MADRID (AP) -- Spain's Banco Santander SA said Tuesday that a sharp reduction in write-offs to cover toxic real estate loans helped second-quarter net profit jump to 1.1 billion euros ($1.45 billion) from 123 million euros for the same period last year.
Santander, along with many Spanish banks, had to write off huge amounts from the value of loans following a 2008 collapse of Spain's property market that has led to nearly four years of recession and an unemployment rate of 26. 3 percent.
The largest bank in the 17-strong eurozone by market value said loan provisions for the second quarter were 3.1 billion euros, down from 6.2 billion euros for the same period last year. The 2012 figure included an extra 2.78 billion euros in government-ordered provisions. There have been no such provisioning demands so far this year.
"Profits rose after more than two years of high levels of write-offs and reinforcement of capital," said Santander Chairman Emilio Botin in a statement. "We are preparing for a new period of profit growth."
The bank, however, said the ratio of non-performing loans to its overall portfolio rose slightly, to 5.18 percent from 4.76 percent in the first quarter of the year.
Santander's shares were down 0.7 percent at 5.42 euros in Madrid trading on Tuesday.
Net profit for the first six months of the year was 2.26 billion euros, up 29 percent on the same period in 2012, the bank said.