Santander Totta profit down 71% in 2021 Q1

Santander Totta registered a net profit of €34.2 million in the first quarter of 2021, representing a 71.2% reduction in relation to the first three months of last year. A result partially explained by provisions of €164.5 million to pay for the departure of workers as part of the restructuring plan and the need to set up impairments (€34 million) to cope with the unfavourable economic situation.

This provision of €164.5 million aims to “cope with the bank’s restructuring, especially the human resources framework,” explains the institution. The bank announced in March plans to reduce staff involving mutual agreement terminations and early retirement, the goal is for between 100 and 150 employees to leave.

The institution led by Pedro Castro e Almeida reveals that, at the end of March, the legal and private moratoria covered about 54 thousand clients, for a total of €6.4 billion in credit (16% of the total portfolio), which corresponds to a 25% reduction compared to the end of 2020, when the private moratoria expired. On the other hand, under the lines of credit with a state guarantee, the bank approved a set of operations that amount to €2.1 billion, covering about 15,000 customers.

The bank also recognizes that “in some cases,” in terms of private moratoria, “it was necessary to adjust the payment plan, since the impact of the closure of some activities made it impossible for some families to return to their normal income to meet their responsibilities.”

“The fall in recurring commercial revenues continued to reflect the difficult economic environment, because of the increasingly competitive environment, the structurally negative level of interest rates and the lower use of banking services, as well as the profound and structural change in the way customers interact with the bank – a trend that has accelerated strongly in recent quarters as a result of changing consumer habits in the demand for banking services,” Santander Totta explains in a statement.

Still, revenue in the first quarter is “positively influenced by the generation of non-recurring revenue associated with the securities portfolio management.” In question are €140 million that positively impacted the balance sheet.

The bank also reveals that total loans to customers were €43 billion, up 5% year-on-year; customer resources totalled 43.8 billion, up 5% compared to the same period last year, due in particular to a 3.5% increase in deposits. Market shares of new business and home loans stood at 21.5% and 21.9%, respectively. The number of digital customers increased 21.7% year-on-year to 970,000, while the number of main bank customers grew 4.4% to 816,000.