Lifting the gloom a little, PagoNxt, Santander’s payment business, reported sparkling Q3 results including a maiden operating profit. This performance highlights the success of Santander’s decision to in-source and consolidate its payment activities. PagoNxt comprises all of Santander’s payment assets, including Getnet, a leading multi-national merchant acquirer, trade finance expert Ebury, Payments Hub which brings together the bank’s account to account transactions, and Superdigital, a financial marketplace for the economic inclusion of the underbanked.
Q3 merchant payment volume was up 27% to €54bn “backed by good merchant performance” in Mexico, Brazil, and Europe and share gains in all core markets. Transactions grew 26%, leaving ATV steady at €22.46.
Management gave few other updates but said that the Payments Hub is “already one of the largest processors of A2A” in Europe and is now processing transactions from Santander businesses in Spain and the UK.
Overall revenue was up 16% in Q3 to €298m but expenses fell 11% to €251m. It’s not clear what has led to the decline in operating costs but the impact on operating profits was very positive. PagoNxt reported an operating profit of €48m for the quarter at a healthy 16% operating margin, compared with a loss of €24m in 2022. It will be interesting to see whether this is a blip or the first step towards steady growth in profitability.