Santander profits miss 2012 target

 

Spain's Banco Santander posted a Q4 profit that missed analyst estimates as Spain's biggest lender set aside money for further loan losses in its home market and earnings slumped in Brazil and the UK.

Profit increased to €401 million from €47 million in 2011 when the bank took one- time costs including a €1.8 billion charge to cover real- estate losses, the Santander, Spain-based bank said in a regulatory filing today. Earnings missed the €801.6 million average estimate of 11 analysts surveyed by Bloomberg.

Santander took provisions of €18.8 billion last year, €6.6 billion more than in 2011, after the government ordered Spanish banks to recognize losses on real estate and it set aside charges to cover for further defaults. While the bank cleans up its balance sheet in Spain, earnings slumped in Brazil and the U.K., which contribute half of Santander's gross income.

"2013 is clearly going to be another tough year, but they are trying to start off on the right foot to position the bank so it has a reasonable outlook," Daragh Quinn, a financials analyst at Nomura International in Madrid, said before the results were published.

Santander shares have increased 4.9% this year, compared with an 8.9% advance for the 38-member Bloomberg Europe Banks and Financial Services Index. BBVA, Spain's 2nd largest lender, which reports earnings tomorrow, has increased 8.2%.