Santander increases profitability target for 2018

Ana Botín announces improved outlook at the Group’s Strategy Update in New York.

New York, 10 October 2017 - PRESS RELEASE

Banco Santander has today increased its return on tangible equity (ROTE) target for 2018. The target has increased from 11% to over 11.5% due to an improving economic outlook in a number of the Group’s core markets.

The change in target has been confirmed at Banco Santander’s 2017 ‘Group Strategy Update’ which has taken place today at the New York Stock Exchange. The event, attended by close to 200 analysts and investors, has been held in New York for the first time.

Over the past twelve months, shares in Banco Santander S.A. have outperformed the market significantly, increasing by 54.3% during the period compared to a 35.8% increase in the Stoxx Banks Index. In July 2017 the Bank announced a 24% increase in attributable profit for the first half of 2017, driven in part by particularly strong performance in Latin America as well as improvements in Spain and robust performance in the UK.

Ana Botín, Banco Santander Executive Chairman, said: “In the last 12 months we have made significant progress in earning customer loyalty and improving the quality of our business. We continue to see excellent growth in Latin America as well as positive trends across both Europe and the US. In the UK, while GDP growth has slowed, performance has been better than we had expected. As a result we have increased our profitability targets for 2018”.

During the strategy update Santander reiterated all its remaining targets for 2018, including targets to reach double digit growth in Earnings Per Share (EPS) by 2018, and grow total and cash Dividend per Share (DPS), and Tangible Net Asset Value per share annually (see appendix).

José Antonio Álvarez, Group Chief Executive Officer, said: “Our strategy is working and we continue to deliver on the commitments made to our shareholders. We are increasing loyal customers and progressing well with our digital transformation – maintaining our position among the most profitable and efficient banks in the world”.

Appendix – Ahead of plan on all commitments

Important Information: Banco Santander, S.A. ("Santander") cautions that this press release contains statements that constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RORAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future” and similar expressions. These forward-looking statements are found in various places throughout this press release and include, without limitation, statements concerning our future business development and economic performance and our shareholder remuneration policy. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macroeconomic, industry, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. Numerous factors, including those reflected in the Annual Report on Form 20-F filed with the Securities and Exchange Commission of the United States of America (the “Form 20-F” and the “SEC”, respectively) on March 31, 2017 and the Periodic Report on Form 6-K for the six months ended June 30, 2017 filed with the SEC on October 5, 2017 (the “Form 6-K”) –under “Key Information-Risk Factors”- and in the Documento de Registro de Acciones filed with the Spanish Securities Market Commission (the “CNMV”) –under “Factores de Riesgo”- could affect the future results of Santander and could result in other results deviating materially from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.

Forward-looking statements speak only as of the date of this press release and are based on the knowledge, information available and views taken on such date; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

The information contained in this press release is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the press release. No investment activity should be undertaken on the basis of the information contained in this press release. In making this press release available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.

Neither this press release nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this press release is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.

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

 

Banco Popular agrees to sell majority stake in its real estate asset portfolio to Blackstone

Agreement reached after European Competition Authorities approve Banco Santander’s acquisition of Banco Popular

• Portfolio includes approximately €30 billion in real estate properties and loans, as well the full share capital of Banco Popular’s real estate management company, Aliseda.
• The valuation attributed to the Spanish assets of the business is approximately €10 billion. This is consistent with the valuation and provisions made by Santander during the acquisition of Popular and does not, therefore, result in any material capital gain or loss.
• The assets will be transferred to a new company that will be 51% owned by Blackstone and 49% owned by Banco Popular.
• The deconsolidation of assets from the balance sheet will have a positive impact on Santander’s CET1 fully loaded capital ratio of 12 basis points. Moreover, five basis points of capital consumption which resulted from the acquisition of 51% of Aliseda by Banco Popular will be released.

Madrid, August 8 2017 – PRESS RELEASE

Banco Popular S.A. (‘Popular’) has today approved the sale of a majority stake in its real estate portfolio to Blackstone Real Estate Partners Europe V (‘Blackstone’). The agreement has been reached following a competitive process in which three international companies with long track records in the management of real estate assets presented offers. Blackstone was selected as the successful bidder after submitting the best offer in terms of both its value and management plan.

The agreement was confirmed after the European Union Directorate General for Competition today approved the acquisition of Popular by Banco Santander S.A. (‘Santander’) with no restrictions.

The transaction will involve the creation of a company to which Banco Popular will transfer assets with an aggregate gross book value of approximately €30 billion, as well as 100% of the share capital of Banco Popular’s real estate management company, Aliseda.

