Spain's Banco Santander Q2 profit down 38 percent

AP News
Posted: Jul 27, 2011 6:07 AM
Spain's Banco Santander Q2 profit down 38 percent

Spain's Banco Santander said Wednesday its second-quarter net profit fell 38 percent as growth in Latin America was offset by weaker results in crisis-hit Europe and a one-time charge in Britain.

The eurozone's largest bank by market capitalization said its net profit dropped to euro1.39 billion ($2.01 billion) between April and June, compared with euro2.23 billion for the same period last year.

This was largely due to provisions of euro620 million it had to set aside in Britain to refund clients for personal loan insurance that a court this year ruled had been mis-sold by banks in the country.

Net interest income for the quarter rose 3.5 percent to euro7.64 billion while gross revenue was up 6.3 percent to euro11.28 billion. Loan-loss provisions were up 8.1 percent at euro2.68 billion.

Investors appeared disappointed with the figures and sent Santander's shares down 2.2 percent to euro7.4 in mid-morning trading in Madrid.

Net profit for the entire first half of the year was down 21 percent to euro3.50 billion.

By region, profit jumped 16 percent in Latin America to euro2.46 billion in the first six months whereas it fell 17 percent in continental Europe to euro1.87 billion.

Santander said the non-performing loan rate was 3.78 percent for the first half, up from 3.37 percent in 2010.