SAN - Earnings call transcript Q4 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everybody, and welcome to Banco Santander's Conference Call to discuss our Financial Results for the Year 2021.

Just as a reminder, both the results report and the presentation, we'll be following today, are available to you on our website. I'm joined here today by our executive Chairman, Mrs. Ana Botín; and our CEO, Mr. José Antonio Álvarez.

throughout an and of countries, some as business provide the performance as will the regions, group, of divisions CEO overall the view of well Our year. the the main

the and provide will going the well key highlights Our strategic both chairman and XXXX key priorities for mid-term. year of as as the forward targets

Ana, With their the to have in may presentations, questions any you over yours. we Following is hand Q&A floor will this, session. for Ms. will open Botin. the floor I the

Ana Botín

much, you everybody. us. Thank you all good It's great Begonia, joining very and and morning to for you to be with thank

since So as results, you XXXX to Begonia our provide and achieved said, with some introduction what XXXX. to would of like an I context as have we

model our grow, balance to customer business and resilient Again, to and attractive us scale, allowed strength, focus. sheet elements shareholder has our diversification our key be deliver returns. profitability, our our to increase continue Our

source strength more All of the of of earnings which predictable results cycle. through a remain and

if business fact, again share XX our years, versus volatility our back you of and XX, per growing lowest the attractiveness our key And peers this represents a results. our is model. earnings look In

deliver great customer we have laid million to increasing these foundations which profits, service a XXXX, So, growing is since value, to base, customers XX up improving profitability.

well significant as XXXX, course, strengthening of way and our shareholders. delivering is RoTE since to in XXX close up a base points Our sustainable our very basis to capital returns as

couple of a numbers Just this. on

since with grown NAV then. shareholders since tangible has have and €XX €XX XXXX, billion remunerated billion our by We

growth, XXXX the Day close strength, strong in including remuneration. and a cases pandemic, to we're will focus targets report shareholder in So, meeting I'm pleased to of on XXXX to takes continue very us we ahead, profitability, some actually spite very Investor our that

our CETX revenue the are said, remuneration would our We share XX% want XX%, buybacks of in subject equity fully say the we be, aiming XXXX, to tangible to course, keep we also I shareholder CETX payout to keep income XX%. buybacks again, which, around And increase aiming cash above and This we total corporate regulatory and aspire and XX%. will a term, and are at in XX% a for of close to as beyond through dividend other around cost approvals. We're that our XXXX XX% cash. and of return to growing whilst maintaining guiding to to growth, future XX% be mid-single-digit XX%, also XX%. decisions share longer on the loaded already

So, if we go to very results. strong the next a slide, you've seen XXXX

profit percentage, net reflect, from XX% of said, our X Our the business million actually onboarded and new similar a customers. underlying XXXX strength in resilience I We as up model. is

efficiency over of to NAV reduced basis and of by growing return XX%. X% the again tangible We share are by generating revenues just dividend increased XX that's cash credit, cost We to and points, billion. as and €XX measured shareholders down per per share a to

for Importantly, terms of XXXX us pivotal was in year a capital.

of I end of XX% loaded. forward, CETX we going And delivering already the high at We levels XX%. as keep range, to the are these at expect a it said, fully

our here. see P&L can you So,

levels of actually able our We have been than more to recover recover, pre-pandemic activity. customer

XX up is quarter, high underlying before €XX.X in of years, terms record this and XX%. it's In again, a highest underlying actually, of profit the the it's the billion, tax, on

model. is reflects in XXXX. a CETX but see, that's to you as have even in generation €X.X business last see structural of our cost, momentum. growing had profit up important revenues significant leverage. – again, operating business than said the compared the Our with And Very Very strong capital very of positive up what risk, more strong XX% year. strong though you this many is can cost change regulatory headwinds this XX%, examples underlying Even optimal And execution year, more of some of year we a XX% I versus importantly, can also billion, to times are and here.

fees, XX%. We some different our POS, model Loans sales, XX%. what's really moving sources to These focus. up are which our our are value-added deposits up the insurance funds linked point profitability, our and are business of in higher are XX%, Mutual to to revenues are diversifying growing more into premiums customer only services, return, of examples. adding growing. at But

tech the going on buy in new Openbank months, built Our debt Europe pay capital first it's businesses for of future markets, the the regions. heavily. and in X we're José investing business our will up details the stack important have give in really This these later you we customers are few soon, XX%. which top across later, now, Antonio Germany, a this is is million on M&A more fees

the and elements the of group. more key strength diversification These we working leveraged two are During this are more and in our and the also model. business scale year, key we of

the is board, America. America, operational South Europe, improving across North our So, performance

Digital slide. close Consumer the you and we on can our of working to hard In Openbank which, tangible one as model. initiatives. auto our really is important the to Bank, Finance in Our business are and XX%, is transform Europe, combines as Consumer growth see you know, Return

tangible across customer return different an €XXX in is better Our will close around billion, for and XX%. And of focus have continue cost equity the showing to structural also efficiencies NPS area we America, of generated on is North up this again, next changes year. focus to to a led on countries. the we

you in details the in also really across the Consumer structural very more the on. experience a And our trying connectivity Europe give basis in to hard Latin in leverage I'll U.S. later new also growing group, and working business, relationships in are global. auto And are Finance other like in increasing great been are the very Mexico, organically. made America in and Corporate America. Banking that progress and North business and Investment have successful We we profitability

with XX%. in of double-digit bank a the respective best all terms and overall in in Chile market their of being share Brazil revenues, performer terms growing South segments America, standout growing in and profitability markets. these We're terms growing of in different returns customers very in markets and again, of

Our on around numbers a slide. this year, tangible equity Digital Bank, like producing strong in key Consumer I return point of two again, would XX%. very to to

these of If have dependent underlying where you Again, business and look group customer profits. on our means Europe our see our loans at XX% is loans and you is the group's more profit, XX% we this can of and mortgages like a and to lending and the in Europe. Spain. in are fees This increase It reduced lot also loans increase U.K. secured countries of something working on means we're profitability. risk is as

exactly on XX% the auto of the XX% can Getnet profits. XX% very contrary, the and America, very This initiatives businesses, Same can profit. to America, platforms, of the other see as South diversified underlying in digital of operating many XX% loans leverage, linked them, and such North like loans, example businesses. you of high-growth businesses customer positive see, fee is you

and, terms We here, and leading in of green on have the building a inclusive and we society us And transition to more for customers, specific been intend responsible and course, talent targets our diversity. continue very our lead have of to banking.

working we our the green customers them terms that transition. help to with in are transition, in of So,

customers. net course, We includes ambition by on XXXX, which, zero own of are focused our on delivering our

And are on green of again, increasingly advisory the net In the operations, but already our and terms also developing capital own we working, €XX since on XXXX. retail zero. We finance in products. we're originated markets, side, SME billion

XXXX. making with to a million the in management renewal under and have goal in We've project some. by empowering number empowered billion very XX microfinance in of We target lot million individuals done €XX that. progress We've in finance bank we're, in on reach million €XXX But also our We're XXXX allocated again, important and seven people one XXXX. of energy. in

and I been thing, said area to very have before, as Gender-Equality two Bloomberg very, number we As just is we'll company we this also focused And it's bank where to business. an in continue for one is Index right focus, diversity are not worldwide. good think the and number proud

So, in is delivering we other commitments. key all believe summary, to our responsible banking on

value dividends, underlying creating also and of cash, We We for set payout between in split XX% shareholders. are a earnings our programs. buyback parts equal did

after and buybacks. cash be of couple the a We in between of weeks dividend dividend interim €X.X, half announcing the second will half and was which

We believe excellent our buybacks of continue to an capital. are investment

And so that would well. dividend be the intention for as the second

will year. now going metrics the over I to who's Antonio, regions the So, detailed pass and review for to operating José

José Antonio Álvarez

And Ana. to good you, everyone. morning Thank

and the in across XXXX notably commented, already we profit results and of higher a Management has of Wealth board, XX% billion, by in a with constant an UK, Ana very recorded set in U.S., euros, Brazil driven the pretty performance strong €X.X As underlying year-on-year businesses. positive CIB that

increase the we the group by a across €XX in we think the lower trends income starting was in revenue side. driven lines some and lines, an operating driven Latin profit pre-provision the in improvement XXXX positive back for main macroeconomic on QX Poland. we is volumes, cost billion in of offset accelerated also, of behavior, was I the net of what If America the X% step credit one around Our the releases after with on funds, portfolios. income due of €X.X significant P&L levy, by charge was remarkable. particularly in the of the year-on-year, were in in interest P&L the Latin Wealth Swiss wholesale the Costs & in our countries down and higher Double-digit very half loss spreads This the QX good billion fall for income what the better through banking, to quarterly grew Net the X% corporates, growth. X% a the provision at to growth The of American Net the contribution saw core revenue, francs financial impact from efficiency performance provisioning outlook and positive [indiscernible] improving from positive in some driven trends loan year, Insurance recent interest the has bank and activity. commercial across increased and rate Poland. the fee improvements. Management rose board the guarantee significant of of hikes year-on-year. analyze of and But look greater profit and pace X% some

fee volumes, comparable and quarter and fairly is Q-on-Q ones. rate and hikes, increase net-net, net the income mentioned revenue interest X% as with customer in plus for quarter-on-quarter growth, by sustained higher NII in I [indiscernible]. X% initial explained driven more growth is products greater fully cost value-added previous impact by detail, So, services. the before, In almost

represent a running does rate coming for this the So, year. not

run in details the In more loss QX following I loan addition, aforementioned will favored through provisions release. the a provision in slides. and in provision the lower costs

constant in of the but On euros higher year. lower have X% cost absorbing seen world. digital agreements second that pressure inflationary activity, around costs significant Group side, expenses, in the terms, the particularly labor real IT developments, we were the part increased X% and rose affected in

