In the first half of 2018, IBOS member Santander has achieved an attributable profit of €3,752 million, an increase of 4%, after €300 million integration charge. Excluding this charge, Santander’s underlying profit increased by 25% in constant euros to €4,052 million.
Santander reports that the focus on customer loyalty helped increase both net interest income and fee income by 10% and 13%, respectively, year-on-year (YoY) in constant euros. Additionally, credit quality improved further during the quarter, with Santander Group’s non-performing loan (NPL) ratio now at 3.92%.
The majority of the Group’s customers are using its digital services, which increased by 23% to 28.3 million YoY. In total, 47% of active customers are now regularly using digital services. The Group also remains one of the most profitable and efficient banks among its peers, with an underlying RoTE of 12.2%, and a cost-to-income ratio of 47.5%.
Santander’s Q2 2018 was impacted by a charge of €300 million, primarily relating to planned integration costs for Banco Popular. As a result, underlying profit for the quarter (i.e. excluding the one-off item) was up 28% YoY in constant euros. Santander’s CET1 ratio was 10.80% as of 30 June 2018, and the Group remains on track to meet its capital target and grow earnings per share by double digits in 2018.
In April 2018, the bank launched Santander One Pay FX in Brazil, Poland, Spain and UK, the first international payments service to be launched across multiple markets using blockchain-based technology. One Pay FX makes it possible for customers to complete international transfers instantly in many cases or by the next day.
Ongoing investment in commercial transformation and digitalisation led to an increase in operating expenses of 3% (+12% in constant euros), however, the cost-to-income ratio, a key measure of efficiency, remained among the lowest of our peer group at 47.5% (compared to a peer average of over 65%).
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