SAN - Earnings call transcript Q3 2021

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Sergio Martinez

Good morning, everyone. Thanks for joining today's Santander nine month 2021 earnings presentation. Every quarter our Group CEO, Mr. Antonio Alvarez will address the highlights on the group performance then the group CFO Jose Garcia-Cantera in detail. We'll comment on the different business areas trends before the CEO jumps into the key takeaways and obviously, we'll have plenty of time to answer your questions. please. Antonio, Jose

Jose Antonio Alvarez

Sergio. joining you, to Thank everyone. Okay. in Good this for us Presentation. Third you Thank morning Quarter Results

comes the income by in constant pre Euros. business the the profit is another diluted rise along results it volume increasing with and growth generation, And results was loans, deposits, the year-on-year -- are be mutual efficiency in -provision the to up think in XX% greater in can operating with of and this solid up momentum not The led strong QX. way, funds. customers Revenue the improvement, growing that basis profitability. having set the I we show utilization X% driven higher but revenue

the will billion currency. credit of QX a around the Euros year against XM numbers in reflected credit in speak constant QX underlying discipline our back was 'XX profit excluding profit, billion, XM EURX.X items depreciation X%. a the maintained, plus bit starting the quarter, Year-on-year below average X% Euro showing quarter-on-quarter year to in Euros EURX.X plus later 'XX in of is cost Specifically as EURX.X current currencies. on basket We I different depreciated themselves. X% going billion. and The profit our for quality, group numbers they attributable the of call bit in the some 'XX

end generation XX-XX% in of equity us range. ratio capital of quarter, tier strong enabled core top to points target at there's capital, fully-loaded QX the our XX.XX% XX a Regarding the plus basis reach in X

And XX% -- at equities the policy value annual the net-asset buyback and of on remuneration set has on grew XX% XX.X%. share year-on-year. and We payout that XX% the in profitability. in In to continue growth And board, region an return underlying as to a on, know, the Return XX% XX medium-term at programs, new approved equity the per region full are cash, you of tangible X.X% XXXX profit, increase to the a on established for we well quarter, year, in rose of in with tangible dividend goals approximately deliver to beginning track the to XX%. Euros. -- our billion. reach we EURX.X And year. underlying target outperform entering the at distribution short, 'XX of outstanding

Moving income net turn are customers. total what And driver recorded on in and and digital increasingly customers great branches. the services to increase our customers, revenue steady transition key our and in success growth. channels has using operating contact a the the been We of a centers, through products

reached and transactions XX% board, As If result, grew more points is full total. a nine percentage of quarter, And Digital a at XX% up customers XX% digital percentage year-on-year. the and deposits, XX%. million we this of countries were all with between months by the than [inaudible as year-on-year. and individuals, XXXX. X the with sales sales look the XX total digital sales in important. consumer mortgage, is in products rose the mainly across XX% Digital ones across year-on-year all investments. growth related last Also, XX:XX:XX] this plus

seven top we markets by are three in We MPS in which operate.

year-on-year -X impact, points the had before. quarter, But to as the to negative in statement. still percent rates -- points percentage revenue, I and Exchange mentioned moving impact a income Going costs. positive small -X -- group's in the percentage in

we have this reaching, has and couple the in grew, Actually related in Chile, Europe. constant Euro, in -- recent years. last inflation, Argentina particularly only certainly been results core Brazil while inflation, revenue. We for significant revenue the now at at in particularly and I'm Looking is of disciplined demonstrated customer word Mexico inflation in not and indicated

had is the year-on-year. performance performance of in middle that performance well. of reflected today, billion, Brazil a performing mainly you elaborate third Garcia-Cantera quarter, and PagoNxt We you. Management has I and in Insurance Wealth we we I global quarter the items XX:XX:XX] X to significant restructuring global recorded region delivered than very in gave recall and some Notwithstanding business, in Additionally, we will with gone expectations U.S. that guidance are [inaudible Jose the Once delivering increase, EURX.X that out our profit and crossing our leave south. reduction positive U.S. the our XX%+ of in or provisions loss month loan CIB a further, them. all will again, The CFO, across the QX. XX business underlying according better XXX overview very

AI are through North trends and was America single X% XX%, XX%, QX. scores fund contributed geographical posted usual in of and quarterly Our lines, Consumer the QX XX%, business diversification. comparison by I'll the sustaining core Group on in and contribution Bank quarter-on-quarter regions Each XX%. our up gains the revenue the analyze by in and Digital to now in XX% growth roughly resolution trading profit. Europe favored our performance America South

the in of higher high in you to in On CIB in lessor detail remained It in activity, in investment control board. stay loan in provision, UK. inflation slides. had the through following the corporate stable, as run mainly But the provisions context business these other will more by net to Europe error and the some in a impacted and and strong across increased QX. expenses related income hand, the seasonality word releases U.S. in both loss Cost back figures with

with in year. months, NII second know, U.S. positionality X% nine was higher to at have LLPs tend half some As X% compared the of you quarter-on-quarter. XXXX, in the already

grew loan that bench grew UK in spreads of back year margin XX improving and the previous X along the repricing deposits Europe, and billion saw billion, On liabilities, higher America, regarding North and in quarter, Chile, management of volumes, of we loans general in U.S.

very of know impact quarter-on-quarter. year-on-year you a no on In positive well. there addition, Naturally, was TLTRO that impact

