Press Release Chairman’s speech at the 2012 results presentation Botín: “We’re confident the cyc...
- Dividend: Banco Santander is going to continue to pay its 3.3 million shareholders EUR 0.60 per share a...
He noted the successful placement of 24.9% of Santander México and the merger ofSantander’s Polish subsidiary with Kredyt ...
Botín stressed Santander’s commitment to Spain and the initiatives it had taken, such as themortgage moratorium launched i...
He underlined the “enormous progress” made so far by the private sector. “On one hand, thecost adjustments and increase in...
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Press Release Emilio Botin’s speech

Press Realease Emilio Botin’s speech
Published on: Mar 4, 2016
Source: www.slideshare.net


Transcripts - Press Release Emilio Botin’s speech

  • 1. Press Release Chairman’s speech at the 2012 results presentation Botín: “We’re confident the cycle is about to change” “Profit before provisions in 2012 was EUR 23.559 billion, ranking Santander third in the world and showing the Groups ability to generate profits once provisions and write-downs return to normal.” “We allocated provisions of EUR 6.140 billion to cover exposure to real estate assets, exceeding the requirements of the two Spanish government royal decrees.” “The timetable for financial reform is clear, the plans are the right ones and I am fully confident that, in a few quarters, we will have a well-balanced financial system that is more solvent, more efficient and the most solid in Europe.” “All countries have to meet the main challenge that Europe faces: growth.” “Banco Santander has the right strategy to create value for its shareholders, customers and employees.”Madrid, January 31, 2013 - Banco Santander Chairman Emilio Botín said the bank madeattributable net profit of EUR 2.205 billion in 2012, 59% less than the previous year. “Theseprofits were significantly affected by the extraordinarily high special provisions and write-downs carried out in Spain. These amounted to EUR 6.140 billion and were only partiallyoffset by EUR 1.241 billion of extraordinary gains.”Botín said, during the presentation of the bank’s 2012 earnings, that the results were “verypositive” and cited four reasons to be optimistic about the immediate future. - Pre-provision profit was EUR 23.559 billion, which makes Banco Santander “third in the world and shows the Groups ability to generate profits once provisions and write-downs return to normal”, he said. - The bank strengthened its balance sheet in three key areas: provisions, increased capital and liquidity. - Santander set in motion three major transactions that strengthened its position in three main markets: The integration of Banesto and Banif into Banco Santander in Spain, the IPO of the Mexican subsidiary and the merger between Santander’s bank in Poland and Kredyt Bank.Comunicación Externa.Ciudad Grupo Santander Edificio Arrecife Pl. 228660 Boadilla del Monte (Madrid) Telf.: 34 91 289 52 11 1comunicacionbancosantander@gruposantander.com
  • 2. - Dividend: Banco Santander is going to continue to pay its 3.3 million shareholders EUR 0.60 per share against 2012 results. Subject to shareholder approvaI, the board of directors proposed a new Santander Dividendo Elección (scrip dividend) program, of EUR 0.146 per share from May 1, the usual complementary dividend date. Santander’s shares rose 3.9% in 2012, compared with a decrease in the Ibex index. The total return for Banco Santander shareholders was 17.3%. Santander’s shares rose 3.9% in 2012, compared to a decrease in the Ibex index. “The market is recognising our provisions and values our ability to generate recurring profits. We are the top bank in the eurozone by market capitalisation. I am convinced that the market will continue to recognize how well the bank is run.”Botín highlighted five basic principles that the Group has followed over the years: strength inthe balance sheet and liquidity, diversification and the subsidiaries model, the commercialbanking model, prudent risk management and cost efficiency.Balance sheet strength and liquidity“Provisions, capital and liquidity management were the Group’s priorities in 2012. BancoSantander maintained its solid core capital, which increased from 10.02% at the close of 2011to 10.33% under Basel II criteria. Our goal is always to keep core capital considerably inexcess of regulatory requirements,” Botín said. He noted that in 2012 the bank set asideprovisions of EUR 18.800 billion, 54% more than the previous year, and improved coverage ofnon-performing loans by 11 points to 73%.Botín highlighted the progress made in Spain. “We allocated EUR 6.140 billion in provisionsto cover exposure to problem real estate assets. This amount exceeded the requirements ofthe two Spanish government royal decrees. We have reduced real estate exposure in Spain,net of provisions, by EUR 12.400 billion, from EUR 24.900 billion to EUR 12.500 billion. Thisadjustment substantially strengthened the balance sheet and was achieved through the saleof 33,500 bank-owned properties, development projects and loan portfolios. Exposure toreal estate in Spain, net of provisions, represented 1.7% of the Group’s loan portfolio atthe end of the year.”He