Santander Earnings Presentation 4Q24 BRGAAP February 5吨, 2025 Disclaimer This presentation may contain certain forward-looking statements and information pertaining to Banco Santander (Brasil) S.A. ("Santander Brasil") and its subsidiaries, which reflect the current views and / or expectations of Santander Brasil and its management regarding its business performance and future events. Forward-lookinq statements include, without limitation, any statement that may predict, forecast, suqqest or imply future re ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Banco Santander Brasil (BSBR) as a strong value stock based on its financial metrics and Zacks Rank [2][4][6]. Company Analysis - Banco Santander Brasil (BSBR) holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating strong potential for undervaluation [4]. - The stock has a Forward P/E ratio of 5.53, significantly lower than the industry average of 9.16, suggesting it is undervalued compared to peers [4]. - BSBR's Forward P/E has fluctuated between 4.94 and 11.91 over the past year, with a median of 6.81, indicating volatility but also potential for growth [4]. - The P/B ratio for BSBR is 0.77, which is favorable compared to the industry average of 1.70, further supporting the notion of undervaluation [5]. - Over the past year, BSBR's P/B ratio has ranged from 0.77 to 1.06, with a median of 0.91, reflecting its current valuation status [5]. - The combination of these metrics suggests that BSBR is likely undervalued and presents an attractive investment opportunity based on its earnings outlook [6].

Company Overview - Banco Santander Brasil (BSBR) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4][3] - The stock is trading with a P/E ratio of 5.97, significantly lower than the industry average P/E of 9.01 [4] Valuation Metrics - BSBR has a PEG ratio of 0.25, compared to the industry average PEG of 0.70, suggesting it is undervalued relative to its expected EPS growth rate [5] - The P/B ratio for BSBR is 0.78, which is also lower than the industry average P/B of 1.67, indicating solid valuation metrics [6] Investment Potential - The historical valuation metrics for BSBR show a Forward P/E range from 4.94 to 11.91, with a median of 7.04, further supporting the notion of undervaluation [4] - Given the strength of its earnings outlook and current valuation metrics, BSBR is positioned as a strong value stock at this time [7]

Core Viewpoint - The article compares Banco Santander-Brazil (BSBR) and HDFC Bank (HDB) to determine which stock is more attractive to value investors, highlighting BSBR's superior valuation metrics and earnings outlook [1][3][7]. Valuation Metrics - BSBR has a forward P/E ratio of 7.26, significantly lower than HDB's forward P/E of 20.07, indicating that BSBR may be undervalued [5]. - The PEG ratio for BSBR is 0.30, while HDB's PEG ratio is 1.68, suggesting that BSBR offers better value relative to its expected earnings growth [5]. - BSBR's P/B ratio is 0.81, compared to HDB's P/B of 2.75, further indicating that BSBR is more attractively priced relative to its book value [6]. Earnings Outlook - BSBR currently holds a Zacks Rank of 2 (Buy), while HDB has a Zacks Rank of 3 (Hold), suggesting that BSBR is experiencing a more favorable earnings outlook [3][7]. - The article emphasizes that BSBR has seen stronger estimate revision activity, which is a positive indicator for value investors [7]. Value Grades - Based on the analysis of various valuation metrics, BSBR holds a Value grade of B, while HDB has a Value grade of C, reinforcing the conclusion that BSBR is the more attractive option for value investors [6].

