Overview
Santander on Wednesday presented a strategic plan running to 2028 which targets annual net profit of more than 20 billion euros. The Spanish bank said the push toward that goal will be underpinned by stronger contributions from its U.S. and U.K. operations, an increase in customer numbers and cost reductions linked to an overhaul of its IT infrastructure.
The bank reported a record net profit of 14.1 billion euros for 2025 and raised its medium-term profitability objective by almost four percentage points to a level above 20% to reflect anticipated synergies from the recent acquisitions of U.S. bank Webster and Britain’s TSB.
Geographic mix and market reaction
For decades Santander has relied on geographic diversification across 10 core markets to smooth the impact of regional downturns. However, that same breadth has historically left the lender exposed to currency depreciation risks, particularly in Latin America, the bank noted. At 0918 GMT following the strategic plan announcement, shares in Santander - the euro zone's largest lender by market value - rose by more than 2%.
The deals for Webster and TSB materially shifted Santander's profit mix. On a pro-forma basis, developed markets now account for nearly two thirds of the group's gross operating profit, up from 56% previously, the bank said.
Customer growth and operating model
Executive Chair Ana Botin said the 2026-2028 plan sets a new standard for profitable growth, with an ambition to serve in excess of 210 million customers across Europe and the Americas. Santander had around 180 million clients at the end of last year. Botin added that disciplined execution of the bank's global business model will support revenue expansion while delivering structurally lower operating costs.
A significant portion of the expected savings is to come from the roll-out of a common IT platform and the adoption of a unified global operating model. The bank aims to improve its efficiency ratio to roughly 36% by the end of 2028 from a reported 41.2% in 2025.
Capital, payouts and targets
Santander maintained a 50% shareholder payout ratio, to be split evenly between cash and shares. From 2027, the cash portion of that payout will rise to 35% as the bank balances distributions with a target to reach a core tier-1 capital ratio of around 13% by 2028. That compares with a core tier-1 ratio of 13.5% at the end of 2025.
Exchange rate information cited by the bank included a conversion of $1 to 0.8472 euros.
Implications
The strategic plan emphasizes scaling in developed markets, reducing costs through technology consolidation and growing the retail customer base. The bank's stated targets and the expected impact of the Webster and TSB acquisitions underpin the higher profitability objective and the revised efficiency target.