BANCO SANTANDER, SA
Otras Comunicaciones #27538 - 31/10/2008 17:21
Presentación relativa a Santander Brasil
PDF Adjunto:
GRUPO
SANTANDER BRASIL
Integration for
Leadership
São Paulo, October 31, 2008
Retail
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.
Index
The Retail Banking Market in Brazil
Grupo Santander Brasil’s Positioning
Strategy 2008 - 2010
Conclusions
3
The banking market in Brazil has developed at high
growth rates
Annual growth rate
2003 2008
Number of Current
61.4 77.1* 6%
Accounts (millions)
Number of branches
14.8 16.4 2%
(‘000)
Number of credit cards 45 107 19%
(million)
Number of insurance
policies 104 400* 40%
(millions) 4
* 2007
Sources: BACEN, ABECS, Febraban, Fenaseg
The brazilian market already offers a diversity of loan 5
products, within a broad price range
CAGR
• •Annual
Individuals Interest Rate
• % % •
100% 100% 27
•
32% 27% Autos • 23 20-30
•
0%
24% Payroll 44**
• 15-25
•
33%
15% Personal Loans 9
• 40-50
•
7% Credit Cards 26
7% •
120-150
•
10% 5% Overdraft Checking Accs. 12
4%
6% CDC • 18 • 40-50
17% Others
12%
2003 2008*
* August/08
** 2004-2008
Source: BACEN
Growth Savings driven by time deposits and pension funds 6
Total Savings (Deposits + Mutual Funds) CAGR
•
% •
100% 100% 14
•
34% Mutual Funds • 10
43%
Retail
30% Savings 13
•
33%
17% Pension 25
•
12%
15% Time Deposits • 34
7%
5% 4% Demand Deposits • 12
2003 2008*
* August/08
Source: BACEN
There are four distinct groups of retail banks in the 7
brazilian market
Large public banks: Large private banks:
With a presence in all Extremely competitive
segments Strong brands
Large branch networks Large branch networks
Large
Significant presence in Alliances with strategic
public entities channels (i.e. retailers)
+
Captive markets for Cover all the
deposits geographic regions
and segments
Size
Regional or
niche banks
Medium-Sized
Others
private banks:
Present in all segments
Good network
coverage, but not the
same as the large
Specialized Other Universal Private Universal banks
with national scope
Business Scope
Index
The Retail Banking Market in Brazil
Grupo Santander Brasil’s Positioning
Strategy 2008 - 2010
Conclusions
8
The new bank has a strong starting point Examples
9
More than 8 million active 29% market share
3,551 current account holders in the high Income segment
Points
of Sale
More than 1,500 banking Strength in
2,042 service points in companies payroll accounts
Branches
1,509 Fourth largest in the Credit 12% market share in
PAB’s¹
Card Market credit card loan volume
2,511
Eletronic R$ 23 billion portfolio 18% market share in
Points financed with Aymoré auto loans
Leader in Payroll Loans
17,978 among the
Focus on the more
ATMs profitable segments
private banks
1) Banking Service points
The two banks have complementary strengths 10
Branch Network Concentration in São Paulo (619 Extensive branch network in the
branches) and the southern region southeast (780), and an important
(152) presence in the northeast (160)
Segments Strength in the Middle-Income and Strength in High Income and
Public Employee segments SMEs
Business High growth in the credit card 12% of market share in auto
business (+2.5 pp of market share loans (CDC + leasing)
in 3 years) and payroll
High penetration in personal
High penetration in insurance among loans among current account
current account holders (Life - 30%) holders
Competitive Innovation in products, solid
Customer satisfaction
Differential international brand
Focus on customer relationships
Focus on commercial productivity
11
Well structured organization, capable of implementing the
Retail’s strategy
Retail (José Paiva)
Commercial Units
Santander Network Real Network Other Channels
(Pedro Coutinho) (Wagner Ferrari) (Ramón Sanchez)
Segment Units Product Units
Individuals Products (Nilo Carvalho)
Individual (Armando Pompeu)
Credit Cards (Nuno Matos)
Autos (Félix Cardamone)
SMEs (Ede Viani)
Asset Management (Luciane Ribeiro)
Private Bank (Francisco Di Roberto) Mortgages (José Roberto Machado)
Insurance (Gilberto Abreu)
Index 12
The Retail Market in Brazil
Grupo Santander Brasil’s Positioning
Strategy 2008 - 2010
Conclusions
We aspire to be the best Retail bank 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
13
We are certain about the bank we are building 14
To be the number one bank for our clients, concentrating on
transactions
Focus on the high and middle-income segments
Network as the main distribution channel, integrated
with the other channels
Differentiated from the competition due to its proximity to
clients, focus on execution and high commercial productivity
Our plan contemplates both external and internal 15
conditions
Market Best
Critical
+ Conditions + Internal
Mass
Practices
Focus on branch customers: Linkage, Retention and 16
Acquisition
Individual and SMEs
Linkage Retention Acquisition
Client Profitability – Basic Linkage of new clients Branch Network
Offer
Management of Payroll
By segment and level of Warnings – CRM
loyalty – CRM + + Synergies with GBM and
Automatic Debit Corporate
Concentration on
transactions Range of Transactions “One product client”
Be the number one bank The best client is the Focus on High and
for our clients current client Middle-Income
segments
High social mobility will be the main factor behind the 17
growth in the banking sector
Size
Millions of individuals* New clients
Income moving up
bracket 2007 2011 segments
> 4,000 2.4 3.9
High 1.2
1,000 – 4,000 18.3 25.9
Medium
5.6
Low 500 – 1,000 18.9 24.8
Income "A"
3.8
Low < 500 56.9 52.5
Income "B"
Total 97 MM 107 MM
* Potential customers, over 18
Sources: Economic Research, IBGE, Santander Brasil
We have the opportunity to grow revenue by adopting 18
best practices
PENETRATION RATES Examples
Santander Brasil Banco Real
Insurance ~50% ~5%
Credit Card ~45% ~60%
CDB* ~7% ~15%
Pension* ~14% ~8%
* high Income
As a result, we are projecting robust and healthy growth 19
over the next few years
Annual Growth Breakdown of customer
2008-10 revenue
2010, %
Credit Volume 15-20%
Deposits
Savings Volume 15-20% 13
Fees
37
Individual
Customer Base ≈ 6%
50
SMEs ≈ 14% Loans
Customer
Revenue ≈ 15%
Index
The Retail Banking Market in Brazil
Grupo Santander Brasil’s Positioning
Strategy 2008 - 2010
Conclusions
20
Conclusions 21
The Brazilian market will continue to grow, supported by the high level
of social mobility
Together, Santander and Real have a strong starting point, with
complementary characteristics
We already have a structured and qualified organization to implement
the strategy
We are clear about our strategy and have built a plan to implement it
The opportunities for the new bank are based on the new critical mass,
market conditions and the best internal practices
As a result of our new strategy we expect at attain an annual growth in
financing and deposits of approximately 15-20%, leading to an annual
increase in retail revenue of close to 15%
Fuente: CNMV