INFORMATION MEMORANDUM DATED 9 JULY 2009 ...

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institutions, which engages in commercial banking, consumer finance, operating and finance leasing, full-service leasing and other activities in Germany, Italy, the Czech Republic, Hungary, Austria, Poland, the Netherlands, Norway, Sweden, Russia and the United Kingdom. The Issuer has recently undergone a period of geographic expansion which is partly due to management's acquisition strategy and partly due to organic growth. The Issuer's activity remains focused on Europe, with consumer finance franchises in Spain, Germany, Poland and Norway and a presence in Italy and Portugal. Management believes that the Issuer is well placed to take advantage of opportunities elsewhere in the growing and highly fragmented European consumer finance market. The Consumer Group's activity is primarily concerned with the automobile financing, personal loan and credit card businesses. However, it also works at attracting customer funds. The Issuer's strategy consists of establishing agreements with subscription agents (mainly dealers) in order to deliver finance for automobiles and other consumer goods. The Issuer also seeks to generate loyalty affiliations with final customers by directly offering them other products such as credit cards. The Issuer's primary business, however, continues to be the financing of new and used cars. Total funds managed by the Consumer Group amounted to €56,946 million in 2008 (excluding Santander Consumer USA Inc.), as compared with €49,071 million in 2007, which represents an increase of 16 per cent. Approximately 85 per cent. of the Consumer Group's assets related to loans and receivables. Approximately 86 per cent. of the Consumer Group's loan portfolio at 31 December 2008 was concentrated in Spain and Portugal, Germany and Italy. Loans and advances to customers amounted to €48.426 million in 2008, 13 per cent. more than in 2007. The managed assets portfolio was €51,825 million (+14.7%), partly due to the assets acquired from The Royal Bank of Scotland plc (growth equivalent to 5 percentage points). The Consumer Group's consolidated net profit was €377 million in 2008 (with an attributable profit of €378 million), as compared with €512 million the previous year, a decrease of 26.4%. In terms of geographic areas, Germany was the main contributor to attributable profits making a contribution of 65.8%, followed by Scandinavia (13.3%), Spain and Portugal (18.6%), Italy (6.3%), and other areas (-4.0%). The Consumer Group's income statement shows gross income up by 15.9% in comparison to the previous year due to the larger volumes administered and the emphasis on price management in view of higher interest rates, and in particular to fees and commissions (+37.19%) as a result of greater market penetration and better product-marketing conditions. Costs rose by 14.9% in comparison to the previous year following the addition of the new units and the impact of the platforms introduced at the end of 2007 – excluding this burden, costs would have increased by 6.1%. The combination of the income/cost trend put the efficiency ratio at 34.3% for 2008. Income and costs partially offset the larger portion of net allocations for loans, mainly due to the economic slowdown and the fall in credit rating in Spain. - 24 -
Excluding this unit, net allocations for loans in the remaining area increased steadily with business, securing twin-figure growth in net operating income. Amid this scenario, write-down activity has given Santander Consumer Finance a non-performing loans ratio of 4.6% as compared with 3.1 per cent. in 2007 and a hedge ratio of 86.1%. Doubtful assets amounted to €2,291 million at 31 December 2008, as compared with €1,357 million at 31 December 2007. Profit before taxes in 2008 was €537.1 million, or €398.03 after taxes (€378 million excluding minority interests). Profit before taxes in 2007 was €812.1 million and includes extraordinary results. From the management point of view inside the Santander Group, the 2008 net attributable profit attributable to the Consumer Group was €696 million (this includes other managed companies, for example Santander Consumer USA, a Texan subsidiary of the Santander Group which is also dedicated to financing vehicles in the US). New Business of the Issuer in 2008 The volume of business grew in 2008 to €23.419 million, a decrease of €800 million with respect to 2007. The