Brexit hits San­tander bot­tom line prof­its

The Myanmar Times - - Business | International -

SPAN­ISH bank­ing gi­ant San­tander has low­ered its prof­itabil­ity tar­get for 2018, say­ing its growth ex­pec­ta­tions had wors­ened in its main mar­ket Bri­tain fol­low­ing the coun­try’s de­ci­sion to leave the EU.

In a pre­sen­ta­tion to in­vestors, San­tander said it was aim­ing for a re­turn on tan­gi­ble eq­uity ra­tio (ROTE) of over 11 per­cent in 2018, down from the pre­vi­ous tar­get of 13pc stated last year.

“While the en­vi­ron­ment in some of our mar­kets has de­te­ri­o­rated, our strat­egy and busi­ness model con­tin­ues to de­liver for our cus­tomers and share­hold­ers,” San­tander chief ex­ec­u­tive of­fi­cer Jose An­to­nio Al­varez said in a sep­a­rate state­ment.

San­tander, one of Europe’s largest banks, said eco­nomic ex­pec­ta­tions have de­te­ri­o­rated in some of the mar­kets where it op­er­ates, es­pe­cially Bri­tain which ac­counts for around 20pc of its net profit.

“This has led to a de­pre­ci­a­tion of many cur­ren­cies against the euro and an ex­pec­ta­tion that in­ter­est rates will re­main at record low lev­els,” the bank said.

San­tander is neck and neck with France’s BNP Paribas for the po­si­tion as the eu­ro­zone’s big­gest bank by cap­i­tal­i­sa­tion.

San­tander posted a sec­ondquar­ter net profit of 1.28 bil­lion eu­ros (US$1.44 bil­lion), a 50pc drop from the same year-ago pe­riod as ad­verse ex­change rates hit its bot­tom line.–

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