Latin America drives Santander profit rise, offsets Spanish slide

MADRID (Reuters) – Santander’s net profit rose by 4 percent in the fourth quarter as a strong performance by the bank in Brazil and higher net interest income offset a Spanish slump.

“Latin America remains an important motor of growth for the group, with good progress, especially in Brazil and Mexico,” chairman Ana Patricia Botin said in a statement on Wednesday.

The euro zone’s biggest bank by market value said net profit rose to 2.07 billion euros ($2.37 billion) in the October-December period, lifting its shares by 0.44 percent at 0833 GMT.

“Core revenue trends look positive but partially offset by higher costs and while capital rose it was a touch below our estimate,” Jefferies said in a research note, adding that quarterly net profit was 8 percent above consensus.

Santander came under scrutiny this month when it said Italian banker Andrea Orcel would no longer take over as its chief executive as it could not meet his pay expectations.

Orcel, who had left Swiss bank UBS to take the job, had been appointed by the Spanish bank in September last year. Following the reversal, Santander said Jose Antonio Alvarez would be staying on as CEO for now.


Santander said its net interest and fee income, a measure of earnings on loans minus deposit costs, hit 12.02 billion euros in the fourth quarter from 10.99 billion in the third.

Net profit in the fourth quarter rose by 1.4 percent to 663 million euros in Brazil, which is Santander’s largest market, while net profit for the whole of 2018 jumped 22.3 percent.

In Mexico, net profit rose 8 percent in the fourth quarter to 206 million euros but in its Spanish home market, Santander’s quarterly profit slumped 18 percent to 432 million euros, dented by high contributions to the country’s deposit guarantee fund.

However, overall Santander posted a 28 percent jump in its full-year profit which rose to 7.81 billion euros, from 6.62 billion euros a year earlier. Analysts had expected a net profit of 7.83 billion euros for the full-year.

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