mentioned the improvement in liquidity in 2012, when the Groups loan-to-deposit ratio fellfrom 117% to 113%, driven by growth in deposits. He announced that Santander returnedEUR 24.000 billion of the funds it drew from the ECB’s liquidity operations. We had the fundsdeposited at the European Central Bank, where they provided liquidity insurance.” He pointedout Santander issued EUR 31.000 billion of debt in wholesale markets. “We have also takenadvantage of windows of opportunity in Spain by issuing another EUR 9.000 billion, and wehave a comfortable maturity structure.”Diversification and the model of subsidiariesBotín also stressed the importance of the bank’s geographic distribution, with a commercialbanking model with critical mass in its ten core markets and a balanced distribution of profits:45% in mature markets and 55% in emerging markets. He explained that the bank’sinternational structure is based on a model of subsidiaries that are autonomous in capital andliquidity, some of them publicly listed. “Our goal is for all our major subsidiaries to be listed intheir home markets,” he added.Comunicación Externa.Ciudad Grupo Santander Edificio Arrecife Pl. 228660 Boadilla del Monte (Madrid) Telf.: 34 91 289 52 11 2comunicacionbancosantander@gruposantander.com
  • 3. He noted the successful placement of 24.9% of Santander México and the merger ofSantander’s Polish subsidiary with Kredyt Bank, which will create value for shareholders fromthe first year. “Today, we are the third-largest bank in Poland by deposits, loans and numberof branches. We have more than 3.5 million customers,” he said.Brazil contributes the most to Group results (EUR 2.212 billion, or 26% of the total). Brazilhas a sound, efficient financial system and strong institutions that for years havedemonstrated a commitment to the countrys economic and social stability. “I am surethe government will continue to make reforms to consolidate this progress. I have fullconfidence in Brazil. It is and will continue to be the benchmark for Latin America and it looksset to become one of the worlds leading economies.”The UK registered profit of EUR 1.175 billion, accounting for 13% of the Group’s total, hesaid, adding that business has continued to be affected by the difficult economic andregulatory environment. “Santander UK is the country’s most profitable retail bank and isbecoming a leader in the British market.” He highlighted its market share of 13% inmortgages, 9.2% in deposits and 32% in remunerated current accounts and its strong growthin the corporate segment. “In 2013, when the economic outlook for the United Kingdom isbetter, our models competitive advantages will become apparent.”In Mexico, Santander is the number three bank and had a “magnificent” year, Botín said,producing profit of EUR 1.015 billion, or 12% of the total. “We continue to invest in businessprojects in Mexico and are going to open 200 branches in the next two years.”In Spain, although the economic situation was very difficult, he said: “Banco Santander had avery good year, sticking to the priorities that we had set out.” The Santander Group madeprofit before provisions of EUR 5.016 billion and attributable profit of EUR 1.290 billion, or15% of the total. “Deposits increased by EUR 22.000 billion and our market share grew by 2.2points. These data reflect the confidence that Banco Santander generates.”He also noted that, for the first time since the crisis began, the volume of propertiesadjudicated or acquired in lieu of payment decreased, falling by 8%, and that the non-performing loan ratio remained well below the average for the sector.Botin gave a detailed explanation of the merger of Santander with Banesto and Banif and saidthat, before the end of 2013, the Groups retail networks in Spain will be completely unifiedunder the Santander brand. He said the deal would be very positive for customers, employeesand shareholders.“I am confident that the merger will strengthen our retail, corporate and private bankingbusinesses and will consolidate our leading position in Spain. Our goal is to gain market sharein loans and deposits. The strategy of having two branch networks in Spain and a separatehigh-income private banking network made sense in the past, in a different economic setting.Now, with the sectors deep restructuring resulting in fewer, larger banks, it makesmuch more sense to operate with a sole brand as we are going to be able to competebetter.”Comunicación Externa.Ciudad Grupo Santander Edificio Arrecife Pl. 228660 Boadilla del Monte (Madrid) Telf.: 34 91 289 52 11 3comunicacionbancosantander@gruposantander.com
