Barclays has cheered investors with signs of resilience in its revamped business model and Spain's Banco Santander , the euro zone's biggest bank, beat analysts forecasts. But as Hayley Platt reports, both results still showed big falls.
It's beginning to look like a banking trend. This time its Europe's Barclays and Santander reporting falls. First quarter pretax profit at the British lender was down by a third (to £793 mln), narrowly missing forecasts (£846 mln) That was a billion pounds lower than the same period last year. It's investment banking arm suffered the most, hurt by a rise in bad loans and a fall in business activity. (SOUNDBITE) (English) CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING: "The real challenge for Barclays was the earnings on the core business' fell some 3 percent short of what many people had been expecting and equally their sales of risk weighted assets were a little bit behind schedule." Barclays is currently restructuring. Last month it put its African operations up for sale, with former Barclay's boss Bob Diamond reportedly showing an interest in buying it. . The lender's loss making French retail banking operation may also be sold off. Barclays shares rose almost three percent on the signs of resilience under CEO Jes Staley. The euro zone's biggest bank also saw a share boost, despite a near 5 percent fall in first-quarter net profit. A deepening recession in Brazil, it's second biggest market, hit Santander - profits there were down by a quarter from a year ago. But an improved capital ratio eased investors concerns. (SOUNDBITE) (English) CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING: "We have in Europe significant challenges for both the Spanish and Portuguese economies. And Latin America as we know has been an extraordinarily difficult market for all banks." So have other key regions. And there's also the challenge of low interest rates and high debt.