THE UK operations of Spanish banking giant Santander saw full-year profits
leap 30 per cent in 2009 as the group grew its share of the mortgage market and
signed up more than expected new customers to its bank accounts.
Pre-tax profits hit £1.54bn for the year to 31 December with new
acquisitions Bradford & Bingley and Alliance & Leicester helping to boost UK
deposits by 8 per cent.
The banking behemoth, which is the second largest bank in Europe by market
value, continued to draw in savers with 1.1m new bank accounts opened
during the year – slightly above targets.
Existing mortgage customers were rewarded with its fee-free Zero account
which does not charge for using overdraft facilities and pays interest of up
to 6 per cent if certain conditions are met.
It now holds a 10 per cent share of the UK retail banking market.
Santander also grew its share of the gross mortgage market to more than 18 per cent
- up from around 14 per cent the previous year. Net home lending stood at £7.6bn during the year.
It said its mortgage book is putting in a better than expected performance
with total arrears rate in the fourth quarter of 1.71 per cent, up from 1.65 per cent in the
third quarter but down on the 2.4 per cent reported for the same period by the
Council of Mortgage Lenders.
Meanwhile lending to small and medium size businesses is up 16 per cent on the same
point last year.
António Horta-Osório, chief executive of Santander UK, said: "Our full year
results demonstrate clearly our business model and strategy are delivering
superior results, allowing us to increase profits and revenues, balanced
against controlled costs and prudent lending."
Santander says B&B has now been fully integrated into its UK product range
while the rebranding of A&L is on track to be completed in the fourth
quarter. It remains on target to deliver the £180M of cost savings,
specified with A&L acquisition, by 2011.
Santander’s UK operations account for just 16 per cent of its global profits with
36 per cent derived from Latin America and 26 per cent from Spain. Full-year net profits
came in €8.94bn – up 1% on 2008.
Fourth quarter profits climbed 13 per cent to €2.2bn – slightly above analyst
estimates. Santander said it will distribute half its 2009 profits out as
Chairman Emilio Botín, said: "The 2009 results are the best in the history
of the bank if you take into account the difficult environment."