Connect to share and comment
Spanish bank Santander, the biggest in the euro zone by market value, said on Tuesday its second-quarter net profit rose eightfold as provisions against loan losses fell sharply.
Net profit climbed to 1.05 billion euros ($1.39 billion) from 123 million euros a year ago, when it booked 1.3 billion euros of one-time charges for Spanish real estate, the bank said in a statement.
During the first half of 2013 the bank posted a net profit of 2.25 billion euros, a 29-percent increase over the same time last year and practically the same as the result for all of last year of 2.29 billion euros.
"Profits rose after more than two years of high levels of write-offs and reinforcement of capital. We are preparing for a new period of profit growth," Santander chairman Emilio Botin said in the statement.
Spanish banks booked billions of euros of provisions against losses on soured real estate deals last year,which caused their profits to plunge.
Santander wrote off nearly 19 billion euros for dodgy loans and property assets in Spain last year causing its net profit to drop by nearly 60 percent.
Bad loans as a proportion of total lending rose to 5.18 percent at the end of the second quarter from 4.76 percent at the end of the first quarter.
Net interest income -- excess revenue from interest earned on assets compared with payments to depositors -- fell 12 percent to 6.72 billion euros from a year earlier.
Profit from Santander's Brazilian unit fell to 420 million euros from 498 million euros a year ago
Profit from Brazil, Santander's biggest-earning unit, fell to 420 million euros during the second quarter from 498 million euros a year ago.
Brazil, which is struggling with rising inflation and anaemic economic growth, accounts for one quarter of the bank's profits, making it the lender's biggest-earning unit.
Earnings from Spain declined to 86 million euros from 201 million euros a year ago while its net profit in Britain rose to 263 million euros from 246 million euros.
Spain accounts for 8.0 percent of the bank's profit while Britain accounts for 13 percent.
A property market collapse in 2008 left Spain's banks awash with bad loans and destroyed millions of jobs.
Spain's bad-loan ridden banks, which were thrown a 41.3-billion-euro European lifeline last year, are stronger but still face high risks from a weak economy, the International Monetary Fund warned in a report earlier this month.