Strong growth in Brazil drove Banco Santander's profit up 14% in the first quarter, continuing a trend in which the Spanish bank's largest market has offset profit weakness in Britain. 

Santander is the euro zone's biggest bank by market value.

It reported a net profit of €1.87 billion in the first three months of the year, well ahead of analysts' forecasts for €1.77 billion in a Reuters poll. 

In Brazil, whose share of the bank's profits has increased from 21% to 26% since the end of 2016, net profit rose for the fifth quarter in a row.

It jumped by almost 80% on underlying growth and the appreciation of the real. 

Net interest income, a measure of earnings on loans minus deposit costs and a key driver of the bank's returns, improved for the fourth consecutive quarter in Brazil after earnings there tumbled in 2015 due to a deep recession. 

Strength in Brazil has helped it through a squeeze on lending margins in Europe that is pressuring its peers, and a slip in profit in its second-largest market Britain due to the depreciation of the sterling since the Brexit vote. 

Santander boss Ana Botin today struck an optimistic note and said the bank expected growth in all of its principal markets this year. 

"The environment keeps offering challenges for the financial sector, but the perspectives for Santander are positive," Botin said in a statement. 

Overall, Santander's net interest income improved for the third quarter in a row after rising 10% to €8.4 billion on still lower funding costs, Santander said as it opened Spain's bank reporting season. 

Analysts had expected NII of €8.17 billion for the quarter. 

In Britain, Santander's profit fell 8% over the quarter but the bank said it would have risen by 3% without taking into account the currency swing. 

Profit from its banking activity in Spain, its third largest market, rose 18% thanks to greater fees from its high-yielding flagship 1-2-3 current account. 

Santander reaffirmed its 2018 targets such as boosting its fully-loaded core capital ratio, a closely watched measure of a bank's strength, to just above 11%, after it ended the quarter with a ratio of 10.66%.