Finally, rates increases recently the went and average month America, XXXX, will rates Poland. to and in the positively go than These with in fee in the remained Brazil, the income, second range quarter Latin the seasonality in of the NII impact Chile, despite product up quarter, interest some When where lower entire year-on-year nine in increases quarters. coming XXXX, Mexico, from in continue the higher lows levels with recovery we mainly the we showed the Europe. activity in

supply growing all improve recovery consumer show July, in activity, In figures of has of turn-ins have cars year-on-year. baker the signs while a so significant Payment the sales [inaudible that far the And activity. been growing, are are business activity a a mainly have XX:XX:XX] strong at as motor the OEMs. are QX, in finance seen chain affected activities a greater have word XX:XX:XX] we strongest volumes the by Car in speed. [inaudible strong to affected, by probably you with the the space. continue we fishing new U.S. day to nothing strongest, shorter-term significantly, know, You the you

higher & fee U.K. across and with In of regarding drafts the all and XXXX. we management costs in of the addition, IT to ECM, cost income insurance footprint -- in [Indiscernible] total for this group XX:XX:XX] X.X%. in DCM, back new April activity inflation CIB see were group's underpinned assets a countries these by rose since significant regulatory In -pandemic in representing Insurance to our labor excluding in [Indiscernible] under Wealth due side, America, activity in this particularly the on Latin written expenses, in [inaudible except countries, and recovery costs and income. changes XX:XX:XX] inflation generated CIB research grew increase levels is fees XX%, real after continue the -- the terms, fee lower premiums. XX% increased Wealth serving and sharp fee [inaudible grew Insurance management In income, Management agreements. XX% about & increase significant pre X%

the the expect to quarters, Our a more is note XXX synergies. the Europe, recorded accelerate in Europe a basis in efficiency mainly plan, costs X.X% year-on-year than driven points region. highest T to our reduction efficiency cost lower Spain a by number the making we XX.X%. increasing which hat efficiency good improved increase were industry headway gains. in very coming in X% we with Of ratio

minus at X% As quarter. in distorted changes U.S. $XX due our in that the [Indiscernible] the seven the terms. the Germany, minus the increased year-on-year. note Argentina driven points US percentage -X% North joint and that at continued were to In real in year to South the mainly we America, leasing very the Company while XX% at venture region amortizations, In efficiency donation In region, in utilization recorded Leasing, America, greatly in stood before, increased X%, in that in costs by Of XX%. the in is community was flat this Argentina. plus improving Brazil increasing and X%, we stood mentioned the consumer launched Chile million terms, Sixt Mexico, XX% foundation in having the Deficiency by declined the bought high -X%, was improvement. I Italy real perimeters cost our stood technology real to region in performance in terms, expansion, costs bank with inflation year. cost is X% in and

Finally, loan loss provisions.

in the Bank, first markets, Taking net -- expected with slightly NPL same the XX%. have was into lower flat quarter-on-quarter to the last in period Taking in X.XX was the of U.S. Chile, basis loan better XX the account due to XX performing XX.X Total a points, ratio the and Consumer most the risk quarter-on-quarter. is the we cost Digital and with year-on-year, of the -- together mainly only nine basis literally months billion was coverage XXXX provisions year cost of XX a of in reserves loss months lower credit While UK. points in into ratio releases account X.XX. Brazil, of of than The

you majority overlay I are year sheet. that addition, the of on would last that balance remind recorded sitting the like the we In to

of around estimation which of in end. will This if QX, [inaudible expect on the year to macro view some nothing our ADO, changed in XX points reach basis releases XX:XX:XX] We our enable the make by new macros the best is back in scenario. to

platform management I the accrual that policy back points. figure you XX:XX:XX] The supported is strong organic know. basis the dividend asset of securitization on highlight quarter, [Indiscernible] mainly. risk-weighted in Finally, already generation on the mainly XX our by capital, [inaudible dividend new like would to through the

to And basis by XX% all, another to mainly XX on points, Additionally impact. regulatory XX%, we increased model-related fully-loaded Tier under XXXX%. recorded in core close the ratio XXXX maximum slide basis All this level XX basis equity the points to range, market have in performance. facing late our basis, very a X to capital XX points related of the you

achieved go results the we clearly at that is on well, in the have solid is versus Additionally, the Asia [Indiscernible] our tangible our asset expectations, That model risk-weighted grouping peers. equity is IVA progressing with by return EPS still our Euro. we RoRWA you reached status business assets progressing I how when we to ratios initial So outperformed would like comment on accordance share in showed well, Also progressing on clearly. per the Tangible value that to X% net X.X% the

dividend once already our pay the housing entering know while in up are EURX.X to was around have costs underwriting XX% recommendation of a ECB we while already policy billion, dividends, Today, you approved buyback of for not value board to XX% distribution we lifted program of the executed. payout buyback. the profit, the As

in are dividend So -- this we where in is these policy. our

to ESG. going Finally,

commitments we many people years, first products towards and the there the As net sustainable have more emissions targets all financial ESG. QX a and is Alliance specific than -- portfolio to founding we generation later our low In to regard, reduce bank CDO by Banking In the standard numbers are for Carbon XXXX. the carbonization our we guidelines the to power banking on stood are XXXX, generation have It carbon to alliance inclusive you ambition in XX:XX:XX] all that is we committed have we in we have Net XX. being harmonize to member set with carbon sectors of bank improving economy. requires transition undisclosed some strong is support this intensive zero published. has than by the partnership all to [inaudible this this. set know, the continue for set the of power standard we And Net-Zero a business numbers a being general our joined have a to -- no under to is be for reach in Accounting for the customers Financial. And related targets growth that which publish important to regard among September the on for working Well,

As you XX we energy, in XXXX. are since regards we nine know, XX finance, leader green to market well, billion as months renewable billion, the mobilized

in number of and leader know, top we renewal lead are you geographies the private As volume year-to-date, number we the to tables in -- by leak continue finance our financial deals by renewals, X like Bloomberg in one core logic.

