2. Important Information
This presentation may contain certain forward-looking statements and information relating to Banco Santander
(Brasil) S.A. (“Santander Brazil") and its subsidiaries that reflect the current views and/or expectations of Santander
Brazil and its management with respect to its performance, business and future events. Forward looking statements
include, without limitation, any statement that may predict, forecast, indicate or imply future results ,performance
or achievements, and may contain words like "believe", "anticipate", "expect", "estimate", "could", "envisage",
"potential", "will likely result", or any other words or phrases of similar meaning. Such statements are subject to a
number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause
actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this
presentation. We do not undertake any obligation to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise. In no event shall Santander Brazil, or any of its
subsidiaries, affiliates, shareholders, directors, officers, agents or employees be liable to any third party (including
investors) for any investment or business decision made or action taken in reliance on the information and
statements contained in this presentation or for any consequential, special or similar damages.
In addition to factors identified elsewhere in this presentation, the following factors, among others, could cause
actual results to differ materially from the forward-looking statements or historical performance: changes in the
preferences and financial condition of our consumers, and competitive conditions in the markets we serve;
changes in economic, political and business conditions in Brazil; governmental interventions resulting in changes in
the Brazilian economy, taxes, tariffs or regulatory environment; our ability to compete successfully; changes in our
business; our ability to successfully implement marketing strategies; our identification of business opportunities; our
ability to develop and introduce new products and services; changes in the cost of products and our operating
costs; our level of indebtedness and other financial obligations; our ability to attract new customers; inflation in
Brazil, devaluation of the Real against the U.S. Dollar and interest rate fluctuations; present or future changes in
laws and regulations; and our ability to maintain existing business relationships, and to create new relationships.
3. 3
Index
Brazilian Economy and Financial System
Santander Group
Santander Brasil
Annexes
4. 4
For the first time in a long period, we are living in a truly DUAL WORLD
Need for PUBLIC SECTOR MATURE MARKETS
to adjust large fiscal have started to
deficits behave like
mature markets…
LOW HIGH i.e., not growing…
Leverage
HIGH MATURE
MARKETS
Need for
PRIVATE …and EMERGING
SECTOR to MARKETS have started to
deleverage behave like emerging
markets… i.e., delivering
Balanced
LOW DIFFERENTIAL GROWTH…
EMERGING
MARKETS
5. 5
Solid macroeconomic fundamentals…
International Reserves and External Debt Interest Rates vs. Inflation
US$ billion
17.8% 18.0%
16.5%
13.3% 13.8%
289
External
11.3% 10.8%
215 239 9.3%
debt¹ 201 207 7.6% 8.8%
169 173 180 247 5.7%
193 198 198 3.1%
86 5.9%
Reserves 49 53 54 5.9%
4.5% 4.3%
2003 2004 2005 2006 2007 2008 2009 2010
2003 2004 2005 2006 2007 2008 2009 2010
Interest Rates (SELIC) Inflation (IPCA)
Net Public Sector Debt / GDP % Real GDP Growth %
54.9%
50.6% 48.2% 7.7%
47.0% 45.1%
42.9% 40.4%
38.4%
2.5% 2.9%
1.1% 1.7%
0.7%
2003 2004 2005 2006 2007 2008 2009 2010 E
2003 2004 2005 2006 2007 2008 2009 2010E Brazil USA Euro Zone
Source: Central Bank, IBGE and Santander Research
1. Last data available for external debt: Nov/10
6. ... which led to less macroeconomic volatility 6
