World Bulletin / News Desk
Banco Santander, the leading bank in the eurozone by capitalisation, said Friday that profit soared in the second quarter thanks to an improvement in the exchange rate with Brazil and an absence of exceptional restructuring charges.
A recovery in the exchange rate of the Brazilian real helped the bank as Brazil is one of Santander's main markets. Profit there jumped 58 percent and the country was the leading contributor to earnings at 26 percent of the total. Britain followed at 17 percent.
Net receipts from banking activities rose by 1.1 percent to 8.5 billion euros.
The results were also flattering as during the second quarter last year Santander booked the cost of a restructuring effort in Spain that entailed closing 450 branches and the voluntary departure of 1,400 employees.
The second quarter this year was marked by the purchase of failing Spanish rival Banco Popular for the symbolic sum of one euro after the intervention of European regulators.
However, this dented Santander's main capital adequacy ratio -- a measure of a bank's ability to handle a crisis -- which slid to 9.58 percent from 10.66 percent at the end of March.
But Santander said a capital increase of seven billion euros carried out in July -- after the books closed for the second quarter -- allowed for it to compensate for the impact of the acquisition of Banco Popular.
The purchase of Banco Popular, however, also pushed up its percentage of doubtful loans, to 5.37 percent from 3.74 percent.
Shares in Santander were down 0.6 percent in morning trading as the Madrid market was down 0.6 percent overall.
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