Banco Santander Misses Q2 Profit Forecast by Narrow Margin, Reaffirms 2025 Outlook

• Q2 pre-tax profit rose 10% to €5.12B, slightly below market expectations.

• Net attributable profit increased 7% to €3.43B, supported by solid income growth.

• Operating income and total revenue rose 4% and 5%, respectively, meeting forecasts.

• CET1 ratio at 12.98%, just shy of consensus but above internal target midpoint.

• 2025 financial targets reaffirmed, including €62B in revenue and major share buybacks.

• €1.7B new share repurchase plan announced, equal to ~25% of H1 profits.

Banco Santander (BME:SAN) reported a 10% year-on-year increase in pre-tax profit for the second quarter, reaching €5.12 billion. Despite the gain, the figure came in slightly below analysts’ expectations, missing consensus by about 1%, and prompting a nearly 2% drop in the bank’s shares on the Madrid exchange.

The bank’s net attributable profit rose 7% to €3.43 billion, supported by strong income generation and resilient operating performance.

Core Revenues and Capital Remain Solid

Santander’s net operating income rose 4% to €9.10 billion, while total income increased by 5% to €15.47 billion — both results were broadly in line with market forecasts.

The bank’s fully-loaded CET1 capital ratio improved slightly to 12.98%, up 12 basis points from the previous quarter. While this was just below the 13.12% consensus estimate, analysts at RBC Capital Markets noted it remains comfortably above the group’s 12–13% target range midpoint.

RBC analysts also highlighted that future earnings calls will likely focus on how Santander plans to capitalize on its strategic investments, given the bank is progressing ahead of previous guidance.

Financial Targets and Buyback Plans on Track

Looking ahead, Banco Santander confirmed its 2025 financial objectives, including:

• Generating around €62 billion in total revenue

• Achieving mid- to high-single-digit growth in net fee income (constant currency)

• Returning at least €10 billion to shareholders through share buybacks from 2025–2026 earnings and excess capital — ahead of the originally planned timeline.

As part of this capital return strategy, the bank also unveiled a new €1.7 billion share buyback program, representing approximately 25% of its first-half profits.