REG - Banco Santander S.A. - Santander expects higher profit&reaffirms targets

Banco Santander SAAnnouncement

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RNS Number : 4271Y  Banco Santander S.A.  27 March 2026

Botín says Santander has made a strong start to 2026, with all targets
reaffirmed and profit on track to be higher than 2025

 

 

·    Ana Botín, executive chair of Banco Santander, will say that strong
first-quarter performance supports the full-year targets: "For the first
quarter of 2026, we have continued the positive trends of previous years,
growing both our customer base and revenue, while costs are expected to
decline in constant euros year-on-year, resulting in an improvement in
efficiency of approximately 250 basis points(( 1 )). As a result, we are on
track to increase profit in 2026 year-on-year."

·    Botín will say the strength of Santander's business model means
targets for 2026-2028 can be re-affirmed despite global economic uncertainty:
"Our balanced presence across different countries and businesses significantly
mitigates risk by reducing volatility, making our results more predictable
throughout the cycle. In a volatile and uncertain world, where the
unpredictable happens every day, diversification is a distinctive advantage
for Santander."

·    Today's AGM is set to approve the capital increase enabling the
acquisition of Webster, which will accelerate Santander's transformation in
the US, and a final cash dividend from 2025 results of 12.5 euro cents per
share, payable on 5 May 2026. As a result, the total cash dividend per share
for 2025 will be 24 euro cents, up over 14% versus the previous year.

 

 

Madrid, 27 March 2026 - PRESS RELEASE

At Banco Santander's annual general meeting (AGM) today, executive chair Ana
Botín will say the group has started 2026 strongly, maintaining the positive
trends of recent years, with continued growth in customers and revenue,
improved efficiency and stable credit quality. She will note that performance
in the first months of the year reflects the strength of Santander's business
mix and the benefits of its transformation. ONE Transformation continues to
drive cost discipline and efficiency gains across the group.

 

Botín will highlight that the global environment is becoming increasingly
complex: "The world now faces the scenario of higher inflation and lower
growth, threats that become more likely with each passing day. Their severity
will depend on the duration of the conflict [in the Gulf] and its impact on
global energy supply."

 

Strong start to 2026

Botín will explain that Santander expects to continue the positive momentum
seen in recent years in the first quarter of 2026, supported by solid
commercial activity and disciplined execution: "For the first quarter of 2026,
we have continued the positive trends of previous years, growing both our
customer base and revenue, while costs are expected to decline in constant
euros year-on-year, resulting in an improvement in efficiency of approximately
250 basis points. Credit quality remains solid, with cost of credit in line
with expectations. Furthermore, we maintain strong capital generation in the
quarter, with the CET1 ratio increasing compared to December 2025 year-end. As
a result, we are on track to increase profit in 2026 year-on-year."

 

She will confirm all the group's targets for 2026, including mid-single digit
revenue growth, a reduction in costs in constant euros, stable cost of risk,
profit growth versus €14.1 billion in 2025 and a CET1 ratio of 12.8-13%,
supported by strong commercial momentum and continued execution.

 

Geographic diversification and Webster acquisition

Santander's geographic diversification is a key differentiating factor in the
current environment, particularly in a context of increasing economic
fragmentation: "Our balanced presence across different countries and
businesses significantly mitigates risk by reducing volatility, making our
results more predictable throughout the cycle."

 

Shareholders at today's AGM are set to approve the capital increase required
to deliver Santander shares for the acquisition of Webster Financial
Corporation, enabling the transaction to move forward and effectively
completing the key corporate step on Santander's side: "Following the sale of
Poland, we announced two complementary acquisitions: TSB in the UK and Webster
in the US, both fully aligned with our capital allocation hierarchy. Capital
discipline is not only about doing more, but about doing what generates the
most sustainable value over time. The combination of Santander's leadership in
consumer finance with Webster's commercial franchise and its high-quality
deposit base positions us as a well-diversified regional bank and will enable
us to capture new growth opportunities and generate synergies."

 

Strategy and outlook

Santander enters the next phase of its strategy from a position of structural
strength, having advanced the simplification and integration of its operating
model and global platforms: "We transformed Santander into a structurally
different bank: simpler, stronger and more predictable."

 

Botín will also highlight the growing impact of artificial intelligence
across the group, already enhancing customer experience, improving risk
management and increasing productivity: "Artificial Intelligence will probably
be the most profound economic and social transformation since the Industrial
Revolution. Its impact goes far beyond productivity. In banking, it enables us
to better assess risks, prevent fraud more effectively, personalize services
and expand access to credit." Artificial intelligence is already delivering
tangible impact across the group and is expected to generate more than €1
billion in business value (savings and revenue) by 2028.

