Banco Santander Reports H1 2021 Attributable Profit Of €3.675 Billion

SantanderEPS 2023 estimates lowered by 3% for Santander

Revenues increased 8% and net operating income grew 13% on a constant currency basis. The group earned €22.7 billion in total income in the first half of 2021, up 8% year-on-year in constant euros(excluding currency movements).

Net operating income grew by 13% year-on-year in constant euros to €12.3 billion, as lending and deposits increased by 2% and 4%, respectively, also in constant euros.

Underlying profit in the first half nearly tripled in Europe to €1.426 billion (+172%) and in North America to €1.628 million (+178%). Meanwhile, it grew 41% in South America to €1.645 billion, reflecting the strength of the bank’s geographic diversification, as well as the impact of higher provisions in 2020 due to the pandemic.

CET1 capital was 12.11%, up 27 basis points (bps) in the last 12 months and above the group’s 11-12% target range. In the quarter, the bank generated 7 bps organically, accruing 18 bps of capital for potential shareholder remuneration. The bank will continue to accrue at this level throughout the year, with the aim of restoring a payout ratio of 40-50% of underlying profit.

Ana Botín, Banco Santander executive chairman, said: “Our commitment to building a more responsible bank, combined with the bank’s ongoing investment in digital innovation, continues to improve the quality and sustainability of our earnings. Our efficiency improved further, with our cost-to-income ratio now 45.7%, and we also made further progress in increasing customer satisfaction.

In line with our strategy, we continue to deploy capital towards high growth, high return businesses and the proposal to acquire the outstanding minorities in our US consumer franchise, and the leading broker Amherst Pierpont is consistent with that approach.

We are on track to outperform our profitability target for the year and continue to target a shareholder remuneration pay-out of 40-50% of underlying profit.”

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