issue on billion of total as sustainable bonds, X dong date billion debt have part grid We our our X plan. to

growth the On to a strong call financial For helps program people and to the of micro-business, leader Finance we the and America as for main the our Santander goal financial having in financial assets It social also presence in being that side, Latin and empowerment is education. setup market strategy naturally, system, All.

was in Brazil, Uruguay, been in launched already Peru Colombia, it launched and have microfinance Our in initiatives QX. Mexico,

empowered people making When and the XXXX, progress in of of women diversity million in We diversity have dimensions. composition And leadership our million reached the independence gender we since share are governance, in to in also which positions. the the terms of all board, it X.X micro-entrepreneurs. comes X.X board, and in financially the senior of are

include scorecard. bonus our ESG XX:XX:XX] [inaudible metrics We also in

addition, in average [inaudible the engagement, work level are our considerably XX%, in employee Way, with culture, XX:XX:XX] reflected than sector XX:XX:XX] of our corporate reached higher the global results year Santander the of In in rates. we coming [inaudible the

to hand over Finally, the external I like to [inaudible Jose business have point to I'll got And initiatives along differing our out units regions. elaborate over that and different significant XX:XX:XX]. would recognition ESG

Jose Garcia Cantera

in volume always, Jose Jose also strongly we growth Antonio low everyone. as led a and we the And lead Like following points. of we doubling In slides. revenues turn This you mentioned, XX% profits. net cost start business almost XX countries trends In morning the growth North had brief strong on of and I to risk a management efficient advanced Thank basis summary then America, we and will income cost with common good continue will expect quarter-on-quarter move our had model. improvement, more and at outstanding year-on-year. XX% in of with these Antonio in efficiency to the operating I s improvement all year-on-year, later, and a strong the while mainly the to U.S. And growing We a are to we will affected Europe, grow year-on-year regions into had accelerated although continue our These credit in We in volumes of year-on-year U.S. operating quarters. by markets. the I disposal in cost coming main comparison. figures as by had increase. and explain the growth boosted in profit revenue at

in continue in on In Return return and profit growth revenue XX%, our we growth to year-on-year volume equity X%. third as America Bank, the -- up In disposals, was and Consumer was we strong Profit Digital saw in tangible ties, Excluding leading the on tangible up double-digit XX%. well. was at total stood equity growth. XX%. quarter, North South America, to income strengthen double-digit reflected customer regional solid

Revenue main dropped rose Now strong flat the the the Spain, years. the let me quarter as countries by into go now. Mortgages net performance. was quarter, in XX% were in stock offset recorded X%. the new mortgages companies. operating quarter while the the in three Results boosted of highest decrease third business the in volumes last in cost In loans

mainly XXXX transactional Spain, grew net Regarding fee half insurance products. driven the provisions income, be revenue expect will but especially remain XXXX. risk in cautious Year-on-year that and of of of by cost in we to approximately in X%,

loss XX% while were fall by efficiency in was X reflected obviously This Our improvement points, profit. X%, the remained stable. in loan a in percentage reflected growth cost efforts almost provisions sharp reduction

X%. recorded income, trends sheet continued. kept main could balance downward expect quarters The rates. in on improving positive margin trends should mortgage in volume the to a Cost interest We while mid-single-digit stable which to quarters, UK, based maintain book fee lead should In previous trend. continue the expand the the income Net grew on coming growth. at interest re-pricing net its

the accelerated investments offset downward our trending program savings and see IT transformation As programs. slide, you in partially regulatory costs by delivered related can as

in on coming a another XX year. nine provisions. Spain, equity We points quarters. percentage trends was As the in balance percentage of ratio loss months result, improved quarter the tangible the nine in months X continue loan the the recorded efficiency Like in of first Return we expect to first XX.X%. sheet

stabilize while income at net Assuming interest would grow rates, should income low no rates. in single-digit fee hikes

year, terms in risk normalize. and another lending quarter. customers and We new -- of gained mortgage We d in showed We million growth excellent another strong in below expect cost cost-to-income gradually volumes, high profitability. sales. the a to card close should rate record next profit, XX% a Brazil maintained new reach while X.X reached of third a in just quarter the

results, a year-on-year. and push year-on-year rates XX%. Turning almost due levels to NII Loan in net also structural percentage performance, year fee performance slight double-digit income up to to cost cost with to X%, XX% will which interest the up net a X.X%, while of grew volume which ago. In fell tangible was especially. fee while to in decreased We maintained, at be was positive profit credit quarters, very a loss EURX.X up as sharply larger positive XX% provisions point had should inflation with growth reached income. billion, coming on XX% less rates, increased and and equity X record interest the than We income average continue insurance return higher -- efficiency markets capital volumes increase

below Santander risk the originations from of benefit be is [Indiscernible] excluding us work cost and will the time, very Leasing perimeter, uniquely Rico U.S. this conducted starting last same We're like-for-like Net and normalization. of fee-income. and performance last and proud the XX% adults, of back to the digital Puerto in by X%, impacted aiding strong order performance comment growing portfolio in and the costs income strong fund Bluestem we're a the X% decreased increasing versus basis. digital In the be Consumer the of Foundation auto affected focused to lives NII with see target families period growth to I year. country. and on years growth to multi-year positioned was increased income This to same announce conditions. results, to to over also, the levels. loan so sharply, Customer million on signs current At XX%. similar low the a XX% of disposal, to a market on growing and families expect operating year-on-year although across the to showed of program disposals, performance financial divide, education several to In resilient programs volumes, Year-on-year allowed at Auto in and quarter boost will young by year-on-year, provisions program was donated keep students students, closing inflation funds on transforming $XX We U.S. able competencies. that maintain results

