Ignacio Cerezo

Ignacio Cerezo requested clarification on the calculation method for the 15% Return on Invested Capital (ROIC), sought confirmation of the distribution policy and annual payout embedded in the 20% ROTE target for 2028, and asked about the possibility of having to raise the offer for Webster and Santander's potential response.

Answer

Executive Chair Ana Botín stated that Santander does not foresee raising the offer, believing the current price is balanced and offers upside for Webster shareholders through the share portion. CFO José García Cantera explained that the 15% ROIC is a cash-on-cash calculation over a three-year period, standard for the industry. Head of Investor Relations Rahul Sinha offered to provide detailed calculation specifics, noting it involves the $12.2 billion consideration, capital impact (140 basis points), share issuance, and consensus estimates for Webster's net profit and cost synergies by 2028. Rahul also reiterated the 50% payout and capital hierarchy for CET1 above 13% for 2027-2028, with more details at Investor Day.

Ignacio Cerezo from UBS requested clarification on how the 15% return on capital invested (ROIC) for Webster was calculated. He also asked for confirmation of the distribution policy or annual payout embedded in the 20% RoTE target by 2028, and if Santander foresees the possibility of having to raise the offer for Webster and how they would respond.

Answer

Ana Botín (Executive Chair, Banco Santander) stated they do not consider raising the offer, believing the current price is balanced and offers Webster shareholders upside through the share portion. José Antonio García Cantera (CFO, Banco Santander) explained that the 15% ROIC is a standard cash-on-cash calculation, representing a three-year return on capital invested, and Raul Sinha (Head of Investor Relations, Banco Santander) added that it considers the $12.2 billion consideration, capital impact (140 basis points), share issuance, and consensus estimates for Webster's 2028 net profit plus cost synergies. Raul Sinha also reiterated the 50% payout and capital hierarchy for CET1 above 13% (expected in 2027-2028) for the distribution policy, with no more bolt-on acquisitions.

Ignacio Cerezo requested details on how the 15% return on capital invested (ROIC) was calculated. He also asked for confirmation of the distribution policy or annual payout embedded in the 20% ROTE target by 2028, and whether Santander foresees the possibility of having to raise the offer for Webster.

Answer

Ana Botín (Executive Chair) stated that Santander does not consider raising the offer, believing the current price is balanced. José Antonio García Cantera (CFO) and Raul Sinha (Head of Investor Relations) explained that the 15% ROIC is a cash-on-cash calculation over three years, based on capital employed (derived from the 140 basis points capital impact and share issuance) and consensus estimates for Webster's net profit plus synergies. Sinha reiterated the 50% payout policy and the application of capital hierarchy for CET1 above 13% post-2027, with more details to follow at Investor Day.

Ignacio Cerezo asked for the geographic and business drivers of the profit growth needed in H2 to meet full-year guidance, considering currency headwinds. He also requested color on the regulatory impacts being postponed to 2026.

Answer

CEO Héctor Grisi Checa expressed confidence in meeting targets, citing improving momentum in Consumer, continued strength in Payments and Wealth, and a potential rebound in CIB, providing specific revenue growth expectations. CFO José García Cantera added that the 'other results' line should also improve. Regarding regulation, he noted the postponed impact relates to an SME model recalibration in Spain and that it's too early for a full 2026 outlook.

Ignacio Cerezo from UBS asked if the strategic plan's ROTE calculation assumes the full €36 billion capital distribution. He also inquired about the potential competitive impact on BBVA's Mexican business, specifically on deposit costs, from Nubank receiving a banking license.

Answer

CEO Onur Genç confirmed the ROTE calculation assumes excess capital is distributed annually to maintain the 12% CET1 target, starting in 2026. Regarding Nubank in Mexico, he acknowledged them as a strong competitor but expressed confidence in BBVA's ability to compete, citing its dominant 44% market share in payrolls and a large, stable retail deposit base that is less sensitive to pure price competition.