Madrid - While several European governments were bailing out banks amid fears of increasing contagion from the US financial turmoil, Spain on Tuesday expressed confidence that its financial institutions remained immune to the crisis.

"We are convinced that the Spanish system is not in any danger," Economy Minister Pedro Solbes said, assuring bank customers that their savings were safe.

While governments have moved in to rescue teetering banks in other countries, the Spanish banking sector has appeared to be in sound financial health despite the country's deepening economic crisis.

It was Spain's biggest bank Santander that came to the rescue of Britain's Bradford & Bingley, announcing the purchase of its savings arm for 612 million pounds (1.1 billion dollars) on Monday.

After the acquisition of the mortgage lender Abbey and with that of Alliance & Leicester underway, Santander rose to a big player in Britain, where it expects to increase its share of retail deposits to 10 per cent.

The meltdown of Spain's key property sector and the international turmoil have plunged the country into its first major economic crisis for over a decade, bringing growth down from 3.8 per cent in 2007 to near zero.

The slowdown has not affected Santander, whose low-risk expansion strategy is seen as paying off, allowing it to be on the look-out for opportunities in the troubled European banking sector.

Santander expects a record net profit of around 10 billion euros for this year, up 10.3 per cent from 2007.

Spain's other banking giant, the Banco Bilbao Vizcaya Argentaria (BBVA), as well as the savings banks La Caixa and Caja Madrid are on an equally solid financial basis, the daily Periodico de Catalunya quoted analyst Arturo de Arteaga as saying.

Analysts attribute the health of the banking sector partly to restrictions imposed by the central bank on risky operations and to the development of retail banking as one of the main activities.

The government does not expect to need to bail out any banks, Solbes said, but analysts warn against excessive optimism.

The shares of Spanish banks have dipped in reaction to the Wall Street jitters, and the national economy was slowing down faster than expected, the daily El Mundo quoted analysts as saying.

"The (banking) sector is not without risks," the economic newspaper Expansion said, warning that the slowdown of consumption and of the repayment of credits could undermine banking activity.

However, Spanish banks' high level of reserves would cushion them for a year or two, giving them time to adopt new strategies, analysts said.