In quarter, transactions fees still the driven shares show in U.S. XX similar and is -- to regulatory quarter, partially In remain In by in Amherst NII In advisory expect below by fee performance XX%, loans, in to we slightly. new deploy financial the X%. capital fees. consumer to agreement Both to quarter IEI, strategy proposal by and X approvals. single-digit at Mexico, to seasonality In the offset to addition, IT already transactions outsourcing that interest in coming growth the grow should September, were growth insurance contract normalization. own, third performance favored acquire continue subject Costs was growth don't The announced impacted around Securities. started we the positive expected income the lending Cost-to-income while acquire Revenue the credit might Santander outstanding supported quarters, most by second just are and the profitable you. corporate recovery and legislation. of and we by signs with CIB. of individuals volume to inflation, We in was high growth cost and In Consumer. double-digit business, levels. all while accelerate with affected in to have as quarter higher well group shared the in-line loan lower third to stood projects, rates, Pierpon

single-digits should NII fees improve. expect grow In generally plus to stable. a below year, high Consumer remain next should increase at while fairly and the trends to Digital inflation, Bank risk We activity cost of continue cost

was XX% year-on-year. lending higher New

shortage production and in month XXXX. fees the the market, Thanks of of consequently strongest strong a These terms increase quarter, income, XX% in particularly and costs the a of quarter-on-quarter second falling flat SRF and since the was first microchip third date, driving the together in Despite year in the part vehicle Germany new September quarters to However, auto quarter total consumer this volumes. quarter. with resulted in used lending and hampered the the in the a the underlying in to recovery profits. X% contribution best in

the we strong of growth risk XX%, consumer ost s, finance demand. gradually quarter For coming should remain C cyclical should normalize. cost -to-income and in below expect

the America, Corporate we positions in structure, Turning financing and held South to global countries in of businesses we most in the Banking, and rankings Investment in operate. and leading ECM Europe the and where DCM

grew increased year-on-year. X% Santander generated, efficiency account assets premiums written XX% the up third X% In insurance, on benchmark accounted group to remained rose part digits volume year-on-year. provisions the income In quarter the leaders commercial contribution fee normalize are world Loan on In managed. year-on-year. total more reached in in Management, started Asset sector the year-on-year We than total total Outstanding And a banking one includes financing XX results ratio year-to-date billion. energy. to XX%. XX% by double-digits in below of under for which profit Management increased renewable and shown for flows -- These Wealth networks XX%. the as total summary, and of management at flows was advising Commercial growth which in the revenues well. private loss gross

revenue PagoNxt. boosted year-on-year, in Now fees, at In months, exchange increased XX% strong rates. constant turning XX% jump to X by the

are billion We half, first on in of expected to growth revenue track versus revenue achieve and close reach to the the clearly XX% second-half to our of EURX medium-term.

components continued Solutions. across Now, a PagoNxt to to significant merchants starting geographies. payments Getnet of reaching active Merchant XX% market deliver volume with growth. number Getnet total, talking share increase three in the continued all in in e-commerce. the The total of country, about grew Brazil on and over XX%

integrated in trend of are already and from Already a initiatives their January. months. the developing markets acquired our customers increase over and active XX% trade in XX% to XXXX XX,XXX payment in and We support customers quarter. new customers evolve over a month. growing an merchants to six the first with XX% X.X continue volume Revenues assets has to an our expand XXXX, and integration offer Europe. the beyond countries, wildcards, In companies XXX domestic per active X,XXX reaching international connects clients for of up All-in-all over at favorably. Getnet March months, in X million eight technology customers, total growing the One last year-on-year. trade last reached our versus total XX talent European billion we of corporate

in operate Argentina Superdigital Solutions, Consumer to began the third quarter. in in Finally,

the track achieve expect X billion to we to us target grow the continue in in revenue puts forward, Euro strongly revenue with in PagoNxt medium-term. XXXX on to Looking line which

transactions. lower the reach go due And to X.X than positive the me financial corporate XXXX. to had active in foreign X than the over hedging we is loss expect last on first in merchants results the that medium-term. to million year months, finalize, now billion X attributable in and gains higher of center more lagging we currency Lastly, Remember let

turn year On [inaudible due the valuation last the the provisions in CEO no costs, me remarks. affected to and nine we for lower a charges to significantly back for his certain let now other first XX:XX:XX] crisis. was whose have months And the in holdings, by hand, difference final it material of

Jose Antonio Alvarez

metrics. third higher results efficiency Jose. Thanks, I into quality. better you and again, we the in geographies revenue, translate solid are quarter, presenting across right Once qualities think the is to by business, and that credit growth consistent solid, supported [Indiscernible] and a Volume

equity We our finally, on continue cost of equity. our capital. clearly And to is tangible return higher now build than

resume to a As lifting these continue of recession dividend focus the policy. we'll distributor of our following our the on improving we result recommendation, And of profitability. strengths, and

in loyalty society While general. satisfaction. digitalization, customer I strengthen to our say, keep customers improving Help helping the the We our any training, in support base aim base, with great in impact in whole our these businesses and a financing amortizations grow growing are a growing In sustainable ahead. positive seeing way growth their should by our the strength our for our society. -- business the customer we short, profitable underpin confidence

returns of for I've this continue on the open may call to that towards our as said will attention. XX%, tangible beginning to questions you you we very Thank target much term presentation. the equity, we confident medium now, your And progress are reason, For show have. that for at

