Santander Raises Profit Forecast on Digital Product Strategy
Santander has hiked its 2028 profit forecast to over €20 billion, citing recent deal activity and a strategic product shift. The bank is increasingly prioritizing fee-based services, digital consumer products, and cross-border partnerships to counter margin compression in its traditional lending and payments businesses.
- The new strategy, dubbed the "ONE Transformation," aims to grow Santander's customer base from 180 million to over 210 million by 2028, targeting a return on tangible equity (RoTE) above 20%. - A core component of the strategy involves generating over €1 billion in annual value from Artificial Intelligence and data by 2028, which will be applied to streamline operations, enhance fraud detection and risk modeling, and deliver more personalized services. - Santander's payments fintech, PagoNxt, recently enabled Real-Time Payments (RTP) in the U.S. by connecting to The Clearing House's RTP® network, giving its two million U.S. customers access to instant payments. This follows PagoNxt's acquisition of Wirecard's European assets and a majority stake in Mexican fintech MIT to bolster its global merchant acquiring arm, Getnet. - In Europe, the bank recently merged its digital-only unit, Openbank, with Santander Consumer Finance to create a single, more efficient digital-first bank, a move designed to better integrate product offerings and reduce operational costs. - The digital strategy for the U.S. market includes the national expansion of its digital platform Openbank, which attracted over $2 billion in deposits within its first three months of operation. - Under Executive Chair Ana Botín, the bank is pursuing a "digital bank with branches" model, focusing on organic growth and simplifying the group's structure following major acquisitions like the $12.2 billion deal for U.S. lender Webster. - To expand its merchant services, Santander UK has entered into a partnership with Worldpay, giving its business clients direct access to Worldpay's payment processing platform for point-of-sale and e-commerce transactions.
