The drop in the Brazilian real and other Latin American currencies weighed on Santander's third-quarter earnings, highlighting potential pitfalls ahead for the euro zone's biggest bank as it aims to increase returns.
However income from other key markets, including the UK, helped Santander counter the currency hit to an extent.
It said its group net profit rose nearly 5% on the same period last year, though it fell quarter-on-quarter.
Santander relies on Brazil for about a fifth of its earnings, but the country's economy has slumped into its worst recession in nearly three decades.
Once Santander's biggest earnings motor, which helped it withstand a severe downturn in its Spanish home market, Brazil's contribution to the bank's profits has dropped below that of its UK business.
Net profit from the country fell nearly 15% from the second quarter to the third, though without taking into account currency fluctuations it would have fallen by a more moderate 1.4%, Santander said.
Soured debts in Brazil as a percentage of total credit continued to rise from June to September, to 5.3%, though at a slower pace than a quarter earlier.
Worries about Brazil come as Santander's executive chairwoman Ana Botin is looking to boost profits and returns at the bank over the next three years, as well as lift dividend payouts, based on a strategy of lending more and winning over clients.
Botin aims to get Santander's return on tangible equity, a measure of profitability, up to 13% by 2018. It slipped from 11.4% to 11.3% in the third quarter.
"We are confident that our model will help us to reach the targets we have set," Botin said in a statement, adding the economic backdrop in most of Santander's markets was expected to improve.
Overall at the group, net profit was in line with forecasts, coming in at €1.7 billion in the three months from July to September. That was higher than a year ago, though net profit was down 1.7% from the April to June quarter.
The bank's net interest income (NII), or earnings on loans minus deposit costs, stood at €8 billion, nearly 7% up from a year earlier, though it fell by close to 4% from the second quarter of 2015.
Strong competition to lend in Santander's Spanish home has eaten into margins - a trend noted by rivals - and even in its UK unit, now the bank's biggest contributor to profits, combined earnings from fees and NII were down slightly quarter on quarter.