Santander UK hit by PPI mis-selling provisions Despite the downturn, Santander said it had exceeded its Project Merlin business lending target, as the bank lent £4.3bn, beating its target by £300m. This was helped by the addition of 200 banking advisers at five new UK corporate banking offices. In retail banking, Santander said it had opened 836,000 new current accounts in 2011, while an "upfront interest" bond launched by the bank had gathered in excess of £160m of new deposits. The problems in the UK business were reflected in Santander's wider operations. The bank said it would have to take a €3.2bn provision against toxic loans, of which €1.8bn recognised new losses on repossessed Spanish real estate. Santander, which is the largest bank in the eurozone, reported total revenues for 2011 of €30.8bn, up 5pc year-on-year. However, pre-tax profits were almost €3bn lower than the previous year, coming in at €9.15bn. Despite the fall in profits, analysts at broker Espirito Santo Investment Bank said Santander's results were "positive." "We believe the results were positive on the back of an operating performance above our estimates coupled with the cleaning-up effort that saw Santander anticipate potential new requirements and be one step ahead of its competitors," said Espirito Santo. The broker noted that the bank's performance in the Spanish market was a "concern" with continuing falls in asset prices in its home market likely to continue hurting its earnings. Mariano Rajoy, Spain's new prime minister, has made forcing banks to properly account for the value of their real estate holdings a key part of his reform package. Speaking last month, Mr Rajoy said: "If your piece of land is worth 100, it can't say on your balance sheet that it's worth 1,000." Santander is also facing the challenge of closing a multi-billion euro capital shortfall by the middle of the year as part of a move by European regulators to shore up the region's banking system. The bank has already moved to sell off businesses, including its Colombian operations, to raise capital, as well as pushing through so-called "liability management" programmes that have seen it attempt to push its bondholders to accept more of the cost of recapitalising the bank, much to their dismay.