Our diversification continues to provide a strong and resilient foundation for growth. In South America our business continues to grow profitably, generating 33% of our profit from 15% of our lending. North America achieved an adjusted RoTE of over 23%, despite the already anticipated normalization in loan-loss provisions, and returns in Europe and Spain came closer to meeting cost of capital, reflecting the improved connectivity across the region.
Banco Santander achieved an underlying profit of €4,894 million in the first half of 2022, up 16% in current euros versus the first half of 2021. Attributable profit, which was impacted by restructuring charges of €530 million in the same period of 2021, was up 33% in current euros. In the second quarter alone, attributable profit was €2,351 million, up 14% in current euros and 2% in constant euros.
Underlying profit before tax was €7,915 million, after growing 4% in current euros, while tax on profit in the period was €2,374 million, resulting in an effective tax rate of 30%.
The bank continued to see strong customer activity in the quarter despite the market uncertainty. Customer funds reached a new high (€1.1 trillion, +4%) thanks to good growth in deposits (+5%). Lending also grew 6%, with mortgages up 7%, consumer lending up 6%, and lending to companies up 4%. The bank’s loan book remains well diversified across both businesses lines and geographies, with 65% of total lending secured.
The group continued to grow its customer base, adding more than seven million customers in the last twelve months, taking the total to 157 million. The strong increase in digital adoption continued, with 56% of sales now through online or mobile channels, compared to 52% in the same period last year. The total number of customers using digital channels grew by more than four million to 50 million.
Don't miss these key takeways
· The group has remained focused on supporting customers throughout the first six months of 2022, with loans and deposits growing by 6% and 5% respectively in constant euros (i.e. excluding FX movements), and total revenue increasing by 4% on the same basis.
· Santander’s diversification continued to deliver consistent, profitable growth, with South and North America generating an adjusted RoTE  of over 27% and 23%, respectively, and Europe 12%. Together North and South America generated 59% of group profit, with Europe contributing 31%, including Spain, which generated 11%.
· Connectivity across the group continued to drive both revenue growth and cost efficiency, with the group’s global businesses performing well, particularly CIB.
· Digital adoption continued to increase, with 56% of sales now through online or mobile channels. The number of customers using digital channels increasing by 10% to 50 million.
· Inflationary effects led to an overall increase in costs (+5% in constant euros), however, in real terms, costs fell by 4% as the bank continued to improve productivity across markets. The cost to income ratio was 45.5%, placing Santander among the most efficient banks in its peer group.
· Cost of risk was 0.83%, remaining below ‘through-the-cycle’ average. Loan-loss provisions increased by 18% in constant euros, due in part to the release of provisions in the second quarter of 2021, as well as the expected normalization in provisions in the US.
· Attributable profit for the first half of the year was €4,894 million, up 33% year-on-year (+21% in constant euros) after the previous year was impacted by restructuring charges. In the second quarter alone, attributable profit was €2,351, up 14% year-on-year (+2% in constant euros).
· Santander’s balance sheet remained robust and the group’s fully-loaded CET1 capital ratio stood at 12.05% at the end of June 2022.
· Santander is on track to meet the 2022 targets outlined in February (mid-single digit revenue growth, underlying RoTE of above 13%, cost-to-income ratio of 45%, fully-loaded CET1 of 12%), and the board remains committed to its 2022 remuneration policy to distribute 40% of underlying profit to shareholders, split between cash dividend and share buybacks  .
Note: Reconciliation of underlying results to statutory results, available in the Alternative Performance Measures section of the financial report.
 Adjusted based on group’s deployed capital calculated as contribution of RWAs at 12%. Using tangible equity, RoTE is 20.8% for South America, 12.2% for North America and 8.8% for Europe.
 The implementation of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.