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Santander double provision for bad debts.

With cent­ral banks expec­ted to con­tinue lift­ing interest rates, the group fore­cast the fig­ure could rise as

Santander

high as 1.2 per cent this year. The bank said it con­tin­ued to bene­fit from higher interest rates as it repor­ted a 1 per cent increase in net profit to €2.28bn in the fourth quarter. The profit fig­ure was bet­ter than the mar­ket’s con­sensus fore­cast, but Cit­ig­roup ana­lysts described it as a «lowqual­ity» beat-driven in large part by trad­ing rev­enue and a lower than expec­ted tax rate. Sant­ander’s UK busi­ness did worse than expec­ted des­pite rising net interest income, with a net profit of €257mn com­ing in below the con­sensus fore­cast of €361mn because of increasing costs and reg­u­lat­ory charges.

In Spain, quarterly net profit was more than double mar­ket expect­a­tions at €456mn, accord­ing to ana­lysts at Jef­fer­ies, aided by higher net interest income as well as trad­ing rev­enue. The lender said it expec­ted cent­ral banks and gov­ern­ments in 2023 to «con­tinue to focus on bring­ing down infla­tion». «Our team has proven exper­i­ence in nav­ig­at­ing these con­di­tions suc­cess­fully, and we expect rev­enue growth will con­tinue to off­set cost infla­tion pres­sures and the anti­cip­ated increase in the cost of risk,» it added. The bank fore­cast an addi­tional €2bn to €2.5bn in net interest income over the next 12 months.

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