results presentation 3q 2011 santander bank

1 1

27 October 2011

2 2

Important information

Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements. 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 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.

Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; 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 presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.

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. 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 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 presentation should be construed as a profit forecast.

3 3

Group highlights 9M’11

Agenda

Results 9M’11: business areas

Conclusions

Appendix

4 4

3

1 Solid basic revenues generation as the driver of profit

Lower market revenues and larger provisions at this moment in the cycle

2 Good liquidity and capital position

Solid balance sheet structure

Deleveraging of mature economies

Complying with the new capital requirements

Worsening

of macroeconomic

scenario in Q3’2011:

Drop in expections

Sovereign debt crisis

Volatility in markets and currencies

Stressed wholesale funding

The balance sheet will be strengthened by the allocation of capital gains in the fourth quarter

Expected capital gains (EUR 1,500 million) will be used to strengthen the balance sheet

Grupo Santander – Management drivers

Basic ideas

5 5 Profit

The Group maintains its capacity to generate profits in a very complex scenario. In Q3 impact from markets and larger provisions

EPS of EUR 0.2030 in Q3'11 and 0.5981* in 9M'11

Quarterly attributable profit. Group

EUR million

Q1'10 Q2 Q3 Q4 Q1'11 Q2* Q3

2,215 2,230

1,635

2,101 2,108

1,393

1,803

Attributable profit. Group

EUR million

9M'10 9M'11

6,080 5,303

-13%

(*) Impact from PPI provision (EUR 620 mill. net of tax). Before this provision, EPS for 9M'11: EUR 0.6680

1

6 6 Basic revenues1

Solid basic revenues as the driver of profits

Basic revenues. Group

EUR million

1

1.- Basic revenues: Net interest income + fees + insurance fee income

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

9,536 9,972 9,967 9,861

10,230 10,493 10,497

Basic revenues:

+ EUR 1,745 mill.; +6%

SCF (organic and

inorganic growth)

BZ WBK entry

Latam dynamism +1,761

Mature markets

+565

+416

-997

9M’11/9M’10

7 7

+6%

+1%

-1%

Peers avg. European peers avg.

Grupo Santander

Grupo Santander Peers avg. Peers avg.

3.6% 3.0%

2.5%

Total revenues

Different evolution of revenues versus our competitors

Gross income vs Peers

Var. 2011/2010*

1

Gross income. Group

EUR million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

9,536 9,972 9,967 9,861 10,230 10,493 10,497

10,260 10,614 10,563 10,613

10,852 11,285 11,117 Total

Trading gains / other

Basic revenues Gross income / Assets vs Peers

% / ATA’s 2011*

(*) Latest available information from each entity. “Peer Group” are large banks that because of their size, characteristics and /or degree of direct competition are the reference ones to surpass: Banco Itaú, BBVA, BNP Paribas, Credit Suisse, HSBC, ING Group, Intesa Sanpaolo, JP Morgan, Mitsubishi, Nordea, Royal Bank of Canada, Societe Generale, Standard Chartered, UBS, Unicredito and Wells Fargo.

Impact from market's revenues in the third quarter

8 8 Expenses

Differentiated management by units and businesses

Expenses. Group

EUR million

1

Expenses:

+ EUR 1,227 mill.; +9%

Develop franchises and businesses in mature ones

(Germany, UK, USA, GBM)

Investments to capture

growth in emerging

countries

Latam: +683

BZ WBK: +217

+359

9M’11/9M’10

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

4,263 4,548 4,687 4,698 4,824 4,908 4,994

Reduce retail units in Spain and Portugal

(-1% / -2%) -32

9 9

Efficiency

Revenues and expenses evolution enable us to make investments and continue as the "best in class" among our peers

Efficiency ratio1 vs Peers (%)

Data 2011*

1

C16

C15

C14

C13

C12

C11

C10

C9

C8

C7

C6

C5

C4

C3

C2

Grupo SAN

C1

77.6

74.2

65.3

63.8

61.1

59.8

58.5

58.5

58.2

56.9

53.7

53.2

51.8

50.1

48.5

44.3

41.7

GrupoSantander

Peers avg. Europeanpeers avg.

44.3

58.4 59.6

Data 2011*

Efficiency ratio vs Peers (%)

(1) Expenses / Revenues

(*) Latest available information from each entity. “Peer Group” are large banks that because of their size, characteristics and /or degree of direct competition are the reference ones to surpass: Banco Itaú, BBVA, BNP Paribas, Credit Suisse, HSBC, ING Group, Intesa Sanpaolo, JP Morgan, Mitsubishi, Nordea, Royal Bank of Canada, Societe Generale, Standard Chartered, UBS, Unicredito and Wells Fargo.

