Santander swings to profit, lender raises forecast

Santander has upgraded its full-year forecasts as the lender returned to profit for the third quarter.

Net profit at Santander rose to €1.75bn, which is three times the profit a year previously. Underlying profit increased by 18% on the second quarter.

The Spanish lender raised the profit forecast for the year to €5bn.

“These results speak to the strength and breadth of our customer relationships and the resilience of our diversified business and markets in which we operate,” said chief executive Ana Botin.

“This diversification has been a key driver of our recovery, with South America performing well and the UK recovering strongly in the third quarter,” she added.

“Given the Group’s current performance, the strength of our balance sheet, our liquidity profile and mix of businesses, I am confident that we will be able to resume cash dividends once regulatory conditions allow. As such, we are seeking shareholder approval today for a €0.10 per share cash payment to shareholders in 2021, once permitted.

“Although the outlook for 2021 depends on how the pandemic evolves, we have proven that our strategy and business model position us well to continue supporting our customers and delivering results for our shareholders.”

Santander has set aside €2.5bn to deal with expected loan losses over the third quarter.

By the end of 2020, the bank will have achieved the €1bn cost savings target in Europe it announced in 2019 and expects to reduce costs by an additional €1bn over the next two years in Europe.

Shares in the group (LON: BNC) are trading +4.97% at 162,70 (0844GMT).