Good afternoon, welcome to the Santander Investor Day 2026. I'm Raul Sinha, Global Head of Investor Relations, it's my pleasure to welcome all of you here in London and all of those who are joining us virtually. It's been three years since our last Investor Day, the world is changing a lot. It's time to talk about why we're well-positioned for the future, for that, I'm honored to introduce our management team, led by Ana Botín, our Executive Chair, Héctor Grisi, our CEO, and José García Cantera, our CFO. A few logistics points to highlight before we start. We're gonna have a presentation from Ana, followed by a presentation from Héctor, we'll have a short break. After that, we will have a presentation from José open up to your questions.
All the presentations will be available on our website shortly before the session start, and a recording of this event will be available on our website shortly after the event is finished. With that, Ana, over to you.
Good morning to everybody, and welcome to our Investor Day. It's the fourth for me, I think for José also. I would like to first begin by giving you an overview of our strategic targets and our plans. Héctor will follow, we'll have a coffee break, and then José will take you in detail through the balance sheet and also capital allocation. I will then wrap up after that, at the end. I'd like just to take a step back and cover very briefly what has been the last 11 years. It is important. We have transformed Santander into a more simple, more effective, and more predictable open global financial services platform.
I'd like to highlight four things that I think are especially important to show what has changed in a structural way, because it underlies what we believe will be an increasingly predictable performance, and especially, a through the cycle, better performance than our peers. First of all, our operating model is now globally aligned. It's more simple. We have reduced complexity. We have fewer products, more common processes, and more automation. This improves experience for our customers, you have seen that in our customer growth. At the end, that's what creates value in a company, and of course, at the same time, reducing unit cost. By the way, this sounds easy. It is hard, and it's what people usually consider boring. It's about changing the culture. It's about changing the way we run the bank in a very structural way.
Second, the second is only possible if you do the first, we're now scaling common technology platforms. That is at the heart of One Transformation. Scale in banking is not only balance sheet, it is operational scale. The ability to build once and deploy across markets, improving both time to market and cost to serve, and of course, the customer experience. We are the scale player in retail and consumer banking across Europe and the Americas, and our global platforms enable us to harness scale efficiencies at a global level, not just by country. My third point is equally important, and it's about our earnings mix. It's increasingly of higher quality and even more predictable. We're growing fee income, generating more capital-light businesses, deepening customer primacy, and importantly, increasing hard currency exposure, which of course, should lead to lower cost of equity and lower volatility.
Lower structural cost of equity over time. Last but not least, our capital position creates optionality. We can invest, execute selective bolt-on acquisitions where returns exceed buybacks and still maintain a sustainable distribution profile. All these are structural changes that matter because they reduce uncertainty, which is a cornerstone for assessing what ultimately drives the valuation of a bank over time. That is what has changed. That is what is giving us a very solid foundation for the future. It is equally important to say what has not changed. Our strategy remains the same. We aim to be the best open global financial services platform, we can help people and businesses prosper.
At the heart of that purpose is our responsibility, our responsibility to be there for 180 million customers in good times and bad, and the wider responsibility to help tackle global challenges, to help our customers transition to a green economy, to give more people access to the financial system and empower them to make prudent financial decisions, to support enterprise and give people the skills they need to get on in life and set up new businesses. We're one of the biggest supporters of universities in the world, and all of that is what drives economic growth and ultimately, our shareholders' value over time. I want to say very clearly, the world is changing, but our principles are not, and we remain totally committed to be a responsible bank for our teams, our customers, our shareholders, and our communities.
Over the last decade, I think you can see that in the screen. I'm not going to spend a lot of time, but we have not just delivered the last three years. We have delivered on every single one of our 3-year plans since 2015. We are coming from way behind, and our profitability was relatively low. It's now higher. We've built capital. We've set the foundations, I had just explained, and we are now, after what we call three years ago, a new phase of value creation. We're not quite sure how we call this period. We haven't really giving it a name, I call it's about growth.
I always tell our teams, "You need to earn the right to grow." We believe at 16 and going to 20, over 20% profitability, we now can accelerate growth. We are setting, of course, the bar even higher. This is also important because we are a bank. The world is a complicated place. There's lots of uncertainty. Markets could be volatile. That is when Santander delivers better than peers. This is not about 10 years or three years. This goes back, as you can see, in the bottom graph, since 1999. That covers the global financial crisis. That compares with the best banks in Europe and the Americas. We are, as you can see, the lowest earnings per share volatility. Very important, we have multiplied by eight our profits in that period. Accelerating, of course, the last couple of years.
We're by far the least volatile bank. We also, with one other U.S. bank, the one that has grown profits more. Again, we have set the foundations to continue doing that for the next few years. The other graph is important because, again, we're a balance sheet bank. We have credit risk. Our pre-provision profit reached a level that is close to three times our cost of risk. You can see it's going in the right direction on the graph. This shows the strength of our model and of our balance sheet, again, in a global environment where this is going to be increasingly important. I would also like to point out, some of you, we've spoken about this, that in 2025, we have delivered in spite of the macro.
We were anticipating in our base case scenario in Brazil, which was not the one we had, the high rates were a negative impact on our net interest income and cost of risk. We still delivered on our targets for 25. As I mentioned before, it's about customers and customer growth. That's what makes a business sustainable. You can see here that we have grown our customer base by 13% over the last three years, from 160 million to 180 million, we have grown revenue by 20%, from EUR 52 billion to EUR 62 billion, with fees, again, growing faster than net interest income. The key behind this progress has been the execution of One Transformation and also the network businesses.
Network businesses we call our Corporate Investment Bank, wealth management, and payments. All of these are operating increasingly as global platforms, as I explained. We can see the numbers here in the Retail & Commercial grew revenue by 16, Openbank by 5. We'll explain later, there was some negative one-offs there. CIB by 27, wealth by 58%, payments by 23%. One Transformation, this is the past. I just want to make sure I show this because this is what we showed you three years ago. We have done exactly what we promised from 45.8 to 41.2 in 2025. We have increased operational leverage, improving cost to income by 2.5. That includes the $300 million efficiencies, which we specified last year, three years ago, in the U.S. consumer and commercial.
We have reduced our product offering by 61%. This is also a forward-looking indicator because that will deliver better numbers going forward, customer experience, and also financial numbers. Our global and network businesses have reduced cost-income by 1 point. We are monetizing increasingly our scale and connectivity and growing in the fee-based capital-light revenue while reducing unit cost. Global tech, again, a contributor to the cost-income improvement as we deploy the shared platforms. What's important, and this is the sort of headline, is that we are seeing higher revenue per customer, lower cost per customer, and near zero incremental cost for growth. This is really important. Obviously, as you will see, this will make our operating jaws wider over the coming years.
I want to say, and I believe the team already gave you details, but we have moved to a more conservative view on our cost. There was a line that was sometimes difficult for you to predict. It will be much easier because we're now fully allocating costs that were previously in other results. Everybody is going to be accountable, and this is very important. It will mean that our efficiency will be a big focus again for the next cycle. The Santander of tomorrow is on the way. This is our new financial North Star. Let me just take you briefly through it. It looks about the same, but as you can see, the numbers are not the same as last time. We have made strong progress. We are raising our ambition.
We still aim to deliver compounding tangible book value per share through the cycle with accelerating growth over the next three years. We aim to grow our profits to above EUR 20 billion, improve RoTE to above 20% by 2028 through the execution of One Transformation and of course, the M&A we have done this year with the U.K., TSB in the U.K. and Webbs in the U.S. We are targeting EPS growth well into double digits from 2026-2028. We will maintain our ordinary payout of 50%, with cash dividend payout increasing to 35% from 2027. The second half of 2027, on the profits of the first half, there will already be this higher payout on the cash dividend and organic capital reinvested above 20% returns.
Excess capital above 13% CET1 at the end of the period by 2028 will be distributed to shareholders. All of this, if you do your math and you believe the numbers, which I hope you do, cash DPS will more than double by 2028 from 2025 levels. As a result of all of this, our value creation, which is tangible book value per share growth, including cash dividends, will accelerate to high teens, up from our previous target of double-digit growth. Again, we'll take you through that in more detail in a few minutes. We expect to end 2028, actually 2027 already, with a CET1 ratio above 13. All of this is financial. It's our North Star. Shareholders, you all, we all own the company, but this is only possible if we have clear operational targets.
We did this time bring you what is our key targets from an operational point of view. Again, we strongly believe in our business model as a scale player in consumer and retail banking, customer growth matters. That is what you have in the center, over 210 million customers by the end of 2025, and importantly, grow active customers from 106 million today to close to 125 million by 2028. That is a big number, by the way. We aim to increase fees per active customer to EUR 135 from EUR 130 in 2025, supporting a high-single-digit CAGR in fees. A key operational commitment, and what's supporting these numbers, is the deployment of Gravity and Gravity 2.0, including our One App.
Gravity and One App will be serving over 80% of our retail and consumer customers by end of 2026. Of course, operationally, One App and common journeys are essential to scale efficiently. We will be able to offer a more personalized proposition at a structurally lower cost per active customer, which we're also putting as a KPI, which we aim to fall by close to 17% by 2028. Again, the outcome of these operational KPIs, along with One Transformation, will increase revenue mid-single digit and lower cost in absolute terms every year in constant EUR. That is excluding M&A. Including M&A... By the way, all the guidance we're giving today, unless we say it includes M&A, doesn't include M&A, okay? And it's in constant, except for the total profit and a few other numbers.
Including M&A, double-digit revenue and digit growth. What is it that makes us different? We believe our business model is unique. It combines unmatched global and in-market scale in retail and consumer banking. We have strong customer focus. We are diversified across Europe and the Americas. More than 30% of our profit after tax now comes from high-growth, highly profitable global network businesses. All of this, when combined with our three core pillars, will deliver consistently for shareholders. Let me take one of these at a time. First, the customer. We aim to be number one bank by number of customers in our footprint, our customer growth taking us to above 210 million customers by 2028. Second, One Transformation.
There's a lot of upside still in One Transformation, changing the model to using global platforms to improve customer experience with a lower cost to serve, creating a positive flywheel that will continue to drive customer growth and customer primacy. Again, our network businesses, which will accelerate revenue growth, leveraging the network, increasing fees across all these businesses. Course, underlying all of this will continue our disciplined capital allocation, continued investments in data and AI, and the integration of the bolt-on acquisitions. All of that will drive the mid-single-digit growth in revenue, double-digit, including M&A, with lower cost. Let me just briefly go, maybe not so briefly, over each one of these four pillars. Raul? Okay. Let me start with customer growth again. As you can see, lots of focus on this.
We'll drive customer growth by combining our leading local franchise, built on trust, with our scale and common platforms. Creating the best user experience using global, not local, platforms will attract more customers and increase primacy at a lower cost to serve. This is our flywheel, and that will drive growth in the future. This primary focus is clear. We will improve customer experience, increasingly with AI-enabled personalization that is already being used across the bank. We will expand our customer base from today's scale to the next level, and very importantly, the integration of TSB and Webster will be a key focus for the next couple of years. It will increase our market share in the U.K. and the U.S. and help us also to accelerate growth. This is probably something you haven't seen until now.
If we include and restate our M&A, so Webster Bank and TSB, our cost base at the end of 2025, obviously taking Poland out, would have been EUR 28.5 billion. Our target for 2028 is to be below 27%. Believe me, there's very detailed plans behind these numbers, and that's the reason we're showing them to you here. As we execute our plan, the benefits of One Transformation that you see are on a net basis, and I just wanted to make sure you understand the effort and what is going on behind the scenes. There is inflation in many of our countries, quite high. There is investments in tech and AI.
If you take all of that into consideration, the execution of One Transformation. By the way, you're going to see now with tech and AI separate, but here you have tech and AI embedded in the One Transformation. That is a improvement in cost between EUR 4 billion-EUR 5 billion. The synergies from the integrations of TSB and Webster is EUR 1.2 billion. Again, this is one way of looking at One Transformation. This is another one. The CEO will show you a bit more detail on this so you can understand our plans better. The efficiency ratio, 45.3, that is restated. We have been, as I explained before, more conservative, assigning other results to the businesses and countries, so that 45 is comparable to the 36.
That's 9 points of improvement, basically, in our efficiency over the next three years. One Transformation is the operating engine. I said that. That's what turns scale into structural advantage. That will help us to reduce efficiency by 3 percentage points. We have broken out our investments in AI and tech, because that is something which we are already doing. I will cover AI in a minute, but that will enable us to become more efficient, reducing cost to income by around 1 point. Our global technology platforms, Gravity 2.0, will mean another 2 points in reduction. Again, what's important is that we can absorb growth with very limited incremental cost, and this is a key part of what we're doing in the next few years.
Finally, our network businesses, here we are increasing our cost, but efficiency is improving, as you can see, reducing cost-income by one point. Again, the network businesses is a bit of a different model, but efficiency also improves. Last but not least, TSB and Webster, that's another 2 percentage points from these two integrations by the end of the period. When we talk about One Transformation, it's the whole bank, but it's really a program that is about retail and consumer. When you compare us with Nubank and Revolut, please compare us and tell us where they're better and where we are better, and we'll get closer to them, believe me. This is the numbers, because this excludes the network businesses. This is only retail, commercial, and consumer banking.
Here, the ratio will go down to 34%, actually less than 34%. Again, retail, commercial, and Openbank. Digital players are in the 30%-38% range. This is really important, okay? That is why our ambition is to be one of the scale players in retail and consumer banking. We also do this, by the way, while operating 7,000 branches and our Work Cafés. We believe in the age of AI, this is differential, and this is the best way for us to have the positive flywheel, but also have that physical connection, which we think will be more and more valuable as time goes by. If you look at, again, retail and commercial and Openbank combined RoTE waterfall, how do we get from the around 15 to over 20?
1 percentage point will come from the announced bolt-ons, 1 percentage point from efficiencies, about 1 percentage point comes from growth, about 1 percentage point from capital allocation. José will go into more detail in that. Most of you know this, allocating capital in a dynamic way across geographies and across global businesses is something we do better and better. Again, every one of these levers has specific plans, and this is how we get from the 15 to the over 20%. Our network businesses, CIB, Wealth, and Payments, a big driver of our fees. We said that three years ago, that will continue to be the case. We will grow fees in high-single-digit CAGR and achieving a cost-income of below 43% in CIB. Here, again, we're playing to our strengths.
We have said, we will keep CIB capital below 20% of the total, and the RoTE will be above 20% by 2028. In Wealth, again, growth fee income, double-digit CAGR, increasing private banking and asset management AUMs by about over 20%, with RoTE above 60%. Last but not least, in Payments, which is a cornerstone of our strategy, where we aim to be a scale player as an enabler, but also as offering more and more to open markets, revenue, again, is expected to grow double-digit, actually over 15%, lowering cost per payment transaction by 40% and expanding EBITDA margin to close to 45% by 2028. The fourth pillar, which is our tech and AI, we will continue to invest. I wanted to stress that this investment is starting to see the benefits.
We've been investing every year for the last 10 years, over EUR 2 billion. If you do the math, that's EUR 20 billion investments in both tech and AI. We plan to continue investing about those rates, but now together, which will mean a lot more bang for the buck, as they say. This is how we scale execution with control. Gravity is our foundation. It's our backend system. It removes reliance on legacy system, creates a common architecture. Gravity already processed 1.3 trillion transactions per year, covers 70% of Santander's technical operations. We have gone live in many countries, but there's one big one that will happen this year, which is Brazil, and that is, again, one of the big uplifts that we have in our plan as Brazil goes on to Gravity.
