Eurozone pain eases profits at Santander
SPANISH banking giant Santander yesterday unveiled a year-on-year fall in first-half profits, stung by a weak performance in the crisis-hit Eurozone and another hike in the amount it put aside to cover bad loans.
Net attributable profit over the first six months of the year slumped 1.6 per cent to €4.45bn (£3.73bn), dragged down by a six per cent fall in income from continental Europe.
Provisions for bad loans, which have started to ease at many of the bank’s global peers, rose again by six per cent to €4.92bn, though Santander insisted that the rate of increase had slowed sharply.
However, in the UK – where Santander has been on a buying spree over the past few years, snapping up Abbey, Alliance & Leicester and branches of Bradford & Bingley – the bank saw attributable profit soar 14 per cent to €1.01bn.
Santander, which is in exclusive talks to buy over 300 branches from the Royal Bank of Scotland, confirmed yesterday it would add 600 new jobs in the UK on the back of the strong performance.
António Horta-Osario, the chief executive of Santander’s UK operations, said: “We have had growth across all areas of the business, demonstrating that our transformation into a full-service commercial bank is progressing successfully.”
The group said that the UK has now caught up with its home market, Spain, in terms of balance sheet share, with both contributing 33 per cent of loans and 31 per cent of customer funds.
Santander now has over 1,300 branches in the UK, a tally which would be boosted significantly if a deal with RBS is announced, as expected, within days. It employs over 22,800 people in the UK, out of a group workforce of 170,264.