Includes countries and provisions in paragraph 1, details on provisions in paragraph 4, quote from chair in paragraph 5, details on profits in Spain, UK, revenues, efficiency and targets in paragraphs 9-10

By Jesús Aguado

MADRID, July 22 (Reuters) - Santander's SAN.MC underlying second-quarter net profit rose 17% year-on-year as higher revenues and a solid performance in Spain and Britain offset a rise in provisions in Argentina and Brazil, it said on Wednesday.

The euro zone's biggest lender by market value booked a quarterly underlying net profit of €3.77 billion ($4.30 billion), slightly above forecasts of €3.75 billion.

Taking into account restructuring charges of €250 million related to its acquisition of TSB in Britain, closed at the end of April, the group's attributable net profit rose 3% to €3.52 billion.

DIVERSIFICATION A 'KEY STRENGTH', CHAIR SAYS

Overall provisions rose 13% to €3.35 billion, in line with forecasts following a 13% rise in Brazil, one of its biggest markets, where the pace of rate cuts has slowed, creating pressure on bad loans, and after impairments doubled in Argentina.

"Our business, geographic and balance sheet diversification... remain key strengths amid heightened geopolitical uncertainty," Santander Executive Chair Ana Botin said in a statement.

For decades, Santander's diversification across 10 core markets has insulated the bank from economic downturns in individual regions but left it vulnerable to currency depreciations, particularly in Latin America.

It recently decided to expand in core developed markets with the acquisitions of TSB in Britain and Webster in the U.S., which it hopes will help to lift its profit by more than 40% in the next three years to above €20 billion.

LENDER REAFFIRMS TARGETS

Net profit in Spain, its biggest market, rose 12% year-on-year in the quarter on higher loans, and was up 47% in the UK.

Revenues rose 9% in the second quarter, outstripping a 2% rise in total costs and allowing the bank to maintain its efficiency ratio at 42.8% from the previous quarter.

It reaffirmed its 2026-28 targets, which for 2026 include mid-single-digit revenue growth and lower costs in constant euros, higher profits and a capital ratio of 12.8-13%.

It ended June with a 14% core tier-1 capital ratio following the TSB acquisition.

($1 = 0.8546 euros)