MADRID – Spain's largest bank Santander expects profits to recover in 2013 after its non-performing loans ratio peaks in the first half of the year, Chairman Emilio Botin told UK financial magazine The Banker.
"In 2012, our profits will be down because we have made large extraordinary provisions for Spanish real estate loans," Botin said in an interview with The Banker this month.
"Santander will finish the extraordinary provisioning in 2012, ahead of most other banks, and we expect our Spanish non-performing loans to peak at about 7 percent in the first half of 2013. Profits will then start to rebound," he said.
A Santander spokeswoman confirmed the comments on Friday.
Santander's Spanish bad loans ratio stood at 6.38 percent in the third quarter of 2012, well below the national average.
Spanish banks have had to provision heavily against toxic real estate assets after a decade-long property boom came to an abrupt end five years ago and the sector has yet to recover.
Santander had completed 90 percent of government-enforced writedowns on soured property investments as of the third quarter, when it reported a plunge in net profit to 100 million euros ($132 million) from 1.8 billion euros in the same period last year.
(Reporting By Tracy Rucinski; Editing by Mike Nesbit)