Santander’s profits increase by 11% due to rising interest rates

Spanish bank Santander reported a remarkable 11 per cent increase in quarterly profits, defying the trend of struggling European rivals. The bank’s success was attributed to a 16 per cent surge in net interest income, fueled by its extensive global customer base.

With a profit of €2.9bn in the first quarter and total income reaching €15.4bn, Santander achieved a record quarterly result for the group. Executive chair Ana Botin emphasized the importance of diversification in delivering such impressive financial performance.

At the annual general meeting in March, Santander announced plans to return €6bn to shareholders through dividends and buybacks this year. The bank’s shares have soared nearly 50 per cent over the past year, reaching a six-year high.

Santander, serving 166 million customers worldwide, unveiled its new operating model based on business divisions rather than geographical regions. The retail unit, contributing over half of the bank’s income, saw a 13 per cent revenue increase in the first quarter.

Customer activity and rising interest rates were key drivers of income growth across various business segments. The bank’s retail business reported a 17 per cent rise in net interest income, while wealth management and consumer segments saw increases of 26 and 25 per cent, respectively.

Despite facing the burden of the Spanish windfall tax on bank profits, costing €335mn this year, Santander’s financial outlook remains strong. Spanish rival CaixaBank also reported positive first-quarter results, with net profit reaching €1bn, marking a 17.5 per cent increase from the previous year.