Santander UK reports full-year profit up 226%

Santander UK has reported a 226% increase in profit for 2021, driven by strong lending growth.

The UK’s third largest mortgage lender recorded £7.5bn of net mortgage lending and attracted 19,000 new current account customers last year.

Net interest income was up 18% to almost £4bn.

Full-year profit from continuing operations climbed to £1.8bn, from £508m in 2020, with profit after tax growing 221% to £1.4bn.

During 2021 the bank closed 111 branches and reduced head office space by 40% as part of a transformation programme which aims to make the business more efficient and meet the changing needs of its customers and employees.

Looking ahead, Santander UK said that while growth slowed at the end of 2021 due to the impact of the Omicron variant of Covid-19, the bank expects the impact on the UK economy to be limited.

Lower expenses resulting from the bank’s transformation programme are anticipated to offset the headwinds from inflation in 2022. Meanwhile, its margin on loans this year is expected to be adversely affected by increased competition for mortgage lending as lenders battle to offer the best deals. This will be offset by the impact of rising interest rates.

Chief executive Nathan Bostock said that Santander UK was “well placed to continue growing as the UK economy recovers”.

“Our absolute priority is to continue providing the support our customers need at this time, including to households and businesses facing challenges due to rising costs,” he added.