Santander’s profits soar despite weakness in Brazilian operation

City A.M. Reporter
EARNINGS from Santander’s flagship Latin American businesses fell in the first half of the year as lending income from Brazil faltered, taking the shine off a turnaround in group profits.

Santander’s Brazil operation posted a 17.5 per cent fall in net interest income – a measure of interest earned on loans minus what is paid out on liabilities such as deposits – to €5.5bn (£4.7bn).

Yet Santander still managed to post a 29 per cent jump in group profit in the six months through June, as provisions against loan losses dropped sharply.

Santander’s €2.25bn net profit in the first half of 2013 was almost as much as what the bank made for the whole of last year.

Across the Santander group, net interest income, which has been squeezed by low interest rates in Europe, fell in the first half. But it was up 1.1 per cent in the second quarter compared with the start of the year, helped by a recovery in some countries such as Portugal and Britain.

It also said its core capital ratio, a measure of its capital strength, was 11.11 per cent at the end of June, up from 10.67 per cent at the end of June.