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* Q1 net profit 1.87 bln euros, ahead of forecasts
* Q1 profit in Brazil up 77 percent y/y
* Brazil's share of group's profits now at 26 pct (Adds details from conference call, shares)
By Jesús Aguado and Angus Berwick
MADRID, April 26 (Reuters) - Strong growth for Banco Santander in its largest market Brazil drove a 14 percent jump in group profit in the first quarter, rewarding its pivot towards Latin America in search of higher returns.
The euro zone's largest bank by market value reported on Wednesday a net profit of almost 1.9 billion euros ($2.07 billion) in the first three months of the year, well ahead of analysts' forecasts.
In Brazil, whose share of the bank's profits has jumped to 26 percent from 21 percent since the end of 2016, net profit rose for the fifth quarter in a row, up by almost 80 percent on underlying growth and the appreciation of the real.
Net interest income (NII), a measure of earnings on loans minus deposit costs and a key part of the bank's returns, improved for the fourth consecutive quarter in Brazil as its economy recovers from its worst ever recession.
Santander CEO Jose Antonio Alvarez said a growing loan book and falling non performing loans were among the key influences on its performance in Brazil.
Its Latin American business has helped it through a squeeze on lending margins in Europe that is pressuring its rivals and to weather a slip in profit in its second-largest market Britain due to the depreciation of sterling since the Brexit vote.
Profit in Latin America shot up almost 50 percent in the quarter, compared to a 10 percent rise in continental Europe and a 8 percent fall in Britain.
The bank expected growth in all of its principal markets this year, Santander boss Ana Botin said, highlighting Latin America, where its businesses in Chile and Mexico also saw greater returns. The region now accounts for almost half of group profit.
"While the environment continues to be challenging for the banking sector, the outlook for Santander is positive," Botin, who chairs the group, said in a statement.
Santander's shares were little changed at 0910 GMT, trading at close to a year-high after outperforming Europe's STOXX banking index over the past year with a 35 percent rise.
Overall, Santander's NII improved for the third quarter in a row, rising 10 percent to 8.4 billion euros. CEO Alvarez said the bank expected interest rates to rise in the coming quarters, which would boost NII further.
Analysts flagged stablising lending margins in Spain, its third largest market, as a positive. Profit from its banking activity in Spain rose 18 percent thanks to greater fees from its high-yielding flagship 1-2-3 current account.
Santander said its profit in Britain would have risen by 3 percent without the currency swing.
In the U.S., where the bank has recently said it aims to address risk controls and better comply with regulations, net profit rose 16 percent in the first quarter.
Santander reaffirmed its 2018 targets such as boosting its fully-loaded core capital ratio, a closely watched measure of a bank's strength, to just above 11 percent, after it ended the quarter with a ratio of 10.66 percent. ($1 = 0.9163 euros) (Reporting by Jesus Aguado and Angus Berwick; Editing by Stephen Coates/Keith Weir)