Spain’s Santander on Tuesday said its net profit in the first quarter rose 1% compared to the same period of 2022 thanks to higher lending income, especially in Europe, which offset a weaker performance in Brazil and the United States.

The euro zone second-biggest lender in terms of market value booked a net profit of 2.57 billion euros ($2.84 billion) despite an impact of 224 million euros from a new tax on banks in Spain. Analysts polled by Reuters expected Santander to post a net profit of 2.45 billion euros.

Excluding the effect of the tax, profit rose 10% year-on-year in the quarter.

Higher revenues also helped Santander increase its return-on tangible equity ratio (ROTE), a measure of profitability, to 14.4% from 13.37% at the end of 2022.

In a higher interest rates environment, the bank reaffirmed its ROTE target of above 15% by the end of 2023.