 

Looking ahead, Botín will reaffirm Santander's 2026-2028 targets: "In 2028,
we aim to exceed €20 billion in profit. This will lead us to profitability,
measured in terms of RoTE, above 20%. We also have the target to exceed 210
million customers in 2028."

 

These targets are underpinned by a clear and disciplined execution plan
focused on customer growth, increasing operating leverage and continued cost
efficiencies, driven by the ongoing execution of ONE Transformation: "These
figures are the result of a plan with very concrete operational targets,
including a reduction of total costs in constant euros each year driven by ONE
Transformation."

 

Today's AGM is set to approve a final cash dividend from 2025 results of 12.5
euro cents per share, payable on 5 May 2026. As a result, the total cash
dividend per share for 2025 will be 24 euro cents, up over 14% versus the
previous year. The total shareholder remuneration against 2025 results will be
approximately €7.05 billion (around 50% of the group's attributable profit
for 2025), divided approximately equally between cash dividends and share
buyback programmes. In February, the bank started a c.€5 billion share
buyback, comprising c.€1.8 billion against the second-half of 2025 results,
as well as c.€3.2 billion linked to excess capital from the sale of 49% of
Santander Poland. Nearly half of this programme has already been executed.

 

Botín will remind shareholders that throughout the 2026-2028 plan the group
expects to maintain a 50% ordinary payout target 2 : "We intend to more than
double the cash dividend per share in 2028 compared to 2025, increasing the
share of profit allocated to cash dividends to 35% from 2027 results, and
maintain a CET1 of around 13%."

 

The chair of Santander will also emphasize that in 2025 the total tax
contribution in the countries where the bank operates was €9,553 million, of
which €2,028 million was in Spain.

 

Board appointment

Shareholders will also resolve on the appointment of Deborah Vieitas as a new
independent director, subject to regulatory approval, replacing Homaira
Akbari, who will step down following today's shareholders' meeting.

 

Deborah Vieitas, currently non-executive chair of Banco Santander Brasil,
brings extensive experience in banking and financial markets, including senior
roles at BNP Paribas and Crédit Commercial de France, as well as CEO of Caixa
Geral de Depósitos' Brazilian subsidiary. Her appointment will further
strengthen the board's international expertise and geographic diversity.

 

Ana Botín will welcome her appointment, stating: "We are delighted to welcome
Deborah to the board. Her perspective and knowledge of the Brazil market will
be a valuable addition as we continue executing our strategy." She will also
thank Homaira Akbari for her contribution to the group, saying: "I would like
to thank Homaira for her commitment and valuable contribution to Santander
over the past years. We wish her all the best in her future endeavours."

 

Important information

Non-IFRS and alternative performance measures

Banco Santander, S.A. ("Santander") cautions that this report may contain
financial information prepared according to International Financial Reporting
Standards (IFRS) and taken from our consolidated financial statements, as well
as alternative performance measures (APMs) as defined in the Guidelines on
Alternative Performance Measures issued by the European Securities and Markets
Authority (ESMA) on 5 October 2015, and other non-IFRS measures. The financial
measures referred to in this report that are considered APMs or non-IFRS
measures were calculated with information from Grupo Santander; however, they
are neither defined or detailed in the applicable financial reporting
framework nor audited or reviewed by our auditors. We use the APMs and
non-IFRS measures when planning, monitoring and evaluating our performance. We
consider them to be useful metrics for our management and investors to compare
operating performance between accounting periods.

Nonetheless, the APMs and non-IFRS measures are supplemental information;
their purpose is not to substitute the IFRS measures. Furthermore, other
companies, including some in our industry, may calculate or use APMs and
non-IFRS measures differently, thus making them less useful for comparison
purposes. APMs using environmental, social and governance labels have not been
calculated in accordance with the Taxonomy Regulation or with the indicators
for principal adverse impact in the Sustainable Finance Disclosure Regulation
(SFDR; EU Reg. 2019/2088).

For more details on APMs and non-IFRS measures, please see the 2025 Annual
Report on Form 20-F filed with the U.S. Securities and Exchange Commission
(the SEC) on 27 February 2026
(https://www.santander.com/content/dam/santander-com/es/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2026/sec-2025-annual-20-f-2025-disponible-solo-en-ingles-es.pdf)
as well as the section "Alternative performance measures" of Santander's 2025
Annual Report, which was published on 25 February 2026
(https://www.santander.com/content/dam/santander-com/en/documentos/informe-financiero-anual/2025/ifa-2025-consolidated-annual-financial-report-en.pdf).

