You are here: Home - News -

Santander’s profits hit but gross mortgage lending up to £26.5bn

by:
  • 27/01/2016
  • 0
Santander’s profits hit but gross mortgage lending up to £26.5bn
Gross mortgage lending at Santander grew to £26.5bn at the end of 2015, but a £450m bill relating to missold payment protection insurance (PPI) sent profits plunging by 4.1% to £1.3bn.

In its quarterly management statement, Santander said the PPI provision charge had ‘an adverse impact’ on profitability and returns which eclipsed underlying growth gained by the business over the last three years.

In the 12 months to 31 December 2015, mortgage lending at the bank grew compared to £26.3bn recorded at the end of 2014, with net mortgage lending also increasing by £2.7bn.

Its mortgage balance sheet now totals £198.6bn, almost £8bn more than a year earlier when mortgage balances reached £190.7bn.

The proportion of Standard Variable Rate (SVR) loan balances and variable rate mortgages both decreased to 23% of its total mortgage balances, while fixed-rate mortgages increased to 54%. New business flows, the prospect of a future interest rate rise and competitively priced fixed-rate products all drove the popularity of fixed-rate mortgage deals, Santander said.

Homemovers continued to make up the majority of total mortgage stock at 45%, with remortgagors contributing to 33%. First-time buyers represented 19% of total stock and 3% was buy to let.

Its statement said: “We expect our net mortgage lending to grow in line with the market and the decline in SVR mortgage balances to be slightly less than the net £8.1bn reduction in 2015. Furthermore, we expect mortgage credit impairments to remain broadly stable, from the cyclically low levels experienced in 2015.”

Santander noted that impairment losses on loans and advances were significantly lower in 2015 at £66m down from £258m a year earlier, which was in part due to retail and corporate loans performing well in the current ‘favourable’ environment.

There are 0 Comment(s)

You may also be interested in