*

Q3 profit up 8% y/y to 3.5 bln euros vs forecasts of 3.34

bln

*

Q3 NII falls 1.1% y/y

*

Net profit in the US up 64%, falls 6% in Brazil

*

Says on track to meet full-year guidance targets

(Adds profitability ratios, targets in paragraphs 4-5, Chair

comments in paragraphs 6-7)

By Jesús Aguado

MADRID, Oct 29 (Reuters) - Spain's Santander bank

reported a 7.8% year-on-year rise in its third-quarter

net profit, saying a strong performance in its U.S. business

offset lower lending income and some weakness in Brazil.

The net profit of 3.5 billion euros ($4.08 billion) in the

July-September quarter reported by the euro zone's biggest bank

came above the 3.39 billion euros expected by analysts in a

Reuters poll and was the sixth consecutive record-high quarterly

result.

A rise of 4.3% in fees and of 0.87% in revenues compensated

a decline of 1.1% in lending income, the bank said.

Santander's measure of profitability, tangible-equity ratio

(ROTE) after the impact of additional Tier 1 (AT1) capital

instruments, remained unchanged at 16.2% compared to the

previous quarter. The bank said it was on track to meet its

target of around 16.5% for this year and its full-year revenue

target of around 62 billion euros.

Executive Chair Ana Botin said Santander's geographical

spread - it operates in 10 core markets in Europe and the

Americas - would act as a stabiliser in an uncertain global

environment.

"Looking ahead, we are on track to meet all our 2025 targets

and, amid continued geopolitical and market uncertainty, we are

confident we will continue delivering further profitable

growth," Botin said in a statement.

Underlying net profit in the U.S., its fifth-largest market,

rose 64% supported by higher lending income and higher fees from

its corporate and investment banking business.

The bank has benefited in the past from higher interest

rates, while growth in key Latin American markets has given it

an edge over more Europe-dependent rivals.

But it was hit by currency depreciations in some of its

emerging markets, such as Brazil, where the real's devaluation

drove the underlying net profit down 5.9% in the quarter.

($1 = 0.8575 euros)