2013 Annual Report

EMPREGO 182 Annual Report 2013 LOCAL COMMUNITIES Materiality The Local Communities item is important to Santander Brazil for two main reasons: the need for the Country to promote financial inclusion and the capacity of the Bank to exercise significant influence on the topic. It is estimated around 40% of the population have no access to the financial system. Moreover, there are thousands of small entrepreneurs in Brazil operating in communities with limited or no access to capital. Impacts - The presence of a financial institution in developing communities may help generate employment, provide support to entrepreneurs and boost the local economy. In addition to enabling the Bank to attract and maintain new clients. Santander's activity in these communities is based largely on the Microcredit operation. The risks, in turn, are associated with the operational difficulties arising from lack of infrastructure, rendering factors such as efficiency, profitability and safety more sensitive. Opening branches in these communities involves the analysis of geo-economic data. Furthermore, the existing infrastructure in the community and the stage of development of aspects such as formal and informal entrepreneurship, health and education must also be taken into consideration. The process involving the opening of service outlets in these areas is in accordance with normal flows and may be adapted where necessary. Policies and Commitments The Bank has an expansion project defined for the Microcredit operation, focused on low-income communities, and assesses the areas of operations in accordance with the potential market for entrepreneurs and the knowledge of agents living in these communities. Microcredit practices are available at http://sustentabilidade. santander.com.br/oquefazemos/produtoseservicos/Paginas/ Microcredito.aspx In addition to the microcredit operation, Santander operates service outlets in communities in the initial stages of social development, including Complexo do Alemão and Vila Cruzeiro in Rio de Janeiro, and Paraisopolis in São Paulo. Practices in relation to Community Branches are available at: http://sustentabilidade.santander.com.br/oquefazemos/ produtoseservicos/Paginas/agenciasemcomunidades.aspx Assessment Mechanisms A complete audit of all the aspects involved in the Santander Microcredit operation is conducted on an annual basis. The results are reported in an institutional press release and in the Bank's financial statements. The goal is constant growth and investment in microcredit. Indicators Consolidation Access points in low populated or economically disadvantaged areas by type: G4-FS13 Santander Microcredit now has 27 branch offices, 20% of which are located in the Southeast region and 80% in the Northeast region of Brazil. Its footprint includes over 500 municipalities, whereby the credit agent can serve clients within a 125 km radius of the branch office. No branch offices were closed in 2013. The Bank also opened a branch office in the community of Paraisopolis in São Paulo (SP). This branch was opened due to the fact this community is commercially active and growing. The community is home to 9,000 established entrepreneurs, 2,000 of which are officially registered (data provided by the Resident's Association). In 2014, the Bank intends to use the HDI of each region in order to map the economically deprived areas. GEOGRAPHIC DISTRIBUTION OF ACCESS POINTS: Alagoas: Arapiraca and Maceió. Bahia: Feira de Santana Maranhão: São Luis and Imperatriz Paraíba: João Pessoa, Campina Grande, Patos, Cajazeiras and Guarabira. Pernambuco: Salgueiro, Paulista, Recife, Caruaru, Garanhuns, Petrolina, Araripina. Piaui: Teresina Rio de Janeiro: Baixada Fluminense and Complexo do Alemão Rio Grande do Norte: Mossoró and Natal → São Paulo: Paraisópolis, East, South and North Districts. Sergipe: Aracaju 183

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