Santander underlying profit more than doubles in Europe and US

Santander reported €46.4 billion in total revenue for last year, up 7 per cent, which the bank said was largely driven by its five million new customers and activity across the group’s regions and businesses.

Underlying profit in Europe and North America more than doubled in comparison to the previous year – increasing by 110 per cent and 109 per cent respectively. In South America, underlying profit was up by 24 per cent.

“The group achieved a record profit before tax of €15.3 billion thanks to disciplined capital allocation, prudent risk management, and further improvements in our efficiency and balance sheet strength, combined with a material increase in customer activity during the year,” said Ana Botín, Banco Santander executive chairman.

The bank saw growth in online adoption over the 12-month period – with 76 per cent of all transactions in core banks via digital channels in 2021 compared to 55 per cent in 2019.

Santander’s FinTech subsidiaries also experienced significant growth, with Openbank reaching 1.7 million customers across five markets – an 80 per cent increase outside of Spain.

PagoNxt saw revenues jump by 47 per cent last year, when Santander discontinued its international money transfer service PagoFX to refocus on business-to-business payments through the autonomous payments tech company. [link]

The bank expects revenue at PagoNxt to increase by 50 per cent this year.

“Through PagoNxt and Digital Consumer Bank we expect to deliver group connectivity, leveraging our global scale, as well as faster growth in customers in the coming years,” continued Botín.

In 2022, the bank is targeting mid-single digit growth in revenues and a payout ratio of 40 per cent of underlying profit.

“Shareholder distributions are an important focus for Santander and 2021 was the first year that Santander undertook a share buyback as part of our total distributions to shareholders, concluded the executive chairman. “We aim to maintain a payout ratio of 40 per cent of underlying profit in 2022 through both cash dividends and share buybacks.”

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