Santander’s net income up 77 percent in first nine months at 3.31 billion euros

Earnings boosted by lower balance clean-up costs But bad loans continue to advance, while interest income falls

Santander's chairman, Emilio Botin, in New York.
Santander's chairman, Emilio Botin, in New York.Ron Antonelli (Bloomberg)

Santander’s earnings jumped in the first nine months of the year as Spain’s leading bank set aside fewer provisions to cover losses, helping to offset ongoing weakness in its domestic market and a fall in the contribution from its operations in Brazil.

The bank said Thursday that its net attributable profit in the period January-September rose 77 percent from a year earlier to 3.310 billion euros despite a fall in outstanding loans of 8.7 percent to 686.821 billion.

“After several years of high levels of write-offs in the first nine months of the year, Banco Santander is prepared for a new period of increased profitability,” Chairman Emilio Botín said.

However, the core ongoing business painted a less rosy picture as net attributable income in the third quarter rose by only 0.5 percent from the previous three months to 1.055 billion euros, while profits from continuing operations declined 1.0 percent to 1.3 billion. Net interest income in the three months shrank by 6.5 percent to 6.285 billion euros. The bank’s non-performing loan ratio increased by 0.25 percentage points from the second quarter to 5.43 percent.

“Earnings looked quite weak, with net interest income down,” Bloomberg quoted Benjie Creelan-Sandford, an analyst at Macquarie Bank in London, as saying. “You’re still struggling to see any signs of real improvement in underlying asset quality.”

Net attributable profit from the bank’s Spanish operations fell 51 percent to 367 million euros, while Brazil’s contribution declined 23.6 percent to 1.277 billion.

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