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BANCO SANTANDER NET EARNINGS UP 17.85 PERCENT; BANK RAISES TOTAL DIVIDEND 11.63 PERCENT

 BANCO SANTANDER NET EARNINGS UP 17.85 PERCENT;
 BANK RAISES TOTAL DIVIDEND 11.63 PERCENT
 MADRID, Spain, Feb. 8 /PRNewswire/ -- Addressing the annual shareholders' meeting of Banco Santander (NYSE: STD), Emilio Botin, chairman and chief executive officer, today announced that net income for the Santander Group for the year ended Dec. 31, 1991, had increased 17.85 percent to 75.1 billion pesetas ($777.1 million), or 638.70 pesetas per share ($6.61 per ADR), compared with 63.8 billion pesetas in the prior year.
 The total dividend increased 11.63 percent to 240 pesetas per share for the year. A final dividend of 110 pesetas per share will be paid to shareholders on April 30, 1992. An interim dividend of 130 pesetas was paid Oct. 31, 1991.
 Operating margin rose 12.10 percent for the year. Contributing to this increase was an 8.12 percent increase in the financial margin, net of provisions for bad debt, and a 24.69 percent gain in fee-based services.
 This was partially offset by a 23.84 percent increase in operating expenses, largely due to the strengthening of the group's Spanish banking network through the opening of 107 new offices, the introduction of new customer services and continued development of information technologies, according to Botin.
 For the year, return on assets was 1.36 percent, an improvement over the 1.30 percent achieved in the prior year, while return on equity was 20.34 percent in 1991, compared with a return of 20.11 percent in 1990.
 Equity at year end was 309.9 billion pesetas ($3.2 billion). With total capital of 519.4 billion pesetas ($5.4 billion), Santander's capital adequacy ratio was 13.24 percent as determined under the criteria established by the Bank for International Settlements (BIS) in Basle.
 Results
 Net income rose to 75,137 million pesetas ($777.1 million), an increase of 17.85 percent over the prior year.
 The financial margin increased 8.12 percent and other revenues grew 24.69 percent, contributing to a 12.10 percent rise in operating margin. Operating expenses increased 23.84 percent.
 The significant increase in operating costs was caused primarily by the expansion of Santander's Spanish banking network through the opening of 107 new branch offices, the development and introduction of new customer services, and the continued improvement of information technologies.
 Cash flow generated 200,065 million pesetas ($2.1 billion), up 13.72 percent over the preceding year. Provision for reserves and writedowns totaled 64,000 million pesetas ($661.9 million), an increase of 46 percent over the prior year. Income before tax was 112,758 million pesetas ($1.2 billion).
 Of the provision, 17,686 million pesetas ($182.9 million) was for the reserve for bad debt, 5,312 million pesetas ($54.9 million) for the writedown of investment securities and 40,910 million pesetas ($423.1 million) for other provisions (general reserves, cross-border loans, pension commitments).
 Other miscellaneous income includes the results of banking activities such as treasury operations, merchant banking and profits of subsidiaries handling investment securities, as well as 25,700 million pesetas ($265.8 million) relating to the capital gains on the sale of the Santander's 83-percent shareholding in Electra de Viesgo and its 64- percent stake in Banca Jover.
 Return on assets was 1.36 percent, an improvement over the 1.30 percent return of the prior year.
 Foreign-based operations, representing 27 countries, accounted for 27 percent of consolidated net earnings, an increase of 61 percent over a year ago.
 Equity
 The capital adequacy ratio was 13.24 percent, according to criteria established by BIS. Total capital resources amounted to 519,422 million pesetas ($5.4 billion), while year-end equity amounted to 309,948 million pesetas ($3.2 billion).
 Dividend
 The total dividend per share increased 11.63 percent for the year. An interim dividend of 130 pesetas per share was paid Oct. 31, 1991, while a final dividend of 110 pesetas per share will be paid on April 30, 1992. That will bring the total year's dividend to 240 pesetas per share.
 Deposits and debt
 Customer deposits and debt financing amounted to 3,620,441 million pesetas ($37.4 billion), up 0.79 percent over 1990.
 Extensive marketing of mutual funds resulted in a 349.19-percent increase in off-balance sheet funds to 515,117 million pesetas ($5.3 billion).
 The total amount of customer deposits, borrowed funds and mutual funds, rose 11.54 percent to 4,135,558 million pesetas ($42.8 billion).