The valuation attributed to the Spanish assets of the business (e.g. properties, loans and tax assets, not including Aliseda) is approximately €10 billion. This is consistent with the valuation and provisions made by Santander during the acquisition of Popular and does not, therefore, result in any material capital gain or loss for Santander or Popular. The final valuation is subject to change depending on the assets remaining within the business at closure and following the integration of Aliseda.

Blackstone will own a majority 51% stake in the new company while also assuming management responsibilities, while Banco Popular will own the remaining 49% stake. As a result, the aforementioned assets will no longer be consolidated on Banco Popular’s balance sheet.

Chairman of Santander Spain, Rodrigo Echenique, said: “We are very pleased to enter into this partnership with Blackstone. The agreement significantly reduces our real estate exposures and further strengthens our balance sheet, allowing us to focus all our efforts on supporting customers. It is an important step in the integration process and demonstrates the quality of our execution capabilities. The interest generated in this transaction among international investors is also a clear sign of confidence in the Spanish economy and we are grateful to all bidders who participated”.

Jon Gray, Global Head of Real Estate at Blackstone, said: “This significant investment reflects our continued confidence in the robust recovery of the Spanish economy. We are delighted to partner with Santander to maximise the long term value of the portfolio."

The deconsolidation of assets from the balance sheet will have a positive impact on Santander’s CET1 fully loaded capital ratio of 12 basis points. Moreover, five basis points of capital consumption which resulted from the acquisition of 51% of Aliseda by Banco Popular will be released.

The transaction, which is subject to regulatory approvals and the usual adjustments associated with transactions of this nature, is expected to close in the first quarter of 2018. The process has been supervised by Pedro Pablo Villasante, Independent Director of Banco Popular. Morgan Stanley has been advisor to the seller.

About Santander
Banco Santander (SAN SM, STD US, BNC LN) is a leading retail and commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful market share in 10 core countries in Europe and the Americas, and is among the world’s top banks by market capitalization. At the end of June 2017, Banco Santander had EUR 1.65 trillion in managed funds, 131 million customers, 13,800 branches and 200,000 employees. Banco Santander made attributable profit of EUR 3.6 billion in the first half of 2017, an increase of 24% compared to the same period last year.

About Blackstone Real Estate
Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $104 billion in investor capital under management. Blackstone’s real estate portfolio includes hotel, office, retail, industrial and residential properties in the US, Europe, Asia and Latin America. Major holdings include Hilton Worldwide, Invitation Homes (single family homes) and prime office buildings in the world’s major cities. Blackstone real estate also operates one of the leading real estate finance platforms, including management of the publicly traded Blackstone Mortgage Trust.

Santander launches integration of Popular with benefits for customers and a redesign of branch signage

• Popular’s four million customers will have access to a network of 7,500 ATMs for free cash withdrawals.
• Retail and independent professionals will be able to do money transfers in euros for free among both banks.

Madrid, October 4, 2017 – PRESS RELEASE
Santander is taking another important step in the integration process of Banco Popular. From today, Popular’s branch signage will include the Banco Santander flame, an initial phase of the rebranding that will take place following operational integration, expected to happen in 2019.

In the next two weeks, Popular’s more than 1,200 branches in Spain and Pastor’s offices in Galicia will start to modify the signage on their facades to include a Grupo Santander endorsement and the Santander corporate color in their logos. The goal is to enhance the sense of integration and welcome Popular’s four million customers to Grupo Santander, following approval of the acquisition by competition authorities on August 8. Subsequently, the Santander logo will be included in other materials, such as business cards, website, branch displays, etcetera.

This initial phase of the rebranding will also involve specific benefits for Popular customers, as they will have access to free cash withdrawals at over 7,500 ATMs in Spain: Santander’s 5,000 tellers and Popular’s 2,500. Moreover, retail customers and independent professionals of both Popular and Santander will be able to make ordinary money transfers in euros between both banks without cost.

Rami Aboukhair, Santander Spain and Popular’s CEO, said: “We welcome Banco Popular’s customers to Grupo Santander. They can start to benefit from the advantages of the integration. We are committed to carrying out an exemplary integration resulting in a bank that will offer the best of both models. We are already part of the same team, which combines soundness, trust, strength, proximity and strives for excellence in customer service”.

Banco Santander, among the world's top 10 banks in the Dow Jones Sustainability Index

• Santander has maintains its leading position in the DJSI World and DJSI Europe indexes since 2000 and again ranks one of the best financial institutions in the world and first in Spain for its sustainability management.

Madrid, 7 September 2017.
Banco Santander was again included in this year´s Dow Jones Sustainability Index (DJSI), the international benchmark that measures the sustainable behavior of companies in the economic, environmental and social arenas.

