Annual report 2009 - Santander

104ActivityActivity is backed by the large customer base of the SantanderBranch Network (almost 9 million) and the “Queremos ser tuBanco” strategic plan, which continued to provide good levelsof capturing and linking customers.In lending, the Santander Branch Network maintained itscapacity to meet the demand from individuals and companies,which was lower than normal because of the recession. Morethan 300,000 credit operations were formalised and lendingamounted to EUR 50,000 million.Of note were the 45,000 loans with mortgage guarantee (EUR8,500 million), 130,000 consumer credits (EUR 1,300 million)and 135,000 other loans to companies and businesses (EUR35,000 million). Also noteworthy was our participation in theprogramme of the Official Credit Institute (ICO) to financecompanies, mainly SMEs, through which the Santander BranchNetwork granted EUR 3,500 million, three times more than in2008 (22% share). One in every five of these operations (45,000in all) was Santander’s.Furthermore, a large part of this activity were pre-approvedcredits, where the Bank used the most advanced tools to enablecustomers and business managers to quickly and safely handlethese operations. More than EUR 10,000 of loans were grantedto individuals, the self-employed, professionals, shops and microcompanies.Customer funds grew 4%, maintaining the trend of the lastquarters. Deposits increased 25%, mutual funds fell 16% andpension funds decreased 2%.The work of the Santander Branch Network was recognised invarious spheres and The Banker magazine named it the bestbank in Spain in 2009.Priorities in 2010The objectives for 2010 are: to have more than 9 millioncustomers, increase the number of customers benefiting from“Queremos ser tu Banco” and push activity as much as possiblein order to increase market share. All of this will be donewithout letting down our guard on two basic aspects: rigorousmanagement of credit risk, which should enable us to maintaina NPL ratio lower than that of the banking system as a whole,and keep flat costs.Banesto• Higher revenues due to capturing and linkingcustomers and SMEs.• Strongly controlled expenses, with a further gain in theefficiency ratio.• Net operating income after loan-loss provisionsincreased 2.6%.• Good evolution of credit quality, better than that ofour competitors.• Strengthened balance sheet and its capital andliquidity position.In a difficult environment for the banking system, Banesto’sfinancial soundness, the development of a business modelfocused on customer growth and linkage, and the capacity tomanage costs and risks, enabled the bank to generate positiveand quality results.StrategyThe whole bank was aligned with the management priorities ofthis business model, focused on making Banesto the first choicebank for its individual and corporate customers.• Quality of service as the basis of the value proposal. Businessprocesses will lead to a sustained increase in recurringrevenues.• Financial soundness as a competitive advantage. A high ratingby external agencies has a positive impact on access to themarkets.• Exploiting Banesto’s technological capacity which, withinnovative solutions, is a distinguishing factor and acompetitive advantage.All of this enabled Banesto to enhance its commercial efficiencywith the launch of new initiatives or deepen those already inexistence, such as the Smash mortgage and the Wii payrollcampaign, among others.As in the rest of segments, Banesto’s figures were drawn upagain in accordance with the criteria set out on page 98 of thisreport. The figures presented here, therefore, do not coincidewith those published by Banesto itself.Income statementNet interest income was 9.6% higher at EUR 1,747 million. Thedrivers were the business derived from the capturing and linkingof customers and management of the balance sheet.Net fees were 1.9% lower at EUR 608 million. This fall was dueto the decline during 2008 of mutual and pension funds, whichin 2009 produced lower revenues from this activity. Fees fromservices and insurance, on the other hand, increased 6.1% toEUR 509 million, largely due to greater linkage and transactions.Annual Report 2009Economic and Financial Review