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LAST UPDATE: 30/04/2024 - 15:45
Q1'24 Attributable profit (+11%)
Q1'24 Revenue (+10%)
RoTE (+55pbs)
FL CET1
Efficiency -153pb
Q1'24 Attributable profit (+11%)
Q1'24 Revenue (+10%)
RoTE (+55pbs)
FL CET1
Efficiency -153pb
- Return on tangible equity (RoTE): 14.9%, or 16.2% after annualizing the impact of the Spanish bank levy
- Fully-loaded CET1: 12.3%
- TNAV plus cash dividend per share: up 14% year-on-year
Don't miss these key takeways
· Net interest income increased 18% to a record €11,983 million, driven by growth in all businesses, particularly in Retail, CIB and Wealth 1.
· Net fee income increased 6%, with good commercial dynamics and higher activity.
· Revenue increased 10% to a record of €15,380 million.
· Efficiency ratio improved to 42.6% driven by the bank’s transformation towards a simpler, more digital and integrated model, with costs stable for the third consecutive quarter.
· Loan-loss provisions rose 9% year-on-year due to the ongoing normalization in Consumer, but fell relative to the previous two quarters.
· Overall credit quality remained robust, with cost of risk in line with the target for the year at 1.20%.
· In May, the bank will pay a final cash dividend of 9.50 euro cents per share against 2023 earnings, resulting in a total cash dividend per share charged to 2023 of 17.60 euro cents, an increase of approximately 50% year-on-year.
· Santander is on track to meet its 2024 targets: mid-single digit revenue growth; an efficiency ratio below 43%; cost of risk of c.1.2%; RoTE of 16%; and fully-loaded CET1 above 12%.
· For the first time the bank is reporting with its five global businesses (Retail, Consumer, CIB, Wealth and Payments) as primary segments, following the introduction of its new operating model, announced last year.
Santander achieved an attributable profit of €2,852 million in the first quarter of 2024, up 11% 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 growth in customers, and good cost control more than offset the expected year-on-year growth in provisions.
Santander increased profitability and shareholder value, with a return on tangible equity (RoTE) of 14.9%, or 16.2% if the impact of the temporary banking levy in Spain, which was registered in full in the first quarter (€335 million), were distributed evenly across the year; earnings per share (EPS) of €0.17, up 14%, and tangible net asset value (TNAV) per share of €4.86 at the end of the first quarter. Including the cash dividend paid in November 2023 and the final dividend to be paid in May, total value creation (TNAV plus cash dividend per share) increased 14%. In the first quarter, the value created for shareholders is equivalent to €3.1 billion.
Customer funds grew 5%, with deposits up 3%, supported by all businesses, strong growth in time deposits (+24%) in the context of higher interest rates as well as the ongoing increase in customer numbers, which grew by five million. Total loans were stable at €1.02 trillion, as growth of 4% in Consumer thanks to the auto business in Europe and Brazil, 4% in Wealth and 7% in Payments offset a decrease of 2% in Retail and 1% in CIB due to lower volumes in Spain and Brazil.
Total income increased 9% to a record of €15,380 million. The rise in both customer activity and interest rates supported a 16% increase in net interest income, with growth in all businesses. For example, in Retail good margin management in Europe and lower cost of deposits in South America, particularly in Brazil, led to a 17% increase in net interest income. In Wealth and CIB, net interest income increased by 26% and 25%, respectively. Net fee income was up 5% to a quarterly record of €3,240 million, supported by sales of high value-added products, particularly in CIB in the US, and higher activity in Retail, with all regions growing, and Consumer. More than 95% of total revenue is customer related.
1 Income statement figures are underlying to better reflect business dynamics.
It has been a very strong start to the year, with revenues growing 10% and further improvement in operating leverage. This has resulted in a return on tangible equity of 16.2% (after annualizing the impact of the temporary banking levy in Spain) and a 14% increase in tangible net asset value plus cash dividend per share.
