Santander Profit Dented by Restructuring Costs
27 July 2016 - 3:42PM
Dow Jones News
By Jeannette Neumann
MADRID-- Banco Santander SA said Wednesday that net profit fell
in the second quarter from a year earlier as one of Europe's
largest banks booked an anticipated restructuring charge due to
branch closures and employee layoffs.
Santander said net profit was EUR1.278 billion ($1.41 billion)
in the second quarter compared with EUR2.54 billion a year
earlier.
Analysts had anticipated that lower lending income and the
restructuring charge would lead Santander to report a net profit of
EUR1.27 billion, according to a poll by data provider FactSet.
The Spanish lender, run by Executive Chairman Ana Botín, said
net interest income in the second quarter was EUR7.57 billion
compared with EUR8.28 billion a year earlier.
Net interest income, a key profit driver for retail banks, is
the difference between what lenders pay clients for deposits and
charge for loans. Analysts had anticipated net interest income of
EUR7.73 billion, according to FactSet.
The consequences of Britons' vote to leave the European Union,
such as a drop in the pound, wasn't expected to take a major toll
on Santander in the second quarter. Investors expect Brexit to slow
Britain's economy and lessen the revenue Santander generates in its
U.K. unit in coming quarters.
Santander had warned investors that it would book a roughly
EUR500 million charge in the second quarter triggered by the
closure of around 450 bank branches in Spain and the layoffs or
reassignments of around 1,380 employees. Santander said at the end
of June that those restructuring costs would be offset in part by
the sale of a stake it holds in Visa.
Spain has among the greatest number of bank branches per person
in Europe, and it is common for small, rural towns in the country
to have several branches. Santander and other Spanish banks are on
the hunt for revenue, and they are starting to cull their bank
branches, which can be expensive to maintain.
Write to Jeannette Neumann at jeannette.neumann@wsj.com
(END) Dow Jones Newswires
July 27, 2016 01:27 ET (05:27 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Banco Santander (NYSE:SAN)
Historical Stock Chart
From Sep 2024 to Oct 2024
Banco Santander (NYSE:SAN)
Historical Stock Chart
From Oct 2023 to Oct 2024