Banco Santander (SAN) Q3 2024 earnings summary

Executive summary

• Attributable profit reached €12,574 million in 2024, up 14% year-over-year, with Q3 profit at €3.3 billion and nine-month profit at €9.3 billion, driven by strong revenue growth and improved cost of risk.

• Transformation initiatives and digitalization improved efficiency to a record 41.7% and ROTE to 16.3%, exceeding targets.

• All business segments contributed to growth, with retail, consumer, CIB, wealth, and payments showing strong revenue and profit trends, though Consumer and Payments faced some headwinds.

• Shareholder value creation reflected in a 14% increase in TNAV plus dividend per share and a 39% higher cash dividend per share for 2024.

• Solid balance sheet with fully-loaded CET1 ratio at 12.8% at year-end, supported by strong organic capital generation.

Financial highlights

• Total income for 2024 was €62,211 million, up 7.9% year-over-year, with net interest income up 8% and net fee income up 8%.

• Net operating income increased 12.3% to €36,177 million, and EPS grew 18% to €0.77.

• Efficiency ratio improved to 41.7% for the nine-month period and 41.8% for the year.

• Cost of risk improved to 1.15% for 2024, with NPL ratio at 3.05% and coverage ratio at 65%.

• Market capitalization reached €71.3 billion, up 22% year-over-year.

Outlook and guidance

• On track to exceed upgraded 2024 targets, with expectations for continued revenue growth, improved efficiency, and stable cost of risk.

• ROTE above 16% and fully-loaded CET1 ratio expected to remain above 12% post-Basel III.

• Total shareholder remuneration for 2024 projected to exceed €6 billion, with cash dividend per share anticipated to be about 20% higher than 2023.

• 2025 profits expected to surpass 2024, driven by further revenue and fee growth, operating leverage, and network effects.