Spain’s Santander Executive Chair Ana Botin has today warned about the uncertainty caused by US trade tariffs, but the bank stuck with a forecast for higher profits in 2025 even as markets fret about a rapid economic downturn.
“While we are monitoring the implications of recent tariff announcements in the US, it is in challenging times when the value of our diversification is most apparent. Our diversification acts as a stabiliser in an uncertain global environment”, Botin will say at the lender’s annual general meeting.
Bank shares have tumbled in the past two days, with the European banking index down more than 10% after dropping sharply again today. Banks with large US exposures, such as Santander and Barclays, have been among the largest fallers.
Sshares in Santander, the euro zone’s biggest lender in terms of market value, were down 7.8% in morning trade.
“As a bank our focus is on helping clients navigate the volatility and we are committed to doing that. Our markets, however, remain resilient. The employment data – which is the cornerstone of asset quality – is very good,” Botin is expected to say.
Her comments come as Santander is expanding its footprint in the US, its fifth-biggest market, where net profit in 2024 rose 19% to €1.11 billion.
Santander, like other lenders, has benefited from higher interest rates, but growth in its key Latin American markets has given it an edge over more Europe-dependent rivals.
The bank said it continued to gain customers and improved efficiency in the first quarter and was on track to meet its full-year revenue, profitability and capital targets.
The lender anticipated that in the first quarter its return-on-tangible-equity ratio (ROTE), after the impact of additional Tier 1 (AT1) capital instruments, a measure of profitability, rose to 15.7%, compared to 15.5% at end of 2024.
For the whole of 2025, Santander expects an ROTE of around 16.5%, a spokesperson for the bank said.
Santander is targeting this year revenues worth around €62 billion after finishing 2024 with a record profit.
Shareholders are expected to approve a total remuneration of €6.3 billion against its record net profit in 2024. It has also announced up to €10 billion in buybacks from 2025 and 2026 earnings and excess capital.
The core tier-1 capital ratio is expected to have risen 10 basis points from the previous quarter to 12.9% by end-March, against a full-year target of 13%.
Investors are also set to approve the re-election of Botin and chief executive Hector Grisi as members of the board of Santander for three years.
