Santander has recorded a goodwill update of its historical investments and deferred tax assets (DTAs), which generates an extraordinary charge without cash effect of 12.6 billion euros and results in an attributable loss of 10.798 billion euros in the first semester. This adjustment is due to the deterioration of the economic outlook as a consequence of the Covid-19 crisis and does not affect liquidity, credit risk or the CET1 capital ratio.
Due to the impact that the pandemic has had on the economic forecasts of the markets in which the bank operates, Santander has made an analysis of the goodwill valuation of its historical investments and the ability to recover deferred tax assets ( DTAs).
After this analysis, the bank has carried out an update of the value of goodwill and DTAs that generates an extraordinary charge with no cash effect amounting to 12.6 billion, of which 10.1 billion correspond to goodwill (45% of total goodwill of the group) and 2,500 million to DTAs.
Regarding the reduction in the value of goodwill, 6,101 million correspond to the business in the United Kingdom, 2,330 million to the United States, 1,192 million to Poland and 477 million to Santander Consumer Finance. This adjustment does not change the strategic importance of the markets or the group's businesses. The bank will continue to invest and accelerate its transformation plans, and maintains complete confidence in the long-term value generation potential of its regions and markets.
"Although the attributable profit has been affected by the non-cash accounting update of goodwill and DTAs due to the impact of the pandemic on economic forecasts, this revision does not affect the strength of our balance sheet. bases of our business are solid, with a level of capital in the high part of our objective ", said Ana Botín, president of the entity.
The entity has communicated that the board of directors is finally planning to propose the payment of a dividend of 0.10 euros for 2019, which will be paid this year, and that this payment will be made in shares. "The board intends to apply a 100% cash dividend policy as soon as market conditions are normalized, subject to regulatory recommendation and approvals, and we have reserved capital this quarter to be able to do so, "the bank said. It should be remembered that Santander announced last April the cancellation of the complementary dividend of 2019 and that of the entire 2020.
— EXTENDING —
. (tagsToTranslate) Santander (t) loses (t) 10,798 (t) million (t) until (t) June (t) after (t) updating (t) fund (t) trade (t) Covid (t) Category: All (t) Category: Company News (t) Category: Pulses (t) Category: Pulses Europe (t) Category: Sectorial: Finance