Welcome to the Quarterly Shareholder Report where you can check the most significant information about Santander's share and the Group in the fourth quarter of 2023.
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“2023 has been a pivotal year for Santander, in which we delivered record results and met all our targets in the right way. We added five million customers, growing revenues and profits at double digits, and increased TNAV plus cash dividend per share up 15%. As a result, we will return €5.5 billion1 to shareholders from 2023 earnings.
I am proud of our team, who delivered these excellent results while continuing to progress on the strategic transformation of our business. We are deploying our own cutting-edge technology globally to fully leverage our global and in-market scale, and taken the final steps towards creating five global businesses.
We are focused on delivering in the near-term while driving sustainable earnings growth for the future, and I am confident that 2024 will be even better for Santander, with strong momentum across our global businesses, despite heightened geopolitical risks and a slowing global economy.
Our progress in executing our strategy, combined with the strength and diversification in our model, will allow us to continue to grow whilst further improving profitability, targeting a RoTE of 16% for 2024.”
Ana Botín, Banco Santander Executive Chair
1. The bank’s shareholder remuneration policy is approximately 50% payout of the group net attributable profit (excluding the impacts that do not affect cash or capital ratios directly), split in approximately equal parts in cash dividends and share buybacks. Implementation of this policy is subject to future corporate and regulatory decisions and approvals.
TNAVps + DPS
+15%
Double-digit growth average through-the-cycleTNAVps + DPS includes the EUR 5.95 cent cash dividend paid in May 2023 and the EUR 8.10 cent cash dividend paid in November 2023.
START
EUR 2.803
30/12/2022
MAXIMUM
EUR 3.970
06/12/2023
MINIMUM
EUR 2.812
03/01/2023
END
EUR 3.780
29/12/2023
Global economic activity experienced a gradual slowdown in the year, labour markets remained solid, but with different trends across countries. In the economic and geopolitical sphere, focus remained on the Middle East, although uncertainty reduced gradually, mitigating the risk of another energy price shock.
Inflation rates globally continued to decline gradually, mainly due to lower food and energy contributions.
In Q4 2023, the fall in inflation and the economic slowdown generated expectations of rate cuts: markets went from being "high for longer" to re-evaluating the likely downward path. The Federal Reserve, the Bank of England and the European Central Bank have held interest rates since September. Central banks in Latin America, such as Chile, Brazil and Uruguay, have already started to lower interest rates, joined by the Central Bank of Poland, which has lowered its reference rate one percentage point since September.
In this environment, the Santander's share price ended the year with a positive return of 34.9%, outperforming the market. In the banking sector, EuroStoxx Banks was up 23.5%, DJ Stoxx Banks increased 20.3% and MSCI World Banks rose 10.4%. The other main indices closed up, Ibex 35 +22.8% and DJ Stoxx 50 +12.1%.
The Santander share ended 2023 up by
34.9%
Select comparables
30 December 2022 = 100.
of analysts recommend buying or holding SAN shares
66.7%
Buy
30.3%
Hold
3.0%
Sell
EUR 4.85
average target price
of analysts for
SAN shares
Source Bloomberg at 29/12/2023.
Share capital distribution by type of shareholder:
Institutions
Retail
Board*
Share capital distribution by geographic area:
Europe
The Americas
Other
In application of the shareholder remuneration policy for 2023, in November, the bank paid a cash dividend of EUR 8.10 cents per share (pre-tax) charged to 2023 results.
In addition, on 26 September 2023, the board approved a share buyback programme against 2023 results for EUR 1,310 million that was executed between 28 September 2023 and 25 January 2024. Under the authorization from the AGM of 31 March 2023, on 30 January 2024 the board resolved to reduce the share capital in the amount of EUR 179,283,744 by cancelling the 358,567,487 shares repurchased in the above mentioned buyback programme, representing 2.22% of the share capital. The share capital will become EUR 7,912,789,286 represented by 15,825,578,572 shares.
The bank's board is expected to propose to the AGM and disclose on the date of the meeting the approval of a final cash dividend, in line with the current shareholder remuneration policy1 of approximately 50% of the Group's underlying profit (excluding non-cash impacts and direct effect on capital ratios), divided approximately equally between cash dividends and share repurchases. As a result, the cash dividend per share paid against 2023 results is expected to be approximately 50% higher than the one paid against 2022.
