1Q18 results: Strong operating evolution shadowed by forex
Net profit amounted to €2,054mn
Santander has released a strong set of results. Net profit rose +10.0%, surpassing consensus estimates. As expected, forex eroded 12.2pp of growth. Net interest income rose +0.6% yoy, fees +3.9% and ordinary revenue +1.0%. Costs increased +4.0% leading to a pre–provision profit of €6.4bn (–1.5%), +1.7% higher than the consensus figure. Cost of risk was 1.04% of loans with the NPL ratio improving to 4.02% (4.08% in 4Q17) and the coverage ratio to 70% (65% in 4Q17). The Blackstone transaction, completed in March, 2018, has reduced the real estate exposure to just €5.2bn. ROTE improved to 12.4%, CET 1 fully loaded rose to 11.0% (+16bp). The negative figure: tangible book per share declined to €4.12 from €4.15 in December 2017 mainly due to the impact of IFRS 9.
Banco Santander is a holding company, providing a range of financial products. Co.'s products and services include: retail banking business that covers all customer banking businesses; wholesale banking business; as well as asset management and insurance business. Co.'s principal operations are in Spain, the U.K., Portugal, Germany, Italy and Latin America. As of Dec 31 2014, Co.'s total assets amounted to Euro1,266,296,000,000 and total customer deposits amounted to Euro647,627,000,000.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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