The bank has also managed to improve its income thanks to the rise in credit and to keep expenses stable
The Santander won 5.849 million between January and September, compared to the unprecedented losses of 9,048 million that it registered in the same period of 2020 due to the devaluation of the goodwill of various subsidiaries (which measure the value of intangible assets, such as the brand) and the reduction of rights to the lowest payment of taxes (deferred tax assets, which offset past losses with future profits), which cost him 12,500 million.
The improvement in the result has been driven mainly by the lower provisions (-34%) to face losses that the group has made, after having made extraordinary provisions due to the pandemic last year that also penalized its profit. In addition, the bank has improved its income (3.8%) thanks to the increase in activity (4% rise in credit), while maintaining the expenses contents (-0.1%).
The third fundamental factor has been the lower tax payment of companies despite the improvement in the result (-25.8%), caused by the higher tax credit that had to be made last year when adjusting deferred tax assets. The entity has highlighted that it has paid 3,725 million for these taxes in all the geographies where it operates (compared to 5,020 in the first nine months of 2020), with a 34% effective tax rate.
The delinquencyFor its part, it remained stable: it stood at 3.18%, 0.4 points below the June level and 0.3 points above September 2020. The capital has risen to 11.85%, on top of the bank’s goal of being between 11% and 12%, while the cost effectiveness on capital was 9.54% (11.8% on tangible capital, ROTE). “We are confident of reaching our profitability target in the medium term of 13-15% thanks to the progress made, a improved macroeconomic forecasts and the great execution capacity of our teams in all regions and all businesses, “said its president, Ana Botín, in a statement.