Banco Santander's profits plummet 60 % over €18-bn debt provisions
01 February 2013
Spain's largest bank, Banco Santander, made debt provisions of over €18 billion last year amid worsening property downturn and the increase in number of toxic loans.
The bank saw its profits fall by around 60 per cent from the previous year to approximately €2.2 billion due to the rise in number of bad loans.
The Spanish lender, which is among the leading survivors of the financial crash has taken a heavy hit with the slump in Spain's economy.
Though the bank kept away from lending to many low-income mortgage seekers in the housing bonanza before 2008, it has found itself involved in a string of property developments that later turned sour. Revenues from divisions in Latin America, Brazil and the UK have supported profits.
Over the last three months of 2012 Spanish GDP fell by 4 per cent and was expected to slump again this year amid government cuts and a combination of high unemployment and declining wages undermining consumer and business spending.
According to the bank, its non-performing loans ratio last year was up 0.65 percentage points to 4.5 per cent while for Spain, it was up 1.25 percentage points to 6.7 per cent.