In its 2017 review of a total of 212 financial entities, only 28 were included in the index.

With a score of 89 points out of 100, Banco Santander was recognized by the Dow Jones Sustainability Index as one of the 10 most highly rated banks in the world for the second year in a row, and the first in Spain for its sustainability management.

The DJSI awarded the Bank its highest score for managing its environmental footprint, its positioning in renewable energy and energy efficiency financing and its financial inclusion programs, among other factors.

In the last year, Santander improved its score in the sustainability rankings of other prestigious agencies such as Sustainalitycs, MSCI, Oekom and Vigeo, and it continues to be included in the FTSE4Good index, where its results have also improved.

Banco Santander´s main purpose is to contribute to the economic and social progress of people and businesses in a responsible and sustainable manner. It carries out numerous social support projects with a strong commitment to higher education as the main focus of its social investment. More information here.

Santander named Best Bank in the World for SMEs and Best Bank in Latin America by Euromoney

• For the second consecutive year, Euromoney recognizes Santander’s global and market specific support for small and medium-sized enterprises (SMEs).
• Santander was also named Best Bank in Latin America and, for the first time, Best Bank in Brazil.
• Santander is also the Best Bank in Chile, Portugal (Santander Totta), Poland (Zachodni WBK) and Puerto Rico, according to Euromoney, as well as Best Investment Bank in Chile and in Mexico.

Madrid, 7 July, 2017.
For the second consecutive year, Euromoney has named Santander Best Bank in the World for Small and Medium-sized enterprises as well as Best Bank in Latin America and the Best Bank in five of the nine countries in which it operates.

Santander Brazil was judged as the Best Bank in Brazil for the first time in Euromoney´s annual awards process. Santander Totta in Portugal, Santander Puerto Rico, Santander Chile and Bank Zachodni BZK, the Group´s bank in Poland, were all recognized once again as the Best Banks in their markets. Santander´s strength in global corporate banking was also demonstrated by the awards it won for Best Investment Bank in Mexico and in Chile.

Euromoney once again recognized Santander as the Best Bank in the World for SMEs for the value proposition it offers, designed to help firms overcome critical obstacles to growth. The award winning strategy goes beyond lending to include the development of managerial skills, access to university talent and to new international markets and digitalization. Euromoney noted the programme´s focus on education and training to deepen its relationship with SME clients, “an investment that few other banks are prepared to shoulder”.

José Antonio Álvarez, CEO of Banco Santander Group, said: “It is an honour for the success of our SME programme to again be acknowledged and gratifying to see the hard work of our local teams pay off. These awards demonstrate that Santander is not only a global force for SMEs, helping them grow at home, modernize, and expand internationally, but that we consistently strive for excellence at a local level. We are grateful to Euromoney for recognizing our work.”

According to its CEO, Sergio Rial, “Santander Brasil is a bank in constant transformation. We have achieved the best results in our history while increasing the number of satisfied customers and the level of engagement of our teams. These awards recognize the progress we have made and carry with them the responsibility of continuing to build a better bank for our clients, employees, shareholders and society.”

About Banco Santander
Banco Santander is the largest bank in the eurozone with a market capitalisation of €83.8 billion. It has a strong and focused presence in 10 core markets across Europe and the Americas with just under 4 million shareholders and 188,000 employees serving 128 million customers.

Euromoney has been a leading publication in international finance for almost 50 years. Euromoney´s Awards for Excellence were established in 1992 and were the first of their kind in the global banking industry. This year Euromoney received almost 1,500 submissions from banks in an awards programme that covers 20 global awards, more than 50 regional awards, and best bank awards in close to 100 countries.

40 universities and Banco Santander create the world’s largest platform for university entrepreneurs: Santander X

• Entrepreneurs and universities throughout the world will collaborate and gain international exposure for their projects, in an open, digital environment thanks to Santander X.
• The Bank will invest 50 million euros over the next four years on university entrepreneurship and projects with social impact.

Mexico City, 17 October 2017.
Banco Santander today announced the launch of Santander X, a partnership with universities to create the largest ecosystem for university entrepreneurship in the world.

Santander X will create an online network where universities and entrepreneurs throughout the world can collaborate, share ideas and expertise and even attract investment. It will allow universities to share best practices, and monitor and measure the impact of their entrepreneurship programs.

Santander’s Executive Chairman, Ana Botín, launched the initiative today in Mexico City, in an event attended by Vice Chancellors from 50 universities from various countries and Mexican entrepreneurs, together with the executive president of Santander Mexico, Héctor Grisi.