We have already launched, actually, what we call Gravity 2.0. This is really important. Gravity is not the end of the efficiencies. Gravity 2.0 has already happened or is happening in our payments hub. This is a global API and account to account that connects all our banks instantly. With Gravity, the savings we have gotten across the group as we take out literally hundreds, if not, I think more than 1,000 applications, has been 16%. With Gravity 2.0, which means that, you know, what we're going to build on top of that, these numbers go up to 45. This is not a PowerPoint. This has happened already, and we have the plans, and this is only one of the platforms that will come on top of the Gravity backend solution. It is a very simple concept.
It's build once and deploy everywhere. For those of you that follow this, it means integration costs go down to close to zero. That's the aim anyway. This is huge, by the way, and this is something which reduces duplication, strengthens operational resilience, so it's really a very, very powerful concept, which is, it's on its way. In terms of AI, I think the slides are being broken up, so you can follow them there. We believe we have a structural advantage in AI. It's not a given, but we are going to continue to make sure that that delivers according to our plans.
We have strengthened our data and architecture, governance, which are cornerstones of AI, but AI allows you to actually leverage our data, which is in multiple places around the world, without having to create a single, you know, what they used to call source of truth data lake. This is really important. Our strategy is to use our decades-long quality data, proprietary data, our financial strength, and our customer relationships to integrate AI fully into our banking platform. We see this at two levels, one as a defensive, i.e., embedding AI for productivity reasons. We are already doing this across different parts of the bank, and we're also taking what we call an offensive stance, where we want to use AI to expand our reach. I like to think of what we've done over the last 10 years.
I'm not allowed to say LEGOs, I'm not saying LEGO. I'm saying building blocks, but let's call it like it, you know, LEGO-like. Sorry, I had to say it. I didn't say LEGO, I said building blocks. The building blocks are very simple. We have a company called Ebury. Ebury is already building its own agents on processes that are very similar to what we have in our banks today, and these are the results, okay? Again, think of this as a building block that you can then scale. If you think about AI at Santander in 2026 and 2027, it's about a lot of initiatives that are going on that have not yet scaled, but once they scale, the numbers are very, Well, I would say very big. These are backend processes, operational processes.
10% of the processes. This is a company that does cross-border FX for SMEs globally. 30 countries, single onboarding, based in London. 10% of the processes meant 60% of the cost. We are building our own agents and getting to numbers, it's early days, that could lead us to 50% reduction of cross-border payment cost. This is something that is not just Ebury, that we're now working, and we have here our Head of Retail, Daniel, and Borja, Head of Commercial, I think he's here, and José Luis, Head of Payments. Please talk to them because they know this well. All these initiatives, if you take everything together over the year of the plan, we're aiming for EUR 1 billion, of which cost reduction, around EUR 700 million, I think, and EUR 300 million in revenue enhancements.
This is happening across the bank, but this is the year where we start to scale. The roadmap to over EUR 20 billion profit. There's different ways of looking at this. This is one that I think is important. You think about hard currency, soft currency, separating the bolt-ons, hard currency, ex the bolt-ons, grows by EUR 3 billion, soft currency by EUR 2 billion, and the bolt-ons by EUR 2 billion. This will take our profit from a like for like EUR 13.1, excluding Poland, to more than EUR 20 billion by the end of 2028. Important because of the tangible book creation, the leakage will be reduced, and José will take you through that later.
This EUR 20 billion in profit translates into RoTE exceeding 20% by 2028, and we believe we have further upside after 2028, so we are confident that our model is not ending in 2028. I want to make sure I make that point. In retail, our RoTE will increase above 21%. In Openbank, the delta is very big, RoTE to circa 16%, and in, of course, you know already the U.S. as a country, we have said not over 18%, and Brazil RoTE will also improve to around the 20s. I already said CIB above 20%, wealth above 60%, and payments, I mentioned already, the numbers.
Again, One Transformation, revenue growth and further cost synergies, together with Gravity 2.0, which is only just beginning, and AI, we see further upside from 28 in terms of our profitability. I'd like to end by our capital discipline. Our capital allocation framework and hierarchy will be a fundamental pillar of our strategy, as it has been for the last few years as we move into this new phase. Following the bolt-on acquisitions of TSB in the U.K. and Webster, we are now at scale in all our core markets. When you combine the in-market and global scale, we will be adhering to the capital hierarchy that prioritizes profitable organic growth above 20% at the moment, followed by shareholder distributions, with a floor on distributions corresponding to a 50% payout.
This means that throughout the plan, we will generate over EUR 50 billion in capital to fund both profitable growth and shareholder distributions. We will return excess capital above 13% at the end of our plan, again, following this hierarchy. A brief reminder on our M&A this year, which will add 9% to our EPS, growth or synergies, 9%, these two bolt-ons. We have refocused our footprint. As we said when we exited Poland, it's a great bank, a great business, but there were better owners. We, you know, the network effects were not as powerful as they should be, and the country happens with TSB and Webster.
They were consistent with our capital hierarchy at the time when we did TSB, at the time we did Webster Bank, roughly the difference between buybacks and the return on invested capital was about the same, a very significant 5-6 percentage points. It will allow us, in the case of TSB, to take our local RoTE to close to 16, with a return on invested capital of close to 20, increasing our market share in the U.K. near the top three marketplace in mortgages and to top three in personal current accounts, which is the relevant metric in this business. Webster Bank will enhance our local RoTE to 18 in 2028, for a return on invested capital around 15. It will accelerate our strategy. It's a high-quality franchise. This is a very good bank.
It will put us top five by deposits in the Northeast, and top five among the 25 largest banks in the U.S. in terms of profitability in 2028. As I mentioned already, our hard currency exposure will rise to 80% of the group's loans, and we expect this mix shift to lower the group's cost of equity. This is a bit more detail in what I just mentioned. You can see there, we're going from 75 to 80 in hard currency. This is really important. We think this is a structural shift in our model, and we expect, therefore, lower earnings volatility and higher value creation. It's important that post-TSB and Webster, all geographies, all countries will be above the 15% RoTE. Again, which is something we had not achieved before.
Am I supposed to do this one now or at the end only? Twice. You sure?
...
Okay. I'm going to do the closing twice, right?
Yes.
Okay. Okay, fine. Bear with me, please. Our investment case is solid. We'll increase EPS well into double digits from 2026 to 2028. We'll accelerate value creation to the high teens, up from a previous double-digit growth, which at the time, three years ago, was considered ambitious, and we'll more than double cash dividend per share by 2028 from 2025 levels. Again, assuming we deliver, which we will, all the numbers we're telling you today. What does this mean for shareholders? This will lead to, again, cash DPS more than doubling by 2028 from the end 2025. We'll continue to compound growth in shareholder value and tangible book value per share through the cycle. We aim TNAV plus dividends per share accelerating to high teens, increase RoTE to 17%-20% on average. We do expect lower FX headwinds as we continue hedging excess capital in subsidiaries.
We'll continue to be very disciplined in upstreaming dividends and increasing the proportion of TNAV denominated in hard currencies to around 60%. That's up from about 55%. In short, the plan is to compound tangible value per share while continuing to return capital and accelerating shareholder value creation through 2026, 2028. Just to end, we have a clear financial North Star. We are lifting our ambition for profitable growth and value creation. Now you'll get a lot more detail from Héctor. Please, the floor is yours.
Hello, good afternoon. Thank you for joining us today. It's a pleasure. As you have seen, Ana has outlined the ambition, and not small one, by the way. Today I will focus on how we're going to deliver it with this great team that I have in front of me, and why we are so confident that we're going to be able to make it. Okay, this, as you can see, you have seen it before, this is a go-to model of the group. What we have built is a scalable operating architecture. Scale, customer focus, and diversification are the foundation of this. This is not complexity, this is one integrated platform. The architecture is built, and the engines are running. Now, this is about executing with precision to deliver higher RoTE and accelerate value creation.
Let me restate our financial ambition very clearly today. Our North Star is to deliver an RoTE of above 20% by 2028. This is not about volume, it's not about financial engineering. It's not about capital. It is about capital allocation. It's about One Transformation and how we scale our business to accelerate value creation. This, as I said, is pure execution. These are not standalone targets. They are tangible outcome of our model with scale, primacy, and productivity, reinforcing each other. This is how we become best-in-class for our customers. three years ago, we set a clear plan: focus on value creation, capital discipline, and above all, centered in our customer. Today, the message is simple: we are and we have delivered, not partially, not selectively. We delivered on growth, on efficiency, on capital, and on shareholder returns.
Credibility, as you know, is only built on execution, and Santander has earned that credibility. Since our last Investor Day, we have accelerated our plan. We prioritize the customer to push One Transformation further and to focus on the entire organization on driving higher value creation. We move from improving performance to fundamentally reshaping the model. As Ana just mentioned, we have met every commitment we made at Investor Day on growth, efficiency, capital strength, profitability, and shareholder returns. This is how long-term credibility is built for our organization. The reason we delivered is simple: we changed the model. We moved from operating as a federation of banks to become One Santander, a global customer-driven platform. Today, everything starts with the customer. We combine global scale with deep local knowledge. We simplify what we offer, we connect capabilities across countries, and we scale what works.
That is why we operate with one global way of working. We will platform once and deploy them everywhere. We develop data and AI centrally and embed it across all our businesses. We industrialize processes instead of duplicating them by market. This is what makes us a one-stop shop financial partner. The objective is clear: grow our customer base and earn primacy, becoming the main bank for our customers. With more than 180 million customers, primacy drives engagement. Engagement improves revenue quality. Revenue quality drives sustainable returns. You win on experience, you win on primacy. Primacy, as I said, drives returns. As you know, we operate through five global businesses with a strong local presence. Our brand is powerful. It's not just about the brand recognition. This is about relevance, trust, and daily customer choice.
We compete at scale, typically with minimum full market share and a strong customer engagement. We rank among the top three NPS in eight out of the nine countries. Deep local presence give us relevance, and global capabilities gives us scale. Together, they allow us to compete head-to-head with both global and domestic peers with better operational leverage. Scale means faster time to market, lower unit cost, more consistent pricing discipline, and a better customer experience. Our local success comes from empowered local teams with local decision-making close to customers, not from centralized dynamics. Growth does not require proportional cost growth, and this is fully supported by our robust balance sheet. CET1 stands at 13.5%, underpinned by organic capital generation and disciplined capital allocation. Cost of risk is stable, asset quality continues to improve, and pre-provision profit covers the cost of risk 3 times over.
A strong capital gives us optionality to support customers, invest in growth, and return value to our shareholders. In short, this is a franchise built not just to compete, but to lead across cycles. Since our last Investor Day, a key priority has been improving the quality of our revenue and reducing the dependence on capital-intensive growth. This is not simply about fees versus NII. It's about shifting the model toward more recurring, capital-light activities across the whole group. Retail, Openbank, CIB, wealth, and payments are driving this transition, increasing transactionality, advisory, and other value-added solutions. Around 60% of future revenue will come from these capital-light businesses. This improves our revenue mix, lowers RWA consumption, and essentially it strengthens the returns. At the same time, we actively rotate the balance sheet, securitizing assets, selling portfolios, and reallocating capital to higher return segments.
Capital allocation is global. Execution is local. This gives us resilience and earnings stability across every single cycle and in every different market. This is not five separate growth stories. Our businesses reinforce each other, sharing capabilities, avoiding duplication, and scaling faster across all markets. This is one integrated model becoming more profitable by design, and this is the first half of the equation. Between 2022 and 2025, costs remained broadly flat in real terms. That did not happen by accident. It happened because of simplification, network effects, and global technology. One Transformation is not a cost-cutting program. It is a redesign of our operating model. The consequence is that cost comes down. As we move towards 2026, cost per active customer declines materially. We continue converging platforms, embedding data and AI, and industrializing all processes. Let me give you a concrete example.
In Portugal, after implementing a unified CRM and embedding AI into our contact center, conversion rates improved materially more than 10 times. Same teams, same market, better tools, higher productivity, that is a structural operational leverage. On top of that, bolt-ons are tangible synergies. TSB and Webster, as Ana said, integrate into one operating model, one technology, and one cost base. The network effect reinforces everything. As our global businesses work together, we share capabilities, avoid duplication, and we scale faster. When you combine higher quality, capital-light revenue with lower cost per customer, network scale, and disciplined M&A synergies, the result is a structural operational leverage. The model becomes more profitable by design. Over the past two years, we focused on three things. Number one, improving margins. Number two is shifting the mix towards lighter capital revenues.
Number three is structurally simplifying the cost base, and the foundations are built. Moving above 20% RoTE is now a question of disciplined execution, business by business. Now, let me show you how. The path to above 20% RoTE is not driven by one single lever. It is the result of every business improving its profitability and each country by country. Our ambition is simple: to be leaders in profitability in every market where we operate. If we achieve that consistently across global businesses, being above 20% at group level is the natural outcome. In retail, we're improving RoTE by combining primacy with operational leverage. Higher engagement drives fees and deposit strength. AI-driven pricing and simplification lower the cost to serve, and this increases returns market by market. In Openbank, we serve 24 million auto customers globally.
That customer base is not only about financing vehicles, it is a natural engine for cross-selling, increasing customer deposits, and also lower the unit cost. This is what makes Openbank RoTE sustainable. In CIB, we are increasing returns by shifting decisively towards fee-intensive, capital-light activities: advisory, capital markets, and transactional banking. This improves revenue and organic capital generation, thereby improving profitability. In Wealth, we will structurally enhance profitability by growing recurring advisory and protection income and improving product manufacturing capabilities. In Payments, we scale transaction volumes on shared infrastructure. As volume increase, margins expand. That is pure operational leverage. One Transformation laid the foundation. Gravity, our next-generation platform, and AI now is scaled across the whole group. This is a layered effect. A stronger revenue mix, better capital allocation, and disciplined cost execution reinforced across all businesses.
After seeing how each business contributes to RoTE expansion, let me start with the largest and most important engine of the group, Retail and Commercial. Retail is becoming a digital bank with branches. It is a structural redesign of how we serve our customers. We are moving from a traditional distribution, product-driven bank to a scalable, customer-centric digital platform, anchored on strong local franchises and powered by global capabilities. The idea is very simple: deliver the best digital experience at scale, combined with a physical infrastructure and the best personal advice at the moments that matter most, integrated in an orchestrated omnichannel model. Digital is our primary channel for daily banking with the speed and simplicity powered by data and AI. Branches evolve into advisory and community hubs focused on mortgages, investments, SMEs, and complex needs. They become relationship centers that sell value-added businesses, not service counters.
This transformation activates two forces. First, customer primacy through deeper engagement, resulting in higher transactionality and a stronger fee generation. Second, operational leverage, simplifying and automating processes and shared platforms. This basically lowers cost to serve. This is about growing faster and growing better. Let me show you how this translates into the execution. By 2028, Retail RoTE moves to above 21%. That's basically contributing clearly to the group's ambition of above the 20%. The improvement is measurable and driven by multiple levers. First is revenue quality. Fee income will grow in high-single digits, supported by deeper penetration, a stronger advisory capabilities, and expansion of insurance and investment products. Second, funding strength. Transactional deposits will continue to increase, improving mix and supporting the margins. Third, scale and engagement. Total customers will grow steadily, reinforcing revenue per customer. Fourth, structural efficiency.
The cost-to-income ratio will fall below 35%. This is basically enabled by One Transformation based on, again, simplification, automation, global platforms, and the productivity gains. Profitability improvement is not just driven by higher leverage or additional risk. It's driven by a much better mix, a stronger productivity, and a very disciplined capital allocation. It's the natural outcome of a really stronger model. Part of this improvement also comes from a disciplined execution on our bolt-ons. Let me turn to the bolt-on acquisitions. In the U.K., TSB is about integration and simplification. We expect more than GBP 400 million of run rate cost synergies, one cost base, one operating model. This is disciplined execution, and it drives a structurally higher profitability, moving RoTE from around 10% to over 16%. In the U.S., Webster is even more transformational.
