Spanish lender Banco Santander announced Wednesday another record quarterly profit thanks to high interest rates and a growing customer base.
Net profit rose 20-percent year-on-year rise in the third quarter to 2.9 billion euros ($3.1 billion), beating analyst expectations and the 2.67 billion euros it earned last quarter.
“The group achieved another record quarter…” said chief executive Ana Botin.
“While the external environment is increasingly uncertain…I am confident that we will achieve our 2023 targets given the positive momentum which we also expect to carry into 2024,” she added.
The bank, which boasts major operations in several countries in Europe and Latin America, saw its nine-month profit hit 8.14, billion euros, raising the possibility it will surpass the symbolic barrier of 10 billion euros in annual net earnings, with the strongest gains posted in Europe and Mexico.
Net profit in Europe, its main market, during the first nine months of 2023 jumped 49 percent to 4.2 billion euros while in Mexico profits rose 19 percent to 1.2 billion euros.
The rise in global interest rates has been a boon for most banks, including Santander, as it has increased margins on their lending operations.
The European Central Bank and its peers outside of the eurozone have repeatedly hiked interest rates in efforts to combat high inflation, which soared following Russia’s invasion of Ukraine.
But the bank also noted it has benefited from a growing customer base, which is up by more than nine million over the past year to 166 million.
Meanwhile, deposits rose 4 percent.
Santander saw its profits rise despite a new temporary windfall tax which Spain’s left-wing government imposed on big banks in January to fund measures to help households cope with higher prices.
The levy, which will continue into next year, is expected to bring the state an additional 1.5 billion euros in revenue this year.
Santander estimates the tax will cost Santander between 220 million euros and 230 million euros in 2023.
