LONDONâ€"The Spanish lender Banco Santander reported on Thursday a surge in profits to 1.1 billion euros in the third quarter as it continued to benefit from declines in charges for bad loans.
Santandar, one of Europe’s largest banks, wrote down billions of dollars of mortgages last year amid a weak economy in Spain, its home market. Provisions for delinquent and defaulted loans fell 13 percent to 2.6 billion euros, or $3.6 billion, in the third quarter, down from 2.9 billion euros in the previous year.
The bank also was boosted by higher profits in Europe and in Britain amid an improving economic outlook. Spain exited a two-year recession in the third quarter, according to data released Wednesday by the Spanish central bank.
“After several years of high levels of write-offs and reinforcement of capital, Banco Santander is preparing for a new period of increased profitability,†said Emilio Botin, Santander’s chairman.
The bank’s net income of 1.1 billion euros far exceeded the 122 million euros earned in the same quarter a year ago.
For the first nine months of 2013, profits rose 76 percent to 3.3 billion euros, up from 1.9 billion euros in the prior-year period. That was in line with analyst estimates.
However, the lender’s Latin American operations continued to weigh on the bank, posting a 31-percent decline in profits to 733 million euros in the third quarter from the previous year.
Santander said the Spanish economy, while improving, remains weak and has been driven primarily by exports.
The bank’s profits in Spain declined 79 percent to 73 million euros down from 342 million euros in the prior year. Profits were down 15 percent from the second quarter, driven by a drop in lending volumes and the repricing of some mortgages.
Provisions for bad loans in Spain fell 11 percent to 56 million euros quarter-over-quarter.
The bank said its core Tier 1 capital ratio, a measure of a bank’s ability to weather financial disturbances, rose to 11.6 percent by the end of the third quarter under the industry regulations known as Basel II.
