2013 Annual Report

INTANGIBLE ASSETS 30,000 EMPLOYEES TRAINED IN FINANCIAL GUIDANCE THE SANTANDER EXPERIENCE The management of intangible assets is based on the experience the brand provides to different stakeholders → Human Capital: encompasses people, individual knowledge, skills, values, creativity. → Organizational Capital: is also known as Information Capital. It includes factors such as management model, technology/systems, production systems and the distribution and generation of content. Relationship Capital: clients, patents, intellectual property rights, partnerships, covenants, agreements, suppliers, society and other stakeholders comprising the relationship network and enabling the company to achieve its business objectives. 34,000 EMPLOYEES TRAINED IN ANTI-CORRUPTION Santander The value of a business in the modern world is increasingly associated with the perception of how it relates to all its stakeholders and to the community where it operates. Whereas a company used to be assessed purely in relation to its inventory, equipment and property, the focus today is on how it deals with people management and client relationship, how it uses the creativity of its personnel in the development of its business, in the research and technology developed, in the integrity of internal processes, to name a few, otherwise known as intangible assets. Santander Brazil believes there are three different categories of intangible assets: Human Capital, Organizational Capital and Relationship Capital. How stakeholders perceive the company putting its belief in specific experiences based on these three factors is what the Bank calls brand. And it is based on the management of the brand that Santander manages its intangible assets. INTANGIBLE ASSET AND BRAND VALUE MANAGEMENT *By Eduardo Tomiya In the past, a good investment analyst was required to have an in-depth knowledge of accounting, of a company's balance sheets and its asset and liabilities structure. In other words, an analyst needed to possess a thorough knowledge of each company's tangible assets. Nowadays, in addition to such knowledge, a successful analyst needs to understand the basics of the business and its competitive edge in the eyes of the main stakeholders. This share of the company's value, which accounts for over 2/3 of shareholder value, is what we call intangible assets. As a rule, Intangible Assets at financial institutions are comprised by three major elements: human capital (people), organizational capital (channels and products, processes) and relationship capital (relations with clients and society). The management of intangible assets is based on two factors: an understanding of how each of these factors is generated internally by the company (Research & Development, experience with regard to points of contact, etc.); and extracting value from each intangible asset (differentials seen compared to competitors, expectations of higher prices, greater volumes, lower costs, lower risks, and, consequently, higher market multiples for the company). Consistency and balance in the process of generating and extracting value from intangible assets give rise to attributes and associations in the minds of consumers and investors. This set of attributes is what we call brand equity. The evaluation of a brand is the connection between the value of intangible assets and brand equity. As a result, brand management is far from managing logos or advertising activities. This challenge involves understanding value levers by perceiving a balance between generating and extracting value from intangible assets, assessing whether or not a brand has a competitive edge, and, above all, providing tools to enable each of the company's employees to deal with problems. 92 Annual Report 2013 * Eduardo Tomiya is general director of BrandAnalytics, Consultoria - a branch of Millward Brown Optimor South America, WPP Group. 93

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