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Santander profits hit by continued restructuring costs

Published 27/07/2016

Santander was hit with a 475 million euro (£398 million) restructuring charge linked to the closure of around 450 branches in Spain
Santander was hit with a 475 million euro (£398 million) restructuring charge linked to the closure of around 450 branches in Spain

Profits at Santander were cut in half in the second quarter as the bank was hit by continued restructuring costs.

The Spanish lender said net income fell 50% to 1.28 billion euros (£1.07 billion) in the period compared with 2.54 billion euros (£2.13 billion) last year. Net interest income, a key profit driver for banks, fell 8.6% to 7.57 billion euros (£6.35 billion).

The bank was hit with a 475 million euro (£398 million) restructuring charge linked to the closure of around 450 branches in Spain, which affected 1,380 employees.

In the UK, first half net profits fell 12% to 843 million euros (£707 million), with Santander pointing the finger at a new bank tax.

Group executive chairman Ana Botin said: "We continue to deliver on our commitments and reaffirm guidance of an increase in earnings and total dividend per share in 2016, despite worse than expected economic conditions.

"We are investing in our people and improving digital and branch‐based personal services for all our customers."

Net earnings across the group were down 32% to 2.91 billion euros (£2.44 billion).

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