RESULTS

Solid business model which enables us to generate value based on profitability, efficiency and innovation, and obtain profits on a recurring basis

First half attributable profit was 14% lower year-on-year at EUR 3,231 million (-12% in constant euros) after recording net results that are outside the ordinary course performance of our business, amounting to EUR -814 million in 2019 and EUR -300 million in 2018.

Excluding these results, the underlying attributable profit was EUR 4,045 million, very similar to that in the same period of 2018 (+2% in constant euros).

The underlying P&L trends remained solid, with:

Customer revenue growing, mainly net interest income.

Costs beginning to reflect the synergies obtained in various units.

Cost of credit still at historically low levels.

H1'19 underlying ATTRIBUTABLE PROFIT1

Increased weight of The Americas in Group profit

1Excluding Corporate Centre (-EUR 1.108 mn) and Santander Global Platform (-EUR 51 mn)
Excluding net capital gains and provisions.

2Uruguay and Andean Region (EUR 94 mn) underlying Profit.

underlying ATTRIBUTABLE PROFIT TO THE GROUP*

eur million

*Excluding net capital gains and provisions.

H1'19 underlying ATTRIBUTABLE* PROFIT IN CORE MARKETS

EUR MN AND % CHANGE VS. H1'18 IN CONSTANT EUROS

*Excluding net capital gains and provisions.

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.

Main business areas performance

CONSTANT EUROS

In Q2, the operating segments were changed to reflect the current organisational and management structure:

  • Creation of the new geographic segment Europe that includes the existing units under the previous Continental Europe segment (Spain, Portugal, Poland and Santander Consumer Finance) plus the UK.
  • Creation of the new geographic segment North America that comprises the existing units under the previous US segment plus Mexico.
  • Creation of the new geographic segment South America that comprises the existing units under the previous Latin America segment except for Mexico.
  • Creation of a new reporting unit segment, Santander Global Platform, which includes our global digital services under a single unit.

North America

Underlying attributable profit of the first half of the year was EUR 889 million, up 21% year-on-year, due to the good performance in total income which grew, both in net interest income and net fee income, more than costs, resulting in an improved cost-to-income ratio.

Loan-loss provisions were up, on the back of higher volumes, and the cost of credit was stable.

Europe

Underlying attributable profit for the period amounted to EUR 2,354 million, down 3% compared to first half of 2018, due to lower gains on financial transactions (markets) and net fee income (Corporate & Investment Banking).

On the other hand, costs decreased reflecting the first savings from our optimisation processes and loan-loss provisions fell.

Santander Global Platform (SGP)

With the creation of Santander Global Platform, we are taking a further step forward in our digital transformation, which aligns our reporting structure with our organisation and strategy.

Our goal is to extend the benefits of the talent and scale of the Group to the payment and digital businesses with higher growth, building platforms only once for all of our banks which allow us to offer the best digital services aimed at retail customers, merchants and SMEs.

South America

Underlying attributable profit in the first half of the year amounted to EUR 1,961 million, up 15% year-on-year, with sound performance of net interest income rose and net fee income. In addition, the cost of credit improved.

On the other hand, costs reflect commercial transformation plans, greater digitalisation of the retail network and reviews of collective wage agreements.

North America
Underlying attributable profit of the first half of the year was EUR 889 million, up 21% year-on-year, due to the good performance in total income which grew, both in net interest income and net fee income, more than costs, resulting in an improved cost-to-income ratio.

Loan-loss provisions were up, on the back of higher volumes, and the cost of credit was stable.

Europe
Underlying attributable profit for the period amounted to EUR 2,354 million, down 3% compared to first half of 2018, due to lower gains on financial transactions (markets) and net fee income (Corporate & Investment Banking).

On the other hand, costs decreased reflecting the first savings from our optimisation processes and loan-loss provisions fell.

Santander Global Platform (SGP)
With the creation of Santander Global Platform, we are taking a further step forward in our digital transformation, which aligns our reporting structure with our organisation and strategy.

Our goal is to extend the benefits of the talent and scale of the Group to the payment and digital businesses with higher growth, building platforms only once for all of our banks which allow us to offer the best digital services aimed at retail customers, merchants and SMEs.

South America
Underlying attributable profit in the first half of the year amounted to EUR 1,961 million, up 15% year-on-year, with sound performance of net interest income rose and net fee income. In addition, the cost of credit improved.

On the other hand, costs reflect commercial transformation plans, greater digitalisation of the retail network and reviews of collective wage agreements.

Income statement

MILLION EUROS
% change vs. H1'18
H1'19 EUR Constant
EUR
Net interest income 17,636 4.2 5.5
Total income 24,436 1.1 2.8
Net operating income 12,849 1.3 3.2
Underlying profit before taxes* 7,579 1.3 3.4
Underlying attributable profit to the Group* 4,045 (0.2) 2.1
Attributable profit to the Group 3,231 (13.9) (11.7)
*Excluding net capital gains and provisions.

FOR MORE INFORMATION FINANCIAL REPORT APRIL - JUNE 2019

Enter