Spanish banking giant Santander has today reported a bumper set of numbers for 2024 thanks to higher income from its retail banking business and lower costs.
For the year, the group reported a profit of €12.5bn (£10.4bn), up 14 per cent and revenue growth of eight per cent to €62.2bn.
Santander reported growth across the business, with customer numbers growing by eight million overall to 173m. Net interest income grew by eight per cent and net fee income also rose by eight per cent.
The banking giant reported a slight increase in its cost base—operating expenses expanded by two per cent for the year. However, this growth was offset by higher income. As a result, the lender’s overall efficiency ratio improved significantly to a 15-year record, falling 2.3 percentage points to 41.8 per cent.
Santander said the performance reflected the group’s “ongoing transformation…with the replacement of legacy technology with shared global technology platforms, such as Santander’s cloud-based core banking platform Gravity, which has helped the bank achieve savings of €452m since December 2022.”
Based on these better-than-expected numbers, the bank said it would seek to return €10bn of additional capital to shareholders through share buybacks over the next two years, in addition to its regular dividends.
Ana Botín, Banco Santander’s executive chair, said, “We have announced record results for the third consecutive year as we continue to grow revenue, profitability, and returns.
“As one of the largest retail and consumer banks in the world, we have the scale to build our own technology platforms, making it possible to offer customers the best products and services while constantly reducing the cost-to-serve.
“This is a key competitive advantage and is reflected in our results through continuous improvement in operating leverage. Our track record shows that in a challenging market we outperform peers and in 2025 we expect to grow our bottom line and profitability –with revenue stable and costs falling.
“And we are only scratching the surface of our potential. As we said at our Investor Day, Santander is in a new era of value creation, and we are confident that our scale, diversification and the impact of our transformation will enable us to increase profitability again in 2025.
“Furthermore, because of our strong capital generation, we now plan to return €10bn in buybacks from 2025 and 2026 earnings and the anticipated excess capital, in addition to our standard cash dividend distribution.”