Santander Posts Record Profit Despite Special Tax

Spanish lender Banco Santander reported Wednesday a record profit for the first half of the year despite a windfall tax imposed on banks, as rising interest rates lifted its earnings.

Banco Santander is the latest European banking giant to get a lift from central bank rate hikes aimed at taming high inflation.

Over the first six months of the year, its net profit reached a record 5.2 billion euros ($5.8 billion), seven percent higher than in the same period in 2022.

The bank is on pace to break the 10-billion-euro mark for the year after posting a record profit of 9.6 billion euros in 2022.

"Thanks to these good results... we will keep all our objectives for 2023," Santander's executive chairwoman Ana Botin said in a statement, pointing to double-digit growth in revenue to 28.23 billion euros in the first half.

The lender said it benefited from growth in the number of customers and "positive balance sheet sensitivity to higher interest rates in Europe".

The European Central Bank and its peers outside the eurozone have hiked interest rates in efforts to combat high inflation, which soared following Russia's invasion of Ukraine.

Britain's Lloyds bank and Italian lender UniCredit also announced on Wednesday that the higher rates brought them bigger profits in their second quarters.

Banco Santander said it has 164 million customers across the world -- nine million more than a year ago, raising deposits by four percent to 1.1 billion euros.

Spain's left-wing government imposed a temporary windfall tax on big banks in January to fund measures to help households cope with higher prices.

The levy, which will carry into next year, will bring the state an additional 1.5 billion euros in revenue this year.

Source: AFP