Santander H1’25 presentation: Record profit, ahead on all 2025 targets

Banco Santander (BME:SAN) reported record first-half profits and announced it’s ahead on all its 2025 targets during its H1’25 earnings presentation on July 30, 2025. The Spanish banking giant posted a 13% year-over-year increase in attributable profit to €6.8 billion, or 18% at constant exchange rates, driven by strong performance across its global businesses.

Executive Summary

Santander’s H1’25 attributable profit reached €6.8 billion, with Q2’25 contributing €3.4 billion, up 7% year-over-year. The bank reported a return on tangible equity (ROTE) post-AT1 of 16.0%, up 0.9 percentage points, approaching its 2025 target of approximately 16.5%. The CET1 ratio strengthened to 13.0%, at the top of the bank’s 12-13% target range.

"We are well ahead on all our strengthened Investor Day 2025 targets," the bank highlighted in its presentation, pointing to improvements across key metrics including efficiency, profitability, and capital strength.

As shown in the following chart of Santander’s performance against its 2025 targets:

The bank also announced enhanced shareholder returns, with a 50% payout ratio and at least €10 billion in total share buybacks for 2025-26, along with 50% annually in cash dividends plus share buybacks.

Quarterly Performance Highlights

Santander reported strong revenue growth across its five global businesses, with total revenue reaching €31.0 billion, up 5% at constant exchange rates. The bank’s efficiency ratio improved to 41.5%, better than its 2025 target of approximately 42%, while cost of risk decreased by 7 basis points year-over-year to 1.14%.

The bank’s performance was supported by solid net interest income (NII) and record fee income, with net fee income growing 9% at constant rates. Santander also added 8 million new customers compared to the previous year, reflecting strong commercial momentum.

The following slide illustrates the record H1 profit with contributions from all global businesses:

Each of Santander’s five global businesses contributed positively to the group’s performance:

1. Retail: €3.7 billion profit (+14%), ROTE of 17.2%

2. Consumer: €1.0 billion profit (-1%), ROTE of 10.4%

3. Corporate & Investment Banking (CIB): €1.5 billion profit (+15%), ROTE of 20.8%

4. Wealth Management & Insurance: High profitability with ROTE of 67.3%

5. Payments: €335 million profit (+47%)

The bank’s diversified business model is illustrated in the following chart showing revenue contribution by business segment:

Strategic Initiatives

Santander’s "ONE Transformation" program continues to drive efficiency improvements and revenue growth. The program has contributed to a reduction of 243 basis points in the efficiency ratio since FY’22, with additional contributions from Global & Network Businesses (-104bps) and Global Tech Capabilities & Others (-87bps).

The bank highlighted that the transformation is delivering "solid results reflected in fee growth (+8%), digital sales (+16%) and higher ROTE (17.2%)."

As shown in the following chart of efficiency improvements from the ONE Transformation program:

Key initiatives under the transformation program include product simplification, increased digital availability, wealth collaboration, OEM expansion, and a global approach to technology. These efforts have helped Santander improve its efficiency ratio from 45.8% in FY’22 to 41.5% in H1’25, ahead of its 2025 target of approximately 42%.

The long-term impact of the transformation program on value creation is illustrated in this comprehensive metrics table:

Capital Allocation & Shareholder Returns

Santander reported strong organic capital generation with profitable front-book growth achieving a 22% ROTE. The bank’s CET1 ratio increased to 13.0%, up 0.5 percentage points year-over-year, positioning it at the top of its 12-13% target range.

The bank announced enhanced shareholder returns, with a commitment to return at least €10 billion to shareholders via share buybacks for 2025 and 2026 earnings, in addition to its 50% cash dividend payout. Santander noted: "Since 2021, including the full buyback we announce today, Santander will have returned €11.2bn to shareholders via share buybacks and repurchased around 15% of its outstanding shares."

The improvement in profitability and value creation is demonstrated in the following chart showing ROTE, EPS, and TNAVps + Cash DPS growth:

Earnings per share increased by 19% year-over-year, while tangible net asset value per share plus cash dividends per share grew by 16%.

Forward-Looking Statements

Santander confirmed it remains on track to meet all its 2025 targets, with some metrics already exceeding expectations. The bank highlighted that revenue and costs are on track, the balance sheet remains solid, and profitability continues to improve with double-digit growth in key metrics.

As illustrated in this summary of progress toward 2025 targets:

The bank also announced its next Investor Day will be held on February 25, 2026, in London, where it will likely outline its strategic vision beyond 2025.

Santander’s ADR (NYSE:SAN) closed at $8.92 on July 29, 2025, up 1.94% for the day, and continued to rise 2.17% in after-hours trading to $8.94. The stock has performed strongly over the past year, trading near its 52-week high of $8.98, significantly above its 52-week low of $4.27.

Full presentation:

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