JANUARY - JUNE FINANCIAL REPORT 2015

HIGHLIGHTS OF THE PERIOD

Profit growth and improved profitability

• Second quarter ordinary attributable profit of EUR 1,709 million, with good performance of the income statement's most recurring lines.

• First half ordinary attributable profit of EUR 3,426 million, 24% more than the same period of 2014:

- Positive impact of exchange rates.

- Commercial revenues continued to increase, mainly net interest income.

- Stable costs in real terms and on a like-for-like basis.

- Improved cost of credit (1.32% as against 1.56% in June 2014).

• Higher profitability year-on-year:

- Efficiency ratio of 46.9% (0.4 p.p. better year-on-year).

- RoTE rose by 0.6 p.p. year-on-year to 11.5%.

The growth in volumes reflects the strategy followed in segments, products and countries

• Positive impact (4/5 p.p.) of exchange rates year-on-year.

• Lending increased 7% y-o-y in constant euros, with growth in all countries, except for Portugal and Spain. Perimeter impact: +2 p.p.

• Funds rose 8% in constant euros, with growth in all countries. Of note were Latin America, Poland and US.

• Solid funding structure and liquidity continued. Net loan-to-deposit ratio of 116%.

(*) Loans and deposits excluding repos

High solvency and enhanced Group credit quality

• CET1 ratio fully loaded of 9.8% and total capital ratio 12.4%, up 16 b.p. and 34 b.p., respectively, in the second quarter.

• Ordinary generation of 22 b.p. of core capital in the second quarter.

• Leverage ratio (fully loaded) of 4.8%.

• Non-performing loan (NPL) entries, isolating the perimeter and exchange rate effects, were 34% lower than in the first half of 2014.

• The NPL ratio continued to improve, notably in the second quarter in Spain, Poland, Santander Consumer Finance and the UK.

Advances in the commercial transformation programme and in the multi-channel distribution model

• Transforming our business model into one that is increasingly simple, personal and fair continued.

• The NEO CRM tool to improve productivity and customer satisfaction continued to be extended.

• Launch of differentiated value offers in various countries to improve engagement and long-term relations with individual customers, including the 1|2|3 account in Spain and Portugal.

• Of note among the specialized solutions for companies was further geographic expansion and new proposals of Santander Advance, already present in eight countries, and Santander Trade.

• Further progress in strengthening multi-channels with better websites, new developments for mobile phones, the Santander Watch app, etc.

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