Banco Santander pre-tax profits declined by 35 per cent in the final quarter of 2020.

The bank saw profits of €27.7 billion in the same period, representing a loss of €8.7 billion.

Santander said that financial drop followed a €12.6 billion non-cash goodwill/deferred tax asset impairment announced in the second quarter.

The multinational company also took on further charges of €1.14 billion in the final quarter, mainly due to restructuring in Europe.

Overall, the company generated an underlying profit of €5 billion.

Ana Botín, Banco Santander’s executive chairman said that Covid-19 vaccination would be the most important economic policy this year and that her view is one of “realistic optimism.”

“A successful roll out of the vaccine will act as a strong catalyst for economic recovery,” she said. “On the basis of the current IMF and OECD economic forecasts, we aim to achieve a lower cost of risk and an underlying RoTE of 9-10 per cent in 2021.

She added: “We have proven that our strategy, scale and business model position us well. Coupled with an even stronger and more diverse leadership driving our ongoing transformation to ‘One Santander’ and expansion of PagoNxt and the Digital Consumer Bank, we are confident we can deliver on our medium-term goals, including an underlying RoTE of 13-15 per cent and a dividend payout of 40-50 per cent in cash, subject to regulatory guidance to the sector.”

Santander UK results

In the UK, Santander saw pre-tax profits drop by 44 per cent to £552 million in the final quarter of 2020, compared to £981 million in the previous year.

The bank said that with further lockdown restrictions imposed last month, the UK economic environment remains challenging, and said that with future recovery closely linked to the vaccine rollout, it remains “cautious” in its outlook.

Nathan Bostock, chief executive, Santander UK, said: “Thanks to the extraordinary hard work and commitment of my colleagues, we have been able to continue providing essential banking services throughout the pandemic, alongside tailored help to customers who are facing challenges. I am proud to say we have lent £4.6bn to our business customers through the Government-backed lending schemes and provided customers with over 373,000 payment holidays.

He added: “Although Covid-19 materially impacted our results, the decisive actions we have taken have helped to deliver a very resilient performance despite the difficult environment. We have achieved strong lending growth, particularly in mortgages, grown customer deposits, delivered further efficiency savings and a notable improvement in income in the second half of the year.”

“With vaccines being rolled out at pace and the ratification of the Brexit trade agreement, we are well positioned to support the UK’s economic recovery over the coming years and deliver on our purpose to help people and businesses prosper.”

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