Annual report 2009 - Santander

133Asset Management and Insurance• Revenues accounted for 9% of the Group’s totaloperating areas.• Preference for deposits / liquidity reduced the sale ofinvestment funds and insurance and their revenues.• Investment funds: recovery of volumes underway inthe last two quarters.Net operating incomeMillion euros718697-2.8%471Attributable profitMillion euros404-14.2%• Insurance: continued strengthening of its globalmanagement model and development of new products.2008200920082009Attributable profit was EUR 404 million, 14.2% less than in2008 (-11.5% excluding the exchange-rate impact) and 4% ofthe operating areas’ total.Gross income fell 5.1%, as the higher revenues from insurancedid not offset the fall in asset management, particularly feeincome. A key factor was the sharp decline in the managedvolumes of mutual funds, particularly in Spain.Operating expenses declined 10.1%, reflecting the area’sefforts to adapt its structures to the new environment ofrevenues. Net operating income dropped 2.8%, a trend thatfed through to attributable profit mainly because of negativeextraordinary results and a higher tax rate.Total revenues contributed to the Group by asset managementand insurance activities, including those recorded by thedistribution networks, amounted to EUR 3,599 million, 9% ofthe Group's total.Asset ManagementSantander Asset Management generated total revenues of EUR1,178 million, 27.6% lower because of the preference forliquidity and deposits by financial agents and the impact of themarkets on portfolios, both average volumes undermanagement (-14%) as well as their composition (moreconservative and lower return).Of note, however, was the trend of stabilisation in revenues asof the second quarter, in contrast to the double digit falls atthe end of 2008 and the start of 2009. This was due to thegradual recovery of mutual fund markets, begun in LatinAmerica and now spreading to Europe, which is improvingvolumes.Total managed assets stood at EUR 116,500 million at the endof 2009, 15% more than a year earlier but still 6% below theaverage volume of 2008.Attributable profit was EUR 54 million (-65.9%), afterdeducting operating expenses and fees paid to the commercialnetworks (-16.9% as a result of structure adjustments).The main elements by units and countries were as follows:• In traditional management of assets, mutual fundbusiness continued to recover gradually, with theincorporation of more markets and greater interest bycustomers and distributors. To Latin America, the UK andPortugal, which attained positive figures of capturing in thefirst half, was added Spain with net contributions in thefourth quarter. Stock markets picked up around the worldand the global volume managed increased substantially.At the end of 2009, the Group administered EUR 110,000million in mutual funds, investment companies and pensionplans, 17% more than in 2008 (+7% without the exchangerateimpact). Spain is the main market, followed by Braziland the UK. These three countries account for more than80% of the total managed volume.In Spain, Santander Asset Management’s growth wasfocused on higher value-added products, such as mixedfunds, which were well received by branch networks andtheir customers in the low interest rate environment. Thisgradual assumption of risk is being accompanied by successin guaranteed equity funds, which have benefited from therise in stock markets.Economic and Financial ReviewAnnual Report 2009