It strengthens our commercial franchise, improves funding scale, and enhances capital-light fee growth. We expect around $800 million of run rate cost synergies through technology integration and operational simplification. It meets a strict return criteria. It improves our RoTE substantially from roughly 10% to around 18%. Together, these bolt-ons represent over EUR 1.5 billion in additional sustainable profit. These integrations are being executed under a single governance framework with clear milestones, technology conversions, and already underway with experienced and dedicated teams. Let me show you how this same discipline applies at the country level. Let's talk about Brazil. As you know, Brazil is a key market for us, and it's entering a new phase of transformation. We are evolving the model in Brazil. The objective is clear. First of all, improve the business quality and reinforce primacy to strengthen the profitability.
Over time, growth in Brazil was heavily driven by credit expansion. We are now rebalancing the portfolio. We're redeploying capital towards select, that's the affluent customers, SMEs, commercial, and corporates. These are segments where relationships are deeper, fee intensity is higher, and returns are structurally stronger. This is disciplined capital allocation again. At the same time, we're strengthening primacy. We're shifting from pure credit growth to relationship-driven growth, more deposits, more transactionality, a stronger share of wallet, and that basically improves the funding mix and stabilizes the earnings. We're also simplifying the operating model, reducing product complexity, automating processes, and improving cost to serve, and we are leveraging our global capabilities. Brazil has been also very strong in CIB and corporates. We are reconnecting those capabilities through our global factories to improve the franchise.
This is not a short-term adjustment, it's an evolution of the model, from volume-driven growth to quality-driven, capital-efficient growth. The path is clear: move towards 20% RoTE as the business normalizes, and then continue improving through transformation towards stronger returns. Brazil is not just about the cycle, it's about evolving the model and strengthening the returns. Let's talk about commercial, which is one of the key drivers and one of the biggest deltas. Commercial is where primacy, advisory depth, and capital discipline come together. We are moving from a product-led model to a relationship-led, data-driven approach focused on high-growth SMEs and mid-market clients, and the difference is material. A high-growth SME can generate multiple times the margin of a standard SME, and when served with higher-value solutions like direct lending or structured products, margins increase significantly.
In Spain, just 7% of high-growth clients account for around 20% of total income. That is the power of segmentation. For example, let's talk about the genetics subsector. Nine companies generated around EUR 7 million in total income in 2025, because they required sophisticated advisory solutions. We build primacy in two ways. First, through transactionality, embedding Santander in daily activities via payments, collections, trade, payrolls, and cash management. Second, through advisory, deploying specialized teams and sector expertise to deepen these relationships. All in all, becoming a trusted advisor of the customer. This shifts the conversation from lending to a strategic partnership. It increases recurring fee income, it strengthens deposit primacy, and it improves capital allocation. Commercial becomes a capital-light, advisory-driven growth engine and a key contributor to higher retail profitability.
Let me turn to Openbank, which is not a volume story, it's about profitability. By 2028, we expect Openbank RoTE to reach around 16%. We do this by fully integrating auto mobility, consumer lending, and digital banking under one platform, evolving from a mono-liner business to a multi-product digital banking model. First, auto and mobility. We are already number one in auto lending in Europe and South America, and number three in North America, and we operate in 26 markets. That global presence allows us to serve manufacturers and partners at scale. We expand beyond lending into leasing, infrastructure, and the broader mobility ecosystem, serving manufacturer, dealers, and new mobility partners. Second is consumer lending. Through Openbank Pay, we continue adding merchants and entering new markets. In 2025 alone, we reached 2 million customers....
Third, in digital banking, we're scaling the platforms in Mexico, Germany, Spain, and the U.S. Greater scale drives revenue increase and strengthens funding through deposit growth that is up 26% over the last three years. Across all businesses, AI and platform consolidation improve engagement and productivity. As we progressively replace legacy systems and simplify our architecture, cost to serve declines by around 30%. In short, Openbank is evolving into a fully integrated, scalable digital banking platform that is capital-efficient and is structurally much more profitable. When we translate that into numbers, the path becomes very clear. By 2028, Openbank scales materially, reaching around 35 million customers. At the same time, cost per active customer declines at double-digit pace, driven by platform convergence, simplification of legal entities, and the embedding of AI across all the processes.
As we remove legacy complexity and operate on one unified platform, productivity improves substantially, bringing the efficiency ratio towards the low thirties. This improvement is not volume-driven. It comes from cost discipline, a better funding mix, and a stronger deposit generation, not from increasing the risk. This is digital scale with capital discipline, a fully integrated platform becoming structurally more profitable as it grows. Now, let's turn to CIB. Our ambition is to move CIB RoTE beyond 20% by 2028, by combining value-added solutions with scalability while maintaining our low-risk profile. Our strategy in CIB is working. It has been very successful because we combine global factories with disciplined capital deployment and consistent low-risk profile. First, growth based on value-added solutions. We are accelerating the shift towards advisory, solutions-led, and capital-light activities across the three business lines.
We will continue strengthening global industry groups and product capabilities, connecting clients across regions, offering integrated solutions rather than isolated local products. Connectivity is a clear factor for this business. Clients increasingly require cross-border capabilities, global liquidity solutions, and integrated capital market access. Our global footprint enables us to deliver at scale. In North America, we operate through a uniquely integrated platform connecting the U.S. with Latin America and Europe, strengthening our cross-border capabilities. We deploy capital with discipline, only where returns exceed the cost of capital. We prioritize capital-light and recurring revenue streams. Let me give you a concrete example. A listed North American company, covered by our wealth team, required a tailored equity-linked solutions. Wealth originated the opportunity, global banking structured it, and market executed it through our U.S. platform. This is our model, one integrated solution delivered globally.
The result: multimillion capital-light fee income. Second, scalability. We leverage our global platforms, data, and AI to enhance pricing discipline, improve execution speed, and simplify operating models. We are not changing the risk profile. We're scaling high-value, capital-efficient solutions globally. When we translate this strategy into targets, the direction is clear. By 2028, we expect efficiency to improve to less than 43%. As our global businesses collaborate more closely, sharing client flows, FX capabilities, trade solutions, and cross-border origination, the network effect becomes increasingly tangible. Fee income grows at high-single-digit, outpacing balance sheet growth. At the same time, we're actively rotating the portfolio, where we allocate capital away from lower return exposures towards higher value, fee-intensive solutions and solution-led businesses. Over the last years, we have significantly reduced our RWAs, improving capital efficiency and strengthening the overall mix.
That portfolio rotation improves mix, it strengthens the capital efficiency, and supports revenue growth without proportional RWA expansion. Collaboration revenue across businesses is expected to grow meaningfully, reinforcing the network effects across the group. Revenue relative to RWA increases by more than 8%, reflecting better capital allocation and improved mix. In the U.S., we expect continued revenue expansion, supported by enhancing connectivity and scale. The objective is simple: sustained RoTE above 20%, improving revenue quality, capital efficiency, and operating scalability. CIB's growth is not about size. It's about connectivity, fee intensity, and disciplined capital deployment. Now, let's talk about wealth, which is about recurring, high-quality, capital-light growth. The objective here is very clear. It's accelerate growth while maintaining a strong RoTE and a strong RoTE level.
We do this by focusing on fee-based scalable businesses, expanding capital-light, recurring revenue through a model that scales efficiently across all our markets. How will we deliver this? Number 1, we focus on high-value-added revenue pools. We're intensifying our focus on probably one of the biggest deltas, retirement solutions and protection, benefiting from structural demographic trends and generating stable recurring fee income. We're also reinforcing our global alternatives franchise, responding to client demand for diversification. Number 2, we elevate advisory through personalization. We are moving from product-led conversations to goal-based financial journeys. This increases loyalty, share of wallet, and long-term value creation. Beyond Wealth, our global family office service is a great example of it. Number 3, we built an integrated and scalable operating model.
We are integrating insurance and asset management under a global platform-based model, industrializing solutions, we leverage on AI to improve productivity and margins. Number 4, we expand our global footprint. We continue expanding in the U.S. and Middle East while investing in our core markets. Number 5, leverage our network business model. We deploy global capabilities to increase penetration across Santander's client base and expand investment capacity via shared expertise. When we translate that model into execution metrics, the trajectory becomes very clear. Assets under management will grow more than 20%, moving towards EUR 650 billion. This is structural growth driven by deeper relationships and stronger distribution, not market timing. Private banking will exceed EUR 350 billion in AUMs, with a strong diversification across geographies, as Spain remains core, and our offshore booking centers attract international customers.
Our combination of local presence, U.S. and offshore booking capabilities, and sophisticated products position us strongly in LATAM and beyond. Asset management reaches around EUR 75 billion, with diversified clients and continued penetration supported by our savings, our investment platform. Product expansion has driven strong growth, particularly in Spain and LATAM. Distribution fees grow above 30%. That's supported by deeper penetration across existing client base. Our deposit base represents an opportunity to shift balances towards investments, improving the customer outcomes and increasing fee generation. Premiums will grow above 70% as protection and life platforms mature, and we penetrate our client base. The key point is not just growth, it's quality of growth: more recurring income, more fee generation, and more scalability. Within Wealth, insurance is one of the most powerful drivers of growth, as I said, one of the biggest deltas.
We are building an integrated insurance platform that brings together life, pensions, investment-linked products, and protection under one single execution model. At the same time, we're strengthening our role as trusted financial advisor, deepening lifetime client relationships. Our opportunity is not starting from zero, it's monetizing a large, loyal, and under-penetrated customer base. First, Santander Retirement Solutions. We are building a global platform for long-term savings and retirement, driving more than 50% growth in AUM-related activity. In Spain alone, by focusing on life's savings and pensions, we increased premiums by 55% versus 2024, narrowing the gap with our bancassurance peers. Second, embedded protection. We are integrating insurance into everyday banking interactions, generating a scalable capital-light fee income and increasing incremental fees by more than 20%.
In Brazil, for example, we are leveraging our strength in SMEs and commercial by protecting their employees through group insurance policies while expanding into health solutions. Third, data and AI. By personalizing and simplifying offers, we expect to increase protected customers by over 20%, maximizing lifetime value. In Mexico, we're scaling life savings with high-affluent and private banking, increasing AUMs by 35% versus 2024. Finally, we're expanding into new revenue streams, including global health and growth in the U.S. and the U.K. Together, these will generate more than EUR 2 billion in PAT and net fees by 2028. Insurance is not an add-on. It's a core capital-light growth engine for Wealth. Now let's go to payments, which is about scaling transactions with operating leverage. Payment solution is one of the highest growth, highest operating leverage businesses that we have.
Today, EBITDA margins are around 35%. By 2028, we move towards 45% as the scale and platform convergence drive structural expansion. The strategy is straightforward: combine fee-based growth with platform scalability. We continue deploying our core global platforms across our footprint. This supports issuing A2A and cross-border payments under a unified architecture. We manage 108 million cards across the group, processing 45 billion transactions per year at around 3.8 billion per month. Customer activity, I could tell you, remains very strong, with spending up 6% in the combination of our markets, and balances are up 13%. We are migrating A2A and card processing to our global platforms, reducing duplication and the commissioning legacy systems country by country. That lowers cost per transaction and improves speed to market. Second, we're strengthening differentiation in SMEs and global accounts.
In Iberia and LATAM, Getnet is the leading acquirer, embedding our solutions directly into SMEs' daily operations through integrated software vendors and payment facilitators. We're also enhancing FX and dynamic currency conversion, giving these capabilities to increase value-added services for merchants. Payments is not just about processing transaction, it's about owning core flows, embedding ourselves in daily activity, and scaling margins structurally. When we look at the numbers, the scalability becomes very clear. By 2028, revenue grows above 15% compound average growth. Total transactions double, cost per transaction declines around 40%. That combination drops EBITDA to margins towards 45%. Getnet targets margins above 50%, Getnet platforms above 30%, and Iberia sustained margins above 30%, while growing very strongly. Payments is a capital-light, technology-driven business that supports higher and more sustainable returns, one of the strongest value creation engines for the group.
Everything that you have seen today comes together here. We have built a unique model combining global scale, deep local knowledge, strong franchises, and disciplined capital allocation. That model is already generating stable, resilient returns. We are not changing direction; we are accelerating what already works. We move to the next phase, a phase defined by execution with precision. Precision in capital allocation and profitability, precision in cost discipline, precision in execution, precision in becoming One Santander, and this is the outcome. As you have seen, we have delivered, not selectively, not partially, across the group, businesses, and markets. Santander is ready for the next phase of value creation. Thank you very much.
Thank you, Héctor. We have time for a short coffee break now. We are going to regather here in 20 minutes time.
Everyone, and thank you for joining us. Let me start with a quick recap of the numbers that Ana and Héctor have already outlined. By 2028, we project a profit above EUR 20 billion and a return on tangible equity higher than 20%, while reinvesting at returns above 20%. A 50% payout, with the cash dividend rising to 35% from 2027, more than doubling cash dividend per share by the end of the plan, and a capital ratio around 13%. Taking them together, this supports high teens TNAV per share, plus dividend per share growth by 2028, and double-digit TPS annual growth over that, over the plan period.
Operationally, it comes down to the following levers: more customers, over 210 million by 2028, with active customers up to around 125 million; better economics per active customer, fees to around EUR 135 and costs down to around EUR 220 in constant euros. Overall, through One Transformation, we expect mid-single-digit revenue growth and cost reduction every year on a constant euro, and constant perimeter basis. The logic behind this is a simple equation: scale, customer focus, and diversification, combined with customer growth, One Transformation, and our network businesses will deliver operational leverage year after year. Within our capital hierarchy, we have also executed three decisive transactions. The sale of Poland and the acquisitions of TSB and Webster will reshape our portfolio and are fundamental to understanding our financial trajectory over the next three years.
Together, this operational leverage and improved portfolio mix lift return on tangible equity and strengthens value creation, supported by disciplined capital allocation. Today, I will focus on the specific levers that drive profitability and accelerate shareholder value creation. First, let me frame the macro assumptions embedded in our guidance. Our plan is built on a prudent, not optimistic, set of assumptions. We assume moderate GDP growth across our core markets, probably between 1%-2% over the next three years, with resilient labor markets. Inflation continues to normalize towards central bank targets, supporting real income and enabling us to maintain our cost discipline. On rates, we assume different paths, easing in markets such as Brazil, while remaining broadly stable in mature economies.
Overall, this is a balanced and conservative macro framework under which our targets are fully deliverable: resilient growth, normalizing inflation, stable mature market rates, and gradually easing in selected developing markets. Let me now turn to the key drivers of the plan, structured around four building blocks. First, our balance sheet; second, profitability; third, capital discipline; and finally, the outcome, accelerating shareholder value creation. Let me start with the balance sheet. With our recent bolt-on transactions, we have repositioned our balance sheet. We expect the loan book to reach around 1.2 trillion by 2028. Importantly, hard currency exposure increases from roughly 75% in 2025 to around 80%. This reduces volatility and improve the stability and predictability of returns through the cycle. Across segments, we continue to prioritize our core franchises. Mortgages remain a stable anchor.
SMEs and corporates continue to show strong momentum, and CIB delivers attractive risk-adjusted growth while remaining at 20% of total allocated capital. Where we have clear competitive advantages, we expect to grow above the market. Latin America should continue to grow at higher rates as banking penetration is still relatively low. As shown on the right, growth is selective and differentiated across markets, fully consistent with our disciplined approach. Importantly, we can deliver this growth with a structurally lower risk profile. Looking at 2026-2028, group cost of risk is expected to remain stable at portfolio level. At the same time, the mix post-M&A reduces cost of risk from around 1.15% during the last strategic cycle to around 1%-1.1% over the next three years. The key driver is the composition of growth.