This Our rate improved basically X%; cost will efficiency in stress decreased. by Spain the in to percentage five that XX%. come and the for I more decrease ratio down recorded UK full line was This in gains. Europe, highest went the region. efficiency circa our which XXXX. to also And points, should running with driven Portugal, targets in is minus X%; our

to which maintain continue improve rate. should further us growth cost drive make to change and structural in efficiency new our to We inflation productivity, to operating improvements below our a model enable

XXXX. at releasing balance X.XX%, QX. remains, say, the constant ratio provisions is NPL on down in due Provision sheet XX% to partly credit So, and the I quality, below in XXXX would euros robust.

some target. We levels also we XXXX we and exceeds expect XXXX, below cost to of U.S. of to In cycle. credit points ratio the the XX cost our and and be was through as to mentioned of normalization key approximately credit, the XX points, already Ana, our to basis offsetting reduce basis reduced expect UK. below XXXX cost XXXX significantly credit initial in maintain will by Spain

at due points organically, in and the due Finally, in basis operating management about In of deliver ALCO dividends that market points generated loaded also points, results on impacts, net to of SCUSA we XX week the Amherst strong of we – Mexico, assets basis acquisition previous already we acquisition points affects which CETX have asset impacts some points was the core XX from thanks XX.XX%. interest able eight tangible quarter-over-quarter. with efficient an XXXX, Pierpont, points capital, We spoke at the XX.XX%, increase risk-weighted minority same an this portfolios, value a on Negative the pro per will quarter, eight will same And X of approved we of the combine in in that including basis executed net XX of were still subject combination to we the impact profit, basis performance risk-weighted regulatory of to this the stand were the small in in in equity this completion, QX, that forma points, Tier of the basis January basis quarter. fully closed reached movements asset basis announced to ratio five the flat nine week, with was affecting our broker-dealer of and XXXX. to net quarter two a share.

most to loan-loss of XX% in provision return equities reduction the equity regions, we reaching XXX in fact the in accelerating on units very to harder X operating the operating have basis the particularly was supported billion this changing while making our the core higher the XX% includes capital return to efficiency units were are the pushing they costs all given are XX% and that volume Tier following in different points. fact recovery. for transformation. like-for-like Profits our are clarity, economic countries. have the with region, tangible €X the revenue, slides, our wider adjustment. by with due due It's customer ongoing Europe, between at order where comparison line Revenue of the to credit gains. in in mortgage Looking sake starting due with particularly the to doubled in flat to improved In that adjusted XX%, jobs model. net profitability up cost growth, we ratios, and a income business we ongoing

with So, funds Spain, boosted starting net last strong pickup Customer Europe, a income individuals, operating activity also significantly in in Spain Profit strong lending. in nearly showed the mortgages, in grew by grew year. provision credit. year. consumer drove full performance, [indiscernible] Loan-loss have reduction X% in cost of in reduced gains X% to year our points, X% revenue percentage XXXX, expect efficiency and costs. on And XX we doubled,

increase So, expect improved also, growth in mortgage four-fold In we profit by four-fold, a basically in balance single-digit UK, sheet we a net XXXX. record lending. it’s

CIB fact see offset Cost and in don't transformation the year-on-year points. Efficiency our to I that book, of deposit loan branch, programs. due from only mentioned this to and sheet on the You the full nearly mortgage of in the by business the balance affect we transfer regulatory strength. repricing loan this X.X% that completed grows growth on investments the IT [indiscernible], to due NII portfolio the improved by went some related XX% that from London Loan-loss reflecting volumes XX before. savings program, partially percentage provision releases plus

our the result, position advancing double-digit we in in increasing IT and a equity America, achieved the connectivity functions return In in on UK. we region, significantly the As improved competitive business tangible simplification. North consolidating in

were we doubled, fees both NII results, extremely We short, and the most the one with In segments XX% in lower to Mexico, revenue announced we being our the a with of by funds positive countries. challenging XXXX able over U.S., XX%, Bluestem provisions in increased In in and to during also quickly group operating trends volumes, in results performance XXXX, by excluding transactions portfolio Volumes grew, of to engines and and had Profit customer funding. driven line higher profit main retail loan-loss the franchise, a XXXX. basis, improving originations, decline several to provisions. cost of in Puerto and XX% auto a in XXXX in with the deploy largely continue cuts unfolding resulting supported driven significantly increase growth to rate environment, positive capital auto in invest profitable we On net increased the Underlying the lower the in in the like-for-like in adapt, income, growth. our year. sharply, strategy double-digit U.S. by along our customer and in increased business. in deposits stake reflecting lease results. Rico In disposals U.S. with due strong

investments X% the despite deposit controlled credit. better result, well thanks a growth, delivered loan cost inflation IT increase in As we to and costs, below profit, and of

Finally, the of region America. South

continue to stand We connectivity.

region. market across a the are We leader

investing are capturing in across We countries where franchise. as had profitable region. already And opportunities, saw leader are of all the we measure our the service synergies growth strong we We new in customer business we in NPS. quality

countries, and tangible improved In terms – were performance, solid. levels all with XXXX, of all productivity, lower credit In efficiency revenue attraction, in us being digitization our in countries, in annual levels. for customer that gross below significantly cost corporates. growth, quality to very NPS, maintained in plus in results efficiency, made better-than-expected in increase Chile, credit Brazil, five resulted and Digital high we SMEs return plus below peers, time, greater of double-digit Excellent which on income above In SMEs, the delivered record to increase performance growing XX%, allow another growth, revenue of Consumer market P&L by credit, inflation well to the double-digit Consumer excellent leader. gap the strong million volumes year-on-year demand capital the growing year. profit in individuals equity. The XX% balance widen deposits in lower driven comfortable increase and profit competitors at process Bank, consumer in our reflected first XX% than is which bank and customer increased with growth fee sheet the Finance, our in on and NII dynamics – customers, into growing more XX%. growth translates attraction, significant plus loans and customer tangible – This Double-digit individuals customer XX%. XX%, equity with return Record in a XX%. cost

challenges auto shortage. note and plus up of share market our pre-COVID the Europe. on activity by by posed back business points the has XX% the Of COVID to XX% across basis was levels, origination restrictions the recovered XX despite New increasing semiconductor

very in in business and working customer Additionally, positive in year XX%, year Bank customer new on achieving terms recovery, a expansion quality, increase profit return of and by In income cost leasing, on the boosted was further we the and excellent in XX% are in Openbank, funds, which performed reflecting Consumer XX%. Total tangible summary, credit the particularly Loans Digital revenue grew XX%. equity increase fee credit. of well growth underlying results with of profitability, volumes. reduction

segments. businesses Banking, And secondary very two provision. that well, industry Both in Investment Corporate & the good loan-loss had the report grew as the to a sharp Going revenues we in year. have XX%, improvement

share, We market and And gaining three focused in finance, project are as Ana and on Europe on green we and in ESG of the mentioned, are the alternatives sustainable top the financing. Latin. through finance top in

of in increase develop U.S. performance Management as in new Continental and are the in Europe, premium in Insurance, billion. contribution group commercial serve UK We €XX Management Record billion capabilities flows & business Insurance both €X.X to asset double-digit. the billion, XX% business management. billion increased total and banking, and business, Wealth to in customers. €X cost the XXXX. investing are In private to our investing to the €XX Wealth protection excellent Insurance & increased we

Well, to grow commitment the on revenue we – the business to Finally, grow XX%. made PagoNxt. the

to on and we Getnet the International summary, in floor number deliver €XXX continue new March. year. of second continue corporates, have progress active pan-European Trade months And and XX% following Brazil XX and technology as talents X,XXX last the Merchant in significant customers and In started launching a – Getnet active recorded as double SMEs PagoNxt banks, I we as our Santander the So, significant the with currently exceeding since payments Wirecard's former the over by increasing achieved gains. to Getnet growth, hand the to trade, XX%. continue Europe best we size merchant in operate in to to Ana invest to volume products. create world-class innovating of of market presentation. the half acquirer One payments technology. connects million, total in share to year year acquiring integration eight

