Santander Improves Provisions Outlook, Vows Additional Cost Cuts
October 27 2020 - 2:48AM
Dow Jones News
By Pietro Lombardi
Banco Santander SA vowed to cut an additional one billion euros
($1.18 billion) in costs from its European operations in the next
two years, and said it now expects to set aside less for potential
loan losses this year than it previously guided.
The Spanish bank said Tuesday that by the end of the year it
will achieve its goal to save EUR1 billion in Europe, and promised
to cut EUR1 billion more in costs in the region in coming
years.
The lender also improved its guidance for bad-loans provisions
for this year.
It now expects cost of credit of around 1.3%, from a previous
guidance of 1.4%-1.5%. It has set aside EUR2.54 billion in the
third quarter for potential loan losses, taking such provisions so
far this year to EUR9.56 billion.
Quarterly net profit rose to EUR1.75 billion. This compared with
EUR501 million a year earlier, when results were hit by charges
related to its U.K. business. On an underlying basis, profit fell
18%.
Revenue was EUR11.09 billion, an 11% decline on an underlying
basis.
Analysts had expected a quarterly profit of EUR971.5 million, on
revenue of EUR10.59 billion and provisions of EUR3.12 billion.
Santander's core Tier 1 ratio rose to 11.98% at the end of
September from 11.84% in June.
The bank also gave some guidance for this year and the next,
including an underlying profit of EUR5 billion this year and core
capital at the top end of its 11%-12% range.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com;
@pietrolombard10
(END) Dow Jones Newswires
October 27, 2020 02:33 ET (06:33 GMT)
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