Duration in months of the Brazilian economic expansion and contraction periods
Largest Most brief
expansion contraction
period
Feb83 Dec91 Sep95 Feb99 Sep01 Jun03
Jan87 Nov94 Sep97 Nov00 Sep02 Jun08
48 8 36 25 22 13 61 21
28 20 30 9 16 9 8 6
Oct80 Feb87 Jun89 Dec94 Oct97 Dec00 Oct02 Jul08 Jan09
Jan83 Sep88 Nov91 Aug95 Jan99 Aug01 Mai03 Dec08 Oct10
Source: The Brazilian Central Bank
7. 7
Social dynamics shows a favorable scenario for Brazil
Favorable Demographic Dynamics1 Social Mobility Trends2
90% 200 ∆abc= 36 ∆abc= 29
Demographic 31
80% 20
Bonus 13
Millions of People
150
70% 66
95 113
+44.0% +19.0%
60% 100
47
50%
50 44
40
40% 49
29 16
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 0
2003 2009 2014*
Population in Active Ages= 15-64 years
Dependence Ratio E D C A/B
Per capita Income – US$ thousand Annual Average Unemployment Rate(%)
CAGR: 6,6% 12.3%
11.5%
8.9 8.5
7.4 9.8% 10.0% 9.3%
6.0 7.9% 8.1%
4.9
3.8 6.7%
3.5
2003 2004 2005 2006 2007 2008 2009 2010
1994 2000 2005 2006 2007 2008 2009
Sources: 1 – IBGE and Santander Research
2 - Ministry of Finance; * estimated
8. 8
Sound Brazilian Financial System
Well-capitalized financial system: BIS Ratio: 17,4%
Solid and Profitable
Coverage index: 109%
High Profitability - ROE: 17%
Concentration: The five largest banks account for 75% of the assets
Sizeable market: The four largest Brazilian banks rank the 30 largest
banks of the world in market capitalization
Highly regulated and
sizeable financial Conservative regulation and strict prudential rules:
system
The minimum BIS ratio required is 11%
High Reserve requirements: average ratio¹ 33%
Source: Central Bank of Brazil
1. Total System reserve requirement / Total system deposits
9. 9
Increasing credit penetration but still low for international standards
Total Credit / GDP*
México 32% Credit Evolution in Brazil
US$ Billion Y-o-Y
Colômbia 41%
1,027
852
739
564 20.5%
366 441
252 300
Brasil 46%
8.8%
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10
Chile 83%
USA 209%
Source: Central Bank of Brazil and Santander Research
*Last data available for Total Credit/GDP: Dec/08, except from US:Dec/07
10. 10
Brazil: a country with great opportunities
The banking sector has a big opportunity
The triple Multiplier
The triple Multiplier
The triple Multiplier
Differential GDP growth (not
involved in the excesses of
the past cycle)
Increased bancarisation
(development of middle class)
Sound Financial System
(Low leverage, conservative,
good profitability, supervision)
11. 11
Index
Brazilian Economy and Financial System
Santander Group
Santander Brasil
Annexes
12. 12
Santander Group
Today Santander is one of the largest financial groups worldwide
Market cap.: EUR
66,033 mill.
# 10 worldwide # 1 in the
(# 12 in 2006) Eurozone
2010 profit: EUR 8,181
mill.
# 4 worldwide
(# 3 in 2008; # 5 in 2007)
# 1 by international branch network: ~14,086
# 1 by number of shareholders: 3.2 million
Note: Bloomberg Data as of December 30, 2010
13. 13
Santander Group
Main financial figures
Sound credit ratings
EUR MM 2010
Long term Outlook
Assets 1.217.501
Standard & Poor’s AA Negative
Loans 724.154
Moody’s Aa2 Negative
Shareholders’ equity 75.273
Fitch AA Stable
Assets Under Management 1.362.289
DBRS AA Stable
8.181
Net profit
Profits by geographical area Assets by geographical area
Other LatAm USA
4% Retail Spain USA
18% Other Continental
15% 4%
LatAm Europe
9% 45%
Other Retail
Europe Brazil
11% 12%
Brazil
25% United
Kingdom
18%
Global
United
Business
Kingdom
Europe
30%
9%
Continental Europe: 37%
14. Santander’s Model 14
Our strategy
1.Critical mass in our core markets
2.High diversification by geographies and businesses: focus on retail
banking
3.Solid retail banking model. Commercial focus (expand the
“front”), continue efficiency improvement (reduce the “back”) and a
prudent risk policy.
