Banco Santander (NYSE:SAN) reported record underlying profit for the first nine months of 2026, as customer growth, higher revenue and cost efficiencies helped offset credit-provision pressure in Argentina and a changing interest-rate backdrop in several markets.
Chief Executive Officer Héctor Grisi said underlying profit reached €11.2 billion through September, up 14% year over year in constant euros. The group added 17 million customers over the past 12 months, bringing its total customer base to 189 million, including customers added through the acquisitions of TSB and Webster.
The quarter was the first to include a full quarter of TSB and 40 days of Webster results following the August acquisition. Santander said its underlying metrics exclude Poland and integration costs associated with the two acquisitions to provide a clearer view of operating trends.
Revenue Growth and Efficiency Gains
Revenue increased 7% year over year, supported by an 8% rise in net interest income and a 7% increase in net fee income. Excluding merger-and-acquisition effects, revenue rose 5%, which Chief Financial Officer José García Cantera said kept the bank on track to meet its mid-single-digit revenue-growth target.
Costs were stable despite the inclusion of TSB and Webster. Excluding those acquisitions, costs declined, reflecting the company’s ONE Transformation program, which focuses on simplification, automation and global technology platforms. Santander’s efficiency ratio improved to 42.6%, its best level in 17 years, while net operating income rose 12%.
Grisi said the transformation has reduced cost per active customer and supported deeper client relationships. Fees per active customer rose 2%, while retail fees increased 8% and the cost per active customer declined 5%.
- Underlying return on tangible equity, or RoTE, rose to 16%.
- Underlying earnings per share increased 21%.
- Tangible net asset value plus cash dividend per share increased 11%, including the initial impact of Webster.
- The CET1 capital ratio stood at 12.7% after absorbing a 147-basis-point impact from the Webster acquisition.
The bank said it generated 59 basis points of capital from profit during the quarter and nearly 90 basis points year to date. Management expects to end the year above its 12.8% CET1 target, despite expected fourth-quarter supervisory charges of roughly 5 basis points and an annual operational-risk charge of around 8 basis points.
Global Businesses Post Strong Results
Santander said all five global businesses contributed to revenue growth. Retail profit increased 12% year over year, supported by operating leverage and relatively stable cost of risk outside Argentina. Commercial operations in Spain and the U.K. generated 17 percentage points of operating jaws, as revenue increased and costs declined.
Openbank and mobility finance reported 13% growth in profit before tax excluding motor finance. In the U.S., Santander’s digital bank has raised around €11 billion of deposits since its launch, according to Grisi. Santander U.S. profit rose 24% in the first nine months excluding Webster, while RoTE improved by roughly two percentage points.
Corporate and investment banking profit rose 15%, with new business originated at an RoTE of about 22%. Wealth-management profit increased nearly 20%, helped by client inflows, fee growth and efficiency gains. In Payments, Ebury revenue rose 15%, its EBITDA margin reached 34%, and profit more than doubled year over year. Getnet processed about 2 billion transactions monthly and reduced cost per transaction by 39%.
Credit Quality and Brazil Outlook
Loan-loss provisions remained affected by Argentina, where the bank cited sector-wide trends. Excluding Argentina, provisions grew broadly in line with organic loan growth, and group cost of risk was broadly stable at 109 basis points. Santander’s nonperforming-loan ratio was 2.9%, with coverage at about 64%.
Management expects 2026 cost of risk of around 1.15%, improving toward 1.1% in 2027 and 2028, partly reflecting the portfolio mix after the TSB and Webster acquisitions.
Brazil remained a focus during the question-and-answer session. Grisi said the bank has been de-risking and changing the mix of its Brazilian loan book, expanding dollar-denominated commercial and CIB lending, including trade and export finance. He said the changes have weighed on near-term net interest income but should support risk performance over time.
Santander said its Brazilian 90-plus-day past-due ratio had stabilized at 4.1%, while early delinquencies improved to 3.9% in August from 4.1% in March 2025. García Cantera said the bank has reduced its Brazil interest-rate sensitivity by roughly half over six months, to about €30 million to €40 million for a 100-basis-point rate move.
Acquisition Integration and 2028 Targets
Management reiterated its plans to achieve about €400 million in TSB cost synergies. Grisi said the U.K. Part VII process is expected to conclude in the first quarter of 2027, potentially allowing the bank to migrate TSB customers to Santander platforms and products by the third quarter of 2027.
Webster contributed approximately €89 million of underlying profit during its 40 days of consolidation in the quarter. Santander said Webster adds deposits, commercial-banking scale and healthcare-related assets under management. The company expects potential U.S. funding synergies of roughly €50 million or more over time as liquidity and commercial funding are integrated.
Santander said it remains on track to exceed guidance for more than €14.1 billion in 2026 profit excluding M&A and expects to report more than €15 billion in underlying net profit including M&A. Grisi reiterated the company’s goal of generating RoTE above 20% by 2028, supported by disciplined capital allocation, transformation initiatives and the expansion of its global businesses.
About Banco Santander (NYSE:SAN)
Banco Santander, SA is a Spain-based global banking group founded in 1857 and headquartered in Santander, Spain. The company provides financial services to individuals, businesses, institutions and governments through a network spanning Europe, North America and South America.
Its principal activities include retail and commercial banking, consumer finance, corporate and investment banking, payments, asset management and private banking. Santander offers products and services such as current and savings accounts, mortgages, personal and business loans, credit cards, insurance, investment products, cash-management services and financing for corporate clients.
The group operates through established banking businesses in markets including Spain, the United Kingdom, Portugal, Poland, Brazil, Mexico, Chile, Argentina and the United States.
