Institutional Presentation - 2nd QUARTER OF 2020 - Santander
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Institutional Presentation 2nd QUARTER OF 2020
DISCLAIMER
This presentation may contain certain forward-looking statements and In addition to factors identified elsewhere in this presentation, the
information pertaining to Banco Santander (Brasil) S.A. (“Santander following factors, among others, may cause actual results to differ
Brasil”) and its subsidiaries, which reflect the current views and / or materially from the forward-looking statements or historical
expectations of Santander Brasil and its management regarding its performance: changes in the preferences and financial condition of
business performance and future events. our consumers and competitive conditions in the markets in which
Forward-looking statements include, without limitation, any statement we operate, changes in economic, political and business conditions
that may predict, forecast, indicate or imply future results, performance in Brazil; government interventions, resulting in changes in the
or achievements, and may contain words such as “believe”, “anticipate”, Brazilian economy, taxes, tariffs or regulatory environment; our
“expect”, “estimate”, “could”, “forecast”, “potential”, “will likely result”, or ability to compete successfully; changes in our business; our ability
other words or expressions of similar meaning. to successfully implement marketing strategies; our identification of
business opportunities; our ability to develop and introduce new
Such statements are subject to several risks, uncertainties and products and services; changes in the cost of our products and
assumptions. We caution that a number of important factors may cause operating costs; our level of indebtedness and other financial
actual results to differ substantially from the plans, objectives, obligations; our ability to attract new customers; inflation in Brazil;
expectations, estimates and intentions expressed herein. the devaluation of the Brazilian Real against the U.S. Dollar and
We do not undertake any obligation to update or revise any forward- interest rate fluctuations; current or future changes in laws and
looking statements, whether as a result of new information, future events regulations; and our ability to maintain existing business
or otherwise. In no event shall Santander Brasil, or any of its subsidiaries, relationships and create new relationships.
affiliates, shareholders, directors, officers, employees or agents be liable
to any third party (including investors) for any investment or business
decision or action taken in reliance on the information and statements
contained in this presentation or for any consequential, special or similar
damages.
1 INDUSTRY OVERVIEW: MACROECONOMY AND FINANCIAL SYSTEM 2 SANTANDER BRASIL PROFILE 3 CORPORATE STRATEGY 4 OUR BUSINESSES 5 FINANCIAL HIGHLIGHTS 6 APPENDICES
KEY ASPECTS OF THE BRAZILIAN
MARKET
2015 2Q201
ECONOMIC ACTIVITY PERFORMANCE
20
GDP (%) 10
GRADUAL
0.90
ECONOMIC 0 0.56
RECOVERY -8.97
-10
WEIGHED DOWN -3.55 -12.04
BY THE COVID-19 -20
GLOBAL CRISIS
-30
SELIC RATE (%)
14.25
LOWEST LEVEL IN
HISTORY 2.00 Industrial production Retail sales Volume of services
INFLATION (%) SOCIAL INDICATORS
ANCHORED 10.67
EXPECTATIONS
2.31
+210MM 13.3% +110 bps
2Q20 vs. 1Q20
FX (BRL/USD) 2Q20 BRAZILIAN 2Q20
FREE FLOATING 3.90
5.20
POPULATION UNEMPLOYMENT +130 bps
EXCHANGE RATE 2Q20 vs. 2Q19
ESTIMATE RATE
Sources: Brazilian Central Bank and IBGE. ¹ Latest available data
4
CHARACTERISTICS OF THE L AY I N G T H E G R O U N D W O R K F O R
BRAZILIAN MARKET THE ECONOMIC REBOUND
TEMPORARY MEASURES TO COUNTER THE
PRIMARY BALANCE AND GROSS DEBT (% of GDP) ECONOMIC IMPACT OF COVID-19;
4 80
75
TAX REFORM;
2
70
0 65 PUBLIC PENSION REFORM AT THE STATE AND
