Santander Lines Up Deep Cost Cuts and Efficiency Drive in New 2028 Strategy

New Strategic Plan Aimed at 2028

Banco Santander is finalising a multi‑year strategic roadmap that it plans to present at the end of this month, setting out its targets and priorities through to 2028. The plan will give investors a clearer view of how the group intends to grow income, manage capital and strengthen its position in key markets over the next three years.

One of the central ambitions is to raise return on tangible equity to levels above 20%, building on the progress made in recent years. To achieve this, the bank expects to combine healthier revenue growth with a significant reduction in its cost base, continuing the trajectory set by previous strategic cycles.

Record 2025 Profits and Improved Efficiency

The new plan comes on the back of a historic year. In 2025, Santander reported a net profit of 14.101 billion euros, the highest in its history and around 12% more than the previous year. Growth was broad‑based across major regions and business lines, supported by solid lending activity and resilient credit quality.

At the same time, the group has been steadily improving its efficiency ratio, which has fallen to just above 41%, the best level in more than a decade. This progress reflects ongoing simplification of products, increased use of shared platforms across countries and a strong push into digital channels that reduce the cost of serving each customer.

Deep Cost Cuts and Revenue Growth Targets

The forthcoming strategy is expected to lean heavily on further cost reduction and productivity gains. Management has already signalled that there will be a “substantial” improvement in efficiency and a notable cut in operating expenses as part of the new plan, although detailed numbers will be presented at the strategy day.

On the revenue side, Santander is aiming for robust growth in income and profits by 2028, helped by its global diversification and recent acquisitions such as TSB and Webster Bank. The combination of a larger, more diversified income base and a leaner cost structure is designed to support higher, more sustainable returns, even in a more demanding regulatory and economic environment.

The bank also intends to maintain an attractive capital‑return policy, committing to distribute surplus capital generated above a core equity Tier 1 ratio around or above 13%. This is meant to reassure shareholders that stronger earnings will translate into tangible rewards.

Digital Platforms, AI and Global Scale

Technology and scale will remain core pillars of Santander’s strategy. The bank has previously highlighted “technology, talent and size” as the three main levers to support its medium‑term ambitions, and those themes are expected to feature prominently in the new plan. Significant investment in digital and technology is earmarked to improve customer experience, boost loyalty and cut structural costs.

Santander is progressively moving more of its infrastructure to the cloud and building global platforms that can be reused and adapted across different countries. This allows the group to avoid duplicating systems and processes in each market and to roll out new features more quickly and cheaply.

Artificial intelligence, machine learning and automation are being integrated into a wide range of processes, from risk and fraud monitoring to customer service and back‑office operations. By increasing straight‑through processing and reducing manual tasks, these tools support the bank’s drive to handle greater volumes of business without a corresponding rise in costs.

Strategic Continuity, Not a Radical Shift

Analysts expect the new roadmap to represent a continuation and acceleration of the existing strategy, rather than a complete change of direction. The focus will remain on cementing Santander’s position as one of the most profitable and efficient large banks in Europe and the Americas, using its international footprint and shared platforms to extract economies of scale.

That means more simplification of the product offering, further consolidation of systems and processes across countries and a rising share of sales and service handled through digital channels. In parallel, the bank will keep investing in talent, particularly in technology and data roles, to ensure it can make full use of its digital tools and global infrastructure.

When the plan is unveiled, investors will be watching closely to see how ambitious the new efficiency and return targets are, and how quickly management believes it can deliver them against the backdrop of fluctuating interest rates, changing regulation and a more competitive banking landscape.