Banco Santander records robust Q3 profits, Lloyds sees share price rise

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Banco Santander records robust Q3 profits, Lloyds sees share price rise
Credit: © Reuters.

Spain's banking giant, Banco Santander (BME: SAN ), led by CEO Ana Botin, announced a record third-quarter net profit of €2.9 billion ($3.1 billion), marking a 20% year-on-year increase. This outperformed analyst expectations and surpassed Q2's earnings of €2.67 billion. The bank's nine-month profit reached €8.14 billion, approaching the significant annual earnings landmark of €10 billion.

The bank attributes this robust performance to higher global interest rates, which boosted margins on lending operations, and an expanding customer base that has grown by 9 million within a year to reach 166 million. Botin highlighted a 13% revenue increase and ongoing business streamlining efforts. The bank, with extensive operations in Europe and Latin America, also reported a 4% growth in deposits.

In related news, Lloyds Banking Group (LON: LLOY ) PLC saw its share price rise by 1.64% after reporting a profit after tax of £4.3 billion and a net income growth of 7% to £13.7 billion for the nine months ending on September 30, 2023. The bank's return on tangible equity (RoTE) stood at a strong 16.6%, peaking at 16.9% in Q3.

Underlying net interest income increased by 10% to £10.4 billion, supported by a net interest margin of 3.15%. Despite challenges in mortgage and deposit pricing leading to a drop in this margin to 3.08% in Q3, other income rose by 8% to £3.8 billion. This increase reflects a recovery in customer activity and strategic investments aligned with the bank's priorities execution.

However, customer deposits decreased by £5.0 billion (1%), largely due to a drop in Retail current accounts, though this was partially offset by an increase in Retail savings and Wealth balances. Loans and advances to customers also fell by £2.8 billion, including a £2.5 billion exit from a legacy portfolio in Q1, leaving the total balance at £452.1 billion.

CEO Charlie Nunn upheld the bank's 2023 guidance, citing cost discipline, net income growth, and resilient asset quality as factors for aiming higher, more sustainable returns. Following this announcement, Lloyds' share price climbed to 41.375p.

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