Spain's Santander Eyes Higher Profit After Deal Spree — Update

By Elena Vardon

Banco Santander is betting on customer growth and the integration of major acquisitions in the U.S. and U.K. to lift its profitability and shareholder payouts over the next three years.

The Spanish banking giant, whose operations span from its home country to Brazil and the U.S., on Wednesday laid out a road map through 2028 ahead of an investor day in London.

The group said Wednesday that it aims to grow its revenue by mid-single digit percentages annually while trimming costs in order to deliver more than 20 billion euros ($23.55 billion) in profit by 2028. Last year, it made 14.1 billion euros in profit.

To achieve this, and bring down its cost-to-income ratio to around 36% from 41.2% at the end of 2025, Santander said it would draw on synergies from its acquisitions and progress on its digital strategy.

The new targets underpin its drive for a return on tangible equity--a key profitability metric--of more than 20% by 2028 from 16.3% last year and follow a period of heavy investment in technology and the reshaping of its global footprint to focus on its core developed markets.

Earlier this month, Santander capped off a string of deals with the announcement of a $12.3 billion acquisition of Connecticut-based regional lender Webster in a bid to boost its deposit base and physical presence in the American Northeast.

The deal is a rare expansionary move for a European lender in the U.S., following retreats from the market by peers BNP Paribas and HSBC in recent years. Already a major U.S. auto lender, Santander has been building out digital banking operations and strengthening its investment bank in the country.

The expansion followed two major portfolio shifts closer to home: it sold its controlling stake in its Polish business and agreed to buy TSB to bolster its U.K. retail presence.

Through its recent dealmaking and digital strategy, Santander plans to offer services to more than 210 million customers across Europe and the Americas by 2028, up from 180 million at the end of 2025.

The bank now has achieved the scale it needs, according to Executive Chair Ana Botin, who has ruled out further acquisitions or disposals to focus on driving growth in earnings per share. "We are where we want to be," she said at a press conference earlier this month.

The new targets were more ambitious than analysts had estimated, sending Santander shares 3% higher in morning exchanges to trade at roughly 11 euros. The stock has nearly tripled in the past two years, propelling the group to become continental Europe's largest bank by market value.

The bank also pledged to double its dividend based on the 2025 payout of 24 European cents a share, and maintained its overall policy of returning half of profit to investors, including through buybacks.

Santander said it expects to operate with a common equity tier 1 ratio--a key measure of capital strength--of around 13% in 2028, and intends to distribute excess capital to shareholders above that threshold once the plan ends.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

February 25, 2026 06:40 ET (11:40 GMT)