60 MUNICIPAL LEVEL;
-2
55
-4 50 CREATION OF INCENTIVES TO INCREASE
NATIONAL SAVINGS;
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Primary balance Gross debt
CURB MANDATORY SPENDING;
RESTRUCTURE SOCIAL WELFARE BY REFINING
TOTAL INVESTMENT BRAZIL RISK (CDS 5 THE “BOLSA FAMÍLIA” PROGRAM;
(% of GDP) years, bps)
DECOUPLE AND DE-INDEX PUBLIC SPENDING;
17.8
100
15.7 102 CONTINUED LIQUIDITY IN THE GLOBAL
2006 2019 2006 2019 ECONOMY
Sources: Brazilian Central Bank and Santander
5SOLID N A T I O N A L FINANCIAL SYSTEM
TOTAL LOAN
TOTAL LOAN SHARE
Concentrated JUN-20
56%
5 LARGEST BANKS
R$ 3,625 bi 53%
74% 72% +1.1% QoQ 47%
44%
Loans¹ Deposits¹ Dec-15 Jun-20
BRAZILIAN Public banks Private banks
MARKET
TOTAL FUNDING
PROFILE Solid JUN-20
R$ 8,690 bi
19.2% 19.6% 19.4%
BIS RATIO²: 17.1%, 17.2% 16.0%
ABOVE THE 10.25%
REQUIRED BY THE
+7.8% QoQ
9.5%
371 407 407 414
BRAZILIAN CENTRAL AuM
339 309
BANK (Anbima);
Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Jun-20
53.4%
COVERAGE RATIO³: Deposits4; Reserve Requirement (R$ Billion)
37.5%
239.6% Other5; Reserve Requirement/Total Deposit⁴
9.2%
¹ As disclosed by each institution, as of June 2020. ² Brazilian Central Bank, as of December 2019. ³ Brazilian Central Bank, as of June 2020. 4 Total deposit considers demand, savings and time
deposits. 5 Including debentures, real estate credit notes (LCI), agricultural credit notes (LCA), financial bills, secured real estate notes (LIG) and structured transaction certificates (COE)
6BRAZILIAN FINANCIAL SYSTEM PROFILE
PROVISION FOR LOAN LOSSES RATE – BY SEGMENT | BY INSTITUTION
5%
5%
4%
4%
3.6% 3.1%
3% 3% 2.9%
2.9% 2.6%
2% 2%
2.0%
1% 1%
Dec-16
Dec-17
Dec-18
Dec-19
Sep-16
Sep-17
Sep-18
Sep-19
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Mar-17
Mar-18
Mar-19
Mar-20
Dec-16
Dec-17
Dec-18
Dec-19
Sep-16
Sep-17
Sep-18
Sep-19
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Mar-17
Mar-18
Mar-19
Mar-20
Total Individuals Corporate Total Public Private
CONFIDENCE INDICES HOUSEHOLD DEBT
(points) (%)
46.5
87.5
78.8 27.3
19.2
Feb-17
Feb-18
Feb-19
Feb-20
Oct-16
Oct-17
Oct-18
Oct-19
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Dec-16
Dec-17
Dec-18
Dec-19
Sep-16
Sep-17
Sep-18
Sep-19
Jun-16
Mar-17
Jun-17
Mar-18
Jun-18
Mar-19
Jun-19
Mar-20
Jun-20
Business Confidence Index Consumer Confidence Index Household debt ratio Without mortgage loans Mortgage loans
¹ Sources: Brazilian Central Bank and FGV/IBRE
71 INDUSTRY OVERVIEW: MACROECONOMY AND FINANCIAL SYSTEM 2 SANTANDER BRASIL PROFILE 3 CORPORATE STRATEGY 4 OUR BUSINESSES 5 FINANCIAL HIGHLIGHTS 6 APPENDICES
SANTANDER BRASIL’S C O N S O L I D A T E D
FOOTPRINT IN THE BRA ZILIAN MARKET
PROFITABILITY
CONSOLIDATION COMMERCIAL AMONG THE A NEW WAY OF
OF DIFFERENT INTEGRATION OF NPS
PLATFORMS TRANSFORMATION BEST IN THE DOING BUSINESS
BRANDS INDUSTRY
1970 1997 1998 2000 2007 2009 2014 2016 2017 2018 2019 2020
ACQUISITION ACQUISITION OF INITIAL PUBLIC ACQUISITION OF 51% ACQUISITION ACQUISITION
OF BANCO THE MERIDIONAL OFFERING SUPERDIGITAL OF LOOP OF OLÉ
GERAL DO CONGLOMERATE (IPO) CONSIGNADO
COMÉRCIO
SANTANDER ACQUISITION OF
ACQUISITION BANESPA ACQUISITION 89% ACQUISITION 70% ACQUISITION 100%
GROUP STARTS OF BANCO (PRIVATIZATION) OF BANCO OF GETNET OF RETURN ACQUISITION
OPERATING IN NORDESTE S.A. REAL OF GETNET
BRAZIL¹ ACQUISITION OF
THROUGH A BANCO 100%
REPRESENTATIVE BONSUCESSO ACQUISITION
OFFICE CONSIGNADO OF RETURN
VOLUNTARY
EXCHANGE TENDER
OFFER (“OPA”)
¹ In 1982 opened its first branch
9BANK W I T H STRONG PRESENCE I N
BRAZIL
Jun-20
~ 105BI 88.6% Northeast
13.9% of GDP2
Market Capitalization Loan portfolio/ Funding 9.1% of Santander
from customers branches
• Operating in all Brazilian
2 Agri branches
states
77 Prospera
• 9.85% free float
• 46.3k employees
26.8MM branches
Active customers
Mid-West + North
• 5.7MM loyal
