Spain's Santander, the euro zone's largest bank, has reported a first-half net profit of €4.5 billion, down 4.5% from last year.
For the three months to June, it had a net profit of €2.42 billion, down 4% but still the second highest quarterly profit in its history, following that of the same period in 2008.
Net interest income - the difference between interest paid out on customer deposits and interest earned on loans - was €6.6 billion in the second quarter, up from €5.25 billion a year earlier. The second quarter result was above analysts' forecasts. But loan loss provisions for the group soared by 61% to €4.6 billion.
UK conditions improve - Santander
The Spanish bank's UK operation - which now includes Alliance & Leicester, Abbey and the savings business of Bradford & Bingley - saw revenues rise by over 20% in the six months to June 30.
Santander reported improving conditions in lending and bad debts, with second quarter bad debt charges in line with the previous three months and a drop in the number of homes being repossessed.
Santander reported pre-tax profits of £790m for its UK bank business, which is being re-branded under the group name by the end of 2010 in a move marking the end of the UK high street brands A&L, B&B and Abbey.
The group is now the UK's second biggest mortgage lender and third largest savings bank following last autumn's dramatic moves to snap up A&L and the savings arm of B&B.
Its UK impaired loan charge dropped slightly to £176m in the second quarter from £189m in the first, though these are at higher levels than a year ago.
