MADRID – Banco Santander SA, Spain’s biggest bank, said second-quarter profit rose 38 percent, beating analyst estimates, helped by the U.K. and a recovery in its home market.
Net income climbed to 1.45 billion euros ($1.94 billion), the highest in the last nine quarters, from 1.05 billion euros ($1.41 billion) a year earlier, the Santander, Spain-based lender said today. Earnings compared with the 1.36 billion-euro ($1.82 billion) average estimate in a Bloomberg survey of 13 analysts.
The bank’s U.K. unit, run by Chairman Emilio Botin’s daughter, Ana Patricia Botin, is setting the pace for earnings growth at Santander, while Spain is emerging from its economic slump. After the bank took bad-loan provisions and writedowns of more than 65 billion euros ($87 billion) over the past five years, Chairman Botin told shareholders in March that Spain would be one of its “most positive stories” over the next three years, helping the bank boost earnings toward pre-crisis levels of 9 billion euros ($12 billion).
“The momentum from the U.K. has been pretty strong, and the expectation is this will continue,” said Benjie Creelan-Sandford, a bank analyst at Macquarie Bank Ltd. in London. “Things are definitely getting better for Santander in Spain, but the extent of the recovery shouldn’t be overstated.”
Santander shares fell 2 percent to 7.55 euros ($10.11) at close of trading in Madrid, valuing the bank at 88.9 billion euros ($119 billion). The stock has risen 16 percent this year, compared with a 0.5 percent decline for the 43-member Bloomberg Europe Banks and Financial Services Index.
Banco Bilbao Vizcaya Argentaria SA, which yesterday reported a 39 percent drop in second-quarter profit after year-earlier asset sale gains weren’t repeated, has risen 3 percent.
“The outperformance was driven by higher-than-expected operating profits, repeating the trend of good net interest income performance from the Spanish banks this quarter,” Daragh Quinn, an analyst at Nomura International in Madrid, said in a note to clients today. “U.K. was as good as expected.”