Santander ends year with higher-than-expected capital position

Fourth-quarter profits rose 35% to €2.78bn, coming in above analysts' expectations for around €2.5bn, or by 5% year-on-year to €2.07bn on an underlying basis.

The group’s CET1 capital ratio – a key indicator of a bank’s financial health – was 11.65%. That was an increase of 35 basis points over the quarter and higher than the 11.4%-11.5% the bank had been targeting.

It now expects the CET1 capital ratio to be close to 12% by the end of the current year.

Ana Botín, executive chairman, said: “Our 2019 results show we are successfully executing on our strategy, generating predictable, sustainable and balanced growth, with a very strong fourth quarter, confirming underlying positive trends.

“Our South American business continued to generate healthy growth; we maintain strong momentum in North America, with the US delivering among the fastest growing underlying profit of all markets; and in Europe we achieved a 10% return on tangible equity, despite a challenge interest rate environment.”

Looking forward, she continued: “We are well on track to achieve our medium-term goals and expect to deliver high single digit average earnings per share growth over the next three years, while continuing to invest for the future.”

Full-year net profit fell 16.6%, however, to €6.52bn, after a number of one-off charges taken earlier in the year, including a write-down of the value of its British arm. The Spanish bank entered the UK market in 2004 when it acquired Abbey, since rebranded Santander.

Total fourth-quarter income was flat at €12.59bn and ahead 2% for the full-year at €49.49bn.