Santander, the largest bank in the eurozone by market capitalisation, has said its profits tumbled by nearly a fifth due to restructuring costs in Spain and Britain.

At €1.39 billion, the second quarter net profit still beat the consensus of market analysts surveyed by Factset of €1.27bn.

The drop in profit was primarily due to a charge of €706 million, most of which went to restructuring operations in Spain and Britain, and the rest for compensation for mis-selling insurance in Britain.

Santander is currently trying to cut about 10% of its workforce in Spain.

Without the provisions, net profit would have climbed by 5% to €2bn, driven by credit growth in Latin America and increased profitability in North America.

Unlike many other banks that have seen a reduction in income from traditional lending operations given the ultra low interest rates still prevalent in much of the world, Santander managed a 4% increase in net interest income.

Shareholders at an extraordinary meeting on Tuesday approved a share capital increase, with the new shares to be offered to buy out minority shareholders in Santander's Mexico unit. 

Shares in Santander rose 2.6% in morning trading in Madrid, while the IBEX-35 index was up 0.8%.