Annual Report 2007 - Santander

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A GEOGRAPHICALLY WELLDIVERSIFIED BANKATTRIBUTABLE PROFIT*BY GEOGRAPHIC AREASLATIN AMERICA: 32%Brazil: 11%Mexico: 8%Chile: 7%UK (ABBEY): 15%* Excluding extraordinary capital gainsCONTINENTAL EUROPE:53%Santander branchnetwork: 22%Banesto: 8%Santander ConsumerFinance:9%Portugal: 6%CONTINENTAL EUROPESantander isthe euro zone’slargest bankBranches (number) 5,976Employees (number) 47,838Customer lending* 310,618Managed customer funds* 323,602Attributable profit* 4,423* Million eurosUNITED KINGDOMAbbey’s goal is tobe the UK’s bestcommercial bankBranches (number) 704Employees (number) 16,827Customer lending* 184,086Managed customer funds* 216,672Attributable profit* 1,201* Million eurosLATIN AMERICASantander is LatinAmerica’s leadingfinancial groupBranches** (number) 4,498Employees (number) 65,628Customer lending* 68,854Managed customer funds* 137,682Attributable profit* 2,666* Million euros** Including traditional branches, banking service points and service points in companies.16
FORMULA 1 TM SANTANDER BRITISH GRAND PRIX - Silverstone, UK. July 8th 2007.Banco Santander is present in 16 countries in Continental Europe and is theeuro zone’s largest bank by market capitalisation. It is Spain’s retail and privatebanking leader and Portugal’s third biggest private-sector commercial bank byprofits. It also has high market shares in consumer finance in Spain, Germany, Italyand Poland.Santander’s business model in Europe focuses on retail banking and has a solidtechnological platform, enabling it to generate recurrent revenues with controlledcosts. Profit growth quickened in 2007, profitability was higher and thecost/income (efficiency) ratio was below 40%.Abbey is the UK’s third largest mortgage lending bank. It strengthened its rangeof products for individual customers in 2007, particularly in savings and currentaccounts, insurance, personal loans and enhanced the quality of service. It is alsostrengthening in corporate, investment and private banking, cards and assetmanagement, generating synergies and taking advantage of the Group’s globalreach and experience.Abbey has made excellent progress in achieving the targets of its plan sincebecoming part of Grupo Santander in 2004. Its attributable profit was morethan EUR 1,200 million in 2007 and its efficiency ratio continued to improve tobelow 50%.Banco Santander has been firmly committed to Latin America for more than 60years. It is present in nine countries and has positions in the region’s three maineconomies: Brazil, Mexico and Chile.Santander doubled its presence in Brazil in 2007 with the acquisition of BancoReal. This purchase will bring the total number of Santander branches and bankingservice points in the country to 4,000 and will make us the third largest bank byloans and the second by customer deposits. Furthermore, the Bank continues toinvest in expanding its distribution capacity in the region, with more branches,ATMs and staff at the service of our customers.17
Page 1: AnnualReport07
Page 5 and 6: ANNUAL REPORT 2007KEY GROUP FIGURES
Page 7 and 8: LETTER FROM THE CHAIRMANSANTANDER A
Page 9 and 10: “We create value through acquisit
Page 11 and 12: LETTER FROM THE CHIEF EXECUTIVE OFF
Page 13 and 14: “The ABN AMRO acquisition has a p
Page 15: “Economic growth forecasts are gr
Page 19 and 20: Branch in Calle Hernani 73, Madrid,
Page 21 and 22: ATTRIBUTABLE PROFIT* 2007BY GEOGRAP
Page 23 and 24: Santander Totta branch, Rua do Ouro
Page 25 and 26: Santander Consumer Finance Headquar
Page 27 and 28: Branch, Gracechurch Street, London,
Page 29 and 30: Branch, Sao Paulo. BrazilBrazil Mex
Page 31 and 32: ACHIEVEMENTS IN 2007• Leading big
Page 33 and 34: ASSET MANAGEMENTGLOBAL BUSINESSESWI
Page 35 and 36: INSURANCEGLOBAL BUSINESSESSANTANDER
Page 37 and 38: CORPORATE GOVERNANCESANTANDER’S C
Page 39 and 40: Investors’ Day held in Santander
Page 41 and 42: JULY• Santander, RBS and Fortis p
Page 43 and 44: ANNUAL REPORT 07CORPORATEGOVERNANCE
Page 45 and 46: 5 31 242. SANTANDER’S BOARD OF DI
Page 47 and 48: 14 15 16 17 18 19 20LORD BURNS (TER
Page 49 and 50: Meeting). In view of the fact that
Page 51 and 52: executive Chairman of Abbey Nationa
Page 53 and 54: All current Directors have been app
Page 55 and 56: - RISK COMMITTEEThe Rules and Regul
Page 57 and 58: 3. RIGHTS OF THE SHAREHOLDERS AND G
Page 59 and 60: ANNUAL GENERAL SHAREHOLDERS’ MEET
Page 61 and 62: 4. SANTANDER’S SENIOR MANAGEMENT1
Page 63 and 64: - The Code for Conduct in Securitie
Page 65 and 66: ANNUAL REPORT 2007FINANCIAL REPORTC
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Another factor is the Group’s exc
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GRUPO SANTANDER RESULTSGrupo Santan
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NET INTEREST INCOME(W/O DIVIDENDS)M
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NET LOAN LOSS PROVISIONSVariationMi
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CUSTOMER LOANSVariationMillion euro
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CREDIT RISK MANAGEMENT (*)Variation
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CUSTOMER FUNDS UNDER MANAGEMENTBill
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SHAREHOLDERS' EQUITY AND MINORITY I
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1. PRINCIPAL SEGMENTS OR GEOGRAPHIC
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CONTINENTAL EUROPEContinental Europ
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SANTANDER BRANCH NETWORKThe Santand
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• The consumer unit, which groups
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New loans rose 6% as a result of a
