MADRID – Banco Santander S.A., the largest bank in the eurozone, said yesterday its net income fell slightly in the first half of this year partly due to losses at its U.S. subsidiary Sovereign Bancorp.
Santander (NYSE: STD) posted a profit of €4.52 billion ($6.35 billion), or 53 cents per share, for the first six months of 2009, down from €4.73 billion in the same period last year. The bank said it still expects a full-year profit of €8.88 billion ($12.48 billion).
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Philadelphia-based Sovereign, which Santander formally acquired on Jan. 30, dragged down the parent company’s earnings with a loss of €26 million ($35 million) from February through June.
Santander’s profile has grown in recent months as it emerged from the financial crisis as one of the world’s strongest banks. Earlier this month, Barron’s called Santander “a rare exception in the long line of walking wounded,” saying it “is becoming one of the most profitable banks in the world.”
Sovereign has roughly $100 billion in loans and deposits combined on June 30, according to Santander. It makes up 5 percent of Santander’s total loans and 6 percent of the parent bank’s deposits.
Santander said its ratio of non-performing lose rose to 2.82 percent in June from 1.43 percent a year earlier, and the bank increased its loan-loss reserves 60 percent year-over-year. The bank said it expects Sovereign’s non-performing loans to continue to grow.
Sovereign had 9,594 employees and 751 branches as of June 30, according to Santander. The bank, which has had multiple rounds of layoffs since late last year, employed 867 people in Rhode Island and 3,200 in Massachusetts as of May, a spokesman told Providence Business News.
Additional information is available at SovereignBank.com.