Sustainability information

This report may contain, in addition to financial information,
sustainability-related information, including environmental, social and
governance-related metrics, statements, goals, targets, commitments and
opinions. Sustainability information is not audited nor, save as expressly
indicated under section 'Auditors' reviews' of the 2025 Annual Report,
reviewed by an external auditor. Sustainability information is prepared
following various external and internal frameworks, reporting guidelines and
measurement, collection and verification methods and practices, which may
materially differ from those applicable to financial information and are in
many cases emerging and evolving. Sustainability information is based on
various materiality thresholds, estimates, assumptions, judgments and
underlying data derived internally and from third parties. Sustainability
information is thus subject to significant measurement uncertainties, may not
be comparable to sustainability information of other companies or over time or
across periods and its use is not meant to imply that the information is fit
for any particular purpose or that it is material to us under mandatory
reporting standards. Therefore, the sustainability information is for
informational purposes only, without any liability being accepted in
connection with it except where such liability cannot be limited under
overriding provisions of applicable law.

Forward-looking statements

Santander hereby warns that this report may contain 'forward-looking
statements', as defined by the US Private Securities Litigation Reform Act of
1995. Such statements can be understood through words and expressions like
'expect', 'project', 'anticipate', 'should', 'intend', 'probability', 'risk',
'VaR', 'RoRAC', 'RoRWA', 'TNAV', 'target', 'goal', 'objective', 'estimate',
'future', 'ambition', 'aspiration', 'commitment', 'commit', 'focus', 'pledge'
and similar expressions. They include (but are not limited to) statements on
future business development, shareholder remuneration policy and non-financial
information. However, various risks, uncertainties and other important factors
may lead to developments and results that differ materially from those
anticipated, expected, projected or assumed in forward-looking statements. The
important factors below (and others mentioned in this report), as well as
other unknown or unpredictable factors, could affect our future development
and results and could lead to outcomes materially different from what our
forward-looking statements anticipate, expect, project or assume:

·      general economic or industry conditions (e.g., an economic
downturn; higher volatility in the capital markets; inflation; deflation;
changes in demographics, consumer spending, investment or saving habits; and
the effects of the wars in Ukraine and in the Middle East or other hostilities
or the outbreak of public health emergencies in the global economy) in areas
where we have significant operations or investments;

·      exposure to operational risks, including cyberattacks, data
breaches, data losses and other security incidents;

·      exposure to market risks (e.g., risks from interest rates,
foreign exchange rates, equity prices and new benchmark indices);

·      political instability in Spain, the UK, other European countries,
Latin America and the US;

·      potential losses from early loan repayment, collateral
depreciation or counterparty risk;

·      changes in monetary, fiscal and immigration policies and trade
tensions, including the imposition of tariffs and retaliatory responses;

·      legislative, regulatory or tax changes (including regulatory
capital and liquidity requirements) and greater regulation prompted by
financial crises;

·      acquisitions, integrations, divestitures and challenges arising
from deviating management's resources and attention from other strategic
opportunities and operational matters;

·      climate-related conditions, regulations, targets and weather
events;

·      uncertainty over the scope of actions that may be required by us,
governments and other to achieve goals relating to climate, environmental and
social matters, as well as the evolving nature of underlying science and
potential conflicts and inconsistencies among governmental standards and
regulations;

·      our own decisions and actions, including those affecting or
changing our practices, operations, priorities, strategies, policies or
procedures; and

·      changes affecting our access to liquidity and funding on
acceptable terms, especially due to credit spread shifts or credit rating
downgrade for the entire group or core subsidiaries.

