Banco Santander presented yesterday a new business plan until 2025 in which it contemplates an increase from 40% to 50% in the part of the profits that will go to shareholders, in addition to the highest profitability forecast among the main Spanish banks .
The plan, the first of Héctor Grisi as CEO of Santander, had the effect of a strong rise in the stock market, of 4.8%, which places the value of the bank at around 62,500 million euros, a level comparable to that set before of the pandemic.
The group promised yesterday a return of between 15% and 17% between 2023 and 2025, above any competitor in Spain and also the current 13.4%. Santander “has entered a new phase of value creation,” announced its president, Ana Botín, during the conference with investors to present the strategy.
The increase in the percentage of profits dedicated to shareholders will allow it to reach the levels of the rest of the large Spanish banks. Where appropriate, the distribution will be made both in dividends and in the repurchase of shares. Santander makes this decision after obtaining a profit of 9,605 million euros in 2022, the largest in its history.
Its book value, he assures, will also increase at a double-digit annual average. The rise in interest rates may also cause problems for some clients, but Santander sees itself capable of maintaining the quality capital ratio at levels above 12% of its risk-weighted assets, in line with the ECB’s requirements.
The keys to the plan include continuing to bet on local markets with the support of its global network, which will allow it to increase the number of customers and revenue, while reducing service costs. Its aspiration is to add 40 million new customers, until it reaches 200 million. Of these, 126 million will be active, 26 million more than now.
The bank will also boost the businesses with which it operates globally, including investment banking, the management of large fortunes, car insurance or the PagoNxt payment platform. Last year they generated more than 30% of the income and more than 50% of the profit, and the forecast is that they will grow by 40% until 2025. The bank’s commission income will also increase by 50%.