Sergio Martinez

Thanks Jose Antonio.

we So with can session. the proceed Q&A now

question. First

Operator

sir. you, Thank

Serrano Morgan from Stanley. from first line Alvaro of The sir. proceed, Please the is one coming

Alvaro Serrano

any XXXX Thanks thanks you my if on there headwinds. the And is maybe guidance and an X, now anything for of that's several additional headwinds remaining another then years, Are the but can question capital some capital, taking costs. already morning. impact about Can remaining provide as -- question or first as questions. guidance of on give think Jose thoughts not. us what we for Good question Basel if and the My passed or quite on you bulk is detailed the we P&L, maybe well. you've guidance had some on on and I provided

you billion if proving is you. the X plans group it the higher cost been difficult the [Indiscernible] X think guidance so Europe. delivering. target? we've costs sort give particular, Costs given wonder plans, billion in quarter. been UK. that thoughts now to on billion and that the the proving you in cutting I were feels discussing in guidance What's in can You've in like to Thank your it's so slightly since in UK, you in It us gave can the the of cost do you cut UK years and get difficult not why

Jose Antonio Alvarez

I cost more Okay, question in issues he refer capital that the the address can will CFO, and to I'll details. elaborate the

in and of next you're reduction the Europe. issue nominal million cost while remain compliance deliver for core lack and nominal mainly cost are going due in year, at to Poland. rate in bit well cost the the some think remain these told these The a running UK, But force we We by I UK be are XXXX. do can committed X cost make cutting the progressing particularly at a billion that billion to the we are I to Portugal, and costs reach but UK to We're commit Spain, us to referring we X you in reduction Spain X In specifically in confident running is XXX to business: in that year. we making, that -- We're this On we billion the Portugal. behind, rate investments. and investments cutting. we X that

Jose Garcia Cantera

to capital. regards With

don't more we So this expect touches. year, regulatory any

we some have we impact products should significantly a the will XXXX. but smaller year, minorities be from models, we small and in the have this For updating than impact next from had

see was need confirmed leaked legislation. upper So very draught X. other on equity the of the few a We've we the throughout Santander would this expect smaller equal small. some changes, and to year. impact that ago, stakes at And Basel is be a to to final the to treatment be range seen of III, is going and the days ILM the with we end If

affected [Indiscernible] floor. be As not we the know, will by you

with be So the of and small. really one-to-one adjustments, the think impact ILM I some will

Jose Antonio Alvarez

you. Thank

please. question, next Our

Operator

Next yield question go Barclays, Fernando ahead. coming the of line is from from Mantovani please

Fernando Santivani

Good Hi. questions. you Thank taking morning. my for

So the first going NII one. you question be trends, and This will pricing, comes volumes on forward? how and do Spain see

[Indiscernible] to The you Thank the how the other much. little bit without on U.S. developing. long-term franchise the do would see with you and a very be touch agreement

Jose Antonio Alvarez

for lending, the good in market -- activity mortgage significant space, And low. the let's is in where where is good right that good see consumer corporate front. Okay. this sector now. in the Spain Not activity I in talk demand activity, credit relatively and the individual We well,

The the has level of as affected So know, you been by Euribor. largely well NII very

where what what had with it show Assuming Euribor that in in remain to NII with in that today. and be going is an the we line we're is

that I Euribor balance understand naturally that, the are sky remains and with of precision interests small, are sheet is what -- we Assuming ALCO precision -- very want a being don't rates. the the

that franchisees of not the declining specific the Well, do continue the Chrysler spikes doesn't Chrysler. but the mean do U.S. in this franchises with On about XXXX, co-signed business we to Chrysler. with agreement

we and normally the creditors. expect comes to our are we specialists have The top the which prime, Naturally like we keep additional them that of are and X from we call where significant we of don't what different space, you I we business. the And of in we the business, know, As prime subprime, they for underwrite the finance them. in near-prime while but of subprime And to that particularly Company, we the where One the now but Chrysler. they part specialists. business, the majority other to generate bulk call will dispose, and are before it is near-prime got the and the core the we is Chrysler, Chrysler, subprime internally it's or the and XXX% have near-prime, going of take of that, diversifying the keep that a business. subprime normally we is in On providers. own, out

us, Going the forward, taking other account being changed to very that agreements get the now as from with being spin Are for franchise but I the working we're OEMs not them. I'm Chrysler. to mainly we're procured. with these, may choose to do we with are traditional, unit a some had dynamic already into volumes not of We're going other expect interoriginate some getting the significant. of DNA impact that on to

Sergio Martinez

Thanks. And next the on question, please.

Operator

Please Elantra. Thank is the Decalt from from coming ahead. of go you. The one line Francisco next

Francisco Decalt

you my Yes, and questions. for taking thank

above Brazil. First XX%. Brazil very bank delivering one is [Indiscernible] in a well, general is about question The performing

expectations However, Concerns of on for up. GDP, with 'XX. north growth increasing the term running driving inflation [inaudible macro are long fiscal revised risks XX:XX:XX] down XX%. spending

you margins, other what the -- about consumer this in second the costs more in main U.S. in Digital EURXXX million on in expected in the Bank the cost which Spain the is And from of question details Consumer what how can volumes, context, most businesses, here see question Brazil and So explain, do the if you include the macro-environment, the higher you and in quarter, particularly general third you was revenue in much than is, mainly the lines current do in the this the and KPIs risk?

on you Thank If not? or these nature are whether the recovering also of can they you. revenues, comment

Jose Antonio Alvarez

your Thank on on depending Brazil. question [Indiscernible] you question for our

on to market make starting of we recognize share me two the back Brazil in performing Let One, points. as you well gains. are

market mainly cards, business the gaining the retail credit in lending while are space, of that insurance on bottom the mainly businesses, those We across side.

