Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Santander profit beats forecasts on strong UK, U.S. performance

Stock MarketsJul 28, 2021 05:51AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Banco Santander's boss Ana Patricia Botin speaks during the annual results presentation at the bank's headquarters in Boadilla del Monte, outside Madrid, Spain January 29, 2020. REUTERS/Susana Vera

By Jesús Aguado

MADRID (Reuters) -Spain's Santander (MC:SAN) beat forecasts with a 35% jump in second-quarter underlying profit on the back of lower loan loss provisions, strong U.S. consumer business and a rise in mortgage lending in the UK market.

The euro zone's second-biggest lender in terms of market value reported a net profit of 2.07 billion euros ($2.45 billion).

The result topped the 1.76 billion euros forecast by analysts polled by Reuters and almost matched the 2.1 billion euros underlying profit recorded in the second quarter in 2019, before the outbreak of the coronavirus pandemic.

Second quarter's net and underlying profit remained the same as the bank did not book any one-off gains or charges. A year ago, pandemic-related writedowns led to a record net loss of 11.1 billion euros.

"We are on track to outperform our profitability target for the year," Santander boss Ana Botin said in a statement.

Its profitability gauge - return on tangible equity ratio (ROTE) - rose to 12.29% at the end of June from 12.16% in March, ahead of Santander's original year-end target of around 10%.

The bank also said it planned to return to its dividend payout ratio of 40% to 50% of ordinary earnings, following the lifting the cap on dividend payments by the ECB last week.

Even though Santander did not set aside specific COVID-19 provisions in the quarter, its solvency ratio dipped because of shareholder remuneration.

The lender's core tier-1 fully loaded capital ratio fell to 11.7% at the end of June from 11.85% three months earlier, adjusted down from originally reported 11.89%, still within its 11-12% target.

Shares in Santander were down 0.5% by 08745 GMT, while Spain's leading blue-chip index was up 0.6%.

Analysts from Keefe, Bruyette & Woods welcomed a solid set of results in Britain, the United States and Brazil despite weaker capital, though highlighted that Spain and the rest of Europe came in weaker than expected.


At the end of June, the bank's cost of risk, which acts as an indicator for potential losses in the future, fell to 94 basis points from 108 points in the previous quarter.

Overall, second-quarter net interest income, a measure of earnings on loans minus deposit costs, rose 6.8% to 8.24 billion euros against the same period last year, with lending growth in the UK and Brazil offsetting pressure from low interest rates.

Analysts polled by Reuters expected 8.07 billion euros.

In Britain, underlying net profit rose 36% against the previous quarter, helped by lower funding costs, while in the U.S. market, which accounts for almost a third of Santander's underlying earnings, net profit rose 9.4%.

In Brazil, also responsible for a third of the bank's underlying results, operating profit rose 29.5% and fell 8.7% in Santander's home market Spain, where the bank now generates 7% of its business.

($1 = 0.8460 euros)

Santander profit beats forecasts on strong UK, U.S. performance

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email