Additionally, Webster Financial Corporation's ("Webster") and Santander's
actual results, financial condition and achievements may differ materially
from those indicated in these forward-looking statements. Important factors
that could cause Webster's and Santander's actual results, financial condition
and achievements to differ materially from those indicated in such
forward-looking statements include, in addition to those set forth in
Webster's and Santander's filings with the SEC: (1) the risk that the cost
savings, synergies and other benefits from the acquisition of Webster by
Santander (the "Transaction") may not be fully realized or may take longer
than anticipated to be realized, including as a result of changes in, or
problems arising from, general economic and market conditions, interest and
exchange rates, monetary policy, laws and regulations and their enforcement,
and the degree of competition in the geographic and business areas in which
Webster and Santander operate; (2) the failure of the closing conditions in
the Transaction agreement by and among Webster, Santander and a wholly owned
subsidiary of Webster providing for the Transaction to be satisfied, or any
unexpected delay in closing the Transaction or the occurrence of any event,
change or other circumstances that could delay the Transaction or could give
rise to the termination of the Transaction agreement; (3) the outcome of any
legal or regulatory proceedings or governmental inquiries or investigations
that may be currently pending or later instituted against Webster, Santander
or the combined company; (4) the possibility that the Transaction does not
close when expected or at all because required regulatory, stockholder or
other approvals and other conditions to closing are not received or satisfied
on a timely basis or at all (and the risk that such approvals may result in
the imposition of conditions that could adversely affect the combined company
or the expected benefits of the proposed Transaction); (5) disruption to the
parties' businesses as a result of the announcement and pendency of the
Transaction; (6) the costs associated with the anticipated length of time of
the pendency of the Transaction, including the restrictions contained in the
definitive Transaction agreement on the ability of Webster to operate its
business outside the ordinary course during the pendency of the Transaction;
(7) risks related to management and oversight of the expanded business and
operations of the combined company following the closing of the proposed
Transaction; (8) the risk that the integration of Webster's operations with
Santander's will be materially delayed or will be more costly or difficult
than expected or that the parties are otherwise unable to successfully
integrate each party's businesses into the other's businesses; (9) the
possibility that the Transaction may be more expensive to complete than
anticipated, including as a result of unexpected factors or events; (10)
reputational risk and potential adverse reactions of Webster's or Santander's
customers, employees, vendors, contractors or other business partners,
including those resulting from the announcement or completion of the
Transaction; (11) the dilution caused by Santander's issuance of additional
ordinary shares and corresponding American depositary shares, each
representing the right to receive one of its ordinary shares ("ADSs"), in
connection with the Transaction; (12) the possibility that any announcements
relating to the Transaction could have adverse effects on the market price of
Webster's common stock and Santander's ordinary shares and ADSs; (13) a
material adverse change in the condition of Webster or Santander; (14) the
extent to which Webster's or Santander's businesses perform consistent with
management's expectations; (15) Webster's and Santander's ability to take
advantage of growth opportunities and implement targeted initiatives in the
timeframe and on the terms currently expected; (16) the inability to sustain
revenue and earnings growth; (17) the execution and efficacy of recent
strategic investments; (18) the impact of macroeconomic factors, such as
changes in general economic conditions and monetary and fiscal policy,
particularly on interest rates; (19) changes in customer behavior; (20)
unfavorable developments concerning credit quality; (21) declines in the
businesses or industries of Webster's or Santander's customers; (22) the
possibility that the combined company is subject to additional regulatory
requirements as a result of the proposed Transaction or expansion of the
combined company's business operations following the proposed Transaction;
(23) general competitive, political and market conditions and other factors
that may affect future returns of Webster and Santander, including changes in
asset quality and credit risk; (24) security risks, including cybersecurity
and data privacy risks, and capital markets; (25) inflation; (26) the impact,
extent and timing of technological changes; (27) capital management
activities; (28) competitive product and pricing pressures; (29) the outcomes
of legal and regulatory proceedings and related financial services industry
matters; and (30) compliance with regulatory requirements. Any forward-looking
statement made in this communication is based solely on information currently
available to us and speaks only as of the date on which it is made.

Forward looking statements are based on current expectations and future
estimates about Santander's and third-parties' operations and businesses and
address matters that are uncertain to varying degrees, including, but not
limited to, developing standards that may change in the future; plans,
projections, expectations, targets, objectives, strategies and goals relating
to environmental, social, safety and governance performance, including
expectations regarding future execution of Santander's and third parties'
energy and climate strategies, and the underlying assumptions and estimated
impacts on Santander's and third-parties' businesses related thereto;
Santander's and third-parties' approach, plans and expectations in relation to
carbon use and targeted reductions of emissions; changes in operations or
investments under existing or future environmental laws and regulations; and
changes in government regulations and regulatory requirements, including those
related to climate-related initiatives.

Forward-looking statements are aspirational, should be regarded as indicative,
preliminary and for illustrative purposes only, speak only as of the date of
this report and are informed by the knowledge, information and views available
on such date and are subject to change without notice. Santander is not
required to update or revise any forward-looking statements, regardless of new
information, future events or otherwise, except as required by applicable law.

