Sunday, June 23, 2024

Santander Loses 8771 Million In 2020 After Accounting Adjustment

The Banco Santander dismissed the year of the pandemic with a loss of 8 billion 771 million euros. A historical fact that was conditioned by the provisions to face the crisis.

In the fourth quarter, a period in which the entity earned 277 million, recorded another 1,146 million euros linked to restructuring costs in Spain, which are added to the accounting write-down of goodwill and tax assets worth 12 thousand 600 million.

Between September and December, the entity chaired by Ana Botín obtained an attributable profit of 277 million euros , as reported to the National Securities Market Commission (CNMV). Santander obtained an ordinary profit of 5 thousand 081 million euros in 2020, 38 percent less in current euros, due to the increase in provisions related to the pandemic.

The ordinary profit for the fourth quarter was 1,423 million euros , 16 percent less compared to the third quarter (-18 percent year-on-year), given that the improvement in the interest margin (+4 percent) was offset by the contribution to the deposit guarantee fund in Spain and bank tax in the United Kingdom, in addition to higher provisions.

We recommend: Santander launches banking for young people with income of more than 60 thousand pesos per month In addition, after having paid 0.10 euros per share through new shares last November, the board intends to pay another 2.75 euro cents in cash per share corresponding to 2020.

The board intends to recoup a cash dividend payout of 40-50 percent of ordinary profit in the medium term. Regarding the remuneration charged to the results of 2021, the intention is to pay dividends again when the recommendations of the European Central Bank (ECB) allow it, in line with what was announced in April 2020.

Ana Botín indicated that “although the crisis is global, our geographic and business diversification has worked once again and highlights the strength of our team and our model. The results in America have been good and global businesses have grown at a good pace, which has allowed us to face a more difficult environment in Europe ”.

We recommend: Santander rejects fine for bonds and will go to court “ The 2020 results reflect the resilience and strength of Santander’s business model and strategy. The profit before provisions is in line with that of 2019 in constant euros and we have obtained an ordinary result of more than 5 billion euros in a very difficult environment.

We thank all the teams for their exceptional dedication and support to their colleagues and to our clients, ”stated Botín. Botín also stressed that the vaccine is “the most important economic policy” for 2021. “We cannot lower our guard, but my vision in the medium term is one of realistic optimism.

The success of the vaccination will act as a strong catalyst for economic recovery, ”he insisted. According to the current economic forecasts of the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD), the objective of the entity, as indicated, is to reduce the cost of credit and achieve a return on capital ordinary tangible (RoTE) of 9-10 percent in 2021.

We recommend: Santander denies participation in monopolistic practices in the bond market “We have shown that our strategy, our scale and our business model are a good starting point.

From now on, the transformation towards One Santander, the expansion of PagoNxt and the Digital Consumer Bank allows us to have the confidence to reiterate our medium-term objectives of reaching a RoTE of between 13 and 15 percent and of paying a cash payout of 40 -50 percent, subject to the recommendation of the regulator to the sector ”, he stated.

Net interest income and client income remained stable at € 31,994 and € 42,009 million in the year, respectively, thanks to the 6 percent growth of linked clients, to 22.8 million, while the profit before of provisions (net margin) increased 2 percent, to 23 thousand 633 million euros.

The provisions for bad debts rose by 2,852 million euros in the year, to 12,173 million, mainly due to the pandemic. However, the cost of credit was 1.28 percent, in line with the improved forecast that was announced the previous quarter.

Thus, the bank’s markets in Europe contributed 37 percent to ordinary profit in 2020, while South America contributed 42 percent and North America 21 percent.

We recommend you: Banks celebrate the opening of deputies to discuss reform of the Banking LawSantander’s Openbank will operate as a digital bank in Mexico in 2022 According to the economic forecasts of the IMF and the OECD, the bank’s objective is to reduce the cost of credit in 2021.

Furthermore, the entity is prepared to face the year with a fund of 24.3 billion accumulated provisions.

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