Santander's profits reached 3.732 billion until September, a 35% decrease, due to Brexit.
Madrid, Oct 30 (EFE) – Banco Santander recorded a net profit of €3.732 billion in the first nine months of the year, 35% less than a year earlier, after a €2.448 billion charge, mainly due to the adjustment of goodwill in the United Kingdom, due to Brexit.
This €2.448 billion charge, in addition to including the impact of the adjustment of goodwill in the United Kingdom (€1.491 billion), also includes an additional provision for payment protection insurance (PPI), also in the United Kingdom (€103 million), and other charges (€40 million).
This amount is also in addition to the €814 million charges announced in the first half of the year, mainly due to restructuring costs in Spain and the United Kingdom.
On September 24, Santander announced that it was assuming a €1.5 billion impairment charge on the goodwill of its British subsidiary, Santander UK, as a result of regulatory pressure, increased competition, and uncertainty about the impact of Brexit on the economy.
As a result of the charges incurred in the third quarter (€1.634 billion), net profit between July and September fell by 75% to €501 million.
However, as Santander explained in a relevant fact submitted to the National Securities Market Commission (CNMV), if all charges incurred during the year are excluded, net profit through September reached €6.18 billion, a 2% increase.
Likewise, Santander explained that despite these provisions, underlying profit stood at €2.135 billion in the third quarter. This represents the highest underlying profit in almost a decade, as highlighted by Santander's chairman, Ana Botín, who expressed confidence in achieving the medium-term targets, including an underlying return on tangible equity (ROTE) of between 13% and 15%.
At the end of September, ROTE reached 11.9%, according to Santander in a statement, highlighting the group's geographic diversity.
By geographic region, Europe contributed 46% to the group's underlying profit; South America, 38%; and North America, 16%.
Brazil was once again the largest contributor, accounting for 29% of total underlying profit, followed by Spain (15%), Santander Consumer Finance (13%), the United Kingdom (10%), Mexico (8%), and the United States (8%).
In Brazil, ordinary attributable profit accumulated through September reached €2.249 billion, an increase of 16.4%; and in Spain, €1.185 billion, an increase of 3.3%; while in the United Kingdom it fell 19.1% to €828 million.
In Mexico, it earned €659 million, an increase of 19.6%; and in the United States, €619 million, a 35.2% increase.
In Chile, profit increased 2.9% to €473 million, and in Argentina, it increased 47.3% to €97 million.
The Santander Consumer Finance division earned €995 million, a decrease of 0.3%, while Santander Global Platforms
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