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1. Company Snapshot

1.a. Company Description

Banco Santander, S.A. provides various retail and commercial banking products and services to individuals, small and medium-sized enterprises, and large companies worldwide.It offers demand and time deposits, and current and savings accounts; mortgages, consumer finance, syndicated corporate loans, structured financing, cash management, export and agency finance, trade and working capital solutions, and corporate finance; and insurance products.The company also provides cash, asset, and wealth management; and private banking services.


In addition, it is involved in the corporate banking; treasury, risk hedging, foreign trade, confirming, custody, and investment banking activities.The company operates through a network of 9,879 branches.The company was formerly known as Banco Santander Central Hispano S.A. and changed its name to Banco Santander, S.A. in June 2007.


Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.

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1.b. Last Insights on SAN

Banco Santander's recent performance has been driven by improved profit margins, with net profit margins reaching 25.3%, up from 22.9% last year. The company's Q3 2025 earnings call highlighted record profits of EUR3.5 billion, with strong revenue growth and strategic plans for shareholder returns. RBC Capital lifted its price target to EUR 8.50, citing high-quality earnings and forecasts for further revenue and profit growth. The company's valuation remains attractive, trading below estimated fair value with a Price-To-Earnings ratio aligning with peer averages.

1.c. Company Highlights

2. Santander's Q3 2025 Earnings: Strong Revenue Growth and Improving Profitability

Santander's third-quarter 2025 financial performance was impressive, with revenues growing 4% in constant euros, driven by a 2% increase in net interest income (NII) and an 8% rise in fees, resulting in a new record quarter. The company's EPS came in at €0.2219, beating analyst estimates of €0.2197. The strong top-line growth, combined with a 1% decrease in expenses, led to a significant improvement in profitability, with the post-AT1 return on tangible equity (RoTE) reaching 16.1%, up nearly 1 percentage point year-on-year.

Publication Date: Oct -30

📋 Highlights
  • Record Quarterly Profit: EUR 3.5 billion, driven by 4% revenue growth and 70bps RoTE increase to 16.1%
  • Customer Base Expansion: 178 million customers (up 7 million YoY), fueling global revenue gains
  • Efficiency Gains: 1% cost decline in current euros, 41.3% efficiency ratio (best in 15 years)
  • Capital Strength: CET1 ratio at 13.1% (above 12-13% target), 56bps capital generation from profit
  • Fee Income Breakthrough: Net fees rose 8% (new record), outperforming inflation and cost targets

Revenue Growth Drivers

The revenue growth was driven by a combination of factors, including a 2% increase in NII, driven by active asset and liability pricing management, and an 8% rise in fees, which achieved a new record quarter. According to José Antonio García Cantera, the company's CFO, "We're doing a great job in managing the cost of deposits, growing volumes at a lower cost, and hedging decisions."

Valuation Metrics

To understand what's priced into Santander's stock, we can look at some key valuation metrics. The company's Price-to-Tangible Book Value (P/TBV) ratio is around 1.39, indicating that the stock is trading at a reasonable valuation relative to its book value. The dividend yield is 1.89%, providing a relatively stable source of return for investors.

Credit Quality and Risk Management

Santander's credit quality continues to improve, with the non-performing loan (NPL) ratio stable at 2.92% and the cost of risk improving to 1.13%. The company's prudent risk management approach is evident in its robust credit quality trends, with a low exposure to private markets (less than 1% of group lending exposure).

Outlook and Guidance

Santander expects to maintain good trends supported by its focus on profitable growth, with a stable cost of risk going forward, backed by stable labor markets. The company is on track to achieve its RoTE target of around 16.5% in 2025, driven by higher fees, seasonality, and momentum from the ONE Transformation program. The guidance for 2025 is reiterated, with expectations of stable revenue and fees growth, and a stable cost of risk.

