Banco Santander (NYSE:SAN) Q4 2025 Earnings call February 03, 2026 02:00 PM ET Company ParticipantsAlvaro Serrano Saenz de Tejada - Managing DirectorAna Botín - Executive ChairFrancisco Riquel Correa - Head of Equity ResearchHéctor Grisi - CEOJosé García Cantera - CFORahul Sinha - Head of Investor RelationsConference Call ParticipantsAndrea Filtri - Equity Research AnalystCarlos Peixoto - Equity Research AnalystIgnacio Cerezo Olmos - Equity Research AnalystIgnacio Ulargui - Equity Research AnalystRahul Sinh ...

Banco Santander (NYSE:SAN) Q4 2025 Earnings call February 03, 2026 02:00 PM ET Company ParticipantsAlvaro Serrano - Managing DirectorAna Botín - Executive ChairBorja Ramirez - DirectorFrancisco Riquel Correa - Head of Equity ResearchHugo Cruz - DirectorHéctor Grisi - CEOJosé García Cantera - CFORahul Sinha - Head of Investor RelationsConference Call ParticipantsAndrea Filtri - Equity Research AnalystBritta Schmidt - Senior AnalystCarlos Peixoto - Equity Research AnalystIgnacio Cerezo - Equity Research Analy ...

FY'25 Earnings Presentation Acquisition of Webster 3 February 2026 Important information Non-IFRS and alternative performance measures Banco Santander, S.A. ("Santander") cautions that this presentation may contain financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securitie ...

Core Insights - Banco Santander has sold a 49% stake in Santander Bank Polska to Erste Group for approximately €7 billion ($8.2 billion), resulting in a net capital gain of around €1.9 billion for Santander [1][2] - The transaction is expected to enhance Santander's CET1 ratio by about 95 basis points, equating to an estimated €6 billion [1] - Following the deal, Erste Group will become the main shareholder of Santander Bank Polska, which will be rebranded as Erste Bank Polska in Q2 2026 [2] Financial Implications - Santander plans to allocate around half of the proceeds from the sale to its shareholder buyback program, pending regulatory approval [2] - After the transaction, Santander's ownership in its Polish banking business will decrease to 9.7% [2] - Erste Group anticipates a return on tangible equity of approximately 19% and expects earnings per share to rise by over 20% by 2026 [3] Strategic Developments - Santander has acquired the remaining 60% stake in Santander Consumer Bank in Poland, becoming its full owner and continuing operations in the consumer finance sector [3] - A partnership has been established between Santander and Erste Group focused on Corporate & Investment Banking, facilitating client referrals and collaboration on specific products [4] - The alliance may extend to collaboration through PagoNxt, Santander's global payments platform, starting with cloud-based payments infrastructure in Poland [5] Future Initiatives - The increased capital flexibility from this transaction is expected to support other initiatives, including the proposed acquisition of TSB in the UK, which is pending regulatory approval [6] - Santander's executive chair emphasized the strategic partnership with Erste Group to leverage complementary strengths for better client service across markets [6]

Core Insights - Santander reported a record attributable profit of €10.3 billion for the first nine months of 2025, marking an 11% increase year-over-year, driven by sustained customer growth and digital transformation efforts [2] - The bank's long-term profitability strategy focuses on streamlining its technology stack and enhancing digital relationships with its 178 million customers, which is a 7 million increase from the previous year [2] - The integration of Santander Consumer Finance and Openbank in Europe aims to simplify operations, reduce costs, and enhance product offerings, strengthening the bank's position in key markets like Germany [3] Digital Transformation - Santander's CEO emphasized the importance of simplification, automation, and technological capabilities, which are exceeding expectations for the end of 2025 [2] - Openbank, Santander's digital banking unit, has successfully attracted $6.75 billion in deposits and 162,000 new customers in the U.S., which is its fourth largest market [2] - The bank is transforming its retail operations to become a digital-first bank, combining advanced technology with the expertise of its teams [2] Payments Division Performance - Santander's payments division, PagoNxt, is performing well, with an EBITDA margin that has already surpassed the 2025 Investor Day target, reaching 32% [4] - The bank's U.S. business holds a significant share of the auto finance sector, which has faced scrutiny due to recent bankruptcies in the industry [5] - Santander's exposure to the auto finance sector includes a $77 million loan to First Brands, although this exposure is not considered material for the bank [6]