effect, at much So stage. we're is and not some growing there mix this that

we growing are Now on in the corporate retail. mainly side,

back risk You mentioned fiscal do of call on of the you and growing the been this, is what all has inflation higher macro-environment the you while significantly. having components,

the this, rates certain and have markets so. not back probably than On is the expectation the back do come running the to that to back some will of now in increasing bank know, a prospects and continue is inflation we you in come is level, as the emerging high, different central point. it's the inflation And for at

the in growing going keep Company market coming any cost is Rice other of going asked and not affects cost the how cost do comes KPIs material the these probably from in I the forward, subtotal of Rice mix. these specifically high of Naturally, to that micro-environment, Rice impact question these reflected be the You expect on a on the back things. than one capacity double-digit other. leader. the a being but critical business retail the high side. lower the mid-single the momentum and The it's business, having a than or see impact and from business here significant question probably RoTE in the the of behind significantly to our is don't year grow Other I than our

leader way transformation. the We in are doing the we are digital market

commercial -- well. activities is So what going very our

million of a fact, half million of Comparing X a As a are ago, year month, we less. card per to ago a quite credit about is one in or X number. and half years were that we a reach that matter probably this, sales half

in high year. keeping year may our the commercial and next control momentum, risk. next around business presidential volatile, with to elections be have volatility because So of growth, be face we going our activity confidence expected we some Naturally environment is elections

looking year. And next at elections taken, could some measures be

method. I revenue think On equity Spain, lines, the so Yes, other is mainly

Francisco Decalt

then the And contributions So of to in Quarter? with both? guarantee cost associated the and is SRF the Second volatility the

Jose Antonio Alvarez

have in basis. that equity to some there So back line business to you are expect business the and the Merlins know, given we know some in you this growing this normal. should are in sustainable those account And growing method coming of that, that well, the keep going we in -- likes probably Spain that to a you expect by economic is years. the Because that keep [Indiscernible]

Sergio Martinez

Next question, [Indiscernible] Thanks please.

Operator

ahead. Thank next Cighi Adrian from go is Please from the one you. of Suisse. line The Credit

Adrian Cighi

impact year the is rate rates of XXX negative my increase on points. over i.e. are which increase Euro stronger? these the delayed the and basis This is we Or that impacts side, results by Two in rates somewhat million from And these these increased from underlying capital. seeing even impact Are one again, results, we in from should aggressive XXX Good insight the NII appreciated. them how from understanding the follow-up much the Suisse. in has Credit quantum expect of see clearly of Brazil, of very X.X% a Cighi quarters? in central timing basis and coming we reiterate be morning, We're and terms. Any one Adrian increase XX increase. these the would a cycle. my in of impact the is middle of rate rate Brazil, by bankers year, questions quarter impact points increases, we On rate on first

Adrian Sankey

and us Thank spread relatively very in Can points Sticking what Can market drove capital, are XX had with us the seen color this And much. you weeks. you any recent hedging some a your big on we've this, Brazil, limited where moves briefly in headwinds this. in pretty as FX is update you others. you basis that on some movement quarter. given to there give

Jose Antonio Alvarez

pass retail in you increased saying the you When XX%. you when the that's Okay, let I Brazil, at the high increasing that's true We what also a to or and In margins the quantum market. in true. see the the you is points, we short while capital impact basis run. Brazil, elaborate volumes, Guangzhou and its me to minus the negative on with the had rates the forex, take trend goes to to CFO, XX I million said, we question in will a basis XXX points. see rates will are very close numbers the volumes XXX look growing up,

in Okay, very We effect growth translate is the strong. this mix into XX% NII.

negative mention basically of in take of be at We in you in way. beginning the more is in to question is year-on-year. margin quarter-on-quarter as pass this this million the one that U.S. you you missing in to are growing negative XX% like-for-like, XX the But on on the are that we we due that is here rates we assets available-for-sale close year. to rightfully these the market The us that affect is somehow Chile, a We're and and Mexico, of negative the mark-to-market growing the Probably pointed, should impacts parts increase the portfolio. able and I to catch -- I impact liabilities. re-appreciate region less XX% say goes, capital. the to had effect Brazil, The is have time due should

Yes. So.

Jose Garcia Cantera

year. have each the beginning XXX impacts portfolio Brazil, and been from X in Poland, the of the of million terms the Chile in largest The available-for-sale region of

this basically the capital. -- So on impact explains in

Well, of terms hedge the capital ratio. hedging. In to the continue we

running profits FX hedge we think and So affect of continue is we the ahead when to expected itself. movements do capital not the market that ratio,

expects. we view already again, and it market what So tactically again, relative which hedged capital, have do. And the important hedging we the most this now depends on is is currencies the continue of to of But some our the to year. market next for

to again, please. continues Thanks, question So hedged. next ratio fully the and be

Operator

Sophie of Please the ahead. from The from next coming line JP Sands is Peter you. go one Morgan. Thank

Sophie Petersen

hi. Yaeh

is Morgan. Sophie JP from Here

I'd thought Just questions. follow do up

growth the get that only if third in But any the look quarter. going interest question you back that my year, in be then in are, less. the something on Brazil. of follow-up wondering, else was I effect. were or remind But net regulatory or the outgo the that was that just also all front, we minorities Is anything I there mix to terms that Brazil the you. you Pierpon. terms, was net Just growth effect? question. kind quarter-on-quarter in up And purely Equity impacts much the you us will the net performance have I the could up in But impacts. the quarter-on-quarter regulatory next regulatory second recognize in loan helps else impacts would you first Brazil Tier-X a [Indiscernible] increased mix saying Brazilian did outside I X% at Brazil loan one have be interest Thank income interest X% of [Indiscernible] should Amherst of how be income. aware or up

