Santander reports 55% rise in profits

Published by Rebecca Atkinson on 04 February 2010.
Last updated on 04 February 2010

Santander branch, Daquella Manera, Flickr

The UK arms of Spanish banking giant Santander saw full-year profits leap 55% in 2009 thanks to its growing share of the mortgage market and more customers signing up to its bank accounts.

Pre-tax profits hit £1.54 billion for the year to 31 December, with new acquisitions Bradford & Bingley and Alliance & Leicester helping to boost UK deposits by 8%.

The banking behemoth, which is the second-largest bank in Europe by market value, continued to draw in savers with 1.1 million new bank accounts opened during the year – slightly above target. Existing mortgage customers were rewarded with its fee-free Zero account, which does not charge for using overdraft facilities and pays interest of up to 6%.

Santander now holds a 10% share of the UK retail banking market.

The bank also grew its share of the gross mortgage market to more than 18% - up from around 14% the previous year. Net home lending stood at £7.6 billion during the year.

It says its mortgage book is putting in a better-than-expected performance, with total arrears rate in the fourth quarter of 1.71%, up from 1.65% in the third quarter but down on the 2.4% reported for the same period by the Council of Mortgage Lenders.

Meanwhile, lending to small and medium size businesses is up 16% on the same point last year.

António Horta-Osório, chief executive of Santander UK, says: "Our full-year results demonstrate clearly our business model and strategy are delivering superior results, allowing us to increase profits and revenues, balanced against controlled costs and prudent lending."

Bradford & Bingley has now been fully integrated into its UK product range, while the rebranding of Alliance & Leicester is on track to be completed in the fourth quarter. It remains on target to deliver the £180 million of cost savings by 2011.

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