Santander has also increased its profits in the first quarter of the year, like the rest of the large entities. It earned 2,852 million euros between January and March, 11% more than in the same period of the previous year, thanks above all to a new increase in interest income, which reached record levels.
This variable, the interest margin, which measures the difference between loan income and deposit payments, amounted to 11,983 million euros, 18% more than a year before. The increase occurred according to the bank in all businesses, although especially in retail banking (Retail), investment banking (CIB) and wealth management (Weaalth).
Adding commissions, which increased by 6%, total income stood at 15.38 billion euros, again a maximum for the bank, which has begun to offer its results by global business, instead of by country. Its strategy involves integrating the different platforms into a single international platform and offering simpler products.
The bank also ratifies its objectives for this year, which include increasing income by "a mid-single digit", placing the cost of risk around 1.2%, obtaining a profitability of 16% and having good quality capital. in relation to assets greater than 12%.
"We have had a very good start to the year," says the bank's president, Ana Botín, before highlighting the improvement in profits in the retail business, of more than 20%, "thanks to the growth of the interest margin in Europe and America".
There is also a message about the beginning of the cycle of lower interest rates, which increases activity in some businesses such as consumer credit. "The positive sensitivity to lower interest rates in some businesses also helps us, especially in Consumer, which will allow us to continue increasing income in the future, another example of the value of diversification," says Botín.
Like other entities, Santander has recorded in the first quarter the annual cost of the extraordinary banking tax approved by the Government after the war in Ukraine. It is applied to income from banking activity in Spain and amounts to 335 million euros by 2024.
The profitability in the first quarter of the year has been 14.9%, but it would be 16.2% if only the proportional part of the year were taken from the impact of the tax. The tangible book value per share of the entity is 4.86 euros at the end of the first quarter, above the 4.75 euros listed price.
The bank increased liabilities through client deposits and investment funds by 5%, with an increase of 3% in the case of the former, which experienced a strong increase of 24% in its term modality. Meanwhile, the volume of loans remained stable, at 1.02 trillion euros, after a growth of 4% in Consumer thanks to the automotive business in Europe and Brazil, 4% in Wealth and 7% in Payments.
Santander also increased provisions for bad debts, by 7%, to cover risk in the consumer business, although credit quality "remained solid", with the cost of risk at 1.2% and a delinquency ratio stable, at 3.1%.
