Santander hit with £91m fines as branch closures loom

Santander hit with £91m fines as branch closures loom

The UK division of Santander has incurred regulatory costs of £91m in the 2018 calendar year, as it announced its intention to shut 140 branches.

The fines comprised a £33m penalty from the FCA for its failure to properly process the accounts and investments of deceased customers, while £58m was set aside by the bank for compliance issues relating to credit cards.

This charge came after a review of its practices, and taking external legal and compliance advice, the bank stated.

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The company set aside the money in the 2018 financial year and expects the payouts to happen in 2019 as it continues to review the situation.

In the company’s results announcement out this morning (February 26) Santander stated the £58m figure was its "best estimate" of how much the cost will be for the consumer credit fine, rather than the final bill. 

In the year to end of December 2018 Santander posted a pre-tax profit of £1.5bn, down 15 per cent on the £1.8bn posted in 2017.

Its net interest income was £3.6bn, down from £3.8bn in the previous year, which the bank stated was down to lower new mortgage margins.

Santander is currently preparing to reduce the number of its branches by 140 to 615, which will be made up of a combination of larger branches offering community facilities to support local businesses and customers, and smaller branches using technology to offer customers "more convenient" access to banking services.

Furthermore, the bank will invest £55m to refurbish 100 branches over the next two years.