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, marking the fourth consecutive year of record results, with 8 million new customers added, reaching 180 million total.

• All 2025 financial targets were met, including profitability, cost, and capital objectives, supported by operational transformation and the ONE Transformation program.

• Announced acquisition of Webster Financial Corporation for $12.2 billion, a strategic move to scale US operations, expected to nearly double US ROTE to 18% by 2028 and deliver 7-8% EPS accretion.

• Shareholder value creation continued, with dividend per share up 14%, EPS up 17% year-over-year, and a new €5 billion share buyback as part of a commitment to distribute at least €10 billion from 2025-26 earnings.

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 operating income reached nearly €37 billion, with expenses down 1% in absolute terms and efficiency ratio improving to 41.2%, the best in over 15 years.

• Cost of risk ended at 1.15%, in line with guidance, and NPL ratio declined to 2.91%, the lowest in 16 years.

• CET1 capital ratio reached 13.5%, above the 12-13% target, and TNAV per share rose 14% year-over-year to €5.76.

• ROTE post-AT1 reached 16.3%, up nearly one percentage point year-over-year.

Outlook and guidance

• For 2026, targets mid-single-digit revenue growth, lower costs in constant euros, higher profits, and CET1 ratio of 12.8-13%.

• 2027 guidance: double-digit revenue growth, mid-teens net profit growth, CET1 above 13%.

• Group ROTE expected to exceed 20% by 2028, driven by US and UK profitability improvements and Webster integration.

• Shareholder remuneration policy targets at least €10 billion in buybacks for 2025-2026, with 50% payout of reported profit.