WEBVTT - Banco Santander's Ana Botin Talks Record Q4 Profit

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>We're in the midst of earnings paloza on both sides

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<v Speaker 2>of the Atlantic, and one earning story that certainly caught our

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<v Speaker 2>eye this morning has been in the banking story. Santander

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<v Speaker 2>reporting pretty blowout earnings. Let me walk you through the

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<v Speaker 2>numbers here that four quarter net income coming at about

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<v Speaker 2>three point three billion euros. The estimate there was about

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<v Speaker 2>two point nine billion euros. According to Bloomberg. They're also

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<v Speaker 2>planning a ten billion euro buyback over the coming years,

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<v Speaker 2>on top of also reporting a full year profit at

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<v Speaker 2>a record higher record cet one ratio as well at

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<v Speaker 2>about twelve point eight percent. Who better to walk us

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<v Speaker 2>through these numbers than the executive chair at Banco Santander,

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<v Speaker 2>Anna Boutin, joins the program and a pleasure to have you.

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<v Speaker 1>We thank you so much.

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<v Speaker 2>There are some pretty blowout numbers. Walk us through how

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<v Speaker 2>you beat them in the coming quarters.

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<v Speaker 3>So it's correct to be with you. Record results for

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<v Speaker 3>the third consecutive year, creating body flashat holders of pressure

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<v Speaker 3>plus different pressure plus fourteen percent and delivered by growing

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<v Speaker 3>eight million customers, growing revenues, profitability and returns so much

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<v Speaker 3>higher returns very close to the top end of our

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<v Speaker 3>range for the three year plan, and cash debent for

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<v Speaker 3>share paid during twenty four was up close to forty percent.

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<v Speaker 3>So in summary, and the increasing profitability, the strong capital

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<v Speaker 3>generation organic has resulted in US announcing a ten billion

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<v Speaker 3>in buybacks for twenty five and twenty six, or from

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<v Speaker 3>twenty five and twenty six earnings from regular earnings and

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<v Speaker 3>anticipated access capital. And that's in addition to our standard

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<v Speaker 3>cash diberent distribution, of course subject to corporate and regulatory approvals.

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<v Speaker 3>So again, all our five divisions really doing well, growing revenues,

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<v Speaker 3>increasing profitability. On one transformation, which is one of the

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<v Speaker 3>key levels we have to continue to create value, doing

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<v Speaker 3>exceptionally well.

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<v Speaker 2>And I let's talk about that profitability story. It is

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<v Speaker 2>very clear from your results that Santander is firing on

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<v Speaker 2>all cylinders. But I'm specifically curious about the maybe ripple

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<v Speaker 2>effects to your bank from some of the policies coming

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<v Speaker 2>out of the United States. We know that you had

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<v Speaker 2>the distinct pleasure of talking to Donald Trump of work,

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<v Speaker 2>of course, at at the World Economic Forum in Davos.

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<v Speaker 2>Since then, we've seen Donald Trump issue and then pull

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<v Speaker 2>back about twenty five percent tariffs on Mexico. We also

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<v Speaker 2>know that Santander is one of the top five banks

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<v Speaker 2>in Mexico and about twelve percent of your profit comes

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<v Speaker 2>from that part of the world. Walk us through how

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<v Speaker 2>the tariff story affects your business. Are you preparing for

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<v Speaker 2>that possibility in less than thirty days.

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<v Speaker 3>Our track record shows that in a challenging market, and

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<v Speaker 3>we anticipate the challenging on volatile market, we do better

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<v Speaker 3>than our peers. And in twenty five we expect to

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<v Speaker 3>both grow a bottom line again with the revenue stable

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<v Speaker 3>and cost folding again due to the one transformation and

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<v Speaker 3>already this year, and this is important our revenue on

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<v Speaker 3>business diversification access from falling grates, which is probably the

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<v Speaker 3>case in the new environment. So four of our five

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<v Speaker 3>global business which is the corporate bank, Wealth, Consuman Payments

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<v Speaker 3>which amounts to fifty percent of our profits, all expected

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<v Speaker 3>to grow revenue in twenty five again one Transformation helping

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<v Speaker 3>us to consistently improve our operating leverage with costs expected

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<v Speaker 3>to fall, and in this environment, cost of risk is important.