 Loans and discounts
 Total lending activity with customers of the Santander Group, of which 86.04 percent are loans and discounts, increased to 3,115,103 million pesetas ($32.2 billion) at the end of 1991, 14.96 percent greater than at the end of 1990.
 Peseta-denominated lending accounted for 70.76 percent of this total, while the remaining 29.24 percent was in foreign currencies.
 Loans classified as being in default or non-performing represent 3.27 percent of the total, or 91,877 million pesetas. For the year, provisions equal to 104.17 percent of this amount, or 95,709 million pesetas, were reserved. For the last five years, Santander has reserved amounts equal to 100 percent of all problem debt associated with country risks.
 Meeting Highlights
 Botin in his address to shareholders commented on a number of highlights of the last year.
 Decisions made in the international arena focused on the following three objectives:
 1) Diversification of income sources,
 2) Development of the IBOS (Interbank On-Line System) electronic banking project with The Royal Bank of Scotland and its expansion in Portugal and Germany, and
 3) Capitalize on business opportunities in markets which will enable the group to further improve its profitability.
 In 1991, 36 percent of group assets were foreign-based and international business accounted for 27 percent of consolidated earnings.
 The importance of the group's European objectives has not decreased attention focused on other parts of the world, where there exist business opportunities that a dynamic group such as Santander should pursue.
 Yet again, Santander stole a march on competitors by establishing a solid presence in markets with the strongest potential. In Mexico and Venezuela, the group's market position was expanded by building on the widespread and profitable business network of its specialized merchant banking units.
 Although the group's international presence is very important, the foundation of Santander is its business in Spain. Primary efforts remain devoted to the domestic market where Santander has developed its most significant commercial activities.
 Three years have passed since the launch of the high interest- bearing checking accounts and results continue to be very satisfactory. Santander consolidated its leadership role and took a major step forward amongst Spanish banks with this product, which remains a basic pillar of Santander's business.
 Banco Santander's market share of customer funds in Spain, including investment funds and pension funds, is now 5.51 percent, compared to 4.05 percent three years ago. In that period of time, its share increased 36 percent, against an average decline of 9 percent for the major banks.
 In today's expanding market for mutual fund business, Santander has quickly and effectively met customers' demands. But, as Botin mentioned regarding the introduction of high interest-bearing checking accounts, he now reiterated that it is necessary to wait before judging the full impact of this competitive challenge on both the customer base and earnings.
 A strong capital base is necessary given that Spanish and international banks are facing significant changes in an economic environment that only can be considered, at best, uncertain.
 In a year when total assets grew by 9 percent, Santander's capital adequacy ratio was above 13 percent. It was, in fact, precisely 13.24 percent, well above the 8 percent guideline established by BIS.
 In the last five years, Santander has initiated some of the most radical changes in Spain's financial system: creating a universal bank that provides a full-range of financial services, developing and distributing new products on a massive scale, and advancing at the forefront of bank internationalization. And importantly, the group has accomplished this along with higher profits, a stronger capital base and greater asset soundness.
 The years to come will be difficult and competition will no doubt increase, but Botin pledged that Santander will be stronger and better prepared than ever.
 These will be years when the spectacular growth and change that characterized the past decade will be complemented by a return to more traditional banking values: sound capitalization, prudence in assuming risks and cost control. Values, that in fact, are in line with Santander's longstanding tradition and which can only strengthen its competitive position.
 Year in review
 During 1991, Banco Santander continued to take steps to solidify its international position and build upon its strategic alliance with The Royal Bank of Scotland.
 Both Banco de Comercio e Industria and Credit Commercial de France were integrated into the IBOS association created by the alliance between Banco Santander and The Royal Bank of Scotland. Today, as a result, 2,700 banking offices in Spain, the United Kingdom, Portugal and France are interconnected on a real time basis and able to meet the needs of each banks' customers.
 The Santander Group has 1,391 offices in Spain and another 337 foreign-based branches in 27 countries around the globe. At year end, 19,842 people were employed by the group, of which 1,000 were added during the past year.
 1991
 Feb. 2 Santander shareholders annual meeting is held
 with presentation of 1990 results.
 March 18 Agreement is reached between Santander and First
 Fidelity Bancorporation.
 May 16 Santander initiates lower mortgage rates.
 June 3 Banco de Comercio e Industria opens 28 offices in
 Lisbon.
 June 11 Santander reaches agreement on sale of Banca
 Jover to Credit Lyonnais.
