Banco Santander has proudly announced its record-breaking financial results for 2024, posting net profits of €12.574 billion, representing a remarkable 14% increase compared to the previous year. This achievement marks the third consecutive year of record profits for the financial giant, solidifying its position as one of Europe's leading banks.
Following the release of these results, shares of Banco Santander surged, climbing over 8% on the IBEX 35, with shares reaching 5.40 euros. Such positive market reactions were bolstered by the bank's announcement of a generous share buyback program, set to commence on February 6, 2025, amounting to €10 billion across 2025 and 2026. This initiative is aimed at rewarding shareholders significantly.
Ana Botín, the bank's president, emphasized the potential for continuing growth, stating, "Thanks to our strong capital generation, we expect to reward shareholders with €10 billion in buybacks corresponding to 2025 and 2026 and with excess capital, additional to the ordinary cash dividend distribution." This forward-looking approach reflects the bank's confidence and plans to leverage its solid capital base.
The bank demonstrated notable resilience and performance across all its business segments. Key contributions to profits came from major countries such as Spain, Brazil, and Mexico. Specifically, Spain contributed €3.762 billion, accounting for about 30% of the total profits, followed by €2.422 billion from Brazil and €1.671 billion from Mexico. Alongside the increase in profit, the net interest income saw significant growth, up 7.9%, reaching €46.668 billion, fueled by the bank's expansive customer base, which increased to 173 million.
Analysts' reactions were overwhelmingly positive, with many firms adjusting their stock recommendations. Jefferies, for example, advised investors to "buy" after reviewing the new guidance which they believe supports profit forecasts and share buybacks. Their analysis suggested potential additional share buybacks could add between €1 billion and €1.5 billion on top of expected earnings, showcasing the strong financial outlook for the bank.
The analysts at Renta 4 acknowledged the bank's impressive performance, maintaining their recommendation of "overweight" for its stock. They noted, "The results demonstrate record net profit for three consecutive years, with RoTE at 16.3% and solid guidance for 2025," indicative of the bank's healthy capital and strategic direction.
Also noteworthy was Santander's commitment to maintain its dividend policy, announcing plans to allocate approximately €6.3 billion for dividends and stock purchases following the confirmed 50% payout ratio for the final cash dividend linked to 2024 results. This generous distribution is well above market expectations and will provide shareholders with attractive returns.
Despite the challenges inherent to the global banking sector, the outlook for Banco Santander looks bright. With plans to pursue ambitious goals for 2025, including projected revenues exceeding €62 billion and continuous improvements across all divisions, the bank is well-positioned to navigate the future economic environment effectively.
With the significant rise of its share price and strong market confidence, Banco Santander's stock is on track for recovery, aided by the positive financial metrics and strategic initiatives. The bank's commitment to growing its financial performance, nurturing its investor relationships, and executing its buyback program reflects its holistic approach to long-term value generation for all stakeholders.
Consequently, this latest announcement consolidates Banco Santander's standing not just as a major player within Europe, but as a banking institution manifesting resilience, adaptability, and commitment to rewarding its investors.