Banco Santander (SAN) Q1 2025 earnings summary

Executive summary

• Attributable profit reached €3,402 million in Q1 2025, up 19% year-over-year, marking a record quarter, with all global business segments contributing to growth and nine million new customers added year-over-year.

• ROTE post-AT1 reached 15.8% (up 1.7pp year-over-year), CET1 ratio at 12.9%, and EPS rose 26% to €0.21, supported by profit growth and share buybacks.

• Efficiency ratio improved to 41.8% (down 0.8pp year-over-year), with operating expenses declining 1% and transformation initiatives driving customer and operational gains.

• Credit quality remained robust, with cost of risk at 1.14% (down 6bps year-over-year) and NPL ratio at 2.99%.

• Shareholder distributions targeted up to €10 billion for 2025-2026, with ongoing buybacks and a 50% payout policy.

Financial highlights

• Total revenue rose to €15.5 billion (+1% year-over-year in current euros, +5% in constant euros), with net fee income up 4% to €3.4 billion and net interest income flat year-over-year.

• Net operating income increased 7% year-over-year in constant euros; expenses grew below revenue and inflation.

• Loan loss provisions rose slightly year-over-year, mainly due to Brazil, but cost of risk improved to 1.14%.

• EPS rose to €0.21, up 26% year-over-year, supported by profit growth and share buybacks.

• Customer funds rose 5% year-over-year in constant euros, with mutual funds up 17% and deposits up 3%.

Outlook and guidance

• 2025 targets reaffirmed: revenue of ~€62 billion, ROTE post-AT1 around 16.5%, CET1 ratio near 13%, cost of risk at ~1.15%.

• NII guidance reiterated: slightly up in constant euros, slightly down in current euros, excluding Argentina.

• Shareholder remuneration policy targets ~50% payout, including up to €10 billion in buybacks for 2025-2026.

• Expect further efficiency gains and operational leverage as transformation continues.

• Capital headwinds of ~60bps expected for the year; asset mobilization to accelerate in coming quarters.