Ana Botín

Thank you very José Antonio. much,

this We have tomorrow. I is the the the of today, have of made we're delivering in to of Santander essential. say, hugely and of am are as proud all, I first we an progress building believe And last years. we So, area few said, our over absolutely I digital and team revolution,

million foundation to the as I up laid since have value to which, service XXXX. our said, great and base, growing deliver We customer was XX

have same increased the We profit. at time

have profitability. delivering capital improved as We our as am strengthened have base And ahead. shareholders. sustainable I our about excited well returns incredibly lies we to what

our is daily services we're people, day-to-day regulatory to this for company what lasting is expectations. continuing the journey our and businesses. is a of communities. stakeholders are across acting the work, This expectations, meeting shareholders as our which, legal best exceed platform, is our our best open customers, of and our course, We responsibly and to driving loyalty the not earning know, any our And actually, become attract just, of to we people's regions our and key In the these is success aspiration basis and all talent, driver financial days.

a over growing just group, personal few So, the in more is people on the we years. unique helping mentioned way earlier where, but and last prosper business the simple, predictable last is areas years, as can delivering case, businesses are and I our And XX over have not that greatest XX, through the cycle. the the and impact, we results this model more fair. a focusing

to We a the group's emerging X% U.S. would this geographical developed diversified XXXX XX% of markets. footprint, from underlying which well profit balanced the I contribution between especially the note and increase is have to year. to in like

high to strong is growth very a they a growth. compared now our in Insurance. And and continued revenues, Wealth XX% & insurance six countries. Management with banking And corporate here to on global XX% strong and we're businesses, allowing and this more you up for intending XXXX, invest also where very but is are to expand value grow in to have really These Getnet global global profitability CIB scale. add what's as revenue One areas is operating our business. platform have to great building Getnet. us example are We

key satisfaction. customers products. a our Importantly, is us for want and across love bank, the this is We that goal customer

we Our for more NPS our of we would set most difficult This connectivity. intend over have the is years. already service also the, I but that. successful continue ourselves on and of last one to building at the is markets, Improving top customer three few goals but in more increasing say,

We are continuing two do are creating our is sharing invest the Where the to to the better return we in technology XXXX. investments? Increasing just building not the but have the together, compared change see last on screen connectivity, on these business a across years. two group bank. key over you model. these This I think to facts

to Our transactions XX% in from in core XXXX. digital banks have of XX% our gone XXXX

the again, want open comment many common total digital Santander, group give global a to customers And XX%. but for building our Our a market. to more redefining bit as PagoNxt across across and cases, again, we're One to well group in together. later, me the a now solutions all own stress, couple as over tech XX% I examples. sales our operating for I will want I from to sales backbone payments on model, aims of

U.S. our platform countries horizontal in aiming the where And We're $XXX drive Our to Bank, and Digital Europe, are least, vertical. Openbank. We're just are in native XX% very platform not also of but South to where, the this to our Last managing have legacy the app, today all already XXXX. for to with years, time, want every the we're couple connectivity, We on an America, develop technology. our America, of At want have in our banking, in North a common replatforming a briefly regional we allocation year, a region. discipline. auto consumer this we own top I finance in share consumer tools now for million and granular America. of building products we place initiatives Europe. key our business you in other across owners return. way for and capital technology Consumer maintaining We increasing In digital our digital, same are XX%, the for saved for single I and South Mexico. we shared stress being the additional last is over manage how but $XX where capital. retail leading example, million going already how in

see You of that had the of XXXX here below we in cost can equity. RWAs XX% our

aiming in We’re to XXXX. XX% have

businesses where was want we’re And are XX%. these investing XX% the XXXX, for say that future. I to in that course, Of

So, we’ve been in this intend forward. going this We to manage ruthless discipline. continue way to in

We businesses. as over few and more most capital to done geographies, will allocate the higher growing profitable years segments last we our and have

I loans actively our the mentioned. on RWAs rates expecting underperforming portfolios, have have XXXX. not X.X. to are to a to lower We expand X.X below at bank manage than book again the average as in assets on in continue front XXXX target We for again a across going books to compared we’ll And

making investments. are accretive some We also

away investment approval, is pending CIB to in – acquisitions, franchises did closing to that’s the Pierpont, the Monday, Europe – pending are is every also course, Santander done actually we We’ve but the still of Consumer, on ago. this cost and was across always – accretive offers minorities us and above with XXXX. – closed really as end are returns Brazil And our incredibly done Amherst buy this case, José made Antonio franchises – of Of regulatory we having of these connectivity mentioned, our important. days we’ve days capital. two we acquisition at and we Mexico two the Americas In

fully generation. expect optimal XX%. growing XX%, to based actually we growth, on above solid capital RoTEs at loaded is continue and return organic again, So strong and This keeping on risk

going can returns the So, grow to we forward. increase continue in shareholder future,

focus strong key. summary, a as So be discipline on capital will

improves We profitability share to – net tangible part deliver growth, value making remuneration done aim as of sorry, cash dividends a meaningful it growing We dividend growing have strategy. cash and in buybacks and profitability our share asset XXXX. per

Longer-term, to to this ratio, performance than even And level, subject to target continue mentioned. a to XX%, bank. we We a at aim of as again, XX% the the is very would to CETX we our increase keep to the payout future, the aim XX% though more that – intention. I importantly, the in

So how We to model. are we goals? business deliver going on to our to deliver want these on continue

on the increased are working We connectivity.

initiatives, at we’re providing customers strategic One brand of the three profitability. Consumer building which Digital same and Our I time, which Bank, a advantage briefly competitive that improving will because trust mention value, and Santander, globally a now, recognizable are all distinctive the PagoNxt

One in shared regionally, profitable we across the customer in to are in are the finance, foremost, footprint, today operating This to experience, but building European but many consumer services. first first, from also Santander. we’re that and with global So And efficient hubs. improve is Latin an I first the way, aiming, do America the way way. a but others mentioned

again, So, covers for This sustainable the UK, four Poland. Portugal while delivering these structural the targets Spain, profitability. countries, change and are Europe,

this this year. We that turnaround, seen some are you’ve very, numbers very confident those already of

digital the For enhancing be always that combination. will individuals, digital building but and focus personal on

working through on announced cross-border. €X XXXX. PagoNxt are of billion SMEs, synergies also the a by end We delivering the cost We for differential services

given that. to to committed going it’s challenging bit Obviously, be the inflation environment. a remaining are We more

are expecting We for tailwinds. XXXX some

be and across higher-growth on also capital opportunities. reallocate and And into expect cross-border risk we’ll to group among, that further U.S., also efficiencies of not we In of more in XXXX. but meaningful. and cost develop businesses. countries, North on synergies normalizing So, will the by Operational Mexico, America, profitable to continue just but back segments addition, the the work

We working few in will the plans actually, few got approval have a U.S.-Mexico comment a are already corridor. minutes. business different the launched I We’ve manage the to ago yesterday in way. a – on that now We business place. in the years we

growth customers. generating We’re in very cross-border high

actually increase America, had revenue example, region business, build growth. as aim and on the I to and franchise on deposits more already Europe the for for other Amherst total very an years. again, profitability, again, have our bank. by bank XX%. And is the a much would technology XX% we consumer done and around goal our Mexico, to in consumer customers. also growth, side, we in In The be investing XX% U.S. the geographies, auto in in allow have and grow we’re accelerating of on retail for for what simplify where strong management going is and this is The aiming focus bankers is year-on-year referred with Just the on the Latin Santander consumer also leveraging have wealth to we the in Pierpont, the but in great, faster. improving a really a in example deliver been and continue in business us many to business, where that efficiency an and our the last around this of want U.S., can together RoTE been couple connectivity XX% the core customers U.S. to

– on and of the course, the now that growth aligned which and management But be will continue a on of U.S. to focus. peers. the can are the I few we Just on a the years, a U.S. and very to want business. for just on we detail how we focus at to are business, looking everyone bit more is focused remind much that

One we Consumer So, the world. much Digital assets: model, year, relationships is bit and consumer We’ll on experience a very technology return group focused the consumer and the will like second two business is This leveraging Europe. is be across equity. a on Actually, in on delivered our OEM one XX% above the key and Bank that. across be

year, simplification key. is XX%. This is be around next going XX% goal efficiency to For the with

retail what the business. our businesses customers some believe simplify and the exiting we U.S., home actually like equity we really and consumer the is to We’re it support need the bank mortgages in on to

have institutional be base businesses we all investing, leading In the and America Very the Amherst opportunities significant there’s many Again, where in believe this our CIB, base we customer mentioned adds add-on businesses net we and in top we drivers investor, already, low-risk in brand going in through commercial terms profitable by and U.S. deposits. a Pierpont of upside the we to customer are for a see of cycle is where Latin of I XX worth. here one lot of are of multi-family, CRE growth. funded high the

have it for key will on market strategy with detailed the more – on detail we’re meeting time giving in you the QX execute to by to is in going investors how working a us. way, that We we’re this some our U.S., more in

key the demand is is the strong growth America, growth region opportunity, to is and that confident expanding markets, revenues. middle key cycle. absolutely One the many class. customers delivering a of again, South remain aspect that of We the in high-growth In services. the these through the our for

are double-digit in growth expecting We retail.

