Santander has today beaten forecasts with a 24% rise in third-quarter net profit on the back of lower loan loss provisions and a strong performance in Britain.

The Spanish bank, the euro zone's second-biggest in terms of market value, reported a net profit of €2.174 billion.

Santander Chairman Ana Botin said that she was "confident" of reaching the bank's 13-15% medium-term profitability target thanks also to an improved outlook.

"Our performance in the US and the UK were particularly strong, underscoring the effectiveness of our strategy in these important markets," Botin said in a statement.

The result topped the €1.97 billion forecast by analysts polled by Reuters and the €2.14 billion underlying profit recorded in the third quarter in 2019, before the outbreak of the coronavirus pandemic.

Third quarter's net and underlying profit remained the same as the bank did not book any one-off gains or charges.

Its profitability gauge - return on tangible equity ratio (ROTE) - rose to 12.56% at the end of September from 12.29% in June, ahead of Santander's year-end target of around 10%.

At the end of September, the bank's cost of risk, which acts as an indicator for potential losses in the future, fell to 90 basis points from 94 points, below its around 100 basis points guidance for the whole year.

Santander also managed to improve its core tier-1 fully loaded capital ratio, the strictest measures of solvency, to 11.85% from 11.7% in June, boosted by a cut in the dividend pay-out accrual to 40% from 50%.

In Britain, which accounted for 21% of Santander's earnings, underlying net profit more than trebled from a year ago and was up 13% compared to the previous quarter, thanks to a rise in mortgage lending.

In the US market, which also makes up more than a fifth of Santander's underlying earnings, profit on underlying terms almost doubled against the same quarter last year as the bank continued to benefit from a strong US economic recovery and fiscal stimulus policies.

But it fell 26% after a previous strong quarter and higher provisions in the July to September period.

Overall, net interest income, a measure of earnings on loans minus deposit costs, rose 8.8% against the same quarter 2020 to €8.46 billion and was up 2.6% against the previous quarter.

Analysts expected NII to come in at €8.33 billion.