By Jesús Aguado

MADRID, Reuters -The Spanish Santander reported Wednesday that a release in excess of 750 millions euros (845 million dollars) was made in pandemic-related provisions. A strong performance in Britain and the United States drove an 8-fold increase in net profits for fourth quarter compared with a year ago.

Banks in Europe had to make costly provisions for their protection from the potential consequences of the coronavirus crises. However, the improved economic environment is causing banks mainly from Britain and the United States to begin to lower their reserves.

Santander is the second largest lender in the euro area.

A lack of restructuring costs in the period from last year led to a net profit in October and December of 2.28 billion. That’s 4.6% more than the quarter before.

After a loss record of 8.77 Billion euros in 2020, the lender made a return to profit in 2021.

The net profit for the quarter and full year were both in line with analyst forecasts.

Santander predicts an increase in the economic outlook and an increased return on equity ratio, a measure to profitability. It is forecasting a ROTE (return on equity) of more than 13% by 2022. This figure represents profitability. The underlying ROTE was 12.73% as of December. Santander has an underlying target mid-term ROTE of 13% to 15.

Santander’s core tier-1 fully-loaded capital ratio was also increased to 12.12%, from 11.85% in September.

The bank is expanding in emerging countries where it hopes for faster growth than in Britain or Spain. Its core European markets are Britain and Spain.

According to the company, it was aiming for a cost/income ratio (a measure of efficiency) of about 45% at group-level in 2022. It is currently 46.2%.

Net interest income is a measure that measures earnings on loans less deposit costs. It rose 8.7% to 8.72 Billion Euros in the fourth quarter, exceeding analysts’ expectations of 8.51 Billion euros.

($1 = 0.8874 euros)