Spain's Largest Bank Escapes Credit Crisis

June 09, 2008

Santander has reported a 22.4 per cent rise in first-quarter net profit, as it escapes the worst of the global credit crisis.

Despite the current economic slowdown in Spain, the country's largest bank, Santander, has reported a net profit rise for the first quarter of 2008, to €2.2bn.

According to AFP, the results, which show it has escaped the worst of the credit crisis, reflected its buoyant Latin American operations and its more conservative approach to lending in Spain which spared it the large financial losses banks have witnessed in many other countries.

Unlike in the United States, Spanish banks require borrowers to provide documentation to prove their income, which has helped ensure loans have only been given to those who can afford to repay them. Also, in Spain, loan-to-value ratios rarely exceed 80 per cent, which meant it has avoided some of the problems of banks elsewhere which were giving 100 per cent, or in some cases as much as 110 per cent, mortgages.

Santander's results are far better than most banks were able to produce and bosses are optimistic about the future.

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