Wednesday July 29, 05:30 PM
Spain's Santander bank profit slips
By Fabien Zamora
MADRID (AFP) - Spain's Santander (Madrid: SAN.MC - news) , the eurozone's largest bank, on Wednesday reported a first-half net profit of 4.51 billion euros (6.4 billion dollars), down 4.5 percent from last year.
For the three months to June, it had a net profit of 2.42 billion euros, down 4.0 percent but still the second highest quarterly profit in its history, following that of the same period in 2008.
The second quarter result was above analyst forecasts for 2.18 billion euros as higher profits from Britain softened the impact of increased loan-loss provisions.
The bank, which avoided investments in products linked to the US subprime mortgage market but has been affected by the economic slowdown and the collapse of a property boom in Spain, said it was sticking to its target of matching last year?s profit of 8.88 billion euros.
"During the second quarter, the solidity of Santander's business model has been confirmed," Santander's chief executive Alfredo Saenz told a conference call with analysts.
Net interest income -- the difference between interest paid out on customer deposits and interest earned on loans -- was 6.61 billion euros in the second quarter, up from 5.25 billion euros a year earlier.
For the six months, net interest income was 12.65 billion euros, up 24.2 percent.
Provisions for bad loans climbed to 2.42 billion euros in the second quarter from 1.6 billion euros a year ago.
Bad loans as a proportion of total lending climbed to 2.82 percent from 1.43 a year ago and 2.49 percent in the previous quarter.
By comparison BBVA (Madrid: BBVA.MC - news) , Spain's second largest bank, said Tuesday that its bad loans ratio climbed to 3.2 percent in the second quarter from 1.3 percent a year ago and 2.8 percent in the previous quarter.
BBVA posted a second quarter profit of 1.56 billion euros, a 35 percent jump over the same time last year.
Santander said its net profits in Britain rose 41 percent during the first half over the same time last year to 885 million euros.
The bank bought Alliance & Leicester (LSE: AL.L - news) in October 2008, one month after it acquired the deposits and distribution channels of Bradford & Bingley.
The deals allowed Santander, which bought Britain's Abbey National in 2004, to become the third-biggest bank in Britain.
Profit from South America, which contributes about a third of Santander?s profit, fell 4.0 percent to 1.8 billion euros.
First-half earnings from Mexico slumped 37 percent to 230 million euros due to the steep recession in the country and the outbreak of swine flu which has hurt economic activity there, the bank said.
In Brazil, where Santander is the third-biggest non-state bank after buying ABN Amro (Amsterdam: AABA.AS - news) ?s business in the country, net profit rose 12 percent to 961 million euros.
The bank also announced plans to merge its consumer finance operations in Poland with US insurance giant AIG.
Santander will hold 70 percent of the merged entity with a loan portfolio of 3.5 billion euros and deposits of 750 million euros, while AIG will hold the remaining 30 percent.
Shares in Santander closed down 1.15 percent at 9.97 euros. The Ibex-35 most-traded share index was virtually unchanged, closing down 0.02 percent.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
