By Jesús Aguado

MADRID (Reuters), Spain’s Santander said on Friday it would meet its 2022 profit target. It also maintained its midterm goals, thanks to solid performances in Europe and the Americas.

In spite of the rising energy costs felt primarily in Europe, the lender maintained its goal of 13% for underlying returns on tangible equity (ROTE), up from 12.73% 2021.

Santander 2022 has also retained its goal of 12% core-tier-1 fully-loaded capital ratio. Santander will continue to pay out dividends at 40 percent and maintain its cost-income ratio of 45% as a measure for efficiency at 45%.

Santander has been able to diversify, particularly in Latin America. This helped it cope with the difficult conditions faced by European lenders since the financial crisis.

The underlying profit of the company in North America exceeded 3 billion euro, a record that was boosted more than threefold by an increase in the United States. In South America however it grew by 24 percent to 3.33 billion euros.

In 2021, the underlying profits of these two regions were around 60%. Europe was 28%.

Santander chairman Ana Botin stated that “in the first quarter 2022, commercial activity has remained robust with revenues in line the previous quarter, and new lending returning at prepandemic levels. This is an increase of approximately 8% annually,” in a statement before the bank’s annual shareholders meeting.

Santander shares were at 3.16 Euros, up 2.2% at 0717 GMT. This was more than Spain’s top blue-chip index Ibex-35 (up 0.4%).

Santander, helped by lower loan losses provisions, earned a net profit in October and December quarters of 2.28 Billion. This is up 4.6% over the previous quarter.

After losing 8.77 trillion euros in 2020, it reported a net profit in 2021 of 8.12 Billion Euros.

Santander has no presence in Russia and Ukraine. This limits its exposure to around 80 million euro. However, the conflict can have an indirect effect, particularly through higher energy prices for its customers.

Santander stated that Botin would assure shareholders that the bank would achieve an underlying return of tangible equity and cost to income ratios of approximately 15% and 40% in the medium-term, respectively. The bank also aims to maintain a capital ratio at 12%.

On Friday, the bank’s shareholders are expected approve a final cash distribution of 5.15 Eurocents per share. This is in addition to an existing 4.85 Eurocents per share.

The capital distribution against the 2021 results will be 3.4 billion Euros with a share buyback of 841 millions euros and an additional buyback 865 million euros.

A reduction in the outstanding capital of the group of 10% will be approved by shareholders. Shareholders may also vote to cancel any shares acquired under future repurchase programs.