The profits of Banco Santander (LSE: BNC) (NYSE: SAN.US) more than doubled during the fourth quarter as fewer provisions were made for bad loans. Over the past year the bank unveiled a 90% surge in net profits.
The Spanish banking group made £3.6 billion in net profits in 2013, up £2 billion on the previous year. Loan-loss provisions were £1.4 billion between October to December representing the lowest amount in eight quarters.
The improvement, slightly below market expectations, reflected a slight upswing in economic growth in Spain. The Spanish economy grew 0.3% in the final quarter of the year, with some positive signs Spain has left the recession behind.
Some 50% of group profits were made in emerging markets such as Latin America, where there is some concern for the future, as some of those markets appear volatile. Brazil, the biggest contributor to Santander’s profit, saw a drop in earnings just shy of 30% on a year ago.
In the UK quarterly earnings rose to £217 million while current account balances grew by 75%. Speculation about an initial public offering of the bank’s UK operations was put to an end by the bank’s chief executive, Javier Marín, who elaborated that the business would need to be at an appropriate value first.
Emilio Botín, the chairman, gave the following statement:
“After several years of strengthening the balance sheet with capital, Banco Santander is embarking on a period of strong profit growth in the coming years.”
Santander shares dropped 1.7% to €6 this morning taking its losses this year to 3.5%.