10 10

-1,269

-483

9M’10 9M’11

Loan-loss provisions

LLPs still high at the current moment of the cycle …

Specific provisions

EUR million

1

Net loan-loss provisions1

EUR million

Use of generic provisions

EUR million

(1) Including country-risk

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

2,436 2,483

2,935

2,404 2,188

2,684 2,906

9M'10 9M'11

9,126 8,255

-871

-787

…. with performance impacted by the lower use of generic ones

11 11

3.42 3.55 3.61 3.78 3.86

Sep'10 Dec'10 Mar'11 Jun'11 Sep'11

The Group's NPLs continue sliding upwards, because of Spain. Downward trend in SCF, Sovereign and LatAm Ex-Brazil

Group's Total

%

United Kingdom and USA

%

1.77 1.76 1.75 1.82 1.88

S'10 D'10 M'11 J'11 S'11

UK Sovereign

4.80 4.61

4.15

3.76

3.22

S'10 D'10 M'11 J'11 S'11

Latin America

%

4.97 4.91 4.85 5.05 5.05

S'10 D'10 M'11 J'11 S'11

Brazil Latam ex-Brazil

3.11 3.07 2.94 2.87 2.84

S'10 D'10 M'11 J'11* S'11*

Continental Europe

%

3.88 4.24

4.57 4.81 5.15

S'10 D'10 M'11 J'11 S'11

Spain SCF

5.13 4.95

4.63 4.42

4.29

S'10 D'10 M'11 J'11* S'11

1

(*) On a like-for-like basis, deducting the acquired GE portfolio in Mexico. Including it: 3.08% in June 2011 and 2.91% in September 2011.

Credit quality

12 12

75 73 71 69 66

Sep'10 Dec'10 Mar'11 Jun'11 Sep'11

The Group's coverage ratio is 66%. Stable in the last quarter in most units

Group's Total

%

United Kingdom and USA

%

48 46 45 41 40

S'10 D'10 M'11 J'11 S'11

UK Sovereign

72 75 82 85

93

S'10 D'10 M'11 J'11 S'11

Latin America

%

98 101 104 102 100

S'10 D'10 M'11 J'11 S'11

Brazil

113 110 114 114 111

S'10 D'10 M'11 J'11* S'11*

Continental Europe

%

65 58 53 49 46

S'10 D'10 M'11 J'11 S'11

Spain SCF

122 128 122 128 132

S'10 D'10 M'11 J'11 S'11

1 Credit quality

(*) On a like-for-like basis, deducting the acquired GE portfolio in Mexico. Including it: 110% in June 2011 and 108% in September 2011.

Latam ex-Brazil

13 13

Santander is not taking advantage yet of the normalisation of the cost of credit as done by its peers

Net provisions / loans

Net provisions / loans vs. peers (%)

1.07%

0.73%

1.45% 1.39%

2010 2011*

SAN

Peers

C16

C15

C14

C13

C12

C11

C10

C9

C8

C6

C3

C7

C5

C4

C2

Grupo SAN

C1

0.00 0.03

0.17 0.19 0.25 0.31 0.36

0.64 0.74

0.91 0.99 1.00 1.00 1.06 1.10

1.39 4,93 -0.25

-0.06

-0.31

-0.11

-0.58

-1.55

-1.13

-0.28

-0.05

-0.03

-0.13

-0.09

-0.11

-0.12

-0.13

+0.08

-0.03

Y-o-y change

Loan-loss provisions 1

Data 2011*

(*) According to the latest available information from each entity. “Peer Group” are large banks that because of their size, characteristics and /or degree of direct competition are the reference one to surpass: Banco Itaú, BBVA, BNP Paribas, Credit Suisse, HSBC, ING Group, Intesa Sanpaolo, JP Morgan, Mitsubishi, Nordea, Royal Bank of Canada, Societe Generale, Standard Chartered, UBS, Unicredito and Wells Fargo.

14 14

Var. / 9M'10 % excl. forex EUR Mill. 9M'11 Amount % and perimeter

(1) Including dividends, equity accounted income and other operating results

Grupo Santander Results

Larger growth of net operating income after provisions, thanks to higher basic revenues and stable provisions …

1

Net interest income 22,853 +957 +4.4 +2.8

Fees 8,017 +728 +10.0 +7.2

Trading gains and other1 2,384 +133 +5.9 +3.5

Gross income 33,254 +1,818 +5.8 +3.9

Operating expenses -14,725 -1,227 +9.1 +6.3

Net operating income 18,529 +591 +3.3 +2.0

Loan-loss provisions -7,777 +78 -1.0 -1.8

Net op. income after provisions 10,752 +668 +6.6 +5.0

15 15

Var. / 9M'10 % excl. forex EUR Mill. 9M'11 Amount % and perimeter

(1) Including dividends, equity accounted income, and other operating results

(2) Including provision for PPI in Q2’11 in the UK (EUR 842 mill. before tax)

