RESULTS

First nine months of 2018 attributable profit of EUR 5,742 million was 13% higher year-on-year and 28% in constant euros

This figure includes non recurring items mainly associated with integrations (to a greater extent restructuring costs) net of tax impacts of EUR -300 million in 2018 and EUR -515 million in 2017. Excluding it, underlying profit was up 8% year-on-year at EUR 6,042 million (+21% in constant euros).

This evolution was positively affected by the incorporation of Banco Popular and the greater stake in Santander Asset Management and negatively by exchange rates and continued low interest rates in mature markets.
- In constant euros.

Higher customer revenue due to rise in loyal customers, increased business volumes and spreads management

Higher costs due to commercial transformation and digitalization investments

Good credit quality evolution, with lower cost of credit and NPL ratios

9M'18 underlying ATTRIBUTABLE PROFIT TO THE GROUP*

GROUP PROFIT GROWTH DRIVEN BY MOST MARKETS

*Excluding Corporate Centre and Spain Real Estate Activity.
*Excluding net capital gains and provisions.

underlying ATTRIBUTABLE PROFIT TO THE GROUP*

eur million

*Excluding net capital gains and provisions.

9M'18 underlying ATTRIBUTABLE* PROFIT IN CORE MARKETS

EUR MN AND % CHANGE VS. 9M’17 IN CONSTANT EUROS

*Excluding net capital gains and provisions

The information shown above in relation to the different units has been prepared in accordance with homogeneous management criteria for the whole Group and may therefore differ from the information published for each company on an individual basis.

EARNINGS IN THE MAIN GEOGRAPHIES

CONSTANT EUROS

United States:

First nine months attributable profit of EUR 460 million, 47% more year-on-year, due to a fall in costs and, above all, reduced loan-loss provisions. Both Santander Bank and Santander Consumer USA registered strong profit growth.

Continental Europe:

Generated an attributable profit of EUR 2,436 million in the first nine months, 22% more year-on-year including the costs associated with integrations (mainly restructuring costs) this year (in the second quarter) and last year (in the third quarter).
Excluding these impacts, underlying attributable profit was EUR 2,696 million (+13% year-on-year). Largely due to the increase in customer revenue and also benefiting from Banco Popular’s integration.
Of note was Spain with an ordinary profit of 1,306 million and growth of 18% (year-on-year).

United Kingdom:

In a highly competitive environment with some remaining uncertainties over Brexit, attributable profit was 9% lower year-on-year in the first nine months at EUR 1,077 million. This was due to pressure on spreads and investments in regulatory and strategic projects.

Latin America:

Attributable profit of EUR 3,160 million in the first nine months, 21% higher year-on-year. Growth in volumes, spreads management and increased loyalty underpinned the good evolution, both in net interest income as well as fee income, in addition to an improved cost of credit. Of note were results in Brazil, with EUR 1,942 million (+24% year-on-year), and Mexico, with EUR 554 million (+13% year-on-year).

United States:
First nine months attributable profit of EUR 460 million, 47% more year-on-year, due to a fall in costs and, above all, reduced loan-loss provisions. Both Santander Bank and Santander Consumer USA registered strong profit growth.

Continental Europe:
Generated an attributable profit of EUR 2,436 million in the first nine months, 22% more year-on-year including the costs associated with integrations (mainly restructuring costs) this year (in the second quarter) and last year (in the third quarter).
Excluding these impacts, underlying attributable profit was EUR 2,696 million (+13% year-on-year). Largely due to the increase in customer revenue and also benefiting from Banco Popular’s integration.

Of note was Spain with an ordinary profit of 1,306 million and growth of 18% (year-on-year).

United Kingdom:
In a highly competitive environment with some remaining uncertainties over Brexit, attributable profit was 9% lower year-on-year in the first nine months at EUR 1,077 million. This was due to pressure on spreads and investments in regulatory and strategic projects.

Latin America:
Attributable profit of EUR 3,160 million in the first nine months, 21% higher year-on-year. Growth in volumes, spreads management and increased loyalty underpinned the good evolution, both in net interest income as well as fee income, in addition to an improved cost of credit. Of note were results in Brazil, with EUR 1,942 million (+24%), and Mexico, with EUR 554 million (+13%).

Income statement

MILLION EUROS
% change vs. 9M'17
9M'18 EUR Constant
EUR
Net interest income 25,280 (1.6) 8.3
Gross income 35,882 (1.2) 9.0
Net operating income 19,039 (1.7) 9.5
Underlying profit before taxes* 11,230 10.4 22.7
Underlying attributable profit to the Group* 6,042 8.0 21.1
Attributable profit to the Group 5,742 13.1 28.4
*Excluding net capital gains and provisions.

FINANCIAL REPORT JANUARY - SEPTEMBER 2018

Enter