Santander Banks Profits As Mortgages Slip
Santander UK has announced strong profits above £1bn for the first nine months - a performance its huge parent firm only just managed to match amid the eurozone crisis.
Spain's Banco Santander, the largest bank in the single currency area by market capital, said its net profit slumped by 66% to 1.8 billion euros (£1.45bn) over the same period as it wrote down billions of euros in assets linked to the country's 2008 property market collapse.
Much of its profit came from South America.
Its UK arm - which is a separate entity but contributed 13% to the Group's overall profit performance - said its earnings represented a 4% increase on the comparable nine months last year.
Lending to small and medium-sized businesses (SMEs) had risen 20% over the past year, the bank said but its share of the mortgage market slumped to 10.8% from 16.3% at the same time - lending £11.5bn compared to £16.8bn.
Chief Executive of Santander UK, Ana Botin, said she was striving for it to become the SME "bank of choice".
She explained: "We welcome the UK Government's Funding for Lending Scheme and have participated in the first tranche of funds which we are using to continue to grow our lending to UK companies.
"Our retail strategy is to offer good value, simple and transparent products and to develop primary banking relationships with our customers.
Santander UK now has more than one million retail customers and said it had made progress in tackling a high rate of customer service complaints.
Despite that record, it has largely kept its nose clean against the backdrop of scandal that has gripped its far bigger UK competitors.
While Barclays was recently fined for rigging the inter-bank lending rate Libor, RBS is still facing investigation over the allegations and has also suffered a series of group-wide technical failures which restricted updates to accounts.
Lloyds and Barclays have made the biggest provisions for costs relating to the Payment Protection Insurance mis-selling scandal.
Santander UK, which was in the driving seat to buy hundreds of branches from RBS but pulled out earlier this month, said it took the decision because of delays - adding it wanted to give customers' certainty.
RBS is hoping it can overturn the EU's ruling which forced it to sell the sites as a penalty for taking its taxpayer bailout.