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Investing.com -- Banco Santander (BME:SAN) expects to maintain profitability growth in the first quarter of 2025, with its return on tangible equity (RoTE) rising to about 15.7% post-AT1 and its common equity tier 1 (CET1) ratio strengthening to 12.9%.
The bank remains on track to meet its 2025 targets, despite ongoing global economic uncertainty.
At 05:20 ET (09:20 GMT), shares of the Spanish company dropped 7.3% following President Donald Trump’s news of broad tariffs.
At the annual general meeting on Friday, executive chair Ana Botín is set to reaffirm Santander’s full-year goals, including a RoTE of around 16.5% post-AT1 and a CET1 ratio of 13%.
Revenues for 2025 are projected to reach approximately €62 billion, with costs declining in absolute terms and credit risk remaining stable.
Santander’s first-quarter performance reflects a continued increase in its customer base, with revenues expected to remain flat while costs decline compared to the same period in 2024.
This improvement has led to an efficiency gain of approximately 50 basis points. Credit quality remains stable, with the cost of credit staying within the anticipated range.
“As a result, in the first quarter we expect to increase profitability relative to full-year 2024,” Botín said, emphasizing the bank’s strong capital position and resilience.
Despite heightened geopolitical tensions and market volatility, Santander’s diversification strategy acts as a stabilizing force.
Botín flagged the "ONE Transformation" plan, which leverages the bank’s global scale and technological platforms to enhance efficiency and profitability while improving customer experience.
The broader economic landscape remains uncertain. Global economic growth projections for the next five years stand at 3.1%, the lowest in 16 years.
However, strong labor markets support Santander’s asset quality, particularly in Spain, where GDP is expected to grow by 2.5% in 2025, outpacing the European average.
Employment in Spain is projected to reach record levels, with nearly 22 million people registered in the Social Security system.
Shareholders are set to approve a final cash dividend of 11 euro cents per share from 2024 results, payable from May 2.
This brings the total cash dividend for the year to 21 cents per share, a 19% increase from the previous year.
In addition, two share buyback programs totaling €3.1 billion from 2024 earnings are in progress.
The first has been completed, while the second is 43% finished. Since November 2021, Santander has repurchased about 15% of its outstanding shares.
Shareholder remuneration for 2024 results is expected to reach approximately €6.3 billion.
Shareholders will also vote on re-electing key board members, including Botín, CEO Héctor Grisi, and vice chair Glenn Hutchins, along with other executive and non-executive directors.
They will also decide on matters related to annual accounts and executive remuneration.
Santander’s leadership remains confident in the bank’s ability to navigate current economic challenges and sustain growth. "It is time to take action and make the changes that lead to stronger and better growth," Botín says, urging Europe to seize the opportunity to strengthen its position in the global economy.