Financial Data and Key Metrics Changes - The quarterly net profit for Banco Santander (Brasil) was BRL 3.7 billion, reflecting a 10% quarter-on-quarter growth and a two-digit growth year-on-year [5][45] - The Return on Average Equity (ROAE) reached 17%, showing significant growth both quarter-on-quarter and year-on-year [7][46] - Net Interest Income (NII) grew by 16% year-on-year, with a portfolio growth of only 6%, indicating improved efficiency in generating income [7][45] - Fees increased by 13% year-on-year, with a month-over-month growth of almost 3% [8][38] Business Line Data and Key Metrics Changes - The retail loan portfolio grew by 11%, while the corporate segment focused on profitability, leading to a slight reduction in its portfolio [33] - Consumer finance, the largest segment, saw a portfolio growth of 20% year-on-year, with net revenues increasing by 33% [22] - The mass retail segment reported a gross revenue increase of 113% year-on-year, indicating a healthier portfolio [23] - The cards segment experienced a spending growth of 10% year-on-year, with an increase in active cardholders [21] Market Data and Key Metrics Changes - The funding grew by 5% year-on-year, with a focus on improving the quality of the funding mix [9] - The loan-to-deposit ratio remained low at 93%, reflecting strong liquidity management [37] - The auto loan market showed good dynamics with a growth of 4.7% in the quarter [34] Company Strategy and Development Direction - The company is focusing on diversifying its credit portfolio and enhancing profitability through better capital allocation [12][16] - There is a strong emphasis on technology integration to improve customer experience and operational efficiency [48] - The strategy includes a new positioning for SMEs, aiming to double the size of this segment in the coming years [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment but expressed confidence in maintaining growth through disciplined capital allocation [54][60] - The focus will remain on profitability rather than just growth, with a commitment to sustainable long-term expansion [32][46] - The company aims to enhance its presence in clients' daily lives, emphasizing the importance of transactionality [11][47] Other Important Information - The company is investing in technology and has introduced new advisory services to enhance its offerings [15][25] - The quality of assets remains stable, with a cost of risk of 3.7% and a non-performing loan (NPL) formation rate of 1.1% [40][41] Q&A Session Summary Question: Future growth expectations in a more uncertain macro scenario - Management indicated that while some portfolios may experience flat or slight declines, overall growth will continue with a focus on marginal profitability and cross-selling opportunities [54][60] Question: Impact of old cases on Tier 1 capital - Management clarified that the recent impact was due to a long-standing case, and they do not expect further material surprises affecting shareholders' equity [62][71] Question: Consumer finance and regulatory impacts - Management acknowledged the upcoming regulation but does not expect a material impact on capital or payout ability [74][76] Question: Strategy for low-income clients and SMEs - Management confirmed that low-income clients remain a focus, with ongoing efforts to derisk portfolios while maintaining a conservative credit appetite [84][86] Question: Growth in fees and commissions - Management emphasized the importance of diversifying revenue streams and maintaining a disciplined approach to fees and commissions [92][93] Question: Profitability levers to reach ROE targets - Management identified maintaining a balance between assets and liabilities as crucial for profitability, alongside a focus on fees over risk-weighted assets [103][104]

Santander Earnings Presentation 3Q24 BRGAAP October 29吨, 2024 Disclaimer This presentation may contain certain forward-looking statements and information pertaining to Banco Santander (Brasil) S.A. ("Santander Brasil") and its subsidiaries, which reflect the current views and / or expectations of Santander Brasil and its management regarding its business performance and future events. Forward-looking statements include, without limitation, any statement that may predict, forecast, suggest or imply future re ...

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Financial Data and Key Metrics Changes - The company's profitability year-on-year is 15.5%, an increase from 14.1% in the previous quarter, indicating a positive trend in ROE above the cost of capital [29][57] - Total revenues increased by 12% year-on-year, driven by NII and a strong performance in fees and commissions [90] - Provisions dropped in both quarterly and annual comparisons, reflecting improved credit quality and management [56][88] Business Line Data and Key Metrics Changes - The loan portfolio grew by 8% year-on-year, with notable increases in the credit card portfolio (4% growth) and payroll loans (2% growth) [84] - Fees and commissions reached all-time highs this quarter, with quarterly growth of 6% and annual growth of almost 18% [54] - The consumer finance segment is experiencing significant transformation and growth, particularly in auto loans, which grew 4.5% in the quarter [85][39] Market Data and Key Metrics Changes - The company holds a 21% market share in consumer finance and originates nearly 90% of all auto loans in Brazil, indicating strong market positioning [39] - The NPL (Non-Performing Loans) ratio improved to 1.2%, reflecting better quality in origination [88] - The loan-to-deposits ratio reached an all-time high of 93%, showcasing effective funding management [87] Company Strategy and Development Direction - The company aims to diversify its funding mix from wholesale to retail, focusing on enhancing its investment platform [45] - A strategic emphasis is placed on customer centricity, aiming to improve client relationships and experiences through technology [59][65] - The company is committed to achieving mid to high teens ROE in the coming quarters, with a long-term goal of reaching around 20% [14][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the dynamic and complex nature of the business environment, emphasizing the need for continuous innovation to meet consumer demands [2] - The company is focused on maintaining profitability while pursuing growth, ensuring a balanced approach to portfolio management [11][13] - Management expressed confidence in achieving consistent growth and solid results in the upcoming quarters, despite market volatility [61][92] Other Important Information - The company has launched a new digital experience aimed at reactivating inactive customers, which is expected to enhance engagement and profitability [68][81] - The introduction of the "Free" offering is seen as a powerful tool for mass income offerings, aimed at increasing activation and conversion rates [120] Q&A Session Summary Question: What is the strategy for SMEs and the increase in delinquency? - Management aims to double the SME business in the coming years, emphasizing improved risk management through a network of experts [124][126] Question: How will fees and commissions grow in the future? - Growth in fees and commissions is driven by new client acquisition and adjustments for inflation, with a positive outlook for both individuals and companies [113][114] Question: What is the outlook for credit card performance? - The credit card segment is expected to grow with a focus on quality and client satisfaction, moving towards a more integrated product offering [104][107]

