MADRID Faced with a deep recession in Brazil and weak margins in Spain, Santander (SAN.MC) boss Ana Botin is expected to stress the banks focus on cost cutting as she seeks to persuade investors this week that profitability is improving.

Botin, who took over as chairwoman from her late father Emilio Botin 12 months ago, is holding Santanders first investor day in four years on Sept. 23 and 24, at a time when challenges are mounting again for the euro zones biggest bank.

Despite a 7.5 billion-euro (£5.4 billion) cash call in January, Santanders core capital ratios remain in the spotlight and lag the levels reached by many major European peers.

Analysts will be looking for reassurance from Santander during the two-day event in London over its plan to grow by lending more and by winning over clients, rather than through acquisitions as used to be its trademark.

The bank will have to increase cost cuts in Brazil and in Spain and be more cautious in the way it lends in the Latin American country to improve the groups profitability in the medium term, said Carlos Peixoto, analyst at BPI.

Santander has already raised its cost cutting target for the 2014-2016 period by 500 million euros to 2 billion euros, and could hike this goal again, financial sources said.

Santander declined to comment.

Brazil will be crucial for Santander to balance its cost and profitability equation, even as the country battles deepening economic and political turmoil.

Its unit there makes up 20 percent of its profit, on a par with its UK business and more than its Spanish home market.

High office costs in Brazil make it especially inefficient when compared to Brazilian rivals, analysts at Citi said -- but trimming them could make all the difference.

If Santander Brasil announced credible cost efficiency measures at the investor day, we would expect earnings upgrades at the group level, Citi said in a note.

Citi also said Santander could possibly raise its 2017 group profitability target -- measured as return on tangible equity (ROTE) -- to 13-15 percent from 12-14 percent. Santanders ROTE stands at 11.4 percent.

Santanders share price has dropped some 30 percent during Ana Botins time in charge, underperforming the broader Spanish blue chip Ibex index.

Many analysts have applauded Botins overhaul of management at the firm and her bid to improve its capital base, but a dividend cut has also hurt shares.

(Writing by Sarah White; Editing by Mark Potter)