4.Balance sheet strength: a distinguishing feature of Santander Group
5.Active management of business portfolio: improving our strategic
positioning during the crisis
15. Santander’s model 15
Critical mass in our core markets
USA7
UK3
Branches: 722 Ranking1: 4th
Customers: 1.7 mill. Mkt. share1: 12%
Branches: 1,328
Mexico Customers: 26.4 mill.
Ranking1: 3rd
Mkt. share1: 15%
Branches: 1,093 Spain2
Customers: 9.0 mill. Ranking1: 1st
Mkt. share1: 15%
Brazil6 Branches: 4,780
Customers: 12.1
Ranking: 3rd mill.
Mkt. share: 10%
Branches: 3,696
Customers: +24 mill.
Portugal2 Santander
Chile Consumer4
Ranking1: 4th (5)
Ranking1: 1st Mkt. share1: 10% Branches: 523
Mkt. share1: 19% Branches: 762 Dealers: 135,000
Branches: 500 Customers: 1.9 mill. Customers: 13.7 mill.
Customers: 3.0 mill.
(1) Loans + deposits (balance sheet funds) + mutual funds
(2) Santander Consumer not included (in Spain: 2.7 million customers and 77 branches; Portugal: 0.3 million customers and 7 branches)
(3) Ranking 3rd by retail deposits and second by mortgages portfolio
(4) Present in 15 countries. Loyalty cards not included under customers
(5) Third largest private bank in Portugal and first by profit in 2009
(6) Excluding public-sector banks. (7) Only data from Sovereign Bank. Customer-homes data.
16. Santander’s model 16
Santander: Low risk business model
Profit before tax Retail Banking
(by business area) Loans/Assets (%)
Top World Banks: Loan/ Assets (% )
Retail Global 70
Banking Banking&
60
Markets
50
40
30
72% 24%
20
10
4% 0
Wells
Barclays
RBS
BNP
UBS
RBC
HSBC
Citi
BBVA
BoA
SocGén
Deutsche
Santander
JPM
Unicredit
Asset
Management&
Insurance Source: Banks' dat a
76% retail
17. Santander’s model
17
Efficiency as a goal: we believe in improving our
efficiency, year after year
Group efficiency ratio* Efficiency ratio vs Peers** (%)
In percentage C1 40.4
SAN
C2 41.3
efficiency:
66.1 SAN 41.7 Global Model
64.1 Abbey’s C4 49.7 of
entry Technology,
C5 50.6
61.4 Operations
59.7
C6 52.1 and Costs
B. Real’s C7 54.1
entry C8 55.3
56.3
54.7 54.1 C9 55.6
C10 55.8
SOV, A&L and C11 57.6
49.7 GE’s entry
C12 57.8
C13 59.4
45.5 C14 59.6
44.6
Peers… 60.6
42.9
41.7 C15 64.8
C16 69.4
C17 69.9
C18 72.5
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 9M'10
C19 87.5
(*) Efficiency ratio with amortisations. Figures from 2004 on C20 98.4
according to IFRS
(**) Note: Data as of December 2009. “Peer Group” are 19 large banks that because of their size, charateristic and/or
degree of direct competition are the reference group to surpass: Banco Itaú, Bank of America, Barclays, BBVA, BNP
Paribas, Citigroup, Credit Agricole, HSBC, Intesa Sanpaolo, JP Morgan, Lloyds, Mitsubishi, Nordea, Royal Bank of
Canada, RBS, Societe Generale, UBS, Unicredito, Wells Fargo.
