"Profit was above 2.5 billion euros, and we saw an improvement of profitability of our main ratios."
Welcome to the Quarterly Shareholder Report where you can check the most significant information about Santander's share and the Group in the first quarter of 2022.
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"We delivered a strong first quarter, growing the number of customers we serve and increasing revenues by 8%, further improvements in efficiency, and credit quality remaining solid.
The return on tangible equity was 14.2%, supported by greater connectivity across the businesses and robust risk management. All regions delivered strong performance, including Europe, where profitability rebounded.
Our geographic and business diversification continue to provide a cornerstone for growth and is a key reason why Santander remains among the most efficient and resilient banks in our peer group, with profitability well above our cost of capital.
Looking ahead, while inflation will affect the pace of global economic growth, with specific impacts varying across our regions and businesses, we are reiterating our 2022 targets, illustrating the benefits of our business model.
Our priority, as always, is to remain focused on supporting our customers, leveraging the group’s collective scale to further improve service and efficiency. Our investments are delivering today and will support future growth throughout the business. We are already seeing the benefits of our investment and strategic focus on our Digital Consumer Bank and payments business, PagoNxt, where revenues have increased by 122%.
I am confident our focus on serving our customers better every day and executing our strategy will allow us continue delivering sustainable growth in EPS, TNAV per share, as well as returning value to shareholders through both cash dividends and share buybacks."
Ana Botín, Group Executive Chairman of Banco Santander
*Including the impact of the Amherst Pierpont acquisition (-7 bps), which closed in April.
START
EUR 2.941
31/12/2021
MAXIMUM
EUR 3.482
10/02/2022
MINIMUM
EUR 2.490
07/03/2022
END
EUR 3.100
31/03/2022
The quarter begun marked by the rapid spread of the Omicron variant, which dampened the IMF's optimism in economic recovery, worsened by the invasion of Ukraine, which led to significant risk aversion.
Concerns recording inflation have forced central banks to take action, despite the impact on economic growth:
In this environment, the Santander share ended the quarter with a 5.4% increase, a better performance than that of the main comparable indexes, helped by its very limited exposure to Russia and Ukraine, geographic diversification, good 2021 results and a positive performance of Latin American currencies.
The main global equity markets, which recorded strong volatility, ended the quarter with declines. The banking sector recorded an overall worse performance, affected by its different exposures to Russia. The DJ Stoxx Banks dropped 5.8% and the MSCI World Banks fell 1.3%, compared to the Ibex 35 3.1% decrease and the DJ Stoxx 50 2.8% decline.
The Santander share ended the first quarter of the year up by
5.4%
Select comparables
31 december 2020 = 100.
of analysts recommend buying or holding SAN shares
67.7%
Buy
25.8%
Hold
6.5%
Sell
EUR 3.97
average target price
of analysts for
SAN shares
Source Bloomberg at 31/03/2022.
In applying the shareholder remuneration policy for 2021, the second payment of remuneration against 2021 results was approved, which will be made in two parts:
A gross cash dividend of EUR 5.15 cents per share, which will be paid from 2 May 2022.
A second share buyback programme that will have a maximum amount of EUR 865 million, equivalent to 20% of the Group's underlying profit in the second half of 2021. The repurchase programme will have the following characteristics:
As a result, total shareholder remuneration totalled around EUR 3.4 billion, equivalent to a share of approximately 40% of 2021 underlying attributable profit.
Top 3 NPS1
in 8 out of 9 markets
155 mn
total customers
1. NPS – internal benchmark of individual customers’ satisfaction audited by Stiga / Deloitte in H2'21.
TOP 3 in lending2
in 10 of our markets
2. Market share in lending as of December 2021 including only privately-owned banks. UK benchmark refers to the mortgage market. Digital consumer Bank (DCB) refers to auto in Europe.
3. Q1'22 underlying attributable profit by region. Operating areas excluding Corporate Centre.
Underlying attributable profit Q1'22
Our geographic and business diversification to some extent protects us from adverse circumstances and enables us to resiliently face the impacts arising from the Ukrainian conflict.
