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The euro zone's biggest bank, Santander, met expectations with a 2.8 percent drop in nine-month net profit, boosting bad debt provisions to offset the effects of Spain's housing boom hangover.
Diversification away from a tough domestic market to expand in fast-growing markets such as Brazil underpinned a 21.7 percent rise in operating income, Santander said on Wednesday.
Net profit of 6.74 billion euros ($10.03 billion) was in line with expectations for 6.724 billion in a Reuters poll, as was operating income.
Santander has been one of the winners in the banking sector shake-out triggered by the global financial crisis, emerging with acquisitions, no need for state aid and an enhanced reputation.
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Sharon Lorimer |
Credit Suisse reported better-than-expected results last week but the earnings were not as spectacular as those of Wall Street powerhouses Morgan Stanley [MS
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Other Spanish banks, including nearest rival BBVA, have also boosted provisions despite a relatively resilient underlying business.
Latin America contributed 20 percent of Santander's profit but was hit by the global recession and exchange rate effects, rising 6.1 percent in local currency terms but decreasing 2.1 percent in euros.
Brazil, however, where Santander has invested heavily, contributed a 10.5 percent rise in net profit.
Santander earlier this month floated its Brazilian unit for 8 billion euros — a sum the bank has said it will set aside for a rainy day.
Britain, where Santander owns Abbey as well as Alliance & Leicester and Bradford & Bingley's, chipped in with 16 percent of net income.
Santander shares closed 3.9 percent lower at 10.91 euros.
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