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year earlier, and coverage was 117%
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UNITED KINGDOM (ABBEY)Abbey continu
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LATIN AMERICAVariationMillion euros
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LATIN AMERICANET OPERATING INCOME A
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LATIN AMERICA. MAIN UNITSBrazil Mex
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Attributable profit was 17.6% highe
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CHILESantander Chile is the largest
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The focus in 2007 was on boosting r
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FINANCIAL MANAGEMENT AND EQUITY STA
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RETAIL BANKING. RESULTSGross operat
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Of note in Mergers and Acquisitions
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ASSET MANAGEMENT AND INSURANCEThis
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Its objective is to achieve global
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ANNUAL REPORT 2007RISK MANAGEMENTIN
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2. CREDIT RISKCredit risk is the po
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DISTRIBUTION OF LENDING BYGEOGRAPHI
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MORTGAGE PORTFOLIO UNITED KINGDOMMi
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CONCEPT OF EXPECTED LOSSAs well as
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2.3 TEST OF REASONABLENESS IN EXPEC
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2.5 MONITORING AND CONTROL SYSTEMSA
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OTC DERIVATIVES DISTRIBUTION BY NET
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coordinates management of the rest
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Coordination with other areasEvery
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HISTOGRAM OF VaR BY RISK FACTORMill
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EVOLUTION OF RISK (VAR) OF THE STRU
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MATURITY AND REPRICING GAPSStructur
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In Latin America, the larger volume
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E. STRUCTURED FINANCING OPERATIONSG
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GRUPO SANTANDER: DISTRIBUTION OF TH
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• Appropriate confirmation of ope
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INTERNAL VALIDATION OF INTERNAL RIS
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Grupo Santander’s capital plannin
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Of the 28 products approved as of N
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ANNUAL REPORT 07GRUPO SANTANDER’S
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ANNUAL REPORT 2007AUDITORS’ REPOR
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2. The relative importance of fees
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Santander GroupConsolidated balance
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Translation of consolidated financi
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Santander GroupConsolidated cash fl
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StandardsObligatory Applicationin t
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Following the submissions phase, in
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standard tax rate for income tax pu
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indirectly half or more of the voti
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- Loans and receivables: this categ
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All derivatives are recognised in t
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In Millions of EurosFair Value Reas
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2. It is effective in offsetting ex
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- The various types of risk to whic
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2. Country risk allowance:Country r
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Depreciation is calculated, using t
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An impairment loss recognised for g
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When the requirements stipulated in
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Post-employment benefits are recogn
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Group plc, Fortis N.V. and Fortis S
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ut, unless expressly authorised oth
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d) Off-shore entitiesAt 31 December
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Thousands of EurosInterim dividends
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Thousands of Euros2007 2006 2005Tot
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The amounts in the “Accrued pensi
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Concessions GrantedExercisedOptions
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million at 31 December 2007 (31 Dec
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Director Corporate Name Number of S
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8. OTHER EQUITY INSTRUMENTSa) Break
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Thousands of Euros 2007 2006 2005Ba
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) DetailFollowing is a detail, by l
