Santander achieved in the first nine months of the year the biggest profit so far for this period: 8,143 million euros. The figure is 13% higher than a year earlier and anticipates for 2023 a maximum annual profit, above the previous one, of 9,605 million, obtained in 2022.
The cause of the strong increase in earnings is the increase in interest rates, which boosted income up to 43,093 million euros, 13% more. The bank was also able to add nine million customers, and now has a total of 166 million. It does this while simplifying the international offer to gain efficiency and achieve economies of scale.
One of the reasons for the new rise in profits is in Spain, which is now the country that contributes the most to the profit. It was 1,854 million euros, 68% more, with which it exceeds the 1,243 million of the United Kingdom, the 1,163 million of North America or the 1,426 million of Brazil. The percentage of growth is also the highest among all the countries in which it operates.
Interest margins in Spain, which are the difference between income from loans and the cost of deposits, increased by 49%, up to 4,903 million euros. The group has 14 million customers in the country, 5% more.
Spanish business is conditioned by the new banking tax, which the PSOE and Sumar want to maintain beyond 2024, according to the government formation agreement announced on Tuesday. The bank’s CEO, Héctor Grisi, warned yesterday in a press conference that this extension would “significantly” affect the granting of credit if the economy deteriorated. The tax is, from his point of view, “discriminatory and stigmatizing” for the bank. Loans in Spain have fallen by 10% since the beginning of the year, more than in the rest of the countries.
For now, the rate hikes continue without affecting the main risk indicators. The bank has increased the amount it distributes in dividends to 50% of the profit, but it has also increased the provisions for insolvency by 21%, up to 9,037 million euros.
The cost of risk was 1.13%, at levels lower than the annual target, while the non-performing loan ratio remains stable, at 3.13%. The group has liquidity of 161%, well above the regulatory requirement of 100%, and its good quality capital ratio is 12.3%, also higher than the ECB requires .