Ana Botín said, “Santander X aspires to be the point of connection for all entrepreneurs. It will be the largest global ecosystem for university entrepreneurship, opening the door to the talent required to build a better world for everyone”.

The platform has been initially developed in partnership with nearly 40 Universities from seven countries: Argentina, Brazil, Chile, Spain, Mexico, Portugal and Uruguay. The aim is to increase the number of universities engaged in the programme to 50 within three months and ultimately to over 1,000.

Over the next four years, Santander will invest 50 million euros to support entrepreneurship programs at universities. Nine hundred projects will be connected to Santander X by yearend.

Among the institutions participating is the Universidad Centro (Mexico), whose general manager, Kerstin Scheuch underscored that with the new platform, “universities can promote their best entrepreneurial capacity internationally and exchange their know how with other universities, creating an incomparable global network”.

The Santander X platform will be an open and collaborative digital framework in which students and entrepreneurs will have access to the community´s resources. They will be able to connect with other members of the Santander X ecosystem to develop their projects, identify new opportunities, collaborators and mentors, or ask for guidance from their university´s entrepreneurship department.

Commitment to Universities
Santander currently provides more support for higher education than any other company in the world. It provides grants to 36,000 students every year and partners with over 1,100 Universities across 21 countries. The aim of Santander X is to strengthen these partnerships to help entrepreneurs throughout the world grow and succeed while fostering projects with social impact that contribute to progress.

Santander’s support for higher education began 20 years ago, with the creation of Santander Universities. Since then, a network of more than 1,100 universities has been built.

The Group also provides a number of initiatives to support entrepreneurs throughout the world – including more than 350 entrepreneurship programs at universities. More than 7,000 entrepreneurs receive support from the Group each year. In addition, more than 25,000 young people participate in the entrepreneurship awards sponsored by the Bank each year.

Group Strategy Update Presentations

•   Executive Chairman. Opening.  
•   Chief Executive Officer  
•   UK  
•   Spain  
•   Brazil  
•   USA  
•   Mexico  
•   Chief Financial Officer  
•   Executive Chairman. Closing.  

We made further progress in implementing MyContribution, the new corporate model of performance management that strengthens the Bank’s culture as the driver of transformation. In September, we launched the 360º assessment in which executives are evaluated by their peers, direct reports and by their line manager on adopting the eight corporate behaviours in their day to day work.

The global survey of commitment was launched throughout the Group. This gauges the level of the team’s commitment and the support for it, as well as identifying where Santander has improved and where it has to keep on focusing in order to be Simple, Personal and Fair.

Leading by example, a training programme that will help leaders to define the role they must perform in order to instil the culture of Santander Way and carry out the transformation, was launched.

The commercial transformation programme started in 2015 continues to drive growth in the number of customers (+1.7 million loyal ones and +4.0 million digital ones in the last 12 months).

Of note in mobile payments was Super Wallet in Mexico, an app that allows customers to manage their cards on a centralised basis, and in Spain, Openbank launched Samsung Pay, which allows its customers agile, easy and secure payments via their mobile phones.

We continue to move forward in our digital transformation, with the launch of Digilosofía in Spain and in Brazil: Santander One, a digital channel that offers tailored financial advice; Consignado 100% digital a mobile app; and Web Casas, a digital platform to apply for real estate loans.

In Spain, the good reception of the 1l2l3 Smart, a 100% digital account aimed at millennials, continues. In Poland, launch of As I Want it Account, which allows customers to decide what they need and how to pay for the products and services offered.

All shareholders were informed about the capital increase carried out in July through various channels, particularly online ones in line with the Bank’s digitalisation.

Shareholders were informed about the second dividend charged to 2017’s earnings, which will be paid via the Santander Dividend Elección (scrip dividend) programme.

Santander held in New York on October 10 a Group Strategy Update at which senior management gave details of the Bank’s strategy to analysts and investors and of the progress made in achieving the objectives.

Banco Santander and the Universia Foundation concluded the ninth edition of the Becas Capacitas for shareholders and their family members with disabilities. The aim of this support programme is to contribute to the academic and professional progress of university students with disabilities.

Banco Santander renewed its presence in the Dow Jones Sustainability Index (DSJI), where it has been present continuously since 2000.

The latest edition of Brain Chile, an entrepreneurial contest for university students, was held and awarded CLP 47 million to the 12 winning projects out of 200 business ideas presented.

Santander Universities and the Universia Foundation opened the door to internet of things (IoT) thanks to the recent alliance with MIOTI, the only 100% IoT institute in Spain.

Banco Santander presented Santander X, a project of Santander Universities that aims to become, via universities throughout the world, the largest university entrepreneurial eco system in a digital environment.