T.C. | Underlying profit was €2.138 billion, up from €377 million a year earlier, with record earnings in the US and strong growth in the UK.
Revenues increased 8% and pre-provision profit grew 15% on a constant currency basis
The group clocked up €11.4 billion in quarterly revenue, up 8% year-on-year in constant euros (excluding currency movements). This increase was driven by growth in volumes with falling funding costs and good performance across all regions.
Business volumes were higher in most markets. Lending and customer funds (deposits and mutual funds) grew 2% and 10% year-on-year, respectively, in constant euros.
Pre-provision profit (net operating income) grew by 15% year-on-year in constant euros to €6.3 billion.
During the quarter, the bank recorded €530 million in charges, net of tax, from expected restructuring costs for the year as a whole.
Credit quality continued to improve. The non-performing loan ratio fell five basis points (bps) year-on-year to 3.20%. Cost of credit improved by 20 bps from December to 1.08%, due to lower loan-loss provisions.
The group CET1 capital ratio rose 72 bps year-on-year to 12.30%, above its target range of 11-12%. The bank accrued 15 bps of capital for shareholder remuneration, the equivalent of 40% of underlying profit in the quarter. And it will accrue 40% of underlying profit throughout the year for shareholder remuneration, once authorised by supervisors.
Ana Botín, Banco Santander executive chairwoman, said: “We saw good performance across all our regions, with particularly strong growth in the US, the UK and Santander Corporate and Investment Banking…We continue to play an important role in the economic response to the pandemic, supporting our customers while maintaining a rock-solid balance sheet. “Credit quality is robust, and capital remains above our target, allowing us to accrue 40% of the underlying profit throughout the year for shareholder remuneration once regulatory conditions allow…The success of the vaccine rollout remains critically important to economic recovery. We are confident we will achieve our 2021 goals of improving our efficiency ratio, reducing cost of credit and increasing our profitability.”