million of and We today. single growing its the accessing XX% businesses, of on mean, with us connectivity again, regional of the is of described. give a there’s that’s dollar is bank on leading that and example, the that return with of lot global and of markets. tangible we’re an I terms XX%, just a of the corporates, around approach key cyclical our building here, the with as will We course, also efficiency In payments, consolidate with all of a strong Amherst with with in multi-Latinas, I around believe €XXX and in operating equity the more and depreciation the a that a business XX%. bank more cards of differentiator around wealth, currency opportunities In And global platforms. operations many in you across And the to to very value connection Pierpont spite Miami by for region the verticals. current regional building in and in

strategy. many our turn strategic relationships. the loyalty me briefly our banking has for happened not let It new. of So This for heart a PagoNxt. is years. key It’s very to are Payments at initiative. customers’ That’s

becomes Now crucial. digital it’s turning and scale

delivering high profitability a platform, growth, business. this say I also we’re as want growth. build revenue is this high we again, And So that to

made PagoNxt with that very the year. progress We are has this pleased

Santander across payment to customers We’re integrate these open investing the to all but the banks, benefit also market. especially but scale systems

As you We for slide, in year, in for ambitious we grew year. XX% target XXXX. set revenues. This XX% have next revenues a can of there see to growth we’re aiming the close

than this payments, be with way, common of already if measure to the more aiming tech here, see will the be we there to all you all and uniting trillions managing payments. banks €X that eventually Again, billion. third XX our a XXXX in our payments about legacy can The are our payments is payments By transactions, reach total the are these of banks and a in but You and where managed platform hub. million billions. for customers volume year this

accelerate going the We’re continue to growth. to

Here, working platform. on we’re a Wirecard common integrating the merchant-acquiring with business, including under

very Again, to The to grow to These billion, our and generate are also, increase that way a way. acquiring. growth, Ebury, XXXX. is very have again, active This open trade, in very with volume markets higher our XX% to importantly, know, to and with a the with we’re in customers. in strong aiming profitability, We payments X.X as aimed to million, are international bring €XXX this proposition. e-commerce going we merchants the aiming growth trade. we’re usually we are for the we’re SMEs, together a happy the progress And our SMEs you XX% higher significant revenue

And that very Openbank third stack. already, year. I profitability into the It’s pillar, XXXX I to European strategic in being important we countries. XX operating maintain been Bank. Our the mentioned a tech times as Consumer several Digital It’s replatformed has say want

in can set have slide. targets important as see for We you the XXXX,

world’s including largest in Openbank We we – launched yesterday. the digital are full-service now, bank global Argentina countries, operating five in now is

assets. XXXX, million with double-digit very customers, in serve X For growth to products robo-advisor but certain we’re strong like expecting to close and customer

Europe, for merchants business, this XX,XXX buy aiming especially now, with the and through sorry, very business, growth than in offline in leasing launch high XX% originations year we’re XX,XXX later, auto XX,XXX South auto and and growing more digital and We planning serve in have – the than we America XX%, are sales which aiming with global pay we’re Spain customer the roughly to customers probably we’re digits. not doing serving in in on double new to XXXX. but well and where just more America, in incredibly and In leader North again, growing this e-commerce loans, also X.X million and

is For expectation at customer efficiency XXXX, growth. RoTE XX% guidance and our XX% driven by double-digit with

of just saying and year, in spite COVID, every today I aspects. started, above our that, by many in to XX% we many to set want delivered we XXXX again in single XXXX, end XX%. But target of as On ahead have in we capital, So, were guidance. we’re of where a importantly, I very cases,

at XX%. basis. XX% said a RoTE, On on loaded we XX% We’re to fully

XX% aim very be to and We’re to above close XXXX. XX% for

we said growth efficiencies, revenue to the in €X guiding is in what that are XXXX. mid-single digit, We billion continue and double

income year, €X last in be for and remember, €X will year. We a cost billion XXXX we billion If you efficiencies. which another to next said XX% added completed

underlying shareholders, shareholder is our believe in for be profit XX% of importantly of an very Santander. a own first choice, is We this a So again, returns, and investing shares excellent shareholder will with permanent our remuneration. this for feature

not to on that, specifically. We’ve obviously, can our energy for the for going detail, of this. advancing through provided trying really XXXX our we sector give targets finance specific we’re All whilst I’m lead more but to coal, dream portfolio we objectives, are these, go you

our be culture on empowerment. we And things decision-making in processes really across this into and can the and our and do course, in financial a an inclusive the ESG believe embedding of ambitious bank We’re very We way. leader across in society sustainable crucial, group also. we an inclusive and is general and ensuring

plan, and finish Investor still is of the XX%. intention be to a of course, XX% efficiency preliminary, we We terms confident we medium-term, will targets Day. our of In as new at XX% would year, of we be keeping decide course, the while is, which, this But having that capital date. XXXX our RoTE, have this are medium-term finish will

strong to organic at for you, geographic consumers profitable that us way model. diversity, our of love countries those for step-by-step, to be commitment will profitability primary I of and achieving will by radically you opportunities every a footprint our our performance, structural our teams. XXXX, increasingly the in products the to consumers Scale that continues in global in important, able during be age. to digital winner was and thank We everybody. the cases. continue savings be to and compete key. building we and We to in branches. We a finish are important and visiting mind very pandemia the key want the growth, to again, shareholders. competing believe to our that to and in will cost are capital to allow we businesses. disruptors what many thanks be top saying We year, growth higher customers and our to invest the our business allocation through diversification winning, to need we in are want remain open higher technology I It’s we to choice ensure you We market. through line course, And of business tech platforms profitability XXXX believe the with want huge improving going us our all in delivering make for deliver be numerous A changes

You’ve our done customers. for amazing an job

very attention. our these I living ahead. of And to you, committed our to this extraordinary to years purpose. Thank and And want course, thank answer for look of forward we’re more during also are your work now all to investors, You for you. questions. Thank you to you happy

Operator

Our Instructions] DBS. [Operator from coming first is from question [indiscernible]

now You’re live.

Unidentified Analyst

Hi, Yes. questions. taking for you morning. good my Thank

question any quality CETX potential selling if is approach How stable you in would economy interest guidance us downside M&A on risk some Brazil, Mexico, including and the have given the asset the be fast on risk in the retail cost potential in see target of is growth Mexico in city I second the that you to of retail Thank you. binding and years. the slow constraint, around funding? XX% mean, any would considering if the you the one recent places. First guidance the color around asset. give books you a And can even of operations

Ana Botín

I Antonio first take can José second the one on one. – the second let Brazil. the take So me mean,

have we satisfied, need and do not we very are We a in great buy. business Mexico. So, to

We’re that’s to profits. great believe generating We accelerate. going

built XX% in this actually that auto an share. scratch business from finance I we’ve commented of is morning We’re gaining market years share. market a couple that

So attractive let and to of to Mexico is not very me generate markets. growth. that, Having core our do be profitable need very clear, said we one buy

lot and generate it’s the capital process months want that we away, I when begin expect can of actually generating so, more and capital. of is to process. part and you and And – We we’re assure be a to expected that to all of profitable to in one I management investing team, putting are the RWAs. reducing of XX% our business new ensuring of that is the we the XX% is that businesses, books said, on goals from total the as

that would can do we ends in happening. That’s shareholders. way really our that is up it attractive for if a So, all I say

cases, some co-market not back an we last obviously good If example, was a end of do actually did in Brazil, opportunity. the the we look in others, ahead market you years, couple went the transactions and deal in that was

So is all that point. I really at say this can

would asset quality, the On you Brazil, Antonio, on take José that, please?

José Antonio Álvarez

Yes. Sure.

