Spanish banking giant Santander said Wednesday it will book an impairment charge of around 1.5 billion euros ($1.65 billion) linked to its British unit due to the uncertainty caused by Brexit and changes in regulations.
File photo: VCG
The impairment was "mostly due" to "various negative impacts" of changes in baking regulations in Britain which require retail banking to be separated from investment banking activities, the bank, the biggest in the eurozone by market capitalisation, said in a statement late on Tuesday.
"The impairment also reflects the increase in competitive pressure in the country and the impact that ongoing uncertainty relating to Brexit has had on UK economic growth," the statement added in a reference to the looming departure of Britain from the European Union.
The bank said the impairment, an accounting principle that describes a permanent reduction in the value of a company's asset, will be booked in the third quarter and it would have "no impact" on the lender’s "medium-term objectives".
Britain is Santander’s third-largest regional market after Spain and Brazil.
Santander in July posted a second quarter net profit of 1.39 billion euros, an 18 percent fall over the same year-ago period due to restructuring costs in Spain and Britain.