Profits slide as competition bites
STIFF competition and tougher regulation sent profits falling at the Spanish-owned bank Santander UK.
Net profits for the first nine months of the year tumbled from £1.28billiion to £659million after allowing for £253million of regulatory costs and the £538million set aside for mis-selling payment protection insurance.
Retail customers withdrew £2.7billion of savings as the battle to win high-street customers intensified.
Santander is fighting back following the recent launch of campaigns to attract more current account and credit card customers.
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The group has 25million customers, including former Abbey National, Alliance & Leicester and Bradford & Bingley account holders.
All banks in the UK are facing headwinds given market conditions
Chief executive Ana Botin said: “All banks in the UK are facing headwinds given market conditions, regulatory uncertainty and low interest rates. Notwithstanding this, Santander UK is well positioned in our core businesses to perform strongly for the rest of this year and beyond.”
Lending to small firms rose by 27 per cent but net mortgage lending was down sharply against a year ago as borrowers opted to step up repayments.
Underlying annual profits at Clydesdale and Yorkshire banks, part of National Australia Bank, rose 4 per cent to £533million.
