barclays field

Retail Bankingg

Fi ld T i B l 16th N b 2010Field Trip – Barclays, 16th November 2010

This presentation was prepared by Santander (Brazil) SA and does not constitutea solicitation or an offer to purchase securities.It may contain information about future events and these projections / estimatesy p j /are subject to risks and uncertainties related to factors outside the Company'sability to control or estimate precisely, such as market conditions, competitiveenvironment, currency fluctuations and inflation, changes in governmental andregulatory policies and other factors relating to the Company's operations, andg y p g p y p ,the Company's future results may differ materially from those projected.Those projections and estimates should not be understood as a guarantee offuture performance.The Company undertakes no obligation to publicly review or update thesep y g p y pprojections and forward the events or circumstances that may occur.

3Agenda

Our ambitionsOur ambitions

2010 – Challengesg

Results

Conclusions

4Our ambition

Be the best and most efficient bank in Brazil

Be a market leader in Revenue Growth and Profitability

Be the best bank in Customer Satisfaction

Be the best bank to Work for

B ild th t Build the most Attractive and Recognized Brand among Banks in Brazil

5To achieve our goals, we must have . . .

ProfitableClients

Profitable

Satisfied

6... And . . .

• Valuable Products

• Robust and Versatile Technology

• Effective Credit ManagementEffective Credit Management

• Wide and well placed branch network

• Engaged and recognized People

• Strong and admired Branch

7Agenda

Results

Conclusions

8Our challenges . . .

Brand Unification ...

Integration ...U

Client loyalty and Increase of our active Client loyalty and satisfaction ...

Increase of our active customer base ...

Network expansion ... Unleash Business t

psegment ...

9With the following premises . . .

Maintain the attributes of each

Retain talents and maintain a good

bank . . .maintain a good

organizational climate . . .

Deliver the budget of Deliver the budget of the year ...

Minimizing the impact on customersMinimizing the impact on customersMinimizing the impact on customersMinimizing the impact on customers

10The integration is progressing according to schedule . . .

3o Trimestre 1st semester of 20112nd semestre of 20101st semester of 20102009

• Integration of senior • Organization of Real • Unified attendance; •Technological i t ti

gmanagement and

central areas;

• Integration of the Wholesale, Private,

Asset, consumer

gand Santander networks; • Brand unification;

integration;

Asset, consumer finance and broker;

• Integration of credit card and insurance

systems;•New structure and new

• All the customers from Real turn into Santander customers.

• Interoperability and platform unification for the cashiers and

• IPO and Santander

New structure and new business model for retail banking;

•Santander “ContaIntegrada” and Van Gogh services for high • New competences in • IPO and Santander

tower;Gogh services for high income clients;

New competences in credit decision;

•Preparation for the technological integration;

Integration ... Brand Unification ...

Client loyalty and Increase of our active Client loyalty and satisfaction ...

Increase of our active costumers base ...

psegmente ...

12Brand unification and external layout of the branches . . .

2010 Brand unificationNovMar T iti D2010 Brand unificationNovMar Transition Dec

Integration ...

Client loyalty and

Increase of our active Client loyalty and satisfaction ...

Increase of our active customers base ...

psegmente ...

Growth of the Account Holders base (Levers)

Increase of our active customers base . . .

Growing in the most profitable segments (focus)

Opening 600 new branches until 2013

Revenue by client

g p g ( )

7 2 XIncrease of our active customers

Strengthen our position in Credit cards

Strengthen the current strategy- New products

- Universities and students- Payrolls (Cross sellI with wholesale)

Menor Renda Média Renda Alta RendaLower income medium income high income

Increase average

Focusing on high-income segments and on the emerging

Business

average revenue

segments and on the emerging middle income individuals and SMEs Revenue between

R$ 0.5 – R$ 5 MM Revenue between

R$ 5 – R$ 30 MM

Integration ...U

Increase of our active Client loyalty and Increase of our active costumers base ...

Client loyalty and satisfaction ...

psegmente ...

16We are emphasizing . . .

Van Gogh (high income)Model standardization

Investing in infrastructure~120 new branches till the end of 2010

RelationshipBusiness support

BrandUnification

Call CenterUnification of the technological platformNew front end for clientsUnification of the attendance model

Technological integrationNew functions and services

Consolidating the CRM ModelBetter approachMulti ChannelsRelationship platform

Tests: 100,000 clients are testing the new platforms

Relationship platform

Credit cardsCartão FerrariSantander Free Flex and RewardSantander Free, Flex and Reward

InsuranceCross sellingPartnershipsPartnerships

17Van Gogh Model Standardization . . .