Financial Data and Key Metrics Changes - Net Interest Income (NII) grew by 14.5% year-on-year and 7.3% quarter-on-quarter, indicating a positive performance in both client and market NII [56][57] - Total revenues increased by 14% year-on-year, driven by NII and fees, leading to a net income of BRL3 billion, up 41% in 12 months [68] - Return on Equity (ROE) improved to 14.1%, reflecting a solid balance sheet [68] Business Line Data and Key Metrics Changes - The retail credit portfolio grew by 5%, with significant contributions from auto loans and SMEs [59] - The private securities and guarantees portfolio saw a remarkable growth of 23% year-on-year [59] - Agribusiness segment reported a 39% growth year-on-year, highlighting its importance in the company's strategy [60] Market Data and Key Metrics Changes - The loan-to-deposit ratio remains at approximately 94%, showcasing strong funding management [62] - Time deposits and real estate LCI and agribusiness LCA credit notes contributed to a 10% growth in liabilities year-on-year [61] Company Strategy and Development Direction - The company is focused on diversifying its portfolio and improving credit quality, with a strategy defined in 2022 and refined in 2023 [4][24] - A new mass retail strategy, "Comeca Agora," was launched to enhance customer engagement and service delivery [54][74] - The company aims to grow its Select customer base from 1 million to 2 million, emphasizing the importance of high-income clients [28][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the NII and overall revenue growth throughout 2024, supported by a diversified portfolio and improved credit quality [71][72] - The company is committed to a multichannel approach, integrating physical and digital services to enhance customer experience [73][74] Other Important Information - The efficiency ratio improved by 3.3 percentage points, now below 40%, indicating effective expense management [11] - The company is actively monitoring the agribusiness segment on a case-by-case basis, acknowledging varying performance across different crops [6] Q&A Session Summary Question: Net funding dynamics and AAA channel performance - Management highlighted strong net inflows through the AAA channel, indicating a positive funding environment despite some challenges in the private segment [78][80] Question: Market NII evolution and Selic rate impact - Management noted that the positive performance in market NII is a result of portfolio repricing and a reduction in the Selic rate, with expectations for continued improvement [87][89] Question: Payroll loans and open finance strategy - Management reaffirmed the importance of payroll loans for customer loyalty and profitability, viewing open finance as an opportunity for growth rather than a threat [96][98] Question: Growth in Select customer segment - Management emphasized the impressive growth in the Select segment and the goal to reach 2 million clients, which would position the company above market leaders [106]

Santander Forward-looking statements include, without limitation, any statement that may predict, forecast, suggest or imply future results, performance or achievements, and may include terminology such as "believe", "anticipate", "expect", "estimate", "could", "forecast", "potential", "will likely result", or others that have similar meaning. Santander 1Q24 Results Highlights 4 Focus on becoming the primary bank for customers in their financial decisions Loyal customers | --- | --- | --- | --- | --- | |--- ...