Santander Surpasses Expectations, Announces Buyback Plan
Spanish bank Santander has reported a record-breaking profit of €12.57 billion for 2024, exceeding analyst expectations and sparking a surge in share prices. The bank’s net income for the fourth quarter rose 11% year-on-year to €3.27 billion, driven by robust lending income and an 8% increase in net interest income. Santander is now planning to buy back €10 billion of its own shares in the coming years, thanks to its strong financial position.
Santander’s Success Driven by Scale, Diversification, and Efficiency Gains
Ana Botín, executive chair of Banco Santander, hailed the bank’s new era of value creation, citing its scale, diversification, and transformation as key drivers of profitability. Despite expectations of falling revenue from loans in 2025 due to rate cuts, Santander is confident of maintaining stable revenue and increasing profitability once again. The bank is forecasting “mid-high single digit growth” in net fee income and a return on tangible equity (RoTE) above 17% for 2025.
Crédit Agricole Also Exceeds Expectations, Beats Analysts’ Estimates
French lender Crédit Agricole SA (CA) has joined Santander in reporting record-breaking earnings, with fourth-quarter net income rising 27% year-on-year to €1.69 billion. Revenue for the quarter increased 17.4% year-on-year to €7.09 billion, driven by success in asset management and insurance units, as well as corporate and investment banking. CA’s chairman, Dominique Lefebvre, praised the bank’s strong results, highlighting its ability to support customers in a global and loyal relationship over the long term.
CA’s Dealings with Banco BPM Raise Eyebrows
Crédit Agricole has also revealed its plans to raise its stake in Italian lender Banco BPM from 9.9% to 15.1%, further solidifying its position as the bank’s largest shareholder. CA’s dealings with Banco BPM come as the larger Italian lender UniCredit seeks to secure more ownership of the bank. The move is part of CA’s strategic plan to support its customers and partners in a rapidly evolving financial landscape.
European Banks Thrive Amid Economic Uncertainty
The impressive earnings reports from Santander and Crédit Agricole come as a welcome respite for European banks, which have faced significant challenges in recent years. While the global economic landscape remains uncertain, these banks are demonstrating their resilience and adaptability, with Santander’s buyback plan and CA’s deal-making activities reflecting their confidence in the future.
SOURCE: Ref Image from Reuters
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