R$ 383BI
14.7% of GDP2
customers (+5%) 7.1% of Santander branches
• 14.5MM digital
26 Agri branches
Loan Portfolio customers (+14%) Southeast
8 Prospera branches
54.9% of GDP2
+ 7.9BI
• R$ 157Bi Individuals 70.1% of Santander
South branches
• R$ 57Bi Consumer Finance
16.4% of GDP2 3 Agri branches
• R$ 47Bi SMEs Socio-environmental 13.7% of Santander branches 12 Prospera branches
• R$ 123Bi Corporate business made viable¹
9 Agri branches
2 Prospera branches
¹ Considers disbursement in renewable energy, sustainable agribusiness, Prospera Santander Microfinance, Project Finance (renewable energy), other socio environmental businesses, student
financing (undergraduate medicine), ESG Linked-Loan; participation in structuring and advisory of Green Bonds/Transition Bonds; and advisory in Project Finance (renewable energy). 2 As of 10
December 2019. Source: 2016 GDP by Geographical Region – IBGEC O R P O R AT E GOVERNANCE
STRUCTURE ABOUT THE BOARD OF DIRECTORS (“BOD”)
FIVE OF THE NINE MEMBERS OF THE BOARD OF DIRECTORS ARE INDEPENDENT
SHAREHOLDERS MEETING
THE POSITIONS OF CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE
OFFICER MAY NOT BE HELD BY THE SAME PERSON
FISCAL
COMMITTEE BALANCE OF KNOWLEDGE AND RELEVANT EXPERIENCE
33% WOMEN ON THE BOARD OF DIRECTORS
BOARD OF
DIRECTORS (BOD)
COMPOSITION OF THE BOARD OF DIRECTORS (“BOD”) AND COMMITTEES
Advisory Committees to the Board
ADVISORY COMMITTEES TO
THE BOARD BOD Nomination and Risks and
Audit Compensation Sustainability
Governance Compliance
# Members 9 3 3 3 4 5
EXECUTIVE COMMITTEE Independent
5 1 2 2 2 1
Directors
• EXECUTIVE COMMITTEE: Non-independent
4 - - - 1 -
COMPOSED OF CEO AND Directors
EXECUTIVE VICE-PRESIDENTS Independent
- 2 1 1 1 1
• EXECUTIVE OFFICERS Members
Non-independent
- - - - - 3
Members
11TECHNOLOGY A N D DIGITAL
TRANSFORMATION S U P P O R T I N G OUR FUTURE
SIMPLIFICATION OF PROCESSES AND TOOLS
BROADER RANGE OF PRODUCTS AND SERVICES
DIGITAL
CHANNELS
+ LAUNCHES
+ FUNCTIONALITIES
+ BUSINESS
86% of total
transactions
ONGOING IMPROVEMENT IN CUSTOMER
SECURE AND EFFICIENT SALES PLATFORMS
SERVICE
BETTER SALES INDICATORS “GENTE” LAUNCH
OUR ARTIFICIAL INTELLIGENCE, AVAILABLE FOR
35% OF BANK SALES TAKE PLACE IN THE OUR CUSTOMERS
DIGITAL ENVIRONMENT
17% OF MOBILE USERS HAVE ALREADY
INTERACTED WITH “GENTE”
ONLINE PURCHASE CARD ACCOUNTS
FOR 36% OF ALL BANK CARD NPS IN MOBILE BANKING AMONG INDIVIDUALS
TRANSACTIONS WHO HAVE USED “GENTE” REACHED 76
POINTS
12S O L I D RISK C U L T U R E
RISKS ARE CALIBRATED IN THE GROUP, ENABLING BUSINESS CONTINUITY AND
G R O U P PREDICTABILITY IN THE FACE OF DIVERSE HISTORY
MANAGEMENT AND CONTROL OF THE ACTUAL LOCAL RISK PROFILE ENSURE
THE MODEL’S ROBUSTNESS
GLOBAL RISK
CONTROL
PLATFORMS
CREDIT
1st 2nd 3rd
MODEL
RISK
MARKET
LINE OF DEFENSE LINE OF DEFENSE LINE OF DEFENSE
RISK RISK
ALL BUSINESS UNITS RISK CONTROL AND INTERNAL
AND SUPPORT AREAS COMPLIANCE AUDIT
REPUTATIONAL
RISK
LIQUIDITY PART OF SANTANDER´S ENSURING THAT THE RISKS REVIEW OF CONTROLS,
GOVERNANCE PROCESSES RISK DAILY BUSINESS ARE MANAGED IN PROCESSES AND
GENERATED, OWNED ACCORDANCE WITH THE MANAGEMENT
STRUCTURAL AND MANAGED BY THE AGREED RISK APPETITE
STRATEGIC
RISK DATA METHODOLOGY RISK BUSINESS
COMPLIANCE
LEGAL
CONDUCT
RISK LOAN 100 LARGEST 24%
CONCENTRATION 50 LARGEST 18%
RISK
MONEY
LAUNDRY OPERATIONAL JUN-20 20 LARGEST 11%
PREVENTION RISK 10 LARGEST 7%
LARGEST DEBTOR 1%
13W E A R E PA R T O F A LARGE GROUP
DIVERSIFIED PRESENCE ACROSS THREE UNDERLYING ATTRIBUTABLE PROFIT DISTRIBUTION ASSIGNED
REGIONS ALLOWS FOR BETTER AND FASTER BY GEOGRAPHIC REGION | 1H20
EXECUTION
SUBSIDIARY MODEL WITH LIQUIDITY AND
CAPITAL AUTONOMY LIMITS THE POSSIBILITY EUR million 1H20
OF CONTAGION BETWEEN GROUP UNITS,
REDUCING SYSTEMIC RISK
North
EUROPE ASSETS 1,572, 881
SPAIN, PORTUGAL, POLAND,
America,
Europe,
