Thursday, October 27, 2011

Banco Santander Q3 profit up 10 percent

MADRID (AP) ? Banco Santander said Thursday its third-quarter profits rose 10 percent compared to the same period a year ago to euro1.8 billion ($2.5 billion) thanks to higher revenue.

Spain's largest bank and the euro zone's biggest by market capitalization said in its earnings report that gross income rose 5.8 percent year-on-year, due to a good evolution of net interest income, which rose 4.4 percent, and fee income which was up 10.0 percent.

The bank also said it would reach a core capital ratio of 10 percent in June 2012, surpassing by one percentage point the new requirements of the European Banking Authority, with no need for a capital increase.

Banco Santander said a write-down of its exposure to European sovereign debt to market-value levels will cost it euro1.5 billion ($2.1 billion) but has made divestments to cover this.

The bank said gross income in the third quarter was 5.2 percent higher than in the same stretch of 2010 at euro11.1 billion, due to the good performance of basic revenues, which were up 5.3 percent.

However, for the nine months through the end of September the bank said its profits were down 13 percent to euro5.3 billion compared to the same period of 2010.

It said this was due in large part to euro620 million in provisions set aside in the second quarter in the United Kingdom to cover possible claims stemming from payment protection insurance.

The bank said that net operating income after provisions, which it called the best measure of its underlying business, increased 6.6 percent year-on-year as a result of a rise in basic revenues.

In Brazil, which accounts for a quarter of the bank's profits, these were down 4 percent to just under euro2 billion for the nine-month period, although lending there was up 19 percent.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2011-10-27-EU-Spain-Earns-Santander/id-ed5a34859ebb46488b953a35e750be59

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