Banco Santander, S.A.

Santander said quarterly profit was a record EUR 3.8 billion and H1 2026 was its best half ever. Underlying profit grew 14% year-on-year, revenue rose 6% in constant euro, NII increased 6%, and fees increased 7%; underlying RoTE was 15.6%, CET1 was 14% including TSB, efficiency improved to 42.8%, and TNAV plus cash dividend per share grew 19%. The company also cited EUR 245 million of gross motor finance impact in H1, mostly booked in Q1, and said profit guidance remains above EUR 14.1 billion in 2026 excluding M&A. Management said it expects the group to stay in line to slightly ahead of plan, with fees growing faster than NII, cost of risk around 1.15%, and CET1 ending the year around the 12.8% target after further regulatory impacts and the Webster deal.

Héctor Grisi framed the quarter as a validation of Santander’s strategy and ONE Transformation, repeatedly emphasizing record profitability, strong customer growth, and operating leverage. He highlighted that the model is producing more revenue, lower cost, and better returns across retail, CIB, wealth, payments, and Openbank, while also scaling TSB and Webster. His tone was confident and upbeat, but he also stressed discipline on capital, profitability, and execution rather than chasing volume for its own sake.

José García Cantera focused on the mechanics behind the results: revenue up 6%, costs down 1% year-on-year despite TSB, and an efficiency ratio improved to 42.8%. He said the main drags were Argentina provisions and the EUR 245 million motor finance charge in Openbank Europe, while excluding Argentina provisions were broadly stable and credit quality remained very solid. On capital, he said CET1 was 14% after a 55 bps TSB hit, organic capital generation was 27 bps in the quarter, and the group still expects to end the year in line with its 12.8% target while staying near the upper end of its 12%-13% operating range.

Analysts focused on Spain NII sustainability, Brazil growth and credit risk, Mexico’s outlook, the U.K./TSB integration, capital headwinds, and whether higher rates were changing the NII trajectory. Management said Spain’s first-half NII strength should persist into H2, with ALCO at EUR 60 billion, average yield of 3.3%, and sensitivity kept around EUR 450 million per 100 bps; it also said the U.K. market is competitive but TSB’s integration is on track, with at least EUR 400 million of synergies and EUR 250 million of non-recurring TSB restructuring items already recognized. On Brazil, management blamed weaker revenue largely on portfolio mix and one-off IT/Gravity-related costs, said cost of risk should stay around 4.2%, and said the worst was probably over; on capital, it said model-update effects were not the same as direct supervisory actions and still expects 15-20 bps of negative regulatory impact in H2.