EU FINANCIALS: Banco Santander: 3Q25 Results Headlines
(SANTAN; A1/A+/A+)
Revenue in line with expectations. Better expenses, driven by the 'ONE Transformation' coming into effect, improving the efficiency ratio from 45.8% in '22 to 41.3% in 9m '25. Provisions slightly better than expected. This results in a decent PBT beat. RoTE post AT1 of 16.1% is not quite hitting the 16.5% target for 2025 but it is close. The wealth & payments business in particular make high teens revenue gains to help boost fee income by 8% vs 9m '24.
- Net Interest Income €11.1bn vs est. €11.2bn (4.8% QoQ / -1.1% YoY)
- Net Fee & Commission Income €3.3bn vs est. €3.3bn (5.9% QoQ / 4.3% YoY)
- Trading Gains/(Losses) €0.6bn vs est. €0.6bn (63.4% QoQ / 19.2% YoY)
- Total Non-Interest Expense €6.3bn vs est. €6.5bn (2.6% QoQ / -1.3% YoY)
- Loan Loss Provision €2.9bn vs est. €3.0bn (-2.9% QoQ / -1.5% YoY)
- Pre-Tax Profit €5.2bn vs est. €5.1bn (1.6% QoQ / 5.7% YoY)
- CET1 Ratio 13.1% vs est. 13.0%
- NPL/Total Loans (bps) 313.1 vs est. 313.3
- Cost of Risk (bps) 107.8 vs est. 112.2
- OpInc/RWA (bps) 82 vs est. 81
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EQUITIES: EU Bank Large Block trade
EU Bank large Block trade, suggest seller:
- CAZ5 ~7.8k at 233.10.
RIKSBANK: September Minutes Due At 0830BST/0930CET; Seim In Focus
Riksbank September meeting minutes are due at 0830BST/0930CET. A reminder that the Board voted to cut the policy rate to 1.75% last Tuesday, with Deputy Governor Seim dissenting in favour of a hold. The guidance was fairly clear that this was likely to be the last rate cut of the cycle.
- We’ll first be looking at Seim’s dissenting comments. The September policy statement said that Seim “advocated an unchanged policy rate….together with a policy rate path signalling some probability of a further cut later this year….She argued that a vulnerable supply side, combined with an expansionary fiscal policy in 2026, implies that inflation could surprise on the upside”
- We already considered Seim to be the most hawkish member of the Board before the September decision, so her dissent wasn’t a massive surprise.
- We won’t pay any attention to First Deputy Governor Breman’s remarks following her announcement as the new RBNZ Governor. Breman formally leaves the Riksbank next week.
- Recruitment for a new Deputy Governor has begun. Aino Bunge has been promoted to First Deputy Governor.
- With the Board currently comprised of only four members, Governor Thedeen has the deciding vote in the event of a tie at upcoming meetings (though these are very likely to be uncontroversial given the September guidance).
SONIA OPTIONS: Call Spread vs Put Spread
SFIZ6 96.60/90.75cs vs 96.25/96.15ps, bought the cs for half in 2k (ref 96.38).
