European banks have started reporting third quarter results amid a low interest rate environment and the threat of Brexit. As Laura Frykberg reports, Lloyds Banking Group has surprised many while Spain's Santander had to rely on Brazil to make up for weakness at home.
Better than expected profits at one of Britain's biggest banks. Lloyds made 1.9 billion pounds in the third-quarter. A similar amount to a year ago. But of course then - the political landscape was much clearer. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "There are a couple of things that Lloyds need to keep their eye on of course, we are yet to see what the implications of a hard Brexit might be. But on other hand they're paying over four percent in terms of a dividend yield, which is obviously attractive given the interest rate backdrop." A subject no one is closer to than the head of the European Central Bank. Mario Draghi's loose monetary policy has been increasingly under fire for adding to a culture of excessive debt. (SOUNDBITE) (English) EUROPEAN CENTRAL BANK PRESIDENT, MARIO DRAGHI, SAYING: "We are perfectly aware, that low interest rates for a long time with plenty of liquidity are a fertile ground for financial stability risks. We watch this risk very carefully. We have so far no sign of financial stability risks." Spain's state-run Bankia may disagree. It blames low rates for a 12 percent drop in third-quarter profits from a year ago. (SOUNDBITE) (English) CO FOUNDER, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "The economic climate and the overall structure of European banks is still a disaster. These are banks which need overall structure and surgery." Santander made up for weakness in Europe with improved third quarter results in Brazil. It also repriced loans and raised fees. Net profit was up 1 percent beating estimates and sending its shares to a six month high.