By Jesús Aguado
MADRID (Reuters) -Santander on Wednesday said its first-quarter net profit rose 19% year-on-year after a solid performance at its retail businesses in Spain and consumer lending business in the U.S. offset a decline in lending income.
The euro zone’s biggest lender by market value booked a record quarterly net profit of 3.4 billion euros ($3.87 billion) – the fourth in a row. The figure topped the 3.16 billion euros expected by analysts in a Reuters poll.
Santander, like other banks, has benefited from higher interest rates, but growth in its key Latin American markets has given it an edge over more Europe-dependent rivals that have scaled back their presence in the Americas.
In Spain, net profit overall rose 49% year-on-year in the quarter, backed by its retail business which rose almost 40%.
In the U.S., net profit rose 49% thanks to its Digital Consumer lending business which almost doubled net profits.
In the quarter, Santander also benefited from a lower impact from the renewed banking tax in Spain and its geographical diversification which also helped it increase revenues by 1%.
The lender booked around an 87 million euro charge against the new banking levy in the same quarter, around a fourth of the estimated annual amount of around 350 million euros.
It adjusted the impact on a linear quarterly basis based on the tax legislation currently in place, in contrast to the previous years when the entire 335 million euros were booked in the first quarter.
Overall, the bank’s net interest income, a measure of earnings on loans minus deposit costs, fell 5% year-on-year in the quarter to 11.38 billion euros, slightly below the 11.42 billion euros expected by analysts, hit by hyperinflation accounting in Argentina.
Quarterly net profit in Mexico fell 4.2% against a backdrop of geopolitical risks stemming from U.S. trade tariffs, especially in that market, partly due to the depreciation of the Mexican peso.
(Reporting by Jesús Aguado; Editing by Inti Landauro and Jan Harvey)