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<v Speaker 3>We're aiming to maintain cost of risk at current levels. Remember,

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<v Speaker 3>employment is one of the biggest drivers and that is

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<v Speaker 3>maybe deterior it's a bit, but we're at historic highs.

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<v Speaker 3>So again, other versification setting us apart from others and

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<v Speaker 3>guiding through better profits and profitability in twenty five and.

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<v Speaker 1>A good morning, it's a guy. Early indications are that

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<v Speaker 1>the market likes the numbers that we're seeing this morning.

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<v Speaker 1>Looks like the share is going to be up two

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<v Speaker 1>to three percent. That's the early indication that we are seeing.

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<v Speaker 1>There are other questions about Santane's scale and whether it

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<v Speaker 1>is too big, whether or not you are doing too much.

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<v Speaker 1>And your Roe targets look great. The numbers you delivered

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<v Speaker 1>this morning look really solid. That is your preferred metric

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<v Speaker 1>and you are delivering upon that. But do you think

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<v Speaker 1>a more focused footprint as maybe smaller, more focused footprints

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<v Speaker 1>would allow the bank to deliver a priced book that

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<v Speaker 1>is north of one and a return on assets that

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<v Speaker 1>maybe could push higher as well. I think it's onero

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<v Speaker 1>point seven right now. I may be slightly wrong on

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<v Speaker 1>that number, but do you think the return on assets number?

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<v Speaker 1>Do you think the price the book number could go

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<v Speaker 1>higher if Santante's a little bit smaller and a little

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<v Speaker 1>bit more focused.

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<v Speaker 3>So we are only scratching the surface of our potential

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<v Speaker 3>as a group. I said that this morning in my quote,

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<v Speaker 3>I want to say that we're in a new euro

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<v Speaker 3>value creation and very confident that it is our scale,

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<v Speaker 3>the versification and the impact of our transformation which will

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<v Speaker 3>allow us to continue to increase profits and profitability into

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<v Speaker 3>twenty five and million. That is what sets us apart

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<v Speaker 3>from Piers. So if you look at something.

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<v Speaker 1>Of that.

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<v Speaker 4>Scale, it's a week that you're reviewing your business in

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<v Speaker 4>the UK, What exactly are you looking at here and

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<v Speaker 4>do you have a sense of what would need to

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<v Speaker 4>be done to improve that performance here?

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<v Speaker 3>Let me address that at the end. So let me

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<v Speaker 3>just say that in order for us to allocate capital

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<v Speaker 3>to different geographies, we don't need to sell. We have

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<v Speaker 3>been doing that for the last few years. Our preferred metric,

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<v Speaker 3>as we said in on Best to Day, is tina

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<v Speaker 3>plus dividen pressure. In the last two years that's grown

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<v Speaker 3>by thirty one percent. That is a very different growth

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<v Speaker 3>perspective than most of our peers. We can reallocate capital

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<v Speaker 3>through businesses and geographies and we've been very strict on that.

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<v Speaker 3>As an example, one of the strongest countries in value

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<v Speaker 3>creation and that is not just the last five but

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<v Speaker 3>the last ten years is the United States in Euros

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<v Speaker 3>for our shareholders. So again, yes, it's our diversification by

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<v Speaker 3>businesses and countries and what we call one transformation is

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<v Speaker 3>bringing together all our retail and consumer platforms. That is

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<v Speaker 3>what Santan there is. Seventy percent of Santandre is retail

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<v Speaker 3>and consumer. Some key markets contribute more than others. But

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<v Speaker 3>the key is that over the last few years we

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<v Speaker 3>are showing in our numbers, our track record shows it's working.

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<v Speaker 3>We have basically flat costs and revenues growing at nine

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<v Speaker 3>ten percent in retail consumer, which includes the US, Mexico, Brazil,

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<v Speaker 3>UK that is you know, very very strong results. That

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<v Speaker 3>division is at eighteen percent nineteen percent rotten on equity

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<v Speaker 3>this year and.

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<v Speaker 2>We have to leave it there. We thank you so

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<v Speaker 2>much for your time. In abouteen the center, they're executive,

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<v Speaker 2>of course, joining us on blow our results from the

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<v Speaker 2>bank Willo Ford seeing how the shares open