QUARTERLY SHAREHOLDER
REPORT

October - December

2016

"In 2016 Santander has achieved strong results, meeting all our strategic and business objectives.
We have earned the loyalty of a further 1.4 million customers, serving 125 million people and
businesses across Europe and the Americas and increasing lending by 2%.

Going forward, we have many opportunities for profitable growth in Europe and the Americas, in an
environment we anticipate will be volatile but generally better than 2016."

ANA BOTÍN, GROUP EXECUTIVE CHAIRMAN OF BANCO SANTANDER

firma presidenta

SHARE ACTIVITY

  Santander shares end 2016 at EUR 4.96 per share, up 8.8% in the year. The total shareholder return
for 2016 was 14.2%

Key share price data for 2016

OPENING

(31/12/2015)

EUR 4.56

MAXIMUM

(16/12/2016)

EUR 5.05

MINIMUM

(24/06/2016)

EUR 3.15

CLOSING

(30/12/2016)

EUR 4.96

Key factors shaping share price performance

Equity markets were extremely volatile in 2016, shaped by uncertainties over the performance of the Chinese economy; trends in commodity prices; the solvency of the financial sector in certain countries; interest rate policies and the stimulus measures applied by different central banks; Brexit; and the US presidential elections.

Against this backdrop, Santander shares ended 2016 at EUR 4.96 per share, gaining 8.8% in the year, in line with the MSCL World Banks (+9.3%) and outperforming Spain's benchmark index, the Ibex 35 (-2.0%), the DJ Stoxx Banks (-6.8%) and the DJ Stoxx 50 (-2.9%).

83% of analysts recommend buying or holding SAN shares

Source: Bloomberg, at year-end 2016

Total shareholder return

The total shareholder return for 2016 was 14.2%, above the main indices: Ibex 35 (+2.5%), MSCI World Banks (+14.0%), DJ Stoxx Banks (-2.4%), and DJ Stoxx 50 (+1.2%).

This good performance reflects investors' confidence, as borne out by the 2017 price earnings (P/E)*, which has improved considerably over the past few months, and 2017 tangible book value (TBV)** multiples, where Santander is one of the banks which generates the most confidence in the market.


*P/E17: 11.1x 30/12/16 vs 7.7x 31/12/15

**TBV17: 1.1x

Source: Bloomberg

Market cap and trading

Santander's market cap at 30 December 2016 was EUR 72.314 billion. Its stock weightings in the DJ Stoxx 50 and DJ Stoxx Banks stood at 2.08% and 7.54%, respectively, and in the Spanish Ibex 35 index at 14.94%.

A total of 25.882 billion Santander shares changed hands in 2016, with a cash value of EUR 104.214 billion, the highest volume of any EuroStoxx constituent, with a liquidity ratio of 179%. 100.7 million shares were traded daily, for a cash amount of EUR 406 million.

SHAREHOLDER BASE

  Banco Santander has 3.9 million shareholders, located mainly across Europe and the Americas

Number
   of shareholders

355,673


more shareholders
in the year

Capital
   stock ownership 30 December 2016

Institutional investors

55.09%

The board of directors

1.20%

Individuals

43.71%

Geographical distribution of share capital 30 December 2016

Europe

79.60%

Americas

19.96%

Rest of the world

0.44%

DIVIDENDS

   Total shareholder remuneration charged to 2016 is expected to reach EUR 21 cents per share

This amount would be paid through four dividends, three in cash (a total of EUR 16.5 cents per share) and one through the Santander Scrip Dividend Scheme (EUR 4.5 cents per share).

Dividend payment dates:

1st

Dividend

Paid in
August 2016 as a cash dividend.


EUR 5.5 cents/share.

2nd

Dividend

Paid in November 2016 through the Santander Scrip Dividend Scheme, allowing shareholders to choose between receiving cash or shares.

EUR 4.5 cents/share.

3rd

Dividend

Payment tentatively in
February 2017,
 in cash.


EUR 5.5 cents/share.

