RESULTS

Solid business model based on customers, scale and diversification, which enabled us to obtain profits on a recurring basis

Attributable profit of EUR 6,515 million in 2019, 17% less than in 2018, after recording net charges that are outside the ordinary course performance of our business amounting to EUR -1,737 million (mainly the UK goodwill impairment, as well as restructuring costs in several markets and other provisions) and to EUR -254 million in 2018.

Excluding these results, the underlying attributable profit was EUR 8,252 million, 2% more than in 2018 (+3% excluding the exchange rate impact).

In a context of lower growth and interest rates, the underlying trends of the P&L remained solid:

Revenue reached a record high.

Costs continue to reflect the synergies obtained in various units.

Cost of credit remained close to historically low levels.

Quarterly performance of underlying attributable profit to the Group*

eur million

*Excluding net capital gains and provisions.

underlying ATTRIBUTABLE PROFIT geographic distribution 2019*

Well balanced Group profit by regions

(*) As a % of operating areas. Excluding Corporate Centre and Santander Global Platform.

underlying ATTRIBUTABLE PROFIT 2019. CORE MARKETS

EUR million. % CHANGE YoY IN CONSTANT EUROS

Overall profit growth by regions and markets

The information shown above in relation to the different units has been prepared in accordance with homogeneous management criteria for the whole Group and may therefore differ from the information published for each company on an individual basis.

Main business areas performance

Changes in constant euros

North America

We are increasing coordination and cooperation between Mexico and the US.

Underlying attributable profit in 2019 was EUR 1,667 million, up 21% year-on-year, with strong growth in both countries. These results are mainly driven by positive revenue performance, improved cost of credit and reduced non-controlling interests, reflecting increased stakes.

Europe

We are working on several initiatives aimed at the simplification of our business models and number of products to gain efficiency and agility.

Underlying attributable profit amounted to EUR 4,878 million, down 3% compared to 2018, due to lower gains on financial transactions (markets), net fee income (mainly Corporate & Investment Banking) and higher provisions. Conversely, net interest income remained stable and costs fell 2.4% in real terms, reflecting the optimisation measures.

Santander Global Platform (SGP)

Includes our global digital services under a single unit. With its creation in 2019 we are accelerating our digitalisation process by developing global digital banking solutions with payments at the core for SMEs and individuals.

SGP leverages the Group’s scale, footprint and expertise in payments, financial services and in scaling fintech solutions to build best-in-class services in key, high-growth and large addressable markets in which we already have a strong presence.

South America

Strategy is focused on leveraging our products and services with strong expected medium-term growth and on sharing positive experiences.

Underlying attributable profit in 2019 amounted to EUR 3,924 million, up 18% year-on-year boosted by the main revenue lines, improved efficiency and cost of credit.

North America
We are increasing coordination and cooperation between Mexico and the US.

Underlying attributable profit in 2019 was EUR 1,667 million, up 21% year-on-year, with strong growth in both countries. These results are mainly driven by positive revenue performance, improved cost of credit and reduced non-controlling interests, reflecting increased stakes.

Europe
We are working on several initiatives aimed at the simplification of our business models and number of products to gain efficiency and agility.

Underlying attributable profit amounted to EUR 4,878 million, down 3% compared to 2018, due to lower gains on financial transactions (markets), net fee income (mainly Corporate & Investment Banking) and higher provisions. Conversely, net interest income remained stable and costs fell 2.4% in real terms, reflecting the optimisation measures.

Santander Global Platform (SGP)
Includes our global digital services under a single unit. With its creation in 2019 we are accelerating our digitalisation process by developing global digital banking solutions with payments at the core for SMEs and individuals.

SGP leverages the Group’s scale, footprint and expertise in payments, financial services and in scaling fintech solutions to build best-in-class services in key, high-growth and large addressable markets in which we already have a strong presence.

South America
Strategy is focused on leveraging our products and services with strong expected medium-term growth and on sharing positive experiences.

Underlying attributable profit in 2019 amounted to EUR 3,924 million, up 18% year-on-year boosted by the main revenue lines, improved efficiency and cost of credit.

Income statement

EUR MILLION
% change vs 2018
2019 EUR Constant
EUR
Net interest income 35,283 2.7 3.5
Total income 49,494 2.2 3.2
Net operating income 26,214 2.2 3.0
Underlying profit before tax* 14,929 1.0 2.0
Underlying attributable profit to the Group* 8,252 2.3 3.2
Attributable profit to the Group 6,515 (16.6) (15.9)
*Excluding net capital gains and provisions.

FINANCIAL REPORT JANUARY - DECEMBER 2019

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