Banco Santander (SAN) Q4 2025 & Acquisition earnings summary

Executive summary

• Achieved record attributable profit of €14.1 billion in 2025, up 12% year-over-year, with strong performances across all global businesses and revenue lines, and added 8 million customers to reach 180 million total.

• ROTE (post-AT1) improved to 16.3%, efficiency ratio reached 41.2% (best in over 15 years), and all 2025 financial targets were met.

• Announced acquisition of Webster Financial Corporation for $12.2 billion, aiming to create a top-ten U.S. retail and commercial bank by assets and a top-five deposit franchise in the Northeast U.S., with expected 18% U.S. ROTE by 2028 and 7-8% EPS accretion.

• Completed sale of 49% stake in Santander Bank Polska and 50% of TFI to Erste Group, redeploying capital to core markets and boosting CET1.

• Launched €5 billion share buyback as part of a commitment to distribute at least €10 billion from 2025-26 earnings and excess capital.

Financial highlights

• Total income for 2025 was €62.4 billion, flat in euros but up 4% in constant euros; net fee income reached a record €13.7 billion, up 5% (+9% in constant euros).

• Net interest income was €45.4 billion (down 3% in current euros, up 1% in constant euros); EPS increased 17% to €0.91.

• Operating expenses fell 1% in euros, improving the efficiency ratio to 41.2%.

• Cost of risk at 1.15%, NPL ratio at 2.91%, and NPL coverage ratio at 66%.

• CET1 capital ratio reached 13.5%, above the 13% target, and TNAV per share rose 14% to €5.76.

Outlook and guidance

• Targeting ROTE above 20% by 2028, with U.S. ROTE at 18% and group CET1 ratio expected to remain at 12.8-13% post-Webster acquisition.

• Revenue expected to grow mid-single digit in 2026 (ex-M&A), double digit including M&A; costs to decline in absolute terms.

• Shareholder payout policy maintained at 50%, with at least €10 billion in share buybacks for 2025 and 2026.

• Expects double-digit revenue growth and mid-teens profit growth in 2027 post-Webster acquisition.