Santander sees earnings surge, shakes up European management

Spanish lender Santander has announced a shake-up of its senior management team, as it posted a surge in first-quarter profits.

UK chief executive Nathan Bostock is stepping down after eight years to take on the newly created role of global head of investment platforms, while Antonio Simoes becomes Spain chief executive while retaining his role as European head.

Simoes replaces Rami Aboukhair, who has been appointed head of cards and digital solutions, another new role reporting directly to group chief executive Jose Antonio Alvarez.

Santander said the shake-up aligned the European management structure with that of North and South America.

It came as Santander reported an 8% rise in quarterly revenues, to €11.4bn, while net operating income rose 15%, to €6.3.bn.

Underling profits, the bank’s preferred measure, rocked 1,000% to €2.14bn, the highest since the second quarter of 2010.

Attributable profits improved to €1.6bn from €331m a year earlier, when the bank took an overlay provision of €1.6bn due to the pandemic. Most analysts had been expecting net profits closer to €1.38bn.

Santander attributed the performance to “record” earnings in the US and strong growth in the UK. Net interest income grew 5%, with new lending returning to pre-pandemic levels in Europe and South America. Net fee income also reached pre-pandemic levels.

The cost of credit, meanwhile, improved 20 bps to 1.08% from December 2020, due to lower loan-loss provisions. Quarterly provisions were down 43% year-on-year at €2.0bn.

Chairman Ana Botin said: “Our first-quarter results highlight our relentless customer focus, and the strength of Santander’s diversification. We saw good performance across all our regions, with particularly strong growth in the US, UK and Santander corporate and investment banking.

“The success of the vaccine rollout remains critically important to economic recovery. We are confident we will achieve our 2021 goals, of improving our efficiency ratio, reducing cost of credit and increasing our profitability.”

Commenting on Bostock’s new role, she added: “Under Nathan’s leadership, Santander UK has consolidated its position as a challenger of scale, laying the foundations for future growth in the UK, a market that is critically important for the group.”

Bostock will leave the UK role at the end of this year. The search for his successor was already underway, the bank said.