The UK operations of Santander posted a half yearly profit of £875 million, up more than 10% on the same period last year. Santander Group profits were lower than the previous year though, at EUR 4.445 billion, down 1.6% on H1 2009.
Santander UK has a gross lending market share of 19%, which equated to £12.3 billion in H1 2010, an increase of 14% on H1 2009. It said that credit quality remained strong with the average loan to value (LTV) on new business completions at 62% (61% Q1 2010; 59% H1 2009) and stock at 51% (52% Q1 2010; 53% H1 2009).
The stock of properties in possession has decreased slightly from H1 2009 and represents 0.06% of the overall portfolio versus the Council of Mortgage Lenders’ average of 0.13% (as at Q1 2010). 3-month plus arrears have decreased slightly from Q1 2010 at 1.42% and compare favourably to the CML average of 2.22% (Q1 2010).
Santander UK said the growth in profit supported its plans to create 600 jobs in UK branches and call centres.
The bank also highlighted that Santander UK products had more best buy table mentions than its competitors.
The results statement said: “Customers continue to see Santander as a safe haven for their money as our funding from deposits continues to grow. In the first six months we saw net-inflows in deposits of £4.6n from retail, corporate and private banking clients, an 11% increase on the previous year.
“We continue to support homeowners with mortgage gross lending of £12.3 billion with an estimated gross lending market share of 19%, well ahead of our stock share. Our continued focus on the quality of new lending based on affordability and robust risk management continues to serve us well.
“The UK economy has made modest progress but demand for credit is subdued and we expect the market will remain challenging. House purchase volumes are higher than a year ago, but remain low relative to the past decade, and house price inflation remains stable. We therefore expect interest rates to remain low for the rest of this year.”