In Q1'22, we achieved an attributable profit of EUR 2,543 million in the first quarter of 2022, up 58% in euros versus the same period last year, when we recorded net charges for restructuring costs. On an underlying basis, profit also amounted to EUR 2,543 million due to no charges in the quarter, and was 19% higher in euros (+12% in constant euros) compared to underlying profit in Q1'21. These increases were underpinned by the positive performance across regions, Digital Consumer Bank (DCB) and our global businesses.
*Excluding net capital gains and provisions.
Well balanced Group profit.
(*) As a % of operating areas. Excluding the Corporate Centre.
% change / Q1'21 | |||
---|---|---|---|
EUR million | Q1'22 | EUR | Constant EUR |
Net interest income | 8,855 | 11.3 | 6.2 |
Total income | 12,305 | 8.0 | 3.3 |
Net operating income | 6,770 | 7.9 | 2.3 |
Underlying profit before tax* | 4,171 | 9.4 | 2.7 |
Underlying profit attributable to the Group* | 2,543 | 18.9 | 11.8 |
Profit attributable to the Group | 2,543 | 58.1 | 46.8 |
Loyal customers
millions
Digital customers
millions
Digital sales
% of total sales
In this environment, and excluding the exchange rate impact:
Loans to
customers
Customer
funds
Europe
59%
65%
North America
14%
13%
South America
15%
17%
Digital Consumer Bank
12%
5%
% operating areas. March 2022.
% change/ Q1'21 | |||
---|---|---|---|
EUR million | Q1'22 | EUR | Constant EUR |
Gross loans and advances to customers* | 998,490 | 8.0 | 5.0 |
Customer deposits** | 906,074 | 8.2 | 5.3 |
Mutual funds | 190,940 | 12.6 | 6.1 |
Customer funds | 1,097,014 | 8.9 | 5.5 |
Q1'22 vs Q1'21 | Total customers (mn) |
Customer loans (EUR bn) |
Customer deposits (EUR bn) |
Net operating income1 (EUR mn) |
Underlying att. profit1 (EUR mn) |
RoTE2 |
---|---|---|---|---|---|---|
Europe | 46.1 — |
584 +4% |
604 +5% |
2,245 +12% |
1,018 +30% |
13.5% +3.0pp |
North America | 25.1 +3% |
141 +8% |
119 +7% |
1,535 -4% |
806 +4% |
24.5% -0.4pp |
South America | 64.4 +11% |
149 +9% |
124 +6% |
2,711 +7% |
900 +8% |
26.7% +0.7pp |
Digital Consumer Bank | 19.2 — |
117 +1% |
57 +6% |
667 +3% |
282 +11% |
12.7% +1.5pp |
Note: YoY changes in constant euros. Loans and advances to customers excluding reverse repos. Customer deposits excluding respos.
(1) North America excluding Bluestem portfolio disposal impact in % changes. Otherwise, net operating income -10% and underlying attributable profit 0%.
(2) Adjusted RoTEs: adjusted based on Group’s deployed capital calculated as contribution of RWAs at 12%.
EUR 69bn since 2019
EUR 3.6bn in Q1’22
EUR 120bn by 2025
EUR 220bn by 2030
In Q1'22:
>EUR 1bn in electric vehicles
>EUR 2bn in green buildings
EUR 27bn Mar-22
EUR 100bn by 2025
8 wind farm3
agreements in Q1'22
Alliance with Enel
Acquisition of 80%
WayCarbon4
0.23 tCO2e/MWh5 in 2019
0.18 by 2025
0.11 by 2030
Thermal coal-related power6
& mining phase out
EUR 7bn in 2021
0 by 2030
Note: Q1’22 data not audited.
1. Only SCIB global business.
2. AuMs classified as Article 8 and 9 funds (SFDR) from SAM, plus third-party funds and other ESG products according to EU taxonomy from Private Banking. We apply equivalent ESG criteria to SAM's funds Latin America.
3. In the UK, Portugal and Poland with a power of 1570 MW.
4. In April 2022, Banco Santander completed its plan to acquire 80% of WayCarbon Soluções Ambientais e Projetos de Carbono (“WayCarbon”), a leading Brazil-based ESG consultancy firm.
5. Reduce emissions intensity in our power generation portfolio.
6. Refers to power generation clients 10% of their revenue depending on thermal coal.