Banco Santander posts record profits of €9.6 billion for 2022, up 18% from 2021

Spanish banking giant Banco Santander reported on Thursday record profits for 2022, as higher interest rates boosted its earnings and offset the costs from soaring inflation.

The bank posted an annual net profit of €9.6 billion, up 18% from 2021 and higher than forecast by analysts.

‘2022 was another strong year for Santander as we made further progress in growing our customer base profitably, while maintaining a rock-solid balance sheet,’ Banco Santander executive chair Ana Botin said.

‘The competitive advantage gained from our in-market and global scale, combined with our diversification and customer focus, has allowed us to grow our customer base by 7 million in the year while achieving double digit growth in revenues and profit, with capital in line with our target,’ she said.

Central banks have hiked interest rates worldwide in an effort to tame inflation, which jumped after economies emerged from Covid restrictions, and surged higher still after Russia invaded Ukraine last February.

Botin said central banks and governments are expected to continue to focuson bringing down inflation this year.

‘Our team has proven experience in navigating these conditions successfullyand we expect revenue growth will continue to offset cost inflation pressures and the anticipated increase in cost of risk,’ she said.

The bank, which has a strong presence in Europe and Latin America, now has 160 million clients worldwide.

Its net interest income, the equivalent of its revenue, rose 16% to reach €38.6 billion.

The bank confirmed that shareholders would receive a payout of around 40% of the group’s underlying profit, divided equally between cash dividends and share buybacks.

Spain’s left-leaning coalition government plans to impose a temporary windfall tax on big banks in 2023 and 2024 to finance measures aimed at helping households cope with higher prices. The measure is expected to add €1.5 billion to the state budget this year and a similar amount in 2024. ALSO READ: Spain seeks 4.8% windfall tax on banks, 1.2% on energy firms to beat cost of living crisis.