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Santander sees net profit drop 17 per cent, dented by UK arm

By Amanda Cooper

Banco Santander posts 17 per cent drop in 2019 after charges on its UK business, but resilient performance in Latin America boosts Q4 results

Banco Santander posted a 17 per cent drop in net profit in 2019, due largely to sluggishness in its British business in towards the end of the year.

Santander, the second-largest bank in the euro zone by market capitalisation, reported net profit of €6.5bn (£5.5bn, $7.1bn) for the whole of 2019, marking a drop of 16.6 per cent, due largely to a one-off charge of €1.74bn stemming from its UK arm and from various restructuring exercises.

In the fourth quarter, the bank’s performance proved far more resilient. Net profit rose 35 per cent to €6.515bn, thanks to robust performance across its Latin American business that helped offset some of the weakness in Europe.

“Our 2019 results reflect that we are successfully executing our strategy, which has enabled us to continue to post predictable, sustainable and balanced growth,” Santander president Ana Botin said in a statement. “Furthermore, the last quarter has been very positive.”

The group said it expected to beef up its capital ratios over the course of 2020. Santander posted an increase of 35 basis points in its common equity tier-one (CET1) ratio in 2019, which rose to 11.65 per cent. The company said it expected this figure to be closer to 12 per cent over 2020.

“We believe we will meet our medium-term objectives. We foresee high single digit average annual earnings per share growth over the coming three years, while we continue investing for the future,” Botin said. “Thanks to today’s excellent results, we are proposing another increase in dividends for 2019, which would mean dividends will have more than doubled since 2014.

FURTHER READING: Number of eurozone banks falling short of ECB capital demands increases

FURTHER READING: London toppled by New York as top financial centre

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