MADRID, 2 (EUROPA PRESS)
Banco Santander obtained a record attributable profit of 9,605 million euros in 2022, 18% more in current euros compared to 2021, thanks to strong growth in commercial activity, good asset quality and cost control.
In the fourth quarter, attributable profit was 2,289 million euros, 1% more in current euros than in the same period of the previous year.
Taxes on benefits reached 4,486 million euros, representing an effective tax rate of 29%, as reported by the entity on Thursday.
"2022 has once again been a very good year for Santander: we increased the customer base profitably and we maintained a very solid balance sheet. As a result, earnings per share have increased by 23% and the cash dividend per share, by 16%", highlighted the president of Banco Santander, Ana Botín.
"In 2023, we expect central banks and governments to continue to prioritize reducing inflation. Our teams are highly experienced in successfully managing this type of environment, so we expect revenue growth to offset rising costs." due to inflation and the expected increase in the cost of risk. We also expect to continue increasing the return on tangible capital per share and the dividend per share", added Botín, who was convinced that the focus on the client and compliance of the objectives, increasing profitability "year after year" will allow the group "to grow in 2023 and in the future".
As explained by the entity, the scale, diversification and commercial orientation of the group result in a "solid" year, with an increase of seven million in the number of clients, up to 160 million; an increase in revenue of 12%, to 52,154 million euros, and an increase in profit before provisions (net margin) of 13%, to 28,251 million.
Likewise, the bank has highlighted that the balance sheet has remained "solid", with a 'fully loaded' CET1 capital ratio above 12% at the end of the year, in line with its objective.
The board maintains its intention to remunerate shareholders with around 40% of ordinary profit by 2022, distributed approximately equally between cash dividends and share repurchases.
Specifically, the total remuneration of the first payment in charge of the results of 2022 was above 1,900 million euros, 16% more than that of 2021.
GROW PROFITABLY BY 2023
Likewise, the bank expects to grow profitably in 2023, with a goal of double-digit revenue growth; a RoTE above 15%; a cost of risk below 1.2%; an efficiency ratio between 44% and 45%, and a CET1 above 12%. "All this, in accordance with the current macroeconomic consensus," he points out.
The increase in customer activity, as well as the increase in interest rates in the United Kingdom, the Eurozone, Poland and other geographies, favored a 9% increase in interest income (16% in current euros), with particularly high growth in the UK (13%), Poland (99%) and Mexico (13%).
The bank has indicated that the effect of the rate hike on the interest margin has not yet been fully reflected in Spain, Portugal and the United States.
As a result of the interest rate rises, Santander could obtain between 2,000 and 2,500 million additional euros of interest margin in the next 12 months, according to current forecasts for the price of money.
Commission income increased 7% (12% in current euros), thanks to higher volumes and improved activity.
The interest margin and commission income represented 97% of the group's income, which reflects the quality of its results.
With this, total revenue grew by 6% (12% in current euros), to 52,154 million euros, in line with the revenue growth target of around 5%.
This, together with good cost control, resulted in a profit before provisions (net margin) of 28,251 million, 5% more (13% in current euros).
The bank has highlighted that the strong rise in inflation caused a general increase in costs (7%), although in real terms they fell by 5% thanks to the improvement in productivity and international collaboration between markets and businesses.
LOWER THE NPL RATE
Thus, the group's efficiency ratio closed at 45.8% in 2022 (with an improvement of 0.4 percentage points compared to 2021), while the non-performing loan ratio stands at 3.08%, after falling eight basis points compared to the end of 2021 thanks to the good performance of Europe and Digital Consumer Bank, while the coverage ratio stood at 68%.
The cost of risk, that is, what the bank reserves based on the expected loss of the portfolio, increased 22 basis points in the year, up to 0.99%, in line with the objective, due to the increase in provisions (31%) compared to 2021, when the bank released endowments in some countries.
Santander has made additional allocations in 2022 due to the update of the macroeconomic forecasts, reflecting its prudence given the economic uncertainty.
Europe accounted for 33% of underlying profit, South America 31%, North America 25% and Digital Consumer Bank 11%.
In Spain, ordinary profit for the year was 1,560 million euros, 149% more, mainly due to the reduction in provisions for bad debts (-30%) and costs (-1%). Total revenue increased 6% and fee income increased 1%, driven by CIB.
