Banco Santander recorded profits of 2,543 million euros in the first quarter of the year, 58% more than in the same period of the previous year, when the entity recorded profits of 530 million euros, a lower figure due to restructuring costs assumed by the group, according to Europa Press.
The ordinary benefit -excluding the impact of these adjustments- increased by 19%, thanks to the increase in the income of its clients and the improvements in efficiency, as reported by the entity to the National Securities Market Commission ( CNMV ) on Tuesday.
The bank is confident of achieving the 2022 targets it announced in February: revenue growth of around 5%, financial profitability above 13%, an efficiency ratio of 45% and top quality capital (CET1). ) of 12%.
“The first quarter has been very good, with growth in the number of clients and an increase in revenues of 8%, improvement in efficiency and good credit quality. Our return on tangible capital in the quarter was 14.2%, supported by greater connectivity in our businesses and solid risk management. All regions performed well, including Europe, where profitability has improved,” said Ana Botín , president of Banco Santander.
“Our geographic and business diversification is key to growth and keeps us as one of the most efficient and resilient banks among our competitors, with profitability clearly above the cost of capital. Although the effects of inflation will have repercussions on world economic growth with a different impact on each region and business, we reaffirm our objectives for 2022, which demonstrates the advantages of our model”, added Botín, who considers that the good progress of the entity will allow to increase profit per share “sustainably” and extend dividends.
The board will distribute to shareholders 40% of ordinary profit, 20% in cash and 20% in the form of share buybacks.
As of May 2, 2022 , a cash dividend of 5.15 euro cents per share will be paid . Together with the payment made in November 2021, the total cash dividend charged to the results of the last financial year will be 10 euro cents per share. If share buybacks are included, total shareholder remuneration on 2021 results would reach €3.4 billion, equivalent to a return of 6%.
By geography, ordinary profit for the period grew by 30% in Europe , to 1,018 million euros, 8% in South America, to 900 million, and remained stable in North America, at 806 million euros. Digital Consumer Bank, for its part, also strongly increased its ordinary profit (+11%), to 282 million.
Benefits in Spain
In Spain, ordinary profit was 365 million euros , 21% more than in the same period of the previous year. This result, according to the bank, was supported by higher fee income (+9%), lower costs (-4%) and lower provisions, thanks to an improvement in non-performing loans.
Ordinary profit before taxes was 4,171 million euros after growing 3% year-on-year and 5% compared to the previous quarter.
For its part, income tax amounted to 1,302 million euros, resulting in an effective tax rate of 31%.
The NPL ratio was 3.26% , six basis points higher than in the first quarter of 2021 after the application of a new default definition, while the coverage ratio remained at 69%.
The cost of credit (level of capital provisions over expected credit losses) improved in the last 12 months, to 0.77%.
The gross margin rose by 8%, to 12,305 million euros, while the net margin stood at 6,770 million, 8% higher than in the first quarter of 2021.
Inflationary pressures, especially in South America, led to a general increase in costs (4%). However, in real terms (after inflation), expenses fell 3% thanks to improvements in productivity and connectivity in the different markets.
With this, the group’s efficiency ratio closed at 45%, which places Santander “among the most efficient entities in the world”, according to the entity.
Customer funds reached their highest figure (1.1 trillion euros, 5% more) and deposits grew by 5%, to 906,000 million euros thanks to the upward trend in most countries.
Investment funds increased by 6% to €191 billion, as a result of a net inflow of funds and the recovery of the markets.
Loans rose 5% to exceed €1 trillion for the first time after growing 4% in Europe (Spain and Poland 6% each), 8% in North America and 9% in South America.
The number of group customers grew by seven million to 155 million , while the number of digital customers rose 11% to 49 million.
Digital sales already represented 56% of the total, compared to 50% in the same period of the previous year.
The strong activity, as well as the rise in official interest rates in some of the main markets where the group operates, boosted net interest income by 6%, with particularly strong growth in the United Kingdom (15%), Poland (78% ), Brazil and Mexico (7%) and Argentina (69%).