Banco Santander, S.A. (NYSE:SAN) Q2 2024 Earnings Conference Call July 23, 2024 4:00 AM ET

Company Participants

Begona Morenes - Director, IR
Hector Grisi - CEO
Jose Garcia - CFO

Conference Call Participants

Sofie Peterzens - JPMorgan
Ignacio Ulargui - BNP Paribas
Alvaro Serrano - Morgan Stanley
Marta Sanchez Romero - Citi
Francisco Riquel - Alantra
Alvaro Fernandez-Garayzabal - UBS
Benjamin Toms - RBC
Carlos Peixoto - CaixaBank, BPI

Begona Morenes

Good morning, everybody, and welcome to Banco Santander's Conference Call to discuss our Financial Results for the First Half of 2024. Just as a reminder, both the results report and presentation we will be following today are available to you on our website.

I am joined here today by our CEO, Mr. Hector Grisi, and our CFO, Mr. Jose Garcia-Cantera. Following their presentations, we will open the floor for any questions you may have in the Q&A session. [Operator Instructions]

And with this, I will hand over to Mr. Grisi Hector, the floor is yours.

Hector Grisi

Thank you, Begona. Good morning, everyone, and thank you for joining us. Today's presentation will follow the usual structure. First, we will talk about our H1 results in the context of our strategy. Then Jose will review our financial performance in greater detail. And then I will conclude with some final messages. As Begona said, we will then open the floor for your questions.

The main highlights of our results in the first half of 2024 are the following. Q2 was another record quarter for Santander, which shows the strength of our strategy and the resilience of our business model. Profit reached €3.2 billion, that's 20% above Q2 '23, even after the impact of €450 million of one-time charges, net of taxes and minorities.

Excluding them, recurring profit was €3.7 billion in Q2. Profit in the first half reached €6.1 billion, also a record high of 16%, supported by the strong cost of revenue growth in all regions and global businesses. We continue to accelerate H1 transformation to become simpler, more automated, and more integrated. As a result, our efficiency ratio improved by 261 basis points to 41.6%, the best in 15 years. And our return on tangible equity rose 137 basis points to 15.9%, or 16.3% if we analyze the impact of the temporary levy in Spain.

Finally, our solid balance sheet with a sound capital ratio, solid credit quality, and a strict capital discipline helped us reach strong profitable growth and shareholder value creation, with TNAV plus dividend per share increasing 12%.