Banco Santander, the Madrid-based bank, has released its financial results for the second quarter. Here are the key highlights:
Net Profit Exceeds Expectations
The bank reported a net profit of €2.67 billion ($2.95 billion) for the quarter, surpassing the consensus estimate of €2.54 billion. This also represents an increase from the €2.35 billion profit in the same period last year.
Revenue Surpasses Analysts' Anticipations
Santander's quarterly revenue reached €14.09 billion, exceeding the analysts' expected €13.975 billion. In comparison, the bank generated revenue of €12.815 billion during the same quarter last year.
Key Points to Note:
Net Interest Income Increases
Santander's net interest income, which measures the difference between interest earned on loans and interest paid to clients on deposits, rose to €10.52 billion in Q2. This is higher than both the first quarter's €10.40 billion and the previous year's €9.55 billion. Analysts at Citi commented that the strong net interest income, especially in Spain, contributed significantly to the better-than-expected net profit.
U.S. Unit Performs Better Than Expected
After a weak start to the year, Santander's U.S. operations showed improvement in the second quarter. The bank's underlying profit in the U.S. was €367 million, compared to €507 million in the same period last year. This outperformed UBS' forecast and can be attributed to stronger core revenue and a more moderate increase in the cost of deposits.
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