Bears roam the plains in Spain

28 October 2008 By Fiona Maharg-Bravo

It is all too easy to construct a gloomanddoom scenario for the Spanish bank. The bank will suffer with the economy in Europe and Latin America. But Santander has good reserves and relatively strong positions in Spain, the UK and Brazil. Investors are too fearful.

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Santander reported a 4.4% rise in thirdquarter net profit to €2.2bn from €2.1bn a year earlier as it profited from its focus on retail banking and the takeover of Brazil's Banco Real from ABN Amro.

For the first nine months, Santander's attributable net profit, excluding extraordinary capital gains, rose 5.5%to €6.93bn, broadly in line with analysts' expectations. The extraordinary €586m gain on the sale and leaseback of the Santander Financial City headquarters outside Madrid was not included in the profit figures.

Santander said its capital base remained strong, with a core capital ratio of 6.3%.

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