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Banco Santander Feeling the Weight of Bad Real Estate

By Phil Butler | October 25, 2012
  • In news from the Spain real estate situation, Banco Santander SA (SAN), the largest bank in the country, Q3 profits dropped far more than estimates predicted. Bad real estate date saw earnings drop an estimated 94 plus percent, while the bank's net income dropped an estimated €100 million euro.

    Santander
    Alfredo Sáenz at the announcement

    Santander, along with several other Spain banks, have lost substantially on bad real estate dealings. Acting in response to the Spain government's demand banks write off piled up bad debt. The bank also had substantial losses with UK and even Brazilian investments, according to their report. Santander's might have added some €5.279 bíllion to their coffers were it not for the write-off of some €3.475 million in losses for real estate exposure in Spain.

    CEO and Vice-Chairman, Alfredo Sáenz was on hand for the results presentation which can be viewed here, as well as a news conference.  Sáenz also told analysts today:

    “A situation in which the Treasury funding is being helped by contingency credit lines offered by any international body will produce a fall in the sovereign debt risk premium and, as a consequence, a fall in banks’ risk premium."

    Saenz suggested his bank's holdings of the country's sovereign dept at right around €30-billion in September, a figure that was down substantially over earlier figures this Summer. Now the bank is pressuring the Spain government to seek bailout funds based largely on this latest purge by them. Interested readers may want to view the official press release from Santander here (PDF).

    Photo credit: Santander CEO image - courtesy the bank.

    Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license.
    A graduate of The College of Charleston, Phil also served in the United States Navy, and has worked for any number of Fortune 500 companies. Together with his wife and partner Mihaela Lica Butler, Phil also helped forge Pamil Visions PR into one of the most successful online PR companies in the world. His greatest accomplishments however involves being the best husband, father, and friend he can be.
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