1. Execution of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
Transform our business and operating model through our global technology initiatives to build a digital bank with branches that provides access to financial services for our customers through several channels.
Top 3 NPS1
in 7 markets
165 mn
total customers
100 mn
active customers
1. NPS – internal benchmark of individual customers' satisfaction audited by Stiga/Deloitte in H2'23.
In-market scale in each of our core markets in volumes combined with our global scale support greater profitability and provide a competitive advantage over local peers.
Top 3 in lending2
in 9 of our markets
2. Market share in lending as of September 2023 including only privately-owned banks. Digital Consumer Bank (DCB) refers to auto in Europe.
Our well-balanced diversification between developing and mature markets, as well as between business and customer segments, delivers recurrent pre-provision profit with low volatility.
3. FY'23 attributable profit by region as a percentage of total operating areas excluding the Corporate Centre.
Attributable profit 2023
In Q4 2023, attributable profit amounted to EUR 2,933 million, 1% more than in the previous quarter (+12% in constant euros) and 28% more than in Q4 2022 (+42% in constant euros).
In 2023, attributable profit was EUR 11,076 million, 15% higher than in the same period in 2022 (+18% in constant euros) and 18% and 20% higher, respectively, if we exclude the temporary levy on revenue obtained in Spain and DCB in Q1 2023.
Constant euros
(*) As a % of operating areas. Excluding the Corporate Centre.
| Underlying income statement | % change / 2022 | ||
|---|---|---|---|
| EUR million | 2023 | EUR | Constant EUR |
| Net interest income | 43,261 | 12.0 | 15.8 |
| Gross income | 57,647 | 10.5 | 13.1 |
| Net operating income | 32,222 | 14.1 | 16.1 |
| Profit before tax | 16,698 | 9.5 | 11.3 |
| Attributable profit to the Group | 11,076 | 15.3 | 17.7 |
Total customers
millions
Active customers
millions
Digital customers
millions
Excluding the exchange rate impact:
Loans to
customers
Customer
funds
Europe
55%
62%
North America
16%
15%
South America
16%
17%
Digital Consumer Bank
13%
6%
% operating areas. December 2023.
| % change/ 2022 | |||
|---|---|---|---|
| EUR million | 2023 | EUR | Constant EUR |
| Gross loans and advances to customers* | 1,014,953 | (0.4) | (1.0) |
| Customer deposits** | 968,347 | 2.3 | 2.1 |
| Mutual funds | 208,528 | 13.3 | 13.2 |
| Customer funds | 1,176,875 | 4.1 | 3.9 |
Performance by business area
| 2023 targets | Our 2023 achievement | |||
|---|---|---|---|---|
| Revenue1 |  |
Double-digit growth | +13% |  |
| Efficiency ratio | |
44-45% | 44.1% | |
| CoR | |
<1.2% | 1.18% | |
| FL CET1 | |
>12% | 12.3% | |
| RoTE | |
>15% | 15.1% | |
Non-IFRS and alternative performance measures
This document contains financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015, and other non-IFRS measures. The APMs and non-IFRS measures were calculated with information from Grupo Santander; however, they are neither defined or detailed in the applicable financial reporting framework nor audited or reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider them to be useful metrics for our management and investors to compare operating performance between periods. APMs we use are presented unless otherwise specified on a constant FX basis, which is computed by adjusting comparative period reported data for the effects of foreign currency translation differences, which distort period-on-period comparisons. Nonetheless, the APMs and non-IFRS measures are supplemental information; their purpose is not to substitute IFRS measures. Furthermore, companies in our industry and others may calculate or use APMs and non-IFRS measures differently, thus making them less useful for comparison purposes. APMs using ESG labels have not been calculated in accordance with the Taxonomy Regulation or with the indicators for principal adverse impact in SFDR. For further details on APMs and Non-IFRS Measures, including their definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFRS, please see the 2022 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the SEC) on 1 March 2023 (https://www.santander.com/content/dam/santander-com/en/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2023/sec-2022-annual-20-f-2022-en.pdf), as well as the section “Alternative performance measures” of the Banco Santander, S.A. (Santander) Q4 2023 Financial Report, published on 31 January 2024 (https://www.santander.com/en/shareholders-and-investors/financial-and-economic-information#quarterly-results). Underlying measures, which are included in this document, are non-IFRS measures.
