The revenues of Banco Santander SA in the second quarter of this year exceeded the initial forecasts regarding this result of the bank’s activities.

For the first time in many years, the domestic market, which is Spain, has become the main source of profit for this financial institution. Experts say that this result is due to the growth of interest rates in the country.

The banking giant, which is based in Madrid, made a net profit of $2.95 billion in the second quarter of this year. At the same time, the initial consensus forecast of analysts provided this result at the level of $2.86 billion.

For the first time in 14 years, Spain has become the main geographical area of profit for a financial institution. The local unit of the bank has a share equal to 22% of the total income structure of the lender. The business of a financial institution in Brazil occupies 12% of the mentioned structure.

During the second quarter of 2023, the bank in its activities relied on such factors of a favorable impact on the final result as the application of the policy of interest rate growth in European countries, an increase in the customer base in Mexico, and a high level of commission fees in Spain. The current chairman of the management board of a financial institution Ana Botin has identified increasing profitability and increasing the volume of payments to investors as the main goals.

The bank is also currently striving to improve the quality of its assets in the United States and Brazil, which is its second-largest market.

Spanish financial institutions and lenders from other eurozone countries have found themselves in an advantageous position against the backdrop of one of the largest and longest cycles of interest rate increases, which has become part of the policy of the European Central Bank.

The net interest income of the Spanish banking giant managed by Ana Botin in the domestic market increased by 16.5% during the second quarter of this year.

Banco Santander and other lenders based in Spain have faced negative criticism from the government of this country, which has made claims that financial institutions have not increased the amount of remuneration to customers amid rising interest rates. Banks, responding to this dissatisfaction of the authorities, said that consumers did not request payments. Financial institutions also noted that clients have other remuneration options that are more profitable from the point of view of their material interests. At the same time, some small banks are starting to pay rewards to consumers.

Banco Santander CFO Jose Garcia Cantera on Wednesday, July 26, while talking to reporters in response to a question about deposit payments, said that depositors have different options for using savings. He also noted that Spain’s borrowing costs are currently the lowest among the five largest European economies. According to him, this financial circumstance leads to the fact that millions of consumers enjoy low-interest rates on loans.

On the way to achieving the goal of expanding the scope of activities, the financial institution doubles the volume of investment business in the United States. In this country, the bank is striving to become a major second-tier player. Within the framework of the concept of achieving the goal, the lender has identified for itself the main areas of activity in the United States, including brokerage services and financial advice in the areas of infrastructure and energy transition.

The business of financial institution unit specializing in corporate and investment banking grew by 28% during the second quarter, amounting to $2.08 billion.

The media, citing sources, report that over the past few months, the lender has hired several Credit Suisse executives. The investment banking business currently has a share equal to more than 30% of the financial institution’s profit structure.

As we have reported earlier, Santander and Microsoft Launch AI Challenge.