Santander posts flat profit growth as Brexit weighs

Spanish banking giant Santander posted flat net profit growth in the third quarter as its results were hit by the slump in the pound following Britain's vote to leave the EU.

The bank said its July-September net profit was virtually unchanged from the same time last year, hitting 1.7 billion euros ($1.8 billion), a 0.9-percent increase.

The results were higher than forecast by analysts polled by Factset who predicted net profit of 1.5 billion euros.

"Excluding the impact of currency depreciation against the euro, attributable profits in the third quarter were 7.0 percent higher than the same period last year," Santander said in a statement.

The British pound has been pummelled since Britain's June 23 EU exit referendum, hitting 31-year lows against the dollar and 7.5-year troughs versus the euro.

The drop in sterling has hurt Santander's results in Britain, which until recently was its main market.

The lender posted a net profit of 360 million euros in Britain in the third quarter, down from 480 million euros from a year earlier.

Santander last month lowered its profitability target, saying its growth expectations had worsened in Britain following the country's decision to leave the EU.

Santander said net profit during the first nine months was down 22.5 percent to 4.6 billion euros due to restructuring costs. The 2015 results were also inflated by one-off items.

Brazil has overtaken Britain as the bank's main market during this period.

The Latin American country accounted for 20 percent of the bank's net profit during the first nine months, followed by Britain which accounted for 19 percent.

Santander is neck and neck with France's BNP Paribas for the position as the eurozone's biggest bank by capitalisation.