Banco Santander (LSE:BNC) reported a 19% increase in third-quarter underlying profit to €3.85 billion ($4.28 billion), supported by higher customer activity and revenue growth, while reaffirming its financial targets for 2026.
Spain’s largest bank reported attributable profit of €3.43 billion for the July-to-September period, representing a 2% decline from the previous year. The decrease reflected integration costs associated with its acquisition of US lender Webster.
Net loan-loss provisions increased 22% to €3.49 billion, partly offsetting the contribution from higher revenues.
For the first nine months of 2026, Santander reported underlying profit of €11.18 billion, an increase of 16%, while revenue rose 8% to €46.81 billion.
The bank maintained its expectations for full-year revenue growth, operating costs and profitability, alongside its longer-term financial objectives for 2028.
Third-Quarter Underlying Profit Increases 19%
Santander recorded underlying profit of €3.85 billion during the third quarter, compared with the corresponding period in 2025.
The 19% year-on-year increase reflected higher customer activity and revenue growth across the banking group.
Underlying profit excludes certain items to provide a measure of operating performance separate from their accounting impact.
However, attributable profit declined 2% to €3.43 billion.
The difference between underlying and attributable profit reflected costs associated with the integration of Webster, the US banking business acquired by Santander.
The company did not specify the total integration expenses recognised during the quarter in the information provided.
The results indicate that growth in underlying earnings was accompanied by acquisition-related costs and higher provisions for potential credit losses.
Loan-Loss Provisions Rise 22% to €3.49 Billion
Santander reported net loan-loss provisions of €3.49 billion for the third quarter, an increase of 22% compared with the previous year.
Loan-loss provisions represent charges recognised by banks to account for expected losses on lending exposures.
The increase reduced the contribution of revenue growth to reported profitability.
Santander’s results reflected the impact of higher provisions alongside increased customer activity and income generation.
The bank did not provide a breakdown of the provision increase by geography or lending category in the reported figures.
Future credit costs will depend on borrower performance, economic conditions and developments across the bank’s lending portfolios.
Nine-Month Underlying Profit Reaches €11.18 Billion
For the nine months ended September 2026, Santander reported underlying profit of €11.18 billion.
The figure represented a 16% increase compared with the corresponding period in 2025.
Revenue increased 8% to €46.81 billion over the same period.
The bank attributed its performance to revenue growth and cost management under its ONE Transformation programme.
The programme is intended to improve operating efficiency and support the group’s financial performance.
Santander’s nine-month results provide the basis for its reaffirmed full-year targets, including its expectation that annual profit will exceed the €14.1 billion recorded in 2025.
Santander Reaffirms 2026 Revenue and Profit Guidance
Santander maintained its financial targets for the year ending December 2026.
The bank continues to expect mid-single-digit revenue growth for the full year.
It also anticipates a reduction in operating costs when measured in constant euros, excluding the effects of currency movements.
Santander expects annual profit to exceed the €14.1 billion reported in 2025.
The company did not announce a revised numerical profit target beyond that threshold.
The reaffirmed guidance follows the increase in underlying earnings during the first nine months, although higher loan-loss provisions and acquisition-related expenses remain relevant to the final reported results.
ONE Transformation Programme Supports Cost Targets
Santander identified cost discipline under its ONE Transformation programme as a contributor to its nine-month financial performance.
The initiative forms part of the bank’s operating strategy and is intended to support efficiency across its businesses.
The bank’s full-year target includes lower costs in constant euros, indicating an objective to reduce expenditure independently of foreign exchange movements.
Revenue growth and cost management contributed to the 16% increase in underlying profit during the first nine months.
The figures provided did not include a separate breakdown of savings attributable to the transformation programme.
Santander continues to incorporate the programme into its financial objectives for 2026 and beyond.
CET1 Capital Ratio Expected to Reach 12.8%–13%
Santander reported a Common Equity Tier 1 (CET1) capital ratio of 12.7% at the end of September 2026.
The bank expects the ratio to reach between 12.8% and 13% by the end of the year.
The CET1 ratio measures a bank’s core regulatory capital relative to its risk-weighted assets.
It is used to assess capital adequacy and the bank’s capacity to absorb losses.
Santander’s year-end target implies an increase of between 10 and 30 basis points from the September level.
The bank reaffirmed this objective alongside its income, cost and profitability guidance.
Webster Acquisition Affects Reported Earnings
Integration costs associated with Santander’s acquisition of US lender Webster contributed to the decline in third-quarter attributable profit.
While underlying profit increased 19%, attributable profit fell 2% to €3.43 billion.
The difference highlights the effect of acquisition-related expenses on the group’s reported earnings.
Santander did not provide a detailed timetable for completing the integration or quantify the expected future financial contribution from Webster in the information supplied.
The integration process remains a factor in the distinction between the bank’s underlying performance and attributable profit.
Santander Maintains 2028 Profitability Objectives
Beyond its 2026 financial targets, Santander reiterated its longer-term objectives for 2028.
The bank aims to achieve a return on tangible equity exceeding 20%.
It also targets annual profit of more than €20 billion by that year.
Return on tangible equity measures profitability relative to shareholders’ tangible equity and provides an indication of the returns generated from the bank’s capital base.
The 2028 objectives imply further earnings growth from the levels reported in 2025 and expected for 2026.
Achieving these targets will depend on revenue development, operating costs, credit performance, capital requirements and the contribution of the bank’s businesses.
The company did not announce changes to either target.
Outlook for the Remainder of 2026
Santander enters the final quarter of 2026 with its full-year financial guidance unchanged.
The bank continues to target mid-single-digit revenue growth, lower operating costs in constant euros and profit above the €14.1 billion recorded in 2025.
It also expects its CET1 capital ratio to finish the year between 12.8% and 13%.
The third-quarter results showed higher underlying earnings and revenue growth, alongside increased loan-loss provisions and costs associated with the Webster acquisition.
The group’s fourth-quarter performance will determine whether the annual targets are achieved.
More About Banco Santander
Banco Santander is a Spanish multinational banking group providing retail, commercial, corporate and investment banking services.
The company operates across Europe and the Americas, offering lending, deposit, payment, investment and other financial services to individuals and businesses.
Santander’s operations include consumer finance, wealth management and corporate banking activities.
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