Banco Santander SA On Course For 9% Yield

The shares of Banco Santander (LSE: BNC) (NYSE: SAN.US) dropped 20p to 550p during early trade this morning today after the bank issued its third-quarter figures.

Santander, which operates more than 1,000 branches within the UK and a further 13,000 branches throughout Europe, South America and Latin America, reported earnings of €1bn for July, August and September.

The group said its largest profit contributors during 2013 to date had been Brazil, at 24%, the UK, at 15%, Mexico, at 11%, and the United States, also at 11%.

Today’s statement also showed total deposits rising 5% to €633bn and loans falling 2% to €687bn. Net book value was declared at €7.58 per share.

Emilio Botin, Santander’s chairman, said:

After several years of high levels of write-offs and reinforcement of capital, Banco Santander is preparing for a new period of increased profitability.

Sr Botin also confirmed Santander would maintain its ‘shareholder remuneration’ — or dividend — at €0.15 per share for the quarter and at €0.60 per share for the fifth consecutive year.

A €0.60 payout is equivalent to 51p per share and supports a 9% yield following this morning’s price reaction.

Meanwhile, the aforementioned book value is equivalent to 648p per share and represents 117% of the share price.

Of course, whether those value ratings, today's quarterly figures as well as the broader prospects for the banking sector all combine to make Santander a 'buy' right now is something only you can decide.

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> Maynard does not own any share mentioned in this article.