Santander, the euro zone's biggest bank, reports a 52 percent jump in third quarter net profit, as losses on problematic debts receded. Melanie Ralph looks at whether Santander can keep up the good work in the months ahead.
It's rare these days that we see a bank hitting the headlines for the right reasons. Santander is bucking the trend. A jump in third quarter profits by over 50 percent to 1.61 billion euros pushed the bank's share price up. It's the first set of earnings presided over by new chairman Ana Botín who stepped into the shoes of her late father in September. IG's Alastair McCaig says with a new captain at the helm markets remain cautious the bank can keep up the good work. (SOUNDBITE) (English): ALASTAIR MCCAIG, MARKET ANALYST, IG INDEX, SAYING: "I guess the change in management is certainly on that the market if still trying to fully get a handle on and its maybe too early to fully analyse as to how successful this has been or will be. Certainly if we look at the share price floating around that 7 euro level, well below the years highs that we saw on at least two occasions this year, around about the 8 euro level, does reflect hesitation." On the surface the foundations for growth look on track. The bank is upping its costs cutting target, aiming to save 2 billion euros by 2016 rather than 1.5 billion euros. Like most of its Spanish peers, it passed the European Central Bank health checks and is benefiting from fewer losses on problematic debts. Its boost in business came mainly from higher incomes from trading bonds and operations in Britain. But with the UK reliant on a struggling eurozone, Santander may do well to think up a plan B. (SOUNDBITE) (English): ALASTAIR MCCAIG, MARKET ANALYST, IG INDEX, SAYING: "One of the worries that might be on the horizon is the dependence to an extent of the British business that seems to be predominantly the key driving aspect here, and with the UK skirting the outskirts of the eurozone, you wonder how long the slightly stalling recovery that the euro zone is suffering from might be before that effects some of the UK business." For now at least, Santander is weathering the storm. Worries remain over a slowdown in the pace of the recovery in its core lending business revenue which fell short of expectations. With Spain's recovery on track, Santander could very well look closer to home to help keep profits rolling in.