Spanish lender Banco Santander reported a 7.7% YoY growth in net consolidated profits to €2.7bn ($2.75bn) for Q2. The bank’s net interest income rose 16% YoY to €9.6bn ($9.8bn) and net fee income rose 16% to €3bn ($3.1bn). Net loan loss provisions were 49.6% YoY higher at €2.6bn ($2.65bn). Overall, its group NPL (non performing loans) ratio declined 17bp YoY to 3.22%, while for North and South America, NPL ratios have gone up 43bp and 103bp to 2.71% and 5.39% respectively.
Ana Botin CEO said, “Diversification continues to provide a strong and resilient foundation for growth. In South America business continues to grow profitably, generating 33% of the profit from 15% of lending. North America achieved an adjusted RoTE (return on tangible equity) of over 23%, despite the already anticipated normalization in loan-loss provisions and returns in Europe and Spain came closer to meeting the cost of capital, reflecting the improved connectivity across the region.” For 2022, the bank has retained its distribution policy of 40% of underlying profits to shareholders, equally split between dividends and buybacks. Revenue guidance is for mid-single digit growth, while RoTE is expected at more than 13%. Its CET1 ratio was at 12.05%, up 35bp YoY and in line with its target of 12%.
Santander’s USD 7.5% Perp was up 0.47 points to 100.87, yielding 6.89%.