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Santander profits hit by new bank tax

Santander profits hit by new bank tax

Santander has reported a profit before tax of £1,078m for the first half of this year, up 16 per cent on the first half of 2015.

Net mortgage lending hit £0.6bn and net lending to corporates was £2bn at the start of this year.

Yet despite the amount of loans Santander arranged and customer funds increasing in the UK in the first half of this year, the wider Banco Santander group posted a 50 percent year-on-year fall in second-quarter net profit.

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In terms of the impact of the UK arm on the overall group, it reported an attributable profit of €843m (£656m) in the first half of this year, down 12 per cent per cent, due to the impact of the new bank tax.

The steep fall in the value of the pound after the Brexit vote also had an impact and saw net profit for Santander in the UK, when converted into euros, slip 14 per cent from the first quarter to the second.

The lending portfolio in the UK amounted to €251.97m at the end of the first half of 2016, with growth of 3 per cent in pounds (down 11 per cent in euros) and progress made in all segments.

In the UK, the volume of assets in mutual funds reached €211.6m and grew 6 per cent in the year in pounds, but was again down 9 per cent in euros.

Nathan Bostock, chief executive of Santander in the UK, said the first half of the year saw solid business performance, continued cost discipline and net lending growth across all customer business segments.

“In a period of significant uncertainty, our commitment to British businesses, customers and our people remains as strong as ever,” he stated.

“I am also confident that, as the only full-service scale challenger, we can face the expected macroeconomic headwinds while managing business performance and maintaining balance sheet strength.”