A 41 percent rise in UK-sourced profits –
at a time when other UK lenders are struggling – has helped Spain’s
Santander to relatively very strong first-half post-tax profits of
€4.52 billion ($6.4 billion), down only 4 percent year-on-year. The
bank says it remains on track for fiscal 2009 full-year profit of
€8.88 billion, flat year-on-year but still forecast to be one of
the more successful banks worldwide for 2009 overall.

While a number of banks continue to suffer the
effects of the financial turmoil, Santander said its second-quarter
profit, which amounted to €2.42 billion, was the second highest in
its history.

It was not all good news. Loan-loss provisions
shot up 60 percent to €4.63 billion; and Santander’s wholly-owned
US subsidiary, Sovereign Bancorp, which it fully acquired in
February, made a €26 million loss.

Santander now runs the UK’s third-largest
deposit taking franchise, having picked up the stricken Bradford
& Bingley and Alliance & Leicester businesses during last
year’s market collapse. Attributable profit in the UK totalled £790
million ($1.3 billion) – loans grew by 43 percent (to €228 billion)
and deposits by 66 percent. It now has 1,329 branches in the
country and 25 million retail banking customers.

Continental Europe, including Spain,
contributed 50 percent of group profit, Latin America 34 percent
and the UK, 16 percent. Total group loans rose by 16 percent and
deposits by 36 percent. In Latin America, Santander’s post-ABN AMRO
Brazilian unit, the country’s fourth-largest bank, saw profit up 12
percent to $1.28 billion.

According to its own figures, Santander, with
a market capitalisation of €80 billion, is now the world’s
sixth-largest bank by stock market value. It boasts 90 million
customers and, with 14,108 branches, is the Western world’s largest
bank by branches (see RBI 615).

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At 79 percent of profit, retail banking was
Santander’s biggest business contributor in H109, and it is an area
it continues to invest in. On 29 July, it announced it was beefing
up its already sizeable consumer finance division, Europe’s
second-largest after BNP Paribas’ (see News Digest), by
integrating the Polish consumer finance arm of AIG with its own to
form a business with €3.5 billion in loans.