Spanish bank Santander takes biggest loss in history with £11 billion Covid hit

The UK wing of Santander managed to keep its head above water even as its Spanish parent took its first loss in its 160-year history.

Santander UK said its profit had dropped by three quarters, but still remained in the black in the first half of the financial year.

It came as the Santander Group took a giant 12.6 billion euro (£11.4 billion) impairment from the impact of the coronavirus pandemic.

The hit pushed the Spanish banking giant into a 10.8 billion euro (£9.8 billion) loss for the first half.

A large part of the hit came as the bank took a new look at the value of UK building society Abbey National – which it bought in 2004.

Santander said that around 6 billion euros (£5.4 billion) of the impairment came from acquisitions in the UK – Abbey National being the biggest of these.

Despite going through what chairwoman Ana Botin said was the “most challenging” six months in Santander’s history, the bank is still promising a dividend to its shareholders, around two million of which are in the UK.

She said: “The board is committed to applying a 100% cash dividend policy as soon as market conditions normalise, subject to regulatory approvals and guidance, and we have accrued capital this quarter to reflect this commitment.”

The bank has lent on average 1.6 billion euros (£1.5 billion) every day during the second quarter to support its customers, Ms Botin said.

UK boss Nathan Bostock added: “Decisive management actions have helped us to mitigate some of the impact this crisis could have had on our results and business operations and ensure we are well positioned as the UK emerges from the lockdown.”

“With strong foundations and a resilient balance sheet, we remain fully committed to our purpose – to help people and businesses prosper.”

Read Full Story Click here to comment

FROM OUR PARTNERS