41746 - Frida

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Summary of Investment Information

Project Number

41746

Company Name

BANCO SANTANDER BRASIL SA

Date SPI Disclosed

Oct 24, 2018

Country

Brazil

Region

Latin America and the Caribbean

Projected Board Date

Nov 23, 2018

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Oct 22, 2023

Department

CF1S7 - Regional Industry - FIG LAC/FIG Inv Ops - CLA

Industry

Financial Markets

Previous Events

Approved : Mar 27, 2019
Signed : May 1, 2019
Invested : May 3, 2019

Sector

Commercial Banking - SME Finance

Additional Project Attributes

Blended Finance

Project Description

The proposed investment (the “Project”) consists of a senior debt facility of up to US$225 million to Banco Santander (Brasil) S.A. (“Santander” or the “Bank”) to support the origination of sub-loans to women-owned small and medium enterprises (“WSMEs”) in Brazil. The facility consists of: (i) a 4-year bullet A-loan of up to US$150 million on IFC’s own account, and (ii) a 2-year bullet B-loan of up to US$75 million.

Santander is the third largest private bank in Brazil in terms of assets, and the largest foreign bank in the country, belonging to Banco Santander S.A. (Spain), (“Santander Spain”). With a wide branch network comprised of 2,262 branches, Santander is very active in the retail and wholesale business, holding a market share of 8.9% in terms of assets, 9.3% in terms of loans, and 10.7% in terms of deposits in Brazil as of June 2018.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	150.0
Equity

Development Impact

(i) Project Impact - Stakeholders: IFC anticipates that the Project will contribute to close the significant financing gap for WSMEs in Brazil, where 30% of WMSMEs find themselves to be financially constrained. The Project will leverage on Santander's position and distribution network to expand access to finance for WSMEs. (ii) Market Impact - Competitiveness: The Project should demonstrate to other lenders the business opportunity presented by under-served WSMEs, leading to replication that will improve competitiveness through an increased offering of financial services and products for WSMEs.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The Project consists of a US$300 million A/B loan to support Santander WSME portfolio in Brazil and has been classified as Category FI-2 according to the IFC's Sustainability Framework. Santander’s WSME portfolio is composed mostly of short-medium term financing with environmental and social (“E&S”) risks of medium to low nature. The applicable requirements for the Project will include compliance with national laws and the IFC Exclusion List.

The main E&S risks and impacts related to the Project derive both from the Bank’s capacity to manage WSME E&S risks as well as to maintain practices with regard to labor and working conditions. Overall Santander’s WSME portfolio risks are of medium to low nature, concentrated in commerce and services sectors, and typically related to occupational, health and safety. The Bank is an existing IFC client and has satisfactorily implemented an environmental and social management system (“ESMS”) in line with IFC requirements. As part of the Project, Santander will be required to: (i) apply the Exclusion List and local E&S regulations to the asset class portfolio, (ii) continue its commitment to applying the labor standards established by the IFC Performance Standard 2 to its own workforce, and (iii) submit a periodic report to IFC.

Contacts

For Inquiries About the Project, Contact

Banco Santander (Brasil) S.A.
Eugenio Zaccaro Pagotto
Funding Manager
+55 (11) 3012-6753
eugenio.pagotto@santander.com.br
Av. Juscelino Kubitscheck, 2235, Sao Paulo
www.santander.com.br

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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