Spain’s Santander has managed to pull in a confident set
of full-year results – posting attributable profit up 9 percent on
its 2007 performance to €8.87 billion ($11.4 billion), or a 2
percent drop if 2007’s capital gains are included.
While bad loans as a percentage of total lending jumped to 2.04
percent at year-end from 1.63 percent at the end of the third
quarter, Santander’s retail banking-focused business model is set
to position the bank as the world’s second most profitable in 2008
after HSBC (according to Reuters estimates), with retail banking
pre-tax profits rising 3 percent to €9.3 billion.Santander’s
business growth in 2008 focused more on deposits than loans, where
demand slackened as a result of the global crisis. Deposits were up
year-on-year by 41 percent while loans grew by 25 percent.
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The figures were boosted by the bank’s three recent purchases:
Banco Real, Alliance & Leicester and Bradford & Bingley.
Excluding the three acquisitions, deposits grew by 14 percent and
loans by 10 percent.
The UK buys helped Santander become the second-largest bank in
the country by mortgages and the third by deposits, with market
shares of 10 percent and 13 percent in deposits and mortgages,
respectively, and 1,300 branches and 25 million customers.
The bank’s consumer finance division increased lending by 18
percent, augmented by the acquisition of Royal Bank of Scotland’s
(RBS) €2.2 billion consumer loan portfolio in Germany, the
Netherlands, Belgium and Austria.
In Latin America, profit grew by 18 percent to $4.31 billion,
the greatest contribution being made by Brazil where profits grew
31 percent to $1.6 billion.
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By GlobalDataLowlights for 2008 included a €500 million Bernard
Madoff-related provision and a €1.43 billion write-down of
Santander’s shareholdings in its ABN AMRO consortium partners RBS
and Fortis. At the end of 2008, Santander held stakes of 0.89
percent and 1.85 percent in RBS and Fortis, respectively.
