Brexit leads Santander to lower profitability target

Spanish banking giant Santander on Friday lowered its profitability target for 2018, saying its growth expectations had worsened in its main market Britain following the country's decision to leave the EU.

In a presentation to investors, Santander said it was aiming for a return on tangible equity ratio (ROTE) of over 11 percent in 2018, down from the previous target of 13 percent stated last year.

"While the environment in some of our markets has deteriorated, our strategy and business model continues to deliver for our customers and shareholders," Santander chief executive officer Jose Antonio Alvarez said in a separate statement.

Santander, one of Europe's largest banks, said economic expectations have deteriorated in some of the markets where it operates, especially Britain which accounts for around 20 percent of its net profit.

"This has led to a depreciation of many currencies against the euro and an expectation that interest rates will remain at record low levels for longer than expected," the bank said in a statement.

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

Santander posted a second-quarter net profit of 1.28 billion euros ($1.44 billion), a 50 percent drop from the same year-ago period as adverse exchange rates hit its bottom line.