18. 18
Index
Brazilian Economy and Financial System
Santander Group
Santander Brasil
-Overview
-Results
- Liquidity and Funding
Annexes
19. 19
Santander Brasil Overview
The only international retail bank
among the top 5 largest banks in Acquisition of two large
Brazil banks in Brazil (Banespa in
With 3,696 branches nationwide 2001, and Banco Real in
Over 24 million 2007)
Solid franchise
Customers in Brazil Integration converted in
3rd largest Brazilian through a profitability
Top universal
successful
private bank bank franchise
process of
in Brazil
acquisition
Focus on Risk and asset
Commercial quality Proven risk management
banking management
Provide a broad range
of commercial banking Approvals, monitoring and
products control of risks are coordinated
worldwide within the Santander
Group
20. 20
Santander Brasil Overview
Santander Brasil rank among the largest banks by market cap¹ in the world
US$ Bi llion
24º 25º 26º 27º 28º 29º 30º 31º Profit before Tax
32º 33º
59.5 54.1 52.0 51.7 51.6 51.4 50.0 49.6 48.2 47.7
Deutsche
Credit
US Bancorp
Barclays
Bank Of
National
Sumitomo
Santander
Communic
Banco do
Australia
Suisse
Scotia
Nova
Bank Of
Mitsui
Bank
Brasil
ations
Brasil
Main financial figures
Focus on Commercial banking US$ million 2010 Y-o-Y
Assets 225.741 18,6%
Profit before tax
2010 Loans 96.739 16,0%
Commercial Funding ² from client 92.332 8,6%
Banking Funding ² from client+ AUM 159.415 10,5%
64%
Net profit 4.198 34,0%
Global
Wholesale
Sound credit ratings
Asset Banking
Management Standard & Poor’s BBB- (stable)
28%
& Insurance Moody’s* Baa3 (stable)
8%
Fitch BBB (positive)
* Long- term deposits rating
1. Source: Bloomberg – 12/31/2010
2. Demand Deposits + Time Deposits + Savings + Debentures + Real Estate Credit Notes (LCI) and Agribusiness Credit Notes (LCA)
21. 21
Santander Brasil is a top universal bank franchise in Brazil
Santander is the 3rd largest Brazilian private bank in total assets, with
a market share¹ in loans of 11%
Market share
Number of branches
Strong distribution platform… Total Country December/2010
Market Share: 12%
North: 5% of GDP
Bank with one of the highest numbers of point Market Share: 5%
of sales in South/Southeast (73% of GDP)
Northeast: 13% of GDP
• 2,201 Branches Market Share: 7%
• 1,495 Mini Branches
Middle-west: 9% of GDP
• 18,312 ATM’s Market Share: 6%
Southeast: 56% of GDP
+10.9 million current accounts², an
Market Share: 16%
increment of 661 thousand current
accounts in 12 months
South: 17% of GDP
Opening of 110 new branches
Market Share: 9%
in 12 months
Source: The Brazilian Central Bank and IBGE. GDP date: 2008
1. Santander’s market share in total loans of private sector: 17% (Dec/10)
2. Current accounts within 30 days, according to Central Bank as of dec/2010
23. 23
Integration Process - Status
1st and 2nd Stages concluded 3rd Stage
Aug/08 Jun/10 Dec/10 1H11
1 Senior Management Integrated
2 Centralized areas integrated
Risk Management, Human Resources, Marketing
Auditing financial Control, Compliance, etc.
3 Wholesale, Private & Asset integrated Re-branding
GB&M, Corporate and Middle
4 Credit card system
5 ATMs integrated
VI
8 Re-branding
ATMs platform
Upgrade on branches infrastructure 9 Unified Customer Services
6 Insurance System 95% of volume
7 New commercial model Technology migration
10 Tests and Simulations
24. 24
Santander Loan Portfolio
Total Loan Portfolio (US$) Credit Portfolio Concentration¹ – – Risk (%)
Credit Portfolio Concentration¹ Risk (%)
Dec/10 Total Credit Dec/10
Total: US$ 96,7 bi 100 largest 29.8%
Corporate Individuals¹ 50 largest 23.8%
27% 32%
20 largest 16.0%
Consumer
SMEs
finance
24% 10 largest 11.5%
17%
Largest debtor 2.8%
2010 Loan Portfolio Breakdown by Segment (US$ Billion) – Dec/10
Individuals Corporate + SMEs Consumer Finance³
Total: US$ 30,7 billion Total: US$ 49,8 billion Leasing / Total: US$ 16,2 billion
