RESULTS

The attributable profit of EUR 7,810 million in 2018 was 18% higher year-on-year in euros and 32% in constant euros

The results reflect the favourable impact of the acquisition of Banco Popular, the larger stake in Santander Asset Management (SAM) and the negative impact of exchange rates and of the still low interest rates in mature markets. In addition, profit was affected by non-recurring items in 2018 and 2017 (EUR -254 million and EUR -897 million, net of taxes, respectively).

Excluding these non-recurring results, underlying attributable profit was EUR 8,064 million (+7% in euros and +18% in constant euros).

For yet another year, growth driven by strong recurring customer revenues

Best-in-class cost-to-income ratio while enhancing customer experience

Continued credit quality enhancement: YoY improvement in all metrics

2018 underlying ATTRIBUTABLE PROFIT TO THE GROUP*

GROUP PROFIT GROWTH DRIVEN BY MOST MARKETS

*Excluding Corporate Centre and Spain Real Estate Activity.
*Excluding net capital gains and provisions.

underlying ATTRIBUTABLE PROFIT TO THE GROUP*

eur million

*Excluding net capital gains and provisions.

2018 underlying ATTRIBUTABLE* PROFIT IN CORE MARKETS

EUR MN AND % CHANGE VS. 2017 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.

EARNINGS IN THE MAIN GEOGRAPHIES

CONSTANT EUROS

United States:

Attributable profit of EUR 552 million in 2018, 74% more year-on-year (EUR 317 million in 2017), impacted by extraordinary net charges of EUR 76 million.
Excluding this, underlying attributable profit was 42% higher, due to higher income from leasing and lower costs and provisions. Both Santander Bank and Santander Consumer USA registered strong profit growth.

Continental Europe:

Generated an attributable profit of EUR 3,428 million, 22% more year-on-year after recording the charges in 2017 and 2018 associated with integrations, mainly restructuring costs.
Excluding these impacts, underlying attributable profit was EUR 3,642 million (+14% year-on-year), largely due to the increase in customer revenue and also partially benefiting from Banco Popular’s integration.
Of note was Spain with an underlying attributable profit of 1,738 million and growth of 21% (year-on-year).

United Kingdom:

In a highly competitive environment with some remaining uncertainties on Brexit, attributable profit was 8% lower in 2018 at EUR 1,362 million. This was due to pressure on spreads and investments in regulatory and strategic projects.

Latin America:

Attributable profit of EUR 4,228 million in 2018, 16% higher year-on-year. Growth in volumes, spreads management and increased loyalty underpinned the good evolution, both in net interest income and fee income. Notable improvement in the cost of credit. Of note were results in Brazil, with EUR 2,605 million (+22%), and Mexico, with EUR 760 million (+14%).

United States:
Attributable profit of EUR 552 million in 2018, 74% more year-on-year (EUR 317 million in 2017), impacted by extraordinary net charges of EUR 76 million.
Excluding this, underlying attributable profit was 42% higher, due to higher income from leasing and lower costs and provisions. Both Santander Bank and Santander Consumer USA registered strong profit growth.

Continental Europe:
Generated an attributable profit of EUR 3,428 million, 22% more year-on-year after recording the charges in 2017 and 2018 associated with integrations, mainly restructuring costs.
Excluding these impacts, underlying attributable profit was EUR 3,642 million (+14% year-on-year), largely due to the increase in customer revenue and also partially benefiting from Banco Popular’s integration.
Of note was Spain with an underlying attributable profit of 1,738 million and growth of 21% (year-on-year).

United Kingdom:
In a highly competitive environment with some remaining uncertainties on Brexit, attributable profit was 8% lower in 2018 at EUR 1,362 million. This was due to pressure on spreads and investments in regulatory and strategic projects.

Latin America:
Attributable profit of EUR 4,228 million in 2018, 16% higher year-on-year. Growth in volumes, spreads management and increased loyalty underpinned the good evolution, both in net interest income and fee income. Notable improvement in the cost of credit. Of note were results in Brazil, with EUR 2,605 million (+22%), and Mexico, with EUR 760 million (+14%).

Income statement

MILLION EUROS
% change vs. 2017
2018 EUR Constant
EUR
Net interest income 34,341 0.1 8.7
Gross income 48,424 0.1 8.9
Net operating income 25,645 0.7 10.6
Underlying profit before taxes* 14,776 9.0 19.7
Underlying attributable profit to the Group* 8,064 7.3 18.5
Attributable profit to the Group 7,810 18.0 32.1
*Excluding net capital gains and provisions.

FINANCIAL REPORT FULL YEAR 2018

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