UNITED KINGDOM AND 20% CUSTOMERS LOAN 934,796
SANTANDER CONSUMER 35% (NET)
FINANCE TOTAL EQUITY 91,859
South
UNDERLYING 1,908
America, ATTRIBUTABLE PROFIT
NORTH 45% BRANCHES
AMERICA 11,847
U.S. AND
MEXICO EMPLOYEES 194,284
SOUTH AMERICA
BRAZIL, ARGENTINA, BRAZIL CONTRIBUTED TO 32% LOYAL CUSTOMERS
(MILLION) 21.5
CHILE, URUGUAY
OF GROUP’S 1H20 RESULTS
AND ANDEAN
REGION
141 INDUSTRY OVERVIEW: MACROECONOMY AND FINANCIAL SYSTEM 2 SANTANDER BRASIL PROFILE 3 CORPORATE STRATEGY 4 OUR BUSINESSES 5 FINANCIAL HIGHLIGHTS 6 APPENDICES
OUR STRATEGIC PRIORITIES OUR
PEOPLE
OUR
CUSTOMERS
ARE B A S E D O N FOUR PILLARS
OUR OUR
SHAREHOLDERS COMMUNITIES
STRONG CORPORATE PREFERENCE AND RECURRENCE AND BUILDING A SUSTAINABLE
CULTURE | LOYALTY | CAPITAL DISCIPLINE | BUSINESS |
ENGAGED PEOPLE CUSTOMER-FOCUSED CREATING RESPONSIBLE BANKING
SHAREHOLDER VALUE
ABILITY TO ATTRACT, PROVIDE SUITABLE MAINTAIN LIQUIDITY DOING BUSINESS WHILE
DEVELOP AND RETAIN OFFERS TO MEET AND CAPITAL CONTRIBUTING TO THE
TALENTS. ENGAGING CUSTOMERS’ NEEDS, DISCIPLINE TO ECONOMIC AND
OUR PEOPLE TO WHILE DELIVERING A GENERATE SOCIAL PROGRESS OF
PROVIDE A STATE-OF- STATE-OF-THE-ART SUSTAINABLE AND COMMUNITIES
THE-ART CUSTOMER CUSTOMER SERVICE PROFITABLE RESULTS,
SERVICE EXPERIENCE WITH SOLID RISK
MANAGEMENT AND
RIGOROUS COST
CONTROL
OUR PURPOSE IS TO HELP PEOPLE AND BUSINESSES PROSPER
16A CULTURE THAT SUPPORTS OUR
PEOPLE
OUR PEOPLE
NEW WAY OF ADAPTING TO
WORKING PROTOCOLS
13TH SALARY PAID IN APRIL
FINANCIAL
AND PROFIT-SHARING
SUPPORT
PAYMENT ADVANCE
HIGHLIGHT FOR WE ARE ONE OF THE
THE 2ND BEST COMPANIES TO
CONSECUTIVE YEAR
BEST COMPANY IN THE
WORK FOR
ETHNIC-RACIAL
25% 33%
FINANCIAL SECTOR WOMEN IN THE BOARD
WOMAN BLACK EMPLOYEES
ETHNIC-RACIAL OF DIRECTORS
W E VA LUE D I VE R S I T Y
17CUSTOMER-FOCUSED B U S I N E S S
OUR
MODEL CUSTOMERS
SERVICE SPECIALIZATION SIMPLIFYING PROCESSES PIONEERS IN PUBLICLY
AND SERVICES DISCLOSING THE NPS
SPECIALTY STORES
-28% LEAD TIME TO 61 POINTS (+3 POINTS
ORIGINATE MORTGAGE YoY)
LOANS (YoY) ~ 2MM REQUESTS PER
APPROPRIATE OFFERS FOR MONTH INCREASE
CUSTOMER PROFILE 1 CUSTOMER
LEADERS IN SATISFACTION, SATISFACTION
INNOVATION ACCORDING TO IBOPE¹
CONTINUOUS SUSTAINABLE
CUSTOMER JOURNEY EXPANSION OF
BUSINESS SERVICE SATISFACTION 2 OUR
DIGITALIZATION CUSTOMER
IMPROVEMENT BASE
RAPID ADAPTATION TO A IMPLEMENTATION OF NPS MARKET
NEW WAY OF WORKING DISRUPTIVE TECHNOLOGIES SHARE
PART OF THE 3 GROWTH IN
DIGITAL CHANNELS ORGANIZATION’S KPIS STRATEGIC
ONE PAY-FX BLOCKCHAIN PRODUCTS
COMMERCIAL STRATEGY EXECUTIVE EXPERIENCE IN AND SERVICES
PRODUCTIVITY
CULTURE OF BRANCHES REALIGNMENT BUILDING HIGH
CLUSTERS SATISFACTION LEVELS
+18% IN TOTAL LOAN
AGREEMENTS IN THE
QUARTER
¹ As of first half of 2020. Since 2014, IBOPE has carried out Santander’s Benchmark project, whose main objective is to gauge customers’ satisfaction and willingness to recommend
the bank and its direct competitors. The survey is based on a quantitative methodology, with interviews conducted through the “CATI” technique (computer assisted telephone 18
interviewing), using a list provided by IBOPE. Sample: 5,870 interviews/yearC R E AT I N G SHAREHOLDER VALUE OUR
SHAREHOLDERS
SOLID BALANCE SHEET AND OPERATIONAL EXCELLENCE BY
ROBUST ECOSYSTEM AS A VALUE
ASSET QUALITY INDUSTRIALIZING THE VALUE
GENERATION TOOL
CHAIN
• CROSS-SELL PREDICTIVE RISK MODELS THAT
ENABLE FAST ADJUSTMENT TO
ECOSYSTEMS: (i) AUTO
DIFFERENT CIRCUMSTANCES
(ii) PAYMENTS
• LOWER UNIT COST PER SERVICE
• NEW INITIATIVES
• FOCUS ON LOWER RISK
PRODUCTS • DIGITAL TRANSFORMATION
• INDIVIDUALS COLLATERALIZED
LOAN PORTFOLIO+ PAYROLL
LOANS/ INDIVIDUALS LOAN %
• WHOLESALE ENHANCEMENT PORTFOLIO REWORK IN BUSINESS
(i) CAPITAL MARKETS ACCOUNT OPENINGS AT
(ii) ENERGY AND COMMODITIES % +437bps QoQ OUR BRANCHES
DESKS
S U S TA I N A B L E R E S U LT S A N D S O L I D P R O F I TA B I L I T Y
