Spain’s Banco Santander 1st quarter profit up 5.7 percent owing to revenue growth

Spain’s Santander Q1 profits up 5.7 percent

MADRID — Spain’s Banco Santander said Thursday its first-quarter net profit rose 5.7 percent as strong revenue growth offset higher loan losses and the effects of the recession.

Spain’s biggest bank and the eurozone’s largest by market capitalization said net profit rose to €2.21 billion ($2.93 billion) in the first three months compared to €2.09 billion for the same period last year.

Gross income rose 11.3 percent to €10.3 billion from €9.2 billion in the first quarter of 2009, Santander said.

The bank said the results showed the bank’s capacity to generate recurring profits in an environment of low economic growth.

Spain’s economy has plunged over the past two years from being Europe’s top job creator to having the region’s highest unemployment rate at some 20 percent due to the collapse of its construction industry and the effects of the global financial crisis.

On Wednesday, Standard & Poor agency downgraded Spain’s rating to AA from AA+ amid concerns about the country’s growth prospects.

Santander said the non-performing loan rate was 3.34 percent for the January-March period, up from 2.49 in 2009.

The group said this figure and coverage of 74 percent compare very well by international standards.

First quarter loan loss provisions totaled €2.43 billion ($3.22 billion), up 10.32 percent from €2.2 billion the same period of 2009.

Shares for the group rose 2.3 percent to €9.3 ($12.32)in mid-morning trading in Madrid.