Spain's Santander said it had significantly boosted its capital ratio in 2019 and will target a further increase in 2020.
The news lifted its shares as a solid underlying performance in Latin America offset sluggishness in Britain.
Santander's diversification overseas, especially in Brazil and Mexico, has helped the bank cope with tough conditions for lenders in Europe in the years since the financial crisis.
But the bank still has consistently had weaker solvency ratios than its European peers.
The lender had said in the previous quarter that it was aiming to end 2019 with a capital ratio of 11.4% to 11.5%.
But today it struck a more bullish tone saying its CET1 capital ratio had risen by 35 basis points to 11.65% and was expected to end 2020 close to 12%.
Shares in Santander, the second-biggest bank in the euro zone in terms of market value, were up 4.5% this morning to become the top performer on Spain's blue chip index as investors focused on progress in areas such as solvency.
"We earned the loyalty of our customers, delivering record annual revenues and strong underlying profit. This allowed us to further strengthen our capital base and grow our CET1 capital ratio," Santander's executive chairman Ana Botin said.
Santander also said it was well on the way to achieving its medium-term goals and expected to deliver high single digit average annual earnings per share growth over the next three years
It posted a 35% increase in fourth-quarter net profit from a year earlier to €2.78 billion euros, beating analysts expectations of €2.5 billion, according to a Reuters poll.
The bottom line was buoyed by capital gains of €711m, mainly related to an agreement with Credit Agricole to combine both banks' custody and asset servicing operations.
Net profit for the whole of 2019 fell 16.6% to €6.5 billion, hit by one-off charges of €1.74 billion related primarily to its British business in the third quarter.
Overall, net interest income, a measure of earnings on loans minus deposit costs, was €8.84 billion, down 2.4% from the same quarter last year but 0.4% higher than in the previous quarter due to solid lending growth in Latin America.
Analysts had forecast a NII of €8.86 billion.
The bank also said today it would pay a second dividend of 0.13 euros per share, which, when added to a 0.10 euro per share dividend paid in November, takes the full-year 2019 dividend to 0.23 euros per share, the same as in 2018.