SANTANDER PRIVATE BANKING

Transcription

1 SANTANDER PRIVATE BANKING Investors Day Boadilla del Monte. September 14 th, 2007

2 Important information 2 Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates, and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the Securities and Exchange Commission of the United States of America (the SEC ), could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities or any advice or recommendation with respect to such securities. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In connection with the offer for ABN AMRO, The Royal Bank of Scotland Group plc ( RBS ) has filed with the SEC a Registration Statement on Form F-4, which includes a preliminary version of the prospectus, and Fortis, RBS and Santander (collectively, the "Banks") have filed a Tender Offer Statement on Schedule TO and other relevant materials. The Form F-4 has not yet become effective. INVESTORS ARE URGED TO READ ANY DOCUMENTS REGARDING THE OFFER, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors can obtain a copy of such documents without charge, at the SEC's website ( Copies of all documents filed in connection with the offer may also be obtained from each Bank, without charge. Nothing contained in this presentation is an offer of securities for sale into the United States. 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 presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act In making this presentation available, Santander makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever and you should neither rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity. Note: Statements as to historical performance, historical share price or financial accretion are not intended to mean that future performance, historical share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast.

3 Agenda 3 Private banking in Santander Group, today Global Private Banking Project Business models adapted to market Outlook 2009

4 Private banking business in Santander 4 Int. Private Banking 21 bill. AUM TOTAL (31/12/06) 140 bill. AUM* 555 mill. PBT México Venezuela Latam banks 13 bill. AUM Colombia Brazil UK 26 bill. AUM Chile Argentina Iberia Italy 0.3 bill. AUM 80 bill. AUM (*) Including assets under administration

6 Global Private Banking Project 6 SANTANDER RETAIL BANKING EUROPE BANIF International Private Banking (SPB) ABBEY AMERICA Santander Totta Private Banking Santander network Private Banking Fumagalli Cater Allen James Hay Santander Mexico Santander Brazil Banesto network Private Banking Santander Chile Banco Venezuela Units in the GPB project with direct management Santander Río Units in the GPB project with shared management

7 Global Private Banking Project units 7 IPB TOTAL (31/12/06) 96 bill. AUM* 324 mill. PBT México Venezuela Colombia UK Brazil Portugal Chile Italy Argentina Spain: BANIF (*) Including assets under administration

8 Why these units? 8 These are the private banking units with a clearly segmented commercial channel, which facilitates an immediate implementation and integration Autonomous domestic private banking units need greater assistance from a central unit in order to achieve higher growth rates In all of them, important synergies in products, IT and HH.RR., can be attained UNITS WITH HIGHER GROWTH RATES ACHIEVABLE, HIGHER ECONOMIES OF SCALE AND WITH MORE ROOM FOR IMPROVING

9 Best capabilities for boosting growth while maximising quality and cost synergies 9 HHRR Attracting, retaining and training the best professionals. Business model Products Business intelligence Client relationship protocols, advisory process, branch layout... Leveraging on the division critical mass and the local teams Use of corporate resources (Isban, Produban...), tools (Altair, Partenón...) and workflows Unique client relationship management tools (CRIS...) ADAPTED TO LOCAL MARKETS BY LOCAL TEAMS

10 Attracting, retaining and training the best professionals 10 Exporting a global training program, common to all units, adopting a single career plan, locally adapted, defining remuneration and professional development and being one of the top global players in private banking, We are one of the first choices for attracting the BEST TALENT in the market

11 Adapting a successful business model in onshore banking 11 Products/Services Distribution Sale Service level Brand image Advisory plus execution Full Open architecture All banking products Own specialized advisory teams Transparent Pricing policy Branch Layout High availability Remote channels Direct and intermediaries Personal relationship Highly confidential Tailor made conditions Strict compliance Definition of service levels Client management Ad hoc information Mint execution Proactivity Financial Strength (Grupo Santander). Bank close to clients. Exclusive Innovative and modern Combining the use of local brands with one global brand

12 Maximising synergies in products and services 12 Backed by in open architecture policy, agreements and procedures, units can offer the widest range of investment products easily and in a short time Combining the critical mass of the division, all units will have access to: structured products, portfolio management capabilities real estate advice... maximising economies of scale. Access to global research of the different countries covered by the units and the Group.

13 Exporting business intelligence 13 Banif s business model is based on a state of the art technology (in-house developed), that upgrades a standard banking platform to provide the best private banking service. Other products Local Unit Banking IT platform 1.Communication 2.Web Internet 3.Web Intranet 4. IT Architecture 5. Clients 6. Customers account 7. Launch 8. Warrants 9. Securities 10. Funds Manager 11. Pension Plans Manager 12. Insurance 13. Cards 14. Payments 15. Banking Transfers 16. Checks 17. Electronic banking 18. Accounting 19. Tax Information System 20. Foreign 1. Integrated Position 2. SIGA 3. Tax Structure and derivates 4. Regulatory entities Client management CRIS Reporting to clients

14 An adaptable IT solution 14 PARTENON BANIF WEB REDC INTERNET CLIENT WEB INTERNET DB WEB INTERNET PERSONAL WEB ACCOUNTS INTERNET WEB INTERNET INTRANET WEB CREDITS INTERNET WEB GUARANTEES INTERNET WEB LOANS INTERNET INTEGRATED POSSITION SIGA MANAGEMENT INFORMATION (CRIS, MIS, PDA) REGULATORY REPORTING WEB WEB WEB WEB CARDS CHECKS DEBITS TRANSFER. INTERNET INTERNET INTERNET INTERNET TAX FIXED WEB INTERNET INCOME WEB FUNDS INTERNET WEB SECURITIES INTERNET ASSET WEB INTERNET MNGMNT. INSURANCE ACCOUNT. TAX INFO FOREX PRODUCTS DHW INFORMATION TO CLIENTS