  • 4. Botín stressed Santander’s commitment to Spain and the initiatives it had taken, such as themortgage moratorium launched in the summer of 2011, which has benefited 21,000customers. “Eviction is the last and worst option for everyone, for our customers and also forthe bank,” he said. He mentioned other initiatives to support the Spanish financial systemsstability, the economy and society, such as becoming a shareholder in SAREB, the paymentplan for suppliers of autonomous communities and local institutions, the bank’s participation inthe Social Housing Fund and the 5,000 grants to fund internships for students in SMEs in2013.Outlook for 2013The Banco Santander Chairman focused the final part of his speech on the outlook for 2013,“a year that has begun very positively in financial markets.” He added: “Very importantprogress has been achieved in the economic and political arenas. The foundations arebeing laid for a stronger and more integrated Europe and a more solid and competitiveSpain. I believe that we are entering a new phase and the recovery will be more visiblein 2014.”In his opinion, the expectations generated after the European Council of June, 2012, will befulfilled by the end of this year. He recalled that the single eurozone supervisory mechanism,led by the European Central Bank, will begin to operate in March, 2014 and that during 2013progress will be made in preparing the bases for a banking union: a eurozone-wide resolutionmechanism and the deposit common guaranty fund. “This is important because it lays thefoundation for a truly European financial system with common regulations, it breaks the tiebetween sovereign risk and bank risk, and it reinforces the monetary unions institutionalstructure. In short, banking union will be a decisive advance for the European economy, for itsfinancial system, for access to corporate and household financing and for Spanish financialinstitutions, which will be favoured by alignment in rules on competition, better credit ratingsand access to the capital markets.”Botín spoke favorably of the Bank of Spain’s record on supervision. “After many years, ourexperience at Banco Santander is that an intrusive supervisory system, with a large numberof inspectors who are permanently at our bank, has proved to be very effective and useful.”He also praised “the crucial and determining role in managing the crisis” played by theEuropean Central Bank and its Governor, Mario Draghi, firstly through the three-year liquidityinjections and more recently with the commitment to intervene without limits to help a countryseeking European Union financial support.On Spain, Botín spoke highly of the advances made in correcting imbalances and the reformsundertaken by the government. “Labour reform has been deep and provides more flexibility tocompanies and the economy as a whole; the public deficit has been reduced a great deal onthe structural side and the institutional framework is much more demanding, with betterincentives for discipline in medium-term public accounts. Also, banks have entered the finalphase of restructuring. They have faced with decisiveness the problems linked to real estateexposure, associated with the systems overcapacity and fragmentation, generated byinsufficient transparency and poor corporate governance in part of the financial system, aswell as financing problems. The timetable for reform is clear, the plans are the right onesand I am fully confident that, in a few quarters, we will have a well-balanced financialsystem that is more solvent, more efficient and the most solid in Europe.Comunicación Externa.Ciudad Grupo Santander Edificio Arrecife Pl. 228660 Boadilla del Monte (Madrid) Telf.: 34 91 289 52 11 4comunicacionbancosantander@gruposantander.com
  • 5. He underlined the “enormous progress” made so far by the private sector. “On one hand, thecost adjustments and increase in productivity of Spanish companies during the last four yearsare unmatched in Europe. On the other hand, the improvement of external accounts, thatreflect the large advance in our competitiveness and the search for new markets. The growthof exports is the best proof this process is working. There is much to do, but we have acorporate fabric and human capital that are capable of shifting our economy into a new phaseof expansion.”“The conviction that the euro will not break up, together with the reforms and the privatesectors effort in Spain, are translating into a clear improvement in the perception of thecountry abroad. The performance of the markets during these first weeks of the year confirmsit: the risk premium continues to decrease. Foreigners are once again investing in Spain: theyare purchasing debt, money is entering the stock exchange and they are also investing incompanies and properties.”“This positive development should not make us lower our guard. Economic recovery requiresa continued effort from all of us. We have to continue with reforms and focus on the publicdebt. The financial system should complete its restructuring, keep an eye on liquidity andimprove profitability. Obviously, from now on all European countries have to meet themain challenge we are facing: growth.”Botín concluded that “Banco Santander is in a solid position to face the coming years and isconfident that it has the right strategy to continue creating value for its shareholders,customers, employees and society at large in all countries where it is present. We areoptimistic about the future because, although 2013 will be tough for Spain, we areconfident that we are approaching a change of cycle. We are confident that we will seea change for the better.”Comunicación Externa.Ciudad Grupo Santander Edificio Arrecife Pl. 228660 Boadilla del Monte (Madrid) Telf.: 34 91 289 52 11 5comunicacionbancosantander@gruposantander.com

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