Santander made recurrent net profit of 8.11 billion euros ($11.9 billion) in 2007, up 23.2 percent but excluding 1.4 billion euros of writedowns, about half of it related to its stake in U.S. bank Sovereign.
In a statement on Thursday, the euro zone's largest bank said that including the writedowns and extraordinary gains, net profit came to 9.06 billion euros.
It added it would pay a dividend of 0.65 euros a share on the results, up 25 percent.
The results were more or less in line with the average forecasts in a Reuters poll of 11 analysts, which expected recurrent net profit of 8.26 billion euros or 9.05 billion including extraordinaries.
Net interest income rose 22.6 percent to 15.30 billion euros while operating profit was up 32.3 percent year-on-year to 14.84 billion.
The Reuters poll showed analysts expected Santander's net interest income to come in at 15.39 billion euros with operating profit of 14.72 billion euros.