Santander profits down as mortgage book shrinks
As the Spanish-owned bank continued its retreat from the riskier parts of the mortgage market pre-tax profits up to June fell to £549m from £690m during the same period last year.
In April the bank said that it had reduced its mortgage loan book by £2.3bn following a deliberate decision to reduce interest-only lending.
In an update on its progress so far Santander said it has now decreased its book by almost £11bn to £152.3bn.
But the bank was keen to highlight the progress it has achieved in corporate markets under plans to rebalance and diversify the business.
In May Mortgage Introducer exclusively revealed Santander’s plans to double its SME market share in the commercial lending sector using the capital originally earmarked for the RBS branch acquisition.
The bank said that such loans to business customers had increased by 11% net of repayments to £21bn in the first half of the year from £19bn in the same period last year.
Total lending to SMEs increased by 12% net of repayments, to £10.9bn from £9.7bn.
The group grew global profits by 29% annually in the first half to £1.9bn. Provisions against loan losses fell sharply compared with the same period last year when some banks in Spain booked big reductions in the valuations of real estate deals.