Brexit will have less impact on Santander's UK arm than was previously feared, its boss said today.
Jose Antonio Alvarez made the comments as the Spanish lender revealed bumper first quarter earnings, growing profit before tax by over a fifth.
Gross income rose by 12.1 per cent to €12bn (£10.2bn), a rise of 6.2 per cent on a constant currency basis.
Operating expenses also increased but at the lower rate of 7.5 per cent to €5.5bn. This meant operating income was up 16.4 per cent to €6.5bn for the quarter.
Profit before tax was up 21.2 per cent to €3.3bn, that's up 16.8 per cent on a constant currency basis.
Net profit was up 14.3 per cent at €1.9bn.
Santander increased its capital buffers during the first three months of 2017, increasing them by 11 basis points to 10.66 per cent.
Why it's interesting
Santander is Europe's largest bank by market value, but it was outside of Europe where it was doing particularly well.
Latin American returns, in particular from Brazil were pivotal to the firm's first quarter returns.
In 2016, Brazil accounted for 21 per cent of the bank's profits. In the first quarter this grew to 26 per cent, with net profit rising for the fifth quarter in a row.
The UK is Santander's second largest market and its chief executive, Jose Antonio Alvarez, made particularly positive remarks about Brexit.
"Initially the perception was very negative for growth ... so far this has not materialised, growth has been good and the impact on volumes has been immaterial," Alvarez said, according to reports by Reuters.
"Now we are more confident that there will less direct impact on volumes and results."
What the company said
Santander group executive chairman, Ana Botin said:
It’s been a strong start to the year with positive momentum across all markets and particularly good growth in Latin America, Spain and our consumer finance business.
We are earning the loyalty of more customers, delivering ahead of our targets, and maintaining our position as one of the most efficient, profitable, and predictable banks in the world.
While the environment continues to be challenging for the banking sector, the outlook for Santander is positive.
The economies of all our core markets are expected to grow this year and we are confident that our business model, combined with the consistent execution of our strategy, position us well to continue delivering for our customers and teams while growing profitably in the years ahead.