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BANCO SANTANDER POSTS 11.80 PERCENT INCREASE IN 1992 PROFIT; INCREASES TOTAL DIVIDEND 8.33 PERCENT

 SANTANDER, Spain, Feb. 6 /PRNewswire/-- At the general shareholders meeting of Banco Santander (NYSE: STD), one of Spain's largest private commercial banks, Emilio Botin, chairman, announced that consolidated net income for the year ended Dec. 31, 1992, amounted to Ptas. 66,152 million ($577.2 million), or Ptas. 530 per share ($4.62 per ADR), an increase of 11.80 percent over 1991.
 The total dividend was increased to Ptas. 260 per share, an 8.33 percent year-over-year improvement. An interim dividend of Ptas. 143 per share was paid Oct. 31, 1992 and a final dividend of Ptas. 117 will be paid April 30, 1993.
 According to Botin: "The improved net income is the result of a 7.39 percent increase in the operating margin, which includes a 21.87 percent increase in income derived from fee-based banking services."
 Additionally, the results benefited from cost-control procedures implemented during the year, which reduced the annual increase to only 3.52 percent as compared to 1991. The cost-income ratio improved to 55.26 percent from 57.32 percent in 1991.
 Operating profit increased 12.58 percent to a total of Ptas. 121,907 million ($1,063.6 million), and pretax income grew 11.03 percent, to Ptas. 100,564 ($877.4 million). Return on assets (ROA) was 1.10 percent, as compared with 1.07 percent for the prior year. Return on equity (ROE) was 20.34 percent.
 Other operating income, which includes recoveries as well as gains from trading activities amounted to Ptas. 21,179 million ($184.8 million).
 Extraordinary income, which declined 40 percent relative to 1991, totalled Ptas. 22,154 million ($193.3 million).
 Ptas. 64,676 million ($564.3 million) has been allocated to depreciation, the writedown of investment securities and net provisions. Provisions represent 101.43 percent of non-performing loans, and the Group's future pension liabilities, calculated on the most conservative basis (6 percent actuarial rate), are fully recovered.
 Equity
 Banco Santander's BIS ratio stands at 12.65 percent. Tier 1 is 9.37 percent and total capital is Ptas. 575,650 million ($5.0 billion).
 As of Dec. 31, 1992, consolidated Group companies held in their respective portfolios, shares equivalent to 0.08 percent of Banco Santander's capital. The non-consolidated subsidiary companies did not hold any shares of Banco Santander.
 Customer Funds
 At Dec. 31, 1992, the Group's customer deposits and debt financing amounted to Ptas. 3,756,245 ($32.8 billion), a 2.90 percent increase over 1991.
 The total amount of customer deposits and mutual funds increased 11.04 percent to Ptas. 4,625,606 million ($40.4 billion). Mutual funds under management increased 68.77 percent, reaching Ptas. 869,361 million ($7.6 billion), representing a market share of 14 percent.
 Loans and Discounts
 The volume of loans and discounts rose by 10.21 percent to reach Ptas. 3,433,077 million ($30.0 billion) at the end of 1992.
 Peseta-denominated lending accounted for 66.27 percent of the total, and the remaining 33.73 percent was in foreign currencies.
 Non-performing loans, at Ptas. 125,033 million ($1,090.8 million) represent 3.89 percent of Santander's total loan portfolio, compared to the industry average of 6.12 percent. Provisions for non-performing loans are equal to 101.43 percent.
 NOTE: Comparable 1991 balance sheet figures and results have been restated, for purposes of comparison, in accordance with Circular 4/91 of the Bank of Spain.
 From the Chairman's Speech
 During 1992, the Santander Group successfully faced those changing political and economic conditions which U.S. President Clinton, in his Inauguration Day speech January 20th, emphasized when he pointed out that "This new world is now freer, but less stable."
 In this time of great uncertainty, our actions during 1992 focused on three points:
 -- Control of Non-performing Loans and of Operating Costs - Non- performing loans have risen by only half the increase seen in the banking sector (24 percent as compared to 50 percent). Reserves for non-performing loans, in percentage terms, are the highest among the banks, with Santander being the only one which covers these risks by more than 100 percent. Operating expenses increase by 3.52 percent, helped by a reduction in overhead expenses of 5.64 percent with respect to 1991.
 -- Consolidation of Commercial Activity - After two years, 1990 and 1991, a period during which initiatives such as the High-Interest Checking Account and Mutual Funds have had a great effect on the Spanish banking sector, we considered 1992 to be a year during which our primary attention was focused on consolidating our established positions and the new customer base.
 As a result of this strategy, Santander has increased its market share by 40 percent in the last five years (customer deposits plus mutual and pension funds), as compared to an average reduction of 12 percent for the other large banks.
