The company attributed the decline in 2020 profits to increased loan-loss provisions due to the impact of Covid-19 pandemic
A branch of Santander in Rio de Janeiro, Brazil. (Credit: Junius/Wikipedia.)
Grupo Santander has reported a net income of €277m for the fourth quarter (Q4) of 2020, a 90% decrease compared to €2.78bn for the corresponding quarter of 2019.
The group’s total income decreased by 11% to €10.92bn for Q4 2020, compared to €12.32bn for the same quarter previous year.
The underlying income attributable to Santander has decreased by 31% to €1.42bn for Q4 2020, compared to €2.07bn for the same period in 2019.
The company attributed the decline in 2020 profits to increased loan-loss provisions due to the impact of Covid-19 pandemic.
The bank noted that amid the negative impact of a pandemic, its net interest income and net fee income have shown signs of recovery in the second half of the year.
Banco Santander executive chairman Ana Botín said: “Our 2020 results demonstrate the resilience and effectiveness of Santander’s business and strategy.
“Net operating income was in line with 2019 in constant euros, and we generated an underlying profit of €5 billion, in spite of the significant headwinds.
“Although the crisis is global, our geographic and business diversification have once again served us well and underscored the strength of our team and model.
“We delivered solid performance in the Americas and strong growth in our global businesses, providing balance against the more challenging environment in Europe.”
Santander’s CET1 ratio was 12.34%, which exceeded the top end of its target range. Its cost of credit was 1.28%, which is in line with its target.
The company reported customer deposits of €849.31bn for the full-year 2020, an increase of 3% compared to €824.36bn for 2019.
Santander’s net operating income for the full-year 2020 decreased by 10.8% to €23.14bn, compared to €25.94bn for 2019.
The bank’s net interest income for 2020 fell by 9.3% to €31.99bn, compared to €35.28bn for 2019.
Botín added: “On the basis of the current IMF and OECD economic forecasts, we aim to achieve a lower cost of risk and an underlying RoTE of 9-10% in 2021. We have proven that our strategy, scale and business model position us well.”