Published by Global Banking & Finance Review®
Posted on February 25, 2026
3 min readLast updated: April 2, 2026
Add as preferred source on GoogleSantander targets profit above €20B ($23.6B) and ROTE over 20% by 2028. It plans to cut cost-to-income to ~36% from 41.2% in 2025, leveraging IT upgrades and synergies from U.S. and UK deals.
By Jesús Aguado
MADRID, Feb 25 (Reuters) - Santander aims to hike its profit by over 40% in the next three years to above 20 billion euros, helped by growth in its U.S. and UK markets, a rise in customer numbers and cost savings from its IT transformation, it said on Wednesday.
Santander, which reported a record net profit of 14.1 billion euros for 2025, also lifted its profitability ratio target by almost four percentage points to above 20% to reflect expected synergies from recent acquisitions of U.S. bank Webster and Britain's TSB.
Its three-year strategic plan envisaged that by 2028 more than 1 billion euros in cost savings and revenues would come from initiatives in artificial intelligence, contributing around 1 percentage point to the group's cost-to-income improvement.
REVENUE, EARNINGS AND COSTS IMPROVEMENTS
Over the 2026-2028 period, the bank targets annual mid-single-digit percentage revenue growth, a double-digit growth in earnings per share, and annual cost declines. Its cost-to-income ratio is seen improving to around 36% at the end of 2028 from a reported 41.2% in 2025.
For decades, the bank's geographical diversification- spanning 10 core markets - has insulated the bank from economic downturns in individual regions but left it vulnerable to currency depreciations, particularly in Latin America.
Shares in Santander, the euro zone's biggest lender by market value, were up 3% at 1221 GMT and have risen more than 80% in the past 12 months, almost twice as much as the European banking index.
Barclays said that Santander's efficiency and profit targets exceeded market expectations and that investors would focus on the bank's ability to deliver structurally higher returns, with lower reliance on Brazil.
The Webster and TSB deals will raise the developed markets' share of Santander's gross operating profit to nearly two-thirds, with the bank aiming for a profitability ratio of around 16% in the UK and 18% in the U.S. by 2028.
"Our (2026-2028) strategic plan sets a new standard for profitable growth, with the aim to serve more than 210 million customers across Europe and the Americas," Executive Chair Ana Botin said in a statement. The bank had around 180 million clients by end of 2025.
GROWTH PRIORITY
European banks announced several new acquisitions last year as they look for ways to deploy the cash piling up from soaring profits, though some, such as Deutsche Bank, Societe Generale, Barclays, have prioritised increasing share buybacks.
Botin said that the execution of the bank's global business model would boost revenues and drive structurally lower costs. Part of its savings are centred on creating a common IT platform and the deployment of a unified global operating business model.
The bank sets a 50% shareholder payout ratio, evenly split between cash and shares, but from 2027 onwards, the cash proportion would rise to 35% in keeping with its goal of reaching a core tier-1 capital ratio of around 13% by 2028, compared with 13.5% at the end of 2025.
Santander aims for higher end-2028 ROTE targets in almost all of its five units, targeting more than 21% for its retail business, more than 20% for corporate and investment banking. For its wealth unit, it forecasts a target of over 60%, a similar level to its current profitability ratio.
($1 = 0.8472 euros)
(Reporting by Jesús Aguado; additional reporting by Emma Pinedo; Editing by David Latona and Tomasz Janowski)
Santander raised its medium-term goals, targeting profit above €20B ($23.6B) and a return on tangible equity above 20% by 2028. The update reflects improved efficiency and integration benefits.
Management cites efficiency gains from IT transformation and cost synergies from recent U.S. and UK deals. These actions aim to lift profitability while streamlining operations.
Santander aims to reduce its cost-to-income ratio to around 36% by 2028, from 41.2% in 2025 (45.3% including banking taxes). A lower ratio indicates better operating efficiency.
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