19RESPONSIBLE BANKING A M I D A NEW BUSINESS ENVIRONMENT OUR
COMMUNITIES
GOAL
Committed to TOMORROW ACHIEVEMENT
CONTRIBUTING TO 100%
BUILD A SOCIETY 34% 1st stage:
administrative
27%
WITH INCLUSIVE AND centers
SUSTAINABLE
GROWTH IS PART OF 100% of Elimination of single- 30% of Women
OUR DNA renewable energy use plastic of our in executive
consumption operations by 2020 leadership roles
by 2025 (1st stage: administrative by 20211
centers; 2nd stage: branches)
Others 6%
Renewable energy
R$ 7.9Bi 6% Green 30K 68K R$1.2Bi
Socio- Microfinance
and
Scholarships Participations credit for
environmental 17%
Transition
Bonds granted3 in financial microentrepreneurs
business made 37% education (Prospera Santander
viable in the year2 Project Finance programs Microfinance)
34%
As of June 2020. 1Local Goal. 2Considers disbursement in renewable energy, sustainable agribusiness, Prospera Santander Microfinance, Project Finance (renewable energy), other
socio environmental businesses, student financing (undergraduate medicine), ESG Linked Loan; participation in structuring and advisory of Green/Bonds Transition Bonds; and
advisory in Project Finance (renewable energy). 3Since 2015 20SUSTAINABLE BUSINESS INITIATIVES OUR
COMMUNITIES
1ST CBIOS 1ST ESG-LINKED 1ST GREEN BOND LAUNCH OF THE
DEAL LOAN ISSUANCE “SANTANDER GO”
IN THE TRANSPORTATION FUND
AND LOGISTICS INDUSTRY
PIONEERS IN 1ST LOAN IN THE ESG-FOCUSED FUND IN
LEADERSHIP AS GLOBAL
STRUCTURING THE BRAZILIAN MARKET PARTNERSHIP WITH THE
COORDINATOR AND
ISSUANCE OF WITH INTEREST RATES ASSET MANAGER ROBECO,
DESCARBONIZATION CREDITS
SUSTAINABILITY FOCUSING ON COMPANIES
PEGGED TO ADVISOR FOR THE
(“CBIOs”) – A BIOFUEL- SUSTAINABLE GOALS THAT HAVE SOLID
INDUSTRY FINANCIAL ISSUANCE OF GREEN BONDS SUSTAINABILITY CRITERIA
PRODUCT TRADED ON THE
EXCHANGE
“PLANO AMAZÔNIA “
PLAN TO PROMOTE SUSTAINABLE 10 MEASURES AIMED AT SUSTAINABLE
DEVELOPMENT OF THE AMAZON BY THE THREE DEVELOPMENT OF THE AMAZON
LARGEST PRIVATE BANKS IN THE COUNTRY REGION
211 INDUSTRY OVERVIEW: MACROECONOMY AND FINANCIAL SYSTEM 2 SANTANDER BRASIL PROFILE 3 CORPORATE STRATEGY 4 OUR BUSINESSES 5 FINANCIAL HIGHLIGHTS 6 APPENDICES
SCALABLE A N D D I V E R S I F I E D BUSINESS MODEL
A C R O S S A L L O P E R AT I N G U N I T S
COMMERCIAL BANKING CONSUMER FINANCE WHOLESALE BANKING
“SANTANDER
INDIVIDUALS SMEs CORPORATE SCIB
FINANCIAMENTOS”
B R O A D P O RT F O L I O O F P R O D U C T S A N D S E R V I C E S | S A N TA N D E R E C O S Y S T E M
TOTAL CREDIT PORTFOLIO PRODUCT AND SEGMENT BREAKDOWN (share in total loans)
R$ billion JUN-20
382.9 INDIVIDUALS CONSUMER CORPORATE
317.6 FINANCE
27% CORPORATE
32% Personal Loans Leasing/Vehicles; 2% Others; 9%
Leasing/Vehicles; 2% Agricultural Loans; 4%
12% 12% SMEs
and Others; 22%
Foreign Trade;
Credit Card;
17% 15% CONSUMER 19% Vehicles; 91% 25%
FINANCE Agricultural
loans; 4%
45% 41% INDIVIDUALS Working Onlending; 6%
Payroll Loans;
Mortgage loans; 29% Capital and Mortgage Loans;
24% Others; 62% 1%
Jun-19 Jun-20
23M O R E T H A N 26.8 M M A C T I V E CUSTOMERS
SERVED BY OUR BUSINESS
PRODUCT PORTFOLIO COMPLETE SERVICE
5.7MM INFRASTRUCTURE 3.5MM CALLS
MADE TO THE CALL
Loyal CREDIT AND DEBIT CARDS REMOTE CENTER / MONTH
customers OLÉ CONSIGNADO (PAYROLL LOANS)
CONSUMER FINANCE 7% CHANNEL
+5% YoY
PAYROLL AND SAVINGS SALES
ACCOUNTS
LENDING PRODUCTS PHYSICAL
/// INVESTMENT
DIGITAL
14.5MM “CONSÓRCIO”
CAPITALIZATION 1.3MM CURRENT +40% E-COMMERCE
ACCOUNT HOLDERS SALES YoY²
Digital INSURANCE
AT OUR STORES
customers GETNET AND SUPERDIGITAL DURING PEAK DAY1 35% CHANNEL SALES
+14% YoY CUSTOMIZED PRODUCTS
CAPITAL MARKETS 56% CHANNEL
ADVISORY SALES
As of June 2020. ¹Average number of account holders per hour who enter our stores in Brazil and perform banking transactions through an ATM or Teller. Peak Day: 5th business day.
