Profits fell double digits at Santander Consumer USA Holdings in Dallas in connection with its exit from the personal loan business and other nagging issues.
The $37.9 billion-asset lender reported first-quarter profits of $200.6 million, or 19% lower than a year earlier. Earnings per share were 56 cents, missing an estimate of analysts polled by Bloomberg by one penny.
Lower fee-based income sunk profits. Noninterest revenue plunged 51% to $72.7 million. The company – a unit of the Spanish banking giant Banco Santander – attributed the decline to accounting adjustments stemming from defaults in its personal loan portfolio.
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The Dallas-based subprime consumer lender backed off controversial changes to its method for calculating its quarterly provisions for loan losses, forcing it to revise earnings downward for the last two years. It also announced that it had found more accounting issues.
March 31 -
Santander Consumer USA Holdings delayed the filing of its annual report Monday amid discussions with the Securities and Exchange Commission regarding unresolved accounting issues.
February 29
Santander said last fall that it was
The provision for credit losses climbed 5% to $706.6 million, but that figure was lower than the
Higher expenses also hurt profits. Operating costs rose 26% to $309.8 million, mostly from investments in the its managed assets portfolio, the company said.
Meanwhile, net finance and interest income increased 10% to $1.2 billion.
Santander last month
Total originations dipped 8% to $6.8 billion as the company said it scaled back its presence in the subprime auto market.
