--- title: "Banco Santander Posts Record Half, Signals Confident Outlook" type: "News" locale: "en" url: "https://longbridge.com/en/news/293535183.md" description: "Banco Santander reported a record first-half profit of EUR 3.8 billion, driven by broad-based revenue growth and improved efficiency. Management highlighted strong performance in retail, wealth, and CIB segments, alongside successful integration of the TSB acquisition. Despite one-off costs from Argentina credit issues and Openbank Europe motor finance, the bank maintains robust capital ratios (CET1 at 14%) and signals confidence in beating full-year guidance." datetime: "2026-07-23T00:07:35.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293535183.md) - [en](https://longbridge.com/en/news/293535183.md) - [zh-HK](https://longbridge.com/zh-HK/news/293535183.md) --- # Banco Santander Posts Record Half, Signals Confident Outlook Banco Santander SA ((ES:SAN)) has held its Q2 earnings call. Read on for the main highlights of the call. ### Claim 55% Off TipRanks - Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions - Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks Banco Santander’s latest earnings call struck a notably upbeat tone, as management highlighted record profits, broad-based revenue growth and improving efficiency, even while acknowledging regional pockets of stress. Executives framed Argentina’s credit issues, a sizeable motor finance hit and restructuring costs as manageable one-offs within an otherwise robust and diversified earnings engine. ## Record Half-Year Profit Marks Best Period Ever Santander reported a record quarterly profit of EUR 3.8 billion, making the first half of 2026 the strongest in its history. Underlying profit climbed 14% year-on-year, and management said the bank is running ahead of plan to beat its guidance of more than EUR 14.1 billion in profit for 2026, excluding acquisitions. ## Revenue and Fee Income Deliver Broad-Based Growth Group revenue rose 6% year-on-year in constant euros, underpinned by strong fee momentum across core franchises. Net fee income increased 7%, with retail fees up 6%, double-digit growth in Wealth and a 40% surge in CIB U.S. fees, while payments revenue jumped 17% on the back of a 10% rise in payment volumes. ## Net Interest Income Proves Resilient Net interest income grew around 6–7.7% year-on-year, reflecting resilient margins, disciplined balance sheet management and profitable volume growth. Spain stood out, with quarterly NII up 8% versus the previous quarter, helping offset pressure in markets where rate cycles and competition are more challenging. ## Capital Strength Supports Generous Shareholder Payouts The CET1 capital ratio stood at 14% even after a 55 basis point hit from the TSB deal, while underlying RoTE reached 15.6%, approaching roughly 17% on a normalized capital base. Underlying EPS rose 20% and tangible net asset value plus cash dividend per share increased 19%, backed by ECB approval for a new buyback of up to EUR 1.8 billion toward a roughly EUR 9 billion total so far. ## Expanding Customer Base and Digital Reach Santander’s customer franchise swelled to 182 million, more than 12 million above last year, aided by the consolidation of about 4 million TSB clients. Openbank Pay now serves over 2.6 million customers, and Getnet processed roughly 15 billion transactions over the past twelve months, underscoring the group’s growing digital and payments footprint. ## Efficiency Gains Drive Operating Leverage Group efficiency improved by about three percentage points to 42.8%, as costs fell 1% year-on-year and 5% in real terms. Spain led the charge with an efficiency ratio of 33.6% and a 3% drop in costs, while the cost per active retail customer declined 6%, highlighting successful productivity and digitization efforts. ## Balanced Performance Across Core Businesses Retail and Openbank delivered a 12% rise in underlying profit with 4% revenue growth and 3% lower costs, while CIB profits climbed 17% as new business generated roughly 23% RoTE. Wealth profit rose 19%, supported by a 15% expansion in customer assets and liabilities and 20% growth in cross-border referrals, and the payments segment posted 17% revenue growth and a four-fold profit increase. ## Strategic M&A and Integration on Track The TSB acquisition, completed at the end of April, is integrating to plan and is expected to help lift Santander U.K.’s RoTE to about 16% by 2028, with at least EUR 400 million in targeted synergies. In the U.S., Webster acquisitions have cleared key regulatory hurdles and are scheduled to close in the second half of 2026, reinforcing the group’s North American strategy. ## Asset and Liability Management Underpins Rate Sensitivity Santander expanded its ALCO portfolio to around EUR 60 billion, with an average yield of 3.3% and a duration of roughly six years to maintain controlled interest-rate sensitivity of about EUR 450 