Core Insights - Santander reported a record attributable profit of €10.3 billion for the first nine months of 2025, marking an 11% increase year-over-year, driven by sustained customer growth and digital transformation efforts [2] - The bank's long-term profitability strategy focuses on streamlining its technology stack and enhancing digital relationships with its 178 million customers, which is a 7 million increase from the previous year [2] - The integration of Santander Consumer Finance and Openbank in Europe aims to simplify operations, reduce costs, and enhance product offerings, strengthening the bank's position in key markets like Germany [3] Digital Transformation - Santander's CEO emphasized the importance of simplification, automation, and technological capabilities, which are exceeding expectations for the end of 2025 [2] - Openbank, Santander's digital banking unit, has successfully attracted $6.75 billion in deposits and 162,000 new customers in the U.S., which is its fourth largest market [2] - The bank is transforming its retail operations to become a digital-first bank, combining advanced technology with the expertise of its teams [2] Payments Division Performance - Santander's payments division, PagoNxt, is performing well, with an EBITDA margin that has already surpassed the 2025 Investor Day target, reaching 32% [4] - The bank's U.S. business holds a significant share of the auto finance sector, which has faced scrutiny due to recent bankruptcies in the industry [5] - Santander's exposure to the auto finance sector includes a $77 million loan to First Brands, although this exposure is not considered material for the bank [6]

9M'25 Earnings Presentation For more details on APMs and non-IFRS measures, please see the 2024 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the SEC) on 28 February 2025 (https://www.santander.com/content/dam/santander-com/en/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2025/sec-2024-annual-20-f-2024-en.pdf), as well as the section "Alternative performance measures" of Banco Santander, S.A. (Santander) Q3 2025 Financial Report, pub ...

Financial Performance Highlights - H1'25 attributable profit reached €6.83 billion, a 13% increase compared to H1'24 [22, 61] - Group revenue totaled €31.01 billion, showing a slight decrease of 0% in current euros but a 5% increase in constant euros compared to H1'24 [24] - The Group's RoTE post-AT1 stood at 16.0%, a 0.9 percentage point increase year-over-year [22] - TNAVps (Tangible Net Asset Value per Share) plus Cash DPS (Dividend Per Share) increased by 16% year-over-year [22, 57] Business Segment Performance - Retail banking achieved a RoTE post-AT1 of 17.2% with a profit of €3.7 billion [30, 33] - CIB (Corporate & Investment Banking) reported a RoTE post-AT1 of 20.8% and a profit of €1.5 billion [30, 39] - Wealth Management saw a RoTE post-AT1 of 67.3% and a profit of €948 million [30, 43] - Payments, including PagoNxt and Cards, reported a profit of €335 million, with PagoNxt EBITDA margin at 28.8% [30, 50] Strategic Initiatives and Capital Allocation - The company is ahead of its Investor Day 2025 targets, including profitability and shareholder remuneration [17] - The company plans to distribute approximately 50% of Group reported profit as shareholder remuneration, split evenly between cash dividends and share buybacks [19] - The company aims for at least €10 billion in share buybacks for 2025 and 2026 earnings [18, 88]

Group 1: Santander's Sale and Partnership - Santander is selling approximately 49% of Santander Polska's share capital and 50% of its Polish asset management business to Erste Group for $7.9 billion [1][2] - The deal includes a partnership where Santander will provide Erste access to its payment system, allowing both banks to explore opportunities in payments, particularly with Santander Polska post-completion [1][2] Group 2: Corporate and Investment Banking Collaboration - Santander and Erste are forming a corporate and investment banking partnership to leverage each other's regional strengths, offering local solutions and market insights to corporate and institutional clients through a referral model [3] - This partnership aims to facilitate seamless client interactions and service offerings [3] Group 3: Economic Outlook and Strategic Focus - Santander's Executive Chair, Ana Botín, highlighted the bank's focus on helping clients manage volatility related to U.S. tariffs and geopolitical uncertainty, which has contributed to a decline in the five-year growth forecast for the world economy to 3.1%, the lowest in 16 years [4] - The bank is leveraging its global scale and diversification as stabilizers in the current economic environment, anticipating continued profitability growth by 2025 [5] Group 4: Importance of Real-Time Payments - Research indicates that offering real-time payments is crucial for banks to attract and retain small and medium-sized business (SMB) clients, with many SMBs willing to pay fees for instant payment advantages [6][7] - Specifically, 88% of the smallest SMBs, those with annual revenues of less than $100,000, would be willing to pay a percentage fee for instant payments [7]