Banco Santander (SAN) Q2 2024 earnings summary

Executive summary

• Attributable profit for H1 2024 reached €6,059 million, up 16% year-over-year, with Q2 profit at a record €3,207 million, up 20% from Q2 2023, despite €452 million in one-time charges.

• Revenue grew 10% to €31,050 million, driven by strong net interest income and fee income across all global businesses and regions.

• Upgraded 2024 targets: high-single digit revenue growth, efficiency ratio around 42%, and ROTE above 16%.

• Fully-loaded CET1 ratio at 12.5%, with robust credit quality and cost of risk at 1.21%.

• Shareholder remuneration for 2023 results reached €5,552 million, split equally between cash dividends and share buybacks, with 11% of shares repurchased since 2021.

Financial highlights

• Net interest income rose 12% to €23,457 million, and net fee income increased 6% to €6,477 million year-over-year.

• Net operating income increased 15% to €18,137 million; profit before tax up 14% to €9,508 million.

• EPS grew 19% to €0.37; ROTE at 15.9% (16.3% annualizing the temporary levy in Spain).

• Efficiency ratio improved to 41.6%, best in 15 years.

• Cost of risk at 1.21%, NPL ratio at 3.02%, and coverage ratio at 66%.

Outlook and guidance

• Upgraded 2024 guidance: high-single digit revenue growth, efficiency ratio close to 42%, and ROTE above 16%.

• Cost of risk expected to remain stable at around 1.2%.

• Fully-loaded CET1 ratio target maintained above 12% post-Basel III implementation.

• Management confident in delivering on more ambitious targets despite volatile geopolitical environment.