BANKING

Sovereign Bank profits rise 27% in 2Q

BLOOMBERG FILE PHOTO/MIKE MERGEN
SOVEREIGN BANK – a subsidiary of Banco Santander – saw its 10th consecutive quarter of profitability, with net income of $127 million.
Posted 7/26/12

BOSTON – Sovereign Bank, N.A. – a subsidiary of Banco Santander S.A. – saw its 10th consecutive quarter of profitability, with a net income of $127 million, an increase of 27 percent compared with the $100 million net income reported in the second quarter of 2011.

“We are pleased to have reached the milestone of 10 consecutive quarters of profitability,” Jorge Moran, Sovereign president and CEO, said in a statement. “Strong loan production in mortgages, small business banking and corporate banking, continuous improvement in asset quality and growth in other income have been the principal drivers of this performance.”

“We have demonstrated our commitment to the communities that we serve in the Northeast through disciplined lending to growing numbers of consumers, large and small businesses, and institutions,” added Moran.

Sovereign’s total loan production for the second quarter of 2012 was $5 billion, a 43.4 percent increase over the figures reported during the second quarter of 2011.

The bank posted net interest income of $467.5 million during the quarter, a $9.7 million increase from the $457.8 million reported during the same period in 2011. According to a release, the most important contributors to interest income were residential mortgages and commercial loans.

Sovereign posted a 1 percent improvement to $1.51 billion in gross income for the first half of 2012. The bank’s net operating income was $769 million during the first half of the year, up 8.5 percent from the first half of 2011. In addition, the bank posted “attributable profit to the [Santander] group” of $362 million, $3 million more than for last year.

In a statement, Santander said that “the foundations of Sovereign Bank for generating consistent results [are] in line with the targets set for 2012 in a low activity environment.”

Santander’s U.S. business division including Sovereign Bank and Santander Consumer USA and saw attributable profit drop 18.5 percent to $591 million during the first six months of 2012, according to the bank’s first-half earnings report. Santander attributed the decline to the company’s decreased stake in Santander Consumer USA.

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