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This amount, after deducting the re
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12. NON-CURRENT ASSETS HELD FOR SAL
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14. INSURANCE CONTRACTS LINKED TO P
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) Property, plant and equipment for
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At least once per year (or whenever
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20. DEPOSITS FROM CENTRAL BANKS AND
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22. MARKETABLE DEBT SECURITIESa) Br
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23. SUBORDINATED LIABILITIESa) Brea
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25. PROVISIONSa) BreakdownThe break
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3. The estimated retirement age of
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Plan assetsPost-Employment PlansMil
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The changes in the present value of
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The changes in the present value of
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- LANETRO, S.A.: claim (ordinary la
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27. TAX MATTERSa) Consolidated Tax
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d) Tax recognised in equityIn addit
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28. MINORITY INTERESTS“Minority i
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30. SHAREHOLDERS’ EQUITY“Shareh
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) BreakdownThe breakdown of the bal
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35. OFF-BALANCE-SHEET ITEMS“Off-b
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The detail of the cumulative credit
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Additionally, following is a detail
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40. INCOME FROM EQUITY INSTRUMENTS
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44. INSURANCE ACTIVITY INCOME“Ins
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47. SALES AND INCOME FROM THE PROVI
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c) Share-based paymentsi. The BankI
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- Monte Carlo valuation model: perf
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In 2005 the Group designed a Medium
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51. OTHER OPERATING EXPENSESThe bre
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Millions of Euros 31 December 2005A
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54. GEOGRAPHICAL AND BUSINESS SEGME
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Millones de Euros 2007 2006Financia
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Millions of Euros 2007 2006AssetAss
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Millions Of Euros 2005Associatesand
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B. CREDIT RISKCredit risk is the po
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operational risks and related mitig
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) Net interest margin (NIM) sensiti
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• Thus, in Latin America the exce
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Role of insurance in operational ri
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Procedures Manual for the Marketing
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Appendix ISUBSIDIARIES OF BANCO SAN
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Appendix ISUBSIDIARIES OF BANCO SAN
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Appendix IILISTED COMPANIES IN WHIC
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Appendix IVNOTIFICATIONS OF ACQUISI
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The Group holds 66,822,519,695 ordi
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Translation of a report originally
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commercial banking units (Santander
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The figures for this area reflect o
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The Group’s gross loans and recei
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These figures illustrate the Group
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Furthermore, as part of the celebra
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- Green loans. In the United Kingdo
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OUTLOOKThe economic outlook for 200
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• In Insurance, the Group will ta
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Significant direct and indirect own
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- Powers of the General MeetingAs p
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This Committee has been permanently
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Banco Santander, S.A. Balance Sheet
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Proposed Distribution of Income (31
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Banco Santander, S.A. Balance Sheet
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APPENDICESREPUTATIONAL RISK AND THE
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Grupo Santander’s prevention syst
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HISTORICAL DATA 1997-2007Without IF
Page 352:
www.santander.com
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Annual Report 2007 - Santander

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