BCDRF - Banco Santander, S.A. (SAN) Q1 2025 Earnings Call Transcript

2025-04-30 08:12:03 ET

Banco Santander, S.A. (SAN)

Q1 2025 Earnings Conference Call

April 30, 2025, 04:00 ET

Company Participants

Raul Sinha - Global Head, IR

Hector Grisi - CEO

José García Cantera - CFO

Conference Call Participants

Sofie Peterzens - JPMorgan

Ignacio Ulargui - BNP Paribas

Andrea Filtri - Mediobanca

Francisco Riquel - Alantra

Alvaro Serrano - Morgan Stanley

Marta Sanchez Romero - Citi

Carlos Peixoto - CaixaBank

Britta Schmidt - Autonomous

Cecilia Romero - Barclays

Ignacio Cerezo - UBS

Pablo de la Torre - RBC

Presentation

Raul Sinha

Good morning all, and welcome to the Santander Q1 2025 Results Call. We are joined today by Hector Grisi, our CEO; and Jose Garcia-Cantera, our CFO. We will start with a brief presentation on our Q1 results and then open the floor for questions. Hector, over to you.

Hector Grisi

Thanks, Raul. Good morning, everyone, and thank you for joining Santander's results presentation. Today's presentation will follow the usual structure. Number one, first, I will talk about our results with a special focus on the performance of our global businesses. Jose, our CFO, will then give a deep dive on the financials and I will conclude with some final remarks before opening up for Q&A. We have entered the last year of our strategic cycle well ahead of our plan. Capital allocation, which is further improving our profitability to 15.8% post AT1 and our CET1 ratio to 12.9% with 87% of RWA generating returns above our cost of equity. Given our solid progress building capital, our diversified earnings and improving profitability will reiterate our target to distribute up to €10 billion to our shareholders through share buybacks for '25/'26 subject to regulatory approvals.

Remember that we no longer set a maximum price for our buybacks reflecting our confidence on the group's potential in terms of profitability and value creation. Q1 was another record quarter for Santander, demonstrating the strength of our strategy and the resilience of our business model. Profit reached a new record of €3.4 billion, 19% higher than Q1 '24 with all of our businesses growing. On the back of our solid franchise of 175 million customers that continues to achieve this as we continue to invest for the future through One Transformation and making excellent progress towards a simpler and more integrated model. This has helped us to improve our efficiency by around 1 point and increase our ROTE was 81% by almost 2 points to 15.8%.

Our balance sheet remains solid with a strong CET1 capital ratio within a plus dividend per share growing 14.5% despite the depreciates across our footprint. Going into more detail line growth, with revenue up 5% in cost and euros, supported by NII, which increased 4%, excluding Argentina, which, as Jose will explain later, is causing some disturbances and also by record fees, up almost double digits, supported by significant growth of our 9 million customers, the network benefits that we are capturing through our global businesses. Number two, expenses grew below revenue and inflation, showcasing the positive effects from a transformation. We reiterate our target of lower cost in current euros in '25....

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