That the the a grew in the year part year. credit we side, in our seen say standards, growing I’m from half Brazil. you’ve of and book is to around As loan – bit where faster the grew speeds that these different the consumer the less presentation in in should two in I speed of grow Brazil. the XX%. in tightened second the results than first particularly referring we One in the we’re second where to part going XXXX, we’re that

the growth is to at to at to expect probably below should high market. going grow the this going in scenario low is situation. digit, we in demand our the XXXX, to be mentioned And in grow line inflation inflation consumer run be And a Going single right we our in in less account of forward, sector. now In for going inflation but loss, this, were significant in run and we corporate expected your already. inflation, and we to now a – building on the should already that, at than question, now is at best. end we expected you line grow are provide to what top of growth of the into barely I you as or that on best side taking the relatively with we’re amount GDP the X%. this out the provisions running say, year are macro-outlook adjusting expect to seeing for with – XXXX, is Probably we a XX%, feel to

that So, levels, into provisioning to manage slow us our we’re going stand able down. this origination be makes taking to account the comfortable our as

situation couple cost was – to So, to when remember although XXXX, a that but a quarters. the be in in not are market XXXX of in face last position as did in more we XXXX And think what cost and and we you’ve of we change negative. position risk the difficult in risk seen of not XXXX extremely we we the a from that significantly to reduce

Ana Botín

which crucial Brazil. add you is just Yes. we’re that think I reason well the may doing I fact, in for of and so one all

well. do course, not that XX%, profits. Of of and lot South we lot actual of that there’s the growing a And for Antonio Brazil loans our But a and fees is XX% explaining. streams is please XX% of José we from aside the of management a have This and diversified reason credit are was America have forget different is and great income team, that great crucial, really for execution. that

José Antonio Álvarez

XX% In mention I is XX%. lending forget now was the to consumers below secured. past to that

Now that and That secured. mortgage. it’s payroll-based XX% is means lending

synergy with the more us vis-à-vis comfortable you make this mentioned. So,

Unidentified Company Representative

Thank you. we have next Can please. the question

Operator

Our [indiscernible]. coming next from question is from Riquel Francisco

You are live. now

Unidentified Analyst

one, my ask cost-to-income about taking And for to wanted for target you Thank I morning. XXXX. Good questions. Yes. first your

emerging the see And to also billion target markets, Brazil, these developed drive you the markets? particular, in markets do challenging. in think could group improve what income if admitted in particular, inflation cost please can you €X should in improvement cost-cutting level, ratio in on not? comment or that If is cost you at the how the And you in

technology. high maintain You level a in

if see be comfortable if in is more then wonder example, terms you medium to were UK we expect? the what the and can on update charges, regulatory the on a would follow-up the of in guiding an the you the capital, bit business for wonder give in units, deal? headwinds might both term, embark also previous up XXXX also minimum can restructuring for the – versus terms you second are seems and that I particularly expected PagoNxt question restructuring in I on question given of slow. in M&A, related is I a for And leveraging CETX the range. the you headwind So, that for with guidance capital you And which previous increase costs XX% if XXXX and on that

So, new Thank terms in is I in you. capital threshold this your also M&A? of wonder if the event of also

Ana Botín

much. very you Thank

let a just high-level So you view again. give me on capital

to want loaded the XX%. really really So, as regulatory XX%, year that to i.e., and investors I XX% XX% XX%, finished Santander I a the some fully of a want from from range against economic the back to buffers XX.XX% perspective, said, that This supervisory gave perspective, of perspective. XXXX. a to XX% take been perspective an the We XXXX actually XX.X%, minimums. pivotal We stress a the XX% a is from has gives we account for capital because us ample And prudence in understand important. at stress and want if is we inorganic. I from

So, the reward from to grow I at allows Throughout perspective, we said, be as profits be going to strong for allows very also us, XXXX. a as balance sheet our increase. us are it profitably XX% us to to this shareholders, year, our increasing and

but of They’re give models is have Business capital. less volatile. I are gave XXX different. all proved banks of again, or because we also just to So minimums, the these numbers, the and not amount same more a buffer our you number, require

resilient in the importantly, business, it’s in the But bit with, I retail diversification, more XXX depletion a the adverse. latest think, commercial the crisis. We that XXXX have most on That’s very seen proven be in you’ve bank to the EBA XXX, for banks. stress our average test geographic capital

year-after-year. that This in XX years, seen just we years. the last lowest You’ve the The volatility. pandemia, not is global last XX have EPS

is the our course, income at of investors, fixed look sheet and inside evidence, which balance out. Another

probably second We – the the than of lowest any think – cost peers. our first credit have second I the or

to as XX%, I our and are more for and is XX% very And that, Having that target seen you’ve get and we’ll year-after-year, that’s be we’re I XX% for and the you even the So and XXXX. increasing at going generating still give again, We’ll crucial. said be organically, or said, detail, we capital this above is that. said our we there. more intention, actually profitability, how medium just maybe term at importantly,

at So, I this level, the important. listening to that is we on Antonio, really, which something, about. think think is I we’re least higher care I José really answered you. which Again,

want pivotal here. listening the more And it’s our to issue And is and a ahead. on need investors. to We’re We that to this we been growth not opportunities that focus is aim discuss.

On to harder give to were that the inflation. going it’s cost have billion. many do reluctant going said we saying Hopefully, are I to going to just the more. record... of we’re track income, to I committed But details, obviously, think stress to we I’m our €X give but you’re the listen. more that would we be because that

José Antonio Álvarez

are top expect outlook. – understood question low where show let’s in Your we go nothing to lower XX%. much facing in us. in I you – we’re on we to very not markets, inflation, in expect in cost we about Brazil, with it’s these – already think not given Argentina Brazil’s we the on cost Probably the what say expect the both we not already elaborate efficiency room constant got do of grow Chile, well, revenues. and to we constant Mexico, levels emerged as countries, if high do there’s Brazil We related more

In literally. going to at referenced be. continues where Argentina, below improve these probably Chile, So, slightly XX%, be we’re XX% have In to we to levels. we to stay are room

emerging target, medium-term XX% for make like towards is deem above cost-income the we still progress Argentina. to is this are We market should an that the to go and we and ratio XX% right significant

should our our to some in continue So, down terms. we’re come to and XXXX We in costs and have Europe, should target cost But go a Europe comfortable view. from gains this gains show target. in costs yes? Europe, So is we in main feel going nominal Europe, the again, in with in

going in mid-single Now, nominal I in region more XX%. in digits. probably terms. Portugal, double mentioned in minus so, expect of well, a to still the significant region UK probably digits, the comes down And close X%, Spain we X% probably XXXX, of in

So down Europe. in

the deal this cost in So, on is XXXX. big

X% our before, negative in our the mentioned Ana taking to to be territory, Inflation taking is we into be Poland, and are track us in line target, As target in around are increases we Poland flat. and account on of this to respect inflation. requires in meet account In region of pretty X%, Poland Salary running with in the high. costs be Poland. flat may

of quarters are the the chaining that’s model. work Europe better That scale taking productivity doing the increase advantage Europe. in our our operation So to back model means, we of operating in four a the on one

Unidentified Company Representative

have next we Can you. please. question the Thank

Operator

Our is from Schmidt Britta coming question Autonomous next from Research.

You’re now live.

Britta Schmidt

please. questions, three got I’ve morning. Good Yes.

points? decrease give third around just NII the is And the on a regulatory that a for be one color some bit basis a tell regulatory would will Can the can to fees. Please. you customer reduction you Thanks. If U.S. approvals. insurance confirm ratio. question QX spread, also the the included that? in on headwinds CETX in on Just us XX bit Could at up. was Spain. at The on on that? operating more still you maybe pending XX.X%? the it on Despite more and is And expected commented model, are you a we say buyback the deals, And element right confirm it be to second about

Ana Botín

on Regulatory in regulatory Consumer We approvals. executed got approvals that Monday. buybacks, we Santander for approval Yes, U.S. the and

the have is other only one for pending pending. the That's Amherst approval Pierpont, transaction. which We the

to we until know CETX, everything the be very would including close XX%. now, On

XX.XX%. it's think XX.XX%, I

to were it's that, be very we close exactly will of – in the the which December, will the like something the pending XX.XX% all XX.XX%, including QX. happen XX.XX%, So, close including XX%, at XX.XX%, in approvals, at

of said XX%. be at terms we will again, In so – we

want to but As And model. quarter of or headwinds, one also. less that? we're That's should year very say, end ups off feel above. be quarter, we I going I'd I there XX% every and, predictable you you Antonio to downs I our take you and can is goal headwinds, said Spain delivered explained, that have a lot and We've anything every have Regulatory at expand? be XXXX. leveling Regulatory they single confident We think of Do at Again, be every the maybe XX%. the very insurance. about think year. – to a and course, the in business at be And some than will for diversified, sure. José

José Antonio Álvarez

contemplate inorganic assess potential we that things have we XX%, we some headwinds higher, the don't On feel be this at naturally, some for capital, from of aside morals, from interest taking a regulatory headwinds to any that than bit regulatory is portfolios. difficult coming stage. to account We're colorful bit basically ALCO probably, not the stage. that But lower there going into that, maybe around the impacts a look rates, the kind coming at some and including running do from this

in have well had So, this is everything CETX. running good going we we Spain Insurance, is is Spain across What now, in world very – region in one-off not is that not Spain. insurance the businesses – – right the from surprised of fee, not will is it be no, some expectation I in growing annuities repeat of for going insurance sure, well, in have it's to our so and But our XXXX. if grow well, to lot. it's XX% insurance basis going Spain probably including – in does a coming all XXXX. in generation

I'm continues our So, grow best And about our of to be Insurance income. insurance. I one optimistic to think fee fairly opportunities

it, the Finally, model in operating the question, you third to the take U.S.? want

Ana Botín

Sure.

