2013 Annual Report
BUSINESS PERFORMANCE
Credit Markets
At Santander Brazil the Credit Markets
Office is comprised by four areas: Debt
Capital Markets (DCM), in charge of
issuing fixed-income securities in the
stock markets; Project Finance, working
jointly with project structuring and
financial advising; Structured Lending &
Distribution (SL&D), which structures
A Windmill Farm in the state of Ceará: Santander Brazil
is a shareholder
financing to acquisitions in syndicated
loans; and Asset & Capital Structuring
(A&CS), in charge among other things
of making proprietary investments in
infrastructure and renewable energy
projects. Credit Markets revenues in
2013 increased by 19%, while the
volume of transactions rose by 9%.
Debt Capital Markets (DCM) -
Despite the tight local monetary
conditions and as a result a drop in the
volume of issuances in the local stock
market, DCM increased its market
share in Brazil to 7.6%1 from 3.2%¹.
In 2013, the Bank played a role in
23 operations in the local market,
which represented a 53% grow versus
the 15 issuances in 2012, for a total
of R$ 2.6 billion(¹).
In the international market (which
also saw a drop in the overall volume
of emissions), the Bank achieved a
significant growth of 40% in revenues
with our diversification strategy in the
profile of any such operations. In 2013,
Santander participated as coordinator
in 15 banking and corporate bonus
issuances in the international market,
totaling US$ 1.7 billion. One of the
highlights of the year was the funding
in reais and dollars by Construtora
Norberto Odebrecht, simultaneously
with a tender offer for bonus shares
in the international market.
Throughout the year, Santander
was confirmed as a pioneer while
playing a successful role in IPOS
for five companies.
Project Finance - The investments
in infrastructure are a key topic in
the country's development agenda,
with the Bank's full commitment.
In September, the Bank announced
through its Global Chairman Mr.
Emilio Botín, that it would make
available the initial amount of
US$ 10 billion to support its clients
in Brazil, Spain and other countries
in opportunities such as port, airport
and highway auctions.
With this focus, Santander Brazil
participated with winning players
in a number of auctions in sectors
such as Energy, Logistics, Transmission,
and Utilities, totaling R$ 32.6 billion.
This helped boost our results in Project
Finance. Last year the credit portfolio
in the area grew by 25%, with
revenues up 21%.
The sizeable investment agenda
in infrastructure by the local
government going forward and the
Bank's commitment in supporting this
process have placed Santander Brazil
in a leadership position in the segment
with Project Finance having become
a key strategic area for the Bank
in the years to come.
Structured Lending
& Distribution (SL&D) -
The SL&D area is divided into three
segments: Syndicated Lending,
in charge of syndicated loans with
the participation of two or more
banks; Acquisition Finance, providing
advice and financing in mergers
and acquisitions; and FI Distribution,
a desk that distributes fixed income
instruments for institutional investors.
In 2013, with the performance
of two additional transactions,
Santander reaffirmed its leadership
in financing for the acquisition of two telecommunication
towers in the country; the Bank has financed the
acquisition of more than 10,000 towers since 2010.
Asset & Capital Structuring (A&CS) - Among other
activities, this division is responsible for making proprietary
investments in infrastructure and renewable energy projects.
In 2013, revenues from business in this segment grew
by 35%.
Santander Brazil is the only bank involved to such
an extent in wind farms in the country as a proprietary
investor, a competitive advantage inherited from the
Bank's experience in investment and advisory services in the
sector in Europe. In 2013 the Bank became the controlling
shareholder in a 170 MW windmill farm in the state of Bahia,
with an estimated total investment of R$ 650 million, the
Bank's largest investment in A&CS investment portfolio.
The bank holds an ownership interest in five windmill farms
in the states of Rio Grande do Norte, Rio Grande do Sul,
Bahia and Ceará. These farms will produce a total installed
capacity of 500 MW when completed. This places Santander
Brazil as the undisputed leader in renewable energies among
the banks operating in Brazil while reaffirming the Bank's
commitment in integrating business and sustainability in a
context of transition to the low-carbon economy.
Treasury
Our Treasury department is divided into Sales (derivative,
fixed income and foreign exchange transactions for
clients in all segments, including corporate, institutional,
Private Banking and Retail); and the Proprietary & Pricing
Desk, in charge of the Bank's proprietary investments
and transaction pricing and the risk management of a
wide range of products and structures for clients, both
local and foreign.
In 2013 the performance of the Proprietary & Pricing
Desk warranted a significant footprint in products such
as share prices, more competitive prices for clients and
sustainable results for the Bank.
In turn, the Sales area benefited from a closer
relationship with Treasury and other business units,
especially Wholesale, which resulted in cross selling
and productivity gains for the Bank. As a consequence
the Treasury commercial revenues grew by 24% YoY,
despite the mild economic activity.
In derivatives, the Sales team conducted the longest
hedging operation ever effected by Santander, a 20 year
swap to protect leasing expenses of a GB&M client. As a
result, the bank went up in the derivative Cetip ranking
to #3 from #4 previously in derivative inventory.
In fixed income, the strongest advancement took place
in the Corporate segment, with an investment product
inventory growth of 22.4% YoY. In foreign exchange
transaction the Bank highlights the performance in the
local market with sectors such as multinational
companies and Oil & Gas.
(1) Anbima Ranking - Fixed Income Breakdown [Dec/13].
88 Annual Report 2013
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