24
² 1H20 vs. 1H19S E G M E N TAT I O N TA I L O R E D TO T H E R E A L I T Y O F
OUR CUSTOMERS
RELATIONSHIP | SEGMENT-ORIENTED VALUE PROPOSITIONS FOR RELATIONSHIP | SEGMENT-ORIENTED VALUE PROPOSITIONS FOR
INDIVIDUALS BUSINESSES
WHOLESALE
SCIB
Santander | Private Banking (Santander Corporate &
Investments above R$ 5MM Investment Banking)
Corporate
Santander | Select
Monthly income above R$ 10,000¹
or R$ 300,000 in investments
Santander | Van Gogh SMEs Empresas Núcleos
Monthly income from R$ 4,000 Empresas Polo (up to R$ 200MM
to R$ 10,000 or R$ 40,000 in (up to R$ 30MM in in revenue)
investments revenue)
Santander Negócios Agência
Monthly income below R$ 4,000 (up to R$ 3MM in revenue)
Negócios MEI
(up to R$ 81k in revenue)
¹ It includes R$ 30,000 in investments
25WELL POSITIONED TO CAPTURE NEW OPPORTUNITIES
MARKET LOAN FUNDING
SHARE¹ 10.6% 11.1%
WHOLESALE
LEADERSHIP POSITION
VEHICLES
MORTGAGE PAYROLL LOANS SMEs
INDIVIDUALS
5.8% 25.3% 11.4% 9.4% 1ST PROJECT FINANCE³
+11bps YoY +7bps YoY +79bps YoY +101bps YoY
1ST FOREIGN EXCHANGE4
SPEED TO INNOVATE AND REINVENT
AUTO ECOSYSTEM MORTGAGE “USECASA” 2ND DERIVATIVES5
(HOME EQUITY)
+16% VEHICLES ORIGINATION²
JUL-20 MoM 6.99% p.a. 2ND M&A LATAM6
“TROCA + TROCO” CAR DELIVERY
INTEREST RATE
JUN-20 R$ 2.0Bi FINANCIAL ADVISOR
CUSTOMER SELLS THE CUSTOMER PURCHASES LOAN BOOK
CURRENT FINANCED VEHICLE,
FINANCES THE PURCHASE OF
THE VEHICLE AT A
PARTNER STORE, AND IT +46% (JUN-20) 2020: Latam7
A CHEAPER ONE, AND GETS DELIVERED TO JUL-20
POCKETS THE DIFFERENCE HIS/HER HOME ORIGINATION
MoM
¹ Source: Brazilian Central Bank, as of June 2020. It refers to portfolio book. ² It includes Individuals and Corporate. ³ According to Dealogic as Global Financial Advisor for deals announced
in Brazil and in the international market, and according to ANBIMA as Financing Advisor for transaction amounts and number of deals. 4 Brazilian Central Bank, as of 5M20. 5 B3, as of 26
5M20. 6 Deal announced. 7 LatinFinanceGETNET AS A
BUSINESS
P L AT F O R M 18% YoY 22% YoY 13% YoY
W I T H I N T E G R AT E D TURNOVER PRE-PAYMENT ACTIVE BASE
SOLUTIONS FOR
OUR CUSTOMERS
E-COMMERCE Marketplace
Solution
Digital Platform for Checkout
SMEs
PRICING Antifraud
TECHNOLOGY Consulting
BANKING Safe
ADDED VALUE Conciliation
LOWER COST PER Recurrence
TRANSACTION Bank Slip
Debit/Credit
ONLINE STORE
PHYSICAL 1.6MM POS DEVICES QR CODE FOR EMERGENCY AID
+45% YoY ADDITIONAL POS DEVICES FOR
DELIVERY SALES
AMBITION TO ACHIEVE A TURNOVER MARKET SHARE OF UP TO 15% IN 2020
27LEVERAGING O U R E C O S Y S T E M THROUGH
NEW BUSINESSES
CORPORATE BENEFITS
CREDIT PLATFORM WITH DEBT RENEGOTIATION AUTO INSURANCE
MARKETPLACE OFFERING
CUSTOMIZED OFFERS PLATFORM
VOUCHERS AND
FOR INDIVIDUALS
FORGING PARTNERSHIPS
LAUNCH: 2019 LAUNCH: 2019 LAUNCH: 2019 LAUNCH: 2020
CUSTOMERS: +2MM CUSTOMERS: 2MM PARTNER CONSUMER FINANCE
ESTABLISHMENTS: 300K PENETRATION: 15.3%
LOAN PORTFOLIO RENEGOTIATIONS
VOLUME: R$ 400MM VOLUME: R$ 187MM CARDS ISSUED: 140k
FULLY DIGITAL BUSINESSES | BREAKEVEN IN 2020
As of June 2020
281 INDUSTRY OVERVIEW: MACROECONOMY AND FINANCIAL SYSTEM 2 SANTANDER BRASIL PROFILE 3 CORPORATE STRATEGY 4 OUR BUSINESSES 5 OUR HIGHLIGHTS 6 APPENDICES
2Q20 RESULTS
HIGHLIGHTS
RESULT
(R$ million) 6M20 6M19 % 12M 2Q20 1Q20 % 3M
Net Interest Income 26,275 23,300 12.8% 13,620 12,655 7.6%
Fees 8,584 9,152 -6.2% 4,102 4,482 -8.5%
Total Revenues 34,859 32,451 7.4% 17,722 17,138 3.4%
Allowance for Loan Losses -6,758 -5,964 13.3% -3,334 -3,424 -2.6%
General Expenses -10,483 -10,303 1.7% -5,191 -5,293 -1.9%
Others -5,997 -5,838 2.7% -3,142 -2,856 10.0%
Profit Before Taxes 11,621 10,346 12.3% 6,055 5,566 8.8%
Taxes and Minority Interest -3,872 -3,226 20.0% -2,159 -1,713 26.1%
Net Income w/o extraordinary provision 7,749 7,120 8.8% 3,896 3,853 1.1%
Extraordinary Allowance for Loan Losses -3,200 - - -3,200 - -
Taxes 1,440 - - 1,440 - -
