Hugo Cruz

Hugo Cruz asked for assurance that the Webster acquisition would be Santander's last major acquisition, or if more would be considered after digestion. He also inquired about any risks to shareholder approval from either Santander or Webster, and questioned the rapid timing of achieving the EUR 800 million in synergies by 2028, asking if further synergies were expected beyond that timeframe.

Answer

Ana Botín, Executive Chair, and Héctor Grisi, CEO of Santander, firmly stated there would be no more bolt-on acquisitions for the next three years, emphasizing that Santander is now at scale in all its core markets. Ms. Botín expressed confidence in obtaining shareholder approval from both sides, viewing it as a beneficial transaction. Regarding synergies, she confirmed the EUR 800 million target by 2028, noting that they would temporarily slow down 'One Transformation' in the U.K. and U.S. to prioritize integration, implying additional benefits beyond 2028. Mr. Grisi highlighted Webster's complementary commercial focus and deposit base as crucial for taking the U.S. business to the next level.

Hugo Cruz sought assurance that the Webster acquisition would be Santander's last major deal for the foreseeable future, inquired about any risks of the transaction not being approved by shareholders of either Santander or Webster, and questioned the rapid timeline for capturing the $800 million in synergies by 2028, asking if further synergies are expected beyond that period.

Answer

Executive Chair Ana Botín stated there would be no more bolt-on acquisitions for the next three years, emphasizing that Santander is now at scale in all core markets. She expressed confidence in shareholder approval for both companies, viewing it as a beneficial transaction for all parties. Regarding synergies, she confirmed the $800 million target by 2028, noting that while One Transformation might slow in the US/UK during integration, additional benefits are expected beyond 2028. CEO Héctor Grisi highlighted the complementary nature of Webster's commercial business with Santander's consumer operations, reinforcing the strategic fit.

Hugo Cruz from KBW asked for reassurance that the Webster acquisition would be the last major acquisition, given past investor sentiment against large deals. He also inquired about any risks of the transaction not being approved by Santander or Webster's shareholders. Finally, he questioned the timing of the $800 million synergies, noting that EUR 200 million would be captured by 2028, and if more synergies were expected beyond 2028.

Answer

Ana Botín (Executive Chair, Banco Santander) firmly stated 'no more bolt-on acquisitions' for the next three years, emphasizing that Santander is now at scale in all core markets, including the U.S. and U.K., achieving best-in-class profitability. She confirmed the need for shareholder approval from both Santander and Webster, anticipating no issues as it's a 'very good transaction for both sides.' Regarding synergies, she explained that while the goal is to capture them quickly, One Transformation efforts in the U.S. and U.K. will be slowed down to prioritize integration, implying additional benefits beyond 2028. Héctor Grisi Checa (CEO, Banco Santander) highlighted Webster's complementary commercial business and deposit base as crucial for taking Santander U.S. to the next level.

Hugo Cruz asked for assurance that the Webster acquisition would be the last major acquisition, or if more bolt-ons are expected after digestion. He also inquired about any risks of the transaction not being approved by Santander or Webster shareholders, and the timing and potential for synergies beyond 2028.

Answer

Ana Botín (Executive Chair) stated there would be no more bolt-on acquisitions for the next three years, emphasizing that Santander is now at scale in its core markets. She confirmed that shareholder approval is required from both sides but does not anticipate any issues. Botín explained that while the initial synergy realization is targeted by 2028, there will likely be additional benefits beyond that, as One Transformation efforts in the US and UK will be temporarily slowed to prioritize integration. Héctor Grisi Checa (CEO) highlighted Webster's complementary commercial business as a key factor.

Hugo Cruz of KBW asked for an explanation of the difference between the €48 billion cumulative profit target and the €39 billion CET1 generation figure. He also inquired about the timing for the €13 billion near-term capital distribution and the planned SRT contributions.

Answer

CEO Onur Genç explained the delta between cumulative profit and CET1 generation is primarily due to the negative impact of assumed currency depreciation (FX) over the plan's period. He confirmed the pending €1 billion buyback will start after the Sabadell process concludes. Global Head of Finance Luisa Gómez Bravo added that SRTs are expected to generate a run-rate of 30-40 basis points of CET1 annually.

Hugo Cruz of Keefe, Bruyette & Woods asked if the guided deterioration in Mexico's cost of risk was due to a shift in business mix or caution regarding the macroeconomic environment.

Answer

Executive Onur Genç gave a direct response, stating that the expected increase in the cost of risk for Mexico is primarily driven by a change in the business mix, specifically the strategy to grow more in the retail segment, which inherently carries a different risk profile.