Infrastructured service network with the Santander Branch . . .

Space and personalized attendance for high income clientes high income clientes . . .

V l bl Off

Van Gogh Model Standardization . . .

Valuable OfferAccount

Investment account includedDifferentiated price system: each R$ 1 invested equals 1 point.

CreditsSantander Master (10 days without interests)Special rates for loans and automobiles

InvestmentsInvestmentsAccess to investment specialists by phoneComplete portfolio of investment productsMeeting with expertsInvestment-driven events all over the country

Credit Cards1 Santander STYLE Platinum MasterCard and + additionals1 Santander STYLE Platinum Visa + 5 additionals

ServicesServicesExclusive account manager, certified by AnbidCall Center 365 days/year and 16 hours/daySpecialists in investments, Mortgages, Insurances on SuperlinhaPrivate spaces in branches

Investing in infrastructure . . .

Branches

2,1272,090

ATMssep/10sep/09

18,12418,081

sep/10sep/09

Source : Results 9M2010.

Integration ...

Client loyalty and

Unleash Business t

Network expansion ...segmente ...

The new branches will have specific management during a specific period of time

Network expansion. . .

The new branches will have specific management during a specific period of timeand should be incorporated into the "Current Network" gradually.

Pl P l P fit bilitPlace People Profitability

Leadership

Revenues afterprovisions

pcommittee

(Break-even)

12 18Period in months 12 18

Branches with specific management

Branches are incorporated into the current network

Integration ...

Client loyalty and

Network expansion ... Unleash Business t p segment ...

23Unidades (mil)

Santander “Conta Integrada” Relationship with clients

Unleash Business segment . . .

BanksAcquirers

Santander Conta Integrada Relationship with clients

ACQUIRER SERVICES

FINANCIAL SERVICES A

“No price war”

Acquirers

1st Bank in Brazil to offer financial

Focus Banks

and acquiring services Banks

Higher results than expected Goals for 2012

More than 75,000 affiliated merchants

More than 15,000 new current accounts

Package with high fidelity driver

300,000 new affiliated merchants

150,000 new current accounts

R$ 5 billion in loansg g y

10% of the credit card market share

Source : Results 9M2010.

24Agenda

Results

Conclusions

25Resulting in . . .

• RelationshipMore clients More satisfied More profitable

+ 2.1 million total clients+ 517 thousand current account holders

Real: Maintaining the satisfaction indexSantander: Significative improvement in the satisfaction

Net profit + 39%

improvement in the satisfaction indexOnly once between the top 3 Ranking of Financial Institutions with the highest number of client complains in 13 months

Clients Profitableclient complains in 13 monthsIncrease of the internal satisfaction level

Satisfied

26More clients . . .IFRS

Total Clients (Thousand)

Current account (Thousand)

24,092

+5%21,926

10,571

10,054sep/10sep/09

sep/10sep/09

Source : September, 2010. Current accounts with 30 days, as per the Central Bank.

Growth in the

More clients . . .

22.8- 1 %C1

period (%)

19.218.4

C214.914.7

10.610.29.89.0

4.44.14.9

Dec/08 Dec/09jan/08 Sep/10

jan/08

Source : September, 2010. Brazilian Central Bank

28More satisfied . . .

Financial Institutions with the highest number of client complains (Over 1MM customers)

Only one time between the top 3 in 13 months Maintaining the satisfaction index

Significative improvement in the satisfaction index

Source : September, 2010

29Increasing internal satisfaction levels . . .

1st Semester of 2010 2nd Semester of2010

Branch Network

Expectedengageme

nt index

+ 4 p.p100%

Administrative areas + 11 p.p

100%Expected

engagement index

, um banco cada vez melhor

Source: September,2010

30More Profitable . . .

Gross revenues

Provisions

22,357 24,057

Comissões7,835

Costs*

sep/10sep/09

6,465 9,166+39%

Net profit

sep/09 sep/10

9,038 5,464

sep/10sep/09

Source : Results 9M2010. * includes depreciation and amortization.

sep/10sep/09

31Agenda

Results

Conclusions

32Conclusions

We are investing in our structure;

Improving the attendance quality;

Accelerating the commercial activity;

Taking care of our customers and employees;

Aggregating the best of each world to build the new bank;

