Santander increases profit 18% to €9,605mn in 2022, earnings per share up 23%

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Banco Santander (SAN) reported a profit of €9,605 million in 2022 (+18% in current euros), after gaining €2,289 million (+1%) in the fourth quarter. Annual net interest income rose to €38,619 million (+16%). The bank pointed out that “the effect of the rise in interest rates on net interest income has not yet been fully reflected in Spain, Portugal and the United States”.

On the dividend policy, it said that “the board maintains its intention to remunerate shareholders with around 40% of ordinary profit by 2022, distributed approximately equally between cash dividends and share buybacks”.

The NPL ratio stood at 3.08%, down eight basis points compared to the end of 2021, thanks to the good performance of Europe and Digital Consumer Bank, while the coverage ratio stood at 68%.

The bank’s provisions amounted to €3,018 million in the fourth quarter, 106% more than in the same period of the previous year. “Santander made additional provisions because of the updated macroeconomic forecasts, reflecting its prudence given the economic uncertainty,” the bank explained. This raised annual provisions by 31% to €10,509 million.
“The group’s scale, diversification and commercial focus resulted in a solid year, with an increase of seven million in the number of customers to 160 million,” the bank said. Its linked customers increased by 8% to 27 million.

Ana Botín, the Banco Santander executive chair, said: “2022 was another strong year for Santander as we made further progress in growing our customer base profitably, while maintaining a rock-solid balance sheet. As a result, we have delivered earnings per share growth of 23% while growing cash dividend per share by 16%. The competitive advantage gained from our in-market and global scale, combined with our diversification and customer focus, has allowed us to grow our customer base by seven million in the year while achieving double digit growth in revenues and profit, with capital in line with our target. Our teams’ excellence in execution, combined with our rigorous capital allocation, provide a solid foundation for sustainable value creation for all stakeholders going forward.”

“In 2023, we expect central banks and governments will continue to focus on bringing down inflation. Our team has proven experience in navigating these conditions successfully and we expect revenue growth will continue to offset cost inflation pressures and the anticipated increase in cost of risk. We also expect to continue growing our tangible net asset value per share and dividend per share.”

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