Santander Says Brexit, Catalan Crisis May Impact Its Business

(Bloomberg) -- Banco Santander SA, Spain’s largest bank, said Catalan independence aspirations and Brexit-related uncertainty may have an “adverse material effect” on its business and results, according to a prospectus registered with Spanish market regulator CNMV.

The outcome of social and political tensions in Catalonia is “still uncertain, and that may affect the business, financing conditions and environment in which the group operates both in the region and in the rest of Spain,” the June 28 statement said. The Madrid-based lender also said the “great uncertainty” related to Brexit may jeopardize the restructuring under way in its U.K. units, which accounted for a quarter of the bank’s total assets as of Dec. 31.

Companies are required to list a range of potential risks to their business in prospectuses for investors. In this case the prospectus was a share registration document dated June 28.

While Santander’s first-quarter profit increased by 26 percent in Spain, it fell 23 percent in the U.K. due to higher expenses and a decline in income from lending.

The volatility of the Mexican peso is another concern, as are changes in U.S. trade and migration policies that may hurt the economies of Mexico and other Latin American countries, the bank said.

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