Banco Santander's Ana Botin Talks Record Q4 Profit

Banco Santander Chairman/Executive Director Ana Botin discusses how diversification sets Santander apart, and the record earnings report. She speaks with Bloomberg's Guy Johnson, Kriti Gupta, and Lizzy Burden.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:08):
We're in the midst of earnings paloza on both sides
of the Atlantic, and one earning story that certainly caught our
eye this morning has been in the banking story. Santander
reporting pretty blowout earnings. Let me walk you through the
numbers here that four quarter net income coming at about
three point three billion euros. The estimate there was about
two point nine billion euros. According to Bloomberg. They're also
planning a ten billion euro buyback over the coming years,

(00:30):
on top of also reporting a full year profit at
a record higher record cet one ratio as well at
about twelve point eight percent. Who better to walk us
through these numbers than the executive chair at Banco Santander,
Anna Boutin, joins the program and a pleasure to have you.

Speaker 1 (00:45):
We thank you so much.

Speaker 2 (00:46):
There are some pretty blowout numbers. Walk us through how
you beat them in the coming quarters.

Speaker 3 (00:53):
So it's correct to be with you. Record results for
the third consecutive year, creating body flashat holders of pressure
plus different pressure plus fourteen percent and delivered by growing
eight million customers, growing revenues, profitability and returns so much
higher returns very close to the top end of our
range for the three year plan, and cash debent for

(01:15):
share paid during twenty four was up close to forty percent.
So in summary, and the increasing profitability, the strong capital
generation organic has resulted in US announcing a ten billion
in buybacks for twenty five and twenty six, or from
twenty five and twenty six earnings from regular earnings and

(01:36):
anticipated access capital. And that's in addition to our standard
cash diberent distribution, of course subject to corporate and regulatory approvals.
So again, all our five divisions really doing well, growing revenues,
increasing profitability. On one transformation, which is one of the
key levels we have to continue to create value, doing

(01:57):
exceptionally well.

Speaker 2 (01:59):
And I let's talk about that profitability story. It is
very clear from your results that Santander is firing on
all cylinders. But I'm specifically curious about the maybe ripple
effects to your bank from some of the policies coming
out of the United States. We know that you had
the distinct pleasure of talking to Donald Trump of work,
of course, at at the World Economic Forum in Davos.
Since then, we've seen Donald Trump issue and then pull

(02:20):
back about twenty five percent tariffs on Mexico. We also
know that Santander is one of the top five banks
in Mexico and about twelve percent of your profit comes
from that part of the world. Walk us through how
the tariff story affects your business. Are you preparing for
that possibility in less than thirty days.

Speaker 3 (02:37):
Our track record shows that in a challenging market, and
we anticipate the challenging on volatile market, we do better
than our peers. And in twenty five we expect to
both grow a bottom line again with the revenue stable
and cost folding again due to the one transformation and
already this year, and this is important our revenue on

(02:57):
business diversification access from falling grates, which is probably the
case in the new environment. So four of our five
global business which is the corporate bank, Wealth, Consuman Payments
which amounts to fifty percent of our profits, all expected
to grow revenue in twenty five again one Transformation helping

(03:17):
us to consistently improve our operating leverage with costs expected
to fall, and in this environment, cost of risk is important.
We're aiming to maintain cost of risk at current levels. Remember,
employment is one of the biggest drivers and that is
maybe deterior it's a bit, but we're at historic highs.
So again, other versification setting us apart from others and

(03:42):
guiding through better profits and profitability in twenty five and.

Speaker 1 (03:47):
A good morning, it's a guy. Early indications are that
the market likes the numbers that we're seeing this morning.
Looks like the share is going to be up two
to three percent. That's the early indication that we are seeing.
There are other questions about Santane's scale and whether it
is too big, whether or not you are doing too much.
And your Roe targets look great. The numbers you delivered

(04:08):
this morning look really solid. That is your preferred metric
and you are delivering upon that. But do you think
a more focused footprint as maybe smaller, more focused footprints
would allow the bank to deliver a priced book that
is north of one and a return on assets that
maybe could push higher as well. I think it's onero
point seven right now. I may be slightly wrong on

(04:30):
that number, but do you think the return on assets number?
Do you think the price the book number could go
higher if Santante's a little bit smaller and a little
bit more focused.

Speaker 3 (04:38):
So we are only scratching the surface of our potential
as a group. I said that this morning in my quote,
I want to say that we're in a new euro
value creation and very confident that it is our scale,
the versification and the impact of our transformation which will
allow us to continue to increase profits and profitability into
twenty five and million. That is what sets us apart

(04:58):
from Piers. So if you look at something.

Speaker 1 (05:01):
Of that.

Speaker 4 (05:03):
Scale, it's a week that you're reviewing your business in
the UK, What exactly are you looking at here and
do you have a sense of what would need to
be done to improve that performance here?

Speaker 3 (05:17):
Let me address that at the end. So let me
just say that in order for us to allocate capital
to different geographies, we don't need to sell. We have
been doing that for the last few years. Our preferred metric,
as we said in on Best to Day, is tina
plus dividen pressure. In the last two years that's grown
by thirty one percent. That is a very different growth

(05:37):
perspective than most of our peers. We can reallocate capital
through businesses and geographies and we've been very strict on that.
As an example, one of the strongest countries in value
creation and that is not just the last five but
the last ten years is the United States in Euros
for our shareholders. So again, yes, it's our diversification by

(05:59):
businesses and countries and what we call one transformation is
bringing together all our retail and consumer platforms. That is
what Santan there is. Seventy percent of Santandre is retail
and consumer. Some key markets contribute more than others. But
the key is that over the last few years we
are showing in our numbers, our track record shows it's working.

(06:21):
We have basically flat costs and revenues growing at nine
ten percent in retail consumer, which includes the US, Mexico, Brazil,
UK that is you know, very very strong results. That
division is at eighteen percent nineteen percent rotten on equity
this year and.

Speaker 2 (06:41):
We have to leave it there. We thank you so
much for your time. In abouteen the center, they're executive,
of course, joining us on blow our results from the
bank Willo Ford seeing how the shares open