Santander reports 25% fall in profits

Press release   •   Apr 25, 2013 12:19 BST

The eurozone's biggest bank, Santander, suffered a 25.9 per cent fall in profits for the first three months of the year.

The Spanish bank said net profits for the quarter were 1.2bn euros (£1bn), down from 1.6bn euros a year earlier.

Santander, which makes about 50% of profits in Latin America, said UK pre-tax profits fell to £282mn, from £363mn.

The bank attributed the year-on-year decline in profit to macroeconomic slowdown, low interest rates, high provisions and preference for capital and liquidity.

Santander's business in Latin America, which has served as the bank's growth engine in recent years and still accounts for the bulk of profits, posted an 18 per cent fall in net profits, with Brazil performing worse still.

"Profit in 2013 will be significantly higher than the €2.3bn registered in 2012," said Emilio Botín, executive chairman.

"This comes after four years in which we set aside €60bn for bad loans, added €20bn to our capital and strengthened deposits by €223bn.

The company said the group figures represented a "return to normality" after heavy provisions taken in previous quarters.

Customer loans fell to £2.3 billion for Q1 2013, which the company said reflected a managed reduction in the residential mortgage portfolio, partially offset by increases in SME and corporate lending.

The company said it has developed its capacity to service SMEs, with more customer-facing staff in its growing regional Corporate Business Centre network.

Corporate banking will remain Santander's key investment and development focus until at least 2015, as it aims to become the "SME bank of choice." Its SME market share increased to 5.3% during Q1 2013 compared to Q1 2012's figure of 4.7%.

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