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Santander Q1 profit up 10%, driven by strong Brazil market

Madrid

BANCO Santander, the eurozone's biggest bank by market value, posted a better-than-expected 10 per cent rise in first-quarter net profit on strength in its largest market, Brazil.

Santander, the first among Spanish banks to report quarterly numbers, bagged a net profit of 2.05 billion euros (S$3.31 billion) in the first three months of the year, from 1.87 billion euros a year ago. Analysts had forecast 2.01 billion euros in a Reuters poll.

Net interest income (NII), a measure of earnings on loans minus deposit costs, was 8.45 billion euros, up 0.6 per cent from a year ago but down 1.8 per cent against the previous quarter. Analysts had expected a NII of 8.49 billion euros.

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In Brazil, where the lender makes more than a quarter of its profits, net profit improved 7 per cent from a year ago, boosted by solid loan growth. But in Britain, its second-biggest market, profit fell 23 per cent.

Santander's Latin American business has helped it through a squeeze on lending margins in Europe that is pressuring its rivals in Spain, such as BBVA and Caixabank.

This year "has started well, with the group generating double digit profit growth driven by strong results in Brazil, Spain and Mexico, and improved performance in the United States", Ana Botin, Santander's executive chairman, said in a statement on Tuesday.

In Spain, where Santander has consolidated lender Popular into its accounts since the third quarter after taking it over in June, net profit rose 26 per cent.

Santander reaffirmed its 2018 targets such as achieving double-digit earnings per share growth.

It finished the first quarter with a fully-loaded core capital ratio, a closely watched measure of a bank's strength, of 11 per cent, compared to 10.84 in the previous quarter, and in line with its target for 2018. REUTERS

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