SAN - Banco Santander stock slides 7% as Q1 earnings dented by windfall tax in Spain

2023-04-25 11:55:02 ET

Banco Santander ( NYSE: SAN ) stock slid as much as 7% on Tuesday as the lender's Q1 earnings were dented by a €224M charge recorded as a result of Spain's temporary windfall tax.

Q1 EPS was €0.15 vs. €0.14 in Q1 2022. Attributable profit was €2.57B, up 1% Y/Y, but down 1% in constant euros.

Excluding the windfall tax impact, profit would've been ~€2.80B, up 10% Y/Y or 8% higher in constant euros. The tax resulted in charges of €202M in Spain and €22M in Santander's ( SAN ) Digital Consumer Bank.

Net interest income rose 17.4% Y/Y to ~€10.4B. Growth was 16% excluding exchange rate impact, driven by greater volumes and higher interest rates. Net fee income increased 8% Y/Y to €3.04B and was 7% higher in constant euros.

Provisions (net of provisions reversals) totaled €642M, up 41.1% Y/Y, mainly in the U.K. and Brazil. Net loan-loss provisions decreased 3%, mainly due to the U.K., Poland, U.S. and Brazil.

Customer deposits totaled €998.95B in March, down 1% from Q4 but 6% higher Y/Y. More than 80% of its deposits are from retail banking customers, and ~80% of deposits from individuals are covered by deposit guarantee funds.

Shares of Santander ( SAN ) have gained 20.3% YTD and 8.4% in the last one year.

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