Banco Santander’s record half-year profits exceeded predictions

ANA BOTIN: Bank making good progress, executive chairwoman announced Photo credit: Ana Botin

BANCO SANTANDER’S €5.241 billion first-half results were the best in the bank’s history and 7.1 per cent more than the same period in 2022.

This increase would have risen to 11.7 per cent without the impact of the €224 million windfall tax charged on 2022’s profits and paid this year.

The January-June figures exceeded analysts’ estimates who predicted a €5.151 billion profit, and the markets responded with shares rising almost 2 per cent on July 26 when the figures were announced.

Continual increases in the interest rate, introduced over the last year by the European Central Bank (BCE) to combat inflation, boosted Santander’s performance in Europe.

“We are making good progress towards achieving our goals of simplifying business procedures and making the most of our global strengths,” Santander’s executive president Ana Botin said.

The bank’s gross income rose 11.5 per cent to €28.01 billion, an increase bolstered by growth in net interest income, which rose 13.6 per cent to €20.92 billion. Net fees and commissions rose 4.3 per cent to €6.103 billion.

It is on these two areas that the government calculates the amount of its temporary windfall tax, charged on banks’ activities inside Spain, which is Santander’s principal market.  During the first half of the year, the domestic market accounted for €3.161 billion in net interest income and €1.413 billion in net fees and commissions.

Europe was the group’s principal driving force during the first six months. Spain, whose customer base increased by 362,000, contributed €1.132 billion, displacing Brazil as the bank’s traditional source of earnings.

Brazil was responsible for €823 million in profits, but plummeted 39.7 per cent owing to a fall in the gross margin, owing to interest rate increases.

The UK was Santander’s third most-important market, contributed a profit of €818 million which was 11.2 per cent up on 2022 thanks to a 9 per cent rise in income that was produced by the Bank of England’s higher interest rates.

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Written by

Linda Hall

Originally from the UK, Linda is based in Valenca and is a reporter for The Euro Weekly News covering local news. Got a news story you want to share? Then get in touch at editorial@euroweeklynews.com.

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