underlying profit before tax was €15.3 billion (+65% in constant euros)1,a record high for the group
Total customers increased by five million in the year to 153 million supporting a 7% increase in revenues (in constant euros)
Madrid, 2 February 2022 –
The group earned €46.4 billion in total revenue in 2021, up 7% year-on-year in constant euros, driven by strong growth in customers (+5 million) and activity across the group’s regions and businesses.
• Net operating income increased by 9% year-on-year in constant euros to €25.0 billion, as both lending (+4%) and deposits (+6%) grew strongly.
• Underlying profit in Europe and North America was more than double that of same period last year, increasing by 110% and 109% respectively in constant euros, while in South America underlying profit increased by 24%.
• The strong growth in digital adoption (76% of all transactions in core banks were through digital channels in 2021 versus 55% in 2019) helped drive improvements in efficiency and customer satisfaction, with the group’s cost-to-income ratio among the best of its peer group at 46.2%, and eight of the group’s markets achieving a
top-three net promoter score (NPS).
• The bank’s fintech subsidiaries showed significant growth, with Openbank reaching 1.7 million customers across five markets (+80% year-on-year growth outside Spain), doubling the number of granted mortgages and achieving the highest NPS in Spain. PagoNxt increased revenues by 47% in constant euros in 2021 and expects to grow revenues by 50% in 2022.
• Provisions were down 37% in constant euros as the group released c.€750 million of the overlay provisions made in 2020. The cost of credit improved further to 0.77% compared to 1.28% in 2020.
• These results led to an underlying return on tangible equity (RoTE) of 12.7%, above cost of capital, and a tangible net asset value (TNAV) per share of €4.12, up €0.33 in the year.
• The group’s fully-loaded CET1 capital was 12.12%. The bank aims to maintain a fully-loaded CET1 of around 12% going forward.
• In September, the bank announced an interim distribution from 2021 earnings of c.€1.7 billion, split between a cash dividend of €4.85 cents per share and a €841 million share buyback. This interim distribution is now complete and a final shareholder remuneration from 2021 earnings will be announced in the coming weeks.
• In 2022, the bank is targeting mid-single digit growth in revenues, a cost-to-income ratio of around 45%, a RoTE above 13% and a payout ratio of 40%2 of underlying profit.
Ana Botín, Banco Santander executive chairman, said:
“Our 2021 results demonstrate once again the value of our scale and presence across both developed and developing markets, with attributable profit 25% higher than pre-covid levels in 2019.
Across all our regions and businesses, we are delivering solid and consistent top-line growth, with the US and UK as standout performers in 2021, and Brazil and Chile the most profitable banks in their peer group. These results are a credit to the hard work of all our team members.
The group achieved a record profit before tax of €15.3 billion thanks to disciplined capital allocation, prudent risk management, and further improvements in our efficiency and balance sheet strength, combined with a material increase in customer activity during the year.
Our relentless focus and progress on improving the customer experience, is allowing us to serve more customers in more ways, and we have added five million new customers in the last 12 months alone. Through PagoNxt and Digital Consumer Bank we expect to deliver group connectivity, leveraging our global scale, as well as faster growth in customers in the coming years.
We are focused on delivering profitable growth in a responsible way, and ESG matters have become even more material for our stakeholders. This is why we have focused our efforts on continuing to support our customers on their transition to a green economy, supporting financial inclusion and empowerment, and ensuring we do things the right way with a long-term vision while also delivering results over the near-term.
We are on track to meet our medium-term targets set out in 2019, despite the impact of the pandemic, and aim to achieve a RoTE of over 13%, cost-to-income ratio of around 45% and fully-loaded CET1 of around 12% in 2022.
Shareholder distributions are an important focus for Santander and 2021 was the first year that Santander undertook a share buyback as part of our total distributions to shareholders. We aim to maintain a payout ratio of 40%3 of underlying profit in 2022 through both cash dividends and share buybacks.”
