Santander achieved an attributable profit of €6,059 million in the first half of 2024, up 16% in current euros versus the same period last year, as strong growth in net interest income in all the global businesses and regions, supported by four million more customers, and very good cost control, more than offset the expected year-on-year growth in provisions.
The Santander group continued to increase profitability and shareholder value creation, with a return on tangible equity (RoTE) of 15.9%, or 16.3% if the impact of the temporary banking levy in Spain, which was registered in full in the first quarter (€335 million), was distributed evenly across the year; earnings per share (EPS) of €0.37, up 19%, and tangible net asset value (TNAV) per share of €4.94 at the end of the first half. Including the cash dividend paid in November 2023 and the final dividend paid in May, total value creation (TNAV plus cash dividend per share) increased 12%.
“The group continues to deliver strong, profitable growth, with earnings per share up 19%. We are growing both net interest income and net fee income, credit quality is robust and our transformation continues to generate positive operational leverage. This reflects the strength of our diversification across both businesses and countries, and progress in the execution of our strategy”
As a result of the strong momentum within the business, Santander has upgraded its 2024 targets and is now expecting high-single digit revenue growth for the year (an increase from its previous target of mid-single digit growth); an efficiency ratio of c.42% (from below 43%); and RoTE of over 16% (from 16%). The targets of cost of risk at c.1.2% and fully-loaded CET1 above 12% after Basel III implementation are maintained.
Don’t miss these key takeways
- Net interest income increased 8% to €34.7 billion, driven by growth in all global businesses.
- Net fee income was up 5%, with good commercial dynamics and higher customer activity in all global businesses.
- Efficiency improved significantly to 41.7%, driven by cost management and the bank’s transformation towards a simpler, more digital and integrated model.
- Loan-loss provisions rose by 2% with good credit quality (cost of risk improved quarter-on-quarter to 1.18%), backed by good economic performance, low unemployment and lower interest rates.
- Non-performing loan ratio of 3.06%, improving seven basis points year-on-year.
- Tax on profit in the period was €4.2 billion, up 13%, resulting in an effective tax rate of 29%.
- In the third quarter, attributable profit reached €3,250 million, up 12%.
- Fully-loaded CET1 increased to 12.5% having added 0.2 percentage points during 2024.
- Value creation (TNAV plus cash dividend per share) grew by 14%.
- Santander upgraded three of its 2024 targets in July and expects high-single digit revenue growth for the year in constant euros, an efficiency ratio of c.42% and RoTE of over 16%.
