The largest Spanish bank, Santander, announced on Tuesday that it has increased its net profit by a modest 5.5 percent in the first nine months of this year compared to the same period last year, in the context of strong growth in retail banking activities but also rising provisions for bad loans.
Net profit during this period amounted to nearly 6.94 billion euros, further stated the Spanish bank. However, these figures do not include extraordinary items, such as 586 million euros obtained from the recent sale of the bank’s headquarters outside Madrid. In the first nine months of 2007, net profit reflected capital gains from the sale of stakes in the Italian bank Intesa Sanpaolo and the Portuguese bank BPI.
As further stated, net interest income in the first nine months of 2008 increased by 13.6 percent year-on-year, to 12.93 billion euros. Operating profit reached 13.15 billion euros, which is 20 percent higher compared to the same period last year. In the context of turmoil affecting global financial markets and a significant slowdown in activity in the Spanish economy, Santander achieved an 8 percent growth in lending activities in the first nine months of this year.
In the past year, the Spanish banking giant has undertaken a series of aggressive investments, taking control of deposits and branches of the British bank Bradford & Bingley, as well as another British lender, Alliance & Leicester. Recently, it agreed to purchase the remaining 75 percent stake in its American banking subsidiary, Sovereign Bancorp. Due to the growth in lending activities, the amount of net provisions for covering losses on unpaid loans also increased. In the third quarter, these provisions amounted to nearly 1.52 billion euros. At the end of September, total reserves at Santander amounted to 11.04 billion euros, of which nearly 6.3 billion euros were regular reserves, the statement further noted. (H)