Grupo Santander Results

… not feeding through to profits because of larger provisions (PPI) and higher taxes

1

Net interest income 22,853 +957 +4.4 +2.8

Fees 8,017 +728 +10.0 +7.2

Trading gains and other1 2,384 +133 +5.9 +3.5

Gross income 33,254 +1,818 +5.8 +3.9

Operating expenses -14,725 -1,227 +9.1 +6.3

Net operating income 18,529 +591 +3.3 +2.0

Loan-loss provisions -7,777 +78 -1.0 -1.8

Net op. income after provisions 10,752 +668 +6.6 +5.0

Other results and provisions2 -2,474 -1,256 n.m. n.m.

Profit before tax 8,278 -588 -6.6 -8.6

Tax and minority interests -2,975 -189 +6.8 +5.2

Attributable profit 5,303 -777 -12.8 -14.9

PPI2 provision

Higher taxes

16 16

Dec'08 Dec'09 Dec'10 Sep'11

104 106 115 116

Liquidity

Solid and sustained liquidity position, favoured by deleveraging of mature markets

Group's liquidity ratios

Dec'08 Dec'09 Dec'10 Sep'11

150 135

117 118

Dep.+ M/L term funding / Loans (%)

Loans / Deposits (%)

Q3’11 trends

Capacity to issue in the M/L term in a strongly stressed market

Approx. € 100 bn

9M'11 = 117% 2011 maturities

9M'11 issues Maturities

36 31

Reduced recourse to wholesale funding in the short

term (only 2% of Group's balance sheet):

— Short term in US market (parent bank): < €1 bn

High discounting capacity at Central Banks

Moreover, € 20 bn in market

securitisations

2

17 17

Solvency ratio

Core capital (%)

Note: Dec’07 according to BIS I

Capital ratios adequate to a diversified balance sheet and with a low risk profile ...

2

Dec'07 Dec'08 Dec'09 Dec'10 Jun'11 Sep'11

6.25%

7.58%

8.61% 8.80% 9.20% 9.42%

… and high capacity for organic capital

generation

18 18 Preliminary estimate of the impact on Santander from the new EBA criteria

In a simulation exercise with the recapitalisation hypothesis: core Tier I of 7.9% at June'11…

9.20%

7.90%

-0.2%

-0.5%

-0.2%

-0.4%

June 2011 as reported

June 2011 adjusted with EBA criteria

Intangibles and other

Basel 2.5 MtM – sovereign

debt

-130 b.p.

2

… which would reach 8.12% after the Q3’11 capital

generation

7.90% 8.12% +0.22%


Increase core Tier I in Q3’11

September 2011 adjusted with EBA criteria

Financial stakes /

securitisations

(*) Including convertible capital instruments

(*)

Deficit at 9% -6,474 +1,250 -5,224

EUR million

19 19

8.12%

9.22%

+0.40% +0.30%

+0.40%

Santander Projections

September 2011 adjusted with EBA criteria


Roll-out of internal models

Ongoing Optimisation of RWA (internal projection)

Generation 3 quarters:

Q4’11 + H1’12

+110 b.p.

2

We estimate that under the new criteria, we can reach a core Tier I of 9.2% by June 2012 via internal generation of

capital and optimisation of RWA

To reach the objective of

10%

Other measures

and assets sales

+0.80% additional

Deficit at 9% -5,224 +1,700

EUR million

Surpluss at 9% +1,076 +2,300 +2,300

20 20

Capital gains and their application

Estimates at year-end 2011

Estimated capital gains net of tax1 (€ mill.)

3

Sale InsuranceHolding Latam

SC USAOperation

Total

750

1,500 750

Will be used at the end of the year to

strengthen the balance sheet

(1) Expected to be recorded in the fourth quarter

21 21


Agenda


Conclusions

Appendix

22 22

Brazil

9M'10 9M'11

2,952 2,773

Constant US$ million

-6%

Profit distribution by geographic area

Results are underpinned by the Group’s diversification and by managing the different growth stages in each market

(1) Over recurring operating areas 9M’11 attributable profit before PPI provision

Continental Europe (ex-BZ WBK)

9M'10 9M'11

2,739 2,269

EUR million

-17%

9M'10 9M'11*

1,503 1,377

Constant EUR million

-9%

UK Sovereign

+44%

LatAm Ex-Brazil

9M'10 9M'11

1,873 2,186


+17%

Attributable profit(1) 9M’11

Poland (BZ WBK)

EUR 172 million (6 months)

Sovereign

UK

SAN network + Banesto

Portugal

Global Europe

SCF

UK and Sovereign

(*) After PPI provision: € 757 mill. (-50%)

Poland (BZ WBK)

2%

25%

20% 5%

18%

10%

2% 5%

13%

9M'10 9M'11

273 394

24 24

Continental Europe (excl. BZ WBK) 9M’11

Networks and wholesale business impacted by macroeconomic environment and market's evolution. SCF growing strongly

Attributable profit: EUR 2,269 mill.