The majority of incremental lending will come from lower risk portfolios. Around 80% of the loan book is concentrated in low-risk segments, all operating with a cost of risk below the group average. Higher risk exposure remains limited and tightly managed. Medium to high-risk portfolios represent less than 10% of the loan book. In these portfolios, we take risks selectively with a strict pricing discipline and higher returns. Turning to deposits, we are strengthening our franchise to build a more resilient and lower-risk funding structure. With TSB and Webster, we add scale and structurally reduce the commercial gap, improving the balance sheet profile. As a result, the loan-to-deposit portfolio, sorry, ratio is expected to move down from 98% in 2025 to around 95% by 2028.
We are also enhancing the quality of the deposit base by deepening primary relationships and increasing the share of demand deposits. With a higher contribution from retail and commercial and Openbank, the deposit base becomes more granular and diversified, and the relative weight of CIB is reduced. As the mix improves and pricing discipline remains strong, we expect the average cost of deposits to trend down compared with the 2022 to 2025 average. For 2026 to 2028, we expect the average cost of deposits to be below 1% in Europe, below 2% in the U.K., and around 2% in the U.S. This reinforces funding resilience and supports margin stability through the cycle. Building on the strength of our deposit franchise, let me briefly address liquidity and funding resilience. Liquidity remains very strong across the group.
We hold a solid liquidity buffer of around EUR 340 billion of high-quality liquid assets, 96% of which qualify as eligible, well-diversified by currency. All metrics remain at comfortable levels, well above regulatory requirements, and we expect them to remain strong throughout the plan. Our issuance plan remains prudent and front-loaded. For Banco Santander S.A. in 2026, we expect to issue EUR 15 billion-EUR 20 billion, of which close to 50% has already been executed. 2027 will require a similar, slightly higher amount before declining to between EUR 12 billion-EUR 17 billion in 2028. Issuances will primarily consist of senior preferred and senior non-preferred instruments, replacing securities that are losing regulatory eligibility while remaining current TLAC and MREL buffers.
In addition, we expect to issue up to EUR 2.5 billion new hybrids in the first year at around EUR 3 billion in 2027-2028, in line with projected risk-weighted asset growth. Turning to another key level of the balance sheet, we will continue to actively manage interest rate sensitivity across the group, particularly in a lower rate environment. In 2025, the ALCO portfolio, excluding Poland, stood at EUR 147 billion. 75% is dedicated to managing interest risk, while the remaining quarter supports liquidity. The portfolio is diversified across our main countries, but let me focus on two markets in particular. In Spain, the ALCO portfolio is around EUR 50 billion, with an average yield of 3.3% and a duration of 6.4 years. In the U.K., we protect margins through the structural hedge.
The average balance in 2025 was around GBP 105 billion, with a yield close to 3% and a duration that is slightly above two years. There is obviously clear opportunity to extend it over time. This active balance sheet management provides meaningful protection and supports low single-digit NII growth in 2026 in both countries. We take a conservative and disciplined approach to FX risk management across the group. For capital, our policy is to hedge the capital ratio, the CET1 ratio, by hedging the excess capital held in our subsidiaries. In 2025, our capital FX exposure was around EUR 18 billion, with a hedging cost of approximately EUR 700 million. For 2026, both the FX exposure and the cost of hedging are expected to remain broadly in line with 2025.
In terms of earnings, our P&L hedging is calibrated to our forward-looking view or reviewed regularly. For 2026, we have fully hedged the expected results from Brazil and Mexico and partially hedged the U.K. and the U.S. For 2027, Mexico is currently hedged at around 50%. In short, the balance sheet is now positioned to deliver growth with a structurally lower volatility, supported by a stronger credit mix post-M&A, a resilient funding and liquidity profile, and active interest rate and FX risk management, which protect capital and earnings through the cycle. Let me turn now to our growth profile. As you've seen, we have strengthened our NII resilience by reducing the balance sheet's rate sensitivity through disciplined ALCO actions and active hedge management. The group is now much closer to rate neutrality.
Importantly, our objective is not to eliminate interest rate sensitivity entirely, but to manage it actively and protect margins through the cycle. For a -100% parallel shift, NII sensitivity in euros has improved from around EUR -1 billion in December 2023 to roughly EUR -530 million in December 2025, and we expect it to reduce it further to around EUR 500 million by the end of this year. Similar interest rate sensitivity improvements are visible across the sterling and the U.S. dollar, while the Brazilian real remains positive and supportive. Just as importantly, relatively small changes in assumptions, such as deposit betas, now translate into a much more limited impact on Group NII than in the past.
As we just saw on the previous slide, our active balance sheet management has allowed us to navigate very different rate cycles while protecting margins. From 2022 to 2024, developed markets went through a cycle of sharp rate hikes, which was supportive for NII. That benefit was partially offset by Brazil, where we have negative sensitivity to higher rates. Since 2024, the environment has become more challenging. Developed markets have faced rate cuts, while Brazil has remained at elevated levels. Even in that context, we have been able to defend our NII. This resilience reflects a structural discipline, active pricing on both assets and liabilities, strict ALCO management, hedging, and the natural geographic diversification of the group. Looking ahead for 2026 to 2028, the rate environment becomes more balanced.
Overall, our rate profile is now more neutral and less dependent on any single cycle, supporting a constructive outlook for low to mid-single-digit NII growth over the period. Let me walk you through how we expect to expand NII over the plan. We start from a position in 2025 of EUR 42 billion, excluding Poland, or EUR 3 billion higher on a pro forma basis, including TSB and Webster. We expect NII to grow at low to mid-single digits over the next three years on a compound basis, supported by volumes, lower rate sensitivity, improved funding, and our active ALCO management. By business, retail will deliver low to mid-single-digit growth, while Openbank grows at a low single-digit rate. By country, growth is also well-diversified.
Brazil, the U.S., and Chile benefit from a more supportive rate environment and solid volumes, with Brazil expected to deliver mid to high-single-digit growth, the U.S. mid-single digits, and Chile low to mid-single digits. In Mexico, strong customer activity and disciplined deposit pricing will support mid to high-single-digit NII growth. As we discussed before, the U.K. and Spain, we expect low single-digit growth in 2026, and the U.K. should accelerate to low to mid-single digit through the plan. Overall, this combination of lower structural sensitivity volumes and active balance sheet management will support sustainable NII expansion through the cycle. Turning to fees, we expect high-single-digit growth over the next three years, supporting structural operational leverage.
Around 30% of the increase comes from high-quality, capital-light activities: our network businesses, wealth payments, and CIB, which are a key engine of fee growth, leveraging our global footprint, collaboration, and scale. Fees play a central role in the plan. They reduce the sensitivity to the rate cycle and enhance the quality and diversification of earnings. By 2028, fees and other non-net interest income revenues are expected to represent around 30% of total revenue, up from 26% in 2028, and to contribute more than 40% of total revenue growth over the next three years. At the same time, the recurrency ratio, fees to cost, is expected to improve to around 65% by 2028, reinforcing the structural nature of our operational leverage.
The result of this is a revenue that will rebalance in a more diversified and capital-light way by 2028. We expect to deliver a compounded mid-single-digit annual growth rate over the 2025 to 2028 in constant euros and constant perimeter. Across our global businesses, growth is broad-based over the plan. Retail is expected to increase mid-single-digit, CIB up between 5%-10%, Openbank, low single-digits, wealth at double-digits, and payments above 15%, all expressed as compounded annual growth rates. Overall, fees are growing faster than NII, as I just mentioned, enhancing revenue stability and predictability through the cycle while supporting stronger operational leverage and sustainable returns. Costs are the other major lever on delivering profitable growth. Our target is clear: tight discipline and structural productivity gains.
We are taking actions to control the cost base structurally and expand operational leverage in an environment where we could see some easing of inflationary pressures. Before moving forward, let me briefly clarify the different cost bases. As we announced recently, we have changed the way we report costs. We have reallocated certain charges previously reported in other results, mainly to the total cost line. This improves reporting, enhances cost control and transparency, and at the same time, does not affect the group's profit or public targets announcements during the fiscal year 2025 presentation. As a result, 2025 total costs, including TSB and Webster, are around EUR 28.5 billion.
We are setting a target of reducing them to below EUR 27 billion in 2028, with an efficiency ratio near 36%, and we expect to deliver around EUR 4 billion-EUR 5 billion in efficiencies that, together with bolt-on synergies, more than offset approximately EUR 3.5 billion to EUR 2 billion to EUR 4.5 billion in inflation and investments. This is structural. For example, Personnel costs, which represented around 63% of total expenses in 2025, are expected to decline to 50% by 2028, reflecting the scale of our transformation. These efficiencies, together with bolt-on synergies, underpin higher operational leverage and support our profitability targets while we continue investing for growth. Moving to asset quality and cost of risk.
As I mentioned earlier, we expect cost of risk to remain broadly stable across most of our portfolios, while the post-M&A country mix supports a lower group cost of risk. We have exited Poland, which had a cost of risk of around 70 basis points, and acquired TSB and Webster with cost of risk of approximately 10 and 40 basis points, respectively. This structurally enhances the group mix and improves our normalized cost of risk. By the way, Poland's cost of risk that I just gave, the 70 basis points, includes loan loss provisions related to Swiss franc mortgages, but the cost of operating in Poland, including Swiss franc provisions recorded below the loan loss provision line, was around 130 basis points in 2025.
Therefore, the overall impact of having exited Poland and having bought TSB and Webster is even higher than that implied by the cost of risk. Over the next three years of the plan, we assume a reduction in cost of risk at the group level to between 1%-1.1%. Let me now briefly address the corporate center. Over the past few years, we have taken consistent actions to reduce its size and complexity. As a result, its weight as a percentage of group underlying profit has declined from around 13% in 2022 to approximately 8% in 2025. Looking ahead, we expect the corporate center's weight to fall even further to around just 5% by 2028, driven mainly by cost actions. The result is a leaner corporate center and again, lower overall earnings volatility for the group.
All these operational targets converge on our path to higher profitability. This is the roadmap from 16.3% return on tangible equity in 2025, or 15.2% on an underlying basis, to above 20% by 2028. First, higher revenue contributes from 3-4 percentage points of return on tangible equity. As we discussed earlier, we will grow NII through volumes and ALCO management, while accelerating fees and other revenue lines, improving the revenue mix. Second, lower costs are expected to add from 1-2 percentage points of RoTE. One Transformation will keep driving structural efficiency gains through simplification, automation, and scale. The integration of bolt-on acquisitions will generate material cost savings.
We expect to reach the full run rate of synergies from Webster by 2028, with 2029 being the first fully synergized year, creating additional upside beyond the current plan. A lower cost of risk will add up to 1 percentage point to RoTE. Over the last three years, four businesses have generated returns below the average of the group: the U.K., the U.S., Brazil, and Openb ank Europe. Between 2026 to 2028, we expect to increase the profitability of these businesses closer to or even higher than the average of the group, which will obviously push that average to higher levels. The improvement of the returns in these four units helps explain the overall improvement in group's return on tangible equity.
Spain, Portugal, Chile, and Mexico are already operating at or above 20% return on tangible equity and are expected to remain at those levels. In the U.K., the acquisition of TSB accelerates profitability improvement, increasing return on tangible equity to approximately 16% by 2028. Similarly, in the U.S., One Transformation, together with the acquisition of Webster, will drive a similar step-up, with RoTE rising to approximately 18%. In Brazil, we expect lower rates to support both NII and asset quality, driving an increase in RoTE from around 15% in 2025 to 20% in 2028. In Open Bank Europe, a business that benefits from lower rates, return on tangible equity is expected to improve to around 14% in 2028. The path to above 20% RoTE for the group is broad-based and supported across our core markets.
With this profitability profile in place, the next question is how we deploy the capital to maximize value creation. We will continue to adhere to our rigorous capital hierarchy, which ensures we maximize shareholder value. First, organic growth. We prioritize capital allocation to accelerate our strategy and strengthen market leadership, but only where returns are attractive and value accretive. Second, ordinary distributions. We maintain a 50% ordinary payout target, but from 2027, we will increase the cash dividend component to around 35% of underlying profits, complemented by approximately 15% through share buybacks, subject to corporate and regulatory approvals. Third, bolt-on acquisitions. We will only consider small bolt-ons where there is a clear strategic and financial rationale with minimal capital investment. We require returns on investment capital above 15%, exceeding our cost of equity and the current return from share buybacks.
Finally, as Ana Botín said, we will return to shareholders any excess capital above 13% at the end of the plan. This capital discipline is supported by a virtuous capital cycle that enhances profitability and maximizes shareholder value creation. We end 2025 with a return on tangible equity at 16.3%. From that starting point, capital is first allocated to our 50% ordinary profit, ordinary payout, FX hedging, and supervisory requirements. The remaining capital is then available for disciplined redeployment, feeding a virtuous circle. Every year, roughly one-third of the balance sheet matures. As assets roll off, we reinvest that capital at higher returns, targeting RoTEs above 20%. In parallel, we rotate out of assets at a cost well below the cost of capital and reinvest into more profitable businesses.
Risk-weighted assets stood at around EUR 630 billion in 2025 and are expected to grow a low single-digit rate through 2028, below loan growth. This disciplined asset rotation and reinvestment cycle supports the RoTE step up to above 20% by 2028. Asset mobilization is key to maximize capital productivity. In 2025, we relieved approximately EUR 6 billion of capital through active portfolio management. Around EUR 3 billion came from asset sales, guarantees, credit protection, and other measures. Only EUR 2 billion came from synthetic securitizations and a bit more than EUR 1 billion from cash securitizations. The average cost of capital of these transactions was around 6%-8%, generating a profitability uplift of more than 10 percentage points with no net capital consumption. We are disciplined in how we grow risk-weighted assets, focusing on capital-efficient revenue.
We have tightened pricing discipline, improved portfolio mix, and prioritized higher quality returns, increasing capital productivity. As a result, return on risk-weighted assets has improved from around 1.8% in 2022 to 2.4% in 2025, and we expect it to reach approximately 2.7% by 2028. In parallel, as I just mentioned, we continue to optimize our balance sheet through asset mobilization. In 2025, we mobilized around EUR 45 billion in risk-weighted assets, as I just mentioned. From 2026 to 2028, we expect to mobilize between EUR 30 billion-35 billion per year, with roughly one-third through SRTs. The combination of improved returns and active asset rotation results in revenue growing faster than risk-weighted assets, meaning a higher income generation per unit of capital.
Here we can see how our capital discipline works, and it links directly back to the capital hierarchy I have just laid out. We use our capital optionality for two clearly value-accretive bolt-on acquisitions: strengthening our U.K. franchise through TSB and accelerating our transformation in the U.S. through Webster. Both transactions meet our strict criteria of capital allocation. They have a clear strategic and financial rationale, and each delivers a return on investment capital above 15%, above our cost of equity and the return we can currently generate through share buybacks. Importantly, these acquisitions enhance our capital generation capacity while preserving balance sheet strength. CET1 ratio remains within our 12%-13% operating range in 2026, ending the year close to the upper end and moving to above 13% in 2027.
The key takeaway is that we are moving into a new capital cycle. Between 2022 and 2025, we rebuilt capital with a clear focus on profitability. Starting from around 12% in 2022, profit generation more than offset distributions, organic risk-weighted asset growth, and regulatory effects, taking us to 13.5% in 2025, around 100 basis points above the midpoint of our operating range. We now begin the 2026 to 2028 strategic cycle from a stronger position. Organic capital generation strengthens as profits increase on our path to above 20% RoTE in 2028. Risk-weighted assets are expected to grow at low single digits, as I just mentioned. Announced M&A transactions represent around 150 basis points of capital consumption, and we expect a further 60-90 basis points from hedges, models, and other effects.
