Santander 2Q Net Profit Fell on Restructuring Costs -- Update
23 July 2019 - 9:09PM
Dow Jones News
By Margot Patrick
Banco Santander SA 's (SAN.MC) second-quarter net profit fell
significantly, hit by restructuring costs and a squeeze on U.K.
mortgage margins.
The Spanish lender, with anchor units in Brazil, Spain and the
U.K., said net profit for the period fell 18% on the year to 1.39
billion euros ($1.56 billion), reflecting around EUR706 million in
restructuring costs in Spain, while U.K. total income rose 3% to
EUR12.35 billion.
Chairman Ana Botin said it was the bank's strongest underlying
quarter in eight years, after stripping out various charges.
Analysts had expected the bank to report a net profit of EUR1.27
billion on revenue of EUR12.17 billion, according to a consensus
forecast provided by FactSet.
Santander endured a rocky start to the year when its announced
appointment of high profile UBS AG banker Andrea Orcel as its new
chief executive fell through after a disagreement over his
compensation.
Santander, along with other global lenders, is seeking to tap
growth in developing economies while stripping out costs and
bringing more customers onto digital banking platforms in its home
market and in the U.K. Margins in the U.K. unit have been under
pressure from low interest rates and competition in mortgage
lending. In the quarter, the bank took GBP170 million in charges
related to restructuring and to compensate customers who were
missold payment protection insurance.
Brazil put in the strongest performance of Santander's three
main markets, with net profit up 8.8% in the second quarter to
EUR762 million.
The bank's core Tier 1 ratio--a key measure of balance-sheet
strength--was 11.30% in June, compared with 11.23% at the end of
March.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
July 23, 2019 06:54 ET (10:54 GMT)
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