Generating solid results

Investor RelationsJuscelino Kubitschek Avenue 2,235 10th floor

São Paulo | SP | Brazil | 04543-011T l (55 11) 3553 3300Tel. (55 11) 3553-3300

e-mail: ri@santander.com.br

Santander CardsSantander Cards

Agenda

Overview of Brazilian Cards Industry

Santander Cards Issuer

Santander Cards AcquirerSantander Cards Acquirer

37Overview of Brazilian Cards IndustryCards industry continues to show substantial growth rates, even considering the competitive

scenario consolidation and recent regulation changes

R$ BillionCAGR

# Million

Cards Total Spending

136153

628565

514453

201217

233249

104124

Credit

453388

174215

309375

302245

97 118 147 196 225

187201

P. Label

56 67 83 107 129 158115142

6860534536P. LabelDebit

Credit

2010(F)20092008200720062005

abe 60534536abe

2010(F)20092008200720062005

Source: ABECS

38Overview of Brazilian Cards IndustryCards transactions have been strongly replacing checks transactions last 10 years

In billions transactions (cards include debit + credit)

+20,6%

Checks

02000 2005 2010(F)2003 20092004 2006 2007 200820022001

Source: ABECS and BCB. 2010(F) –Abecs & Bacen

39Overview of Brazilian Cards IndustryLower income population’s tool as formal payment means and bank services inclusion

For classes D/E the ratio of card holder is higher than check account holders

Total AB C DESocial PyramidCards Holders (% of pop.)Cards 71% 83% 67% 44%

Credit 50% 65% 43% 20%Credit 50% 65% 43% 20%Debit 56% 72% 50% 28%

Check Account Holders (% of pop ) 69% 82% 65% 44%Check Account Holders (% of pop.) 69% 82% 65% 44%

Source: Researches Abecs-Datafolha July 20101 - survey on 11 metropolitan areas.

40Overview of Brazilian Cards IndustryThe relative lower participation as a mean of payment shows a relevant up side opportunity for

Brazilian Cards Industry

25,0%21,4%19,1%17,1%15,8%14 0%12 4%

%Private consumption(2)

14,0%12,4%

...but below developed countries (2)

20062005

2008 200920072003

(1) Source : Abecs and IBGE(2) Source: ABECS, Bank of International Settlements, United Nations, IBGE

41Card penetration, average ticket and transactions per card are still low in Brazil

Number of cards (MM)

~ 15 MM credit cards / year CAGRCredit

249233217201CreditDebit

452 514 565 627

104 124 136 153

Credit

Spend (R$ Bn) Average Ticket (R$ per transaction)

225196173147

217201DebitPrivate Label

2010(F)

93 98 100 104

Spend (R$ Bn) Average Ticket (R$ per transaction)

215 256 309

CAGR: 21.1% CAGR: 3.7%

07 08 09 (F)

93 98 100

48 51 53 5553 52 52 51

2007 2008 2009 2010(F)

174 215 256

83 107 129 15845 53 60 68

2007 2008 2009 2010(F)

Source: ABECS (Associação Brasileira das Empresas de Cartões de Crédito e Serviços)

Credit Debit Private Label Credit Debit Private Label

42Santander Cards Issuer – Role in the Value ChainSets rules for issuers and

Issues credit and

acquirers

Card Brands

Captures and processes transactions

debit cards

Issuers Acquirers

Use credit and debit cards

Merchants

Clients

43Santander Cards Issuer – Business modelTo be the world’s best integrated cards monoliner within a retail bank…

Retail BankMonoliner Retail Bank

Access to customers’ base

Product focus

Specialized

Monoliner

pcapabilities

Direct channels: Telemarketing /

Mailings Brand

Traditional channels: branches / agents

Mailings

Global specialized systems

Economies of scale

… contributing to improving our local banks’ performance

44Santander Cards Issuer – Business ModelIs based on managing all levers along the customer lifecycle …

PORTFOLIO MANAGEMENTPORTFOLIO MANAGEMENTACQUISITION

AcquisitionActivation RetentionSpending Outstandings

Profitability

Product innovation

and ions

PlatinumUnlimited

Profitability

and…us

CancellationLight

FreeReward

Mini Card

VALUELight

Mini Card

Ferrari

Specialized risk managementTime

… supported by an end-to-end view of RISKS and TECHNOLOGY

45Santander Cards Issuer – Business ModelThe Business expansion will be held in two dimensions: Customer Base and Profitability

per Account

Increase the profitability by using Card Accountsprofitability by using

the card’s platforms as a distribution channel

for other banking products and services

Card Accounts

Personal Loan

Insurance

Payment Services

Savings Insurance

Continuous product innovation as a

growth lever

Source: Internal data

growth lever

46Santander Cards Issuer – Continuous growthThe Credit market continues to show substantial growth rates, even considering the competitive

scenario consolidation and recent regulation changesC d (MM) Market SantanderCards (MM)

Key Observations

Market149136124104

826853

+19%+16%

(04~10)

