Santander’s web revenue rose 20 per cent 12 months on 12 months within the third quarter, as Spain’s largest lender grew to become the newest European financial institution to report sturdy outcomes because of record-high rates of interest.
The financial institution mentioned on Wednesday it earned €2.9bn in web revenue within the third quarter, beating the €2.8bn anticipated by analysts. Web curiosity earnings, the distinction between the cash lenders make on loans and pay out on deposits, rose 16 per cent 12 months on 12 months.
Eurozone banks have been boosted by the quick tempo of rate of interest will increase by the European Central Financial institution, which has raised charges to an all-time excessive of 4 per cent.
With buyers betting European central financial institution charges have peaked, many regional lenders are warning that web curiosity earnings will drop subsequent 12 months.
However Santander mentioned its publicity to Latin American markets meant efficiency would stay sturdy into subsequent 12 months.
“Whereas the exterior surroundings is more and more unsure, it’s in these instances that the energy of our mannequin and our staff is most evident,” mentioned government chair Ana Botin. “I’m assured that we are going to obtain our 2023 targets given the optimistic momentum which we additionally anticipate to hold into 2024.”
Final month, Santander introduced a 39 per cent enhance in its dividend and a share buyback based mostly on this 12 months’s earnings. As soon as accomplished, the lender could have purchased again 9 per cent of its shares since 2021.
Shares in Spanish banks had been hit on Tuesday after Yolanda Díaz, who leads the Sumar coalition of leftwing teams, mentioned she would push for an extension of the nation’s windfall tax on banks and power firms as a part of negotiations to help appearing prime minister Pedro Sánchez’s socialist celebration.
The tax launched final 12 months was designed to final for 2 years, however analysts speculated {that a} deal among the many left-leaning events would have an effect on banks over a number of years.
Santander was hit with a €224mn tax bill at the beginning of the 12 months, equal to 10 per cent of its quarterly earnings. The following fee is due early subsequent 12 months.
Beneath Botin, Santander has been attempting to capitalise on its world community, rising in areas resembling wealth administration and funds.
The Monetary Occasions reported this month that it had put aside $250mn to develop its company and funding financial institution, having already employed greater than 100 funding bankers this 12 months.
Income in Santander’s company and funding financial institution rose 22 per cent within the third quarter, whereas earnings in its wealth administration and insurance coverage division rose 62 per cent in contrast with a 12 months earlier.
Santander shares are up 18 per cent this 12 months in contrast with 7.6 per cent for the European financial institution sector.