Even after these impacts, the capital ratio is expected to remain above 13% after 2026, creating a new layer of capital optionality as we move towards our circa 13% target in 2028. In other words, we can fund growth, execute our capital priorities, and still maintain a stable and resilient capital position. A stronger balance sheet, higher profitability, and disciplined capital allocation set the stage. Let me now turn back to our 2026-2028 commitments. Looking back at our last strategic cycle, we delivered on our commitments, achieving double-digit value creation over the period. During the last three years, we generated an average pre-81 return on tangible equity of around 16%. Despite headwinds from FX and other factors, we delivered average value creation of approximately 14% between 2022 and 2025....
demonstrating our ability to execute consistently and create value through different market environments. Our ambition today is to accelerate it further over the next three years. We project TNAV plus dividend per share to accelerate to high teens over the plan, up from double-digit growth on average in the previous cycle. Over the plan, we will increase return on tangible equity to between 17%-20% on average. At the same time, we expect lower FX headwinds as we continue hedging excess capital in subsidiaries, maintaining disciplined dividend upstreaming, and increasing the proportion of TNAV denominated in hard currencies to around 60%, up from 55% in 2025. In short, the plan is to compound tangible book value per share growth while continuing to return capital and accelerating shareholder value creation through 2026-2028.
As we made public during our 2025 results presentation, 2026 will be a transitional year for the group. In 2026, we completed the sale of Poland in the first quarter, and we will also complete the acquisition of TSB in the second quarter and Webster Bank in the 2nd half of the year. At the same time, we will continue running in parallel our legacy systems and new platforms for a few months as we migrate our businesses to the global platforms. Excluding these corporate transactions for 2026, we already expect an acceleration in operating leverage. We expect revenue to increase mid-single digit in constant euros, with fees growing more than NII, lower cost in constant euros, leading to operating jaws more or less double of what we reported in 2025.
All in all, underlying profit above EUR 14.1 billion, with a capital ratio close to the upper end of our operating range. Looking ahead into 2027, we expect revenue to grow double digits, deliver positive operational leverage, profit increase in the mid-teens, and capital above 13%. In 2028, delivering on our 2020 ambition, more than EUR 20 billion in profit with a return on tangible equity above 20%. Let me close reiterating our financial objectives for the next three years.
In addition to the profitability increase that I have just mentioned to above 20% and the profit exceeding EUR 20 billion by 2028, based on our disciplined approach to capital allocation, we will maintain a 50% ordinary payout, but will increase the cash dividend to 35% from 2027, more than doubling cash dividend per share by 2028 from 2025 levels. At the same time, we will end the period with a capital ratio of around 13% at the top end of operating range. All of this will help us to accelerate value creation through the plan, reaching high teens TNAV plus dividend per share growth by 2028 and double-digit annual EPS growth. This is a plan designed to consistently compound value, driven by a stronger balance sheet, disciplined growth, structural efficiency, and rigorous capital allocation.
Thank you very much for your attention. I will now hand it back to our Executive Chair for her closing remarks, after which the chair, the CEO, and myself will be very happy to take your questions. Thank you very much.
Thank you, José. Actually, we're gonna go to Q&A first, and then we'll do closing remarks at the end to remind everybody. Can I please ask you to raise your hands? We've already got a few hands to the mics in the room. I think some people have an early flight to catch, so can we start here with Ignacio Ulargui, and then Álvaro Serrano?
Thanks. Thanks very much for the presentation. Have just two questions, one a bit more strategic. I mean, just looking to Santander growth potential, just wanted to get your thoughts on the trade-off between distributions and growth. You have a very clear organic or capital hierarchy. You have shared with us what makes you to be more keen on growing the balance sheet. The second one, more on the cost to income interaction. With a EUR 27 billion, constant euros, target of course in 2028, the 36% cost to income would probably get you to a much higher than EUR 20 billion net profit. I just wanted to get a bit of your sense, what could be changing that picture in the end?
We said less than 27. I will let Héctor cover that maybe. In terms of how we think about distributions and growth, you know, the capital hierarchy is very clear. We expect to land in 2028 at 13%, circus or 13%. We do expect to be above 13%, actually, other things equal, at the end of 2027 already. We believe that we are in a situation today where we can maximize growth in distributions over time and deliver higher returns on higher amounts of TNAV. This is really important. I would say that again, our goal is to maximize growth in distributions over time on higher returns, on higher amounts of TNAV. There's not many companies in the world that can give you that. Going back to our hierarchy, again, organic growth above 20%-...
distributions, minimum of 50% payout. Bolt-ons, we will not do any bolt-ons the next couple of years. We're very busy. Again, if and when bolt-ons return, it will always be consistent with what I said, and what we believe is that they have to be substantially above share buybacks, and then there would be extraordinary distributions. At the moment, Héctor has lots of opportunities to invest above 20%. I think he deserves that he gets that if, you know, again, he can deliver the goods, which he has over time, as José has explained. That's how we see it. You know, if we do not find those opportunities, believe me, we're very disciplined, we'll give it back. We've said at the end of the period, it could be before. It will depend on distributions.
If you ask our colleagues in Spain, you know, mortgages, we're losing market share in mortgages. It's a public number. Why? Because, you know, we will not allocate beyond the franchise, and of course, we support our customers, but we can allocate capital globally. This is a huge flexibility that not many companies have. Is that a good answer? Okay, on the cost-income, I don't really understand the question. You're saying that the less than EUR 27 billion and the 36% don't-
It gets us to a lot more than EUR 20 billion profit.
Right. Well, you know, we said over EUR 20 billion, so you do your numbers, and you can say EUR 20.01 or EUR 20.1, it's gonna be over EUR 20 billion. I can tell you that over the last 11 years, I showed you that graph, really important one on predictability. 99 until this year, quarterly earnings per share volatility of Santander was the lowest among those banks, and these are the top banks that you all know. Multiply profits by 8. Every year when we start 12 months, and we're getting better and better over three years, there's a 5% difference in EUR between what we say we're gonna do, our plan, and what happens at the end, in revenues and in net profit. I hope that gives you enough.
If I may add...
Mm-hmm.
we gave ranges for NII, for revenue. We gave a cost figure, but we gave ranges for cost of risk. Obviously, if you use the most optimistic scenario, you get to over EUR 20 billion. We gave ranges, you know, with the purpose of, you know, being conservative.
Alvaro Serrano from Morgan Stanley. Thanks for the incredible amount of detail in the slides. Two questions from me, please. On the cost efficiency, which is clearly better than most of us expected, you call out EUR 4 billion-EUR 5 billion efficiencies. Could you maybe break that down where they're coming from? Obviously, you've called out the implementation of Gravity many times before, that's part of the plan, I'm sure. I'm thinking more headcount-wise, how much it's coming down. Is it switching off mainframes? Just a bit of color on that to assess how much revenue disruption, if any, presumably not much, there could be. Kind of related to that is a second question on, in particular, on the high-single-digit fee growth.
I mean, what part of that. Again, can you help us understand what part of that you feel is entirely in your hands and what kind of market environment you're expecting? Obviously, in CIB, that's important. It's difficult from our side, maybe putting a high-single-digit CAGR as a base case. Maybe help us through the assumptions and how you're seeing that. Thank you.
Okay. Yeah, in terms of cost and revenue, as we think about cost, first, we really believe in today's world, being a cost leader is incredibly important, right? We want to be a cost leader, but also the best in UX. The only way to do that is investing in platforms, everything we have explained, aligning the business model and then the platforms. You have only begun to see the effects of that, okay? I gave you an example of payments hub. Again, Gravity is a first step. Brazil is not even on Gravity yet, but there's a Gravity 2.0, which will bring additional benefits, and some of that you're gonna see in this plan, and some of it will go beyond that. Again, it's a very structural change. I think Héctor explained it really well.
It's a change in the way we run the company. It's a change in the business model. This is not about cutting costs and affecting revenues. We're cutting costs and growing revenues. What we've said is every single year in the next three years, we're gonna grow revenues and reduce cost. This is what we're saying, with a stable cost of risk across portfolios, but a structurally, you know, 1 to 110, given the change in the mix, you know. Again, going to cost and revenue, this is about a structural change in the business model. It's about reducing cost and growing revenues as a consequence, because we're simplifying, we're aligning. It's not something you do in one year, and it's really hard. I can say it's maybe not a lot of fun.
Actually, this is one of my colleagues calls boring banking, right? Is how do you run a bank in a better way, aligning not just CIB, which I'm sure you can all visualize, but, you know, individuals and SMEs. There will be personalization, as Héctor said, and we will run the banks by geographies in terms of the balance sheet and many of the things. We're not gonna go all the way and say that global business run everything. It's a 50/50 JV, the local countries will have it. This is, again, the change in the model and the One Transformation. You have the way we think about corporate investment banking, wealth management, and payments is in a bit of a different way. It's more, it is about One Transformation, but the model is easier, you know, to implement.
It takes less time. There, it's about network effects, it's about leveraging and working across, the countries.
You want me to. Yeah, let me give you a little bit of hard data, Alvaro, because I know you always like it. First of all, it's important that what Ana says is the concept of exactly how we're doing things. I explained it through the presentation. It's important to acknowledge that we will achieve this by First of all, accelerating One Transformation, as Ana told you. It's important to take into account EUR 1 billion in cost reduction from TSB and Webster, okay? That's a very important number. IT and operations, OpEx will drive around 25% of the total cost reduction, all right? It's reflecting the platform consolidation that we're doing, the commissioning of legacy systems, and all the automation and simplification that we're doing, okay? It's very important to say that we're not cutting strategic investment.
We will continue investing around EUR 2 billion in technology by 2028. While One Transformation is simplifying the group, but we're extracting synergies at the same time and lowering the cost base, all right. Over the last two years, One Transformation has already improved efficiency by more than four percentage points, and we have delivered tangible structural results. Headcount, if you see, is down 3% in 2024, and 4% on 2025. We have also reduced the number of branches by around 8% annually since 2022. IT OpEx has come down around EUR 542 million between 2025 and 2022. As Ana, I mean, correctly mentioned, we're reducing our efficiency ratio from 45% to 36% by 2028.
Yeah, if you say a little bit, I mean, on the next few years, from One Transformation, 3 percentage points. AI initiatives is gonna be 1 percentage point, EUR 700 million and EUR 300 million in revenue and cost efficiencies. The global technology platforms, around 2%, network businesses, around 1%, and the bolt-on acquisitions that I just told you is around 2%, okay? That's where the numbers come from.
The AI is EUR 700 costs, EUR 300 revenues.
Yeah.
just to clarify.
Yeah. on the fees, I mean, assumptions, obviously, there's the micro assumptions that José explained. at the end, you know, fees grow when customers grow.
Mm-hmm.
We are aiming for a EUR 30 million increase in total, but EUR 19 million increase in active customers. You've seen over the last few years, there is a correlation between growth in customers and growth in revenues, and of course, fees. That is one part of it for retail and consumer. As activity grows, you know, fees should grow, other things equal. There is a couple of very significant opportunities. One is insurance. You're gonna see part of that in wealth management and insurance. You're gonna see part of that as distribution fees. We're aiming for 70% increase in gross written premiums, right, Javier and Héctor? There is a huge opportunity that we have not really focused on. A lot of this, again, is what we call boring banking. It's actually getting incentives aligned. It's actually getting the product to be better.
It's not rocket science. There's a lot of basic things that we can do and we will do to increase insurance premiums. Again, that's a big part, in the fees. Then you have the, what we call network businesses, which are growing. We're being quite conservative. In CIB, they say 5%-10% growth in fees, and hopefully, that's gonna be more 10% than 5%. Let's see. In payments, over 15% increase in fees. Wealth management, I think, is like double-digit.
Mm-hmm
... in general, in that area. That's where the fees increase come from, more or less. Again, a lot is gonna be based on growing customers and a big leap in active customers. That's not an easy thing. It's not so much the macro, so you have to go to the base, right?
I mean, just to complement, very fairly quickly what Ana Botín said, it's important to see. Look at what we have been able to do in CIB, for example. CIB has had a tremendous growth in fees, and as I was saying, now we're changing the business completely. Before, basically, it was a corporate bank. Now, it's a true investment bank, all right? In which we're really taking care of, really extracting value out of the money that we lend to customers. The fee growth was 9%, okay, in 2025. That basically tells you a little bit of what we've been doing. Wealth, as Ana Botín was telling you, 9% again in 2025. In payments, the capture, we're capturing the scales and increased by 9% also the volumes. And also the point that Ana Botín said about how many...
the important growth that we had had in active customers, that basically has created that we have grown fees much more than NII, and it's gonna continue in that way because it's exactly what the change of the model is about. By becoming the number one bank to our customers, we're making sure that we penetrate the client base, not just with mono products. It's basically giving them a lot of different services. Insurance is probably the biggest delta that we have, as Ana pointed out, but nonetheless, there's many different kind of products that we can do with that, and not just with individual customers. The commercial side is very important as well because we try to do, and that's our bread and butter in that business because we actually do everything for them.
We're the largest, for example, in trade finance, where we operate, and probably world, you know, in the world, we're trade finance, EC, ECA financings. A lot of things and services that we do. Remember that we have the network businesses, that they are the ones that serve retail.
... and an Openbank. The network businesses service a lot, and that's where the value -added come from, is working together in order to reach over to that.
I think we got Paco, who's got the mic already, and then we can come this side.
Francisco Riquel from Alantra. I have two questions: one on capital and the second on capital allocation. On capital, you have followed an asset-light strategy. To date, 70 basis points organic generation in 2025. That's also the guidance for 2026. It seems to me that capital generation in 2027, 2028 will be much smaller, so you are shifting to a more capital-intensive business model. If you plan to accelerate the loan growth in the next couple of years, where and what businesses, countries? Any excess capital generation indication that you can give from the new from the business model in coming years. My second question is, you have deployed M&A selectively to strengthen your position in the U.K. and the U.S.
Once these deals are integrated, I wonder if you would also consider M&A opportunities, to improve your position in other markets, like, Brazil or Mexico. Thank you.
Maybe, José, you can take the loan growth and excess capital.
No.
I will take the M&A. I mean, actually, let me go on the M&A first. For the next three years, we're not gonna do any bolt-ons. I mean, that is something that we have said, I have said several times. You go back to the capital hierarchy. Again, we do have markets where, as we have explained, if organic growth is not there above 20%, we have paid the 50%, you know, 50% that we have in terms of payout. If there's any opportunities for bolt-on in core markets from 2028 onwards that meet our requirements, which is to be significantly above buybacks, that enhance our strategic position, improving funding, giving us greater scale, and deliver for shareholders, you know, that is something that we're not gonna take off the table. You can relax for a couple of years.
Well, yeah, that's it.
Yeah.
No, I was gonna say, because then you're gonna come back and say, you know, a few days ago we did a small insurance deal in Chile, 1.5 basis points. You know, don't come and tell me then, "Oh, you said this," 1.5, 2 basis points in specific areas, small things, that doesn't count, right? As long as the returns are 50% or something crazy like we're doing in Chile. This are minor, and it's not like we're gonna do a lot, but...
I have given you all the details of the capital plan. There are differences between 2026, 2025, 2026, and 2027, 2028. Significant differences. I give you a number of a substantial lower asset rotation in the plan than in previous years. We want to be conservative. We need the market to be there. We don't know if the market is gonna be there next year or not. We want to make sure that what is in the plan, we are going to be, you know, executing for sure. I have given you an estimate for regulatory headwinds, which is probably also conservative. It might not be there, but we don't know. The capital plan is consistent.
