2Q26: Better NII and Fees offset by Trading

Research evidence excerpt

2Q26: Better NII and Fees offset by Trading

Update

July 22, 2026 06:21 AM GMT

Morgan Stanley Europe S.E., Madrid Branch+MSantander | Europe Alvaro Serrano

Equity Analyst

2Q26: Better NII and Fees offset Alvaro.Serrano@morganstanley.comMorgan Stanley & Co. International plc+ +44 20 7425-6942

Almario Sulaj

Research Associateby Trading Almario.Sulaj@morganstanley.com +44 20 7425-2049

Santander (SAN.MC, SAN SQ)

AlphaSignals Earnings Reaction

Top Pick

Unchanged In-line Largely unchanged

Banks | Spain

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS Stock Rating Overweight

Source: Company data, Morgan Stanley Research Industry View Attractive

Price target €13.50

Shr price, close (Jul 21, 2026) €11.91

Key Takeaways 52-Week Range €12.59-7.14

Mkt cap, curr (mn) €174,756

Ppop is in-line with consensus with better NII and Fees offsetting lower trading Return on avg tang eqty (12/26e) (%) 17.0

P/tang BV (12/26e) 1.9

held back by FX hedging. Costs in-line. P/E (12/26e) 11.5

CET1 of 14% came in 10bp above MSe, helped by 4bp model tailwinds and a 5bp

lower TSB capital consumption, on track to meet its 12.8-13% target.

By region, Spain NII/Fees were 5/8% better, US beat on fees/provisions, and costs

in key regions were also better. Brazil more mixed on lower fees & trading

2026 guidance was reiterated: mid-single digit revenue growth, costs down, and

underlying profit growth from€14.1bn in 2025; Brazil profits were 7% lower.

We would expect a neutral share price reaction. We are Overweight on 1.75x TBV

for 21% ROTE 2028E including Webster. The analyst call is at 9:00am UK time.

2Q26 net profit was €3.5bn +4% vs. MSe and 5% ahead of consensus. Revenues

were in-line with MSe/Consensus with better NII and Fees offsetting lower trading