Santander posts record first-half profit as technology overhaul cuts costs

Banco Santander reported record underlying profit of €7.3 billion, about $8.3 billion, for the first half of 2026, up 15% from a year earlier, as the Spanish banking group linked stronger customer activity and lower costs to a broad technology overhaul. In the second quarter, underlying profit rose 17% to €3.8 billion, about $4.3 billion, according to results released by the bank on Wednesday.

The earnings release said revenue increased 6% in the first half while costs declined. Santander attributed part of the improvement to ONE Transformation, its programme to use shared technology platforms, data infrastructure and artificial intelligence across its businesses.

Executive Chair Ana Botín said in the release that the group added 12 million customers year on year in the first half. She said revenue growth and lower costs, supported by ONE Transformation, improved operating leverage and helped deliver record profit.

Shared platforms and AI

Santander has described ONE Transformation as an effort to scale common technology across its global operations rather than maintain separate systems in each market or business line. The model is intended to lower duplication, speed product development and give the bank a common base for data and cloud-based services.

In a presentation released alongside the results, Santander said the programme includes digital self-service tools for contact centres, artificial intelligence to improve cross-selling across businesses, global technology deployed throughout the group, and common architecture, cloud capabilities and data.

The bank said in February that investments in data and AI would be embedded in its businesses and used to deliver more personalised customer journeys. In banking, that type of deployment can allow a group to use customer data across channels, subject to controls and local rules, to tailor offers, automate service requests and reduce manual processing.

For investors, the operating effect is measured through the combination of revenue growth and cost control. Santander said efficiency gains from ONE Transformation contributed to a 2% reduction in costs during the first half. The bank said lower costs, together with strong customer activity, supported the record profit for the period.

Targets maintained

Santander reiterated its 2026 objectives in the Wednesday release. Those targets include mid-single-digit revenue growth, lower costs in constant euros and profit above the €14.1 billion, about $16.1 billion, reported for 2025.

The bank said it expects revenue growth to continue to draw support from customer activity. It also said net fee income is expected to grow faster than net interest income, while cost discipline and ONE Transformation are expected to support positive operating leverage.

Net interest income is the spread banks earn between what they receive on loans and securities and what they pay on deposits and other funding. Net fee income comes from services such as payments, asset management, cards and other customer activity. A faster rise in fees can make earnings less dependent on the direction of interest rates, although Santander did not provide a market forecast in the release.

The group also reaffirmed the three-year plan presented at its Investor Day in February. That plan includes a target for profit above €20 billion, about $22.8 billion, by 2028. At the time, Santander said it planned to use artificial intelligence to expand profit and its customer base over the following 24 months.

This story draws on original reporting from PYMNTS.