1 Feb 2012

Property woes hit Santander

10:32 am on 1 February 2012

Santander has revealed a 35% fall in annual profits after the group took extra provisions for deteriorating real estate assets in Spain.

The bank announced a net profit of 5.35 billion euros ($US7.05 billion) for 2011, down from 8.18 billion euros in 2010.

It said it had made provision of 1.8 billion euro against property exposure in Spain and had written off 600 million euros relating to its businesses in Portugal. Group revenues increased by 5% to 44.3 billion euros.

The Spanish property bubble burst in 2008. Banks took on land holdings from bankrupt developers, but have since struggled to offload most of their property assets.

Economy minister Luis de Guindos has said new provisions to cover losses on real estate assets could cost Spanish banks up to 50 billion euros.