Spanish banking giant Santander will miss the €10 billion (£9 billion) profit target for 2008 set last June, following Bernard Madoff’s alleged $50 billion scam and the collapse of Lehman Brothers, according to The Times.

Speculation about the weakening of the bank’s position increased as more details emerged about Mr Madoff’s frantic attempts to prevent the collapse of his alleged elaborate Ponzi scheme, and US prosecutors increased their efforts to jail the shamed fund manager.

Santander, which appeared to weather the financial crisis better than most international banks, announced in June that it was aiming for a net profit of €10 billion for 2008.

Banking sources in Spain said yesterday, however, that Santander was likely to miss the target as its private banking operation compensated wealthy clients who lost millions of euros on Lehman bonds, according to the paper.

Santander may also be forced to compensate customers who lost money in the Madoff scandal after investing in the bank’s Optimal strategic US equity fund.

The Swiss listed fund lost about €2.33 billion of its clients’ cash after putting it into Mr Madoff’s investment fund. Santander itself lost some €17 million invested with Mr Madoff.

The fund manager was arrested in early December after allegedly confessing to his sons Mark and Andrew that he had been running what was effectively a Ponzi scheme in which he used funds invested by new clients to pay fake returns to existing investors. The scam was exposed after clients became nervous because of the financial downturn and asked for $7 billion of their cash back.

On Wednesday, it emerged that Mr Madoff had made desperate attempts to prop up the scheme by taking $250 million from Carl Shapiro, one of his long-time supporters, in the weeks before his arrest.

It is understood that Mr Shapiro, a 95-year-old entrepreneur and philanthropist, was assured that the money would be returned quickly.

Mr Shapiro first invested in 1960, when he gave the young Mr Madoff thousands of dollars to invest on his behalf. Mr Shapiro has personally lost an estimated $400 million in the fraud, including the $250 million, and his charitable foundation a further $100 million.

US government prosecutors have been pushing to have Mr Madoff jailed after he allegedly violated the terms of his bail.

Marc Litt, assistant US attorney, told a Manhattan court on Monday that Mr Madoff had posted valuables over the Christmas and New Year period to his sons, his brother and an unnamed couple.

The fund manager had previously been ordered by the court not to move any of his assets while investors who lost money in his alleged scam try to recover their cash.