 

ADDITIONAL INFORMATION ABOUT THE ACQUISITION OF WEBSTER AND WHERE TO FIND IT

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON
FORM F-4 AND THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION
STATEMENT ON FORM F-4, AS WELL AS ANY OTHER RELEVANT DOCUMENTS THAT HAVE BEEN
OR WILL BE FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR
INCORPORATED BY REFERENCE INTO THE REGISTRATION STATEMENT ON FORM F-4 AND THE
PROXY STATEMENT/PROSPECTUS AND ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS,  BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING
WEBSTER, SANTANDER, THE TRANSACTION AND RELATED MATTERS.

Investors and security holders may obtain free copies of these documents and
other documents filed with the SEC by Webster or Santander through the website
maintained by the SEC at http://www.sec.gov.

No offer or solicitation

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended (the "Securities Act").
No investment activity should be undertaken on the basis of the information
contained in this communication. By making this communication available, no
advice or recommendation is being given to buy, sell or otherwise deal in any
securities or investments whatsoever.

Participants in the solicitation of proxies

Webster, Santander and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Webster in connection with the Transaction under the rules
of the SEC. Information regarding the directors and executive officers of
Webster and Santander is set forth in (i) Webster's definitive proxy statement
for its 2025 Annual Meeting of Stockholders, including under the headings
entitled "Director Nominees", "Director Independence", "Non-Employee Director
Compensation and Stock Ownership Guidelines", "Compensation and Human
Resources Committee Interlocks and Insider Participation", "Executive
Compensation", "2024 Pay Versus Performance" and "Security Ownership of
Certain Beneficial Owners and Management", which was filed with the SEC on
April 11, 2025 and is available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000801337/000080133725000015/wbs-20250411.htm,
and (ii) Santander's Annual Report on Form 20-F for the year ending December
31, 2025, including under the headings entitled "Directors and Senior
Management", "Compensation", "Share Ownership" and "Majority Shareholders and
Related Party Transactions", which was filed with the SEC on February 27, 2026
and is available at
http://www.sec.gov/Archives/edgar/data/san-20251231.htm/000089147826000030/0000891478-26-000030-index.html.
To the extent holdings of Webster's securities by its directors or executive
officers have changed since the amounts set forth in Webster's definitive
proxy statement for its 2025 Annual Meeting of Stockholders, such changes have
been or will be reflected on Webster's Statements of Change of Ownership on
Form 4 filed with the SEC. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, are contained in the proxy
statement/prospectus of Webster and Santander and other relevant materials
filed with the SEC, as well as any amendments or supplements to those
documents that have been or will be filed with the SEC. You may obtain free
copies of these documents through the website maintained by the SEC at
https://www.sec.gov.

Past performance does not indicate future outcomes

Statements about historical performance or growth rates must not be construed
as suggesting that future performance, share price or earnings (including
earnings per share) will necessarily be the same or higher than in previous
periods. Nothing mentioned in this report should be taken as a profit and loss
forecast.

Third Party Information

Regarding the data provided by third parties, neither Santander, nor any of
its directors, managers or employees, either explicitly or implicitly,
guarantees that these contents are exact, accurate, comprehensive or complete,
nor are they obliged to keep them updated, nor to correct them in the case
that any deficiency, error or omission were to be detected. Moreover, in
reproducing these contents in by any means, Santander may introduce any
changes it deems suitable, and may omit, partially or completely, any of the
elements of this report, and in case of any deviation, Santander assumes no
liability for any discrepancy.

 1  Figures related to the 2026-2028 financial and operating targets are
presented on a basis reflecting the changes made to the presentation of the
Group's financial information, effective from the first quarter of 2026 and
communicated through Other Relevant Information filed with CNMV on 10
February. The 2025 figures are presented on a basis that does not reflect
these changes in the Group's reporting. Accordingly, any comparison has been
made and should be made on a like-for-like basis, that is, at constant
perimeter.

 2  The board of directors intends (1) to apply an ordinary shareholder
remuneration policy for 2026 to 2028 results that entails allocating
approximately 50% of the Group's underlying profit (excluding non-cash,
non-capital ratios impact items), split approximately evenly between cash
dividends and share buybacks for 2026 results, and (2) to distribute to
shareholders any excess capital at the end of the 2026-2028 period. From 2027
results, the ordinary shareholder remuneration policy is expected to comprise
around 35% of Group underlying profit (on the same basis) in cash dividends
and around 15% in share buybacks. Execution of the shareholder remuneration
policy and of the distribution to shareholders of any excess capital at the
end of the 2026-2028 period remains subject to future corporate and regulatory
decisions and approvals.

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