 -- International Diversifications - The Santander Group, which has a presence in 26 countries, is the Spanish banking entity with the most extensive and profitable international activity. In 1992, the group abroad achieved net income of $205 million. To give you some idea of its importance, our income from foreign activities alone is equivalent to the total net income of the seventh most-profitable German bank.
 I would like to emphasize the following points:
 -- The positive progress of our strategic alliance with the Royal Bank of Scotland, particularly with regard to the development of the IBOS project;
 -- The continued success of our investment in First Fidelity;
 -- The extension of our commercial banking activities in the emerging markets, and,
 -- The second largest international network in Latin America.
 I would also like to stress that certain fundamentals, such as our strong capitalization, solvency and the strength of our balance sheet, remain unchanged.
 Our solid capital base allows us, when circumstances make it advisable, to pursue attractive investment opportunities with may become available, both in Spain and abroad, without being limited by a lack of equity.
 We expect that 1993 will be another year of adjustment in Spain, during which our group must therefore pursue more than just strong growth in assets. We must also maintain our tight control of costs and a close watch on credit risks.
 Santander intends to focus on its financial activities, both domestically and internationally. Should the opportunity arise, any acquisitions will be within the financial sector. In this regard, there has been some discussion in the market about possible mergers, but our strategy has not changed over the last five years. Today, I will repeat verbatim what I said years ago: "Banco Santander doses not consider a merger with another institution to be one of its objectives, and it will pursue its own independent expansion. In the event that it should be necessary, or when it might be considered appropriate -- and provided that the price is attractive and will not excessively weaken the capital base of the group -- we would then consider an acquisition, not a merger."
 The consolidated Santander Group is composed of Banco Santander, 16 additional banks and another 98 companies of various national origins in which the group owns a majority position. Santander has the largest and most profitable international network among the private Spanish banks, and through its network of over 1,720 offices in 26 countries, the group provides an effective system to fully meet the individual financial needs of its customers.
 Each Banco Santander ADR is the equivalent of one ordinary Spanish Banco Santander share.
 Conversion of Spanish pesetas was translated into dollar amounts at the exchange rate of U.S. $1.00 equals Ptas. 114.62.
 BANCO SANTANDER
 Consolidated Financial Highlights
 (amounts in millions)
 Year Ended December 31, 1992 Percent Change
 U.S. $ Ptas. 92/91
 Income before taxes 877.4 100,564 11.03
 Net income 577.2 66,152 11.80
 Operating margin 2,377.1 272,460 7.39
 Operating profits 1,063.6 121,907 12.58
 Equity 2,866.3 328,537 10.46
 Debt on balance sheet 32,771.3 3,756,245 2.90
 Total third-party funds
 (balance sheet resources
 plus investment funds) 40,356.0 4,625,606 11.04
 Loans and discounts 29,951.8 3,433,077 10.21
 Average total assets 52,475.1 6,014,702 9.26
 Note: U.S. $1.00 equal Spanish Ptas. 114.62
 Comparable 1991 balance-sheet figures and results have been
 restated, for purposes of comparison, in accordance with Circular
 4/91 of the Bank of Spain.
 BANCO SANTANDER
 Consolidated Income Statement
 For the years ended December 31, 1992 and 1991
 (amounts in millions)
 Year Ended December 31, 1992 1991 Percent
 U.S. $ Ptas. Ptas. Change
 Financial revenues 6,017.1 689,682 680,281 1.38
 Financial costs 4,242.8 486,310 483,249 0.63
 Financial margin 1,774.3 203,372 197,032 3.22
 Other ordinary revenues 602.8 69,088 56,688 21.87
 Operating margin 2,377.1 272,460 253,720 7.39
 Personnel expenses 858.5 98,406 90,169 9.14
 Overhead expenses & taxes
 other than income tax 455.0 52,147 55,262 (5.64)
 Operating expenses 1,313.5 150,553 145,431 3.52
 Operating profit 1,063.6 121,907 108,289 12.58
 Other operating income 184.8 21,179 35,548 (40.42)
 Extraordinary income 193.3 22,154 36,508 (39.32)
 Depreciation (243.2) (27,874) (23,399) 19.12
 Writedown of investment
 securities (34.2) (3,921) (2,045) 91.74
 Net provisions (286.9) (32,881) (64,327) (48.88)
 Income before taxes 877.4 100,564 90,574 11.03
 Provision for income tax 300.2 34,412 31,404 9.58
 Net income 577.2 66,152 59,170 11.80
 Group 516.4 59,189 55,084 7.45
 Minority interests 60.8 6,963 4,086 70.41
 Average total assets 52,475.1 6,014,702 5,505,113 9.26
 Note: U.S. $1.00 equals Spanish Ptas. 114.62
 -0- 2/6/93
 /CONTACT: Paseo de la Castellana, corporate communications of Banco Santander, Madrid, Spain 1-581-3700, or Philip L. Thomas of The P.L. Thomas Group, 312-906-8060, for Banco Santander/
 (STD)


CO: Banco Santander ST: Spain IN: FIN SU: ERN

LD-TM -- NY002 -- 3812 02/06/93 09:02 EST
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