XXth aiming i.e., a U.S. But business can follow to rather Europe, do where more in largest the the in the slides. of lines, to U.S. in in operating some One the consumer We're but special we detail will consumer, lender give see as we more the a in we model as a are at So, U.S. consumer model four not planning digital point have is the compete QX, vertical. one you has in the consumer auto full-service bank,

going fund we're grow with retail streamline going in consumer consumer vertical going of essential retail because funding. we're our parallel, cost a to business prime prime core are operation. and near is to as This into to manage that of We our deposits. where to In the

which, to significant business We are where the management was able a we competitors. that working consumer, synergies, it stack from company. on and scalable, to will businesses with and not not us a new that we to by allow are we're where are on that's tech of not listed way, We're not believe achieve exit the do competitive planning certain the focus we're just the because

banks, much where you're you you the consumer so, going have where finally, see the have connectivity markets, so are presentation, operation I in I referred very is wealth working deposits, and that we on. my and that the by to operating others, to management a and And core based the bank with that's a on that U.S. funded CIB explained commercial Mexico really model mirrors

Unidentified Company Representative

have we the question next Thank Can you. please?

Operator

from Morgan Our next Stanley. from Serrano Alvaro question is coming

now You’re live.

Alvaro Serrano

thanks question. for Good morning, taking my

consensus on according The outlook you mean, to the payout. your better length, profits reached at you've is first to is saying guidance. of your is you've significantly where what is kind I is than one want be described which XX%, which

venture You're with in the you what joint I there have the more any it M&A? Just and QX part XXXX? or expect revenues know have your May all you with in sort what interactions color, some because what What's Why later I to in some expecting think of leaving probably should RWA happen? going us more I is in that XX% that financing can it and your presumably realize can Do the top to the you arm, are restructuring would feels that? any give Or offset know to going past, be like you of year. disconnect there's buybacks to and U.S. there. the not part a feels Or realize something more and that had subprime we comes single-digit end second, risk? in up – next Is don't I year if already this of you're in-house it payout keep Thank the can you they're maybe a And you low capital but, keep. color explained special maybe has charges Chrysler? for you're strategy. José is add-on how growth. strong room can you be we reassessment I like year? some idea? able on might a quantify think Antonio for mean, only don't that the very be you. accumulation about an

Ana Botín

much. question. Very Excellent

have return we the where for put aiming total that disciplined say We growth in our profitability, which be next point. are aspire and We So, profitable to we we moment. about on will. would buybacks if we Again, And at and a really We've been investors it sorry, the buybacks. that share think the competition. and this increasing beyond is we is we increased all – can intend increased I at the also The increase increase means do that very to investments. with through we payout, as said, of we of XX% share expect year. to you, shareholder interesting XX-XX for dividend intention said happens, we've per XX% are around an confident for we remuneration it's era opportunities. that that

next returns. growth for year. again tell you it's actually getting I be to are I We also, XX% mentioned positive year. EBITDA can going revenue PagoNxt And next

goal. the is that So

the The all our absolutely is bent, I current supportive, the is to want Board other we very change and management absolutely believe shares. excellent buy to opportunity it's stress is back important and an

shares new this going at issue are We to price. not

want that to is retail many you. clear back guidance, last was do. within buying not we year back we've guidelines. I because are and We very to investors exception ECB We the that buy shares our of It as something want shares. leave we an given can as will

great is will be provider. the have attractive for working very Europe a continue and great of preferred relationship, business a partner. Europe, which terms we America, on and arrived business. sides. to in with agreement in as U.S., in both in their has indicated the great is a a we that their auto This In Chrysler We've It's U.S. Stellantis Latin

Unidentified Company Representative

Thank question you. the next please? Can we have

Operator

Our next question is coming from Morgan. Sofie Peterzens JP from

live. now You’re

Sofie Peterzens

Morgan. JP It's Sofie from Hi, Yeah.

elaborate not previous So question new just you're points of to through not also normalized you think saw the – to mentioned In so more just of in basis any Mexico? more just Could then you. could potential losses on XX U.S., the going loan the basis forward? – XXXX. shares. kind past, I any XXX, normalized in Does another in we you're is do talking going headwinds bid the in could XXX level. U.S. points? on of be this about you follow-up XXXX the you And in So, just we going XX final U.S.? you a for cost relate points are And losses should my to points. Banamex remember Thank be any capital comments, comment in about you would the level that And follow-up what that confirm question, also that around how will issue if then loan a the these the cycle regulatory was basis question of risk headwind

Ana Botín

very So, to clear. I be want

for any We to issue case Banamex or are not contemplating new whatever. in shares

us shares and it's then not excellent We're shares. We're buying point an contemplating would back buying back for are new for We an again, it's acquisition share new issuing shares. issue planning. opportunity. We be sense We to believe at this shares opportunity. price. excellent It this investment make no any to not at believe,

seen You've number. shares. I public bought I many can. I myself buying every a mean, It's many, time

issuing shares. not very contemplating that clear. We're So is

XX%. the of less regulatory, terms not so Antonio XX%, José In less It’s I than XX%. that believe than mentioned

we terms and course, In of what’s this on comment the the cost and U.S. can delivering maybe in of risk. you XX% the important of and XX% U.S., But year. are

U.S. adjusted XX% the attractive the including U.S. XX%, which be are U.S., returns large is cycle, not very We and Actually, would the to managed the RoTE else, year. next are dividends markets through example, a term the using everything as shareholders. XX%. we around medium year aiming on for we’re and across expecting Mexico, of and some And XX% because very the this risk cost our return our

On of risk? the cost

José Antonio Álvarez

you unusually in Yes. I the should to say, presentation, see the in low. SCUSA, our referring risk as XXXX, cost business – was of you’re

business, have we expectation. our second of And We where expect XXXX. a be Chrysler going single – on looking number preferred couple one the less cost in partner our some than same we we’re for levels space the generating normalization originating even in going the continue primary we space. continue on in X%. the is forward, space the than years, side, in to years. back the digits. mix the on subprime next across the will coming coming not And – cost more to to space This the risk, the are the Naturally, is depend of prime is the mid- of to high because cycle, And subprime in risk for

this. this to naturally, is what going So is drive

– to previous to long across significantly not you maintained had number of in we the – the the where will the run, cost we this On cycle, the the will risk XXXX than year. be lower that be this in X% still mentioned, are expect we come

going in prime forward, in are, bank be more what have And in more matters. the XXXX. to the we’re launch. the So, prime case we we to the mentioned it’s going Ana booking is as subprime Probably, presentation, and not going mix because are

Unidentified Company Representative

please? Can you. we question, next have the Thank

Operator

question Toms Benjamin RBC. Our from next is from coming

live. You in are

Benjamin Toms

Good my please. morning. Thanks the UK, for Two on taking questions.

point quarter-on-quarter. the a customer in just beaters sensitivity assumptions rise your saw to terms relation that rate from slightly the UK In fall growth for in competition? the assuming secondly, showed in you’ve year? clarify of XXX Firstly, for saw talk changes, clarify Thank spread, guidance And you. geography, bit data deposit customer we then UK, for which you’re what or erosion more some a holidays. mortgage about loan you in released or can spread was assumed what this recently just margin demand and biomortgage that Can UK in over Christmas we very strong the for growth the basis you

Ana Botín

you José Antonio, take maybe those?

José Antonio Álvarez

Yes.

go are in XX raising our assumption a maybe not basis has is some And this So, mentioned bit rates the current two This in points – points we rise, our the rate big, UK, probably. higher. to XX two as you basis taking, from to effects. assumptions,

said, make side. we margin to on liability the expansion As expect you some rightly

we Christmas, on with part your the is demand prices On And market second the competition – more that mortgages, competition. fairly which a is in market we in means asset competitive. you grew the market. along keeping is our and that UK, mentioned, as the The the question mortgage side, have on share, drives depends of during strong were we

X%, losing – first book half year We question gaining And the expect more market. the much line pressure big not year mortgage in with the market no the competition along the the in market, mark share. in [ph] XXXX the to half. with year, very or saw competitive in – second the line is We grow X% of

Now it's fairly stable, yes.

market. moment. the is I the favor situation place of to what rate prices at this on Naturally this that's can you So And in us. comment

the So, sheet is rates. to toward balance higher sensitivity

Unidentified Company Representative

Can the you. please? Thank next have question, we

Operator

question next coming Paribas. from BNP is from Ignacio Our Ulargui

live. in are You

Ignacio Ulargui

lending the a disclose whether by to a XXXX? for the the bit bit emissions given you. your One on to Scope considering previous stage interest sensitivity I green I of of is net much. taking are on just if bank for at Thanks rate question on very more X what commitments. was planning main finance the the level, my is bank? through loan what's a have and And Thanks towards units support targets. in that I the questions. is ESG the you progressing two questions. have you of mean that bank one. track book, more what you the bit guidelines run a zero on presentation is could terms At the on and to other linked wondering Thank

Ana Botín

Thank you.

the actually, those. I are So positioned rate let interest rates. higher we of take mean, me both sensitivity, for

should So be it net, positive.

it clearly some but to Sometimes time feed positive. through, takes

Scope the ESG commitments, On X.

