market
Main Characteristics
High
1 Large Universal Local Banks
3 • Wide products and services offering.
Large Universal Local Banks
Large Universal Local Banks
Global Universal Banks • High balance capacity and capillarity to
Banco do Brasil
Banco do Brasil generate business.
Santander + Real
Bradesco BBI
Bradesco BBI
1 2 Medium Universal Local Banks
Itaú BBA
Itaú BBA
• Similar to large banks, but with balance
Banco Real
Balance Capacity
and coverage limitation.
Medium Universal Local Bks
Medium Universal Local Bks Santander
Unibanco
Unibanco 3 Global Universal Banks
HSBC
Safra
Safra 2 • Mix between local relationship and
Citi global structure and capabilities.
• Balance capacity and financial
Global Banks focused on IB
Global Banks focused on IB strenght.
Credit Suisse
Credit Suisse
4 Global Banks focused on IB
Merrill Lynch
Merrill Lynch
• Strong specialization and team quality.
Goldman Sachs
Goldman Sachs • Access to international structure and
JP Morgan
JP Morgan 4 market.
• Focus on structured deals, mainly for
Low
large companies.
Specialized Generic
Products and Services Offering
7
Index
Wholesale Market in Brazil
GB&M Brazil Positioning
Strategy 2008-10
8
Business model and segmentation created to make
Santander the leader in the brazilian wholesale market
Business Model Segmentation Criteria
A Coverage Model B Value Proposal
Sector vision with the main Main clients strategic partner.
clients. Integrated product offering to Sector Clients
emerging clients. Retail, Services & TMT Revenues > US$500 mln,
Regional coverage of emerging
Specialized treatment to global Energy, Resources & FIG except for automotive
clients. multinationals.
clients. Infrastructure & Agribusiness
Specialized teams to coverage
Industrials
global clients.
Awarded research team.
1.363 companies with high potential to Domestic capital
companies with revenues
generate deals. Regional between US$200 mln and
US$500 mln.
D Better Products C Risk Management
Product Commitee. Processes and analysis clear
Customized products and and objective.
Automotive
solutions to local and global Operational agility and flexibility multinationals.
clients. in the credit concession Foreign capital
•
process. companies with revenues
Development of governance Multinational between US$200 mln and
mechanisms. US$500 mln.
•Global clients with
revenues < US$500 mln.
9
Higher client portfolio diversification, guaranteeing a balanced
source of revenues and less exchange rate exposure
Segment Vision (Revenues 2008E)
Visão por Segmentos (dist. por receita) Client Concentration (1.363 clients)
Concentração
BRL mln
Foreign
Companies,
13% 43%
26% Brazilian
9% Companies,
57%
16% 27% Credit Assets Currency (USD 44bln)*
Concentração
9% US
Dolars,
28%
Industrials Brazilian
Retail, Services & TMT
Energy, Resources & FIG Reais,
Multinationals 69%
Regional Yen, 3%
Infra. & Agribusiness
* Credit assets paid out to clients.
Source: MIS Santander
10
Balance strenght enables Santander to give credit to companies in a low
liquidity period, generating revenues to GB&M and value to shareholders.
Credit to Large Corporates
BRL bln
66
42 40
26
C1 Santander C2 C3
Source: Financial Statements 1H08
11
Client portfolio with high rating and low default probability
Weighted Average Rating: 6.7
USD mln 12,508
9,667 9,624
Disbursement
7,739 8,127
4,491
3,662
Nº of
109 323 288 181 100 27 26
Companies
Rating
5.0-5.4 5.5-5.9 6.0-6.4 6.5-6.9 7.0-7.4 7.5-7.9 8.0+
SAN
% Limit 10% 14% 15% 21% 21% 9% 9%
12
Index
Wholesale Market in Brazil
GB&M Brazil Positioning
Strategy 2008-10
13
Annual growth rate of approximately 15% in GB&M Brazil
total revenues until 2010...
x% • CAGR BRL mln
15%
2008 2009 2010
Revenues w/ Clients: 76%
•
C/I(1): from 28% to 21%
•
Source: MIS Santander; (1) Cost to Income
14
...keeping the client portfolio diversification and improving the
product mix.
Revenue with Clients(1) Evolution by Revenue with Clients(1) Evolution by
Segment Product
BRL mln CAGR BRL mln CAGR
15% 15%
7% 21%
46%
33%
-19%
Multinationals Credit
16%
Regional
Equities
Sector Clients
M&A
12%
Rates 15%
GTB
2008 2010 2008 2010
Source: MIS Santander; (1) Considers only revenues which can be allocated to the segments, without “revenues sharing” with other segments.
15
Integration Plan – GB&M
Milestones
3T 08 4T 08
1T 09 2T 09 3T 09 4T 09 1S 10 2S 10
J A S O N D
Management unification
Relationship integration
Brand integration
Team physical integration
Risk process integration
GB&M
GB&M
Product and commercial politics equalization
Operational platform and systems integration
(except cash)
Cash Management
and Internet
Banking Integration
Fuente: CNMV