2013 Annual Report

BUSINESS PERFORMANCE WHOLESALE The Santander Brazil Wholesale Bank serves corporate clients with revenues in excess of R$ 80 million and provides high added value services to a number of segments such as stock markets, mergers and acquisitions and access to international markets. In 2013 the areas continued their process of a closer relationship in order to improve synergy and cross selling. Despite the mild economic activity scenario, a bearish stock market and strong currency exchange volatility, the Wholesale division achieved growth. Corporate In 2013 the Corporate segment, serving local and multinational companies with revenues in excess of R$ 80 million managed to increase customer satisfaction and team productivity, despite the less than favorable economic scenario and a trend for more competitive margins. The strategy was to enhance a close relationship with clients through its managers all over the country by capitalizing on the Bank's capacities while offering solutions that meet the demands of each organization and strengthening client loyalty and the services provided. The outcome of this customized service effort was the improvement of client satisfaction ratio for the second consecutive year, as measured by the IPSOS Institute, a market intelligence survey firm. The improvement of a closer relationship with and satisfaction of clients had a positive impact on earnings: a 14.9% growth in the total asset portfolio and up 11.3% in revenues, due to the increase in loans and fee income. The area also strengthened the strategy of improving the risk profile of the asset portfolio while reducing impacts and closing the year with a lower cost of credit YoY. Santander Global Banking & Markets (GB&M) Santander Global Banking & Markets (GB&M) is a global business unit in charge of servicing clients who, due to their size, complexity or sophistication need customized services and/or Wholesale products with high added value. The business focuses on financial services to large local and foreign conglomerates, simultaneously with the Proprietary Desk and Treasury activities. The offer includes essential services (Loans and Collateral, Cash Management, Investments and Foreign Exchanges) and high complexity, customized solutions (Mergers & Acquisitions, Credit Market, Shares, Derivatives and Structured Financing), while also servicing clients from other Bank segments such as Corporate, SMEs, Private Banking and Retail. Clients rely on segmented services according to the industries they operate in (Telecommunications, Retail, Aviation and Logistics, Manufacturing, Energy, Building and Infrastructure, Natural Resources, Food, Agribusiness and Financial Institutions) while benefiting from a global structure in financial services and the local expertise by the Bank in the different markets it operates. This makes Santander the most local bank among the international competitors and the most international bank among the local competitors. In 2013 the GB&M strategy was focused on the relationship with clients via the implementation of a new coverage model while strengthening the partnership with other Bank segments. For this purpose the unit inaugurated an area that is exclusively dedicated to cross selling which stimulates the sale of products under the GB&M management to other segments. In addition, the unit attained its goal of sustainable growth via the diversification of results while focusing on clients under the Tier 2 and 3 classification, and the increase of its asset portfolio with focus on funding, capital and liquidity active management and an increase in product capacity. Despite a complex scenario in Brazil, with mild economic activity, volatile exchange rates, a bearish stock market and high interest rates, the GB&M loan portfolio grew by 22% YoY. The division had a 16% growth in the number of clients. Below is a summary of the activities for each business area comprising the division. Equities The Equities area acts as an advisor while executing share purchase and sale orders for individuals and institutional investors (especially equity fund managers in Latin America, the United States, Europe, and Asia). The team makes decisions about the best deals based on reports developed by analysts in the Strategy and Research areas. In the Individual segment, strategies show a significant performance throughout the year. While the Bovespa Index declined by 15.5%, the Carteira Dinâmica attained a yield of 11.5% in 2013. This product is more flexible than the traditional portfolios and allows the investor to adapt their portfolio to market changes using bolder strategies. The result, however, was even stronger in short-term strategies. The directional purchase/sale strategies resulted in a yield of 33.6%. GB&M +15% in in the number of clients 84 Annual Report 2013 85

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