Var. 9M’11 / 9M’10 (%)

Basic revenues

Gross income

Expenses

Net op. income

Net op. income afterprovisions

Attributable profit

+4%

-1%

+7%

-6%

-6%

-17%

SAN network

Banesto

Portugal

SCF

Other

602

189

129

990

358

Units' profit

Var. / 9M’10 EUR million

-10%

-54%

-65%

+65%

-48% (GBM,

Asset Mgmt. …)

Basic revenues

EUR million

9M'10 9M'11

10,407 10,795

+4%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

3,568 3,432 3,406 3,306

3,554 3,674 3,567

+5%

25 25 Santander Branch Network 9M’11

Activity

Net interest income return

Basic revenues

Net operating income / provisions

1.44% 1.42% 1.27%

2.87% 2.99%

3.59%

Sep'10 Dec'10 Sep'11

3.06%

2.69% 2.55% 2.52%

2.77%

3.08% 3.02%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

EUR million

EUR million

-2.5 -6.7

+14.8

-4.6

9M’10 9M’11 9M’10 9M’11

Loans Deposits

Var. in EUR billion

Return / Cost

Return

Cost

Net int. income /ATAs Net operating income

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

691 576

497 462 588 639 588

9M'10 9M'11

3,246 3,303

+2%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

1,184 1,060 1,002 974

1,072 1,136 1,094

9M'10 9M'11

897 845

1,765 1,815

+3%

-6%

+18%

+9%

Improved underlying business backed by higher spreads and gross income and lower costs. Larger loan-loss provisions because of depletion of generic ones

Prov.

Net op. income after LLPs

Net op. income

26 26

9M'10 9M'11

605 415

1,064 876

Banesto 9M’11

Banesto's trends are similar to those of the Santander Branch Network

1.73% 1.95%

1.67%

2.89% 2.94%

3.48%

Sep'10 Dec'10 Sep'11

1.44% 1.31%

1.21% 1.05% 1.13%

1.33% 1.36%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

EUR million

EUR million

-1.1

-6.4

+6.7

-7.1

9M’10 9M’11 9M’10 9M’11

Loans Deposits excl. Repos

Var. in EUR billion

Return / Cost

Return

Cost

Net int. income /ATAs

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

384 362 317 312

273 324

280

9M'10 9M'11

1,706 1,531

-10%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

601 570 535 481 489 525 516

-12%

-4%

-18%

-31%

Net operating income

Activity

Net interest income return

Basic revenues


Prov.


Net op. income

27 27

Spain. Customer lending and NPLs

Gross loans

Dec'09 Dec'10 Jun'11 Sep'11

31 27 25 24

108 106 104 104

31 30 28 27

64 61 59 59

10 12

13 12

245 236 229 226

-12% -7% -4%

NPL ratio

3.4 4.2

4.8 5.1

2.5 2.2 2.4 2.5

2.4 3.1

3.4 3.4

11.1

17.0

21.3

24.9

Dec'09 Dec'10 Jun'11 Sep'11

%

TOTAL

EUR billion

Companies w/o construc. and real estate

Real estate purpose

Household mortgages

Public sector

Other loans to individuals

With real estate

purpose

Total portfolio

Spain

Other portfolio

Household

mortgages

Coverage. Loans with real estate purpose

EUR million

100% of substandard and 40% of NPLs are up-to-date with payments

Risk Coverage

NPLs 6,062 1,864 31

Substandard 3,425 382 11

Amount Amount %

28 28

LOANS. Real estate purposes

Breakdown (Sep’11 / Dec’10)

Foreclosed ASSETS (gross amount)

Breakdown Sep’11

EUR million

EUR billion EUR billion

Sep’11 Dec’10 Var.

