13th Sep 2007 13:26
Banco Santander Central Hispano SA13 September 2007 --------------------------------------------------------------------------------Press Release-------------------------------------------------------------------------------- Santander Investors' Day Banco Santander profit will grow 15% annually in 2008 and 2009 • Santander aims to grow ordinary profit five points above its peers. • Santander aims to be the world's most efficient global bank, with anefficiency ratio of 40%. Madrid, September 13, 2007 - Almost 200 analysts and investors attended twoworking sessions of Santander Investors' Day in Madrid, held to review theperformance of the Group and its various business units and report on theprospects for the next two years. Alfredo Saenz, Santander's Second Vice Chairman and CEO, opened today's session.He anticipated that the business environment will be more complex and demanding.In this context, Banco Santander is targeting a 15% CAGR in EPS for the period2008-2009. This forecast excludes acquisitions and extraordinary items fromasset sales. Alfredo Saenz explained that the market has become more demanding and"successful companies need to grow ahead of their peers. To achieve this, youneed to be efficient and have strong franchises, with high market shares instrategic markets," as is the case with Santander. Santander's CEO said: "Our model guarantees higher long-term growth than ourpeers." He added that Banco Santander will increase EPS at least five pointsover its competitors in the next few years. The reasons behind Santander's ability to grow more than its competitors arebased on the business model. - We actively manage our business portfolio, which is very diversifiedand balanced between mature and emerging markets. - We export our business model to each local market to achieve bestpractices in the local market. - We leverage our local businesses in global economies of scale(unified technological platform, four regional operational centres and commonorganizational structure). - We leverage our global businesses to improve our competitive positionin our local banks. This means local banks operating in each market can't compete with Santander'slocal units in costs or global businesses. This structure will enable Santanderto end 2009 with an efficiency ratio of 40%, becoming the world's most efficientglobal bank, according to Alfredo Saenz. Santander's CEO explained the Group's main challenges for the next five years: - Santander's value being higher than the sum of the parts.- Maintaining dynamism.- Not loosing the costs' culture.- Ever-more sophisticated risk management.- Capital discipline. Alfredo Saenz's speech was followed by presentations from executives from theGroup's main business units. Santander Commercial Banking in Spain: Enrique Garcia Candelas, the head ofSantander's network in Spain, said the Spanish economy will maintain itsstrength and continue to grow ahead of the European average. Lower growth insectors such as real estate and construction, which are in a soft landingperiod, will be offset with growth in other sectors, such as industry. Thus, aslowdown in mortgages will be offset by higher growth in consumer and companyfinance. Moreover, immigration will have a positive impact. Enrique Garcia Candelas said: "Santander's differentiated abilities will enableus to continue growing revenues by over 12%, with a normalising risk premium."The bank expects to have 10 million customers by 2009, half of which willbenefit from the "We want to be your bank" strategy. Santander's network inSpain aims to be the best savings bank in the mass market and the best bank insegments such us companies, private banking, etc. Banesto. Ana Patricia Botin, Chairman of Banesto, presented the bank's goals forthe next two years, including targets for 2009 for the first time. Banestoexpects to grow its market share 0.25 point annually over the rest of the banksin loans and customer funds. ROE will increase 1% annually, reaching 19% in2009, and the efficiency ratio will improve two points each year, closing 2009at 38%. Ana Patricia Botin said: "Banesto has developed capacities which will allow itto grow revenues ahead of its competitors in the next few years thanks to awinning commercial strategy which overlays our technological advantage and astrong distribution capacity." Latin America: Francisco Luzon, member of the Board and head of the AmericasDivision, said that Latin America and, mainly, its three largest economies -Brazil, Mexico and Chile, which account for 70% of the region's GDP- haveconsolidated sustained growth, with low inflation and a sound management ofpublic and external accounts, enhancing macroeconomic stability. Francisco Luzon indicated that presence in geographical areas which, like LatinAmerica, are in a process of "bancarisation", or increasing bankingintermediation, with medium class expansion and demographic growth, offers aunique opportunity for Santander's retail banking business, which will continueto grow revenues by around 20%, 10 points above the expected increase in costs. Abbey: Antonio Horta Osorio, Abbey's CEO, said we are implementing a newbusiness model to transform Abbey into a retail bank with a full range ofproducts and services. "Abbey is registering an excellent performance againstits initial goals, surpassing local competitors", Horta Osorio said. In 2007,and for the third consecutive year, the gap between growth in earnings and costswill be double-digit, thus more than covering the cost of capital. For the next few years, Abbey's CEO expects annual revenue growth of 5%-10%,above the market average, continuing with around 0% cost increase and soundcredit quality. Santander Consumer Finance. Juan Rodriguez Inciarte, head of Santander'sConsumer Finance Division said: "Our excellent position in consumer financegrants us significant opportunities, even in the most heavily banked economies.Consumer credit per capita is still low in most European countries. The averagein the European Union (EU15) is around 2,600 euros, much lower than US's 6,200euros." Santander Consumer Finance's goal is to position itself as the leader inconsumer finance. Despite the short-term pressure in spreads due to higher interest rates, JuanRodriguez Inciarte expects SCF revenues to grow over 10%, 12% in the case of newbusinesses, whilst the efficiency ratio will remain below 30%. Portugal: Nuno Amado, Santander Totta's CEO, explained that the bank has shownexcellent performance in spite of the unfavourable environment. In the last fiveyears, net profit has more than doubled, achieving earnings well ahead of itsmain competitors. "The improvement in economic prospects will give us higher growth potential inthe next few years, especially in the SME segment." In the period 2008-2009,Santander Totta expects to improve its market share 0.15 point annually in loansand customer funds. The goal of achieving double digit growth in revenues, withcosts under control, will enable the Bank to reach an efficiency ratio below 40%in 2009, remaining the most efficient retail bank in the Portuguese market. Banco Santander's meeting with analysts and investors will continue tomorrow.Chairman Emilio Botin will close the event. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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