million per 100 basis points move. Despite the TSB impact, net organic capital generation reached 27 basis points in the quarter, illustrating disciplined risk-weighted asset and balance sheet management. ## Argentina Drives Higher Cost of Risk Loan loss provisions were materially elevated by deterioration in Argentina, pushing the group cost of risk to around 115 basis points over twelve months, slightly above the 100–110 basis point target range. Management expects some improvement in the second half but conceded that Argentina remains a significant drag and a key source of near-term credit risk. ## Openbank Europe Hit by Motor Finance One-Off The bank booked a roughly EUR 245 million gross impact in its Openbank Europe motor finance portfolio, most of it in the first quarter, which weighed on first-half profitability. Executives stressed that this was a material but isolated one-off tied to that specific book rather than a broader asset-quality trend across the group. ## Weaker Trading Income in CIB Markets Trading and financial income fell, with gains down EUR 132 million year-on-year and CIB trading weaker quarter-on-quarter amid lower market volatility and adverse mix effects. Management highlighted the inherent seasonality and dependence on client flows, but acknowledged that second-quarter trading performance lagged the very strong levels seen previously. ## Transformation and Restructuring Costs Weigh on Results Non-recurring charges from the group’s ONE Transformation program and integration activities are currently a visible drag on other income. Around EUR 281 million in transformation costs and about EUR 250 million of TSB restructuring charges have already been booked, with a similar amount of additional TSB-related costs expected, though management reiterated these are temporary. ## Brazil Faces Margin Pressure and Risk Normalization In Brazil, slower-than-expected rate cuts and stress in some corporates and SMEs pressured margins, resulting in only 2% NII growth year-on-year. Cost of risk in the country stood at roughly 4.14%, which management expects to remain below about 4.2% for the year, while IT and core system migrations added to the cost base during the period. ## Competitive and Market Uncertainty in the UK and Mexico Management flagged intense competition in U.K. deposits and mortgages as a risk to margins, even as integration with TSB progresses. In Mexico, trade-policy uncertainty around the USMCA review and the emergence of new players such as digital banks are being monitored, though the bank sees sector-level dynamics as manageable for now. ## Regulatory and Leverage Headwinds on the Horizon The bank expects supervisory and regulatory changes to shave about 15–20 basis points off capital in the second half of 2026, while the anticipated Danish Compromise approval brings no immediate benefit. The leverage ratio slipped to around 4.8%, and management noted that balance sheet optimization and TLAC/MREL issuance, especially senior non-preferred needs, will be key ahead of the Webster integration. ## Guidance and Outlook Remain Constructive Santander reiterated that it is ahead of its strategic plan, guiding to more than EUR 14.1 billion profit in 2026 excluding M&A, with revenue, NII and fees all slated to grow around mid-single digits and fees outpacing NII. The bank aims to keep CET1 around its 12–13% range after Webster, maintain cost of risk near 115 basis points this year and target a RoE above 20% by 2028, supported by efficiency gains and substantial buybacks. Santander’s call portrayed a bank that is converting its scale and diversification into record profits while absorbing sizable one-offs and region-specific shocks. For investors, the key message was that robust capital generation, growing fee and payments franchises and disciplined efficiency improvements are more than offsetting credit and regulatory headwinds, underpinning a confident medium-term earnings and capital return story. ### Related Stocks - [SAN.US](https://longbridge.com/en/quote/SAN.US.md) - [WBS.US](https://longbridge.com/en/quote/WBS.US.md) - [BNC.UK](https://longbridge.com/en/quote/BNC.UK.md) - [WBS-F.US](https://longbridge.com/en/quote/WBS-F.US.md) - [WBS-G.US](https://longbridge.com/en/quote/WBS-G.US.md) ## Related News & Research - [Banco Santander SA Stock (SAN) Closed Up by 3.21% on Jul 27: A Full Analysis](https://longbridge.com/en/news/293970630.md) - [Banco Santander issues EUR 2 million 3-year express memory coupon notes tied to bank stock basket](https://longbridge.com/en/news/293892818.md) - [The IPO Buzz: Catalyst Acquisition (CATLU) Raises $200 Million](https://longbridge.com/en/news/294071804.md) - [SAN: Record profit growth, efficiency gains, and strong capital position support 2026 targets](https://longbridge.com/en/news/293752996.md) - [Santander's Q2 net profit up 3% compared to same period in 2025](https://longbridge.com/en/news/293422313.md)