Branch Closures to Cost Banco Santander EUR250 Million

By Jeannette Neumann 

MADRID -- Banco Santander SA said branch closures and employee layoffs in Spain will trigger a charge of EUR250 million, or around $275 million, in the second quarter, a cost the bank said it aims to offset by the end of 2016.

Santander had previously announced it would close 450 bank branches in Spain and lay off or reassign around 1,380 workers as it seeks to cut costs amid low and negative interest rates and historically sluggish loan growth.

That restructuring cost the bank EUR500 million in the second quarter, which was partially offset by a sale of its stake in Visa, Santander said Monday in a regulatory filing. Santander aims to offset the remainder of the restructuring costs by the end of 2016.

Santander also sought to ease investors' "Brexit" anxieties in the same regulatory filing by reiterating its 2016 financial targets.

"We do not anticipate that recent events will have a material impact on Grupo Santander accounts in 2016," the bank said in the filing.

Santander generates about a quarter of its net profit in the U.K., and the bank's shares have been hammered since Britons voted to leave the European Union.

Santander's shares closed down 2.5% on Monday after falling 20% on Friday.

Write to Jeannette Neumann at [e-mail]

(END) Dow Jones Newswires

June 27, 2016 13:41 ET (17:41 GMT)

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