Underlying profit before tax was €11.4 billion (+74% in constant euros). The group’s fully loaded CET1 increased by 15 basis points in the quarter to 11.85%
Santander clocked up €34.6 billion in total income in the first nine months of 2021, up 8% year-on-year in constant euros (excluding currency movements), with 94% of income coming from net interest income and fees.
Net operating income increased by 11% year-on-year in constant euros to €18.8 billion, as lending and deposits grew by 4% and 6%, respectively.
Tax on profit in the first nine months of the year was €3.9 billion, resulting in an effective tax rate of 34%.
Underlying profit in Europe and North America was double that of same period last year, increasing by 98% and 122% respectively. Meanwhile, in South America underlying profit increased by 31% in constant euros. In Santander CIB and Wealth Management & Insurance, underlying profit increased by 26% and 24%, respectively.
The total number of customers increased to 152 million, with 54% of group sales made through digital channels compared to 44% in the same period last year.
Provisions are down 34% in constant euros. The cost of credit improved further to 0.9%.
These results led to a return on tangible equity (RoTE) of 11.8% (underlying RoTE, 12.6%), above cost of capital, and a tangible net asset value (TNAV) per share of €3.99, a 6.5% increase over the last 12 months, including dividends.
Fully loaded CET1 capital was 11.85%, up 15 basis points (bps) in the quarter and at the top end of the group’s 11-12% target range, having accounted for almost all regulatory impacts expected this year.
In September, the bank announced plans to make an interim distribution from 2021 earnings of c.€1.7 billion, split between a cash dividend of €4.85 cents per share and a €841 million share buyback. A further final dividend from 2021 earnings will be announced during the first quarter of 2022.
Ana Botín, Banco Santander executive chairman, said: “We delivered solid top line growth across all of our regions and businesses again this quarter. Our performance in the US and the UK were particularly strong, underscoring the effectiveness of our strategy in these important markets.
Our teams’ relentless focus on improving the way we serve customers helped attract over a million new customers in the last quarter, while increasing loans and deposits by 4% and 6% year-on-year, respectively.
Our investment in digital is critical to achieving profitable and efficient growth. This is reflected in our cost-to-income ratio which remains among the best in our peer group at 45.6%.
Looking ahead, we are well on track to significantly outperform our profitability target for 2021, while maintaining a fully loaded CET1 at the top end of our 11-12% range. We remain confident of reaching our 13-15% medium-term profitability target thanks to the progress we have made to date, an improved outlook, as well as our team’s excellent delivery across all businesses. I am proud that Santander has again been recognized amongst the top-25 ‘great places to work’ globally, and of our support for renewable energy and financial inclusion.”