We are going to be generating, as I said, more capital organically, we are in the plan assuming that some of the components of the capital plan are substantially, let's say, less positive than what we saw in 2025 and we expect in 2026. Even with that, we will generate capital, as Ana said. Already in 2027, we expect the capital to be above 13% and above 13% in 2028. As Ana said as well, there is not an infinite amount of capital that we can invest at 20% organically, we have very good opportunities to grow organically. As long as we can grow organically above 20%, we should, because that's what this is about. This is compounding growth and value creation going forward. Obviously, there are not infinite amount of opportunities.
That's it, I think.
We've got Jacques-Henri, who's already got the mic.
Thank you very much, Raul. Well, this is hard work, that's visible. Two questions for me. One on boring banking again. The insurance development makes a lot of sense. Are you happy about the product engine you have on insurance? That you have the whole shebang, that you're okay? You mentioned a deal in Chile, 1.5 basis point. Would you do some other things like that? Again, not a lot, but to develop that product, which is not necessarily natural with you. The second question, because we discussed it here, at the intermission, is the U.S. development. I mean, we're all putting the great synergies that you've had, but the reality is the integration of U.S. assets from European bank has been a graveyard over the last 25 years.
Why is it gonna make it really different and make the paper being realized in effect? Thank you.
Insurance, are we gonna do lots of 1.5 basis points? I don't know, but we might do a few, but that's not gonna take away from the numbers we gave you, and even doing better than the numbers we gave you. The boring banking, that's Manuel's description. There's a lot of boring banking improvement in insurance that we're gonna be doing and, you know, the product itself. Actually, Javier Garcia-Carranza is here. What are the two things you're gonna improve in insurance to deliver those 70% increase in premiums, Javier?
Can we please get the mic in front, to Javier?
Do we have another mic here?
Yep. Well, on insurance, we have two different businesses. One is on life-saving insurance, which is around being able to sell to our clients, and if a client needs long-term liabilities and deploy those liabilities into long-term duration assets. We originate very small amount of premium of the life-saving insurance every year. The penetration among our client base is super low compared to our peers. We want to go from EUR 6 billion of premiums every year to EUR 20 billion. There is very significant upside on life-saving insurance. Then we have another business, which is protection. Just to give you a sense of the upside on protection, out of the 180 million clients that we have, only 22% of those clients buy insurance products from Santander.
Aligning incentive, digital platform distribution, improving, at the end of the day, the franchise is going to have also significant upside and growth in the premiums and in the fees.
Thank you. On the U.S., this time it's different. Yes, we are going to deliver the goods. The first thing I would say is that Webster is a great bank. I'm not sure what other colleagues did, but this is a fantastic bank, well-managed bank, best-in-class profitability. By the way, they have managed integrations very successfully with the current team, and I think we have John connected. Maybe he. I want to go first to Christiana, who's here on the front row. Thank you for making it in spite of the storms. I don't know how you made it, but that shows you that, you know.
That's why you're here. That's why.
Yeah. We have an organic plan that takes us, and that's why I said, and I reiterate, we're going to get to 15%, 16% organically. I'd like Christiana, the three things you're going to do, and then maybe John Ciulla, who I think is connected, can also give us a bit of color on his track record and why he believes that this is something that will deliver the 18% in three years. Christiana?
Thank you. Thank you. We appreciate the question. We appreciate and recognize, you know, where the skepticism may come from. As Ana says, we are building on significant momentum in the U.S. business already. If I take you back to 2023, on a fully loaded IFRS basis, we have to acknowledge our business, as was shown in the slides, was earning less than 6%. In 2025, we had significant momentum, had moved that already above 10%. If you translate that from IFRS into U.S. GAAP, that's actually already a comparable return of 11.5%. That is well within the mid-range of the regional banking peer group against whom we compete in the U.S. market.
We've had momentum building already into 2025, and that our organic plans from here actually represent more than half of the return on tangible equity improvement from 10% to 18% over the coming three years. That's coming from two very important levers. The first, as has been emphasized strongly in the presentation, is around the continued momentum that we have in our fee-based businesses in the U.S. We've seen fee-based growth in our CIB business in excess of 30% each year in the last two years, and we are continuing to build on that pace and momentum over the coming period. Then secondly, which is probably a bit more buried in the story, is around the full integration of our auto lending capabilities into our deposit-taking institution in the U.S.
Folks will know that our corporate structure in the U.S. has previously had the auto lending business separate from the deposit-taking institution at Santander Consumer. We are on the path to be bringing all of those assets into our deposit-taking institution, benefiting not only from the funding advantages that we achieve through that, but also the elimination of redundant systems and costs. If you walk that bridge from 10%-18%, you've got 3 percentage points coming from that integration of the consumer business into the bank, another 2 percentage points coming from the momentum out of CIB, and the remainder comes from the successful execution of the integration of Webster.
Maybe just two comments. Because I'm sure someone is going to ask, on the $800 million synergies of the combined institution. Maybe you and John, can you hear us? Hi, John.
Yeah.
Hi.
Hi.
You have a big audience here.
Great to see you.
Yeah.
I'm sorry I can't be there in person. I appreciate the opportunity to say hi to everybody.
You heard Christiana mention our path organically. Maybe you want to comment briefly, both of you actually, on the $800 million synergies, and also, John, on your and your team track record in integrations and why you believe this is something that we will deliver.
Shall I kick it off?
Sure, I'll let Christiana... Go ahead, Christiana.
I'll kick it off on the $800 million. I think it's important everyone hears from John on the execution track record that the Webster team bring. We laid out, again, in the presentation, clearly the material three buckets that build that $800 million. It's a significant chunk, equally, you know, roughly about a third of our technology and operations strategy integration, the deduplication of head office functions, as well as the scaling and deduplication of retail and commercial overhead. Clearly, you know, it's an ambitious number. If you place it only on top of Webster's existing cost base, we know that it's close to 60% of their standalone cost base. It's 19% of the combined.
I think a couple of reasons why you should be confident that we can achieve that. Clearly, it reflects and embeds cost takeout on both sides of the organization and some KPIs that may be helpful in thinking about that, particularly in the retail business. You know, our goal is frankly, to get Santander to be as efficient as the Webster platform is. They operate with 1.1 FTE overhead per branch. We're at 1.5, so we're going to move in clearly in the direction of Webster. Likewise, if we think about the amount of overhead per business volume. So if you take the KPI of billion dollars of business volume, how much overhead FTE do you have? Webster operates at about half of the overhead that Santander operate at.
you know, our work is cut out for us. The KPIs are clear. We know what we need to do. I think two other aspects that underpin the credibility before we get to what's really important and the execution effectiveness of the team that will be doing this. Remember that when you think about in-market benchmarks in the U.S., this is actually quite a different scenario, right? This is a GSIB acquiring a regional bank, and a lot of the cost infrastructure around regulatory compliance is frankly already there, and we're able to bank on that. I think folks have also focused a little bit on the guidance that we'd given around a sub 40% cost-income ratio in the U.S. as being, you know, out of line with the regional peer banking average.
I would encourage you to remember there our business mix, that we are indeed a consumer finance player for a significant portion of our business in the U.S., which already operates at about a 25% cost-income ratio. You marry that with what Webster already achieves today, with about 45% cost-income ratio. We just got to get the Santander commercial platform to that level, and we're absolutely confident of being able to do that.
John, do you want to take from there?
Thanks. I'm happy to, and I think Christiana hit most of the details, but I just want to let this group know how excited we are for this transaction. We are confident in our ability to deliver the promised financial metrics of the combined company. Why are we confident? Because Webster has a strong track record of delivering high returns, ROATCs, in the high teens, through an efficient operating model that focuses on clients, customers, and local communities. We're really excited about the scale and the technology that Santander brings to the combined entity. We think there are really opportunities to do things not only more efficiently, but more effectively to deliver products and services to our clients.
We have recently, in the last three years, been through a significant integration with an MOE with Sterling Bank a few years ago. Our team is primed and has a lot of ability and proven track record in terms of successful integrations. Ana was nice enough to have me here, but we also have our current president, who will be COO of bank, Luis Massiani, who led the integration through the last merger and will be a principal in the integration here. He did a terrific job three years ago and has his sights on strong execution here now.
I believe with our model, Ana, and the combined power of what Santander brings, with respect to technology, scale, and products, that we've got a clear path to be able to deliver the types of returns that we've promised the market here, and quite frankly, I can't wait to get started.
Okay, let's get moving, guys, and get the approval soon, okay? That's an upside for everybody because that's not in the numbers.
Okay, Ben's got the mic, but can we move it?
Thank you, John.
... back on this side to Antonio and Sophie after that? Thank you. Hi, go ahead, Ben.
Thanks for taking my questions. Ben Toms from RBC. One of the bits about Santander, which isn't born banking, I guess, is the CIB. Generally speaking, what are the growth ambitions of that business? Are there any products that you don't currently offer that you're looking to offer? If I think about CIB RWAs as a proportion of the group, are you looking to grow that over the 3-year plan, or is this really about doing more with what you've got in the CIB? Secondly, in the U.K., I'm just interested in relation to the structural hedge. What proportion of the NII growth that you're expecting to deliver in the U.K. is coming from that structural hedge?
I'm trying to work out how much of the growth is just a mechanical rollover, of the, of the swaps, and whether there's anything specific about your structural hedge versus peers, which means that it won't be the same kind of tailwind that we're seeing at other banks like Lloyds and NatWest. Thank you.
Yeah, on CIB, we're not thinking about launching any new products. We have what we need, we have, correct? We have been very clear that we'll keep CIB capital at 20% of the total, just below that. We're not going to increase the capital to the business. We want to grow it in a, you know, capital-light manner, that's less and less balance sheet relative to the income. There is a lot of opportunities on the commercial side. For example, talking about the United States, we know very well that Webster has commercial customers that don't have today the products that we already have. That's not in the numbers, by the way. There is zero revenues, correct? Zero revenues in what we have shown you on Webster. Zero. You might say usually you lose revenues.
Maybe, we don't think so because we have a very tiny commercial bank. Yes, the goal is to do more with what we have, do more network collaboration. We've invested in the teams. It's now about profitability and scaling up our network effects. I have said it correctly?
Sure.
Thank you. Right, Héctor?
Right.
You agree on that, right?
Yeah, no, completely. Look, I mean, let me give you... because the proof, as, the Chair would say, "The proof is in the pudding." Okay? Three years ago, RWAs from CIB were EUR 126 billion. We closed 2025 with EUR 106 billion, and actually, we're decreasing the number of RWAs that José is consuming. Because what we've been able to do is basically to do really do great in rotating the balance sheet and managing the business in that way, okay? Also, what you'll see is we're doing a lot better-
in other income, That's because there is a lot of client flow that is coming in, exactly what Ana was talking about, of the gross fertilization we have with the commercial and the other businesses that we have in the group in terms of FX, trade financing, in terms of credit. A lot of what the factory. Because you got to understand that CIB is not just an independent part of the company. CIB is an integral part of the business in which is, and it's a global factory. I mean, they have their own customers, but they're, most importantly, they're a global factory for Borja here that he manages commercial. Borja depends a lot on the product that José is giving him all the time, and we manage that because that's very important, the amount as.
I was explaining to you the example in the U.S. The moment that John's customers basically will have the capabilities to do something that we don't have today. That's exactly what is giving us, and that's why we call them network businesses, because it's a part of a network that they, yes, they do have their business within themselves, but as well, they service other areas of the banks.
Thank you.
Thank you.
On the structural hedge, maybe José, you want to take that?
We-
Just have, José.
As I said, we have EUR 105 billion at the end of 2025. The main difference with our competitors is that this is very short term. It's slightly over two years. There is a great opportunity to lengthen the maturity of the structural hedge. Right now, the yield is below 3%, and we think we can take it to over 3%, 3.3%, more or less, in two to three years. If we add TSB, with TSB, the structural hedge will increase to around EUR 125 billion. Again, the opportunity comes from lengthening the structure of the hedge. More or less half of the growth of NII, as I mentioned, NII in the U.K., will start growing low single digits, accelerating to mid-single digits.
Half of that is the consequence of lengthening the maturity of the structural hedge going forward.
Okay.
I think Antonio's got the mic.
Hi, Antonio Reale from Bank of America. Two questions from me, please. One is a follow-up on the discussion we've had on allocation of capital. I mean, if I look at what you've delivered and where we've come from, obviously, you've shown a significant amount of discipline. You bought back shares when you were trading at steep discount. You've had high return on investments on that. You've sold Poland. You've added to your developed market exposure with Webster and TSB. My question is really, how should we think about sort of buyback at Santander from here? You've committed to do more of that, but I wonder to what extent does it make sense for you to deploy this capital to buyback, for example, minorities in Santander Brazil, for example.
How does that compare as a use of capital to buying back your own shares? Would that be at the right time, given what you've done in the DMEM mix and what you've talked about in terms of Brazil returns and where we are in the interest rate cycle? That would be my first question. My second question is on the business unit and specifically on a product. I mean, it's quite clear from what you've said, the direction of travel of the various business units and the strategy that you've outlined today is quite clear. Maybe help us here clear the one hurdle that I have, which is, what do you see as the future for the auto lending business?
This still accounts for about 18% of your group numbers. I think it'd be interesting to hear your thoughts as to what you think is the end game there. Thank you.
In terms of capital allocation to share buybacks, you know, I still believe at this price, Santander is a very undervalued company. If you think about everything you just heard, I'm not going to go through the business model, you know, the plans we have, the scalability, and if we're going to get the company to 20%, over 20%, you know, buying at, what? 9% spot, but what is it, whatever it is forward, it is still cheap, right? We always look at that on a constant basis. Again, going back to the capital hierarchy, and we analyze minorities, and we analyze the group, but the hierarchy is what drives our decision making. Again, organic, you know, buybacks, bolt-ons, I would put minorities within that, and we always compare that vis-à-vis our share buybacks.
In terms of auto is a business that does better with lower rates. A lot of the volumes in auto have been put on the books at rates in 22, 23. By the way, when interest rates were negative or zero, you know, this was the star in the group, and we value diversification and through the cycle delivery, as you saw. Part of these businesses, people think about geographies. The types of businesses have very different, you know, correlations with the cycle. Again, lower rates are good for consumer, so you should see a big improvement. Part of it is ourselves improving the business model, part of it is the lower rates, right? That's why, again, there will be very little upside in net interest income in euros, but there will be upside in consumer.
That's how I would describe it. Again, we have taken a very important step, consolidating Openbank with consumer. That gives you a huge opportunity to offer additional products to our customers we didn't have before. It was much harder. Today, you have a single bank in euros that is going to have customers, what we call now mobility, but it will have the opportunity in Germany, in Holland, where we have Openbank up and running, to offer other products, current accounts, the whole digital bank. Again, a lot of opportunities to make single product customers, you know, do what we do in retail: offer insurance, offer other accounts, that is the strategy. By the way, also in the United States. You'll have auto and the digital bank, national, across the United States, the same as in across Europe.
Sophie?
Yeah, thank you. Thank you for taking my question. Sophie from Goldman Sachs. My first question would be on the number of customers. Back in the 2022 plan, you guided for 200 million customers in 2025, but you actually only got 280 million customers. Now, you target 210 million customers in 2028. What gives you the confidence that you can grow the customer base this time around, especially considering a lot of banks have excess capital, they are very happy to kind of deploy that, everyone wants to grow, and competition, you could argue, on many fronts is increasing? My second question would be on Mexico.
On one of the slides, you say that you are kind of, or Mexico is, profitability is in line with the above 20% Return on Tangible Equity target. You continue to kind of lose a little bit of market share in Mexico. How do you think about the organic growth opportunities in Mexico, and what can you do to improve that franchise further? How should we think about the EUR 2 billion improvement in net income that comes from the soft currencies? Is it fair to assume half of that comes from Mexico? Thank you.
