Santander UK posts surge in nine-month profits, cautious on outlook

For the period ending on 30 September, Santander posted a 381% surge in profits from continuing operations to reach approximately £1.44bn.

Its net interest margin meanwhile grew by 32 basis points to 1.91%, while the cost-income ratio fell to 56% from 65% one year ago.

Commenting on the lender's performance Santander UK boss, Nathan Bostock, highlighted Santander UK’s position as the third largest retail mortgage provider in the country, which he said delivered £5.2bn of net mortgage growth "in a competitive market as well as an increase in customer deposits".

"Despite a more positive economic environment, conditions remain uncertain and a number of factors could impact the pace of recovery," he added.

"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."

Boosting the lender's bottom line, it wrote back £170m of credit impairments on the back of the recovery in the the UK economy.

More than 90% of its customer balances were secured, the majority being prime residential mortgages with an average loan-to-value of 41%.

In turn, Santander UK's return on tangible equity improved from 4.3% for the comparable period of 2020 to 12.9%, while its common equity tier one ratio ended the period at 16.6%, with the latter "well above" regulatory requirements.

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