 Aug. 30 Santander is first to issue Mexican Matador
 bonds, in an amount of 10,000 million pesetas.
 Sept. 9 A first issue of $230 million of preferential
 shares is issued in the United States.
 Oct. 9 Santander is the first to offer bonds securitized
 by mortgages, an issue of 13,000 million pesetas.
 Oct. 9 Santander launches the first fixed-rate
 mortgages, at a rate of 12 percent.
 Nov. 14 A second issue of Mexican Matador bonds is issued
 for Banco Interamericano de Desarollo in an
 amount of 10,000 million pesetas.
 Nov. 28 Credit Commercial de France joins IBOS.
 Dec. 26 Santander acquires 13.5 percent of First Fidelity
 Bancorporation.
 Conversion of Spanish pesetas was translated into dollar amounts at the exchange rate of U.S. $1.00 equals Sp. Ptas. 96.688
 The consolidated Santander Group is composed of Banco Santander, 16 more banks and another 98 companies of various nationalities in which it maintains an ownership position. This network of 1,728 offices in 28 countries provides Santander with an effective system to fully meet the individual financial needs of its customers in Spain, as well as being the largest and most profitable international network among private Spanish banks.
 Each Banco Santander ADR is equivalent to one ordinary Spanish Banco Santander share. Santander ranks among the five largest capitalized banks traded on the New York Stock Exchange.
 BANCO SANTANDER
 Consolidated Group Results
 For the years ended Dec. 31, 1991 and 1990
 Consolidated Financial Highlights
 (Millions of pesetas) 1991 1990 Percent
 Income before taxes 112,758 96,103 17.33
 Net income 75,137 63,758 17.85
 Operating profit 265,182 236,552 12.10
 (after provision for bad debts)
 Equity 309,948 300,503 3.14
 Deposits and debt 3,620,441 3,592,080 0.79
 Total of customer deposits
 and borrowed funds 4,135,558 3,707,529 11.54
 Loans and discounts 3,115,103 2,709,785 14.96
 Total assets 5,826,193 5,346,419 8.97
 BANCO SANTANDER
 Consolidated Income Statement
 For the years ended Dec. 31, 1991 and 1990
 (In millions of pesetas and related dollar amounts)
 Year Ended Year Ended Percent
 12/31/91 12/31/90 Change
 Financial revenues Ptas 633,218 $6,549.1 Ptas 605,514 4.58
 Financial costs 421,288 4,357.2 409,456 2.89
 Financial margin 211,930 2,191.9 196,058 8.10
 Net prov. for bad debts 17,686 182.9 16,396 7.87
 Financial margin after
 provision for bad debts 194,244 2,009.0 179,662 8.12
 Other ordinary revenues 70,938 733.7 56,890 24.69
 Operating margin 265,182 2,742.7 236,552 12.10
 Personnel expenses 90,169 932.6 78,704 14.57
 Overhead expenses 49,251 509.4 33,351 47.67
 Taxes, other than income 6,011 62.2 5,382 11.69
 Operating expenses 145,431 1,504.2 117,437 23.84
 Operating profit Ptas 119,751 $1,238.5 Ptas 119,115 0.53
 Other miscl. income 59,729 617.7 39,332 51.86
 Recovery of assets
 previously written off 7,742 80.1 5,296 46.19
 Depreciation (23,399) (242.0) (36,218)(35.39)
 Writedown of investment
 securities (5,312) (54.9) (12,479)(57.43)
 Other net provisions (40,910)) (423.1) (14,733)177.68
 Contribution to deposit
 Guarantee fund (4,843) (50.1) (4,210) 15.04
 Income before taxes 112,758 1,166.2 96,103 17.33
 Provision for inc. taxes 37,621 389.1 32,345 16.31
 Net income Ptas 75,137 $ 777.1 Ptas 63,758 17.85
 Group 71,051 734.8 56,204 26.42
 Minority holdings 4,086 42.3 7,554 (45.91)
 Avg. total assets 5,508,931 56,976.4 4,917,876 12.02
 Cash flow 200,065 2,069.2 175,929 13.72
 -0- 2/8/92
 /CONTACT: Banco Santander corporate communications, Madrid, Spain, 1-581-3700, or Philip L. Thomas of P.L. Thomas Group, 312-906-8060, for Banco Santander/
 (STD) CO: Banco Santander ST: IN: FIN SU: ERN


PS -- NYSA001 -- 8030 02/08/92 09:02 EST
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