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Santander UK 2016 profits down to £1.44bn on weak pound


Santander UK’s profits fell 14.7 per cent to 1.68bn (£1.44bn) in 2016, driven by a weakening pound and a new ban tax surcharge.

Accounting for currency movement in 2016 the drop was 4 per cent.

Additionally, Santander says an 8 per cent bank corporation tax surcharge hit UK profits.

Santander says it expects 2017 net mortgage lending to be “broadly in line with the market”, with a drop in SVR when compared to 2016.

Most of Santander’s £200bn of UK lending was mortgage lending, at 77 per cent of the total.

Gross mortgage lending in 2016 was down slightly, at £25.8bn compared to £26.5bn in 2015.

In 2016 Santander had £18.1bn of product transfer, up £0.1bn from 2015.

Around 59 per cent of the lender’s mortgage book was fixed rate, with 22 per cent variable rate and 19 per cent standard variable rate.

Meanwhile, 44 per cent Santander’s 2016 mortgage book were homemovers, with 33 per cent remortgagors, 19 per cent first-time buyers and 4 per cent buy-to-let.

Around 34 per cent of the lender’s book is interest-only, down from 36 per cent at the end of 2015.

The bank also put aside another £114m in the fourth quarter of 2016 for payment protection insurance mis-selling compensation.

The number of Santander’s UK staff fell by 178 in 2016, to 25,688.

The UK was Santander’s second most profitable region in 2016, accounting for 20 per cent of the bank’s underlying profit. The most profitable region was Brazil, with 21 per cent.

The firm had 844 branches at the end of 2016, having shut one-and-a-half.


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