Santander posts record underlying profit of €11.176 billion in nine months
Key Facts
Santander reported record underlying profit of €11.176 billion in the first nine months of 2026, up 16% year on year, according to the bank’s results published on October 28. The bank said underlying profit in the third quarter alone rose 19% to €3.848 billion. By contrast, profit attributable to shareholders reached €12.405 billion for the period, up 20%, but fell 2% in the third quarter to €3.432 billion. The divergence reflects the impact of non-recurring items on attributable profit, while the underlying profit measure excludes them. The nine-month result included a net gain from the sale of Santander Bank Polska, partly offset by charges incurred by the bank.
The gain on the sale of Santander Bank Polska, completed in January, was €1.9 billion, while charges reached €666 million in the nine months and included costs related to the integration of TSB and Webster, according to the bank’s statement. In the third quarter, non-recurring items had a negative impact of €416 million. These items explain why quarterly profit attributable to shareholders did not keep pace with underlying profit growth, despite the latter rising 19%. For the nine months, the gain on the sale boosted reported results, while charges reduced its impact. The bank therefore presented underlying and attributable profit side by side, with each measure including different items.
Group revenue rose 8% to €46.807 billion in the nine months, with net interest income up 10% to €34.614 billion and net fee and commission income up 9% to €10.349 billion. Santander said the increases reflected greater customer activity, deeper customer relationships and business volume growth. It added that about 95% of group revenue is linked to customer activity. On costs, the One Transformation programme helped reduce costs by 1% in constant euros, excluding TSB and Webster. Net operating income rose 14% to €26.882 billion, while the efficiency ratio improved by 2.8 percentage points to 42.6%.
Both loans and customer funds increased 16% in constant euros over the nine months, the bank said; customer funds include deposits and investment funds. Excluding the two acquisitions, loans rose 6% and customer funds 8%, distinguishing underlying business growth from the effect of expanding the group. Chief Executive Hector Grisi said the bank added a net 17 million customers in the 12 months ended in September, taking its total to 189 million. Eight million of those customers came with TSB and Webster after the acquisitions were completed on April 30 and August 20, respectively. The bank attributed loan growth to residential mortgages and car financing at Openbank, and to double-digit lending growth in corporate and investment banking and wealth management.
Loan-loss provisions rose 13%, or 10% in constant euros, in the nine months, and the bank said the increase mainly reflected broader trends in the Argentine market. Excluding Argentina, provisions rose 6% in constant euros, in line with organic loan growth, according to the statement. Santander described credit quality as resilient and put the cost of risk at 1.16% in September. The non-performing loan ratio also improved to 2.90% from the previous quarter, while the coverage ratio was 64%. These indicators place the increase in provisions within the broader credit-quality picture reported by the bank, which distinguished the impact of Argentina from provision trends elsewhere.
In the market, Reuters reported in a snapshot of shares on Wednesday that Santander stock fell 4.2%, saying weaker earnings and higher provisions in Brazil weighed on the market’s reading of the results, despite the bank beating third-quarter profit expectations. A separate report published by Investing.com on October 28 said the stock fell 3.3% to €10.895 after the results were announced during the day’s trading. The report noted that revenue came in about €370 million below expectations, alongside a 2% decline in third-quarter profit attributable to shareholders. The figures in the two reports reflect separate market snapshots and do not represent a single closing price. Market commentary thus focused on provisions, weakness in Brazil and the gap between revenue and expectations, alongside underlying profit growth.
The bank maintained its 2026 targets, which include mid-single-digit revenue growth, cost reductions in constant euros, profit exceeding the €14.1 billion recorded in 2025, and a Common Equity Tier 1 ratio of between 12.8% and 13%. It said these targets exclude the impact of mergers and acquisitions in 2025 and 2026. The capital ratio was 12.7% in September following the Webster acquisition, and the bank said it remained on track to meet its year-end target. Through 2028, Santander is targeting a return on tangible equity above 20%, profit above €20 billion and more than 210 million customers; it also expects fee income to grow faster than net interest income. The bank announced an interim cash dividend of 12.70 euro cents per share, up 10% from the corresponding distribution in 2025, to be paid on November 2.