Banking giant says it's on track to meet 2025 targets
Banco Santander has reported a solid start to 2025, with first-quarter profitability and capital metrics pointing to continued progress toward its full-year targets.
The bank expects to post a return on tangible equity (RoTE) of around 15.7% post-AT1, up from the full-year 2024, as well as over 14% growth in tangible net asset value plus cash dividend per share. Its core capital (CET1) ratio is anticipated to reach 12.9%, up 10 basis points from the end of last year.
The Spanish bank is maintaining its full-year 2025 targets, including revenues of approximately €62 billion (£52.4 billion), reduced costs in absolute terms, a cost of risk within expected levels, and a RoTE of around 16.5%.
“Looking forward, we expect to continue increasing profitability in 2025,” stated Santander executive chair Ana Botín during the bank’s annual general meeting. “While we are monitoring the implications of recent tariff announcements in the US, it is in challenging times when the value of our diversification is most apparent. Our diversification acts as stabiliser in an uncertain global environment.”
The update comes amid growing speculation around Santander’s future in the UK, following reports that the bank is conducting a strategic review of its British operations. Concerns intensified after Santander UK chairman William Vereker unexpectedly announced he would step down later this year. While Botín has publicly denied any intention to exit the UK, industry sources have suggested a potential sale could be considered if a suitable buyer emerged. The speculation intensified following a sharp drop in profits at the UK arm, which saw pre-tax earnings fall 38% to £1.3 billion in 2024 — making it the only major market in the group to record a decline.
Transformation strategy and macro outlook
Meanwhile, Botín discussed Santander’s transformation strategy, known as ONE Transformation, which aims to leverage the group’s global scale through cross-market platforms and technology to boost customer experience and operational efficiency.
“ONE Transformation is our plan to harness the full potential of our global scale, by combining our local leadership with the platforms we are deploying across the group,” she explained. “This way, we enhance customer experience while reducing the cost to serve, growing faster and continuing to increase profitability.”
Turning to the broader macro environment, Botín acknowledged the challenges posed by rising geopolitical risks and market volatility. The global economy is projected to grow at an average of 3.1% over the next five years — the weakest outlook in 16 years.
Despite concerns over escalating trade tensions in the US, Santander sees continued resilience across its key markets, underpinned by strong labour market data. In Spain, the economy is forecast to grow by 2.5% in 2025, exceeding the European average.
“In Europe, we have a great challenge, and also a great opportunity to play a very significant role at a global level,” Botín said. “It is time to take action and make the changes that lead to stronger and better growth, which will enable the European social model to be sustainable.”
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