Jose Antonio Alvarez

I'm Okay, to Brazil. going

the issue portfolio. on retail growth, other between corporate path of business the and growth ALCO and top The is mix the different of

the -- portfolio two it size much was the now is is NII much of is -- more, than this the and the components. we're no naturally more is ALCO are answer spread given smaller answer, the the The smaller than those so and that. to smaller, So so this

pass the Jose. front, regulatory question the to On I

Jose Garcia Cantera

subject year, will get around buyback before year-end, will we points. to the we have those The regulatory the be have, basis for this be XX again, we we is minorities will Amherst SCUSA impact regulatory this but this X So approval still year. If points. of approvals account the basis Pierpon

us plus look models have be will capital. of next charges which bit year. when a be pure Again, regulatory year, could of that the will of will next sum impact that regulatory in smaller. XXXX new we another significant cost the next points only relative change XX accounting regulatory the which of of again to significantly is basis expect models year, terms minorities On at we the top we In year next

Sergio Martinez

please. Thanks Filtri, next question,

Operator

Cobo The you. Societe line from of Generale, next Castena Thank Carlos from ahead. the is go coming please

Carlos Castena

Europe, you've joint thank wondering was on are could bit process negotiations little If on some from of We impact any Hello, touched a already those them. are I of you explain any if that with And in you [Indiscernible] our where Europe. the is the reported for are to have you couple questions. presentation. a of but they on it's the the partnerships ventures you and Stellantis, see risk that in been One the of and of in or I losing of part sourcing relationship

And run reward. be comfortable if you It don't nice much. approach capital buffer the even units know Secondly, the capital on for if these to that could different question, running further. group, versus have a tight it's group, capital and market you ratio considered in agree is Because else will be capital market with allocation you be -- stock I in if but if is you not, a preventing the very somewhere to hear it'd open a perception may your the view, the really why that? to could with thoughts.Thank more help earnings some why not? Perhaps good that with rerating unlocking

Jose Antonio Alvarez

Okay. questions. Taking the

The the year. existing to We're or partner first Stellantis them them, we the optimistic be the to on continue we well partner continuing to maybe I Europe. talking partnerships one is in the continue naturally be to would that them coming case for are, relationship I -- say, the and we that be preferred and fairly expect to preferred to for do the

change back material think [Indiscernible] positive. the I from And any any, is the on be expect it should of things. performance the not other this. of If do I So not

started venture XXX with them when net do So to [Indiscernible] million making profit. we

expect Now, making performance. excellent, outstanding than back this going of profit the net are million they forward. more we XXX on continue this And to

that's at of precision target We're end absolutely you upper That's of on range. XX, lower largest and in XX, the at far XX%. at capital we we to will will Europe so upper the I test, test bank. well year view, be credit remain there. side, the with say add is standpoint in the want and see at you look as score From we two the be these the is When around next adios. is the be more You why you Santander and lowest at reasons: uncomfortable need. capital. the our mentioned I the their view. are the of plan we the the should stress be for different. stress When end comfortable would Jose, to The and this, end And our market, close year of comfortable would look by -- we Well, to the the sustain of credit the is to I range I'm something? stress among capital, XX% view do no in the the And already with ball our look

Jose Garcia Cantera

No.

a with couple comments. the are Just in requirements of we Europe, the the Amongst largest bank all. banks lowest capital of

today a points. XXX MDA basis Our CETX buffer stands

So amongst all. the one, requirement But in the being are said it and capital scarce has largest Jose capital most again, Europe. a we expensive the think bank I lowest the resource Antonio with

Sergio Martinez

question for Thanks Carlos, one. next the

Operator

coming of next one Quin The Daragh the is KBW. line ahead. you. Please from from go Thank

Daragh Quin

just QX. Hi. on the my clarification question. Thanks for One on you made comments taking Good of cost into the morning. risk

XX for the would release points XX charge. I provision that a as I the year correctly, of understood full points and provisions basis think to September. lower compared to mentioned basis of that you If

again on to So capital. just this. then clarify And just wanted maybe

maybe at change lower Thanks. of given, wondering, profitability, it high guidance or being expecting why range headwinds in with can growth? be wouldn't is that by indicated XXXX. You've above you've And regulatory but you ratio much CETX higher I'm the that that just be offset on end RWA your QX, the too higher your on range, in those more you're not specific profits are given on that moving

Jose Antonio Alvarez

X Okay. [Indiscernible] the questions.

scenario other risk, that balance in [inaudible have region but is that I our billion, in the I last don't macro with remains in majority in the provision of, we released said I in lead sheet need the the update assessment right in one fourth any guess quarter, update basis -- in X because presentation this of the in region that quality the made the to first the of know, the from number The the XX:XX:XX] we cost of fourth macros mind that now. of billions macros final the components. mentioned XXX one what from in the the we risk has the quarter I XX comes And the of X.X coming have assuming One of will to the is portfolios. I the points whole [Indiscernible] the in to maybe year we year before. different that is don't overlay related range decent macro the When of X