3. NewsRoom

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Canadian Big Bank Earnings Top Expectations, Raise Dividends

Dec -04

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Canada's Big Bank Earnings Off To A Strong Start On Earnings Beat, Dividend Hike

Dec -03

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Santander sells 3.5% stake in Polish unit for $473m

Dec -03

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Canadian Banks Need Flawless Earnings To Keep The Rally Alive

Dec -02

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Santander to Sell Stake in Polish Subsidiary for Around $473 Million After Erste Group Deal

Dec -02

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Wallbox Announces an Agreement With Core Banking Partners and Major Shareholders, Advancing Into Its Next Phase With a Renewed Capital Structure

Dec -01

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Poland Buy Now Pay Later Business Report 2025: A $2.8 Billion Market by 2030 Featuring Twisto, Klarna, PayPo, Santander, Allegro, mBank, BNP Paribas, ING Bank Slaski, Alior Bank, and Revolut

Dec -01

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A Major European Bank Opened Crypto Trading to Everyday Customers—Here's Why That Matters for Bitcoin's Next Move

Dec -01

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.40%)

6. Segments

Retail & Commercial Banking

Expected Growth: 2.7%

Higher than global average due to increasing demand for digital banking services and expanding customer base in emerging markets. The growth in consumer lending and deposits drives this segment's revenue.

Corporate & Investment Banking

Expected Growth: 3.0%

Growth is driven by increasing demand for corporate financing, mergers and acquisitions, and trading activities. This segment benefits from global economic expansion and market recovery.

Digital Consumer Bank

Expected Growth: 4.2%

High growth is driven by the increasing adoption of digital banking services. This segment benefits from technological advancements and changing consumer behavior.

Payments-Pago Nxt

Expected Growth: 3.5%

Growth is driven by the increasing demand for digital payment solutions. As more businesses and consumers move to online transactions, this segment is poised for significant revenue growth.

Wealth Management & Insurance

Expected Growth: 2.5%

Moderate growth is driven by the increasing demand for wealth management services and insurance products. This segment benefits from the growing wealth of individuals and the need for financial planning.

Corporate Centre

Expected Growth: 0.0%

This segment is not directly revenue-generating and is subject to the bank's overall cost management strategies. Its growth is not directly tied to revenue but to the bank's operational efficiency.

7. Detailed Products

Retail Banking

Provides personal banking services to individuals and small businesses, including current and savings accounts, credit cards, personal loans, mortgages, and investment products.

Corporate and Investment Banking

Offers a range of financial services to corporate and institutional clients, including cash management, trade finance, and investment banking.

Global Transaction Banking

Provides cash management, trade finance, and securities services to corporate and institutional clients.

Wealth Management and Insurance

Offers investment and insurance products to individuals and businesses, including life insurance, pension plans, and investment funds.

Digital Banking

Provides online and mobile banking services to customers, allowing them to manage their accounts, make payments, and access financial information.

Cards and Payments

Issues credit and debit cards, and provides payment processing services to merchants.

Mortgages and Consumer Finance

Offers mortgage loans and consumer finance products, such as personal loans and credit cards, to individuals.

8. Banco Santander, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Banco Santander, S.A. operates in a highly regulated industry, making it difficult for substitutes to emerge. However, the rise of fintech companies and digital payment systems poses a moderate threat to the company's services.

Bargaining Power Of Customers

Individual customers have limited bargaining power due to the large customer base of Banco Santander, S.A. However, large corporate clients may have some negotiating power.

Bargaining Power Of Suppliers

Banco Santander, S.A. has a diverse supplier base, reducing the bargaining power of individual suppliers. The company's large scale of operations also gives it negotiating power over suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory requirements and capital requirements, making it difficult for new entrants to join the market.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Banco Santander, S.A. faces intense competition from other large banks and fintech companies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 80.24%
Debt Cost 10.79%
Equity Weight 19.76%
Equity Cost 10.79%
WACC 10.79%
Leverage 405.98%

11. Quality Control: Banco Santander, S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HSBC

A-Score: 8.0/10

Value: 7.7

Growth: 7.3

Quality: 6.3

Yield: 8.8

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
NatWest

A-Score: 7.3/10

Value: 8.0

Growth: 5.6

Quality: 6.8

Yield: 8.1

Momentum: 9.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
ING

A-Score: 7.2/10

Value: 6.4

Growth: 5.7

Quality: 5.0

Yield: 9.4

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Barclays

A-Score: 7.1/10

Value: 9.0

Growth: 7.2

Quality: 5.8

Yield: 5.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Handelsbanken

A-Score: 6.7/10

Value: 5.5

Growth: 3.8

Quality: 5.4

Yield: 9.4

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Santander

A-Score: 6.2/10

Value: 7.1

Growth: 3.4

Quality: 6.3

Yield: 5.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.46$

Current Price

9.46$

Potential

-0.00%

Expected Cash-Flows