Spain's Santander to exit mortgage business in Germany and cut 500 jobs
Reuters
Published Apr 17, 2024 15:08
Updated Apr 17, 2024 16:12
MADRID (Reuters) - Spain's Santander (BME:SAN) will exit the mortgage business in Germany and cut around 500 jobs there by the end of 2026 as part of a process to concentrate on more profitable activities, a spokesperson for the lender told Reuters on Wednesday.
Germany has been going through its worst real estate crisis in decades.
After years of boom, mortgage lending slowed sharply in Germany after a rapid rise in interest rates to stamp out inflation caused potential homeowners to stay on the sidelines. Recent data have shown a stabilisation of the market.
The reduction in staff to 3,600 will be distributed across all Santander Germany companies, such as its consumer bank, and the move will not lead to a reduction of its 189 branch network.
"We will aim to achieve the necessary reduction in roles through natural attrition, as well as voluntary and early retirement," a spokesperson said, adding that all Santander employees in Germany had been informed.
In Germany, its biggest competitor Deutsche Bank (ETR:DBKGn) has also been streamlining its mortgage business, a move that is reducing hundreds of jobs.
In Germany, Santander, which has an outstanding mortgage loan book of around 2.5 billion euros ($2.66 billion).
Santander Consumer in Germany reported a decline of 41% in last years' net profit to 264 million euros. Its return on equity (ROE), a measure of profitability, stands currently at 7.8%, below the group's ROE of 11.91%.
($1 = 0.9398 euros)
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Written By: Reuters
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