Santander earns 33% more and confirms its objectives and the dividend

He obtained an ordinary profit of 4,894 million euros during the first half of the year, a figure that represents a year-on-year increase of 33% and that is limited to 16% if the 530 million extraordinary costs recorded last year are excluded to assume the plans of restructuring. The amount

“We have achieved good results in the first half, with a return on tangible capital well above 13% and a CET1 capital ratio of 12%, which shows the strength and efficiency of our model and the solidity of our balance sheet. “, indicated the president of the group, Ana Botín, who ratified all the objectives of the entity for this year.

“Despite uncertainty and difficult economic conditions, we are confident of reaching our 2022 targets, while continuing to increase tangible book value (TNAV) and dividend per share in the medium term, after increasing 9% in the last twelve months,” he detailed in a statement sent to the National Securities Market Commission (CNMV).

The banker stressed that diversification provides “a solid and resilient base for growth”, with South America generating 33% of the group’s profit and 15% of credit; and North America with a return on tangible equity (RoTE) of 23%; and profitability in Europe and Spain that “is already close to the cost of capital”. Adjusted RoTE was above 27% in South America and 12% in Europe, and 13.7% for the group as a whole.

For the year as a whole, its forecast is to maintain this profitability ratio above 13%. The figure improves the 11.96% at the end of the 2021 financial year and exceeds the 9.31% at the end of 2019, before the outbreak of the pandemic.

Botín estimated that the economic context that is opening “will probably be difficult for governments, central banks, citizens and companies”, claiming the role of banking. “The banks continue to be part of the solution and, as up to now, we see the path of collaboration between all the economic and social agents, and the banks as the way to continue supporting the economies and our clients”.

The bank is on track to achieve the targets announced last February for this year: revenue growth of around 5%, ordinary RoTE above 13%, an efficiency ratio of 45% and a CET1 capital ratio fully loaded of 12%. Its board of directors also maintains the intention of distributing 40% of ordinary profit to shareholders through cash dividends and share repurchase.

Ratifies the distribution of dividends

In full controversy over the one whose design will be known today, the bank indicated that its gross profit grew by 4% in current euros -corrected for the effect of foreign exchange-, up to 7,915 million, and paid 2,374 million in taxes, with an effective rate of 30%.

In terms of activity and despite the uncertainty of the markets, the bank has captured more than seven million customers in all its geographies, reaching 157 million, and made 56% of sales via web or mobile.

In business, managed customer funds increased by 4% and now exceed 1.1 trillion euros, with 5% growth in deposits. In loans, the portfolio increased by 6%, with increases of 7% in mortgages, 6% in consumer credit and 4% in companies.

Favor rate hikes

It is also benefiting from higher interest rates in the UK, Poland and elsewhere, which boosted 7% net interest income, with particularly strong growth in the UK (+13%), Poland (+92 %), Mexico (+9%), Chile (+7%) and Argentina (+93%).

Total income increased by 4% in constant euros and 11% if the appreciation of most currencies is taken into account, up to 25,120 million; by also integrating fee income, which increased by 7% due to “higher volumes and improved activity.”

Inflation shot up its general costs by 5% in constant euros. If that CPI is discounted, they would fall by 4% due to the improvement in productivity. The efficiency ratio stood at 45.5% and plans to lower it to 45% in the year.

By geographical area, Europe contributed 1,839 million to ordinary profit (+38%), South America 1,946 million (+7%) and North America 1,578 million (-10%). Digital Consumer Bank in turn raised the profit by 16% and placed it at 572 million. In an analysis by country, Spain earned 652 million, 68% more, thanks in part to an 11% reduction in loan-loss provisions and lower costs, with non-performing loans at 3.83%. In the United Kingdom, the benefit advanced 6% and stood at 736 million; while in Mexico it earned 546 million (+32%) and in Brazil it added 1,365 million (-1%).

Regarding the quality of the balance sheet, the delinquency ratio stood at 3.05%, with a decrease of 17 basic points; improved the fully loaded CET1 top-quality capital ratio by 18 basis points to 12.05%, in line with the goal of keeping it above 12%.