Net Income 5,989 7,120 -15.9% 2,136 3,853 -44.6%
302Q20 RESULTS
NII
GROWING IN CUSTOMERS AND MARKET ACTIVITIES
HIGHLIGHTS
NET INTEREST INCOME (R$ million)
13% (R$ million) 6M20 % 12M % 3M
13%
8%
26,275
Customers 21,862 3.1% 1.8%
13,620 23,300
12,655 4,413
MARKET 12,015 2,104 Product NII 20,909 5.4% 4.4%
2,591
NII 1,147 1,823
Volume 377,755 20.4% 7.8%
21,196 21,862 Spread 11.1% -1.7 p.p -0.4 p.p
11,029
CUSTOMERS
10,868 Working Capital 953 -29.5% -41.7%
NII 10,833
Market activities 4,413 109.8% 42.1%
Net Interest Income 26,275 12.8% 7.6%
2Q19 1Q20 2Q20 1H19 1H20
312Q20 RESULTS
PORTFOLIO
HIGHLIGHTED BY CORPORATE AND SME LOANS
HIGHLIGHTS
(R$ million) Jun/20 % 12M % 3M
CREDIT PORTFOLIO (R$ billion) Individuals 157,002 11.0% -0.2%
Consumer finance 56,732 6.7% -4.1%
21% SMEs 46,556 27.3% 5.6%
1%
Corporate 122,587 41.8% 3.9%
317.6 378.5 382.9
Total 382,877 20.5% 1.2%
11.5% 11.7% 12.2%
Other transactions1 83,872 9.6% -1.2%
27.2% 31.2% 32.0% Expanded portfolio 466,749 18.4% 0.7%
16.7% 15.6% DESTINATION OF
14.8%
GOVERNMENT PROGRAMS
FOR SMEs
Bi
44.5% 41.6% 41.0%
INDIVIDUALS COLLATERALIZED LOAN PORTFOLIO+
PAYROLL LOANS/ INDIVIDUALS LOAN PORTFOLIO
Jun/19 Mar/20 Jun/20
Individuals Consumer finance % +636bps
YoY
+437bps
QoQ
Corporate SMEs
¹ Includes debentures, FIDC, CRI, international distribution promissory notes, promissory notes, acquiring activity-related assets, as well as sureties and guarantees
32ADDRESSING THE NEEDS OF OUR CUSTOMERS
13%
ACCOUNTS FOR
OF OUR TOTAL LOAN
PORTFOLIO
LOAN PAYMENT
DEFERRAL DEFERRAL PORTFOLIO PROFILE
1%
R$ 49.8
23% 42%
52% 57%
COLLATERALIZED
PORTFOLIO
77% Individuals Mortgage
Corporate & SMEs Consumer Finance/Vehicles
Others
83%
OF CUSTOMERS WHO HAVE
91%
JOINED THE PROGRAM EXTENDED RATED AA-C
THEIR LOANS BY ONLY 60 DAYS
332Q20 RESULTS
FUNDING
HIGHLIGHTS
STRONG INVESTMENT MOVEMENT
FUNDING FROM CUSTOMERS (R$ billion)
(R$ million) Jun/20 % 12M % 3M
Demand deposits 39,497 92.5% 16.1%
23% 12%
Savings deposits 55,756 19.7% 11.1%
432.3
Time deposits 256,866 30.2% 19.6%
385.4
351.5 Financial Bills 22,443 -33.2% -20.7%
Others¹ 57,734 7.9% -0.7%
Funding from customers 432,294 23.0% 12.2%
- Reserve requirement -57,132 -23.7% 18.6%
Others 90,184 17.0% -1.5%
Total Funding - balance 465,347 31.6% 8.5%
Assets under management
363,862 15.5% 4.7%
(AuM)
Total Funding + AuM 829,209 24.0% 6.8%
Jun/19 Mar/20 Jun/20
1 Including debentures, real estate credit notes (LCI), agricultural credit notes (LCA), secured real estate notes (LIG) and structured transaction certificates (COE)
342Q20 RESULTS
FEES
HIGHLIGHTS
IMPACTED BY TRANSACTIONALITY IN THE PERIOD
FEES (R$ million) (R$ million) 6M20 % 12M % 3M
Cards 2,632 -16.5% -12.1%
-11% -8% -6% Current account 1,886 1.4% -0.2%
9,152 Insurance 1,464 -3.3% -4.6%
8,584
4,623
4,482 Asset management 478 -7.4% -10.0%
4,102
Lending operations 670 0.7% -15.5%
Collection services 718 -4.6% -8.7%
Securities brokerage and
477 0.0% -15.8%
placement
Others 258 20.8% -14.5%
Total 8,584 -6.2% -8.5%
2Q19 1Q20 2Q20 1H19 1H20
352Q20 RESULTS
LOAN PORTFOLIO QUALITY
CONTINUOUS FINE-TUNING OF OUR RISK MODELS
HIGHLIGHTS
NPL INDICATORS COVERAGE RATIO
FROM 15 TO 90 DAYS OVER 90 DAYS OVER 90 DAYS
272%
6.0% 4.1% 4.0% 4.0% 191% 194%
5.8% 5.7% 3.9%
5.2% 3.5%
4.2% 4.2% 3.0% 3.0% 2.9% 3.0%
4.1% 3.9% 4.1%
2.4%
2.7%
1.9% 1.7% 1.9% 1.6% 1.1% 1.8% 1.5% 1.6%
1.3% 1.2%
Jun/19 Sep/19 Dec/19 Mar/20 Jun/20 Jun/19 Sep/19 Dec/19 Mar/20 Jun/20
Jun/19 Mar/20 Jun/20
Individuals Total Corporate & SMEs
362Q20 RESULTS
LOAN PORTFOLIO QUALITY
HIGHLIGHTS
INDICATORS UNDER CONTROL TO FACE THE PRESENT SCENARIO
ALLOWANCE FOR LOAN LOSSES (R$ million) | COST OF CREDIT
6.0%
3.4% 3.2% 3.1% 3.3% 4.7%
3.2%
9,958
6,534
3,200
3,200 5,964
3,092 3,424
7,981
4,045 6,999
3,682 3,936
(590) (513) (711) (1,036) (1,223)
2Q19 1Q20 2Q20 1H19 1H20
Provisions for loan losses Recovery of written-off loans Cost of credit Cost of credit w/o extraordinary provision
