Financial and Liquidity Management Summary
Santander Portugal's transformation resulted in greater customer loyalty and
transactions, as well as one of the best efficiency ratios in the Portuguese banking system
Financial System
▸ Economic activity continues operating above its potential, driven by private consumption and the post-pandemic recovery in tourism. The
persistently high level of inflation is penalizing households' purchasing power, which is already affecting economic sentiment and future
investment decisions
▸ The abrupt and fast monetary policy tightening is contributing to a faster-than-expected increase in interest rates which will have a mixed effect
on the banking system's trajectory, with a favourable impact on NII but a potentially negative effect on provisions
Strategy & Business
Santander Portugal's comprehensive transformation programme allowed it to increase customer loyalty, with the improvement in net fee
income, high new origination volumes, controlled costs and strict asset quality management
We remain focused on our digital transformation process, with the aim of achieving top customer satisfaction, best-in-class efficiency ratio and
attractive financial performance, including sound capital and liquidity
OD Results
Total income accelerated QoQ, supported by growth in NII, reflecting the positive effect of higher interest rates and the effect from the SRF
contribution in Q2. YoY comparison continued to be affected by ALCO sales in 2021
▸ Operating expenses continued to improve YoY, reflecting our commercial and digital transformation. Efficiency ratio improved by 2.1pp
▸ LLPs remain at very low levels, reflecting the strength of our balance sheet and a resilient labour market
▸ Attributable profit increased 67% QoQ, driven by the recovery in total income, combined with a flat cost base and low provisioning
Santander
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