UK now Santander's biggest market

Santander chairman Ana Botin says the bank's model is sound and consistent

The UK has become Santander's most profitable market, generating just over a fifth of the bank's profits in the first half of 2015.

Pre-tax profits in the UK rose £74m to £928m, while revenues were up 5%.

The results eclipsed the €1bn (£700m) posted by the Spanish bank's Brazilian operation, which saw its revenues jump by 9%.

Overall, the bank posted a 24% rise in attributable profit to €3.24bn, but was flat at €2.99bn on the pre-tax level.

Nathan Bostock, chief executive of Santander UK, said: "We are well placed to benefit from the positive economic outlook, although future earnings will be impacted by the bank corporation tax surcharge announced in the recent UK Budget.

"Nevertheless, I am confident that we can continue to grow the business, whilst maintaining balance sheet strength."

Although a flotation of the UK business has been mooted for some years, Mr Bostock said he did not expect it to happen "for the next couple of years".

UK lending rose nearly 3% in the second quarter, while the bank also benefited from the strong pound and an increased focus on business loans.

In February, Santander announced a near-£44m seven-year deal to sponsor London's 11,000 bicycles for hire, taking over from Barclays.

Santander sponsors London's cycle hire scheme

Spanish profits up

Santander chief financial officer Jose Garcia Cantera said on Thursday that higher UK tax rates and the bank levy would result in a £500m hit to the UK operations by 2020.

In its home market of Spain, profits were up 50% to €771m despite a dip in revenues as charges against bad debts fell.

Spain accounted for 16% of profits, with Europe making up 54% of the total.

Brazil accounted for 20%, while the rest of Latin America had a 37% share.

Emerging economies - Latin America and Poland - accounted for 41% of profit, while mature markets contributed the remaining 59%.

Ana Botin, Santander chairman, said the first-half results showed the "soundness and consistency" of the bank's business model.

Santander is worth €91bn (£64bn), making it the eurozone's most valuable bank and the world's 11th largest.

Shares fell 1.5% to €6.40 in Madrid on Thursday. The stock is down 17% over the past 12 months.

In January, Santander tapped shareholders for €7.5bn to bolster its balance sheet amid stricter EU regulation and greater competition.