Other
Leasing/Auto Auto Loans Consumer Credit 0,4%
Loans¹ 3.7% Large 7,2%
4.5% Construction 8,6%
Loans
Personal Credit Card
6.5%
Loans/Others 19.5% Trade Finance
Working
33.8% 24.0%
capital /
Payroll Others
Vehicles &
Loans² 53.5% On-lending Motorcycles
Mortgages 25.0% 9.8% 83,8%
12.1%
Agricultural Agricultural
Loans Loans
5.1% 2.5%
1. Includes: Credit Portfolio and Credit Guarantees, Securities and Derivatives Financial Instruments
2. Includes acquired portfolio
3. Vehicles (Cars, Motorcycles), Large vehicles and Others: Clubcard, CVC.
25. 25
Business - Portfolio Evolution – IFRS
US$ billion US$ million Y-o-Y Q-o-Q
2010 2009 Variation Variation
16.0%
Individuals 30,717 26,029 18.0% 5.6%
4.3%
Consumer Finance 16,249 15,124 7.4% 1.9%
92.8 96.8
100.0
83.4 84.3 88.3 8.5% SMEs 23,080 18,948 21.8% 7.1%
80.0
4.7% 5.1% 6.5%
4.1% 4.3% Corporate 26,693 23,284 14.6% 1.9%
60.0 4.5%
40.0 Total IFRS 96,739 83,385 16.0% 4.3%
1.1% 2.5%
20.0 0.5% Others Credit Risk
4,624 1,946 137.6% 38.5%
dec.09 mar.10 jun.10 sep.10 dec.10 -1.5% Transactions¹
-
Q-o-Q Var. Expanded Credit
101,363 85,331 17.2% 4.0%
portfolio¹
Expanded Credit
portfolio¹ including 103,893 86,669 19.9% 5.2%
acquired portfolio²
1. Loans for the year 2009 have been reclassified for comparison purposes with the current period, due to re-segmentation of clients occurred in 2010
2. Portfolio acquired from other banks
26. 26
Profitability and asset quality levels
Delinquency IFRS³ (%) Coverage Ratio IFRS²
9.3 101.7% 102.8% 101.7% 101.4%
8.8 98.3%
8.2 7.9 7.6
7.2 7.0 6.6
6.1 5.8
5.3 5.3 5.1
4.5 4.3
4Q09 1Q10 2Q10 3Q10 4Q10
4Q09 1Q10 2Q10 3Q10 4Q10
Individuals Corporate Total
Net Interest Margin¹
8.8%
7.9%
2009 2010
1) Net interest income (including dividends on equity securities) divided by average interest earning assets.
2) Allowance for Loan Losses / nonperforming loans for over 90 days + performing loans with high delinquency risk
3) Nonperforming loans for over 90 days + performing loans with high delinquency risk / total managerial loans
28. 28
Index
Brazilian Economy and Financial System
Santander Group
Santander Brasil
-Overview
-Results
- Liquidity and Funding
Annexes
29. 29
Income Statement – IFRS
US$ Billion 2010 2009 Y-o-Y
Net Interest Income 13.702 12.606 8,7%
Net Fee 3.886 3.547 9,6%
Other Operating Income 768 983 -21,8%
Total Income 18.356 17.136 7,1%
General expenses¹ (7.090) (6.935) 2,2%
Allowance for loan losses (4.682) (5.677) -17,5%
Net Provisions/Others (1.055) (548) 92,7%
Net profit before tax 5.530 3.976 39,1%
Income tax (1.332) (843) 57,9%
Net profit 4.198 3.132 34,0%
1. Includes depreciation and amortization.
30. 30
Santander Brazil Performance Ratios - IFRS
Efficiency Ratio¹ (%) ROAA²(%)
-1.5 p.p. 0.4 p.p.
