Banco Santander 3Q Net Profit Slightly Fell -- Update
Banco Santander (SAN.MC) said Thursday that its third-quarter net profit fell compared with the same period a year earlier, given costs related to the acquisition of Banco Popular Espanol SA.
The company said net income was 1.46 billion euros ($1.73 billion), compared with EUR1.70 billion a year earlier. Net interest income, the difference between what banks earn from interest and the interests paid to lenders, was EUR8.68 billion, compared with EUR7.80 billion in the year-ago period.
The bank said that net income was affected partly by one-off costs of EUR515 million related to the integration of Banco Popular, as well as other charges. Adjusting for this, net income was up 17% to EUR1.98 billion.
The Spanish bank's fully-loaded common equity tier 1 ratio, a key measure of capital strength for banks, grew to 10.80% from 10.47% in the year-earlier period.
"Our business has delivered another solid quarter of results - with positive trends and further improvements in earnings quality across all of the markets in which we operate," Executive Chairman Ana Botin said.
Specifically, Ms. Botin said that Latin American franchises continued to perform well, showing growth in customer numbers and lending, as well as further improvements in credit quality. In Europe, the business also performed strongly despite market challenges in the region, she said.
"We see significant potential for further profitable growth across our business and remain confident that we will meet all commercial and financial targets, including delivering double digit EPS growth by 2018," she added.
In a conference call following the earnings release, Chief Executive Jose Antonio Alvarez said he was optimistic about the coming quarters. However, he warned about the risk of a prolonged crisis in Catalonia, where separatists are pushing to break away from Spain, but said it's still too early to make estimates on any potential impact.
"The longer it takes to resolve [the situation], the bigger the impact will be, not only in Catalonia, where our exposure is relatively low, but in Spain, where the potential impact is much higher," Mr. Alvarez said.
A protracted crisis in the region would affect Santander at the end of the year, he said.
Ana Garcia contributed to this article.
Write to Marc Bisbal Arias at marc.bisbalarias@dowjones.com
(END) Dow Jones Newswires
October 26, 2017 06:34 ET (10:34 GMT)