RESULTS

First half of 2018 attributable profit of EUR 3,752 million was 4% higher year-on-year and 16% in constant euros

This figure includes EUR 300 million of non recurring items associated with integrations (mainly restructuring costs) net of tax impacts. Excluding it, underlying profit was up 12% at EUR 4,052 million (+25% in constant euros).

This evolution was positively affected by the incorporation of Banco Popular and the greater stake in Santander Asset Management and negatively by exchange rates and continued low interest rates in mature markets.

Solid commercial revenues

Efficiency ratio among the best in the sector

Further improvement in the cost of credit

H1'18 underlying ATTRIBUTABLE PROFIT*

GROUP PROFIT GROWTH DRIVEN BY MOST MARKETS

*Excluding Corporate Centre and Spain Real Estate Activity.

underlying ATTRIBUTABLE PROFIT TO THE GROUP**

eur million

**Excluding net capital gains and provisions.

H1'18 underlying ATTRIBUTABLE PROFIT IN CORE MARKETS

EUR MN AND % CHANGE VS. H1’17 IN CONSTANT EUROS

The information shown above in relation to the different units has been prepared in accordance with homogeneous management criteria for the whole Group and may therefore differ from the information published for each company on an individual basis.

EARNINGS IN THE MAIN GEOGRAPHIES

CONSTANT EUROS

United States:

First half attributable profit of EUR 335 million, 54% more year-on-year, due to a fall in costs and, above all, reduced provisions. Both Santander Bank and Santander Consumer USA registered strong profit growth.

Continental Europe:

Recorded an underlying attributable profit of EUR 1,707 million, an annual increase of 15%. Growth was largely due to the increase in commercial revenue and also benefited from Banco Popular’s integration. Of note was Spain with a profit of 780 million and growth of 25%.

United Kingdom:

In a highly competitive environment with some remaining uncertainties surrounding Brexit, attributable profit was 14% lower year-on-year at EUR 692 million. This was due to pressure on spreads and investments in regulatory and strategic projects.

Latin America:

Posted an attributable profit of EUR 2,214 million, 26% higher year-on-year. Growth in volumes, better spreads and increased loyalty underpinned the good evolution, both in net interest income as well as fee income, in addition to an improved cost of credit. Of note were results in Brazil, with EUR 1,324 million (+28%), and Mexico, with EUR 359 million (+13%).

United States:
First half attributable profit of EUR 335 million, 54% more year-on-year, due to a fall in costs and, above all, reduced provisions. Both Santander Bank and Santander Consumer USA registered strong profit growth.

Continental Europe:
Recorded an underlying attributable profit of EUR 1,707 million, an annual increase of 15%. Growth was largely due to the increase in commercial revenue and also benefited from Banco Popular’s integration. Of note was Spain with a profit of 780 million and growth of 25%.

United Kingdom:
In a highly competitive environment with some remaining uncertainties surrounding Brexit, attributable profit was 14% lower year-on-year at EUR 692 million. This was due to pressure on spreads and investments in regulatory and strategic projects.

Latin America:
Posted an attributable profit of EUR 2,214 million, 26% higher year-on-year. Growth in volumes, better spreads and increased loyalty underpinned the good evolution, both in net interest income as well as fee income, in addition to an improved cost of credit. Of note were results in Brazil, with EUR 1,324 million (+28%), and Mexico, with EUR 359 million (+13%).

Income statement

MILLION EUROS
% change
H1'18 EUR Constant
EUR
Net interest income 16,931 (0.5) 9.6
Gross income 24,162 0.3 10.6
Net operating income 12,680 (1.6) 9.6
Underlying profit before taxes* 7,480 13.6 25.8
Underlying attributable profit to the Group* 4,052 12.1 25.2
Attributable profit to the Group 3,752 3.8 15.9
*Excluding net capital gains and provisions.

FINANCIAL REPORT JANUARY - JUNE 2018

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