Santander's Q1 profits jump as Spanish economy recovers

The eurozone's biggest bank, Spain's Santander, said Tuesday its first quarter net profit jumped 32 percent as strengthening economic recovery in its home market boosted revenue.

The bank reported a net profit of 1.72 billion euros ($1.87 billion) in the first three months of the year, up from 1.3 billion euros during the same period last year.

Net profit in Spain -- which posted its first full year of economic growth last year since the 2008 bursting of the property bubble -- surged 42 percent in the first quarter to 357 million euros.

The bank said its bottom line in Spain was boosted by better lending income and fewer provisions against losses on bad loans.

Net loans in Spain were up 0.2 percent in the first three months of 2014 over the same period last year. Loans also increased slightly from the fourth quarter of last year.

The Spanish economy, the eurozone's fourth-largest, fell into a prolonged slump when the property bubble burst, leaving thousands of labourers out of work and creating an aftershock that claimed millions more jobs across the country.

But the economy is in the midst of an accelerating economic recovery due to a rise in private consumption and higher business investment.

Prime Minister Mariano Rajoy on Monday said the government expects the country's economy will expand by 2.9 percent this year, up from a previous estimate of 2.4 percent growth.

Spain's economy expanded by 1.4 percent in 2014.

Among Santander’s main banking units, only Chile posted lower first quarter net profit, dropping 11 percent to 109 million euros.

In Britain, where Santander is one of the leading finance groups, profits rose 14 percent over the year to 477 million euros.

In key emerging market Brazil, profits rose by 41 percent to 516 million euros.