UPDATE 1-Spain's Santander says seeking further growth

Fri Mar 28, 2014 7:59am EDT

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SANTANDER, Spain, March 28 (Reuters) - Santander, the euro zone's biggest bank, is ready to seize any chance it gets to further expand, Chairman Emilio Botin said on Friday, adding that the lender's Spanish home market would help drive a profit recovery in the coming years.

Santander, built up through acquisitions in Spain and overseas over Botin's 28 years as chairman is, like its domestic peers, emerging from a property crash and a prolonged recession that ate into earnings in recent years.

Like banks across Europe, Santander has been shedding assets and building up capital ahead of European health checks on the sector this year. It made fresh investments in 2013, however, including in China, and has shown few signs of tempering its appetite for new deals.

"We are prepared to make the most of all the opportunities for growth within our reach," Botin, 79, told shareholders at their annual meeting in the port city of Santander, northern Spain. He added the bank had made "a very good start to 2014."

Santander, which makes half its profit in Latin America, was among Spanish lenders to have survived a 2008 property market crash without state aid.

Its net income nearly doubled in 2013 to 4.4 billion euros ($6.1 billion), helped by a sharp drop in provisions against soured property deals compared with a year earlier, when the Spanish government forced banks to take writedowns on real estate.

Spain, which is edging out of recession, only made up 7 percent of Santander's profits last year - Brazil, its single biggest market, provided almost a quarter. But Botin said it would be "one of the most positive stories in Santander's results" in the next three years.

The bank, which bought 51 percent of Spain's largest consumer finance business from department store chain El Corte Ingles last year, forecasts it will make a 3 billion euro profit in the country in 2016, up from 478 million in 2013, and it aims to grow lending there this year.

Santander has been among bidders for some bailed-out Spanish banks, but has not yet bought any. Barcelona-based Catalunya Banc, the biggest bank in state hands after Bankia, is likely to come up for auction this year.

The bank is also seen as a likely bidder for banks that might come up for sale in Poland, where it is already present.

Botin, who did not identify any possible acquisition targets, said Santander would easily pass banking health checks being run across Europe this year before the European Central Bank takes over as supervisor.

He did not comment in his speech on its capital plans in the United States, which were rejected earlier this week by the Federal Reserve in its own banking test. ($1 = 0.7278 Euros) (Editing by Paul Day and David Holmes)

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