Santander Q1 2025 slides: record profit and double-digit EPS growth

Banco Santander (BME:SAN) reported a record quarterly profit in its Q1 2025 earnings presentation released on April 30, with attributable profit reaching €3.4 billion, up 19% year-over-year in current euros and 24% in constant euros. The Spanish banking giant demonstrated strong performance across all business segments, supported by its ongoing transformation program.

Quarterly Performance Highlights

Santander started 2025 with robust business momentum, reporting total revenue of €15.5 billion, a 1% increase in current euros and 5% in constant euros compared to Q1 2024. The bank’s efficiency ratio improved to 41.8%, down 0.8 percentage points year-over-year, while return on tangible equity (RoTE) post-AT1 rose to 15.8%, up 1.7 percentage points.

As shown in the following performance summary, the bank achieved strong metrics across key areas:

Earnings per share (EPS) grew by 26% to 21.5 € cents, while tangible net asset value per share plus cash dividends per share (TNAVps + Cash DPS) increased by 14.5% year-over-year to €5.56. The bank’s credit quality remained solid with a cost of risk (CoR) of 1.14%, an improvement of 6 basis points from the previous year.

"We are on track with our 2025 targets, with all global businesses growing revenue and profit," the bank stated in its presentation. Santander highlighted that it added 9 million new customers year-over-year, contributing to good activity levels across its operations.

Business Segment Performance

All five of Santander’s global business segments showed revenue and profit growth in Q1 2025. The bank’s presentation provided a detailed breakdown of each segment’s contribution to overall performance:

The Retail banking segment, which accounts for 50% of group revenue, saw a 2% increase in revenue to €7.9 billion and a 28% jump in profit to €1.9 billion. Its efficiency ratio improved by 1.3 percentage points to 39.4%, while RoTE post-AT1 reached 17.6%.

Corporate & Investment Banking (CIB) delivered strong results with an 8% revenue increase to €2.2 billion and 18% profit growth to €0.8 billion. The segment achieved a RoTE post-AT1 of 21.6%, exceeding its 2025 target of around 20%.

The Wealth Management business showed particularly impressive growth, with revenue up 14% to €1.0 billion and profit increasing 28% to €0.5 billion. The segment’s RoTE post-AT1 stood at 68.0%, well above its 2025 target of around 60%.

Strategic Initiatives

Santander’s ONE Transformation program continues to drive efficiency improvements and revenue synergies across the organization. The bank reported significant progress in product simplification, with 40% fewer products compared to Q1 2024 and 51% fewer compared to December 2022.

The following chart illustrates how the transformation program is contributing to efficiency improvements:

The bank has increased digital availability of products and services to 63%, up from 62% in December 2024 and 56% in December 2023. In the US, Santander has captured $260 million in efficiencies in its Consumer and Commercial businesses since 2022.

Global technology capabilities have also delivered significant benefits, with €40 million in efficiencies in Q1 2025 and €492 million since December 2022. These improvements come from process optimization, global vendor agreements, and IT and operations shared services.

Capital Position and Shareholder Returns

Santander maintained a strong capital position with a CET1 ratio of 12.9%, up 60 basis points year-over-year and well above its target operating range of 12-13%. The bank continues to generate capital organically while improving capital productivity.

As illustrated in the following chart, the bank has made significant progress in improving profitability metrics and creating shareholder value:

The presentation noted that since 2021, including the second buyback against 2024 results, Santander will have returned €9.5 billion to shareholders via share buybacks and repurchased 14% of its outstanding shares. The bank maintains its shareholder remuneration policy of distributing approximately 50% of group reported profit.

Forward-Looking Statements

Santander confirmed it is on track to meet its 2025 Investor Day targets, as shown in the following summary:

The bank expects to maintain its revenue momentum while continuing to reduce costs through the ONE Transformation program. It aims to achieve a cost of risk of around 1.15% and a RoTE post-AT1 of approximately 16.5% by 2025.

Santander’s stock closed at $7.40 on April 29, 2025, down 0.54% for the day, but has shown strong performance over the past year, trading near its 52-week high of $7.46 compared to a 52-week low of $4.27.

The bank’s strong start to 2025, with record profit and growth across all business segments, positions it well to achieve its medium-term targets and continue delivering value to shareholders.

Full presentation:

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