Spanish banking giant Banco Santander has reported record profits for 2022, becoming the latest European lender to get a boost from higher interest rates.
The bank posted an annual net profit of €9.6bn, up 18% from 2021 and higher than forecast by analysts polled by financial data firm FactSet.
However, the bank’s massive profits are still streaming in spite of multiple crises. Recent data showed the extent of what poor people face, with particularly low rates of saving in the UK. This is before we address the spiralling climate crisis, fuelled in part by both banks and fossil fuel giants.
Smashed records
The Santander result smashed the previous record annual profit of €9.06bn seen in 2007, before the global financial crisis of 2008.
Banco Santander boss Ana Botin said:
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.
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.
Banks across Europe have capitalised on higher borrowing costs. BBVA (Banco Bilbao Vizcaya Argentaria), Spain’s second-biggest lender by market value after Santander, posted a 38% jump in its net profit to a record €6.42bn in 2022. Germany’s largest lender, Deutsche Bank, also said it booked its highest annual profit since 2007 last year.
Cashing in
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.
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.
It’s worth noting that Botin has previously lashed out against the idea of windfall taxes on the banking industry:
We need . . . sustainable growth, non-inflationary growth – and banks are fundamental to this equation. Governments need to understand that.
Like Big Oil, big banks are making a killing despite the difficulties facing normal people. And it would be fair to say they aren’t big fans of a bit of mild redistribution. And this comes soon after big banks in the City of London gave their biggest bonuses since the 2007-08 crash. Things needs to change, and it can only be done from below.
Featured image via Wikimedia Commons/HRVdriveblue4449, cropped to 770 x 403, licenced under CC BY-SA 4.0.
Additional reporting by Agence France-Presse
By Joe Glenton
