Banco Santander (Brasil) S.A. February, 2011 2 Table of Contents Santander – Worldwide Santander – Brazil - Brazil: Macro Information - Strategy - Business - Results in IFRS and Asset Quality - Additional Information Annexes 3 Santander – Worldwide Santander is one of the largest financial groups worldwide and has a long track record of profit generation, specially during the crisis Solid results allowed Banco Santander to Mkt Cap.: EUR 66,033 MM. rank 3rd worldwide* by accrued profit # 10 worldwide # 1 in the ¹ 1 (# 12 in 2006) 2007-2010 (e) Attributable profit (EUR MM.) Eurozone 2010 profit: EUR 8,181 MM. # 3 worldwide (# 3 in 2008; # 5 in 2007) # 1 by international branch network: ~14,082 # 1 by number of shareholders: 3.2 MM Note: Bloomberg Data as of December 30, 2010. (1) Attributable profit: Bloomberg in current euros from each year. In 2010, data published by the entities or Bloomberg estimates 4 Santander – Worldwide 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 Net profit 8,181 Profits by geographical area Assets by geographical area Other LatAm USA Retail Spain 18% 4% Other USA 15% Continental LatAm 4% Europe 9% 45% Other Retail Europe Brazil 12% Brazil 11% 25% United Kingdom 18% Global Business United Europe Kingdom 30% Continental Europe: 37% 9% 5 Santander – Worldwide Santander’s footprint USA7 UK3 • Branches: 722 • Ranking1: 4th • Customers: 1.7 MM • Mkt. share1: 12% • Branches: 1,328 • Customers: 26.4 MM Mexico • Ranking1: 3rd • Mkt. share1: 15% • Branches: 1,093 Spain2 • Customers: 9.0 MM • Ranking1: 1st • Mkt. share1: 15% Brazil6 • Branches: 4,780 • Customers: 12.1 MM • Ranking: 3rd • Mkt. share: 10% • Branches: 3,696 • Customers: +24 MM Portugal2 Chile Santander Consumer4 • Ranking1: 4th (5) • Ranking1: 1st • Mkt. share1: 10% • Branches: 523 • Mkt. share1: 19% • Branches: 762 • Dealers: 135,000 • Branches: 500 • Customers: 1.9 MM • Customers: 13.7 MM • Customers: 3.0 MM (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. 6 Table of Contents Santander – Worldwide Santander – Brazil - Brazil: Macro Information - Strategy - Business - Results in IFRS and Asset Quality - Additional Information Annexes 7 Solid macroeconomic fundamentals… International Reserves and External Debt Interest Rates vs. Inflation US$ billion 17,8% 18,0% 16,5% 13,8% 289 13,3% 11,3% External 10,8% 215 239 9,3% debt¹ 201 207 7,6% 8,8% 169 173 180 247 5,7% 5,9% 5,9% 4,5% 4,3% 198 198 3,1% 86 193 Reserves 49 53 54 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% 47,0% 7,7% 45,1% 42,9% 38,4% 40,4% 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. External debt as of Nov/10 8 Social dynamics shows a favorable scenario for Brazil Favorable Demographic Dynamics1 Social Mobility Trends2 90% 200 ∆abc= 36 ∆abc= 29 80% 20 31 Demographic 13 70% Bonus 150 66 +44.0% 95 +19.0% 113 60% 100 50% 47 50 44 Millions of of MillionsPeople 40 40% 49 29 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 0 16 Population in Active Ages= 15-64 years 2003 2009 2014* Dependence Ratio E D C A/B Per capita Income – US$ thousand Annual Average Unemployment Rate(%) CAGR: 6.6% 12,3% 8,9 8,5 11,5% 7,4 9,8% 10,0% 6,0 9,3% 4,9 7,9% 8,1% 3,5 3,8 6,7% 1994 2000 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009 2010 Sources: 1 – IBGE and Santander Research 2 - Ministry of Finance; * estimated 9 Brazil: a country with great opportunities The banking sector has a big opportunity The triple Multiplier TheThe triple triple Multiplier 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) 10 Table of Contents Santander – Worldwide Santander – Brazil - Brazil: Macro Information - Strategy - Business - Results in IFRS and Asset Quality - Additional Information Annexes 11 Santander Brasil Overview The only international retail bank Acquisition of two large within top 5 largest banks in Brazil banks in Brazil (Banespa in 3,696 branches nationwide 2001, and Banco Real in Over 24 million 2007) Customers Solid franchise 3rd largest Brazilian