2.2%
36.3 34.8 1.8%
2009 2010 2009 2010
ROAE (adjusted)³ (%) BIS³ (%)
-2.4 p.p.
-3.5 p.p.
19.3 25.6%
16.9 22.1%
Average Peers*
15,1%
Current Minimum Requirement
11,0%
2009 2010 2009 2010
Average Banco do Brasil, Itaú Unibanco Bradesco (sep-10)
1. General Expenses excluding amortization / Total Revenue excluding Cayman hedge
2. Net Profit / Average Assets
3. Excludes goodwill on acquired companies (Banco Real and Real Seguros Vida e Previdência)
31. 31
Total Risk-Based Capital Ratio
BIS Ratio %
Santander x Major Banks (including Local Institutions)
Source: Bloomberg – 01.27.2011
32. 32
Index
Brazilian Economy and Financial System
Santander Group
Santander Brasil
-Overview
-Results
- Liquidity and Funding
Annexes
33. 33
Financing Strategy: we are managing our balance sheet in a
very PRUDENT / CONSERTIVE way
Santander’s basic liquidity management principles
Decentralized...but coordinated...action
Diversification: market; maturity; currency;
instrument
Limited short term funding
Limited intra-group funding (principle of
autonomy in the context of the “Living Wills”)
34. 34
Financing Strategy
Decentralized…but coordinated…actions
Each subsidiary has its own rating…and can access the market in
different currencies, products and investor bases
35. 35
Conservative Balance Sheet Management: Liquidity
Balance sheet: liquidity ¹ Key principles
Low Liquidity Risk
The local balance sheet should be self-
Credits + 56% funded.
Similars Deposits
58% raised by No liquidity “carry trade”.
business
lines Focus on retail and stable funding:
stability and long tenor.
63%
Santander Brasil reliance in
Other* 46% 5%
international funding is not
14% Other** considerable (11,1% of the total
Reserve balance sheet)
7% Debt issued
Requirements
+ Others***
21% Liquidity buffer based on stress
16% Equity results.
Government 7%
Bonds
No refinancing “peaks”.
Proforma Data
*Defered tax assets, Plant, property and equipment;Investment in affiliates, Prepaid expenses
** Provision:Tax; Labour; Civil
*** Data does not include double count which inflate assets and liabilities in the same proportion
1 – Managerial Balance Sheet used for liquidity management.
36. 36
Liquidity Firewall
The Brazilian Law
It is forbidden lend money to Parent Company
(Lei 4.595/64; Lei 7.492/86; MNI 02-01-16).
In Brazil it's a white-collar crime.
Dividend Policy Supervision
Limited
Regulation: max. The Central Bank
95% of Profits (BR of Brazil has a
GAAP). close and
Santander: 80-85% rigorous
(BR GAAP) and supervision.
50% (IFRS).
Corporate Governance Decentralized Model
There is a Policy for
Independent
Transactions with
Related Parties subsidiaries in terms
Bylaws are designed to of capital and liquidity.
protect shareholders.
37. 37
Santander Model
Loans / Deposits Key principles
105% Low Liquidity Risk
98%
Metrics are used in order to control
funding maturity concentration and/or
funding providers.
Dec-09 Dec-10
As long as market conditions /
instruments allow, strive to match
Short Term Funding (*) / Total Funding (*) assets and liabilities.
Santander has a formal contingency
funding plan to be held as insurance
%
%
against a range of liquidity stress
scenarios.
15 %
Continuous and closer monitoring of
1%
liquidity used by various business
Dec-09 Dec-10 units.
(*) Institutional Funding
38. 38
Santander Brasil Capital Markets funding is carried out through a
diversified approach by markets, tenor and instruments
Short Term
• EuroCD: 1 billion Programme (Reg. S Notes only)
Medium and Long Term
• Eurobond market: Senior transactions in all major currencies through a
US$ 3,5 billion EMTN Programme (Reg S and 144-A). Structured and
Private Placements are also issued under the Programme.
