MADRID: Spanish banking giant Banco Santander Tuesday reported first-quarter profits plunged 82 percent as it put aside 1.6 billion euros to protect it from the impact of the coronavirus.
The provisions are “based on an estimate of anticipated loan losses from the pandemic,” Santander, the largest eurozone bank by capitalisation, said in a statement.
“However, it is too early to know the full economic effects of the crisis or draw conclusions,” it added, saying the bank “will continue to review both the development of the crisis and the medium-term strategic objectives once the economic impact of the crisis is clear.”
Net profits were 331 million euros ($358 million), but without the extra provisions this would have been 1.9 billion, or up 1 percent from the same period last year.
“Our underlying quarterly operating performance was strong, with a relatively limited impact from COVID19,” executive chairman Ana Botin said in a statement.
“The pandemic is, however, causing a global health crisis and significant economic and social distress as a result.”
Spain is Europe’s second-hardest hit country by the coronavirus outbreak, with more than 210,000 confirmed cases of the disease and over 23,000 deaths.
Spain has already begun easing a tight lockdown to combat the virus, and was set to announce more detailed plans on Tuesday.
Earlier this month, Santander announced it had suspended the payment of the last installment of the 2019 dividend to its shareholders due to the pandemic.
In late March, the bank, which employs some 29,000 people in Spain, said it would not fire or temporarily lay off workers during the outbreak.