Santander posts first annual loss on Covid-19 impact

Santander plunged to its first ever annual loss as revenue fell and the Spanish bank wrote down the value of assets in the UK and other markets during the Covid-19 crisis.

The eurozone's biggest retail bank swung to a €2.1bn (£1.9bn) pretax loss in the year to the end of December from a €12.5bn profit in 2019 as total income dropped 10% to €44.3bn.

With interest rates at near-zero during the Covid-19 crisis, net interest income dropped 9.3% to €32bn. Loan loss provisions rose 31% to €12.2bn. The Spanish lender also took €10.1bn of charges against the value of non-financial assets, including a €6.1bn impairment in the UK, because of the worsening economic outlook.

Excluding adjustments and restructuring costs attributable profit dropped 38% to €5.1bn. Most of the writedowns and provisions were announced in the first half of the year.

Trading improved in the fourth quarter as the bank recorded a €1.2bn pretax profit, down 62% from a year earlier, and a 1.5% drop in total income to €10.9bn.

Ana Botin, Santander's executive chairman, said: "Vaccination is the most important economic policy for 2021. We will not let down our guard, but I define my view as one of realistic optimism. A successful roll-out of the vaccine will act as a strong catalyst for economic recovery."