Banco Santander Approves Board Changes, Goodwill Impairment of EUR600 Million

By Anthony Shevlin Features Dow Jones Newswires

Banco Santander SA (SAN.MC) said late Tuesday that it has approved changes to its executive board, as well as a goodwill impairment of 600 million euros ($712.9 million) that will be recognized in its fourth-quarter results.

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Following a meeting of its board of directors in Brazil, the Spanish bank said that it has appointed Ramiro Mato as independent director. He will join the board's executive committee, as well as the audit and risk supervision, regulation and compliance committees.

Banco Santander said that Matias Rodriguez Inciarte and Isabel Tocino will both leave the board of directors to take on new roles.

Mr. Rodriguez Inciarte will become the chairman of Santander universities, replacing Rodrigo Echenique Gordillo, and also vice chairman of universia, reporting directly to Banco Santander Executive Chairman Ana Botin.

Mrs. Tocino will assume the roles of vice chairman of the Santander Spain board and chairman of Banco Pastor, an entity that became part of Santander Group earlier this year following the acquisition of Banco Popular SA (POPULAR.BO).

Mrs. Botin said that the appointment of Mr. Mato to the board will add value thanks to his "broad finance and international banking-management experience."

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Banco Santander added that, in accordance with its annual engagement plan and accounting standards, it has carried out a review of its goodwill. The bank said that an impairment will be taken for approximately EUR600 million, of which EUR500 million are a result of the review of the group's investment in Santander Consumer USA Holdings Inc (SC). The impairment is driven by a reduction in the company's earnings relative to prior years.

Banco Santander said that the impairment will be recognized in its consolidated results for the fourth quarter of 2017 but that it will not impact on the group's common equity Tier 1 capital ratio as goodwill is excluded from its calculation. CET1 is a key measure of capital strength for banks. The bank said that its fully loaded CET1 at the close of the third quarter was 10.8%.

The Spanish bank added that it has updated the public information regarding two previously announced transactions that will have an impact in the forth quarter. The bank and its partners closed the sale of 100% of Allfunds Bank SA's share capital, which forms part of the previously reached agreement to acquire the 50% of Santander Asset Management that the bank doesn't own from Warburg Pincus LLC and General Atlantic LLC.

Banco Santander said that the combined effect of the two transactions will consume nine basis points of capital, including the effect of the EUR300 million net gain obtained from selling the investment in Allfunds Bank.

The company reiterated its goal to increase both dividend per share and earnings per share in 2017 and 2018, the latter by double digits.

Write to Anthony Shevlin at anthony.shevlin@dowjones.com

(END) Dow Jones Newswires

November 29, 2017 01:53 ET (06:53 GMT)