We test. that Scope that very to taking go as obviously, X, up. are actually through last And to consistent But comparable. going our need year. stress be this the We that's to into some And to we that Scope give numbers. a rely X, on We're that compare others we need you on. focused account We're time. need year. then some of to doing that in measure we bottom So, embedding numbers all way with is already can take we that going customers did we of

we we So, do so take with with it's have exercise, working really can can going much tests, you Scope are a compare measure we where regulators we to important. And common learning measurements financial and are we these supervisors numbers. as stress that the that X as

is a measure we happens that common and I'm others Africa, is in in as we some that. in Latin are green grounds. ensure that in are and not way we believe personally very involved. what very Again, acceptable, We that that – as the way. soon as can the now possible. ensure what measuring fair do beginning to as we disclose yes, so group, And those, we're are are across we to involved can of that can that but develop is But comparable a working will countries we we America, in course, we soon need

Unidentified Company Representative

we Thank have you. question, please? Can the next

Operator

Our is from next coming Marta Sanchez of Romero the America. question Bank from

You are in live.

Marta Sanchez Romero

back My Good first Banamex. morning. very much. Thank to you going question is

discount the you can outlook general you this, Are Given rating have any your shares, of further Group specifically, synergies JV minorities And Thank on a risk last in Metrovacesa equity are would Banamex? consider comment where impairments on in Mexico papers. Santander my the or cost space? you Related there you And in lot the what relative plans to companies been question on if are headlines numbers and of also real of could this in you. more Merlin, using Spain? recently estate asset your in quality done? is Mexico listed with There's preliminary run buy the Blackstone. for subsidiaries potential your

Ana Botín

So let me take those.

what's our too not shares. group We early back buy in contemplating important any shares. to really say. group is really I It's are we want to issuing think way,

growth. We very our are organic happy with

at but going any contemplate process to part group when be we the in way, are I before, to, issuance. prices, begins, process, As not we do the share these expect said of

our follow Banamex numbers. our for competitors. In numbers, terms of years, competitors' we We know

So, at really It's on that moment. working understanding. not we do We're specifically have the too an early.

credit, me In we XXXX. let normalization group asset on through and terms to cost the just in the expect that of happen quality, say of of comment cycle

still some which So, Antonio Brazil, José again, questions. And be already, the below be some cycle. XXXX the believe one would be could on could where I detail gave of there areas

terms anything. core The are some of there in sense. as not In we there obviously, have maximize permanent for terms believe But At value trying the we to of assets. our We're value real – goal is holdings we not moment, now. estate when long it business. this any specific we sure restructure stay plans make actually subsidiaries, can in point, generate as have It's we some any makes is do for a to to these to don't way.

Unidentified Company Representative

the have you. question, next we Can please? Thank

Operator

from Our question coming is next from Daragh KBW. Quinn

You are live. in

Daragh Quinn

morning. the good Thank taking for Hi, you the and question. presentation

for on one And an idea Just us if this first year? time just process you a then the question on give the UK how about have a could small the you and Banamex, that and question. us the higher NII a rates to declining the if growth, understand line could second final current Maybe expectations just impact, remind you And UK, reacting loan for on how NII in just any? see of rates then higher quarter. the

Just said on dividend traditionally, results always the announced few think you with time. you've dividend. a dividend proposal be announcing XXXX I weeks' the in the you'd the mean, I and

and more be time much. the curious line timing what dividends? for the final Thank you on very change Just announcement the in you specific if of on XXXX kind could of

Ana Botín

put to they a They don't be think to be long. because that the involved. they few they it's at carve-out Banamex, believe keep. a We think to issue in a process, going shares. months it's And So have I we're announced new subsidiary also putting idea, level, not going the place assets there's need is and significant actually be again, would on we we to for to crucial thing for least where but going – the investors am my have a I at shareholder, no want

we're months, to So, more not do But again, – are we we don't that's in think we QX. – know. not happen probably going for not

have We engaged this not at point.

U.K., that the in in income interest explained net think I of Antonio detail. terms In sufficient José

In a positive a terms curve. would – the in XXX previous be was points in would impact a positive in rates question. rise the have the hundreds U.K. of the millions U.K., parallel impact of of positive basis impact higher for It significant That

In require dividend, terms have it's said of to process going different from is without reason no mean, what effectively be a the The we there saying. that I mystery. buybacks cash. is

like to And keep announcement mainly is of so we'd because but the reasons, shareholders' to one it's some our that meeting.

the questions surprised bit on So, I'm a at this.

it's said cash, have XX% We going of shares. to XX% be XX% underlying income,

pretty give not again, I So it's like simple a mathematical to number, the would but calculation.

So, few weeks, be again. that, we'll in a saying

shareholders' and That's we We shareholders' that. coming meeting up, we'll have calling when giving at of February. will end meeting be the a the be

Unidentified Company Representative

next Can we please? the question, you. Thank have

Operator

coming from Our Bestinver Securities. is from next Mario Ropero question

You are now live.

Mario Ropero

My question morning. Good on is Hi. XXXX hard. in first Spain. NII is probably revenues outlook for

to I growth basically, Spain PagoNxt. linked breakeven perhaps fee some Thank you So, Well, wanted be to the in is on to to expect one to update think be will just on XXXX? then offset the this ask give guidance when in if you enough an second And this reached? fee and you.

Ana Botín

showing XXXX. year. On revenues, in giving business that's positive more It's EBITDA PagoNxt, next horizontals and give that. you In planning positive growing Spain? XX% to a April, we're a in growth in more on We'll restatement be XX% EBITDA the detail. revenues. detail

José Antonio Álvarez

be deposits. the be and main probably bit driver NII in Well, both going loans should will of The TLTRO. question Spain, volumes is a grow to I say relatively in flat,

the negative the in So expires, from it's TLTRO the as will the basically – TLTRO impact NII Spain. in come

Unidentified Company Representative

we you. question, please? have next the Can Thank

Operator

is from question Filtri Our coming next from Andrea Mediobanca.

are You now live.

Andrea Filtri

you. Thank

target EBA the minorities, before, fully on capital. you've impact that And inorganic forma on the you're the buyback is it for U.S. second Including loaded if target, it, a treatment acquisition? ratio the question not of all of issuing Can not changes you're CETX And against from pro shares Britta's just giving M&A; including case regulatory tranche exiting some the you the you're if the First XX% is expected the clarification, I’m, firm question Second profits. businesses be would question given finally, XX% of in XXXX following us I'm Banamex please? XX.X%, correct? you operations from CETX announced tell even a on in

us profits Thank If risk-weighted for attached you. you and this? assets detail the could to

Ana Botín

EBA the minimum? So,

José Antonio Álvarez

of not regulation, In case, basis is couple any four yet that yet know as maybe Well, it maybe a of this the reregulation. a region in is maybe it's not to come, it's three, of today, suppose five, what we as points, region. maybe in

because So, okay, know into a I not as as today, it's know, we translated it's regulation. what far into still

Ana Botín

On QX, at is the accrued including acquisitions. that reiterate and for of again before. pro both the XX% I XXXX, has do that cash. forma included One will quarter every to closed, Right. the gets in be actually quarter, happen likely. for course, one and QX, when you it said every hasn't. other target XXXX XXXX including capital, as I accrual XX% And including in most for buybacks The

U.S., shares again, you event give the not details something on the can that is to for York, we're we of a all probably, do issue new give we weeks, and terms And few do that. In do year, we'll when day target New on we'll in inorganic. in to in on that announce planning the We're a the U.S. this special details XX% that more so a planning briefly we the

Unidentified Company Representative

question, Thank we have Can please? next you. the

Operator

Benjie question Creelan-Sandford coming next Jefferies. from from Our is

now are live. You

Benjie Creelan-Sandford

Yes. question a I Good the Consumer Bank. morning, on everyone. Digital had

looking cost if risk the digital level? traditional would at of Bank the you just what of in also, the you and Consumer you could consumer It Just and of And still Thank and the synergies digital out whether forward? income relatively was this currently bank. see the cost I'm year. bank you're business wondering of the for business or able perhaps I profitability Digital expect remain some in discuss the wondering consumer to RoTE business trajectory a to fund guidance that's whether the of potentially the risk digital for the business consumer confirm just you've the the bank implies available XXXX. and about still normalized use there the could as low you. cost sort on between you going in of deposits before talked – to the whether of Europe that potential tailwind raised

Ana Botín

cloud-based any market. is cross-selling easier But in native is which other we what the bank believe importantly, effective you achieving and lower way. We're of a digital therefore, much are primary able very native deposit Portugal, yes, through those together goals the launch other in very so markets €XX Openbank bank which that it's Openbank deposits, grow learnt believe we new So actually Holland, is of that those of Germany running don't grown that and now funding, actually platform significant core achieved, have billion can use banks. a Again, these is Spain as we XX% I and we aiming customers that. in than Germany, We've one fund to in at the included, we around businesses Spain in what going at and a of a are bank managing to by with cost outside more digital customers do has have be to customers deposits to much consumer.

opportunity. that's So the

And You XXXX. normalized should haven't yet. seen we risk? of cost to see in expect XXXX, that that risk, of Cost

José Antonio Álvarez

have early. in XXXX, going We're with we line be XXXX. In to already

quality a see good. credit is so significant very there. Yes, we do the not risk So,

Ana Botín

still good. It's Yes.

