Spain’s Banco Santander SA (MCE:SAN), the euro zone’s largest bank by market value, wrote down a stunning $26 billion of assets, primarily because of plunging Spanish real estate values and delinquent loans in the recession-wracked economy.

The Madrid-based bank also said Thursday its net profit for 2012 dropped 59 percent as its European business declined and a weak revenue from operations in the U.K., Mexico and Brazil.

“Spain by itself should be enough to make 2012 a turning point for earnings because there were a lot of one-off costs for real estate,” Carlos Joaquim Peixoto, an analyst at Banco BPI SA in Portugal, told Bloomberg News.

“The performance of other regions, especially Brazil, still represents a significant challenge.”

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