The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the businesses included and local applicable accounting principles of our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries.
Non-financial information
This document contains, in addition to financial information, non-financial information (NFI), including environmental, social and governance-related metrics, statements, goals, commitments and opinions.
NFI is included to comply with Spanish Act 11/2018 on non-financial information and diversity and to provide a broader view of our impact. NFI is not audited nor reviewed by an external auditor. NFI is prepared following various external and internal frameworks, reporting guidelines and measurement, collection and verification methods and practices, which are materially different from those applicable to financial information and are in many cases emerging and evolving. NFI is based on various materiality thresholds, estimates, assumptions, judgments and underlying data derived internally and from third parties. NFI is thus subject to significant measurement uncertainties, may not be comparable to NFI of other companies or over time or across periods and its inclusion is not meant to imply that the information is fit for any particular purpose or that it is material to us under mandatory reporting standards. NFI is for informational purposes only and without any liability being accepted in connection with it except where such liability cannot be limited under overriding provisions of applicable law.
Forward-looking statements
Santander hereby warns that this document contains “forward-looking statements” as per the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements can be understood through words and expressions like “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RoRAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future”, “commitment”, “commit”, “focus”, “pledge” and similar expressions. They include (but are not limited to) statements on future business development, shareholder remuneration policy and NFI.
While these forward-looking statements represent our judgement and future expectations concerning our business developments and results may differ materially from those anticipated, expected, projected or assumed in forward-looking statements.
In particular, forward looking statements are based on current expectations and future estimates about Santander’s and third-parties’ operations and businesses and address matters that are uncertain to varying degrees and may change, including, but not limited to (a) expectations, targets, objectives, strategies and goals relating to environmental, social, safety and governance performance, including expectations regarding future execution of Santander’s and third-parties’ (including governments and other public actors) energy and climate strategies, and the underlying assumptions and estimated impacts on Santander’s and third-parties’ businesses related thereto; (b) Santander’s and third-parties’ approach, plans and expectations in relation to carbon use and targeted reductions of emissions, which may be affected by conflicting interests such as energy security; (c) changes in operations or investments under existing or future environmental laws and regulations; (d) changes in rules and regulations, regulatory requirements and internal policies, including those related to climate-related initiatives; (e) our own decisions and actions including those affecting or changing our practices, operations, priorities, strategies, policies or procedures; and (f) the uncertainty over the scope of actions that may be required by us, governments and others to achieve goals relating to climate, environmental and social matters, as well as the evolving nature of underlying science and industry and governmental standards and regulations.
In addition, the important factors described in this document and other risk factors, uncertainties or contingencies detailed in our most recent Form 20-F and subsequent 6-Ks filed with, or furnished to, the SEC, as well as other unknown or unpredictable factors, could affect our future development and results and could lead to outcomes materially different from what our forward-looking statements anticipate, expect, project or assume.
Forward-looking statements are therefore aspirational, should be regarded as indicative, preliminary and for illustrative purposes only, speak only as of the date of this document, are informed by the knowledge, information and views available on such date and are subject to change without notice. Santander is not required to update or revise any forward-looking statements, regardless of new information, future events or otherwise, except as required by applicable law. Santander does not accept any liability in connection with forward-looking statements except where such liability cannot be limited under overriding provisions of applicable law.
Not a securities offer
This document and the information it contains does not constitute an offer to sell nor the solicitation of an offer to buy any securities.
Past performance does not indicate future outcomes
Statements about historical performance or growth rates must not be construed as suggesting that future performance, share price or results (including earnings per share) will necessarily be the same or higher than in a previous period. Nothing in this document should be taken as a profit and loss forecast.
Third Party Information
In this document, Santander relies on and refers to certain information and statistics obtained from publicly-available information and third-party sources, which it believes to be reliable. Neither Santander nor its directors, officers and employees have independently verified the accuracy or completeness of any such publicly-available and third-party information, make any representation or warranty as to the quality, fitness for a particular purpose, non-infringement, accuracy or completeness of such information or undertake any obligation to update such information after the date of this document. In no event shall Santander be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for inaccuracies or errors in, or omission from, such publicly-available and third-party information contained herein. Any sources of publicly-available information and third-party information referred or contained herein retain all rights with respect to such information and use of such information herein shall not be deemed to grant a license to any third party.
