Chinue blog

Spain's Santander bank sees 2010 net profit fall

MADRID (AFP) – Spanish titan Banco Santander reported Thursday an 8.5-percent dip in 2010 net profits, hammered by the troubled economy and new rules forcing it to make hefty provisions for bad loans.

The biggest bank in the euro zone in terms of market value, Banco Santander said net profit dropped to 8.181 billion euros ($11.3 billion).

New Bank of Spain rules had obliged the 154-year-old institution to put aside a 487-million-euro precautionary reserve in the third quarter for loans that might not be recovered, it said.

Without these new rules, net profit would still have slipped by only three percent, it said.

The results demonstrated Banco Santander's capacity to generate profits, which exceeded eight billion euros for the fourth year running, the 154-year-old institution said in a statement.

"This consistency was achieved in the worst economic context in several decades and is due in large part to the geographical and business diversification of the group."

While suffering a 23-percent drop in net profit in continental Europe, the bank enjoyed a 25-percent profit surge in Latin America, a 31-percent leap in Brazil and an 11-percent gain in Britain.

Net banking income rose 11.1 percent to 29.224 billion euros.

"We achieved results that again place us among the leaders of world banking," Santander President Emilio Botin said in a statement. "Banco Santander has had another excellent year."

Banco Santander has 90 million clients and 13,660 offices worldwide.