The bank said profits were driven by growth in revenues (up 18%) almost double that of costs (up 10%).

Excluding acquisitions and the exchange rate effects, revenues were up 11% and costs by less than 1%.

Loans rose by 9% and deposits by 21%.

Attributable profit in the UK totalled £1,536m (up 55%) while loans grew by 5% and deposits by 8% in sterling terms.

The group says it continues to progress in its geographical diversification, with Continental Europe contributing 48% of profit (Spain accounts for 26%); Latin America, 36% (Brazil accounts for 20%); and the UK 16%.

Shareholder remuneration totalled ?4,919m, up 2%.

Chairman Emilio Botín said: "Considering the difficult backdrop, the 2009 earnings are the best in the bank's history.

"For a second consecutive year, we are among the front-runners of world banking in terms of profit and dividend."

Story provided by Business Financial Newswire