Santander Bank Made attributable profit of 7,316 million euros in the first nine months of 2022so one 25% more in current euros compared to the same period of the previous year, as reported by the entity on Wednesday.
If we do not count the extraordinary expenditure of 530 million Euros in the same period of 2021, Ordinary profit increased by 15% in the current euro.
In the third stagnant quarter, attributable profit 2,422 million euro, 2% more (+11% in current euro), after including a net fee of 181m euros for new moratorium arrangements in Poland.
Same way, profit before tax reached 11,761 million euros6% less (+3% in the current euro) and taxes on profits amounted to 3,538m euros, placing the effective tax rate at 30%.
The macroeconomic environment will continue to be challenging as Europe and North America adjust to levels of inflation not seen in decades, but our teams have extensive experience in successfully managing such situations and we are confident that increased revenues will offset increased costs and risk”, Banco Santander underlined by President Ana Botín.
“We believe our consistently increasing profitability record with 31% annual growth in earnings per share will allow us to continue to increase TNAV plus cash per share dividends and create value for shareholders.”
way to achieve goals
Santander underlined that it is on track to meet its revenue, profitability and capital targets for the year.While waiting to improve the productivity rate for 2021 and close the year close to its target despite inflationary pressures.
The Board of Directors maintains its intention to distribute to shareholders approximately 40% of the ordinary profits by 2022, approximately equally distributed between cash dividends and share repurchases.
this bank He stressed that the group’s diversification remains “a great lever for growth”.
Thus, ordinary profit for the period increased 32% to 2,837 million euros in Europe and 6% to 2,884 million in South America, while in North America it decreased by 9% (+2% in current euro). Provisions for loan losses reached 2.271 million due to expected normalization. Digital Consumer Bank’s ordinary profit increased by 11% to 908 million euros.
Strong activity along with a rise in interest rates in the UK, eurozone, Poland and other countries supported an 8% increase in net interest income (+15% in the current euro due to the appreciation of most currencies). particularly high growth in the UK (+12%), Poland (+104%), Mexico (+12%) and Argentina (+142).
Wage revenue increased 7% (14% in current euro), according to business, thanks to higher volumes and improvement in activity.
As a result, total revenue increased 5% to €38,629 million, with net interest income and fee income accounting for 97% of group income. Results”.
Special, net interest income increased by 15.4% to €28,460 milliongross profit margin increased by 11.5% to EUR 38,594 million.
The bank pointed out that the sharp increase in inflation led to an overall increase in costs (+6%), but stated that these costs fell by 5% in real terms, that is, while reducing inflation, thanks to the improvement in efficiency and linkage between the different costs. markets.
Thus, the group’s productivity rate closed at 45.5% in the first nine months of the year (up 0.1 percentage points from the same period in 2021), placing Santander “among the most productive organizations of its comparator”.
These results allowed to improve profitability metrics, with a return on tangible capital (RoTE) of 13.6% and earnings per share (EPS) of €0.409, well above cost of capital, 31% more, according to the bank. The target for the whole of 2022 is to achieve a regular RoTE of over 13%.
In September 2022, the tangible book value per share (TNAV) was 4.31 euros.
TNAV per share plus cash per share paid in May 2022, up 11% in the last twelve months announced for November 2022.
3.08% NPL rate
Business stresses group balance sheet remains “solid”With a non-performing loan ratio of 3.08% and a 70% coverage rate, 10 basis points lower than the previous year thanks to the good performance of the European and Digital Consumer Bank.
The cost of risk rose three basis points to 0.86% in the quarter, driven by an increase in provisions that include fees for macroeconomic uncertainties.
Santander also delivered “strong” organic capital generation in the quarter, with a “full” CET1 capital ratio of 12.10%. Looking to the future, the group plans to keep this rate at 12%.
Despite the uncertainty in the markets, the bank maintained its “strong” commercial activity in the quarter.
Customer funds reached the highest figure (€1.13 trillion, 4% more) thanks to growth in deposits (+6%), loans increased by 7% to reach 1.04 trillion, mortgages and consumer loans 7% and loans to companies, 6%. .
Spain
Ordinary profit in the first nine months of the year in Spain reached 1,104 million eurosIt was motivated by a reduction in allowances for loan losses (-27%) and costs (-2%), which represented a 99% increase.
In addition, the improvement in the bank’s risk profile allowed it to maintain a stable NPL ratio of 0.71% (3.69% after a 118 basis points decrease from the same period in 2021).
Revenues increased 3% thanks to higher commissions (+6%) in both retail banking and Santander CIB.