New rules hit Santander profit

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New rules hit Santander profit

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The euro zone’s biggest bank, Santander, has said its profit this year would be less than anticipated because of new accounting rules imposed by Spain’s central bank.

Santander reported a 9.8 percent fall in net profit for the first nine months of this year.

It has had to set aside 472 million euros to cover loans which are unlikely to be paid back.

The aggressively acquisitive bank also said it did not expect to make any further purchases and would work to consolidate recent buys.

“(There’s) nothing expected, nothing on the horizon,” Chief Executive Alfredo Saenz said.

It has been on a multi-billion euro spending spree since the beginning of the summer on assets from Britain to Mexico.

Home market Spain, comprising the Santander retail banking network and the contribution from majority-owned unit Banesto, now accounts for 23 percent of Santander’s net profit, less than the 25 percent brought by Britain and 34 percent from Brazil.

Saenz ruled out a capital hike to boost the bank’s reserves but said a flotation of its UK business was likely for the first part of 2011. Santander is expected to sell about 20 percent of the business.