Unidentified Company Representative

Thank we please? have next you. Can the question,

Operator

question next [Barclays]. de is Gil coming Fernando Santivañes Our from

live. now are You

Fernando Gil de Santivañes

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

Just follow-up XXXX please on a quick guidance. question,

First ALCO in any big that book big. change think is on question, including part. are This I the is you that on ALCO the strategy. one Is your one Polish strategy there is guidance? still

taken provisions happen The you second Thank reuse still you of much. you any XX%. then? provisions outlook on above on RoTEs contemplating the very is Are overlay that do

Ana Botín

not anticipating we're change strategy; ALCO the on any So, there.

higher points we parallel basis As are shift. rates, XXX positioned I for said,

But Again, don't together, we We the if if the... over benefits the both in billion have the but and the U.K. again, you in have you €X take Eurozone. take U.K. Europe, the Eurozone even bigger biggest

José Antonio Álvarez

Yes.

are the portfolios We at the we of end projecting December. just initiated the already having one

Ana Botín

think right? in for anything I release provisions don't have On we overlay, XXXX,

José Antonio Álvarez

very in have a balance sheet, depending, relation this as Well, well, macro potential some the losses headwinds as with we are offset And know. provide still on side. mentioned – in well be credit we but questions, maybe to you overlay the our reduction, may potential I offset –

growth. are largely working GDP this, in losses being naturally losses the IFRS on to on respect depends we While and expected

synergies countries, I we yes. for with unique, in that IMF, have say, line should not So, different

Ana Botín

curve, end the We use and Yes. the we on be believe some my the could is IMF early by positives, be negatives, could we to the back positives working. continue and there model again day, diversification, but point use at offset to and going the of going

would So trends individual should be, in we you believe the might though offset even get principle, each no countries, surprises, other. in surprises

José Antonio Álvarez

question, please. Kim, Thank you, the next

Operator

Instructions] Suisse. [Operator Our Credit from is Zuluaga Pamela next question coming from

You live are in

Pamela Zuluaga

for presentation the you my morning. two. taking Thank have for I questions. good Hello,

one basically FX first a mortgages their both to the about is reaching amid decisions. in regarding coverage to Poland. increasing And actively banks levels resolution Do my is denominated seen settlements and we exposure other these question The out-of-court We've anticipate related of the should increasing think How your mortgages? for those? you court then charges second follow-up. unfavorable

an You RoTE guided ranging for had to from XX%. initially XX%

XXXX. are Now higher you. encompassing you're guiding for downside highlighting? higher-than-anticipated XX% Is in this level you from like amid any Thank costs inflation the risk

Ana Botín

on First then francs. one, the and Antonio, Swiss José

it's achieved. the team believe I remarkable So, has what

COVID. We close are XXXX XX% to achieving after in

four medium that's guided we XXXX, term, in three, years. So,

XXXX to now. XX% going to XX% We're XXXX, we're close – to that's to XX%. So

next are saying XX% above We year.

pandemia guidance, but XX% delivered delivering important over Second a was goal to lot again, shows we the we very delivered, guided in CETX. said XX.X%. close when XX% what there a The CETX point, to gave we with XXXX. XX% we not just than that We're more after

strength of the we'll execution. working still our our that present on model, our would we term, XXXX. strategy XX%, in four-year So we're but medium of of you strength to three We're plan, now shows which the you saying next to and said be our what

course, have extra and in pandemia we're the XXXX that were that not delivering, aspects, planning the capital so stress to we're if want what we just I you overdelivering we of and on. in some So, just for versus consider

of terms So, Swiss the francs, Antonio? in José

José Antonio Álvarez

Well, it's very long.

We bank the bank billion have an round €X exposure of Swiss consumer franc between mortgages. the billion €X and FX

back doing same. on The XX%, is provisioning levels XX%. the final the everybody are some are and now the we rates. settlements doing. are depends customers, business as rulings we of the largely settlements the for of the well, on Our with behind But cost interest doing courts is Polish outlook some this of much for back Well, this – us the of largely the higher better on success

going this offset margin QX, quarter-on-quarter large. give be to room the XX% losses in from NII You to not the to us very is and see that potential there, come enough that expanding going are

Unidentified Company Representative

you. Thank

you We I are very running out have brief. questions be but two left. I ask of will time, to

we can the have please? next So, question,

Operator

coming is question Nedialkov from Our Stefan next from Citi.

live. are You in

Stefan Nedialkov

your your quick decreased geographical going XXXX. level your us allocation Hi about How guidance NII assumption if have that's across may, Good significantly – a versus on think baked pretty what's ones. tiering, one. you're rate the your guidance for morning. into as example, and about overall should in of it You've portfolio? portfolio quite at I keeping mid-single-digit for and Spain a for the the group level, that should in the we how ALCO So What super the Europe giving – footprint? the I what's just as the while for well constant assumption rises we Yes. couple guys. what's On forward? NII revenues, assumption XXXX ALCO quick to

DGF XXXX there? maybe reduction you onwards significant from charges XXXX. a expecting even On and or ERF Are the

Ana Botín

if brief. if Okay. Antonio, to just I – – could José may you you be could be you ask

We we and have... have one question, more

José Antonio Álvarez

portfolio, to in in XXXX, I revenues Yes, ALCO less specifically the NII coming the yes? So, had growth, referring already ALCO portfolio we of half the the the year, in second the you're mean, and basically where not system. Brazil, system UK ALCO small Europe, are Mexico, the and Chile, somehow somehow Poland a in on The portfolios back. not is in portfolios U.S.; in are from in

does our but So in Mexico, is this for have guidance revenues in in and we this, yes? UK Europe is So guidance up expectations from it. That's for NII to with included but our rates, this higher go the that U.S., Brazil, lower rates matter XXXX, not Europe, in means regard. naturally in

cover was? The the not established Spain. Bank Well, wrong, by question side the if XXXX, I'm back – Yes. we second the low of of in range

Well, very that million, somehow So are already happen, likely, you by small no path So year, million, €XX a going amount, yes. cost yes? may the the million, €XX reduced the those this €XXX €XX – €XXX two year, a million But resolution the us forward. this shows contributions same million, more. things they

is is So this this the forward. well, going happens; – path this something and

Unidentified Company Representative

Thank you. Can we have the you. last question, please? Thank

Operator

Our Catena Societe is question coming Carlos from from Cobo last Generale.

You live. are in

Carlos Cobo Catena

quick. you I'll be on thank One is for organic capital formation. Hi, presentation. the try to

in you But XX, the I basis You've this points points. – cash basis guided to deduct the and more sorry, XX I explained something may dividends formation around to get XX if payout quarter.

So, us in wondering new how And the plan you I more difference? that second bit Europe, securitizations the agreement. on group? the that is question any color Stellantis a in is give what sort the in I business that reinitiated if forward the whether are delta or going was agreement includes performance? what of wondering affect you if forward, is could the about Or expected different going Thank And not, the changes And lines? record business business would little you. was

Ana Botín

us together grow On me I next the would Again, you deliver have. strong a again, which the that's take think, already a let for of making both to very that. and as our that committed to we Europe. Stellantis very, Stellantis, in digital years, few is And agreed sides, are really, a do relationship again, a and have us allow agreement very we we just partner to second baked strong numbers transformation one. we over here into every the in U.S. So business We've continue year, strong are the interesting

degree. a are some generating say of that to point, capital terms the rates interest I'd and exchange also just In headwinds, organically. markets, In had just as but – more more rates XXXX, on regulation, you've not on especially general we and

I Antonio the his you say know don't in think to presentation. that what José about I future, showed want but...

José Antonio Álvarez

tool match The Securitization to simple. capital. fairly naturally there is a guide is

of long of going the in As cost at to release much because is going that. below finance we the This to flexibility our we positive we're going portfolios our the an take to are of check with very cost release is will attractive, X% But approach. opportunities, and we doing our continue How sheet. fairly that to balance consumer consumer to ones. offer opportunity, able of the in It's capital finance portfolio, be market. the an X%, this offer were keep we securitization If source nature more granular this? it. If we're they like the naturally, XXXX can equity, loans equity levels don't was securitization capital, X%, a simple, at as do ones, very we fairly particularly implicit given

Ana Botín

that's So, I it. think

bit years a answer wanted in but the long. you. they've to disposal. if this Again, is not you a And shown are, question. for model very Thank has know And been your We attention. give much to at every this of to much. try a work our and any works. update year, – But we and it again our we IR today, just your they team will We the done We also of again, has questions, will day. appreciate stakeholders profitable you are again grow are our other very deliver for proud vision continue the remuneration anybody to and we Have strategic teams, our all huge about ahead. all great has business shareholder have the confident once very our we actually thank that you the confidence we continue profits. as very, reiterate increasing also And again the optimism commitment and growth, higher

Banco Santander (SAN) 4 Feb 222021 Q4 Earnings call transcript