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The bank’s British arm made a pre-tax profit of £687million for the three months to the end of September, compared with £172million for the same period last year. Revenues grew by 17.2 per cent to £1.2billion.
Additionally, its thirdquarter profits were boosted by the release of £100million of rainy-day funds owing to the stronger than expected economic recovery.
Santander had originally set aside the money to cover loans that it had expected to sour because of the pandemic.
The bank added that although the vaccine rollout has boosted the economy, it believes that Covid’s impact will linger.
It expects that supply chain disruption and manpower shortages will affect the sustainability of the recovery.
Additionally, it said that the growing levels of price competition in the mortgage market will affect its future profit margins, while rising inflation will lead to higher interest rates. Santander UK chief executive Nathan Bostock said: “Despite a more positive economic environment, conditions remain uncertain and a number of factors could impact the pace of recovery.”
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The banking chief added that while the pandemic’s trajectory over the winter remains unclear, “I believe we are well positioned to grow and to support our customers over the years ahead, with strong capital and liquidity and proven balance sheet resilience”.
Santander believes that as long as there are no further economic shocks, it does not expect there to be any deterioration in its loan portfolios, which will enable it to release more of its Covid funding provisions.
On its monthly fee-paying 123 current accounts it cut the interest it provides on balances up to £20,000.
The strong UK performance is one of the highlights of the Spanish banking giant’s current financial year.
The UK arm has seen income growth of 27 per cent so far. Brazil and Chile were both 12 per cent and Spain four per cent.
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