Santander, the eurozone’s largest retail bank, announced its first-ever annual loss on Wednesday, but was optimistic about an improvement this year if vaccination campaigns were to be successful.
The bank was due to report a loss due to impairments and loan provisions announced in the first half of the year, but this figure was exacerbated by an additional charge of 1.1 billion euros related to a planned restructuring of its UK and European operations in the fourth trimester.
However, its preferred underlying measure of profitability was slightly higher than its own forecast, at 5.1 billion euros, and the bank forecast a rebound in profitability in 2021.
“We will not let our guard down, but I define my point of view as realistic optimism,” said Ana Botín, executive president of Santander.
Santander said he expects to generate an underlying return on tangible equity of between 9% and 10% this year, up from 7.4% in 2020.
Santander’s Latin and North American unit posted the best performance, offsetting weakness in Spain and the UK. Fourth quarter revenues held up better than expected, climbing 1% year on year after excluding the impact of currency movements.
“Although the crisis is global, our geographic and commercial diversification has once again served us well and underscored the strength of our team and our model,” added Ms. Botín.
Santander has said he will pay a dividend of 2.75 cents per share, the maximum allowed under the limits introduced by the European Central Bank in December.
The capital saved from the dividend cut pushed Santander’s level one common stock ratio, a key measure of balance sheet strength, above the top of its target range of 11 to 12 percent, to 12. , 34 percent.