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Santander UK profits recover after PPI scandal

Santander UK profits recover after PPI scandal

The UK arm of Santander has made a significant comeback in the first quarter of this year, reporting profits before tax of £532m from the £82m loss in the final quarter of 2015.

In its first quarter results, published today (27 April), the bank revealed its profits before tax had jumped 13 per cent against the same period last year.

This comes after Santander UK posted a 14 per cent jump in profits in its full year results for 2015.

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Earlier this year, Santander revealed it had set aside another £450m for compensation to customers who had been mis-sold payment protection insurance (PPI), which pushed the bank down to a fourth quarter loss of £82m in 2015.

Nathan Bostock, chief executive of Santander, said: “I am pleased to report a solid start to 2016, underpinned by strong business flows and lower loan loss provisions.”

In January, Santander announced it would start offering branch-based investment advice, two years after it was slapped with one of the biggest retail banking penalties for giving unsuitable advice to customers.

Santander’s customer numbers continued to grow, which Mr Bostock said was helped by improvements in the retail customer experience.

The bank’s lending to UK companies was up 10 per cent to £27.5bn year-on-year, despite an increasingly competitive market.

“We expect the improving trend in UK lending growth seen in 2015 to continue, but are conscious of prevailing market volatility from macro-economic and geopolitical factors, uncertain prospects for policy interest rates, and the upcoming UK referendum on EU membership,” Mr Bostock said.

katherine.denham@ft.com