On the number of customer growth, we feel confident because we are setting a target which is very much aligned with the growth we have seen in the last three years. Again, the growth we are aiming for of EUR 30 million is more or less the same as the EUR 20 million. The EUR 30 million, the EUR 20 million in the previous years. Where it is coming from, EUR 20 million of that growth is coming from retail and commercial, and EUR 10 million is coming from Openbank, of which EUR 7 million-EUR 8 million is in Europe, based on what I just described, where we are going to now, with a single Euro bank, we are going to be able to offer the digital bank to our mobility customers. Again, these are customers that come in the door with a loan, and we are already testing that.
Would they like us to offer other products? In Germany, the answer is overwhelmingly yes, okay? We also originate customers in Openbank through alliances with Amazon and others. We are gonna try and offer other products. We are working on that. On the EUR 20 million growth in retail commercial, about half of that is coming from Brazil and Mexico. I think actually more than half, EUR 15 million is coming from Brazil and Mexico, and EUR 5 million from everywhere else. These are numbers that I think we feel very comfortable we can get to. Last but not least, and this is maybe where we got it wrong before, is that for a structural change, by the way, the big number is not total customers. The big number is 19 active customers. 19 million active customers, that's a big jump. Why do we feel comfortable?
One Transformation is helping us. We're gonna have a One App across all our countries by the end of this year, which is, you know, exponentially better, or should be, than what we've had before. Again, customers will come because of the better UX, and at the end, that's something which we believe. There's other levers to grow customers. As I said, insurance is not just a product you can offer to existing customers; it's also a way to acquire customers. Mexico, maybe, Héctor, do you want to address Mexico?
Yes.
Sure, Sophie. Okay, first of all, I mean, you got it right.
Sorry!
I mean, Sorry, yes?
Yes, sorry. I forgot one very important thing. We did a lot of cleanup in our customers. That's one of the reasons we didn't get to that. We had a lot of inactive customers, and we are very rigorous. We audit customers, so we did a big cleanup. Millions of customers disappeared. I mean, we decided, they were not customers, or they, we, you know, they didn't meet our bar, and these are millions over the last couple of years. That's one of the reasons that we didn't get to the target. We feel very comfortable that a lot of this cleanup across the group has been done. Yeah, perdón.
No, fine.
Yeah, it is important.
Well, that helped a lot. Okay, Mexico, first of all, the business basically is returning in pesos much more than 20%. What we've been doing is getting closer to the best-in-class every single year. If you look at the three years, we've been closing the gap to the leaders in Mexico, okay? That has been part of the reason that we've been so strict, and this is goes basically to capital allocation. The reason that we've been losing a little bit of market share in Mexico, first of all, we changed the mix a little bit, all right? We wanted to be cautious in the way we were seeing the Mexican economy.
And we changed the mix a little bit of that, but also because due to capital allocation, we basically concentrated on profitability, and that's why the reason that Mexico has been growing on the RoTE. On the other side, we basically have been allocating capital in a much, I would say, a strict way than some of our competitors. This basically goes to being cautious in that way. Secondly, about, I mean, what we've seen in terms of organic opportunities in Mexico, look, We have the number third, the number three bank in Mexico.
We have almost 15% market share in that market, that basically gives us the scale and allows us to compete, to launch products, to do whatever we require in order to compete head-to-head in the market against the two big guys. On the other side, what it is important is that we continue to enhance the deposit base that we have, and we have been able to do so. If you take a look and compare what we've been doing in terms of decreasing the cost of funds in Mexico, which is a big difference that we have to both, to the both leaders in the market, is exactly that. Much more transactional deposits concentrate on that and closing the commercial gap that we had years ago. It's basically being and having a much.
franchise that we used to have, at the end, this is what we have. We believe that if Mexico basically doesn't have a good year, we have a very good, strong balance sheet in order to sustain that, very good liquidity, very good structure, and we want to maintain that. We don't want to go overboard and grow like crazy in credit cards or something like that. We already had a problem in credit cards in Mexico, you remember back in 2012. We don't want to go back to that again, so we want to do it in the right way. Cost of risk, as you have seen, has decreased significantly over the past few years, so we maintain a lot of discipline in the way that we manage the franchise.
That's the way we've been doing it, and we plan to continue that way. We don't believe we need to acquire anything to be competitive in the market.
The EUR 2 billion soft currencies, how much comes from-
No, I think it's, you know, We have given you the details of Brazil, so it's less than half of that is Mexico.
Next question from Andrea.
Thank you. One on M&A and one on Brazil. On the slides, you put a 15% return on invested capital as the hurdle for M&A, but you have regions with very different cost of equity. Why not just stick to what Ana said, i.e., returns well above share buyback and above local cost of equity instead as the hurdle for eventual future bolt-on acquisitions? The second is on Brazil. With rates declining from 15% to 10%, can you explain how is Brazilian cost of risk meant to be stable at portfolio level? At a 20% RoTE, Brazil would still be a drag to the group, given the higher cost of equity versus the group. What do you need to take Brazil to 25%? Thank you.
You answered your question on. Yeah, we you know, I would go, again, always back to. I don't know, we didn't say 15% ROIC. I mean, that was. It has to be substantially above share buybacks. When we did TSB, it was roughly 6 points, 5, 6 points. When we did Webster, it was the same, 5, 6 points. If you take the cost of equity at 9 or 10, 15, it was 14, 15 when we did TSB. That would be, again, capital hierarchy. We're going to be super disciplined. That is going to be. That's a firm commitment of this team and the board, that that's going to be something we're going to stick to, okay? You can relax on that. The 15. Who put 15?
No, no.
Did you put 15?
This is because this is hard currency. Obviously, 15% in BRL is not 15%. It's obvious.
It should not have. I mean, it was a. You put 15, no?
Yeah.
Is it clear what it is? Okay. Yes, thank you. On Brazil, I'll let Héctor maybe cover that. In terms of the cost of risk stable in Brazil with rates coming down, I must say something, is that, you know, when rates come down, it doesn't mean that customers who have not suffered are not going to continue suffering. I think this is what we see, you know, happening in many cases. You know, Brazil's stable cost of risk, I think, is what we really think is going to happen. Héctor, you can cover that maybe in a bit more detail. As we take Brazil from 20 to, Héctor was just telling me before, Itaú is at 22, I believe.
Yeah.
Yes, we should aim for higher than 20 down the road. Absolutely, yes. The issue in Brazil is that, you know, it's really important that we're able to compete in individuals. We are very good at CIB and affluent. There's space to grow. We are going to grow in commercial. We're going to reallocate capital to the, you know, better risk-return segments. There is an issue in terms of the cost base with competitors that are very competitive. Sorry for the repetition. I do think that's something we have further upside than the 20, for sure. For now, that's a number we feel comfortable with. If I ask Héctor more, he's going to say that's not possible.
What?
to go above 20, you know, sooner.
Sooner or not, yes, I mean, the idea is basically to go beyond 20. I don't know if in two years I'm going to be able to make it, to be sure. Look, I mean.
But-
you did, the first part was very good in your question. Let me tell you why. First of all, cost of risk has been stable in Brazil below 5%, okay? We intend to do so and to maintain it. Why, if rates are coming from 15 to 10, the cost of risk doesn't get any better? Let me tell you why, and it's very important. This is because the moment that we see that the credit cycle becomes much better, I tend to go back into credit cards and personal loans in the upper market, which I'm not doing today. I know perfectly well that credit cards cannot go beyond 11%-12% cost of risk. If I go beyond there, it's because I'm giving them too much.
If my cost of risk in credit cards go below 10%, I'm leaving money on the table. That's exactly the right combination that I need to get in order to deliver the 20% or above 20% RoTE. That's exactly how precise it needs to be. What we're playing with here is basically the change from the model, what Ana is telling you about, basically changing the mix a little bit. When we see the market getting better, I'm going to get back into that market. Cost of risk is not going to get better because of that. If I deliver better cost of risk in Brazil, it means I'm leaving money on the table. It's the same as in Mexico. I understand very well the dynamics on the market, and we are playing it that way.
It's very important to understand that. We went a little, I mean, we went a little bit. Remember, rates in Brazil went from 2% to 15% in less than 24 months. Some of the things and on some of the market that you were playing in personal loans, and you lost a little bit of money there. We are basically recovering ourselves, covering that, and then as soon as the market gets better, we're gonna get back into the game. Ana said, you cannot be a complete bank in Brazil if you don't play in the mass markets, and this is a huge opportunity. You're talking about a humongous market, 240 million customers. Two hundred, sorry, 240 million Brazilians at average age of 32 years old, okay?
That's much better than Europe, it's a huge opportunity, and at the end, the market has become very competitive. That's exactly what we're trying to do. It's a change in the model, but we're also. We need to change the cost to serve on how we manage mass markets, and that's exactly what we're doing. That combination is the one that is gonna take us. If we do things right, I really do believe we can go beyond the 20%. We need to. Actually, if you know her, you know she's gonna push me towards that. In the meantime, I'm in changing the model, doing the things I need to do in order to be able to get better. 2026 is still gonna be tough, okay? I believe that 2027, 2028 will get a lot better.
Ignacio Cerezo. He's got his hand up there.
Who? I'm sorry.
Right here.
Oh, sorry. Thank you.
The lights are very bright.
Yeah. Hi, this is Ignacio from UBS.
Hi.
A couple questions. First one on AI around the strategy, if you can give us a bit of color in terms of internalization versus outsourcing, third-party vendors, strategy over time. The second one on AI is, you seem to be incorporating some revenue enhancement coming from AI. What makes you confident there's not gonna be any margin compression coming through? If so, what kind of vulnerability or what are the products or the segments where you see more vulnerability in terms of margins coming from AI? One follow-up in terms of detail, sorry if I've missed it. I don't think I've seen the currency expectations you have. If you can share what kind of effects assumptions we're taking in the main countries. Thank you.
The one? Forward rates.
Is that forward rates? Is that.
Yes
enough of an answer? You're being very, like, parco en palabras, no, hoy?
Has been.
Yes. Is that enough, or do you want him to say more?
Number.
Yeah, the forwards. The forward, whatever the forward curve is, as of where, as of what day? At least tell him when.
It's forward rates as of a couple of weeks ago.
Bueno, ya, por lo menos es algo, si no. Okay, on AI. You know, we have not begun to invest in AI yesterday or the day before, so this is really important. Let me just go back to why we think that Santander can be a winner in AI. I know there's a lot of talk about that. First of all, you know, we have everything that is needed to succeed in AI, in the sense that, you know, it's all about data, and we have quality data for decades. I mean, huge amounts of quality data, which obviously is important. The top talent today, that's what they want. They want lots of data to work with. We have that. We have, as of today, I would say, an organization that is able to embed AI in a lot of productivity and improvements.
We are putting. Ricardo is here, he's the head of AI. He reports directly to me. He heads up data and AI. It's actually in the businesses under Héctor. There's a data AI person in every single global business and countries, you know, coordinated by the global businesses. The most difficult thing for us is the culture. That is the hardest thing for us to get right, because at the end of the day, if we, and when I say we, I mean me, Héctor and Ana and José, you know, if we build our own agents, which we are doing, by the way, this is what every single person in the organization needs to do, right? That's a starting point. That is not easy for people to understand and to spend time on, and that's one of the things we're trying to change.
there is a big cultural mind shift, mindset, sorry, shift across the company. I think that is the biggest hurdle once we get over that, and that's why I think today or this year, we should be able to see, and that's why we gave some numbers. you know, we just had a board yesterday, and the board members were asking for the same: "How do I measure progress in AI?" I'm saying we're gonna do that as of this year. We're gonna start measuring progress. To measure progress, you need to know where you're going. to be honest, this, what's going on in AI is changing every month, every two months. again, we're gonna start being much more specific on both what we call defensive and offensive.
Of course, we're gonna work with partners, but we're not gonna give partners all the IP of Santander. That is not gonna happen, right? We've been very thoughtful about how we build alliances with strategic partners, from the very big names to the not such big names, to the startups. Through our, you know, fintech fund, we're making small investments in startups where we are working with them and helping them scale. You know, if these startups do well, we'll also be able to benefit from that upside. We've been doing that for 15 years. There's a lot of things going on, and I would say that in the next 12 months, we should see big progress. Again, data is crucial, right?
This is something which we have loads of, and as I said in my presentation, with AI, you can actually access that data without having to do anything very expensive or, you know, boiling the ocean as you had to do before. There was a news yesterday where Anthropic Claude is gonna. I hope you saw that one. They're gonna translate COBOL, and that had...
Streamline.
Streamline. Well, I call it translate. COBOL into something more user-friendly, I guess. Of course, every single bank in the world, including us, still has COBOL, right? Again, these kind of things should help us get better faster. I think AI is a huge opportunity for companies that are at scale, like us, that understand this. We've been working on technology for 11 years. I've been making this speech for 11 years. Nobody listened until two years ago, right? Why? Because a lot of the things you have to change are really boring. They're not gonna give you a headline, you're not gonna do M&A, but it works, right? It's aligning the culture, it's putting in place the global business, and I think today we're ready to really take Santander to the next level and be a big winner in the AI world.
When we say defensive and offensive, we're also gonna do, you know, offense. Why not? You know, we're very big in many markets, but we have two brands, so there's many things we can think of. Openbank and Ebury, I'm not saying LEGO-like, Raul, and the lawyers, but think about a LEGO, okay? Think about a LEGO.
Building blocks.
Yeah, that's very boring. Building blocks. We have Ebury, we have Openbank, we have places where we can actually test these things without, you know, getting in the way of delivering all these boring banking and huge numbers that we need to do, all you guys get all the capital generation. I'm very optimistic that there's a huge opportunity for us in AI. Again, both defense and offense.
Mike. Mike's got a question here. Mike, please.
Sorry, we have Ricardo. If there's not more questions on AI... Do you want to say something, Ricardo? No. No? No, no. Yeah. Okay. Yeah, one question.
Yeah, he's got an AI question.
Another AI?
Yeah, thanks.
I'm so happy-
I, actually-
This is in fashion finally.
Yeah, I'm Mike Holton-
For banks.
... from BNY Newton. I do have a question on AI, you know, most people talk about it as being a massive game changer, whether for companies or industries. If I look at your efficiency ratio walk slide, it shows, I think, 100 basis points of the 900 from AI, which is good. That doesn't scream game changer. That screams kind of just another tool. Would investors be better thinking about AI at Santander and the banking industry in general as being just another helpful tool versus something that changes everything?
I, you know, I think we should not get ahead of ourselves. As I said, my vision for Santander, not today, but in 2, three years, is that we have lots of AI startups within the bank. Remember, we are highly regulated, and we're always gonna have to have a person, at least for now, you know, controlling whatever happens and whatever goes to customers, and so this is really important. We need to make sure that before we can say it's a game I think it is gonna be a game changer, by the way, and for a very simple reason, because you know, you're gonna end up, each one of us, including, you know, our mothers and grandparents, if you're young enough and so on, they're gonna have AI in here, right?
This is not gonna take 10 years. It's gonna take four, five years, so maybe less. We have to be ready for that, and we will be ready. To answer your question, yes, I do think it's gonna be a game changer. Is it gonna happen tomorrow? I think it's gonna take a bit longer because of, A, it takes a lot of work to change culture, organization, you know, leadership mindsets, but at some point, those that are not ready, you know, it's not gonna be good. That's why we want to play defense and offense, and when I say offense, going back to the building blocks, I will not say Lego again. You know, companies like Ibery-
Sure
... which is a fintech, which does cross-border payments, one of the more, you know. Openbank, where we can play with another brand. Not play, but you know, not put at risk, the Santander franchise in any way. It gives us huge optionality, and that's what you want.
