 half-year profits fell as the high street bank warned on an increasingly "challenging" environment. Profits across the UK business dipped 16 percent due to investment costs and weaker revenues.){kind=link}
Santander (BME:SAN) half-year profits fell as the high street bank warned on an increasingly “challenging” environment.
Profits across the UK business dipped 16 percent due to investment costs and weaker revenues.
Moreover, costs relating to restructuring also impacted its home market of Spain.
Nevertheless, global profits rose by 4 percent, driven by strong growth in the US and Brazil.
The bank said it earned €3.75 billion (£3.3 billion) over the course of the January-to-June period, benefiting from an increase in its customer base by three million to 140 million.
Net earnings jumped 6 percent in Brazil, currently its largest market, while US profits rose 37.5 percent.
Profits in Argentina fell 29 percent with to respect to the euro because of the weak peso, while Spanish profits also slumped 20 percent.
Earnings in the UK fell to €692 million, with the UK market accounting for a fifth of total profits.
Chief Executive of Santander UK, Nathan Bostock attributed the fall in profits to a “competitive and uncertain operating environment”.
However, Mr Bostock also stressed that the bank “continued to deliver attractive shareholder returns.”
He continued: “The progress made recently is encouraging with profit before tax of £489m, up 18 per cent quarter-on-quarter, importantly with some improvement in costs. Our investment in business transformation initiatives also continued despite significantly higher regulatory, risk and control spend for projects, such as GDPR, PSD2 and MiFID II.
“We have strong and sustainable foundations in place and the right approach to succeed. Our focus remains on long-term customer loyalty, with our retail customer satisfaction in line with the average of our three highest performing peers and our corporate customer satisfaction now 11pp above the market average.”
Shares in the bank are currently down -0.11 percent as of 12.34PM (GMT), as the market reacts to the results.