Banco Santander(US:SAN)2025-10-29 10:00Financial Data and Key Metrics Changes - The quarterly profit reached a record €3.5 billion, marking the best nine-month period ever for the company [3] - Return on Invested Capital (ROIC) increased by 70 basis points to 16.1% [3] - The capital ratio ended the quarter at an all-time high of 13.1% [3][30] - Earnings per share rose by 16%, supported by solid profit generation and fewer shares due to buybacks [19] Business Line Data and Key Metrics Changes - Revenue grew by 4% in euros, with Net Interest Income (NII) increasing by 2% and fees rising by 8% [5] - Corporate and Investment Banking (CIB) revenue rose by 6%, driven by global markets and growth initiatives in the U.S. [23] - Wealth management revenue increased by 13%, supported by record assets under management [23] - Payments revenue surged by 19%, with both PagoNext and cards delivering double-digit growth [23][18] Market Data and Key Metrics Changes - The company added 7 million new customers year on year, bringing the total to 178 million [3] - Customer activity and diversification continued to drive revenue growth, particularly in fee-driven businesses [7] - The cost of risk improved year on year, reflecting robust credit quality trends [5][28] Company Strategy and Development Direction - The company is on track to meet its 2023-2025 strategic plan targets, focusing on profitability and disciplined capital allocation [4] - The transformation strategy aims to simplify operations and enhance customer experience, with a focus on digitalization [9][11] - The integration of Santander Consumer Finance and Openbank in Europe is expected to reduce costs and improve product offerings [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 targets despite a more challenging environment than initially anticipated [32] - The outlook for 2026 is promising, with expectations of improved credit quality and stable cost of risk [40][42] - The company anticipates a stable cost of risk in Brazil, supported by resilient labor markets [42][64] Other Important Information - The company plans to distribute at least €10 billion to shareholders through share buybacks for 2025-2026, subject to regulatory approvals [4][19] - The efficiency ratio improved to 41.3%, the best reported in over 15 years [28] Q&A Session Summary Question: ROIC target for the year of 16.5% - Management expects strong performance in Q4 driven by seasonality, higher fees, and execution of One Transformation [37] Question: Credit quality in Brazil - Provisions have decreased, and management expects stable cost of risk due to improved credit quality [41][43] Question: Capital guidance and regulatory headwinds - Regulatory charges are expected to be lower than initially anticipated, with a CET1 ratio projected to increase further in Q4 [48][49] Question: NII outlook in Spain - NII in Spain improved, with expectations for continued growth in Q4 and 2026 [51][52] Question: Litigation provisions - The impact of litigation provisions is not expected to be material for the group [60][62] Question: NII outlook in Brazil - Management expects stable NII with improved margins as interest rates decline [64][65]