20th Jun 2005 07:50
Banco Santander Central Hispano SA20 June 2005 Annual Shareholders Meeting of Santander Emilio Botin: "Attributable profit in 2005 will be at least 5 billion euros" All the proposed resolutions included in the Agenda of the meeting were passed Extraordinary income will have no impact on profit and will be allocated to aspecial fund for future provisions The Santander chairman announced that dividends will continue to increase. Thefirst interim payment for 2005, approved by the Board will be 12% above lastyear's "We will fully meet the goals we have set for Abbey. Our plan over three yearsis to become the best bank in Britain in customer attention and in efficiency." Madrid, 18 June 2005 - Emilio Botin, presiding over today's Annual GeneralShareholders Meeting of Santander which approved the 2004 accounts, said that in2005 "our attributable income will be at least 5 billion euros...a new recordfor the Group and a record for a Spanish company." He added that extraordinaryincome will have no impact on profit, as it will be allocated to a special fundfor future provisions. Botin said: "we will continue to increase our dividend," noting that the first2005 interim payment, already approved by the Board, will represent a riseof12%. DISCLAIMER The projection of results has been prepared in accordance with accountingpractices applied by the Group for the present fiscal year and assumes norelevant change in the economic environment. "Santander is enjoying the best moment in its history," said Botin. "We have anunbeatable business model and one that can be exported, a model that enables usto generate recurring revenues with practically flat costs and in very diversemarkets." He recalled that in the past 10 years, the average total return toshareholders has reached 370%, well above the 280% achieved by the Ibex-35index, and listed the factors that have helped Santander become a "winning bankin efficiency, in commercial activity and above all in profitability." "We are the leading bank in the Eurozone by market value, and also in LatinAmerica". "With the purchase of Abbey we have diversified further and incorporated a richnew vein of value creation for our shareholders". "We have a valuable brand that symbolizes 150 years of growth and profitability". "We have a first-rate Corporate Governance, founded on transparency and rigorousaccounting standards, and an exceptional Board". "We have developed a unique worldwide alliance with Universities and institutesof higher education in the countries where we operate". "We have the finest management teams and an excellent customer base". Reviewing 2004, when Santander recorded a net attributable profit of 3,136million euros (+21%), Botin said that "first quarter figures continue to showhigh growth activity in all our markets," with an increase in attributableincome of 38.5% to 1,185 million euros, a quarterly record (+20.1% excludingAbbey). "These are quality results, based on increased commercial activity inall our business areas. Extraordinary results from the sale of our remainingstake in The Royal Bank of Scotland last January, totalling 717 million euros,will have no impact on profit as they are being allocated to a special fund forfuture contingencies." Botin recalled that Retail Banking accounts for 80% ofGroup business. The Chairman highlighted the revenue generating capacity of Retail BankingSpain, the division that contributes most to Group results. "This is an areathat quarter after quarter presents exemplary results, with strong growth inrevenue (at a rate of 7.4% in 2004) and with flat costs." He added that both theSantander and Banesto branch networks have focussed on higher growth segments -mortgages, SME lending, cards and insurance, with innovative products,anticipating the competition and deploying the most advanced technology. Referring to Spain's banking sector, he said it is, "among the most efficient,profitable and financially sound in the world. Spain is a leader in efficiency,ahead even of the United States and the United Kingdom, and is also among thebest in profitability and solvency. This is due to three factors: a strongcompetitive environment, excellent regulation, and economic stability." On the UK market, Botin said the Abbey acquisition had provided a giant leapforward for the Group. "Abbey is a purchase that transforms the bank,positioning us in the largest market in Europe, diversifying our risk profileand opening up new growth options...We have been managing Abbey for six monthsand taken some very important steps." In this regard, he said progress in costcutting has been ahead of schedule and that steps have also been taken tostabilize revenues. "I can categorically state that we will fully meet the goalswe set for Abbey. Our plan over three years is to become the best bank inBritain in customer attention and in efficiency," he said. Turning to Latin America, which last year achieved 6% growth, the highest in thepast 30 years, he placed special emphasis on Brazil's role as an economicengine, especially in the south of the region. "Brazil is a key driver of growthfor the Bank," he said. "I share the vision of those that project that theBrazilian economy will be larger than that of of France and Italy in 2030, andit is therefore one of our central priorities for the future." He also pointedto the strong commercial growth for the Bank in Chile, Mexico and othercountries of the region. "In Mexico we are closing in on our market share goalof 20%, while in Chile we are spearheading the process of banking penetration." He highlighted the strong growth potential of Santander Consumer, which "increased its contribution to the Group by 45% in 2004, and which in 2005 hasbeen increasing profit at even higher rates. Right now it is a European leaderin consumer banking and vehicle finance thanks to its presence in 11 countriesof this continent." Botin referred to Santander's corporate governance, affirming "We are in thevanguard in this aspect. No other company in our country has introduced a seriesof corporate governance measures as complete as Santander: total elimination ofanti-takeover statutes, maximum transparency in executive compensation,elimination of the requirement to hold 100 shares in order to take part inshareholder meetings, self-evaluation of the Board, directed by specialistconsultants, a training programme for directors, or the live Webcasts of theshareholders meetings and electronic voting, among others." He resumed the Bank's corporate governance model in four key concepts: Self regulation. "Every company is different and has different requirements. Anexcess of regulation should be avoided". Transparency. "Transparency is fundamental to self-regulation." Rigorous accounting standards. "Confidence cannot exist, either internally orexternally, if the accounts are not clear". An exceptional board. "A Board which has no voting blocs, taking collectivedecisions, with independence of criteria, great awareness and business vision,and which accounts for a significant portion of the Group's share capital". The Santander Chairman defended the concept of Corporate Social Responsibility,to which the Bank allocated 84.4 million euros last year, 2.7% of attributableincome. "At Santander we do not forget that the best CSR policy is that whichachieves a good return for our shareholders over the long term. But this isperfectly compatible with our emphasis on investments with a significant socialcomponent. Based on this premise, our CSR policy incorporates the samerequirements of efficiency demanded for any investment," he added. Turning to the Spanish economy he said it "continues to be an exception in theEuropean context. Our economy is growing vigorously, founded on domestic demand.The government's economic policy has been focused prudently, respectingbudgetary balance, which in my opinion will help ensure positive economicprogress in the future." His vision of Europe, he said, was that it should "face without delay thereforms needed to make its economy more efficient...The euro, which has beenintroduced with great success, should play a fundamental role in the future. Ido not believe that the negative vote among some countries on the EuropeanConstitution has any significance for the euro, and rather reflects a lack ofconfidence in the economy. Globalization, relocation of industries and jobs,rapid technological change and changes we have witnessed in the world politicaland economic structure are causes of economic uncertainty for Europeancountries. I think, however, that these issues should be a stimulus for Europeanintegration and not ones discouraging unity among our countries." Finally, the Santander Chairman reviewed the share's stock market performance. "Our share has proved its strength this year. We have increased our shareholderbase to 2.6 million, and investors all over the world hold Santander shares." Botin said that "since the bid for Abbey was announced last July the Santandershare has risen 20%. At yesterday's closing price it has achieved a dividendyield of 3.5% and our market value is 59,666 million euros, positioning us asthe 9th largest bank in the world." But he added that "the share price stilldoes not reflect the full potential for value creation....Our performance isfounded on a solid base and our future potential is enormous. We are and willcontinue to be a winning bank," he said. All the proposed resolutions included in the Agenda of the meeting were passed. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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