Spain’s Santander on Wednesday beat forecasts with a 35% rise in second-quarter underlying profit, which nearly returned to pre-pandemic levels on the back of fast economic recovery in its U.S. and UK markets.
The euro zone’s second-biggest lender in terms of market value reported a net profit of 2.07 billion euros ($2.45 billion). The result topped the 1.76 billion euros forecast by analysts polled by Reuters and almost matched the 2.1 billion euros recorded in the second quarter in 2019, before the outbreak of the coronavirus pandemic.
Last quarter’s net and underlying profit remained the same as the bank did not book any one-off gains or charges. A year ago, pandemic-related writedowns led to a record net loss of
“We are on track to outperform our profitability target for the year,” Santander boss Ana Botin said in a statement.
Its return on tangible equity ratio (ROTE) – a measure of profitability – rose to 12.29% at the end of June from 12.16% in March. Santander had previously said it aimed to hit a ratio of around 10% by the end of 2021.
The bank also said it planned to return to its dividend payout ratio of 40% to 50% of ordinary earnings, following the lifting the cap on dividend payments by the ECB last week.