Finished buildings 12,523 12,709 -186

Buildings under constr. 1,737 2,548 -811

Developed land 2,814 3,678 -864

Building land 1,516 2,023 -507

Other land 194 252 -58

No mortgage guarantee 5,585 6,124 -539

Total 24,369 27,334 -2,965

Gross amount Coverage

Finished buildings 3,467 25% 2,611

Buildings under constr. 827 25% 621

Developed land 2,854 38% 1,756

Building land 1,040 42% 607

Other land 371 42% 215

Total 8,559 32% 5,810

Change / Dec’10 +1,050 +615

Net amount

Dec'08 Dec'09 Dec'10 Jun'11 Sep'11

37.7

31.1 27.3 25.3 24.4

Dec'08 Dec'09 Dec'10 Jun'11 Sep'11

4.8 6.5 7.5 8.3 8.6

+EUR 3.8 bn

-EUR 13.3 bn

Loans with real estate purposes and foreclosed assets

EUR million

29 29

-2.0 bn -2.2 bn

Plan 2011

Reached in Sep’11

Dec'10 Sep'11

49

44

-13%

+15%

Loans Deposits

Portugal 9M'11

Managing a “bail-out” scenario and deleveraging

Deleveraging process

continues

Balance sheet

reduction

Reduction of

commercial GAP

NPLs evolution:

as envisaged

Total Assets (€ bn)

Activity

9M'10 9M'11

415

233

518

355

Basic revenues


EUR million

EUR million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

192 188

138 132

151

112 93

9M'10 9M'11

855 740

-13%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

293 289 273 262 273

242 225

-33%

-18%

-31%

-44%

% var. Sep’11/Sep’10

2.9% 3.8% 4.1%

Dec'10 Sep'11 Dec'11 (e)


-11%

Prov.


Net op. income

30 30

Santander Consumer Finance 9M’11

Activity

Sharp profit increase, fuelled by the main units and excellent credit management

Net interest income / provisions (% /ATAs)

2.80%

1.91%

4.97% 5.03%

9M'10 9M'11

Provisions

Net interest income

2.17 3.12

Loans Deposits

+10%

+34%

Var. Sep’11 / Sep’10

Volumes

Total portfolio = EUR 74 billion (+10%)

EUR billion

Germany

USA

Italy

Spain

Nordic countries

Other eurozone

UK

Poland

30

12

8

7

7

4

3

3

+38%


-6%

+1%

-13%

+10%

+3%

+8%

-9%

9M'10 9M'11

980 1,563

2,501 2,738

Basic revenues


EUR million

EUR million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

786 825 890 860 920 917 900

9M'10 9M'11

3,400

3,965

+17%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

1,068 1,114 1,218 1,217

1,324 1,322 1,320

+1%

+8%

+9%

+59%


Prov.


Net op. income

31 31 Poland (BZ WBK) Data in local criteria. Constant EUR million

(*) 2010 proforma information.

Loans and deposits growth since its incorporation to the Group

Results* show sharp growth over 2010

Mar'11 Sep'11

2,610 2,856

5,209 5,775

7,819 8,631

Total

Companies

Individuals

Loans

+10%

+11%

+9%

Mar'11 Sep'11

5,780 5,941

3,558 3,995

9,338 9,936 Total

Companies

Individuals

Deposits

+6%

+12%

+3%

Basic revenues

Provisions

9M'10 9M'11

577 637

+10%

Expenses

9M'10 9M'11

324 338

+4%

9M'10 9M'11

79 70

-11%

9M'10 9M'11

176

245 +40%

Attributable profit

33 33

United Kingdom 9M'11

Results affected by sluggish activity environment, regulatory impacts and PPI1 provision

(1) In Q2'11 before provision of sterling 538 million (net of tax) for possible claims related to payment protection insurance (PPI).

(2) Loans to SMEs: +27% (3) Not including GBM balances and other deposits for sterling 11 billion as of September 2011.

Attributable profit1: £ 1,198 mill. (EUR 1,377 mill.)

Var. 9M’11 / 9M’10 in £ (%)

Gross income

Expenses

Net op. income


Attributable profitbefore PPI provision

-8%

+1%

-14%

-4%

-9%

Attributable profit 9M’11 after one-off = £ 659 mill.

Activity

Mortgages

Sep'10 Sep'11

166 166

Sep'10 Sep'11

21 25

5 4 26 29

Sep'10 Sep'11

151 151

Companies' loans Deposits3

+19%2

+0%

+11%

+0%

Core Non core

Net operating income / Provisions

£ Mill.


Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

830 825 805 741 729 728 666

Prov.


-17%

-14%

-4%

Net op. income

£ billion. Local criteria

9M'10 9M'11

1,817 1,747

2,460

2,123

35 35

9M'10 9M'11

5,500 5,678

9,467 10,653

Brazil 9M'11

Solid increase in basic revenues accelerated net operating income. In profit, impact from larger provisions, higher tax rate and minority interests

Attributable profit: US$ 2,773 mill. (EUR 1,973 mill.)

Var. 9M’11 / 9M’10 in constant US$ (%)



Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

3,134 3,107 3,226

3,377 3,459 3,610 3,584

+11%

+13%

+3%

Basic revenues



9M'10 9M'11

14,329

16,229

+13%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

4,700 4,778 4,851 5,034

5,305 5,428 5,495

+13%

Activity1

NII / Provisions (/ ATAs)

Loans Deposits*

+19%

+10%


Volumes

2.73% 2.89%

7.56% 7.28%

9M'10 9M'11

Provisions

Net int. income

4.39 4.83

Basic revenues

Gross income

Expenses

Net op. income

Net op. incomeafter provisions

Attributable profit

+13%

+12%

+11%

+13%

+3%

-6%

Prov.


