Santander Bank Polska (SPL) Q2 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached PLN 2.4 billion, up 10% year-over-year, with strong growth in net interest and fee income, but quarterly profit was impacted by legal risk costs on FX/CHF loans.

• Over 7.5 million customers served, with digital customers up 7–8% year-over-year and mobile transactions up 28%.

• Total assets increased to PLN 282.9 billion as of June 2024.

• CEO and management express optimism for continued growth despite regulatory and legal challenges.

• Dividend of PLN 44.63 per share paid in May 2024, totaling PLN 4.56 billion.

Financial highlights

• Total income for H1 2024 was PLN 8.3 billion, up 9% year-over-year; net interest income was PLN 6.8 billion, and net fee income increased 9%.

• Customer deposits grew 7% year-over-year to PLN 215 billion; gross loans portfolio also up 7% to PLN 174 billion.

• Operating expenses rose 11% year-over-year to PLN 2.6 billion, mainly due to inflation, salary adjustments, and regulatory costs.

• Cost of legal risk on FX/CHF mortgage loans was PLN 1.55 billion in H1 2024, with cumulative impact estimated at PLN 5.8 billion.

• Cost-to-income ratio at 31.1%; ROE at 19.1%.

Outlook and guidance

• Management expects continued organic growth in customers and lending, supported by positive macro trends and EU funds.

• Sensitivity of net interest income to a 100 bps interest rate move estimated at PLN 300–350 million.

• No specific guidance for NIMs or ROTEs due to market uncertainty.

• Cost discipline expected to continue, with staff cost growth dependent on management decisions and market conditions.

• Ongoing monitoring and management of legal risks related to CHF mortgage loans.