Santander posts first annual loss on Covid-19 impact

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."