BOSTON, March 5, 2015 /PRNewswire/ -- The capital
ratios of Santander Bank, N.A. (SBNA) and its parent company,
Santander Holdings USA, Inc.
(SHUSA), would remain above minimum regulatory requirements
under the Federal Reserve's hypothetical severely adverse economic
scenario, according to the latest stress tests conducted by the
Federal Reserve Board (FRB). This exercise is required by the
Dodd-Frank Wall Street Reform and Consumer Protection Act.
The companies' internal results under the severely adverse
scenario also showed continued resilience through the forecast
horizon. Using the companies' internal models and processes,
Santander Bank's Tier 1 common ratio under the severely adverse
scenario would decline from 13.4% at September 30, 2014 to 10.2% at December 31, 2016. The Bank's benchmark
capital ratio would therefore remain above the minimum regulatory
requirement of 5%.
The same exercise for SHUSA showed that the Tier 1 common ratio
under the severely adverse scenario would decline from 11.0% at
September 30, 2014, to 7.9% at
December 31, 2016, the end of the
forecast period.
Following are the Dodd-Frank Act stress test (DFAST) results for
Santander Bank and Santander Holdings USA, Inc., from the companies' internal
analysis:
SBNA Projected Capital Ratios through
Q4 2016 under the Supervisory Severely Adverse Scenario
|
Actual
Q3 2014
|
Severely
Adverse
|
|
Ending
|
Minimum*
|
Tier 1 common ratio
(%)
|
13.4%
|
10.2%
|
10.2%
|
Common equity Tier 1
capital ratio (%)
|
12.9%
|
10.9%
|
10.9%
|
Tier 1 risk-based
capital ratio (%)
|
13.4%
|
10.9%
|
10.9%
|
Total risk-based
capital ratio (%)
|
15.0%
|
12.3%
|
12.3%
|
Tier 1 leverage ratio
(%)
|
12.1%
|
10.1%
|
10.1%
|
* "Minimum" means the lowest result for any quarter over the
9-quarter planning horizon
SBNA
Projected Losses, Revenue, and Net Income before Taxes through Q4 2016 under
the Supervisory Severely Adverse Scenario
|
Severely
Adverse
|
|
$BN
|
% of average
assets
|
Pre-provision net
revenue
|
-0.2
|
-0.2%
|
Other
revenue
|
0.0
|
0.0%
|
Less
|
|
|
Provisions
|
2.3
|
3.0%
|
Realized losses/gains
on securities (AFS/HTM)
|
0.2
|
0.3%
|
Trading and
counterparty losses
|
0.0
|
0.0%
|
Other
losses/gains
|
0.0
|
0.0%
|
Equals
|
|
|
Net income before
taxes
|
-2.6
|
-3.5%
|
SBNA
Projected Loan Losses by Type of Loans for Q4 2015 through Q4 2016 under the
Supervisory Severely Adverse Scenario
|
Severely
Adverse
|
|
$BN
|
Portfolio loss
rates (%)
|
Loan
losses
|
1.7
|
3.6%
|
First lien
mortgages
|
0.3
|
4.1%
|
Junior liens and
HELOCs
|
0.2
|
3.1%
|
Commercial and
industrial
|
0.5
|
3.1%
|
Commercial real
estate
|
0.6
|
3.4%
|
Credit
cards
|
0.1
|
24.8%
|
Other
consumer
|
0.1
|
10.4%
|
Other loans
|
0.1
|
3.3%
|
Following are the Dodd-Frank Act stress test results for
Santander Holdings USA,
Inc. from the companies' internal
analysis:
SHUSA Projected Capital Ratios through Q4 2016
under the Supervisory Severely Adverse Scenario
|
Actual
Q3 2014
|
Severely
Adverse
|
|
Ending
|
Minimum*
|
Tier 1 common ratio
(%)
|
11.0%
|
7.9%
|
7.9%
|
Common equity Tier 1
capital ratio (%)
|
10.7%
|
10.1%
|
10.1%
|
Tier 1 risk-based
capital ratio (%)
|
13.1%
|
10.5%
|
10.5%
|
Total risk-based
capital ratio (%)
|
15.0%
|
12.4%
|
12.4%
|
Tier 1 leverage ratio
(%)
|
11.8%
|
9.7%
|
9.7%
|
* "Minimum" means the lowest result for any quarter over the
9-quarter planning horizon
SHUSA
Projected Losses, Revenue, and Net Income before Taxes through Q4 2016 under
the Supervisory Severely Adverse Scenario
|
Severely
Adverse
|
|
$BN
|
% of average
assets
