The return on equity rose to 27.2%, above that recorded in the same period last year (19.7%).
At the end of March 2024, Santander Totta SGPS obtained a net profit of 294.4 million euros, which compares with 185.9 million at the end of the same period in 2023, representing an increase of 58.4%.
The return on equity rose to 27.2%, above that recorded in the same period last year (19.7%).
The financial margin increased by 64.4% in one year to 440.6 million euros. Commissions fell -0.7% to 120.9 million euros. Results from financial operations registered a reduction of 47.8% compared to the same period in 2023, standing at 4.3 million euros. Which caused banking revenue to grow by +39.1% to 567.3 million euros.
Due to inflation, operating costs rose +1.1% to 129 million euros. The bank details that “the commercial and digital transformation that it continues to carry out has allowed
maintain cost growth below inflation, especially in services. Personnel costs rose 3.1%, to 70.2 million euros, and general and administrative expenses grew 2.4%, to 49.3 million euros.”
As a result, the efficiency ratio (cost-to-income) fell 8.6 percentage points to 22.7%.
“The net result achieved was 294.4 million euros. We maintained a solid quality of our credit portfolio and adequate capital generation, which allows us to continue investing in improving the quality of service and customer experience”, says the CEO of Santander Totta, Pedro Castro e Almeida, in a statement.
The bank details in the income statement that the evolution of net interest income revenue almost entirely reflects the evolution of market interest rates, which allowed growth compared to the same period last year.
But “the quarterly dynamics have already reflected, on the one hand, the effects of the increase in the remuneration of the deposit base, and, on the other, the inversion of the yield curve associated with expectations that the ECB may begin a new monetary cycle in the coming quarters (Euribor 6 and 12 month interest rates reached their maximum in September/October 2023)”, says the financial institution.
“Additionally, a very competitive competitive environment continued to be observed in a context of high liquidity in the banking system, with the consequent downward pressure on credit spreads”, he adds.
Regarding the quality of the asset portfolio, Santander Totta states “despite the rapid and pronounced rise in interest rates, in the years 2022 and 2023, the quality of the credit portfolio was not affected, benefiting to a large extent from low unemployment , as well as proactive action by customers themselves in managing their credits”.
As a result, the NPE (non-performing exposure) ratio, or non-performing loans, stood at 1.8%, a reduction of 0.3 pp compared to the same period in 2023. Impairment coverage is 86.2% .
However, there was an increase in the cost of credit risk compared to the same period of the previous year, standing at 0.14%.
The net impairment of financial assets at amortized cost, in the amount of 5.9 million euros, recorded a decrease of 65.3% compared to the same period last year.
Net provisions and other results amounted to 3.3 million euros, and the result before taxes and non-controlling interests amounted to 429.1 million euros, which represents a growth of 59.2% compared to the same period 2023.
The bank revealed that its base of active customers and digital customers continued to grow, by an additional 57 thousand and 60 thousand, respectively, compared to the same period last year, leveraged on its digital and commercial transformation. Additionally, it continued to grow in terms of customer transactions, with more than 1 million daily purchase and payment transactions (+13.0%).
On balance, credit to customers amounted to 46.6 billion euros (+9.6% year-on-year). However, mortgage credit fell by 1.5% compared to the same period last year, while consumer credit remained practically unchanged, benefiting from a progressive recovery in new credit volumes.
Customer resources amounted to 43.8 billion euros, which represents a reduction of 2.3% compared to the same period in 2023, largely explained by the behavior of deposits, which fell 4.7% to 35.5 thousand million euros, but this was offset by the diversification of savings into off-balance sheet resources, which grew 10.1% in this period.
In terms of capital, the CET1 ratio (fully implemented) stood at 13.6% (+0.2 pp compared to March 2023).
