NEW YORK (TheStreet) -- After years of crippling economic recession, the Spanish economy is slowly beginning to turn the corner. The recovery is slow and analysts don't have any high expectations at this stage of the game.
But one way to look at the improvement is to look at the stock performance of Banco Santander (SAN). The stock, at $8.98 on Thursday, is up 21% for the past 52 weeks.
In late 2012 many economists were making the case that the Spanish economy had reached its nadir and -- barring a full collapse of the euro -- would begin to claw its way out of the recession.
This appears to be the case as Spain has witnessed three quarters of positive economic growth.
From July 2013 until the present day, the Spanish economy has witnessed positive GDP growth. The fourth-quarter growth for 2013 was 0.2%, and the first quarter growth for 2014 is expected to be in the same range.
Investor confidence is returning to Spain and particularly Banco Santander.
The country has been reeling with massive outflows of foreign capital but that, too, is changing. Foreign direct investment in Spain is increasing, as evidenced by George Soros and John Paulson backing the Spanish property fund Hispania.
But the true litmus test of the economic recovery can be seen with Banco Santander. The bank suffered immense losses between 2010 and 2012 owing to its heavy investment in the Spanish economy.
Banco Santander Profitability
Pre-tax profits dropped from 12 billion euros in 2010 to 3.5 billion euros in 2012. By 2013, the bank had posted strong pre-tax profits to the tune of 7.3 billion euros.
The recovery in Spain is evident in the bottom line that is being reported by major corporations, banks and stock prices.