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Santander raises key profit target for 2018 on positive economic outlook

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Santander raises key profit target for 2018 on positive economic outlook

Banco Santander SA has raised a key profitability target for 2018 as some of its core markets enjoy an improved economic outlook.

In a presentation to investors Oct. 10 in New York, the bank said it had increased its targeted return on tangible equity ratio to more than 11.5% for 2018 from a previous target of 11%.

"We continue to see excellent growth in Latin America as well as positive trends across both Europe and the U.S. In the U.K., while GDP growth has slowed, performance has been better than we had expected. As a result we have increased our profitability targets for 2018," Santander Executive Chair Ana Botin said in a statement.

Santander derived about a third of its profits in the first half from Brazil, where it saw a 32% rise in earnings.

Santander's presentation comes as Spain is undergoing political turmoil following an independence referendum on Oct. 1 in the northeastern region of Catalonia. Pro-independence parties may decide to call for unilateral independence, which could lead the Spanish government to impose direct rule over the region.

Although several Spanish banks have had their share prices hit by the crisis, Santander has largely been shielded because of its international exposure.

The bank also reiterated its 2018 target for double-digit earnings per share growth and said it was on track to have a fully loaded common equity Tier 1 ratio of 11% for 2018.