Net op. income

(1) Local currency (*) On a like-for-like comparison

37 37

Latin America Ex-Brazil 9M’11

Profit increase spurred by retail banking: faster growing basic revenues and lower cost of credit. Negative impact from trading gains in Q3'11

+59%

Var. / 9M’10

-6%

+8%

+12%

+6%

-76%

-1%

Attributable profit by country

Mexico

Chile

Argentina

Colombia

P. Rico

Uruguay

Other

1,028

655

288

42

37

18

117


Attributable profit: US$ 2,186 mill. (EUR 1,555 mill.)


Activity1

NII / Provisions (/ ATAs)

Loans Deposits

+19% +15%


Volumes

Basic revenues

Gross income

Expenses

Net op. income


Attributable profit

+7%

+5%

+12%

-1%

+1%

+17%

1.02% 0.86%

4.15% 3.87%

9M'10 9M'11

Provisions

Net int. income

3.01 3.13

9M'10 9M'11

6,102 6,552

+7%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

1,977 2,071 2,053 2,115 2,099 2,195 2,258

+10%

Basic revenues


(1) Constant currency (2) Excluding minority interest: Mexico +25%; Total area: +6% (3) Including Peru, New York and International Private Banking

2

2

3

38 38

Mexico 9M'11

(1) Local currency (2) Excluding perimeter: +24%

Attributable profit: US$ 1,028 mill. (EUR 731 million )


Activity1

NII/Provisions (/ ATAs)

Loans Deposits

+32%

+13%


Volumes

(2)

Basic revenues

Gross income

Expenses

Net op. income


Attributable profit

+7%

+3%

+8%

-1%

+12%

+59%

9M'10 9M'11

2,315

2,471 +7%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

768 781 766 765 793 804 874

+14%

9M'10 9M'11

1,057 1,188

1,555 1,543 Constant US$ million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

532 506 517 435

525 539 479

-7%

-1% Net operating income

Basic revenues


1.19% 0.77%

4.04% 3.81%

9M'10 9M'11

Provisions

Net int. income

3.04 2.85


+12%

Prov.


Net op. income

Profit fuelled by strong basic revenues and lower provisions needs. Moreover, positive impact from minority interests

39 39

Chile 9M'11

Activity continued to grow strongly, focused on deposits. In Q3’11 lower revenues in UF portfolio due to low inflation and one-time charge in provisions

(1) Local currency

Basic revenues



9M'10 9M'11

2,077

2,112

+2%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

658

720 699 700 679

744 688

-2%


Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

472 465 465 439 450 496

392

-16%


Attributable profit: US$ 655 mill. (EUR 466 million )

Activity1

NII/Provisions (/ ATAs)

Loans Deposits

+14%

+23%


Volumes

1.05% 1.00%

4.44% 3.90%

9M'10 9M'11

2.90 3.39

Basic revenues

Gross income

Expenses

Net op. income


Attributable profit

+2%

+1%

+10%

-5%

-9%

-6%


9M'10 9M'11

1,022 929

1,402 1,338

-5%

-9%

Prov.


Net op. income

Provisions

Net int. income

41 41 Sovereign 9M’11

Attributable profit: US$ 554 mill. (EUR 394 mill.)

Activity and profitability1

Year-on-year change US$

Var. 9M’11 / 9M’10 in US$ (%)

(1) Local currency

Gross income

Expenses

Net op. income


Attributable profit

+9%

+8%

+9%

+58%

+44%

Loans Deposits Net interest income /

Provisions (% / ATAs)

-12%

-1%

+5%

-8% -4%

+15%

Dec’09 Dec’10 Sep’11 Dec’09 Dec’10 Sep’11 1.14%

0.67%

3.31% 3.26%

9M'10 9M'11

Provisions

Net int. income

2.59 2.17

Note: Loans data (excl. securitisations) and deposits under US GAAP

9M'10 9M'11

574 910

1,169 1,272


US$ million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

385 382 401 378 422 418 432

+8%

+9%

+58%


Consolidating the franchise’s profitability: higher revenues, increased activity and enhanced credit quality

Prov.


Net op. income

43 43

Corporate Activities

Larger trading gains (fx hedging) offset the negative impact from funding cost and lower tax returns

EUR mill.

