Santander Bank reported an increase in annual profits on Wednesday as the global economy recovered from the worst of the pandemic.
The Spanish lender reported total revenue for the year to 31 December 2021 of 46.4 billion euros, a 4% jump from 2020, while net operating income came in at 25.0 billion euros, up 6%.
Underlying pre-tax profits rose 58% to a record €15.3 billion. Attributable pre-tax profit was €8.1 billion, compared to a loss of €8.8 billion in 2020 following a series of write-downs, restructurings and provisions.
An improvement in credit quality led to a 37% loosening of provisions at constant exchange rates, after the bank released around 750 million euros that had been set aside to cover bad debts in 2020.
Santander said the “strong” performance was driven by a rebound in activity, with loans and deposits ahead 4% and 6% respectively. The number of customers increased by 5 million during the year to reach 153 million.
In Santander’s three main geographies, underlying profit jumped 110% and 109% in Europe and North America, respectively, to €3 billion and €3.1 billion, and 24% in South America at 3.3 billion euros.
Executive Chairman Ana Botín said, “Our 2021 results once again demonstrate the value of our scale and presence in both developed and developing markets, with attributable profit 25% above pre-Covid levels in 2019. .
“Across all of our regions and businesses, we are delivering strong and consistent top line growth, with the US and UK posting outstanding performance in 2021.”
Regarding the current year, she added: “We are on track to achieve our mid-term objectives set in 2019, despite the impact of the pandemic, and aim to achieve a tangible return on equity. of more than 13%, cost-income ratio of approximately 45% and fully loaded Tier 1 capital of approximately 12% in 2022.”
The group’s current CET1 is 12%.
Victoria Scholar, Head of Investments at Interactive Investorsaid: “This is a strong set of results from the second largest bank in the euro zone. European banks are priced more attractively than US banks at the moment, and although the rate hike trajectory in the Eurozone is lower than that of the US and the UK, it still enjoys a robust economic backdrop and will benefit from a turn towards tightening from the European Central Bank on the horizon.”
At 11:45 GMT, Santander shares were 2% ahead in London at 265.25p.