Santander rose as much as 6.4 percent in Madrid trading, after the comments by Botin, 75, at the biggest Spanish lender's annual shareholders' meeting in Santander. "During this period of crisis, Banco Santander has been the international financial group with the best quality and consistency of profits." Net income was 8.94 billion euros ($10.8 billion) in 2009.

While Spain's property crash pushed up loan defaults, Santander dodged the worst of the credit crisis and seized opportunities to further diversify its business by buying lenders in the U.S., the U.K. and Germany. That hasn't prevented a 26 percent slump in the bank's share price this year as investors expect Spain's struggle to slash its budget deficit to slow economic growth and drive up lenders' financing costs.

"I'm not sure they can actually do a lot by themselves to improve sentiment because there are bigger issues affecting their share price including governmental debt levels," said Kevin Lilley, a fund manager at Royal London Asset Management, which oversees about 1.25 billion euros in continental European stocks, including Santander. "I don't think that by themselves they're doing anything particularly wrong."

Santander will maintain its 2009 dividend of 60 cents per share in 2010, Botin said. The board yesterday approved a first dividend against 2010 earnings of 13 cents per share, unchanged from a year earlier, he said.

Eoin Treacy's view Spain has had one of the more high profile property busts and its financial sector has been a focus of investor ire over the last few months as the scale of problems with its savings banks became clearer. The additional threat of a Greek default and the contagion risk that could initiate has also contributed to declining investor sentiment towards the sector. However, the exposure of the nation's banks to these risks is not uniform and the large caps such as Banco Santander and BBVA are less exposed to domestic issues than the unlisted Cajas.

As of yesterday's close CDS spreads on senior debt at Bancaja had begun to contract while Caja Madrid spreads had yet to top out. However the fact that they are now moving towards a much closer alliance in order to access government bailout funds suggests that the risk of outright default has decreased considerably.

Banco Santander is the second largest weighting on the IBEX Index behind Telefonica and has an approximate weighting of 17% on the Dow Jones Euro Stoxx Banks Index. The share price lost downward momentum in the region of €8 from early May and has now formed a weekly upside key reversal which puts at least a short-term floor under the market and increases the likelihood of a mean reversion relief rally.

The Dow Jones Euro Stoxx Banks Index has also lost momentum and found at least short-term support in the region of 150 this week. A mean reversion rally, (characterized by a move back up to the now declining 200-day MA) could be underway and a sustained move to new lows would be required to question scope for some higher to lateral ranging.