A Santander office building in London.
Luke MacGregor | Bloomberg via Getty Images
Spain’s Santander on Wednesday said its net profit in the second quarter rose 14% year-on-year to 2.67 billion euros ($2.95 billion), as higher interest rates in Europe, mainly in Spain, offset some weakness in Brazil and the United States.
Net profit topped the 2.54 billion euros expected by analysts, despite a rise 10% in provisions, and was also 3.9% higher than in the previous quarter.
Santander has relied on Latin America in the past to cope with tough conditions but European banks are now reaping benefits from higher interest rates.
The bank’s overall underlying net interest income, earnings on loans minus deposit costs, rose 12.4% to 10.74 billion euros, above analysts’ estimates of 10.45 billion euros.
In Spain, the bank’s biggest contributor to profits this quarter, net profit more than doubled from the same quarter in 2022 to 666 million euros on higher lending income and lower provisions.
NII at its home market jumped 67% year-on-year in the second quarter and was up 16.5% from the previous quarter.
In Brazil, net profit fell 52% year-on-year in the quarter due to a rise in costs driven by inflation and a fall of 4.3% in net interest income.
Net profit in the United States fell 28% on higher funding costs in the auto business while provisions rose 30%.