We got a question from Britta there, and then, another question here in front, please. Mike there. Pink jacket at the back. Sorry if it's not pink.
Yes, it is. Thank you. Yeah, thanks. I've got two or three questions, depending on which way you look at it. The first one is on the cost targets. Can you maybe talk a little bit about the trajectory of the cost reductions that you're seeing? You got to a decrease every year, but are there any bumps along the road? Maybe also comment a little bit on what your plans are for the U.S. in terms of corporate structure and what the timeline is to potentially merging the entities, be it Miami, SCU.S.A, and then eventually also Webster Bank. The other one is on Openbank. I personally was surprised to see the target of a 16% return from 10%, which is a very meaningful improvement.
The back end of the slides points to the European business seeing the improvement mainly being revenue driven, if I see that correctly. Given that the fee growth is low single-digit, I would presume that's going to be NII driven. Maybe you can talk a little bit about the interplay of volumes in this business versus also potential margin pressure from digital challengers, versus the opportunity of funding cost offsets from expanding the deposit base, and maybe tell us what your deposit growth ambition in this business is.
In terms of the cost reduction trajectory, I guess, José?
No, no bumps.
No bumps, no? No bumps, so it should be quite linear, right? Cost down every year in constant-.
This is ex M&A.
Ex M&A.
Okay, M&A will obviously, you know, create, you know, volatility, but ex M&A, it should be pretty.
The BAU reduction is, you know, this is something we have worked really hard, and believe me, it's not easy. Because people always give you great projections three years down the road, but everything goes up before and then it comes down. You know, there's no hockey stick here, no. M&A, well, do we have anything more on M&A? No. U.S., U.S.A, the idea is that it'd be a single bank, right? We'll integrate Dallas, as Christiana was saying. Dallas will be integrated. We have already filed all the approvals. We should get that in the next couple of months. That should happen this year. They will be collapsed, right?
That would be funding benefits, that would be a significant part of the road to 18%, 3 basis.
Three out.
3 out of the total, 3 percentage points will be with the integration of Webster, we both have to have shareholder meetings for that. That should be in the next months, but you know, we're still in the process of approval. I'd say by the end of this year. We're estimating the closing of Webster sometime in Q3. That's what we're saying. Again, both of those should happen this year, correct? Okay, on Openbank. Yeah, Europe is a big delta for Openbank, and its volumes and margins, it's both. Of the improvement in Openbank, about 50% of the total is Europe, and 40%, 45% is U.S., and 10%, 15% is LATAM. The big delta is in Europe.
Europe had a lot of one-offs this year. When you see those low numbers, that includes non-recurring items. Maybe somebody can remind me what they are. There was, you know, the FC, you know, a couple of things here.
U.K. motor
... in the U.K. There was, Swiss francs or something in Poland.
Swiss francs.
So-
The fee regulation in Germany.
And?
Germany.
Germany.
Fee regulations in Germany.
That should not happen again, right? We don't expect that to happen, and that is. The underlying performance is much better than the, what you're seeing as a headline. Again, a big delta will be in Europe and will be both volumes and margins, aside from the one-offs not happening again. Then there's also One Transformation going on, by the way, same as in retail. Consumer is part of the same program, with common platforms, you know, across consumer and Openbank.
Question here. Sorry, Bora, I'll come to you next.
Thank you. Hi, Carlos Peixoto from CaixaBank. two quick questions from my side, I guess. The first one would be on the cost to income. I know you already broke down more or less the EUR 4 billion-EUR 5 billion expected cost reduction. I was wondering, given the changes in the disclosure that took place with this new reporting, whether there are any effects from lower legal charges that are now included in the cost line, within those EUR 4 billion-EUR 5 billion of cost reduction. The second question would be on the capital, the excess capital distribution part.
Many of your competitors have opted to distribute excess capital when it's built up at the end of each year or around that. What drove the decision to allow for a capital to accumulate up until 2028 and only distribute excess capital by then? Thank you.
On the excess capital, we have a lot of organic growth above 20%. That's going to be the priority, and depending on what opportunities there are, again, after the BAU distributions, we would return any excess over 13 in principle. We do not want to say that that's going to happen across the plan, but it might happen. We're absolutely open to that. If there is excess capital, if, you know, if mortgages continue to be below Treasuries and we don't grow, you know, we will have more excess capital. As we've said, I believe that both Mexico... We have a lot of organic growth, which is very different from our peers. You know, we are in markets that have growth, we can deliver, and as I said before, our goal is to maximize growth in distributions over time.
Higher returns on a higher TNAV, very simple. Higher amounts of TNAV, higher returns, growing distributions over time. That is the business model of Santander. That's why you should own Santander if you like that kind of a model. If you want to get everything back today, that's not Santander, right? Again, if we can offer you returns above 20%, as we're saying, in EUR, right? Well, actually in EUR, high teens, right? But close to 20, we think that is a good value proposition at these levels. On the cost-income and EUR 4 billion and EUR 5 billion in legal-
I mean, once you move the cost to the cost line, it's all the same. There is, in the plan, there is not a disproportionate cutting from the piece that has been moved from other results to cost. For instance, trabalhistas in Brazil. That's the cost of operating in Brazil, is really personnel cost, because it has to go through a judicial process, it's accounted for below the line. It's part of, you know, personnel cost, and it needs to be managed as such. The key point of moving those costs to the cost line is that now they are included in the cost to income, we are gonna have management focus on the cutting of those costs. In the plan, there is not a disproportionate saving coming from those costs.
Borja has got the next question here.
Thank you. Borja Ramirez from Citi. I have two questions, please. Firstly, a follow-up on the AI. In my view, Santander seems to be better positioned, not only because of the scale, but also because it's globality. You are present across many markets, and you could maybe learn what is happening in more advanced digital regions like U.S. or U.K., and apply it to other regions. Kind of to the similar of applying a building block or a label from one region to another. That would be one question. My second question would be more of a high level.
It's quite evident the revenue diversification and lower earnings volatility of Banco Santander, and that could become more relevant in the current geopolitical environment. Yet, if I take the EPS 2028 post-AT1 based on the plan, and I calculate the implied price earnings, it seems to be slightly below the sector average. I would like to ask, I mean, this is a good opportunity, but I would like to ask: What could the market be missing at this point? Thank you.
In terms of, in terms of the AI, there's a number of other advantages. For sure, learning from one market to the other is one, but I also think the trust in the brand, you know, in the age of machines, having, like, branches and people talking to people, I think that will have huge value, and that's something we believe in, and we can make happen in a profitable way because of the network effect and because we don't just have individuals. You know, maybe you don't need as many branches, but our work of a model is working incredibly well. There's gonna be a lot of the creator economy that we can service.
We have all these entrepreneurs, we think there's a lot of advantages to our scale, but also to our physical presence and our belief in people talking to people and the brand. In terms of EPS 28% below the sector, you know, to be honest, when we benchmark against our peers in 28%, in terms of value creation, we're gonna be near the top. That is what we look at. We believe that we're gonna be one of the most profitable banks among the top banks in the world. You can see that in our RoTE. Other banks are at our level. The question is: Is it sustainable, and is it growing? That is, I think, the question you need to ask yourself, you know. Is our profitability gonna stop at 20%?
We've said we think we can do better than that. Second, we have growth, so it's not just about profitability, it's about growth. That's how you compound returns, because you make more money, more distributions on a higher TNAV. That's the difference, I think, with many of our peers, including, you know, U.S. banks, that not all of them have the growth we have, right? We believe the U.S. is a great market, but obviously, Brazil, Mexico, grow faster. We will be towards the top of the profitability and EPS growth league.
The last question there, I think, or maybe two. Yeah.
Okay. Hi, my name is Fernando Gil de Santivañes from Intesa Sanpaolo. Couple of questions, please. First one, regarding the assumptions on costs. Other than the U.K. and the U.S. restructuring, are there any one-off restructuring included in the plan, and where, to what units? Second one is on taxes assumption. I know it's minimal for you, the banking tax in Spain in 2028, is it included in the EUR 20 billion forecast? What is in the other provisions, line litigation and other stuff, what should we be thinking about in terms of litigation costs and going on? Thank you.
Yes, in the BAU, every year we include restructuring costs, pretty big numbers. We just think that's BAU, and that's gonna continue. When we give you the numbers, we're including BAU restructuring in different countries. I mean, numbers close to EUR 1 billion a year, roughly, across the company. Again, in the BAU... What we don't include in the BAU is the M&A restructuring, okay? M&A is out. That's why all the guidance we're giving you, all the guidance, except when we say including M&A, and that includes restructuring. Yes, in every single market. You're not gonna get it below the line on the BAU. Is that clear?
Yeah, but the.
So-
...
No. Yes, there is, there is... Okay.
No, no. He asked about if, besides the two.
No, that's what I said.
So-
On the BAU, there is a restructuring allowance every year, about EUR 1 billion, in the BAU numbers that we're giving. The one thing that's not there is the M&A. The M&A is separate, right? We will try. You know, that's an accounting issue. When you do the restructurings, that's when they go in, right? We're gonna try and do some this year already. That's as far as we can go, but that's in the numbers that we gave you on the ROIC. On taxes and other provisions?
No, the plan is that the Spanish banking tax will stay. It's a very small amount. It goes in the tax line, so it's, you know, very, very small. There's nothing extraordinary in the expected tax rate for the next three years. Nothing extraordinary. In the other results line, in the next three years, the average of the three years is below EUR 1.5 billion per year. EUR 1 billion-EUR 1.5 billion, below EUR 1.5 billion per year. Last question.
Hi, hi. Hugo from KBW. Thank you for the time. I just wanted to ask a little bit more detail, if you can, about the split of the fee growth by country, if possible, and the cost savings by country, if possible. Most analysts still model by country. A more high-level question around... I think you mentioned that the tech transformation probably would continue post-2028. I know that it's an ongoing process, tech transformation, but when talking about moving everything to global platforms, how much do you think will be done by you know, 2027, 2028, in terms of % of your, like, the work, the bulk of the work you're doing? Thank you.
You know, we run the company by global business. I hope that you can model by global business, but we're very happy to try and help you if you need some help on that. Raul, please. Again, the key thing here is the network businesses are the ones that are going to grow more in fees, and that is really important. We said that already three years ago, 50% of the increase in fees over the plan should come from the network businesses, and I think that number is roughly the same. Again, CIB, wealth management, and payments are the big uplift in fees. There is a increase in retail, commercial, and consumer also, but that is not going up as much.
If you want a breakdown by country, in retail commercial banking, Spain, the U.K., Mexico, and Brazil represent 72%. Four countries within retail commercial banking, represent 72%. In Openbank, as I said before, 50% is Europe and 40% is the U.S., roughly. If you go to CIB, actually, Europe, which is Spain hub, Brazil, and the U.S., is 72%. It's not hard to model by global business. That's how we run the company, that's how we model the numbers, that's how we do the plans. Of course, within each global business, as I said, three or four countries are 70%, 80% of the total.
When people say we're such a, you know, diverse and everything, once you take Poland out, there's. You need to understand four or five countries and understand what it means within retail, commercial, consumer, and CIB. That's it. Simple. Again, I'm really keen that you tell me directly. Write to me an email, tell me what you need to model by global business. What are we missing? What information you need so you can do that? Again, I think that reflects much better what Santander is and the potential we have. Sorry to say that. Now, if somebody wants to give
I'll call you back, Hugo.
On fees.
follow up with you.
On fees, yeah. Maybe Raul can call you and give you some detail on that. On tech, and the deployment of the platforms, you know, a huge country for us, which is Brazil, is still not on Gravity. We will focus over the next three years on the countries that are not in the process of M&A. Even though, yes, in the U.S., and I think John and Christiana mentioned that, some of our platforms, like payments, like the front end of Openbank, will be ours from the start. We will wait on the others because we have to prioritize integration, and we have to prioritize customers being, you know, serviced in the right way. We cannot do too many things at the same time. That's the case for the U.S. It's also partly for the U.K.
That doesn't mean that they will not be convergent to the platforms, that means that you will have further upside beyond 28, especially in those countries where we're going to focus on the integrations. You know, Brazil, Mexico, Spain, Chile, will be much more of a focus on the deployments this year, and again, with a big focus on Brazil. Spain is very advanced already, I have to say. Spain is very advanced on Gravity and payments. Yes, there will be further upside from 29 as we deploy further platforms.
Yeah, as I said, 2029 is going to be the first fully synergized in the U.S. By the fourth quarter, we will have executed 100% of the synergies, obviously, the first fully synergized year will be 2029.
Thank you.
Can we connect? Yeah. Finally, I'm going to get to do the closing that, as I said before, I think I've done a bit already, but I'm very disciplined, and I do what my head of IR says. I want to show you first... Great job, Raul. No, really, you've done a fantastic job. I'm not kidding. This is a sum up, so you have it fresh in your minds. We do have a unique business model. It combines unmatched global and in-market scale in retail consumer, customer focus, and diversification across Europe and Americas. When combined with our three core pillars, we are convinced this will deliver consistently for our shareholders. We aim to be the number one bank by number of customers in our footprint, going to above 210 million....
We are changing the model in a structural way and going to global platforms. We have done a lot of the groundwork, as we have explained today, on the business and operating model alignments, which is again, what we call the boring banking, but incredibly important part of being able to deploy this common tech. We will continue to leverage our network businesses, our CIB wealth management and payments. Together with a continuing focus and discipline in capital allocation, continued investments in data and AI, the integration of the bolt-on acquisitions will drive mid-single-digit growth in revenue, double-digit, including M&A, with lower cost. José has explained in more detail, 2026, 2027, 2028. 2026 will be a transition year. What's important is we're setting a new standard for profitable growth and value creation.
Just going over the targets again, we completed the sale of Poland in Q1, we'll complete TSB in the second quarter and Webster in the second half of the year, hopefully in Q3. We expect revenue to increase mid-single digit in constant EUR, lower cost in constant EUR, underlying profit above EUR 14.1 billion, and CET1 ratio close to the upper end of its operating range. For 2027, we expect revenue growing double-digit, positive operational leverage, profit increase in the mid-teens, and CET1 being above 13. For 2028, more than EUR 20 billion in profit with a return on tangible equity of above 20%.
I will not go over again the operational targets, but these are being cascaded down to all the countries and global businesses. This is something which will be our operational North Star, with, of course, a very important deployment of Gravity in Brazil and Gravity 2.0, including our One App, to serve over 80% of retail and consumer by the end of 2026. This means we aim to increase revenue mid-single digits and lower cost in absolute terms every year in constant EUR and excluding the impact of M&A. I said already, including M&A, double-digit revenue and profit. This takes us to the financial North Star, which you have seen a few times already.
EPS growth set to grow well into the double digits from 26 to 28, maintaining the payout target of 50%, with cash dividend payout increasing to 35% from 27 onwards. This means that cash dividend per share will more than double by 28 from 25 levels. Excess capital above 13% CET1 at the end of 28 will be distributed to shareholders, and again, our value creation will accelerate to the high teens. Importantly, our commitment is to continue to be a compounder, again, growing profits, growing distributions on a higher TNAV and doing this during time and continuing to improve profitability, as we have said before. Our investment case is solid. In the following three years, we'll have more than EUR 50, over EUR 50 billion in capital to fund both profitable growth and shareholder distributions.
Again, these are the numbers that we have reviewed today. Thank you very much. I want to end by saying something which is really, really important. I mean, here you have in the front row, not all, but our key management team. We have an amazing group of people. They work really hard. Believe me, today is the interesting and fun day. There's been a huge amount of work, and I want to congratulate Héctor, especially because he is the leader in a lot of what has been happening in the planning. These are very ambitious numbers. They're not going to be easy, we are very confident that with the team we have today, we will continue to deliver. Thank you very much.