Banco Santander announced profits for the fourth quarter were all but wiped out after it made massive write downs in Spain and Portugal.

The bank said profit for the last three months of 2011 fell to €47m from €2.1bn in the last quarter of 2010.

This was mainly down to a €1.8bn provision against bad property loans in Spain and a €600m write off relating to its businesses in Portugal.

In total the bank knocked €3.18bn off its profits, which also covered its investment portfolio, amortization of intangibles and contributions to pensions.

The bank reported a net profit of €5.35bn for 2011, down 35% from €8.18bn in 2010, with group revenues increasing by 5% to €44.3bn throughout the year.

In the UK, pre-tax profit for the year fell 42% to €1.57bn (£1.3bn), after the bank set aside £538m after tax to compensate customers who were mis-sold payment protection insurance.

Santander also said that it had reached the 9% core capital ratio required by the European Banking Authority six months ahead of schedule.

Related share prices
Banco Santander SA (BNC) share price