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You are here: Home » Business Bank Account Updates » Santander posts 11 per cent increase in UK profits in 2010

Santander posts 11 per cent increase in UK profits in 2010

04. Feb, 2011 Categories: Business Bank Account Updates, News by Business Bank Accounts 0 Comments

Personal and business bank account provider Santander recently announced that it experienced an 11 per cent increase in UK banking profits in 2010.

The Spanish banking giant posted the increase despite declines in the amounts the bank lends through mortgages and took in from savings account deposits.  Deposits declined by 33 per cent in the face of intense competition from other financial service providers and a summer filled with dreadfully bad publicity stemming from customer service issues.  Net lending in Santander’s mortgage business likewise declined by 27 per cent.

In the face of these difficulties, the UK branch of the Spain-based bank still managed to report profits of £2.3 billion before taxes.  The majority of the bank’s gains stem from the first half of 2010.

Despite the encouraging first six months of the year, UK savings deposits were cut in half during the remainder of 2010.  The bank experienced an overall reduction in savings deposit activity by 35 per cent in comparison to 2009 figures.  Despite the decrease the bank still took in over £9.5 billion in deposits.

While Santander has campaigned hard to grow its savings business, the costs of meeting new regulatory requirements and of attracting savings may result in slow growth in the coming year.

A 61 per cent drop in the bank’s mortgage lending activity over the second half of 2010 only contributes to lessened growth.  2010 only saw £5.5 billion in outgoing mortgages, while 2009 saw £7.6 billion.  However, due to the general health of the UK mortgage market, the Spain-based bank managed to retain its 18 per cent market share.

Recently released figures from the BoE revealed that 2010 mortgage lending rates declined by 28 per cent.

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