Santander, the euro zone’s second-largest lender by market value, has reported a 1% rise in first-quarter net profit, despite a new tax on banks in Spain. The bank’s net profit for the quarter was €2.57 billion ($2.84 billion), up from €2.54 billion a year earlier, thanks to higher lending income in Europe. Analysts had expected net profit of €2.45 billion, according to a Reuters poll.
Higher Lending Income Boosts Q1 Results
Santander’s Q1 results were boosted by higher lending income, especially in Europe, which helped offset a weaker performance in Brazil. Excluding the impact of the new tax on banks in Spain, the bank’s net profit rose by 10%.
Santander’s lending income rose 3.5% in Q1, driven by growth in Spain, the UK, and Poland. The bank’s net interest income increased 5.5% year-on-year, to €8.9 billion. However, Santander’s results were impacted by a new tax on banks in Spain, which cost the bank €224 million.
The bank’s results in Brazil were also weaker, due to lower interest rates and a decline in fee income. Santander’s Brazilian unit reported a net profit of €377 million, down from €646 million a year earlier.
Santander’s Results Beat Expectations
Despite the impact of the new tax on banks in Spain and weaker results in Brazil, Santander’s Q1 results beat expectations. Analysts had expected the bank to report net profit of €2.45 billion, excluding the impact of the new tax.
Santander’s CEO, José Antonio Álvarez, said that the bank’s results reflected “solid business performance” and “resilient earnings” in the face of “challenging macroeconomic conditions.”
Outlook for 2023
Santander’s outlook for the rest of the year remains positive, despite the challenging macroeconomic conditions. The bank expects to continue to benefit from its diversification across different markets and its strong digital capabilities.
Santander is also focused on expanding its presence in high-growth markets such as Latin America, where it has a strong presence. The bank plans to invest more in its digital capabilities and to continue to expand its lending business in key markets.
Conclusion
Santander’s Q1 results demonstrate the bank’s resilience in the face of challenging macroeconomic conditions, thanks to its strong diversification across different markets and its focus on digital capabilities. Despite the impact of the new tax on banks in Spain and weaker results in Brazil, the bank’s results beat expectations. Santander’s outlook for the rest of the year remains positive, and the bank is focused on expanding its presence in high-growth markets and investing in its digital capabilities
