Banco Santander reports attributable profit of €3,675 million for the first half of 2021
Banco Santander achieved an attributable profit of €3,675 million in the first half of 2021. This compares to a loss of €10.8 billion in the same period last year, when the bank made a non-cash adjustment to the valuation of goodwill and deferred tax assets (DTAs). Excluding net charges of €530 million for restructuring costs already announced in Q1 2021, underlying profit for the first half was €4,205 million, up 153% versus the same period of last year. This is Santander’s highest underlying profit in the first half since 2010.
The bank’s strong performance was driven by good volume growth, with loans increasing 2% and deposits 4%. Across the group, businesses continued to focus on supporting customers, revenue growth, effective net interest income management and cost control.
The results illustrate the benefits of Santander’s geographic and business diversification, with its three regions (Europe, North America and South America), making similar contributions to the group’s overall profit. Underlying profit in the first half nearly tripled in Europe to €1,426 million (+172%) and North America to €1,628 million (+178%), while it grew 41% in South America to €1,645 million.
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Banco Santander reports underlying profit of €1,908 million for first half of 2020 and makes non-cash goodwill and DTA impairments
Banco Santander achieved an underlying profit of €1,908 million in the first half of 2020, down 48%, due to an increase in loan-loss provisions attributable to the covid-19 pandemic. While the pandemic has had a significant impact on customer activity, the underlying performance of the business was strong, supported by resilient customer revenues, higher than expected cost reductions, robust credit quality and good organic capital generation.
The board of directors intends to propose a payment of a scrip dividend (payable in new shares) equivalent to 10 cents per share for 2019.
Net interest income and customer revenues remained stable year-on-year, at €16.2 billion and €21.3 billion, respectively, driven by revenue growth in Latin America, Santander Corporate & Investment Banking, and Wealth Management & Insurance. This, combined with good cost control, resulted in net operating income growth of 2% to €11.9 billion.
The group is ahead of its cost saving plan, with the European region achieving more than €300 million in efficiencies in the first half of the year, representing 75% of the bank’s 2020 target. Operating expenses fell by 2% or 5% in real terms (i.e. excluding inflation).
The board of directors intends to propose a payment of a scrip dividend (payable in new shares) equivalent to 10 cents per share for 2019. The board is committed to applying a full cash dividend policy as soon as market conditions normalise, subject to regulatory approvals and guidance. In line with this commitment, the bank has accrued six basis points of CET1 capital in the quarter for a potential cash dividend against 2020 results. This is in addition to the scrip dividend for 2019 mentioned above.
The group has continued to provide significant financial support to customers throughout the pandemic, extending an average of €1.6 billion every day in new lending during the second quarter and providing more than five million customers with payment holidays. Santander also ensured that its core banking services continued to operate normally while keeping employees and customers safe. Around 90% of branches are currently open and substantially all of the banks 40,000 ATMs are operating normally.
Allianz sells stake in Spanish joint venture Allianz Popular to Banco Santander for €936.5m
German insurer Allianz has agreed to sell its 60 percent stake in joint venture Allianz Popular SL to Banco Santander for €936.5 million, and terminate its exclusive non-life insurance distribution agreement with the Spanish bank.
Allianz and Banco Popular entered into an exclusive long-term bancassurance alliance in 2011. It covered life insurance, pensions, and asset management through a joint venture Allianz Popular SL, as well as the distribution of non-life insurance products in Spain.
Banco Santander acquired Banco Popular in 2017 and the two banks were subsequently merged in 2018.
Following the resolution of the Allianz Popular bancassurance alliance, Allianz will continue to operate in both non-life and life insurance markets through Allianz Compañia de Seguros y Reaseguros, SA and Fénix Directo Compañia de Seguros y Reaseguros, SA, generating gross written premiums of €3.3 billion in 2018. Allianz Popular SL had gross written premiums of €0.3 billion and assets under management of €12.5 billion in 2018.
The transaction is subject to regulatory approvals and expected to be completed in the first quarter of 2020.
Source: intelligentinsurer