Santander annual profit falls 12 per cent on one-time charges
Spain’s biggest bank Santander suffered a 12 per cent fall in profit in 2019 as the lender was hit by goodwill and restructuring costs and low interest rates.
It pulled in record annual revenues, however, supported by solid expansion in the Americas, its yearly results showed today.
The figures
Profit before tax at the lender fell 11.7 per cent in 2019 as a whole, with Santander bringing home €12.54bn (£10.6bn) compared to €14.2bn a year earlier.
A large chunk of this fall in profit was attributable to a hefty goodwill impairment Santander took on its UK business in the third quarter.
The third-quarter hit helped profit surge 75.7 per cent in the final three months of the year quarter on quarter to €3.83bn, although it was not enough to boost yearly net income.
The fall in profit took earnings per share for the year down to €0.362 from €0.449 in 2018.
With such one-time charges stripped away, Santander’s underlying profit rose two per cent last year to €8.25bn.
The Eurozone’s biggest bank by value took generated a record €49.23bn in revenue last year, 1.7 per cent higher than the €48.42bn figure of a year earlier.
Why it’s interesting
To cope with the ultra-low interest rates of the Eurozone, Santander has focused on growth in the Americas. Underlying profit jumped 18 per cent in South America in 2019, with Brazil contributing 28 per cent to the lender’s total underlying profit.
Underlying profit in Europe, meanwhile, fell three per cent. This was largely driven by a 16 per cent drop in the UK as tough competition squeezed Santander.
What Santander said
The lender’s chairman Ana Botin said: “Our focus on customer loyalty, geographic diversification and scale drove strong operating performance across all regions.
“Our South American business continued to generate healthy growth; we maintained strong momentum in North America, with the US delivering among the fastest growing underlying profit of all markets.”
Botin added that the bank was “well on track to achieve our medium-term goals and expect to deliver high single digit average annual earnings per share growth over the next three years”.