in Brazil through Integration converted in private bank Top universal a successful profitability bank franchise process of in Brazil acquisition Focus on Risk and asset Commercial quality Proven risk management banking Provide a wide range management of commercial banking Approval, monitoring and products control of risks are coordinated worldwide with the Santander Group 12 Franchise Santander is the 3rd largest Brazilian private bank in total assets, with a market share¹ in loans of 11% in the Brazilian banking system Market share 2010 R$ million Number of branches December/2010 Total Country Loan Portfolio 160,558 Market Share: 12% North: 5% of GDP Expanded Credit portfolio² 168,232 Market Share: 5% Funding from Clients³ 153,243 Funding from Clients³ + AUM 264,581 Northeast: 13% of GDP Market Share: 7% Net Profit 7,382 Strong distribution platform… Middle-west: 9% of GDP Market Share: 6% Bank with one of the highest numbers of point of sales in South/Southeast (73% of GDP) Southeast: 56% of GDP Market Share: 16% 2,201 1,495 18,312 Branches Mini ATM’s branches South: 17% of GDP 4 +10.9 million current accounts , an increment Market Share: 9% of 661 thousand current accounts in 12 months Opening of 110 new branches 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.Includes others Credit Risk Transactions with clients (Debenture, FIDC, CRI, Floating Rate Notes and Promissory Notes) 3. Demand Deposits + Time Deposits + Savings + Debentures + Real Estate Credit Notes (LCI) and Agribusiness Credit Notes (LCA) 4. Current accounts within 30 days, according to Central Bank as of dec/2010 13 And a well defined segmentation for each type of customer 14 With increasing results¹ per segment Global Wholesale Banking R$ MM 6.3% Net Profit before tax 2.651 2.818 Commercial Banking R$ MM 2009 2010 Global 29,7% Wholesale 6.347 Banking 4.895 Asset Management 28% Commercial and Insurance Banking R$ MM 8% 64% 40.6% 2009 2010 832 592 Asset Management & Insurance 2009 2010 1. Does not consider the fiscal effect of Cayman hedge 15 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 VI 5 ATMs integrated 8 Re-branding . ATMs platform . Upgrade on branches infrastructure 9 Unified Customer Services Individuals 6 Insurance System . 95% of volume 11VI Technology migration 7 New commercial model 10 Tests and Simulations Technology migration 16 Customer base Customer base grows 2.3 million in 12 months to 24.8 million Increase of 661 thousand current accounts in 12 months Customers (thousand) Current accounts¹ (thousand) 10.5% 6.5% 2.8% 3.1% 24.092 24.757 22.412 10.240 10.571 10.901 Dec.09 Sep.10 Dec.10 Dec.09 Sep.10 Dec.10 1. Current accounts within 30 days, according to Central Bank. 17 Partnerships - New Products Partnership Santander - Cosan Santander Acquiring + Esso Santander Credit Card¹ • Partnership Santander - Cosan to leverage Credit Card business FINANCIAL ACQUIRING SERVICES SERVICES • Discount on the purchase of fuel and products at Esso Gas stations • Program Pontos: doubling of accumulated points and discounts offered at the program website. Results Target (%) Partnership Santander – Century 21 2010 2012 Affiliated Merchants 104.2 300 34.7% + (thousand) New Accounts 26.6 150 17.7% • CredImob21: agreement (thousand) between Santander and Century 21 Brasil to provide mortgage loans 1. To be released in the first quarter of 2011 18 Table of Contents Santander – Worldwide Santander – Brazil - Brazil: Macro Information - Strategy - Business and Asset Quality - Results in IFRS - Additional Information Annexes 19 Managerial Loan Portfolio - IFRS R$ billion 18.8% Y-o-Y Q-o-Q 5.4% R$ million 2010 2009 Variation Variation 168,2 Individuals 50,981 43,200 18.0% 5.6% 152,1 159,5 141,6 143,4 8,5% Consumer 6,1% 26,969 25,101 7.4% 1.9% 5,4% Finance 4,9% 6,5% 3,7% 4,5% SMEs 38,306 31,448 21.8% 7.1% 1,3% 2,5% Corporate 44,302 38,645 14.6% 1.9% 0,5% dec.09 mar.10 jun.10 sep.10 dec.10 -1,5% Total IFRS 160,558 138,394 16.0% 4.3% Q-o-Q Var.