Attributable profit

(Change 9M'11 vs. 9M'10)

Main effects:

Net interest income -308

Trading gains +596

Other results and tax -199

Total impact on profit: +89

44 44


Agenda


Conclusions

Appendix

45 45 Conclusions (I)

In the quarter solid profit for the Group amid a complex scenario

In the year-to-date

improved underlying results (net operating income after provisions +7%)

due to sustained growth and increased revenues

larger provisions (PPI) and tax pressure tarnish profits

By unit

retail units in Europe and the UK more impacted by environment

SCF, Poland and Sovereign kept up sharp profit growth

Latin American units maintain very solid underlying results, underpinned by the top part of the income statement

RESULTS: high generation underpinned by the top part of the P&L

46 46 Conclusions (II)

Liquidity

capacity to issue in the M/L term + deposit capturing

low recourse to short term + discounting capacity in central banks

deleveraging in mature markets

Capital

high quality balance sheet

continuous capacity of free capital generation

complying with the new capital requirements

Capital gains at year-end, the announced capital gains will be used to further strengthened the balance sheet

BALANCE SHEET STRENGTH: Solid liquidity and capital position

Basic trends in profits and balance sheet in line with those announced at Investor Day for the coming quarters

47 47


Agenda


Conclusions

Appendix

48 48

Group Balance Sheet

49 49 Main trends of the Group’s balance sheet

Retail balance sheet, appropriate for the business nature of low risk, liquid and well capitalised

(*) Other assets: Goodwill EUR 26 bn , tangible and intangible assets 17 bn , other capital instruments at fair value 8 bn, accruals and other accounts 51 bn

Balance sheet at September 2011

Assets Liabilities

734

103

102

224

66

620

68 37

112 122

168 144

1,250 1,250

EUR billion

1

6

5

4

3

2

Lending: 59% of balance sheet

Derivatives (with counterpart on the liabilities side): 9% of balance sheet

Cash, Central Banks and credit institutions: 14%

Other (goodwill, fixed assets, accruals): 8%

Available for sale portfolio (AFS): 5%

Trading portfolio: 5%

1

3

2

4

5

6

Loans to

customers

Derivatives

Cash and credit institutions

Other*

AFS Portfolio

Trading portfolio

Customer Deposits

Issues and subordinated

liabilities

Shareholders’ equity & fixed liabilities

Credit institutions

Other

Derivatives

50 50

Secondary segments results

51 51

Retail Banking

High one-digit growth in net operating income after provisions fuelled by recovered basic revenues and lower provisions

Attributable profit: EUR 5,330 mill.

Var. 9M’11 / 9M’10 in euros

Activity

EUR billiion

Basic revenues

Gross income

Expenses

Net op. income


Attributable profit

+7%

+6%

+9%

+4%

+8%

-8%

9M'10 9M'11

27,434 29,283

+7%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

8,837 9,239 9,357 9,115

9,556 9,857 9,870

+5%

9M'10 9M'11

8,941 9,654

16,709 17,341 EUR million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

5,448 5,640 5,621 5,380 5,685 5,980 5,675

+1%

+4% Net operating income

Basic revenues


EUR million

+8%

Deposits Loans

Sep'10 Sep'11

644 656

+2%

Sep'10 Sep'11

505 522

+3%

Prov.


Net op. income

(1) After PPI provision. Before it: +3%.

1

52 52

Global Wholesale Banking (GBM)

Customer revenues resilient to the environment. Impact on revenues from markets and on costs from investments

Gross income

EUR million

9M'10 9M'11

3,324 3,155

574 480

3,898 3,635

-7% -11%

9M'10 9M'11

2,794 2,275

2,793

2,405

EUR million

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

1,023 922 848 865 943

782 680

-20%

-14% Net operating income

Gross income


EUR million

-19%

1,738 1,785

1,067 1,022

38 47

481 301

574 480

9M'10 9M'11

3,898 3,635

-7%

+23%

+3%

Customer revenues

-37%

-16%

TOTAL

-4%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

1,082 1,199 1,042 1,090 1,127 1,053 976

282 104 188 162 210

148 122

1,364 1,303 1,230 1,252 1,337 1,201 1,098

Total

Trading

Customers

Total

Trading

Customers

(1) Including Global Transaction Banking and Credit

Prov.


