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After recording the first loss in its 163-year history in the second quarter, net income totaled 1.75 billion euros ($2.1 billion) in the third, beating estimates of about 1 billion euros, the bank said on Tuesday. The CET1 ratio, a key measure of capital strength, improved to 11.98% from 11.84% at the end of June.
The results strengthen a push by lenders to overturn the European Central Bank’s de-facto ban on paying dividends, which has pushed down share prices. Santander (MC:SAN) Chairman Ana Botin has argued that the measure is harmful not only to bank stocks but also to the economy as a whole because it restricts the flow of capital and increases the cost of equity.
Santander was boosted by its operations in Brazil, as the third-quarter earnings once again highlighted diverging fortunes between Europe and its the bank’s more successful businesses in the Americas.
The bank expects underlying profit for the full year to reach 5 billion euros, compared with estimates of 3.66 billion euros.
Profit was lifted by better-than-expected cost savings, the bank said. The lender held back 2.5 billion euros for loan losses in the quarter after 7 billion euros of provisions in the first half. Net interest income fell from a year earlier to 7.77 billion euros.
Santander will hold a shareholders meeting on Tuesday to vote on a proposed dividend for this year’s earnings.
©2020 Bloomberg L.P.
