Banco Santander (SAN) Q2 2024 earnings summary

Executive summary

• Record H1 2024 attributable profit of €6.1bn, up 16% year-on-year, with Q2 profit of €3.2bn, up 20%, despite €450m–€500m in one-time charges; recurring Q2 profit reached €3.7bn.

• Strong operating performance driven by growth in net interest income, fees, and efficiency improvements across all global businesses and regions.

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

• Fully-loaded CET1 ratio at 12.5%, with robust credit quality and cost of risk at 1.2%.

• Shareholder remuneration for 2023 reached €5,552m, split equally between cash dividends and share buybacks, with TNAV plus DPS up 12% year-on-year.

Financial highlights

• Net interest income rose 12% year-on-year to €23.5bn; total revenue up 10% to €31.1bn.

• Net operating income increased 15% to €18.1bn; profit before tax up 14% to €9.5bn.

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

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

• Cost of risk at 1.2% YTD, NPL ratio at 3.02%, and coverage ratio at 66%.

Outlook and guidance

• Upgraded 2024 revenue growth target to high single digits, efficiency ratio to close to 42%, and RoTE to above 16%.

• CET1 ratio guidance remains above 12% post-Basel III.

• Cost of risk expected to remain stable at ~1.2% for the year.

• Double-digit TNAV plus DPS growth confirmed through the cycle.