Banco Santander posts record profit as rates rise

MADRID (AFP) - Spanish banking giant Banco Santander reported on Thursday record profits for 2022, as higher interest rates boosted its earnings and offset the costs from soaring inflation.    
The bank posted an annual net profit of 9.6 billion euros ($10.6 billion), up 18 percent from 2021 and higher than forecast by analysts polled by financial data firm FactSet.    
"2022 was another strong year for Santander as we made further progress in growing our customer base profitably, while maintaining a rock-solid balance sheet," Banco Santander head Ana Botin said.    
Central banks have hiked interest rates worldwide in an effort to tame runaway inflation, which jumped after economies emerged from Covid restrictions, and surged higher still after Russia invaded Ukraine last year.    
Botin said central banks and governments are expected to continue to focus on bringing down inflation this year. "Our team has proven experience in navigating these conditions successfully and we expect revenue growth will continue to offset cost inflation pressures and the anticipated increase in cost of risk," she said.    
The bank, which has a strong presence in Europe and Latin America, added seven million new clients last year, bringing its worldwide total to 160 million. Its net interest income, the equivalent of its revenue, rose 16 percent to reach 38.6 billion euros, slightly higher than forecast by FactSet.    
The bank confirmed that shareholders would receive a payout of around 40 percent of the group's underlying profit, divided equally between cash dividends and share buybacks.    
Spain's left-wing government plans to impose a temporary windfall tax on big banks in 2023 and 2024 to finance measures aimed at helping households cope with higher prices. The measure is expected to add 1.5 billion euros to the state budget this year and a similar amount in 2024.