Santander 1Q24: On Track, Little To Drive Spreads Tighter Still

Santander 1Q24 (SANTAN: A2 pos/A+/A) were solid with a good NII beat which equity investors will like, we feel. Credit metrics appear marginally better but perhaps not enough to push spreads meaningfully tighter here.

• Key credit stats: CET1 is in line with consensus (at 12.3%) and loan losses are marginally better than expected (and down 10bp from 4Q23 to 1.23%). Non-performers are also better (and down 4bp from Dec-23 to 3.10%).
• Wider group: revenues are broadly in line with consensus (+9% y/y) but with a good (4%) NII beat which equity investors will like, we feel. The strength of Spain (expected) did much to offset quite a weak UK performance, we feel. Costs were marginally weaker but with some loan loss offset to bring net profit within 1-2% of consensus.
• Outlook: guidance is not being upgraded but the phrase “even overdeliver some of them” is present, referring to 2024 targets.

Conf call is 0900 (London time) at: https://aiti.capitalaudiohub.com/santander/reg.html