SantanderCAGR (06~10*)

Total Spend (R$ Bi)

~80% of the Cards Market is concentrated at the top 4

Banks (Banco do Brasil, Itaú, Bradesco and Santander)

1110875

Sep 10

There is an important opportunity for cards revolving

growth

309256

21517414211595

2933261914

+22%+21%

(04~10*)

Revolving Balance (R$ Bi)

Relevant regulation changes are being implemented, representing significant

opportunities for issuers and

2933261914

Sep 10

28,625 7

(04 10*) ppnew acquiring business

players

25,722,117,213,411,38,2

3,12,42,11,71,2

+23% +21%

(04~10*)

Note 1: Source Banco Central do Brasil, including +360 days balance

Note 2: Source ABECs – Brazilian Cards Association

* Data until Sep 10th

90807060504 Sep 10

47Santander Cards Issuer – 3Q10 performanceThe business growth is leveraged by Cards expansion…

T l C d

11,110,710 09 79 2

21% 4%

Total CardsMillion YoY QoQ

,10,09,79,2

Jun’10

Credit

Sep ’10Mar ’10Dec ’09Sep’09

2%11%Total Cards

MillionYoY QoQ

25,224,624,023,622,8

Mar ’10Dec ’09Sep’09 Sep ’10Jun’10

48Santander Cards Issuer – 3Q10 performance… generating relevant revenue increase

T l S di

29 228 3

+9%+19%

Total SpendingR$ Billion YoY QoQ

29,226,926,328,324,5

1Q ’104Q ’093Q ’09 3Q ’102Q ’10

+24% +5%Total BalanceYoY QoQ+24%

9,78,78,77,8

Total BalanceR$ Billion

2,92,52,7 3,13,0

6,66,2

Revolving

5,86,25,1

+15%YoY

Source: Santander Income Statement 3Q10

Jun ’10 Sep ’10Mar ’10Dec ’09Sep ’09

494949

Agenda

Santander Cards Issuer

Santander Cards AcquirerSantander Cards Acquirer

50Santander as Issuer and AcquirerSets rules for issuers and

Issues credit and

acquirers

Captures and processesCard Brand

Issues credit and debit cards

Captures and processes transactions

Issuers Acquirers

Uses credit and debit cards

Merchant

debit cards

Clients

51Santander’s Experience in Other Countries

Sovereign

Puerto RicoUK

Mexico

Colombia

SantanderArgentina

SpainPortugal

Santander + Acquiring Partners

52Partnership Santander & GetNet

Creation of a Partnership leveraged by GetNet’sCreation of a Partnership leveraged by GetNet stechnological expertise and POS network

MASTERCARDLicense

Investment in Capturing Network and

License

Integrated value offer – Acquiring and Banking

Business

gProcessing Platform

Other POS Capturing Ser ices

Partnership

Business

Commercial Model –Distribution/Pricing

Communication and

Services

165 POS (Capturing Terminals - 2009)Communication and

Terminals 2009)“Time To Market”

53Santander Cards: Acquirer

Better than expected results in the first 6 months of operationBetter than Expected Results in the First Months of OperationsBetter than expected results in the first 6 months of operation

Results Sep/10

Target 2012

Better than Expected Results in the First Months of Operations

ACQUIRINGSERVICES

FINANCIALSERVICES

Sep/10 2012 ( )

Affiliated Merchants (thousand) 75 300 25.0%

N A t New Accounts (thousand) 15 150 10.0%

i i fi i iRevenues: R$ 400 Million

Santander Acquiring

Credit Package with high fidelity driver;

6 mo. of operation with Mastercard2 mo. of operation with Visa;Debit

Number of transactions: 4.3 Million

Revenues: R$ 200 Million

Most of the Loans were made with SMEcompanies;

Number of transactions: 4.7 Million

Revenues: R$ 600 Million

Number of transactions: 9 Million

54Conclusion

S t d i th i i l hi thi i i d l iSantander is the pioneer in launching this acquiring model in Brazil

fThe partnership provides the bank access to a network of more than 160,000 merchants and to GetNet’s know how

The credit card industry is expected to grow around ~20% p.y. and double its size in 4 years

This strategy focuses on strengthening the relationship with SME clients – main competitors are banks

Santander Conta Integrada – “Win-Win” relationship between the bank and small and middle market companies (SMEs)

São Paulo | SP | Brazil | 04543-011Tel. (55 11) 3553-3300

Wholesale Bankingg

Agenda

Market Overview

Santander Wholesale Banking

Santander Wholesale Banking Growth StrategySantander Wholesale Banking Growth Strategy

