Santander Misses Forecasts as Profit Drops 26%

Bank of Santander Headquarters
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Bank of Santander Headquarters

The euro zone's largest bank Santander missed expectations on Thursday with a near 26 percent fall in first quarter net profit on the back of shrinking income from South America and Britain.

Spain's largest lender, which makes about half of its earnings from South America, posted net profit of 1.2 billion euros, below the average estimate of 1.3 billion euros in a Reuters poll.

Santander said net interest income, the profit margin on its loans, fell 6.3 percent from the fourth quarter and was off 14.3 percent from a year ago as low interest rates and recession in key markets hit.

Net profit from Latin America fell 18 percent and British net profit was down by nearly a quarter.

Smaller domestic rivals, Caixabank and Sabadell posted a deterioration in their loans as a contracting economy hiked bad debts.