372Q20 RESULTS
DILIGENT COST MANAGEMENT
HIGHLIGHTS
LEADS TO THE BEST EFFICIENCY RATIO IN OUR HISTORY
ADMINISTRATIVES AND PERSONNEL EXPENSES
COMPOSITION (R$ million)
GENERAL EXPENSES (R$ million)
-3% 1%
9,130 9,207
0% 2% 4,667 4,540
-2% 4,585
4,663
10,303 10,483 2,353 2,232
5,201 5,293 5,191 4,467 4,621
1,277 2,314 2,308
594 626 1,174
651
1Q20 2Q20 1H19 1H20
Personnel Expenses Administratives Expenses
EFFICIENCY RATIO EVOLUTION
4,607 4,667 4,540 9,130 9,207
38.1%
37.2%
35.7%
2Q19 1Q20 2Q20 1H19 1H20 2Q19 1Q20 2Q20
Depreciation and amortization
38
Administratives and Personnel Expenses2Q20 RESULTS
HIGHLIGHTS
BALANCE SHEET
STRENGTH
LOAN PORTFOLIO/ FUNDING FROM CUSTOMERS BIS RATIO
98.2% 16.2%
90.4%
88.6%
14.4%
13.8%
14.0%
11.9%
11.4%
Jun/19 Mar/20 Jun/20 Jun/19 Mar/20 Jun/20
BIS ratio CET1
392Q20 RESULTS
HIGHLIGHTS
INDICATORS
EFFICIENCY RATIO RECURRENCE RATIO
38.1% 88.9%
37.2% 84.7%
79.0%
35.7%
-2.4 pp -9.9 pp
YoY YoY
2Q19 1Q20 2Q20 2Q19 1Q20 2Q20
ROAA ROAE
1.8% 21.3% 22.3% 21.9%
1.7% 1.6%
-0.9 pp -9.3 pp
YoY YoY
0.9% 12.0%
2Q19 1Q20 2Q20 2Q19 1Q20 2Q20
w/o extraordinary provision 401 INDUSTRY OVERVIEW: MACROECONOMY AND FINANCIAL SYSTEM 2 SANTANDER BRASIL PROFILE 3 CORPORATE STRATEGY 4 OUR BUSINESSES 5 FINANCIAL HIGHLIGHTS 6 APPENDICES
MORTGAGES CARDS GETNET
LOAN TO VALUE TURNOVER TURNOVER
R$ billion R$ billion 12.5%
11.3% 11.5%
10.8%
62% 63% 63% 63% 68% 66.6
57.3 58.4 57.4 61.1 59.2
51.9 52.5
22.3 47.3 46.9
17.5 18.3 19.2 24.6 22.5
49% 49% 49% 50% 51% 19.9 18.4
15.6 17.9
39.7 40.1 44.3 32.0 36.5 36.7 34.1
38.2 29.0
Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 31.7
Origination (quartely average) 2Q19 3Q19 4Q19 1Q20 2Q20
Loan Portfolio 2Q19 3Q19 4Q19 1Q20 2Q20 Debit Credit
Debit Credit Market Share in Turnover¹
ORIGINATION BY DISTRIBUTION TRANSACTIONS TRANSACTIONS
CHANNEL million million
8% 681.2 700.8 708.4 730.0
13% 12% 14% 12% 683.4
12% 617.4 632.7
14% 17% 20% 541.1 570.4 538.4
20% 28%
13% 11% 8% 319.3 323.5 322.7 418.2
10% 292.1 353.7 375.4
266.7 322.8 289.1
60% 60% 61% 58% 51% 361.9 377.3 385.7 325.3 311.8 308.0
274.4 247.6 279.0 249.4
2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20
2Q19 3Q19 4Q19 1Q20 2Q20
Digital Brokers Transfers to Homebuilders Branches Debit Credit Debit Credit
¹ Source: ABECS – Monitor Bandeiras 42RESERVE REQUIREMENT
Type of Deposits Rate Remuneration
Allocation
Before 2008 During
Current
Mandatory Allocation (maximum rates)
Financial Crisis the Crisis
Demand Deposit
Reserve Requirement 45% 42% 21% Cash deposit in Bacen -
Reserve Requirement - Additional 8% 5% 0% - -
Rural Loan 25% 30% 27.5% Allocate 27.5% for Rural Loan 8% p.a.
Microcredit 2% 2% 2% Allocate 2% for microcredit 4% p.m.
Free Funding 20% 21% 49.5%
Savings Deposit
Real Estate Financing 65% 65% 65% Allocate 65% for real estate financing TR +12%¹ p.a.
Reserve Requirement 20% 20% 20% Cash deposit in Bacen TR + 6.17% p.a. or 70%² of Selic
Reserve Requirement - Additional 10% 10% - Mandatory allocation was extinguished -
Free Funding 5% 5% 15%
Time Deposit
Reserve Requirement 15% 14% 17% Cash deposit in Bacen Selic
Reserve Requirement – Additional 8% 4% - Mandatory allocation was extinguished -
Free Funding 77% 82% 83%
1Referring to the maximum effective cost regulated in Severance Indemnity Fund for Employees (FGTS) operations. 2 If the Selic rate target is equal or less than 8.5%, remuneration will be 43
TR (Brazilian Reference Rate) +70% of the current Selic RateInvestor Relations (Brazil) Av. Presidente Juscelino Kubitschek, 2,235, 26th floor São Paulo | SP | Brasil | 04543-011 Phone: 55 11 3553 3300 E-mails: ri@santander.com.br acionistas@santander.com.br Our purpose is to help people and businesses prosper Our culture is based on the belief that everything we do should be: Simple | Personal | Fair
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