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Suspend any disbelief you might have. Assume that Santander chairman Emilio Botin is right, and that the bank is over the worst. In one way, that might well be true – the 2012 numbers were depressed by a €6-billion ($8.1-billion) provision for real estate losses in Spain. That is unlikely to be repeated, so earnings this year will improve. But is there any reason to consider that, more generally, the bank is on the way up and that its shares deserve their rating of 1.3 times tangible book value?

Anyone signing up to such a scenario would have to believe three things. First, that regular Spanish loan losses are at a trough. Second, that the bank's capital position is healthy. And third, that its emerging markets businesses are doing well enough to make up for tough conditions in Europe.

Thursday's full-year numbers provided causes for concern on all three fronts. Non-performing loans in Spain continue to creep up – from 4.2 per cent of the book two years ago to 6.7 per cent – and the rate of increase shows little sign of easing. The bank's core capital ratio of 10.3 per cent under the Basel II rules looks fine but it will soon have to shift to Basel III and will not say how capital looks on that basis. With widespread concerns about its capital (and despite Oliver Wyman's approval of its position), Santander could do itself a favour by providing more clarity. Finally, emerging markets are a mixed bag. All is going well in most parts of Latin America, but Brazil is the biggest operation in the region and profits there fell by a 10th.

There are glimmers of light. Integrating Banesto should provide €420-million of cost savings, and there could be an IPO of the U.S. consumer finance business this year. But neither suggests long-term recovery. Buying Santander requires an assumption that 2012 was the low. It is too early to make that call.