Banco Santander said its struggles in Europe had contributed to a 10 percent fall in net profit during the first quarter (CURTO DE LA TORRE, Pierre-Philippe MARCOU)

Madrid (AFP) – Spanish banking giant Banco Santander posted a 10 percent drop in first quarter net profit to 1.84 billion euros ($2.1 billion) on Tuesday due largely to a “difficult operating environment” in Europe.

The eurozone’s largest bank by market capitalisation said a loss from the sale of residential properties in Spain and restructuring costs in Britain and Poland contributed to the fall, which was in line with analyst expectations.

Broadly speaking, the bank blamed its business in Europe, where it makes 48 percent of its profit.

In a statement, executive chairwoman Ana Botin said there was “a difficult operating environment, particularly in the UK and Europe.”

Profit dropped 11 percent in Spain and 36 percent in the United Kingdom, its second and fourth markets respectively.

In Spain, Santander blamed it on a drop in its wholesale banking activities.

Meanwhile in Britain, where the bank plans to close one in five agencies, Santander faced restructuring costs.

It also said “a highly competitive environment placed pressure on revenues, and costs increased due to higher investments in strategic, digital transformation and regulatory projects.”

Over in the Americas, Santander was in much better shape.

Net profit jumped seven percent in Brazil, its first market, while it soared 18 percent in Mexico, a strategic market for Santander where it plans to buy the 25 percent stake in its subsidiary Santander Mexico that it doesn’t already control.

In the United States, net profit increased 35 percent.

Meanwhile indicators measuring the bank’s financial robustness, which are closely watched by analysts, slightly improved.

The non-performing loan ratio fell to 3.62 percent of total loans compared to 3.73 percent in the previous quarter.

The so-called fully-loaded CET1 ratio, an indicator of a bank’s ability to withstand a crisis, fell to 11.25 percent compared to 11.30 percent at the end of December.

By late morning, shares in Santander had fallen 1.05 percent to 4.47 euros in a market down around 0.39 percent.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.