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Net profit in Q1 of €1.63B fell nearly 5% from a year ago, particularly thanks to the recession and sliding currency in Brazil (the bank's 2nd-largest market), but nevertheless topped consensus forecasts.
- The lender did report a pleasing increase in its capital ratio to 10.27% from 10.05% three months earlier. That still puts it well below the average CET1 ratio for Europe's largest 23 banks of 12.7%. Santander says it's on track to get north of 11% by 2018, but the team at UBS expects the bank to meet that target a year ahead of schedule.
- The U.K. is Santander's largest market, and profit there fell nearly 4% for the quarter, with part of that coming from the slide in the pound. Turning back to Brazil, profit there fell 25%, but analysts note loan loss provisions in Q1 fell from Q4 when measured in reals. "The lack of a deterioration in Brazil and good capital generation should be supportive of performance in the short term,” says KBW's Daragh Quinn.
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SAN +1.7% premarket