a to the deploying keep allowed bankers the because I in healthy growth region is right bank the on our for risk the remember to America naturally average tangible on one that if XX% a capital the probably than for and so. is higher the assets And to equity generation capital. looking having in going same Europe, risk to a The pay grow three Latin mentioned of we than shouldn't the perception last time At any more X, less second our happen significantly same of we forward, see don't facing. at expect have XX%. board, we tangible we at have weighted we assets is from think equity X, to we the on well had that Well, And we are reason the expectations I about bank, we the going This the dividend question weighted return did. have XX% to and grow when capital the range may region X, on two emerging time assets XX% a or we reason beyond combine the us to why be years. is that the look significant. expect Well, naturally, the potential pay, we a In range capital, that the growing see continue ratio grow. given capital, in do the more than and markets we the to business. year. risk-weighted right you And on in for return

with case, the Finally, me, models decisions pace, not we to some the in beyond the to regulatory board have in appropriate at this ratio and up is capital, are And in growing capital. we'll we XX%. that naturally XXXX. grow But relationship the to take themes the

at all. operational, XXXX, to Beyond single-digit, policy sky not way to a in rewarding, high retail navigate is don't If policy the our -- I to We an risk the impact like is issue sequel this we III a consistent one for us growing Basel and a region be that clear not ones [inaudible dividend [Indiscernible] XX:XX:XX] grow much -- of cash. issue toward paying in and will for will the the floor. of very particularly with medium have to high come going task within shareholders, having an us to say output have

Sergio Martinez

XX:XX:XX]. the question, Thanks [inaudible for

one please. Next

Jose Antonio Alvarez

one next you for question your Thank Daragh, please.

Jose Garcia Cantera

Next question.

Operator

ahead. from Mario one go is Inverse The Securities, you. Roberto Thank from next Gasta Best please

Mario Roberto Gasta

Hi, my related first good in is And to question Spain. NII morning.

time year can to for on in you forward. that And for question know current XXXX. give assumptions about whether some expect what target. that year going for versus Spain. more you possible remain XXXX in [inaudible target. or to for whole guideline the be some Thank then if the you I level. in expect on place the a that perhaps mentioned you indication to next road return indication cultures a year XX:XX:XX] it stability the give the improving NII assuming will maybe again And you. embedded us are conditions have NIS regarding mid-term Are You this stability Would target, continue you the

Jose Antonio Alvarez

in So the Yeah. assuming current Spain. The NII were conditions ones.

on that unless the So Euribor same only. or increase average main this impact largest I'm who cards, the navigate one is The not we the in so the one more the in an not on with you that level has year -- rates assuming less mean year.

So in general, Spain. outgo as you know, we positions in have don't

So our we many years. rates higher pretty to had strongest many is in position probably the strong, have

higher, can is not do in XXXX. on sees those be indication projection, to XXXX. easily, equity, particularly of being significantly down its we are is to up I tangible It's well on guidance and we Jose one some an But, you of project what see you similar in projections gave the in are our in expect to than in to cost tangible going already my positive. lower those where it it if trends back my affects you If you, this We're that be down big point the XXXX XXXX equity expect will rates being our this to policy lower higher and at if navigate the So give on this. indications you. this of business provision that where gave Spain we

You Euro what can and be may of group make the get numbers plan you into easily the next year.

tangible in on XXXX in sure return For higher I do equity XXXX. expect than

Sergio Martinez

Thanks, Mario.

question. Next

Operator

Mediobanca, ahead. from go you. The Andrea one please Filtri, is next Thank

Andrea Filtri

on. for you questions taking Thank my

Can the you you. quarter. the XX And taken the from in a that expect impact the of I IFRS to are should Is them. expect you on may lay detail provisions. activity indications shift where negative some going what given from expect over you don't the on you missed You've capital. the share on reversals U.S. implementation, it's risk any the important of know I impact if expect you if with you outlook we in rules from is addendum with future lever and you've this us where have having, NII. given implementation on cost tell guidance the on could And us, securitization the impact Thank

Jose Antonio Alvarez

Spain. particular Spain, of because where guidance in The in Paris,

events, provisions spent was course, were you guidance The cost SME view significant taking a these of were know broaden sheet year to next comfortable come building We on losses that portfolio been or EMEA. year in we SMEs, our once the side. these already that don't materially Spain, of I relation expected lending-related with don't expect down the the SME, feel we On credit macro for seen, amount with I Sorry, we the balance the space happened have reis operational in we -- on. know around with made of have to you've different future Spain. comments as quarter the lower off events expected we've with this in of in mic be the all the all evolution and what that events on

levels the You mentioned U.S. It risk. is the low also of is extraordinary us than go next helpful make to seen probably this average we've go up and motor going industry is not year. year the and the being the XXXX, risk cycle to up, used situation with price was doubt optimistic very the going for up. growth to it's the levels to be go this U.S. but this The going compared before cost to high cost car of with more because still of no environment is year what

as of X portfolio synchronization You mentioned -- I plus of X the being The the securitizations issuing in are incredibly remains or same securitizations the do particularly X% something? It's which consumer costs combination or in Either active at in is securitizations, funding very negative. on market Securitizations, implicit low going these release for assets. be is buy to tool capital. capital of is cost that. last probably situation do eager as this situation, we low. years, something traditionally extremely impressive when in this market Jose, the equity, on all the to is the low want a funding of add relatively as we use and your the do or in portfolios we're capital like market to where not you

Jose Garcia Cantera

Thank this to -- and understand terms accounting. any That aware you. related But refers were we know will are if back XX. be correctly, of that to to changes leasing there get will and this. it But IAS we as Yes, changes I and as look in to not we leases the you. far into no

Sergio Martinez

is everyone at we for Thanks here. joining. the need any And team it you. to follow-up. disposal obviously itself leave for So Thank your

Jose Antonio Alvarez

Bye. Thank care. you, guys. Take

Banco Santander (SAN) 27 Oct 212021 Q3 Earnings call transcript