• Securitization of Payment orders (future flows) – MT103 and MT202
through established programme. Debt Service Coverage Ratio is
currently above 90 times. Rated A2 Moody’s / A- S&P / A Fitch.
39. 39
Index
Brazilian Economy and Financial System
Santander Group Overview
Santander Brasil
Annex
40. 40
Quarterly Managerial¹ Income Statement – IFRS
US$ million
Income Statements 4Q09 1Q10 2Q10 3Q10 4Q10
- Interest and Similar Income 5.596 5.276 5.595 6.030 6.363
- Interest Expense and Similar (2.270) (1.959) (2.260) (2.597) (2.746)
Interest Income 3.327 3.317 3.335 3.433 3.617
Income from Equity Instruments 5 2 8 1 18
Income from Companies Accounted for by the Equity Method 3 6 7 6 6
Net Fee 947 922 972 1.010 982
- Fee and Commission Income 1.074 1.047 1.097 1.154 1.157
- Fee and Commission Expense (126) (125) (125) (144) (175)
Gains/Losses on Financial Assets and Liabilities and Exchange Rate Diferences 174 346 165 268 133
Other Operating Income (Expenses) (34) (26) (34) (60) (78)
Total Income 4.422 4.568 4.454 4.659 4.676
General Expenses (1.645) (1.510) (1.577) (1.620) (1.679)
- Administrative Expenses (809) (739) (772) (781) (724)
- Personnel espenses (836) (771) (806) (839) (954)
Depreciation and Amortization (151) (163) (167) (176) (198)
Provisions (net)² (274) (358) (165) (383) (217)
Impairment Losses on Financial Assets (net) (1.208) (1.369) (1.259) (1.034) (1.033)
- Allowance for Loan Losses³ (1.221) (1.367) (1.280) (1.030) (1.005)
- Impairment Losses on Other Assets (net) 13 (2) 21 (4) (27)
Net Gains on Disposal of Assets 19 67 27 20 (34)
Net Profit before taxes 1.163 1.235 1.313 1.466 1.516
Income Taxes -258 -233 -309 -365 -425
Net Profit 905 1.003 1.004 1.100 1.091
1. Does not consider the fiscal effect of Cayman hedge
2. Includes provision for tax contingencies and legal obligations
3. Includes recovery of credits written off as losses
4. Exchange rate of 1,7585, Dec/11
41. 41
Balance Sheet - Total Assets – IFRS
US$¹ million
Assets Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Cash and Balances w ith the Brazilian Central Bank 16.430 22.194 25.513 32.151 34.223
Financial Assets Held for Trading 12.120 13.938 21.632 14.303 14.955
Other Financial Assets at Fair Value Through Profit or Loss 9.817 9.564 9.769 10.041 10.809
