Santander books record quarterly profit on retail unit, delays UK results
Santander’s UK unit postponed the release of its earnings following a London court ruling last week
SANTANDER booked a record net profit in the third quarter thanks to a solid performance at its main retail business and strict cost controls in a set of earnings overshadowed by a British court ruling on motor finance brokers.
Overall, the group’s net profit in the third quarter rose 12 per cent year-on-year to 3.25 billion euros (S$4.65 billion), compared with the 3.1 billion euros expected by analysts in a Reuters poll.
Results at the eurozone’s third-biggest lender were helped by a decline of 9 per cent in net loan-loss provisions and a fall of 2 per cent in operating expenses.
On Monday, Santander’s UK unit, which usually publishes its results separately, said it postponed the release of its earnings following a London court ruling last week that ordered motor finance brokers to fully inform customers about commissions when taking out car loans.
Santander UK, which is one of a number of key providers of motor finance in Britain, said it would take time to assess the impact from the ruling.
A spokesperson for Santander said on Monday the bank did not expect any material impact on the group’s financial position from a review by the Financial Conduct Authority related to the London court decision on motor finance.
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Santander included the results of its British unit in group earnings.
Net profit in Britain fell 18.6 per cent year-on-year in the third quarter, while lending income was down 6.6 per cent amid fierce competition in the mortgage market.
Profit generated by the retail business, the main contributor to earnings of its recently rolled out five global units, rose 17.5 per cent, while its wealth and insurance unit rose 12.85 per cent.
Net profit at its Corporate and Investment Banking unit declined 5 per cent compared with the same quarter a year ago, when the lender released provisions.
Higher profits helped to lift Santander’s overall return-on-tangible equity ratio (ROTE), a measure of profitability, to 16.2 per cent as of September from 14.8 per cent in the first nine months of 2023. This allowed Santander to maintain its ROTE target for 2024 at above 16 per cent. REUTERS
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