Shares of Banco Santander jumped after Spain’s largest lender reported record profit in the fourth quarter and announced plans for 10 billion euros ($10.4 billion) in share buybacks from 2025 and 2026 earnings and anticipated excess capital.
The bank’s net profit picked up by 11% year-on-year to 3.265 billion euros in the fourth quarter and by an annual 14% to 12.574 billion euros across the full-year stretch, as Santander noted a pick-up in customer activity, robust margin management and growth across operations — particularly in the core retail business. The lender added eight million new customers in 2024 to 173 million.
The bank’s return on tangible equity (RoTE) — a measure of profitability — picked up to 16.3% in 2024 from 15.1% a year prior.
Shares of Santander were up 7.4% at 10:58 a.m. London time.
Like other European lenders, the bank has benefitted from the post-Covid-19 environment of high interest rates, and now faces the loss of that support as the European Central Bank continues to ease its monetary policy. For 2025, Santander issued guidance targeting around 62 billion euros of revenue, mid-high single digit growth in net income fee, a RotE above 17% and a CET1 ratio — which indicates a lender’s resilience — of 13%, after achieving 12.8% in 2024.
“We have announced record results for the third consecutive year as we continue to grow revenue, profitability and returns,” said Santander Executive Chair Ana Botín in a statement accompanying the results, stressing the bank’s scale to build its own technology platforms allows it to reduce its cost-to-serve and improve its operating leverage.
“We’re growing customers, eight million. We’re growing revenues, we’re growing profit and profitability. So everything [is] going the right way,” Botín said Wednesday on CNBC’s “Squawk Box Europe,” adding that she expects “next year to be quite stable,” with the bank targeting lower costs.
Beyond borders
Questions over Santander’s global footprint emerged earlier this year, amid reports that the bank could be considering an exit from its U.K. operations — which Botin has since refuted. Asked on Wednesday about the future of the European banking landscape, Botin said, “The first thing which is really important to consider in Europe is that there is no framework today for cross-border M&A. So what you’re going to see and you’re seeing already, is in-market consolidation.”
Her comments come amid bolstering appetite for consolidation across the European banking sector, with questions rising whether UniCredit’s surprise stake build in Germany’s Commerzbank since September will result in a cross-border bid. Italy’s second largest lender has since also launched a takeover offer for Banco BPM, with Monte dei Paschi putting in a bid for Mediobanca within the Italian space.
“Many of our peers are more single market. That means that when there is, you know, not a lot of growth, there is not the option of cross-border, you are going to see in-market consolidation,” Botin said Wednesday.