In spite of a robust double-digit growth in lending in Latin America, Banco Santander (NYSE: STD) reported a 4.8% drop in its first-quarter net profit, primarily due to a sharp decline in profit in continental Europe. As expected, the quarter witnessed a rather mixed performance throughout the group. But with growing revenues, declining loan-loss provisions and improving credit cost, Santander looks fundamentally upbeat on the whole.

Overall performance
The $103 billion Spanish banking giant witnessed significant improvement overall. Net interest income grew 5.5% owing to an increase in volumes and improvement in the spreads on loans. Net fee income increased 11.5% as it gained on a strong performance from its insurance and services, as compared to the first quarter of 2010. Net operating income after provisions rose too, growing 7.9% year-on-year.

Regionally and within the U.S., I've discussed the trend of declining provisions for losses thanks to growing credit quality at banks such as BankAtlantic Bancorp (NYSE: BBX) and Flagstar Bancorp (NYSE: FBC) in a recent article. It seems the trend isn't a provincial one.

Santander too, seemed to fall in line as loan loss provisions declined to $3.2 billion, 10.2% down from the first quarter of 2010, and the lowest since the first quarter of 2009. Santander's core capital ratio also rose to 9.66% from 8.8% in the preceding quarter, at it slashed its risk-weighted assets and issued convertible bonds in Brazil.

Europe disappoints
The Spanish bank, however, did not perform impressively in all its business areas. While its profit in Latin America surged 26.8% on a year-on-year basis, it reported a decline in the profits in the European region. Net interest income in continental Europe declined by 3.5%, while its profit shrank by 14.1% compared to the year-ago period. Profits in the U.K. went down by 2.2% and -- although net interest income for the group grew overall -- it could have fared much better if it had not been for tougher regulatory requirements regarding liquidity in countries such as the U.K. The bank also witnessed a decline in the demand for loans in Spain and Portugal.

The Foolish prognosis
In a previous article on Santander, I presented my bullish stance on the bank as I spoke about the string of deals it had been clinching and how the bank projected a positive outlook with strong basics.

Unfortunately, operating expenses went up by 13.2% this quarter as compared to the same quarter a year ago. But this was part of its strategy to secure its grip in key markets and businesses acquired in previous years. Long-term, I expect greater things from this company.

As a testament to its potential, Fool colleague Russ Krull prepared a list of seven lucrative international stocks based on parameters such as current dividend yield and price-to-earnings ratio on which you'll find Santander prominently placed. I clearly agree. Here, I've done the math to advocate for the stock with the highest current yield on the list. Go ahead, Fools -- take a look. I think you'll like what you see.