|
Pre-provision net
revenue
|
5.2
|
4.9%
|
Other
revenue
|
0.0
|
0.0%
|
Less
|
|
|
Provisions
|
9.9
|
9.2%
|
Realized losses/gains
on securities (AFS/HTM)
|
0.2
|
0.2%
|
Trading and
counterparty losses
|
0.0
|
0.0%
|
Other
losses/gains
|
0.0
|
0.0%
|
Equals
|
|
|
Net income before
taxes
|
-4.8
|
-4.5%
|
SHUSA
Projected Loan Losses by Type of Loans for Q4 2015 through Q4 2016 under the
Supervisory Severely Adverse Scenario
|
Severely
Adverse
|
|
$BN
|
Portfolio loss
rates (%)
|
Loan
losses
|
8.3
|
12.3%
|
First lien
mortgages
|
0.3
|
4.1%
|
Junior liens and
HELOCs
|
0.2
|
3.1%
|
Commercial and
industrial
|
0.6
|
4.2%
|
Commercial real
estate
|
0.6
|
3.4%
|
Credit
cards
|
0.1
|
37.9%
|
Other
consumer
|
6.5
|
31.1%
|
Other loans
|
0.1
|
3.2%
|
The Federal Reserve's Supervisory Severely Adverse assumes a
substantial weakening in global economic activity and large
reductions in asset prices. In summary, for the U.S.:
- The unemployment rate increases to 10 percent, accompanied by a
decline in real GDP of 4 1/2 percent,
- Equity prices fall by approximately 60 percent and house prices
decline 25 percent during the scenario period,
- Investment grade and non-investment grade firms both experience
significant financial distress, reducing asset prices linked to
these borrowers, and
- Short-term interest rates remain near zero through 2017, while
yields on the long-term Treasury bonds decline to 1 percent in the
fourth quarter of 2014 before edging up.
Additional details of the Santander Bank and consolidated
holding company stress forecast results are included in the Form
8-K regarding its Dodd Frank Act Stress Test results filed with the
Securities and Exchange Commission today.
About Santander
Santander Holdings USA, Inc.
(SHUSA) is a wholly-owned subsidiary of Banco Santander, S.A.
(NYSE: SAN). Banco Santander is a diversified global retail and
commercial bank offering a wide range of financial products and has
over 103 million customers worldwide. SHUSA owns 100% of Santander
Bank, N.A., a retail and commercial bank with 703 branches and
9,703 employees in the Mid-Atlantic and Northeast United States, and 60.5% of the
common stock of Santander Consumer USA Holdings Inc. (NYSE: SC), a Dallas, Texas-based national vehicle finance
and unsecured consumer lending company. For more information about
Santander Bank, visit www.santanderbank.com. For more information
about Santander Consumer USA,
visit www.santanderconsumerusa.com.
Santander Bank, N.A. is one of the largest retail banks
in the United States by
deposits. Its main corporate offices are in Boston and it operates principally in
Connecticut, Delaware, Maryland, Massachusetts, New
Hampshire, New Jersey,
New York, Pennsylvania and Rhode Island. Santander's 9,703 employees
serve its 1.8 million customers through the Bank's 703 branches,
2,092 ATMs, call centers, website and mobile app. Supervised by the
Office of the Comptroller of the Currency and a member of the
Federal Deposit Insurance Corporation, Santander in the United States is a wholly-owned,
financially autonomous subsidiary of Banco Santander (NYSE: SAN), a
global commercial and retail bank. For more information about
Santander, visit www.santanderbank.com or call 877-768-2265.
Corporate
Communications
|
|
Peter
Greiff
|
Nancy
Orlando
|
Director of
Communications and Corporate Affairs
|
Media
relations
|
pgreiff@santander.us
|
nancy.orlando@santander.us
|
617.757.5777
|
617.757.5765
|
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SOURCE Santander Holdings USA,
Inc.