The UK’s second biggest lender’s full year results show Santander’s gross mortgage lending continues its downwards trend down from £24.2bn in 2010 and £26.4bn in 2009.
The figures hand the bank a mortgage stock market share of 13.9%, with an average Loan to Value (LTV) on new business of 65% in the 12 months to December.
The statement said: “First half lending was impacted by a weaker pipeline from the last quarter of 2010 during which market pricing became less attractive in the lower LTV segments of the market.”
In a signal that mortgage lending and market share could fall again this year, as it did the previous year, the statement warned the greater economic challenges meant balance sheet strength, diversifying its business mix and encouraging customer loyalty would be the main focus this year.
A spokesman said: “Santander is currently second in both the UK mortgage and savings markets, but fifth in current account provision and lower again in UK credit card provision. We need to maintain but not grow our mortgage and savings positions in 2012. The big focus will be in driving our banking products.”
He added: “The core strategy of the bank which Ana Botin has restated again and again is that is that the bank’s business mix must diversify deeper into the SME and business banking franchise and become more customer-centric.”
Trading profit after tax fell by 6% last year, which Santander attributed to higher regulatory costs. Statutory profit after tax was more than 40% lower than 2010 at £538m, largely due to costs associated with PPI mis-sales.
The bank blamed low interest rates, term funding costs and higher capital adequacy expectations for the hit on both its results and balance sheet in 2011. It said its liquid assets were three times the balance at the end of 2011 than 2009. Other costs included the higher fees of the Financial Services Compensation Scheme (FSCS) and the introduction of the Bank Levy in 2012.
Ana Botin, chief executive officer, Santander (pictured), said the bank had delivered a solid performance despite challenging conditions.
“2012 is likely to be a tough year for the UK banking industry,” she added.
The UK’s biggest mortgage lender Lloyds’ full year results are due on 24 February.