Net op. income

Trading

Investment banking

Corporate banking1

Hedging of interest /

exchange rates

Equities

53 53

Asset Management and Insurance

High contribution to the Group via revenues and profits: 10% of the operating areas total revenues (+15% / 9M’10)

Total revenues. Group

9M'10 9M'11

756 865

+14%

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

229 269

258 276 288 293 284

+10%

9M'10 9M'11

552 608

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

169 196 187 186

202 216 190

+1% +10%

Basic revenues

Net operating income 9M'10 9M'11

2,965

3,403

Insurance Asset Management

9M'10 9M'11

959 958

9M'10 9M'11

2,006 2,445

+22%

+15%

0%

EUR million

EUR million

EUR million

54 54

Main units spreads and NPL ratios

55 55

2.10 1.94 1.83 1.83 1.90 1.97 2.03

0.50 0.10 0.04 0.06 0.05

0.56 0.65

2.60 2.04 1.87 1.89 1.95

2.53 2.68

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

Loans Deposits Total

2.02

2.00 1.92 1.99 2.03

2.08 2.12

0.18 -0.35 -0.51 -0.52 -0.36

0.12 0.42

2.20

1.65 1.41 1.47 1.67

2.20 2.54

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3


1.76 1.82 1.82 1.88 1.96

2.06 2.15

0.09 0.10 0.21 0.23 0.12 -0.31 -0.47

1.85 1.92 2.03 2.11 2.08

1.75 1.68

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3


5.90 6.19 6.72 6.94 6.69 5.99 5.98

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3

Loans

Continental Europe. Main units spreads (%)

SAN Branch Network Banesto Retail Banking

Santander Consumer Lending Portugal Retail Banking

56 56

Banco Santander (*)

3.61% 3.65% 3.79% 4.24% 4.68% 5.08% 5.63%

66% 61% 61% 54% 49% 44% 39%

Mar'10 Jun Sep Dec Mar'11 Jun Sep

NPLs Coverage

Banesto

Santander Consumer

Portugal

2.32% 2.40% 2.43% 2.90% 3.03% 3.25% 3.78%

64% 65% 69% 60% 62% 62%

53%


NPLs Coverage

5.12% 5.23% 5.13% 4.95% 4.63% 4.42% 4.29%

108% 111% 122% 128% 122% 128% 132%


NPLs Coverage

3.13% 3.49% 3.83% 4.11% 4.31% 4.54% 4.69%

61% 58% 60% 54% 52% 52% 53%


NPLs Coverage

Continental Europe. NPLs and coverage ratios

(*) Santander Branch Network NPL ratio was 7.70% and coverage 41% as of September 2011

57 57

Spreads Retail Banking

2.05 2.13 2.20 2.28 2.34 2.35 2.42

-0.06 -0.14 -0.17 -0.25 -0.30 -0.38 -0.45

1.99 1.99 2.03 2.03 2.04 1.97 1.96

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3


NPL and coverage

1.88% 1.85% 1.77% 1.76% 1.75% 1.82% 1.88%

46% 46% 48% 46% 45% 41% 40%


NPLs Coverage

United Kingdom. Spreads and NPL ratios (%)

58 58

15.26 15.29 14.73 14.29 14.72 15.05 14.23

0.87 0.94 1.08 1.13 1.12 1.12 1.18

16.13 16.23 15.81 15.42 15.84 16.17 15.41

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3


10.03 9.50 9.20 8.93 8.58 8.40 8.27

2.05 1.92 2.03 2.05 2.09 2.04 1.99

12.08 11.42 11.23 10.98 10.67 10.44 10.26

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3


5.24 5.03 4.76 4.52 4.38 4.14 4.18

2.25 2.30 2.27 2.17 3.09 2.90 2.65

7.49 7.33 7.03 6.69 7.47 7.04 6.83

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3


Spreads main countries Latin America (%)

Retail Banking Brazil Retail Banking Mexico

Retail Banking Chile

59 59

(*) On a like-for-like basis, excluding the acquired GE portfolio. Including it, NPL ratio: June 2.45%, September 1.78%. Coverage ratio: June 165%, September 176%

Brazil

5.04% 5.01% 4.97% 4.91% 4.85% 5.05% 5.05%

100% 98% 98% 101% 104% 102% 100%


NPLs Coverage

Mexico

Chile

1.86% 1.77% 2.20%

1.84% 1.58% 1.63% 1.45%

268% 257%

199% 215% 234% 222% 217%

Mar'10 Jun Sep Dec Mar'11 Jun* Sep*

NPLs Coverage

3.36% 3.31% 3.58% 3.74% 3.80% 3.65% 3.63%

99% 97% 94% 89% 89% 89% 88%


NPLs Coverage

Latin America. NPLs and coverage ratios

60 60

1.94 1.96 2.04 2.08 2.16 2.24 2.22

0.94 0.99 0.62 0.53

0.78 0.66 0.40

2.88 2.95 2.66 2.61

2.94 2.90 2.62

Q1'10 Q2 Q3 Q4 Q1'11 Q2 Q3


5.14% 5.11% 4.80% 4.61% 4.15% 3.76% 3.22%

64% 67% 72% 75% 82% 85%

93%


NPLs Coverage

Sovereign. Spreads and NPL and coverage ratios (%)

Spreads Retail Banking NPLs and coverage

results presentation 3q 2011 santander bank

Economy & Finance