Banco Santander (SAN) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered record attributable profit of €3.4 billion, up 19% year-over-year, with all business segments growing and strong global business performance.

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

• Efficiency ratio improved to 41.8% (-0.8pp YoY), with transformation initiatives and global platform rollout driving efficiency gains and improved customer experience.

• Shareholder distributions targeted up to €10 billion for 2025-2026, with ongoing buybacks and disciplined capital allocation.

• The Group remains on track to meet 2025 targets, with robust credit quality and double-digit shareholder value creation.

Financial highlights

• Total revenue rose to €15.5 billion (+1% YoY in current euros, +5% in constant euros), with net fee income up 4% and net interest income down 5% due to Argentina's rate cuts.

• Operating expenses declined 1% YoY, improving the efficiency ratio to 41.8% (down 0.8pp YoY); net operating income up 2% (+7% in constant euros).

• Loan loss provisions rose 7% YoY, mainly due to Brazil, but cost of risk improved to 1.14% (down 6bps YoY); NPL ratio declined to 2.99% with stable coverage at 66%.

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

• Customer funds rose 5% YoY in constant euros, with mutual funds up 17% and customer deposits up 3%.

Outlook and guidance

• 2025 targets reaffirmed: revenue €62 billion, ROTE 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.

• Ordinary shareholder remuneration policy remains at 50% payout, split equally between cash dividends and share buybacks.

• Up to €10 billion in share buybacks planned for 2025 and 2026, subject to regulatory approval.

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