Banco Santander FY16 Profit Rises, Lifts Dividend; Stock Up

(RTTNews) - Shares of Banco Santander S.A. (BNC.L, BSBR, SAN) gained around 4 percent after the Spanish retail and commercial bank reported Wednesday higher profit in its fiscal 2016, despite weakness in net interest income. The company also announced higher dividend.

Banco Santander Group Executive Chairman, Ana Botín, said: "In 2016 Santander has achieved strong results, meeting all our strategic and business objectives. We have earned the loyalty of a further 1.4 million customers, serving 125 million people and businesses across Europe and the Americas and increasing lending by 2 percent."

Ana Botín added that going forward, the company has many opportunities for profitable growth in Europe and the Americas, in an environment anticipated to be volatile but generally better than 2016.

For fiscal 2016, attributable profit was 6.20 billion euros, 4 percent higher than last year's 5.97 billion euros. Earnings per share were 0.41 euro, up 1 percent from 0.40 euro last year.

According to the firm, the profit growth reflected strong growth in fee income and improvements in credit quality, partially offset by the weakening of certain currencies against the Euro and an increase in tax in both Poland and U.K.

Excluding one off items, underlying attributable profit profit was 6.62 billion euros, compared to 6.57 billion euros a year ago. Underlying earnings per share were 0.43 euros, compared to 0.44 euros. Underlying profit before tax excluding currency movements increased 12 percent.

The company noted that profit before tax rose in nine of its ten core markets, excluding currency movements, despite challenging market conditions. Europe contributed 55 percent of Group profit and the Americas, 45 percent.

In the fourth quarter, Santander generated 1.60 billion euros in attributable profit, compared to last year's 25 million euros that was impacted by a number of one off items including an impairment of intangible assets and a charge for PPI in the U.K. Underlying profit before tax climbed 22.6 percent to 2.66 billion euros.

For fiscal 2016, net interest income decreased 3.4 percent to 31.09 billion euros. Net fee income was 10.18 billion euros compared to 10.03 billion euros. Net operating income was 22.77 billion euros, down 3.9 percent.

Tangible net asset value per share increased 3.7 percent to 4.22 euros in the year.

Further, the company said its cash dividend per share increased by 8 percent to 0.17 euro.

In Spain, Banco Santander shares were trading at 5.37 euros, up 3.95 percent.