Santander Gains 16%, Improves 2024 Targets to Boost Dividend

As the financial institution reported this Wednesday, from January to June this year it had a total income (gross profit) of 30,715 million euros, up 9.7%. Of this amount, interest income (interest margin) was 17,802 million euros, up 14.6%. Return on tangible capital (RoTE): 15.9%, or 16.3% year-on-year, with the impact of the Spanish tax. Santander has set new targets for 2024: high revenue growth in the single digits, efficiency around 42% and a RoTE above 16%.

An hour before the market opened, Banco Santander presented results corresponding to the first half of 2024, the period in which it reached imputed profit 6,059 million euros, up 15.6% in current euros compared to the same period last year, thanks to strong interest margin growth across all global companies and regions, supported by an increase of four million customers and good cost control, more than offsetting the expected increase in provisions.

income They grew by 9% to a record EUR 31,050 million. Increased customer activity and good margin management contributed to an 11% increase in net interest income, with growth seen across all business areas. In retail interest margin grew by 12%, supported by economic growth in most countries, reflecting the strength of the bank’s diversification. Fee and commission income increased by 6% to a half-year record of €6,477 million, driven by increased activity across all global businesses. More than 95% of revenues come from clients, reflecting the quality and repeatability of Santander’s results. Revenue growth outpaced cost growth (+3% or -1% in real terms), allowing for a significant improvement efficiency ratio by 2.6 percentage points to 41.6%. This demonstrates the impact of the group’s transformation, which improves the quality of customer service while reducing the unit costs of providing services.

Overall credit quality remained stable, with cost of risk at 1.21%, in line with the annual target. bad debt ratio It closed at the previous quarter’s level of 3.14%. Fully loaded capital adequacy ratio CET1 improved by 20 basis points quarter-on-quarter to 12.5%, above the group’s target, driven by strong organic capital generation in the quarter (+52 basis points), which more than offset the future shareholder compensation expense charged to 20242 results (-25 basis points).

Banco Santander Increases Profitability and Shareholder Value Thanks to return on tangible capital (RoTE) 15.9%, which rises to 16.3% if the impact of the Spanish bank tax, fully recorded in the first quarter (335 million euros), is distributed evenly throughout the year. Moreover, it achieved earnings per share (EPS) of EUR 0.37, up 19%, and tangible book value (TNAV) per share of EUR 4.94 at the end of the first half of the year. Taking into account the cash dividend paid in November 2023 and the final dividend paid in May, the total created value (TNAV plus cash dividend per share) increased by 12%.

In the first half of 2024 Client resources (deposits plus investment funds) grew by 5%, with deposits growing by 2%, driven by strong growth in term deposits (+12%) and continued growth in the number of clients. total amount of loans They rose 2% to €1.03 trillion, as gains in Consumer, CIB, Wealth and Payments offset a slight decline in Retail.

Increases 2024 targets

Thanks to these good results, Banco Santander improved its goals for 2024 and now expects to achieve high single-digit revenue growth (versus the previous mid-single-digit growth target); an efficiency ratio of around 42% (versus the previous target of below 43%) and a RoTE above 16% (versus 16% previously). On the other hand, after the implementation of Basel III, the cost of risk targets remains at around 1.2% and the full CET1 burden is above 12%.

If Banco Santander achieves all of its 2024 targets in line with its current shareholder remuneration policy, The total amount of shareholder remuneration attributed to the 2024 results will exceed EUR 6 billion.

Ana Botin, President of Banco Santandernoted that “revenue grew 10% in the first half, supported by five global businesses, and costs remained almost flat for four consecutive quarters, while earnings per share increased 19%. These results demonstrate that we are growing sustainably and profitably, thanks to our scale, diversification and transformation. We continue to invest in future growth by implementing our own technologies, which ensure that we not only offer the best service to customers, but also improve efficiency, and have helped us achieve our best efficiency ratio in 15 years. In a volatile geopolitical environment, we are confident of achieving new goals due to our diversification of businesses and markets, the strength of our model and the quality of our teams.”

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