Santander sets further share buybacks as first-half profit advances
Banco Santander SA on Wednesday reported profit growth in the first half and outlined plans for further buybacks, despite a downturn in quarterly performance, which it attributed to the impact of acquisitions and disposals.
The Madrid-based lender booked total income of EUR30.82 billion in the first half, up 6.4% from EUR28.98 billion a year earlier, with net interest income up 7.1% on-year to EUR22.71 billion from EUR21.21 billion.
Attributable profit jumped 31% to EUR8.97 billion from EUR6.83 billion on-year, while earnings per share climbed 38% to 60 euro cents from 43 cents.
Return on equity was 15.1%, compared with 13.6% the previous year, while return on tangible equity advanced to 17.4% from 16.0%. The phased-in common equity tier one ratio edged up to 14.0% from 13.0%. Santander expects to meet full-year guidance for a CET1 ratio ranging from 12.8% to 13%, which is at the top end of its 12% to 13% guidance range.
In the second quarter, total income rose 3.7% from the level reported in the first quarter to EUR15.71 billion from EUR15.14 billion, but attributable profit fell 36% on-quarter to EUR3.52 billion.
Santander explained that comparison with the first quarter "was significantly impacted" by a capital gain of EUR1.90 billion from the completion of a disposal in Poland and by EUR250 million of restructuring charges linked to the integration of TSB Group PLC.
Santander's UK arm completed the nearly £3 billion acquisition of TSB from Spanish peer Banco de Sabadell SA in May, forming as a result the third largest bank in the UK by current account balances and fourth largest mortgage lender.
According to Santander, its second-half results leave the bank on track to achieve full-year targets. These exclude the impact of mergers and acquisitions. The lender eyes revenue growth in the mid-single digits, higher profit than the EUR14.1 billion posted in 2025 and a CET1 ratio of 12.8%-13%.
"Revenue growth is expected to continue to be supported by customer activity, with net fee income growing faster than net interest income, while cost discipline and ONE Transformation will continue to drive positive operating leverage," Santander noted.
The bank is currently carrying out a share buyback scheme and on Wednesday said it is planning further buybacks of about EUR1.8 billion, based on its first-half performance.
When combined with the scheme already in progress, this would bring Santander's buyback to EUR9 billion of the EUR10 billion it had planned to return via buybacks in 2025 and 2026.
Santander shares were down 0.5% to EUR11.85 early Wednesday in Madrid.
"We performed strongly in the first half, adding twelve million customers year-on-year," commented Chair Ana Botin.
"The successful completion of the TSB acquisition in the UK marks another important milestone in the execution of our strategy. It strengthens our position in one of our core markets, adding scale, high-quality deposits and a low-risk mortgage portfolio, while creating significant opportunities to improve our customer offering and profitability once the integration is complete."
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