Banco Santander NYSE: SAN opened its first-quarter 2026 results presentation by highlighting that it is the first quarter reported after the disposal of Santander Polska and under a new group reporting structure announced in February. Raul said underlying metrics exclude Poland’s impacts in both 2025 and 2026 to ensure comparability, and that the Poland impact is now shown in non-recurring items.
Record profit and stronger returns
CEO Héctor Grisi described the period as “another excellent quarter,” saying profit reached a new record of EUR 3.6 billion, up 12% versus Q1 2025. He said results were supported by all global businesses “even after a EUR 210 million motor finance provision in U.K.”
Grisi said the group’s “efficiency improving by 2 percentage points” and underlying return on tangible equity (ROTE) rising to 15.2%. He also pointed to a “very solid” balance sheet, with the CET1 capital ratio reaching an “all-time high” of 14.4%. He added that underlying ROTCE adjusted for excess capital “would be around 16.5%.”
On shareholder returns, Grisi said value creation remained strong, with dividend per share up 19%. He also said that including the buyback underway, Santander has returned EUR 7 billion to shareholders toward its commitment to distribute at least EUR 10 billion for 2025 and 2026.
Revenue growth, cost discipline, and credit quality
Grisi said revenue rose 6% in constant euros, with net interest income (NII) and fees up 5% and 7%, respectively, together representing around 95% of total income. He attributed performance to an increase of 8 million customers year-over-year and growing contributions from “network benefits” across global businesses.
CFO José confirmed total revenue increased 6% year-over-year to EUR 15 billion, which he said is in line with the group’s 2026 target. He noted the gap between current-euro and constant-euro growth was about two percentage points this quarter, “mainly due to the depreciation of the US dollar.” He said profit grew 14% year-over-year in constant euros.
On costs, José said the efficiency ratio improved to 42.8%, supported by revenue growth and costs declining 1% year-over-year in constant euros (or down 4% “in real terms”). He said retail and Openbank—together representing about 75% of the cost base—reduced costs by 3% while revenue grew 3%.
Credit quality metrics, José said, remained solid across the group, though reported figures were impacted by Argentina. He said excluding Argentina, provisions declined 2% year-over-year. He added that cost of risk improved 2 basis points and the NPL ratio improved 5 basis points to 2.94%, with a stable coverage ratio.
Business-line highlights: Retail, Openbank, CIB, Wealth, and Payments
Management emphasized broad-based contributions from global businesses. Grisi said retail’s underlying profit grew 9% year-over-year, driven by operational leverage, with costs down 5% and “good revenue growth” across NII and fees. He also said cost of risk improved to 1.07% excluding Argentina.
Openbank was presented as a key driver of scaling and funding optimization. Grisi said Openbank’s U.S. digital bank gathered EUR 11 billion in deposits since launch, delivering about EUR 150 million in net funding cost savings annually. Later in Q&A, José said the group has merged Santander Consumer Finance with Openbank and described Openbank deposits as EUR 82 billion in Europe, while “consumer U.S., which is Openbank U.S.” has about EUR 50–51 billion in deposits.
In Corporate & Investment Banking (CIB), Grisi said profit was up 16% year-over-year and ROT reached 21%. José said CIB revenue rose 15% driven by client activity “especially in global markets.” In response to questions about sustainability, Grisi linked growth to integrated coverage, an expectation of a 2026–2027 M&A cycle, and client hedging activity, while noting the outlook could change if macro conditions deteriorate significantly.
Wealth profit rose 11%, according to Grisi, who said customer assets and liabilities grew 11% year-over-year. He also highlighted distribution fees up 7%, and in Q&A described insurance as a major long-term opportunity for the group.
Payments, including Getnet, posted the largest growth rates. Grisi said revenue increased 20% and profit was up “four-fold” year-over-year. José added Getnet’s total payment volumes rose 11%.
Capital, acquisitions, and key regional discussions in Q&A
José said CET1 rose 90 basis points in the quarter to 14.4%. He cited 29 basis points of net organic capital generation, 20 basis points of benefit from risk transfer initiatives offsetting RWA growth, and a 39 basis point CET1 contribution from the Poland disposal “net of the EUR 3.2 billion additional share buyback.” He also said regulatory and model updates added 20 basis points.
On regulatory impacts, José told analysts that the 20 basis point “regulatory tailwind” came from an updated model for small SMEs in Spain and described it as structural. He said Santander expects additional model-related headwinds of “somewhere between 10–20 basis points” over the next three quarters, and reiterated confidence the bank will end the year above its 12.8% target.
Management discussed the expected capital impact of the TSB and Webster acquisitions, which José estimated at around 210 basis points, “phased across the second and the third quarter.” Grisi said Santander is focused on integrating TSB and Webster and does not plan any “significant inorganic transaction” for the next two years. On timing, Grisi said TSB had been authorized and Santander would enter a Part VII process, with “numbers” coming in the second quarter, while Webster was “for sure in the second half of the year.”
On Argentina, Grisi said the group has stopped consumer lending due to very high real rates and is focusing on corporate lending linked to dollars. He said Argentina’s cost of risk reached 9.77% and Santander expects it to normalize to around 7% as conditions improve.
In Brazil, Grisi said the loan book is about 10% of the group total and cited expectations for 2026 GDP growth around 1.5%, a resilient labor market, and the start of an easing cycle in March 2026. He said Santander assumes Selic ends 2026 around 13% and noted that every 100 basis points in Selic improves NII by about EUR 60 million. He also said cost of risk in Brazil was around 4.1%, lifted by “some single names,” but expected to be stable for the rest of the year.
In the U.K., Grisi attributed cost reductions to “One Transformation,” including simplification and automation, and said the trend should continue even ahead of TSB. On the motor finance issue, he said Santander booked an additional EUR 207 million pre-tax provision in the quarter and said the stock provision stands at EUR 725 million (GBP 633 million), adding, “We believe we’re done” given current expectations. José also said the structural hedge in the U.K. was around GBP 101 billion with 2.5 years duration and yield of 3.0%, and that lengthening the hedge should contribute more meaningfully to NII in coming quarters as reinvestment yields are around 4%.
Grisi closed by saying the group had a “great start of the year” and reiterated guidance, while maintaining Santander’s longer-term “North Star” of delivering ROTE above 20% by 2028 through execution, capital discipline, and scaling global businesses.
About Banco Santander NYSE: SAN
Banco Santander, SA NYSE: SAN is a Spanish multinational banking group headquartered in Santander, Spain. Founded in 1857, the bank has grown from a regional institution into one of Europe's largest banking groups, operating a diversified financial services platform that serves retail, small and medium-sized enterprises, and large corporate clients. Santander is publicly listed in Spain and maintains American Depositary Receipts on the New York Stock Exchange under the ticker SAN.
The group's core activities include retail and commercial banking—offering deposit accounts, payment services, mortgages, personal and auto loans, and small business financing—alongside corporate and investment banking services for larger institutional clients.
Featured Articles
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Banco Santander, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Banco Santander wasn't on the list.
While Banco Santander currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Wondering where to start (or end) with AI stocks? These 10 simple stocks can help investors build long-term wealth as artificial intelligence continues to grow into the future.
Get This Free Report
