Abbey banks on double digit growth

ABBEY, the UK arm of Spain&rsquo;s Santander, posted a 37 per cent rise in nine-month profit yesterday, leaving it well on track to meet its target of double digit profit growth in 2009.<br /><br />The group &ndash; which includes the brands Abbey National, Bradford &amp; Bingley and Alliance &amp; Leicester &ndash; said profits totalled &pound;1.16bn in the nine months to September, helping its Spanish parent meet expectations with a net profit of &euro;6.7bn (&pound;6bn).<br /><br />Abbey continued to grab mortgage and savings business from its rivals, with its gross lending market share rising to 20.5 per cent in the quarter, well above its share of UK mortgage stock. In the year to date, Abbey&rsquo;s market share stands at 18 per cent.<br /><br />But the firm said that non-performing loans continued to rise in the period, to 1.65 per cent, as the UK struggles with the recession, though mortgage arrears were stable at 1.3 per cent. Bad debt provisions in the third quarter were &pound;215m, compared to &pound;176m in the second quarter, though mortgage bad debts were stable.<br /><br />Santander plans to rebrand its UK operations as Santander next year, scrapping the Abbey, B&amp;B and A&amp;L brands. It said the integration was on track, along with the targeted &pound;180m of cost savings by 2011.<br /><br />Abbey&rsquo;s parent company, Santander, reported a 2.8 per cent drop in nine-month net profit, du to bad debt provisions caused by Spain&rsquo;s housing boom hangover.<br /><br />The eurozone&rsquo;s biggest bank said that expansion into fast-growing markets such as Brazil underpinned a 21.7 per cent rise in operating income.