Jefferies | The print includes a €1.9bn capital gain in relation to the sale of the Polish business. Excluding this, net profit of €3,560m was also a 3% beat. PBT was a 2% miss on higher impairments, with pre-prov profits 3% above consensus. Revenues were a 1% beat, with NII 2% above and fees broadly in line. Costs were a 1% beat, with a C:I ratio in the quarter of 42.8%, 300bps lower than 1Q25. Total provisions were 9% above consensus, and include a €207m provision for potential complaints related to UK Motor Finance dealers, alongside higher Retail provisions in Argentina and single names in CIB. Santander is reiterating the 2026 and investor day targets.
Ex-Argentina, attributable profit (ex. Poland capital gain) was 5% above consensus, with PBT 1% above. Pre-provision profit was a 3% beat. Revenues were 1% above and costs were 1% lighter.
- NII was 1.5% above cons, up 2% quarter-on-quarter and up 3.6% year-on-year. Ex-Argentina, NII was a 0.6% beat.
- Fee income was in line with consensus (in line ex-Argentina). Trading income was a 3% miss (1.4% miss ex-Argentina). Other operating income of €113m EUR compares to cons of €102m EUR.
- Total costs were a 1% beat (1% beat ex-Argentina).
- LLP were a 3.4% miss versus cons (or 0.9% miss ex-Argentina) on higher Retail provisions in Argentina and single names in CIB, and other provisions of €402m were a miss versus €200m in consensus, and include €207m provision for potential complaints related to UK Motor Finance dealers. Overall, CoR at 114bps remains in line with FY26 guidance.
- Customer loans were 2% above cons, up 3% q/q and down 1% year-on-year.
- Capital: CET1 ratio of 14.4% was 50bps above cons, with CET1 1% above and RWAs 3% lighter. The print includes +58bps attributable profit, -31bps accrual for ordinary capital distribution (cash dividend + SBB) and AT1 costs, +2bps net organic RWAs, +20bp regulatory and models (SMEs Spain), +42bps markets & others (including minorities and FX hedging costs) & one offs (includes Poland disposal positive impact of +95bps, and the €3.2bn extraordinary SBB impact of -56bps).
- 1Q26 underlying RoTE at 15.2%
- 2026 Guidance unchanged.
