Santander has again managed to close a record first quarter. The entity chaired by Ana Botín registered between January and March some earnings of 2,571 million euros, barely 1% more than in the same period last year, but which represents a record figure for the bank in the first quarter. In addition, this result was obtained despite the extraordinary payment of the temporary tax to the bank, which in the case of Santander the full amount corresponding to the entire year was paid (224 million in charge of the previous year). Excluding the tax, the result would be 10% higher. Despite this, the market has received the quarterly accounts with skepticism and the bank’s shares have fallen by close to 5% on the stock market.
The results of were boosted by higher revenues, thanks to the rise in interest rates that have already led to a repricing in the bank’s portfolio. Thus, the gross margin rose by 13% to 13,922 million euros. It was mainly supported by the interest margin, which rose 17.4% to 10,396 million. This increase was especially significant in some European countries (in Portugal it increased by 54%, in Poland by 47% and in Spain by 46%).
Also contributing to higher revenues was business activity growth, with the acquisition of 9 million new customers in the last twelve months, which allows the bank to have 161 million customers globally. Customer funds increased by 5%, to 1.12 trillion euros, thanks to the increase in deposits (+6%) in all regions. Globally, credit increased by 3% despite the general stagnation of the sector in some markets. Specifically, mortgage production rose 2% and consumer credit 9%.
By geographic markets, Brazil and Spain were the motors of the group, almost at the same level. The South American country obtained an attributable profit of 469 million, which represents 26% less due to the bank’s negative sensitivity to a rise in interest rates in the country. This is a momentary effect and is that when interest rates rise in the short term, the liability is repriced before the asset and causes an increase in costs. Even so, deposits increased 9% and loans 10%.
For his part, Spain It achieved a profit of 466 million euros, which is 26% more due to the increase in interest income, commission income and the acquisition of new customers (+700,000). Deposits grew 7% to 301,000 million, although loans fell 3% due to early repayments.
In third place is United Kingdom, with a profit of 395 million (+11%), thanks to the strong generation of income (+12%) driven by the rise in rates. In Mexico, Santander obtained 359 million (+26%) after boosting revenues by 15% due to higher volumes and the tailwind caused by interest rate rises. In USAprofit fell 51% to 300 million due to higher financing costs in the auto business and the normalization of provisions.
The strong inflationary pressure in the markets caused a 11% cost increase. However, revenues increased more than expenses and the group’s efficiency ratio improved to 44.1% (experts consider that this ratio must be below 50% for an entity to begin to be efficient).
The return on tangible equity (RoTE) stood at 14.4%, which is one percentage point above last year but below the 15% target. Of course, the bank points out that if the impact of the tax were distributed throughout the year (56 million per quarter), the profitability of the first quarter would be 15.3%.
In regards to the solvencythe CET1 capital ratio fully loaded rose 10 basis points in twelve months to 12.2%, above the target range of 12%. For its part, non-performing loans stood at 3.05%, which is 21 basis points less than in March 2022.
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