Spanish banking giant Banco Santander said on Tuesday it had returned to profit in the third quarter after massive losses in the second of €11 billion due to the coronavirus pandemic.

Third-quarter net profit of €1.75 billion was also better than analyst estimates for €1.0 billion compiled by financial information service Factset.

“Activity came back vigorously (after the second quarter lockdown) and as a result the third quarter was much better than the second,” bank head Ana Botin said in a statement.

The bank’s diversification into several markets “has been a key driver of our recovery, with South America performing well and the UK recovering strongly in the third quarter,” she added.

The bank’s diversification into several markets ‘has been a key driver of our recovery, with South America performing well and the UK recovering strongly in the third quarter’- Bank head Ana Botin

The company also benefited from cost savings worth €500 million compared with €200m in 2019.

The massive second quarter loss was Banco Santander’s first ever three months in the red as it was forced to write down the value of several subsidiaries, most notably in the UK.

For full-year 2020, Botin said the bank hoped for earnings of around €5 billion, without specifying if this was a net figure.

Despite the much improved third quarter performance, for the nine months to September, Banco Santander still reported a net loss of €9 billion. The bank said it expects it will post an underlying profit for the year of around €5 billion. Bad loan provisions for the nine-month period were up 42 per cent from 2019 at €9.5 billion.

Santander said it would seek approval for the payment of a €0.10 dividend in 2021.