4th

Dividend

Payment tentatively in
May 2017,
in cash.


Amount pending Board approval

Estimated total remuneration: EUR 21 cents/share
Dividend yield: 5.2%*

*2016 dividends/ 2016 average share price

This remuneration would imply:

Increase the total dividend per share by 5%

And the cash dividend per share by 8%*

*Forecast cash dividend 2016 vs. 2015


RESULTS

   Attributable profit in 2016 of EUR 6,204 million, 4% more than in 2015. The underlying profit before taxes was EUR 11,288 million, increasing 12% over 2015 (in constant euros) by:

datos acción inicio

Solid commercial revenues, driven by net interest income and fee income.

datos acción inicio

Strict control of costs for the third straight year, with reduction of 2% in 2016 adjusted for inflation and on a like-for-like basis.

datos acción inicio

Lower provisions and cost of credit.

Business areas. 2016 underlying attributable profit

Well balanced profit generation.

Percentage excluding the Corporate Centre and the Real Estate Activity in Spain.

Underlying attributable profit to the Group

Million euros

Note: excluding non-recurring net capital gains and provisions in 2Q’15, 4Q’15, 2Q’16 and 4Q’16.

More information



BALANCE SHEET

   The total business managed and marketed at the end of 2016 stood at EUR 1,521,633 million, of which EUR 1,339,125 million was on balance sheet and the rest mutual funds, pension funds and managed portfolios

Widespread growth, particularly in developing markets


Lending was up 2% year-on-year with increases in the main segments and in 7 of the 10 main units.

Funds rose 5% year-on-year due to demand deposits and mutual funds. Increase in the 10 main units.

% LENDING % FUNDS
  • UK
 30% 27%
  • Spain
 19% 28%
  • SCF
 11% 4%
  • Portugal
 4% 4%
  • Poland
 3% 3%
  • Rest of Europe
 2% 1%
% LENDING % FUNDS
  • USA
 11% 9%
  • Mexico
4% 5%
% LENDING % FUNDS
  • Brazil
 10% 13%
  • Chile
 5% 4%
  • Argentina
 1% 1%
  • Rest of Americas
 1% 1%

% over operating areas. December 2016

% LENDING % FUNDS
  • UK
 30% 27%
  • Spain
 19% 28%
  • SCF
 11% 4%
  • Portugal
 4% 4%
  • Poland
 3% 3%
  • Rest of Europe
 2% 1%
% LENDING % FUNDS
  • USA
 11% 9%
  • Mexico
4% 5%
% LENDING % FUNDS
  • Brazil
 10% 13%
  • Chile
 5% 4%
  • Argentina
 1% 1%
  • Rest of Americas
 1% 1%

% over operating areas. December 2016

More information



Activity



Loyal customers
(million)

Retail loyal customers
(million)

SMEs & corporate loyal
customers (million)

Digital customers
(million)

NEWS

Apple Pay, now available in Spain for Banco Santander customers

Banco Santander is the first Spanish financial institution to offer this service.

2017 General Shareholders' Meeting

Banco Santander intends to hold the 2017 Ordinary General Shareholders' Meeting soon. All shareholders will be notified of the terms and methods of participation, and of the proposed resolutions.

Santander named 'Bank of the Year' for the Americas, Portugal and Argentina according to ‘The Banker’

The magazine highlights Santander's "impressive" performance in the Americas and the leadership of Santander Totta and Santander Río in Portugal and Argentina, respectively.

Santander Río reaches agreement with Citi to acquire retail banking business in Argentina

As part of its investment and growth strategy in Argentina, Banco Santander Río has reached an agreement with Citibank Argentina to acquire its retail customer portfolio and branch network there. The deal ratifies Santander Río's commitment to Argentina and cements its position as the country's leading private bank.

Santander and Universia Foundation award 46 university scholarships to the Bank’s shareholders and/or family members with disabilities

The EUR 35,000 invested in this edition of aid were distributed among students with disabilities to drive access to and progress in their university education.

More information

Keep up to date with the Group at www.santander.com