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Banco Santander reports 1Q profits up

Banco Santander said Tuesday its first-quarter net profit rose 22 percent thanks to its purchase of part of ABN Amro and strong lending activity in Latin America and Spain.
/ Source: The Associated Press

Banco Santander said Tuesday its first-quarter net profit rose 22 percent thanks to its purchase of part of ABN Amro and strong lending activity in Latin America and Spain.

Spain's largest bank by market value said its net profit was euro2.21 billion (US$3.44 billion) for the three months to March 31. This compares to euro1.8 billion (US$2.8 billion) in the same period a year earlier.

Santander's bottom line was driven by a 19 percent rise in revenue, to euro7.35 billion (US$11.49 billion), while costs grew 6 percent to euro3.08 billion (US$4.81 billion).

Total loans grew by 9 percent, at a lower rate than in recent quarters, but Santander managed to offset the lower loan growth by widening its lending margins. Net interest income rose 15 percent to euro4.03 billion (US$6.3 billion) from euro3.51 billion (US$5.49 billion).

Banco Real, the Brazilian bank that Santander purchased when it took over ABN Amro together with two other banks last year, contributed euro151 million (US$236 million) to profits, Santander said.

Santander originally paid upwards of euro20 billion (US$31.26 billion) for ABN's Brazilian and Italian units, and then quickly sold the Italian assets for euro10 billion (US$15.63 billion).

Its biggest geographical unit, Continental Europe, posted a 7 percent decline in first quarter net profits, to euro1.22 billion (US$1.91 billion). The bank experienced a sharp drop in financing for large corporate transactions, partly offset by continued lending growth in its Spanish and Portuguese retail branch network.

Santander's Continental Europe division includes the bank's retail banking network in Spain and Portugal, Santander Consumer Finance and the bank's wholesale banking business.

At Santander's other two divisions, Latin America and Britain, strong operating growth was partly offset by weaker currency exchange rates against the euro.

In Latin America, net profit rose 7 percent to euro729 million (US$1.14 billion). In dollar terms, profit was up 22 percent, with growth of 20 percent in loans and 18 percent in customer resources, measured in local currencies.

In Britain, Abbey's net profit rose 4 percent to euro311 million (US$486 million), up 17 percent in pounds sterling with growth of 10 percent in loans and 5 percent in deposits.

At 0737 GMT, Santander shares were down 0.6 percent, or euro0.08 (US$.13) at euro13.62 (US$21.29),

Company Web site: http://www.santander.com