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Our geographic and business diversification continues to provide a cornerstone for growth and is a key reason why Santander remains among the most efficient and resilient banks in our peer group, with profitability well above our cost of capital
Banco Santander achieved an attributable profit of €2,543 million in the first quarter of 2022, up 58% in current euros versus the first quarter of 2021 when the bank incurred €530 million in restructuring charges. Underlying profit, which excludes the aforementioned charges, was up 19% in current euros.
The bank saw strong customer activity in the quarter. Customer funds reached a new high (€1.1 trillion, +5%). Deposits climbed 5% to €906 billion due to growth in most countries, and mutual funds increased by 6% to €191 billion, underpinned by net inflows and markets recovery. Lending also grew 5%, reaching €1 trillion for the first time, after increases of 4% in Europe (Spain and Poland, +6% each), 8% in North America and 9% in South America.
The number of customers the group serves increased by seven million to 155 million, while the number of digital customers grew by 11% to 49 million. Digital sales accounted for 56% of total sales compared to 50% in the same period last year.
Santander’s ongoing focus on customer loyalty and digital innovation enabled the bank to achieve a top-three position in customer satisfaction in eight out of its nine core countries, according to net-promoter score (NPS) rankings.
Don't miss these key takeways
• Underlying profit increased 19% year-on-year, supported by growth in customer revenues and further improvements in efficiency.
• The group’s geographic and business diversification continued to provide a resilient foundation for growth, with all businesses performing strongly and a record profit contribution from Santander CIB.
• The balance sheet remained strong, with credit quality normalising following the release of provisions in Q4 2021. Loan loss provisions were €2,101 million, in line with first quarter of 2021 in constant euros (i.e. excluding fx movements), while the group’s fully-loaded CET1 capital ratio stood at 12.05%, including the impact of the Amherst Pierpont acquisition, which closed in April.
• The strength of the group’s performance was reflected in all profitability metrics, with return on tangible equity increasing to 14.2%, underlying earnings per share up 22% year-on-year to €0.141, and tangible net asset value (TNAV) per share up 12% to €4.29.
• Inflationary effects, particularly in South America, led to an overall increase in costs (+4% in constant euros), however, in real terms, costs fell by 3% as the bank continued to improve productivity and connectivity across markets. As a result, the cost to income ratio was 45.0% (improving 1.2 percentage points versus full year 2021), placing Santander among the most efficient banks in the world.
• The bank remains confident it will achieve the 2022 targets outlined in February: mid-single digit revenue growth, underlying RoTE of above 13%, cost-to-income ratio of 45%, fully-loaded CET1 of 12%. The board intends to maintain its policy to distribute 40% of underlying profit to shareholders, split evenly between cash dividend and share buybacks[1].
• Santander has been active in supporting the response to the humanitarian crisis resulting from the war in Ukraine. Among other initiatives, the bank is helping refugees get access to cash raised by the UN Refugee Agency, and has enabled travel to Spain and Portugal for over 350 people fleeing the war.
[1] The implementation of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
Media Gallery: Financial Results