Av ailable - for- Sale Financial Assets 27.960 22.403 25.655 24.479 28.442
Loans and Receiv ables 91.681 90.380 94.477 101.976 104.903
- Loans and adv ances to credit institutions 14.598 12.249 12.220 14.925 13.652
- Loans and adv ances to customers 83.151 84.159 88.153 92.784 96.789
- I mpairment losses -6.067 -6.028 -5.896 -5.733 -5.538
Hedging deriv ativ es 98 80 64 63 70
Non-current assets held for sale 103 25 56 52 40
I nv estments in associates 252 255 258 265 224
Tangible Assets 2.231 2.311 2.396 2.538 2.722
I ntangible Assets: 19.050 19.032 19.058 19.080 19.258
- Goodw ill 17.059 17.059 17.059 17.059 17.059
- Others 1.992 1.973 1.999 2.021 2.199
Tax Assets 9.507 8.938 9.188 9.193 8.943
Other Assets 1.128 1.307 1.156 1.339 1.153
Total Assets 190.379 190.425 209.222 215.479 225.741
1. Exchange rate of 1,6597, Dec/10.
42. 42
Balance Sheet – Total Liabilities and Equity – IFRS
US$¹ million
Liabilities Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Financial Liabilities Held for Trading 2.672 2.714 2.813 3.021 2.883
Other Financial Liabilities at Fair Value Through Profit or Loss 1 1 1 - -
Financial liabilities at amortized cost 122.653 122.612 140.009 143.314 152.643
- Deposits from the Brazilian Central Bank 145 70 - - -
- Deposits from credit institutions 12.626 14.516 28.791 24.921 25.542
- Customer deposits 90.040 88.743 90.606 96.057 101.192
- Marketable debt securities 6.892 6.791 7.331 9.004 12.103
- Subordinated liabilities 6.811 5.938 6.075 5.683 5.841
- Other financial liabilities 6.138 6.554 7.207 7.650 7.964
Hedging deriv ativ es 6 22 25 10 -
Liabilities for I nsurance Contracts 9.355 9.702 10.058 10.781 11.835
Prov isions² 5.712 5.953 5.822 5.971 5.661
Tax Liabilities 5.698 5.131 5.543 6.054 6.345
Other Liabilities 2.547 1.674 1.800 2.297 2.172
Total Liabilities 148.645 147.810 166.070 171.448 181.538
Shareholders' Equity 41.397 42.218 42.744 43.597 43.726
Minority I nterests 1 1 2 4 5
Valuation Adjustments 337 397 406 430 472
Total Equity 41.734 42.616 43.152 44.031 44.203
Total Liabilities and Equity 190.379 190.425 209.222 215.479 225.741
1. Exchange rate of 1,6597, Dec/10.
2. Includes provision for pension and contingencies
43. 43
Quality of Loan Portfolio - BR GAAP
Delinquency Over 90¹ (%) NPL Over 60² (%) Coverage Ratio Over 90³
9.2
7.8 8.7
7.2 8.0
6.7 7.4 133% 137%
6.2 6.8 6.9 120% 128%
5.9 5.8 6.4 113%
5.4
4.7 5.6
4.2 5.0
3.9 4.7
4.2 4.7
3.7 4.4
3.0 3.6
2.5 2.2 2.9 2.7
4Q09 1Q10 2Q10 3Q10 4Q10 4Q09 1Q10 2Q10 3Q10 4Q10
4Q09 1Q10 2Q10 3Q10 4Q10
Individuals Corporate Total Individuals Corporate Total
1. Nonperforming loans over 90 days / total loans BR GAAP
2. Nonperforming loans over 60 days / total loans BR GAAP
3. Allowance for Loan Losses / (nonperforming loans for over 90 days + performing loans with high delinquency risk)
44. 44
Corporate Governance
The Bank is managed by the Board of Directors and the
Executive Board, supported by specialized committees
Banco Santander believes that a good corporate governance is a competitive advantage and
strategic element supported by two pillars: shareholder rights and transparency
In line with the corporate governance best practices, Banco
Santander’s units are listed in BM&FBOVESPA and in the NYSE
Level 2 of BM&FBOVESPA with 100% of Tag Along
Board of
Directors¹
3 Executive Board 3 Board Members of 3 Independent Board
Members Grupo Santander Spain Members
1 Data as of December, 2010
45. 45
Santander Brazil Ownership Structure
Santander Group Controls 81,6% of Santander Brazil
Santander Brazil’s shares are listed in NYSE and in the Brazilian stock, mercantile and futures
exchange BM&FBOVESPA
BANCO
SANTANDER S.A.
(SPAIN)
99.11% 99,99% 100%
(V/T) (V/T) (V/T)
GRUPO
EMPRESARIAL SANTANDER STERREBEECK MINORITY
SANTANDER S.L. SEGUROS S.A. B.V. SHAREHOLDERS
34.7%(T) 0.2%(T) 46.6%(T) 18.4%(T)
35,2%(V) 0,2%(V) 46,8%(V) 17,7%(V)
BANCO
SANTANDER
(BRASIL) S.A.
Date: As of 10/22/2010
Note: “V” denotes percentage of voting shares; “T” denotes percentage of total share capital
