Santander 2Q Net Profit Fell on Restructuring Costs -- Update

   By Margot Patrick

Banco Santander SA 's (SAN.MC) second-quarter net profit fell significantly, hit by restructuring costs and a squeeze on U.K. mortgage margins.

The Spanish lender, with anchor units in Brazil, Spain and the U.K., said net profit for the period fell 18% on the year to 1.39 billion euros ($1.56 billion), reflecting around EUR706 million in restructuring costs in Spain, while U.K. total income rose 3% to EUR12.35 billion.

Chairman Ana Botin said it was the bank's strongest underlying quarter in eight years, after stripping out various charges. Analysts had expected the bank to report a net profit of EUR1.27 billion on revenue of EUR12.17 billion, according to a consensus forecast provided by FactSet.

Santander endured a rocky start to the year when its announced appointment of high profile UBS AG banker Andrea Orcel as its new chief executive fell through after a disagreement over his compensation.

Santander, along with other global lenders, is seeking to tap growth in developing economies while stripping out costs and bringing more customers onto digital banking platforms in its home market and in the U.K. Margins in the U.K. unit have been under pressure from low interest rates and competition in mortgage lending. In the quarter, the bank took GBP170 million in charges related to restructuring and to compensate customers who were missold payment protection insurance.

Brazil put in the strongest performance of Santander's three main markets, with net profit up 8.8% in the second quarter to EUR762 million.

The bank's core Tier 1 ratio--a key measure of balance-sheet strength--was 11.30% in June, compared with 11.23% at the end of March.

Write to Margot Patrick at margot.patrick@wsj.com

(END) Dow Jones Newswires

July 23, 2019 06:54 ET (10:54 GMT)

Banco Santander (NYSE:SAN)
Historical Stock Chart
From Mar 2024 to Apr 2024