LONDON (ShareCast) - (Sharecast News) - Santander on Wednesday reported a drop in third quarter profits after being hit by impairment charges relating to its UK business.
The Spanish banking giant reported a profit before tax of €2.18bn for the three months ended 30 September, down 26% compared to the prior quarter, with pretax profit for the first nine months having fallen by 18% to €8.71bn compared to the same period last year.

Consequently, net profit for the quarter was 75% lower than last year, as it came in at €501m.

Santander blamed the fall in profit on non-recurring charges, with Brexit uncertainty and regulatory pressures resulting in the UK business posting a €1.49bn charge related to goodwill.

The quarter also saw the company set aside €103m for the mis-selling of payment protection insurance (PPI).

Total third quarter income increased by 0.9% to €8.81bn, with Santander attributing a 3% rise in net fee income to greater customer loyalty combined with a growth strategy in higher value-added services and products.

Meanwhile, the company said net interest income was 5% higher due to greater lending and deposits in developing countries, and management of spreads in a lower interest rate environment in many countries in the last 12 months, with particularly low levels in Europe.

Indeed, the company's total income from Europe has fallen by 1% during the first nine months of the year, though this has been more than offset by 14% and 5% growth in North America and South America respectively.

Executive chairman Ana Botín said: "Our diversification across Europe and the Americas is one of the defining characteristics that stands Santander apart from our peers. And because of this, we continue to deliver predictable, profitable growth, and a sustainable dividend through the cycle."

Santander shares were down 4.06% at €3.71 by the close of trading in Madrid.

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