15 Client Relationship Integrated System 15 CRIS provides On line indepth information to Private Banking Advisors About Clients: Portfolio breakdown, profitability, operations, tax issues Risk adequacy and product suitability Loyalty parameters. History of contacts Tailor-made reports for clients Pyramidal drill down analysis Commercial control linked any parameter database field M.I.S. Bank's management Operational control Marketing information Marketing and advisory aid About private banker s portfolio: P&L Drill down Budget follow up Compliance issues

16 Adapted to local markets 16 Every market has its own practices, legal framework, systems, tax environment, and client behaviour. Only a local team with strong market knowledge in coordination with the division can implement the strategy successfully

17 An exportable model 17 BANIF IPB UK Italy LatAm Portugal HHRR Business model Products Global Technology and Operations TWO BUSINESS MODELS; ONE SINGLE STRATEGY

19 Banif. Our business model in on-shore PB 19 BANIF Best Private Bank in Spain in 2004, 2005, 2006 and 2007 Euromoney Awards 2004 h 2005 h 2006 h 2007 Allfunds Bank Best world funds Distributor 2003 Institutional Investors Awards. 40% Market share in domestic private banking in Spain 43 years of experience in private banking. 37,532 mill. AUM* 30/06/07 100% of client advisors have achieved the European Financial Advisor Certificate (EFA). 300,000 Minimum client size Average over 1,000,000 (*) Including assets under administration

20 Banif 20 Service model in constant evolution as well as its value proposition Global service Wealth management ASSET MANAGEMENT Asset Managers 2000 Family Offices Family Off. Equity Brokers International Private Banking WEALTH MANAGEMENT 1990 s Portfolio management 2007 Comercial Banks Private Banking Units 1970 s Brokerage BANKING OPERATIONS FINANCING

21 Banif. An excellent track-record Mill. euros Gross operating income x % Mill. euros Profit before taxes X % H1'06 H1' H1'06 H1'07 Cost to income ratio Assets under management* 74% 62% 55% 50% 47% Bill. euros x % H1' H1'06 H1 07 (*) Including assets under administration

22 International Private Banking: Our offshore model 22 Mission: to become the Bank of reference in Latin American private banking In 2005, third best off-shore bank in Latam 2005: Top 3 Off Shore Bank in Latin America In 2006/07, among the top five biggest offshore private banks in Latin America (AUM) More than 20,000 clients in LatAm 20 years of experience in private banking. USD 32,668 mill. AUM* 30/06/07 100% of Private bankers have or will have achieved the EFA Certificate 500,000 USD Minimum client size Average over USD 1.5 MM (*) Including assets under administration

23 International Private Banking 23 Main levers Integrated Model: Commercial, Centres, Products A sole commercial business line independently of the booking centre A business model focused on both, organic an inorganic growth Highest compliance procedures Steady organic growth Efficient portfolio integration High value added product differentiation: hedge funds and wealth management

24 International Private Banking. An excellent track-record 24 Gross operating income Profit before taxes Mill. US$ Mill. US$ % % X % H1'06 H1'07 Cost to income ratio H1'06 H1'07 Assets under management* 55% 46% 43% 41% 40% Bill. US$ % % H1' H1'06 H1'07 (*) Including assets under administration

25 Italy. Building from scratch 25 Fumagalli Soldan acquired in April Today: HHRR Top management and first wave of private bankers onboard Career plan already in place Business model Business and compliance processes Brand and image Branch layout Products Complete range of banking and investment products Open architecture through All Funds Bank Leveraging on Global teams Business intelligence CRIS in place Local intranet working Client statements

26 UK. Transforming the business 26 Develop the current Administration Business of James Hay, Cater Allen and Abbey Sharedealing into a Private Banking Business focused on the introducer Channel in two phases: Phase 1: Transformation & Consolidation From an administration service and banking product provider to a Private Bank Three companies and brands: single management and strategy. Leverage distribution through Introducers, completing the offer. Growing in clients, balances and margin. Estimated duration of two years. Phase 2: Platform for Growth Merger and single brand Reinforce the Introducer channel. Branch network to provide a higher service level to Introducers. Complete range of services and products. Estimated duration of implementation of three years.

27 UK. Transforming the business 27 From low value to full service HHRR Reinforce HQ with teams of specialists Adapting the Career and training plan Hiring private bankers for intermediaries Business model Adapting the onshore business model to UK intermediaries Brand and image Branch layout Products Complete range of banking and investment products Open architecture through All Funds Bank Drawing support from Global teams Business intelligence CRIS for intermediaries Integration of IT processes with Partenón and CRIS

28 Latin America private banks 28 Different situation depending on the country: HHRR Implementation of Career plan and Training programs New hiring... Business model Commercial setup, Definition of Service levels Branch network layout... Products Completion of product range All Funds Bank connection Levering on Global teams Business intelligence CRIS interface to Altair Local/regional intranet implementation

30 The division will be fully integrated in Q4 07: Start up of Division Q4 07 Italy fully operative Transforming the UK business Adaptating and implementing the business model to each Latam Bank Integrated Division reporting

31 In summary 31 An operation with a solid strategic rationale: Strong business know-how Markets we know well Where we can generate more value With a more integrated approach to business Improving quality of service Taking advantage of our local presence Growing the business Our ambition is to achieve a CAGR ( ): AUM*: +18% PBT: +20% (*) Including assets under administration

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