Santander reports most profitable quarter in 12 years

Santander reported its highest quarterly underlying profit in 12 years at the end of last year, buoyed by the economic recovery from the pandemic and growing business in the US, UK and Brazil.

The Spanish lender reported full-year net profit of €8.1bn as it unwound €750mn in loan loss provisions, in marked contrast to the €8.8bn loss it suffered in 2020 due to writedowns, restructuring and provisions.

Ana Botín, Santander’s executive chair, said the results showed “the value of our scale and presence across both developed and developing markets, with attributable profit 25 per cent higher than pre-Covid levels in 2019”. She also said the group had added 5mn new customers over the past 12 months.

For 2021 as a whole, the group reported total income of €46bn, a 4 per cent increase on 2020. For the fourth quarter, it marked up underlying attributable net profit of €2.3bn, a 60 per cent increase on the same period a year earlier and the highest level for more than a decade.

The bank said its performance was driven by a rebound in activity with loans and deposits growing 4 per cent and 6 per cent respectively.

Underlying profit in the UK reached €1.6bn, four times the level of 2020, helped by an increase in net interest income and lower loan loss provisions due to the recovering economy. In the US underlying profit of €2.3bn was up 230 per cent as the group’s consumer arm, notably its car financing business, prospered and provisions fell. In Brazil, underlying profit of €2.3bn was up 21 per cent.

In an environment in which interest rate rises in some of its markets may further aid profitability, Santander added that this year it was seeking “mid-single digit growth in revenues” and a return on tangible equity of above 13 per cent, compared with 12.7 per cent in 2021.

The group’s tier one capital reached 12 per cent, a level it said it intended to maintain.