Spain’s Santander posts 20% hike in net profit as retail business shines

Banco Santander posted a 20% year-on-year hike in second-quarter net profit underpinned by growth in its retail, wealth and consumer activity, after firm revenues and margin management in Europe and Brazil.

The company’s net profit attributable to the parent group came in at 3.207 billion euros ($3.48 million), in line with a consensus from analysts polled by Reuters.

The bank’s ratios also firmed, with its fully-loaded CET1 ratio (a measure of a bank’s solvency) up from 12.3% in the March quarter to 12.5% in the three months to June.

Its return-on-tangible-equity ratio — a profit metric — rose to 16.8% in the June quarter, up from 14.9% in the first quarter, and to 15.9% in the first half, up from 14.5% in the same period of last year — prompting the bank to improve its RoTE guidance to above 16% for full-year 2024, from a forecast at 16% previously.

Santander now expects revenues will hit high-single digit growth, from a previously forecast mid-single digit expansion.

Other highlights included:

• Pre-tax profit: 4.925 billion euros in the second quarter, versus 4.258 billion euros in the same period of last year.

• Net interest income: 11.47 billion euros in the June quarter, compared with 10.52 billion euros in the same three-month stretch of last year — but below a 11.96% forecast for the second quarter of 2024 from analysts polled by Reuters.

Discussing income, the bank flagged a “negative impact from hyperinflation adjustment” in Argentina, where President Javier Milei has made a priority of attempting to tame price hikes.

“In the context of a volatile geopolitical environment, we are confident that we will deliver on the more ambitious targets set out today thanks to our diversification across businesses and markets, the strength of our model, and the quality of our team – to whom I am again extremely grateful,” Santander Executive Chair Ana Botin said in a statement.

This breaking news story is being updated.