2013 Annual Report

BUSINESS PERFORMANCE Microcredit loans R$ 487 million Santander Asset Management +5.5% Agricultural loans - Individuals +26.7% Santander Universidades 450 partner universities Asset Management Santander Asset Management (SAM) operates in third party asset management via investment funds and managed portfolios for clients in the segments of Retail, Private Banking, Corporate and GB&M, in addition to institutional investors. For SAM, the 2013 highlights were the partnership between the Santander Group and the American private equity firms Warburg Pincus and General Atlantic. Together, the firms now hold 50% interest in a holding company that integrated 11 fund managers with offices in Europe and Latin America, including the Brazilian branch (for more details please see page 25). Another highlight was the launch of new products that provide the Brazilian investor with access to foreign markets. Sustained by its global expertise and in opportunities in international stock markets, the firm made available to Brazilian clients a new family of funds investing in global stock funds. By the same token, SAM launched two protected capital structures with returns linked to the American stock market performance: the Capital Protegido Cesta Americana Multimercado (with returns linked to the yield of a basket comprised by the stocks of Apple, Coca-Cola, Google, Macy's & The Walt Disney) and Capital Protegido S&P 500Ⓡ Multimercado, with returns linked to the growth of the S&P 500 Index. Both products reinforce the SAM leadership in Protected Capital Funds in Brazil. In the institutional segment, SAM launched a product to invest in funds by several asset managers in the market with value strategy (i.e., funds that invest in shares that are significantly below estimates), with a diversified management in the stock market. The manager also continued its effort to simplify the range of funds for all segments. In total, SAM achieved a 36% average reduction in its product range. Assets under management closed the year with an 8.4% growth, to R$ 123.76 billion(1). SAM retained its maximum rating by international rating agencies Standard & Poor's (S&P) and Moody's in Brazil. A pioneer in responsible funds in Brazil, in 2013 SAM made an effort to include the sustainability criteria in the selection of assets that comprise the fund portfolios in the country. Throughout the year, 173 companies were assessed and monitored according to an internal methodology, in line with the criteria of the Principles for Responsible Investment (PRI). Gross funding - Pension R$3.2 bilhõe Individual and Property Insurance +77% Capitalization Security R$ 1.2 billion Corporate revenues +15.1% growth in the asset portfolio Insurance, Pension Funds and Capitalization Security Since 2011, the Insurance/ Private Pension at Santander Brazil has been working in a partnership with Zurich Seguros, one of the largest insurance companies worldwide. Back then the Santander Group executed an international agreement with the Swiss giant, with the objective of joining Zurich's expertise in product design and Santander's distribution power. With the partnership in place, a joint venture was created i.e., Zurich Santander Brasil Seguros e Previdência, which took over the responsibility of developing products. The Bank, in turn, became the exclusive distributor of the joint venture products. Upon the consolidation of the partnership in 2013, Santander Brazil posted a 25% growth in insurance commissions, totaling R$ 1.72 billion. Two main business lines were the highlight. In loan-related products, the push came from the launch of the first products designed for Corporate clients, the Prestamista Capital de Giro and the Prestamista Cheque Empresa. In the Open Market products, comprising individual and property insurance, sales volume grew by 76%, boosted by Life Insurance, Auto Insurance and Business Insurance. In Private Pension, the Bank recorded a gross funding of R$ 3.2 billion, with the launch of new products both in Retail and Private Bank, such as the Novo Fundo Multi Ativo (a fund with variable income management, according to the changes in the economic environment) and the Fundo Conservador DI (100% in fixed-income securities). In Capitalization Security (long-term savings with prizes) the Bank also posted a growth with revenues of R$ 1.2 billion, up 10% YoY. The Bank retained a good performance in the Reserva Protegida product (focused on Corporate clients) with a growth rate above 50% YoY. SANTANDER BRAZIL POSTED A 27% GROWTH IN INSURANCE COMMISSIONS, TOTALING R$ 1.75 BILLION (1) The ANBIMA Rank of Third Party Asset Management. 82 Annual Report 2013 83

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