Banco Santander Earnings: Revenue Slowing Down but 2025 Guidance Remains Bullish

Narrow-moat Banco Santander reported an attributable profit of EUR 3.2 billion for the second quarter of 2024, 12% higher than a year earlier and slightly ahead of the expectations of the consensus of analysts polled by the bank. However, as we expected, the momentum of earnings is slowing down. Attributable profit was flat compared with the second quarter of 2024, with revenue declining by 3%. Santander remains on course to meet its fiscal 2024 guidance of a 16% return on tangible equity, and its guidance for 2025 is ahead of consensus. The market chose to focus on the potential fallout from an adverse Supreme Court ruling in the UK around commissions paid by UK banks to auto dealerships, with the shares trading down 3% on the day. We maintain our EUR 5.80 per share fair value estimate and believe the share price weakness represents an entry opportunity for long-term investors.