following table summarises new financing extended in 2008 by product line, compared with the previous year: New Business (millions of euros) 2008 financial year (W/O Stock Financing) % of total activity 2007 financial year Variation 2008/2007 Cars 13,035,90 60% 13,482.80 -3% New Cars 7,442.6 57% 8,068.3 -8% Used Cars 5,593.3 43% 5,414.5 3% Consumer Financing and Credit Cards 4,197.0 19% 5,979.6 -30% Direct 3,107.1 14% 2,760.9 13% Mortgages 723,9 3% 1,613.1 -55% Other 504,9 2% 383.6 32% Total financing activity 21,568.8 100% 24,220,0 -3% The managed assets portfolio in 2008 was €51,825 million (+14.7%), partly due to the assets acquired from The Royal Bank of Scotland plc (growth equivalent to 5 percentage points). Loans and advances to customers amounted to €48.426 million in 2008, 13 per cent. more than in 2007. Almost two-thirds of the entire managed portfolio was accounted for by vehicle financing, mostly new car registrations (34%, as compared with 28% for used cars), and 22% by indirect consumption, with cards and direct loans as the most profitable products. There are five key factors which explain the trend over the year: - 25 -
Page 1 and 2: INFORMATION MEMORANDUM DATED 9 JULY
Page 3 and 4: Neither the Issuer, the Arranger no
Page 5 and 6: TABLE OF CONTENTS Page Risk Factors
Page 7 and 8: can be no assurance that the Consum
Page 9 and 10: Consumer Group's use of observed hi
Page 11 and 12: The Consumer Group also faces the r
Page 13 and 14: Holders of beneficial interests in
Page 15 and 16: Insolvency Law could affect the ran
Page 17 and 18: Issuer: Risk Factors: Arranger: Dea
Page 19 and 20: Status of the Notes: Taxation: Disc
Page 21 and 22: Beneficial Owners must seek their o
Page 23: SANTANDER CONSUMER FINANCE, S.A. Hi
Page 27 and 28: The Mortgage financing business dec
Page 29 and 30: SPAIN AND PORTUGAL The following ta
Page 31 and 32: Financial assets held for trading (
Page 33 and 34: Deposits from credit institutions 2
Page 35 and 36: Recent Developments The most signif
Page 37 and 38: At the date of preparation of the 2
Page 39 and 40: Banco Santander Consumer Portugal,
Page 41 and 42: Millions of Euros (*) 2008 2007 San
Page 43 and 44: At the date of preparation of these
Page 45 and 46: Consequently, at 31 December 2008,
Page 47 and 48: Key Information CERTAIN INFORMATION
Page 49 and 50: credits under the limited events re
Page 51 and 52: FORMS OF NOTES Part A - Form of Mul
Page 53 and 54: (iii) (iv) (v) (vi) (vii) in respec
Page 55 and 56: 9. If the Maturity Date (or, as the
Page 57 and 58: (b) the period beginning on (and in
Page 59 and 60: 16. Instructions by the Issuer expr
Page 61 and 62: AUTHENTICATED by CITIBANK, N.A. Sig
Page 63 and 64: FINAL TERMS [Completed Final Terms
Page 65 and 66: 2. All payments in respect of this
Page 67 and 68: 7. If the Maturity Date (or, as the
Page 69 and 70: (b) in the case of a Note which spe
Page 71 and 72: (d) Service of process: The Issuer
Page 73 and 74: were the number of months specified
Page 75 and 76:
FINAL TERMS [Completed Final Terms
Page 77 and 78:
8. Maturity Date: [ ] [May not be l
Page 79 and 80:
[Moody's Investors Service Ltd.: [
Page 81 and 82:
PART B - OTHER INFORMATION 1. INTER
Page 83 and 84:
levy, generalising the Value Added
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(b) Wealth Tax (Impuesto sobre el P
Page 87 and 88:
They will be subject to NRIT (as de
Page 89 and 90:
In light of the above, the Issuer,
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1. General SUBSCRIPTION AND SALE Ea
Page 93 and 94:
7. Norway This Information Memorand
Page 95 and 96:
Clearing of the Notes GENERAL INFOR
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APPENDIX 1 ICSDS PROCEDURES Spanish
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ICSD Customer/Participant that requ
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According to the procedure agreed u
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Article II. Quick refund procedure
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enefit of the beneficial owners. Th
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Article IV. Summary of certificatio
Page 109 and 110:
EXHIBIT II [English translation pro
Page 111 and 112:
EXHIBIT III [English translation pr
Page 113 and 114:
REGISTERED OFFICE OF THE ISSUER San
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INFORMATION MEMORANDUM DATED 9 JULY 2009 ...

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