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Santander's profits jump as Spain economy recovers

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

The bank reported a net profit of €1.72bn in the first three months of the year, up from €1.3bn 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% in the first quarter to €357m.

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% 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% this year, up from a previous estimate of 2.4% growth.

Spain's economy expanded by 1.4% in 2014.

Among Santander's main banking units, only Chile posted lower first quarter net profit, dropping 11% to €109m.

In Britain, where Santander is one of the leading finance groups, profits rose 14% over the year to €477m.

In key emerging market Brazil, profits rose by 41% to €516m.

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