Money

Santander quarterly profits surge nearly fivefold

Banco Santander posted a near fivefold increase in quarterly profits on Wednesday after Spain’s biggest bank set aside huge sums last year to weather the coronavirus pandemic.

First quarter profits reached a better-than-expected 1.6 billion euros ($1.9 billion), compared to 331 million in the same period last year.

“We saw good performance across all our regions, with particularly strong growth in the US, UK and Santander Corporate and Investment Banking,” Banco Santander head Ana Botin said in a statement.

“The success of the vaccine rollout remains critically important to economic recovery,” Botin said, adding she was “confident” that the bank would achieve its goals for the year.

The bank set aside 12 billion euros in provisions for loan losses last year, including 1.6 billion euros in the first quarter, as the pandemic pummelled Spain’s economy.

“We have not used them so far,” Santander Chief Executive Jose Antonio Alvarez told a news conference.

Banks across Europe have been struggling with record low interest rates, a shift towards online banking and an economic downturn sparked by the pandemic that has forced them to cut costs.

Banco Santander posted its first ever annual loss in 2020 due to restructuring costs and provisions to cope with the Covid-19 crisis, and it announced 3,500 job cuts in Spain.

As part of the global cost-cutting drive, the lender also plans to close around a fifth of its branches in Britain in response to a fall in over-the-counter transactions, as customers increasingly use online services.

Santander said it would distribute 40 percent of underlying profit throughout this year to remunerate shareholders. © Agence France-Presse

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