Santander's UK profits take a beating from pound slump

Shruti Tripathi Chopra
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In the last quarter of 2016, Santander made net profits of €1.6bn (Source: Getty)

Santander chief executive Nathan Bostock expects this year to be "challenging" despite the Spanish bank reporting strong profit growth this morning.

The figures

The bank saw a four per cent rise in 2016's net profit to €6.2bn (£5.3bn) after its Brazilian operations grew for the fourth consecutive quarter.

In the last quarter of 2016, the bank made net profits of €1.6bn, up from €25m the year before.

However, the bank's performance in the the UK, its second biggest market, took a beating on the impact of the EU referendum.

Earnings in the UK dropped by nearly 15 per cent over the year to €1.68bn. However, excluding currency movement, the fall was four per cent.

In other bad news, the bank's net interest income, was down from €32.2bn in 2015 to €31.1bn last year.

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What Santander said

Nathan Bostock, chief executive officer, said: “I am pleased to report a strong performance in 2016. We saw net lending growth across all three customer business segments, increased cost discipline and continued good credit quality – all supported by robust UK economic growth.

"We also continued to see the benefits of our innovative approach to enhancing our customers’ experience, with significant improvements to core digital services throughout the course of the year giving us one integrated platform which will allow us to understand and meet our customers’ needs better.

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"Investing in new technology such as our: investment hub; voice banking capabilities; end-to-end mortgage digital application process; and working capital loan solutions that give SMEs quick access to finance, will help support our growth ambitions in 2017 and beyond, enabling us to fulfil our purpose of helping people and businesses in the UK prosper.

“Looking ahead, we expect to see a changeable and more challenging macro environment in 2017. We believe the transformation we have made in putting the customer at the heart of our business, coupled with a continued focus on costs and risk management, gives us solid foundations to succeed and confidence in the future.”

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