By Elena Vardon

Spain's Banco Santander reported a surge in profit as it added more customers and logged a large gain from a recent disposal.

Continental Europe's largest lender by market capitalization posted a 60% increase in first-quarter net profit to 5.455 billion euros ($6.39 billion). The bottom line was helped by a 1.9 billion-euro capital gain from the recently completed sale of most of its Polish subsidiary.

Excluding that gain, underlying profit came in 12% higher at 3.56 billion euros. This beat company-compiled analyst expectations and was driven by higher fee income and lending volumes as customer activity continued to increase, leading to a 4% rise in revenue to 15.14 billion euros.

The group, which does a large chunk of its business in the U.S. and across Latin America, said total costs fell 3% to 6.48 billion euros, reflecting efficiency gains. However, provisions to cover bad loans ticked up to 3.225 billion euros. This included money set aside for its corporate and investment bank's exposure to single names in Europe and Brazil--its second-largest market after Spain--as well as higher retail provisions in Argentina.

The bank also booked a 207 million-euro charge related to an industry-wide car-finance probe and redress plan in the U.K., topping up previous provisions for the same issue.

Santander's global and diversified footprint has made it more resilient to economic uncertainty across its core regions while exposing it to higher-growth markets beyond Europe. But this has also left it open to headwinds from currency fluctuations, which dented its top line by a couple of percentage points in the first three months of the year.

The Madrid-based bank recently embarked on a portfolio reshuffle to capitalize on its developed markets, pivoting capital toward the U.S. and the U.K. through a string of acquisitions. Earlier this year, Santander laid out a three-year strategy betting on these deals and overall customer growth to lift profitability and shareholder payouts.

"Looking ahead, we expect this performance to continue, supported by growth in both total and active customers," Chair Ana Botin said, reiterating the bank's targets for the year and the period through 2028. Targets for this year include revenue growth in the mid-single digits, lower costs and higher profitability compared with the previous year.

Following the exit of its core retail business in Poland, the bank now serves around 176 million clients and hopes to boost that figure to more than 210 million by 2028.

The stock, which has risen 62% in the past 12 months, traded slightly higher on Wednesday.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

April 29, 2026 04:48 ET (08:48 GMT)

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