Santander starts the year with record profits

Madrid"These are very good results." This is how Banco Santander's CEO, Héctor Grisi, defended the bank's first-quarter earnings. The bank, chaired by Ana Botín, achieved a record profit of €3.402 billion between January and March, representing a 19% increase over the same period last year. The increase is the result of record commission income and reduced costs, as reported by the company through the National Securities Market Commission (CNMV). However, the market is not initially in its favor. At 1:30 p.m. on Wednesday, the bank's share price fell more than 5%. "The entire European banking sector is falling today," Grisi said, aiming to downplay the stock's performance.

"We are entering a scenario in which the interest rate environment is less favorable, but business will remain good," anticipated the bank's president, Ana Botín, just three months ago, when the entity presented its earnings for the whole of 2024.

It is worth remembering that the increase in interest rates on products such as mortgages, corporate loans, and consumer loans, which translates into an improvement in its net interest income, has also improved. But now that organizations such as the ECB have begun to lower rates, that part of the banking business has also normalized. In the case of Banco Santander, during the first three months of the year, net interest income stood at €11.378 billion, 5% less than in the same period of the previous year. In contrast, fees increased by 4%, to €3.369 billion, and gross income rose by 1%, to €15.537 billion.

Thus, despite the negative impact of changes in monetary policy, the strong performance of credit demand, as well as revenue from other countries where the bank operates, such as the United States, where it currently appears to be avoiding the impact of Trump's trade war, have allowed the financial institution to record record profits in three months. Furthermore, the bank's business is progressing in parallel with customer acquisition. During the first three months of the year, it has acquired another 9 million, adding to the 175 million it has worldwide. Paradoxically, Botín's bank has indicated that "by its own decision" it has lost positions in the Spanish market in terms of mortgages and SMEs: "At these prices, it's not worth investing [in mortgages and SMEs] in Spain," Grisi stated. The CEO has also confirmed his divestment in Poland: Santander is considering selling 49% of the bank's stake in Erste Bank.

Changes with the tax

The new design of the extraordinary tax on banking (until now, it was a levy) has also been noted in the results for this first quarter of 2025. Thus, instead of paying the entire amount owed for this tax in a single payment, banks can now do so gradually. In the case of Banco Santander, it paid €87 million in the first quarter of the year, compared to the €335 million paid last year.

Overall, the bank confirms all its objectives for 2025. It expects revenues to reach €62 billion, fees to continue increasing, and profitability to reach 16.5%. It also promised more than €10 billion in shareholder remuneration.