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Last update: 26/07/2023 - 14:56
Santander achieved an attributable profit of €5,241 million in the first half of 2023, up 7% in both constant and current euros versus the same period last year, as strong growth in revenues, particularly in Europe, offset the year-on-year growth in provisions in North and South America. In the second quarter, attributable profit increased 17% versus the second quarter of 2022 to €2,670 million, as the number of customers the group serves grew nine million year-on-year, taking the total to 164 million.
Don't miss these key takeways
· Nine million customers added in the last twelve months, with deposits up by 4%.
· Revenues up 13% supported by solid income growth in all regions and global businesses. Revenue growth was particularly strong in Santander CIB (24%), Wealth Management & Insurance (25%) and PagoNxt (27%).
· Net interest income increased 15%, reflecting growth in customer activity and positive balance sheet sensitivity to higher interest rates in Europe.
· Fee income increased 5%, with particularly good growth in payments, Santander CIB, and Wealth Management & Insurance - reflecting the strength of the group’s global businesses.
· Efficiency ratio improved further to 44.2%, despite inflationary pressures, driven by the group’s transformation towards a simpler, more integrated model, contributing to enhanced profitability.
· Loan-loss provisions were up 21% due primarily to the post-pandemic normalisation in the US. Compared to the prior quarter, second quarter provisions were down in the US on better-than-expected credit quality.
· Overall credit quality remained robust, with cost of risk lower than target for the year at 1.08%.
· Second quarter attributable profit was €2,670 million, up 17%. Versus the first quarter, profit was up 4%.
· In April, the bank completed its second share buyback against 2022 earnings. Since November 2021, the group has bought back 7% of its shares, with buybacks and cash dividends in the past year representing a yield of over 8%.
· Santander remains on track to meet its 2023 targets, including: double-digit income growth; RoTE above 15%; cost-to-income ratio of 44-45%; fully-loaded CET1 above 12%, and cost of risk below 1.2%.
The strength of the results was reflected in growing profitability and shareholder value, with a return on tangible equity (RoTE) of 14.5% (+80 basis points); earnings per share (EPS) of 31 euro cents, up 13%; and tangible net asset value (TNAV) per share on 30th June at €4.57. Including the cash dividends paid against 2022, TNAV per share plus cash dividend per share was 11% higher year-on-year. In the first six months of the year, the value created for shareholders (TNAV + cash dividend) is equivalent to more than €6 billion.
We are making excellent progress against our strategic objectives of simplifying our business and leveraging the strength of our global network. Our results reflect that progress, with nine million customers joining us in the past twelve months, resulting in double-digit revenue growth.
Total loans were flat, with consumer lending up 8%. The bank’s loan book remains well diversified across both business lines (mortgages, consumer, companies, auto, Corporate & Investment Banking or CIB) and geographies.
Customer funds grew 4% to €1.13 trillion, with deposits up 4%, supported by both individuals and Corporate and Investment Banking (Santander CIB). Customers continued to utilize excess deposits to pay down debt in the quarter, particularly mortgages.
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