Banco Santander’s London-listed shares surged on Thursday, gaining over 3% in morning trading after the Spanish banking giant posted second-quarter net profit that comfortably exceeded market expectations. The stock hit a session high of 456p, making it one of the top performers on the FTSE 100 index, which itself edged up 0.4% to 8,215 points.
The Madrid-based lender reported net profit of €3.2bn for the three months to 30 June 2026, a 12% increase compared with the same period last year and ahead of the consensus analyst estimate of €3.0bn. Revenue rose 8% to €15.4bn, driven by robust lending growth in its UK and Brazilian divisions, while the net interest margin — a key measure of profitability — improved across most regions.
Santander’s UK arm, which operates Santander UK and Cater Allen, saw pre-tax profit climb 9% to £1.1bn, helped by higher mortgage lending and disciplined cost control. The bank also set aside less money for bad loans, with the cost of risk falling to 1.12% from 1.25% a year earlier, reflecting an improving credit environment in its core markets.
Analysts at RBC Capital Markets described the results as “solid across the board”, noting that the beat was broad-based rather than reliant on one-off gains. They highlighted that Santander’s diversified geographic footprint — spanning Europe, Latin America and the US — provides a buffer against regional economic slowdowns. For UK investors, the stock’s strong performance is a welcome boost for pension funds and income portfolios that hold the shares for their dividend yield, currently around 5.8%.
The positive sentiment also lifted other European banking stocks, with shares in Barclays and Lloyds Banking Group rising 1.2% and 0.9% respectively in London. However, some analysts warned that UK-focused lenders face headwinds from a slowing housing market and potential interest rate cuts by the Bank of England later this year, which could compress net interest margins.