5959Market Overview – Credit to Corporate

Credit (YoY Gro th%) Spreads (%)Credit (YoY Growth%) Spreads (%)

Average Tenor (days) DelinquencyAverage Tenor (days) Delinquency

Source: Brazilian Central Bank

6060Market Overview – Capital Markets (ECM & DCM)

ECM Evolution – Volume & Number of DealsECM Evolution – Volume & Number of Deals DCM Evolution – Volume & Number of DealsDCM Evolution – Volume & Number of DealsECM Evolution – Volume & Number of DealsECM Evolution – Volume & Number of Deals DCM Evolution – Volume & Number of DealsDCM Evolution – Volume & Number of DealsVolume = BRL MM; N = Number of Deals Volume (BRL MM)

-5.3% +48.6%

67.174 63.591 37.007 54.997

N=15N=24

Number of DealsForeign Investors Participation – YTD Sep/10289 323 213 255

Source: Boletim ANBIMA – October/ 2010

6161Market Overview – Capital Markets (M&A)

M&A Evolution – Volume & Number of Deals

Volume = BRL billion; N = Number of Deals

M&A Evolution Volume & Number of Deals

N=75 N=124N=73 N=99N=73

N=148 N=95N=89 N=59

Announced Deals by Value Capital Source (1º sem 2010)

Number of Deals Volume

Source: Boletim ANBIMA – 1st semester 2010

Agenda

Market Overview

6363Santander Wholesale Banking Client Segmentation

Revenue Classification CriteriaRevenue Classification Criteria Client Distribution *Client Distribution *

~530 *Client List

Corporate

BRL 250MM and above

Corporate

~650 (13%)

Empresas

BRL 30MM-250MM

Empresas **

~3900 (77%)

(*) Includes MRG model clients only

(**) Annual revenues greater than BRL 20K

6464Santander Global Wholesale Banking* Overview (IFRS Criteria)

Total Revenues = BRL 2.615 MMTotal Revenues = BRL 2.615 MM

Profit Before Tax (% / Total) Profit Before Tax (% / Total)

Total Costs = BRL 554 MMTotal Costs = BRL 554 MM

Profit Before Tax = BRL 2.057MMProfit Before Tax = BRL 2.057MM

Source: Santander Financial Statements (IFRS)

(*) – GB&M only

6565Santander Wholesale Banking – Credit Evolution & League Tables

C dit E l ti (L C t ) *C dit E l ti (L C t ) * L T blL T blCredit Evolution (Large Corporates) *Credit Evolution (Large Corporates) *

BRL MM

League TablesLeague Tables

Project Finance (Fin. Advisor & St t i )1st24 3% Structuring)

Anbima - 2009

DCM (External Issues)Bond Radar – Sep / 2010

DCM (Domestic Issues)Anbima - Aug / 2010

ECM (Closed Deals) 13rd

FXBanco Central do Brasil – Jul / 2010

M&A (Value) 2Bloomberg Out / 2010

( )Bloomberg – Out / 2010

Source: Management Information 3Q10Note: (1) 3rd also in Latin America

(2) 4th in Latin America

(*) - Does not include Empresas. Volumes do not include guarantees and other collaterals

Agenda

Market Overview

6767Santander Wholesale Banking Growth Strategy

General Strategy

EmpresasEmpresas

General Strategy…

Focus on clients relationship

Increase share of wallet, cross-selling and lead strategic transactions/loans with the Empresas(BRL 30-250MM)

Empresas(BRL 30-250MM)

existents key clients

Expand market penetration with new clients and clients with unexplored potential

Cross-selling to individual clients

General Strategy…

Explore value chain and sector opportunities with large companies

Corporate(BRL 250MM

Increase cross-selling and diversification

Expand use of our wholesale and Investment Banking product platforms

and above)and above) Increase share of wallet

Continuous active NPL management (recovery and prevention)

Cross-selling to individual clients

6868GB&M Growth Strategy

Become the top relationship bank for the main players of sectors with high growth perspectives, like Energy, Mining, Construction, Infrastructure and Agribusiness.

Take advantage of our global capabilities and support local clients who intends to become international22 Take advantage of our global capabilities and support local clients who intends to become international. 22

The concept of one-stop shop and the first option for share of mind products.33

Santander is well positioned in Investment Banking products and intends to take advantage of the good perspectives for M&A, ECM and DCM markets.

Increase our client’s satisfaction, generating value to the Bank.55

Leverage Retail opportunities through our origination capacity.66

Increase net profit, ensuring full costs control and preserving a low risk profile.77

São Paulo | SP | Brazil | 04543-011Tel. (55 11) 3553-3300

barclays field

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