Santander 2Q Profit Hit by Integration Costs, Currency Headwinds -- Update
July 25 2018 - 2:20AM
Dow Jones News
Adds detail, information on delistings
By Adam Clark
Banco Santander SA (SAN) said Wednesday that its geographical
diversity helped deliver a strong underlying profit rise in the
second quarter, although it was hit by integration costs and
currency headwinds.
The Spanish bank, one of Europe's largest lenders, said its
second-quarter net profit was 1.70 billion euros ($1.99 billion),
down 3% from the year-earlier quarter.
Santander said the fall was due to EUR300 million in planned
costs related to the integration of Banco Popular, which it
acquired in 2017. Santander said when it made the acquisition that
it expected an equal charge each year until 2019.
However, on an underlying basis profit rose 14% to EUR2.00
billion, Santander said. Excluding foreign-exchange effects,
underlying profit rose 28%.
"During the second quarter we have delivered strong growth in
underlying revenue and improving credit quality, despite strong
currency headwinds," Executive Chairman Ana Botin said.
"During the quarter we have seen particularly strong growth in
Brazil, Spain, Mexico and the U.S. and this has more than offset a
more-challenging environment in other markets," Ms. Botin said.
Net interest income--the difference between what the lender
earns from loans and pays out on deposits--was EUR8.48 billion, as
gross income remained flat at EUR12.01 billion.
Net loan-loss provisions fell 12% from the year-earlier quarter
to EUR2.02 billion, a 1% fall excluding currency effects.
Santander's Common Equity Tier 1 ratio, a key measure of
balance-sheet strength, stood at 10.80% at the end of the quarter,
down from 11.00% at the end of the prior quarter. The bank said
that it continued to organically generate capital, and that it
remains on track to meet its capital target and grow earnings per
share by double digits in 2018.
In a separate statement on Wednesday, Santander said it intends
to delist from stock exchanges in Argentina, Brazil, Portugal, and
Italy. The bank also intends to consolidate its Mexican listing in
the system for shares of foreign companies. Santander said the
change is due to the small volume of its shares traded in those
markets.
Write to Adam Clark at adam.clark@dowjones.com;
@AdamDowJones
(END) Dow Jones Newswires
July 25, 2018 02:05 ET (06:05 GMT)
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