Banco Santander (NYSE:SAN) reported its highest-ever annual profit on Tuesday, yet shares tumbled nearly 8% as a massive $12.2 billion acquisition in the U.S. and a slight revenue miss overshadowed the milestone.
The Madrid-based lender posted fourth-quarter net income of $4.38 billion (€4.06 billion), contributing to a record full-year profit of $15.95 billion.
While the bottom line was robust, quarterly revenue of $17.65 billion fell just short of Wall Street estimates.
Investors reacted sharply to the bank’s simultaneous announcement that it will acquire Connecticut-based Webster Financial for $12.2 billion—a strategic move intended to triple Santander’s presence in the U.S. Northeast but one that sparked immediate concerns over execution risk and capital dilution.
"Our 2025 results demonstrate the power of our 'One Transformation' strategy, which is simplifying our global operations and driving record efficiency," said Executive Chairman Ana Botín.
Regarding the Webster deal, she added, "This is a rare opportunity to accelerate our growth in the world's largest profit pool with a high-quality franchise that perfectly complements our existing U.S. footprint."
Despite the market's initial skepticism, Santander's underlying metrics remain healthy.
The bank’s Return on Tangible Equity (RoTE) climbed to 16.3%, and its CET1 capital ratio—a key measure of financial strength—hit an all-time high of 13.5%.
The bank also rewarded patient shareholders by announcing a new $5.4 billion (€5 billion) share buyback program, which includes proceeds from the recent sale of its Polish subsidiary.