Santander Posts Higher Third-Quarter Profit -- 2nd Update
October 29 2015 - 3:49AM
Dow Jones News
By Jeannette Neumann
MADRID-- Banco Santander SA on Thursday reported a 5% rise in
third-quarter profit on stronger lending income and slightly lower
loan-loss provisions.
The bank said net profit for the quarter was EUR1.68 billion
($1.86 billion), roughly in line with analysts' expectations of
EUR1.7 billion, according to a poll by data provider FactSet.
Profit increased in Santander's U.K., Brazilian and Spanish
businesses.
"We view the economic situation as improving in the majority of
our core markets," said Santander's executive chairman Ana
Botín.
Santander, the eurozone's largest bank by market value, said net
interest income was EUR7.98 billion, up from EUR7.5 billion in the
same period last year, roughly in line with analysts' forecasts of
EUR7.9 billion. Net interest income, a key driver of revenue for
retail banks, is the difference between what lenders pay clients
for deposits and charge for loans.
Santander reported a "fully loaded" capital ratio of 9.85%, a
sliver higher than in the second quarter. Investors and analysts
are closely watching the pace at which Santander is able to
generate capital. Despite a hefty capital increase in January, the
lender's financial cushion remains below its European banking
peers.
Net profit in Santander's U.K. unit was up 18% at EUR480 million
in the third quarter on stronger lending income and lower loan loss
provisions. Loans to clients were up in the first nine months of
this year compared with a year ago.
Profit at Santander's Brazil unit rose to EUR385 million from
EUR376 million on lower loan loss provisions. Net interest income
fell to EUR1.98 billion from EUR2.25 billion.
Accounted for in the Brazilian real, net profit and net interest
income both rose strongly during the third quarter.
Santander's Spanish business reported third-quarter net profit
of EUR311 million, up from EUR252 million a year earlier on sharply
lower loan loss provisions. But net interest income fell nearly 8%
during that period. Net interest income also fell 2.2% in the third
quarter from the second quarter.
Investors and analysts had expected a decline in that key
profitability figure. Its Spain unit, like other Spanish banks,
faces sluggish borrowing demand and falling yields on the loans
they are issuing.
Investors and analysts also had expected Santander's net
interest income in its Spain unit to take a slight hit from the
expense of funding a new, higher interest checking account.
Write to Jeannette Neumann at jeannette.neumann@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 29, 2015 03:34 ET (07:34 GMT)
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