Its Q3 results, covering the year to 30 September, showed that its mortgage loan book rose from £169bn at the end of last year to £205.6bn at the end of the reporting period.
Santander attributed this to higher gross mortgage lending and its acquisition of TSB, which completed in May and added £33.9bn to its mortgage book.
TSB’s higher net interest margin (NIM) contributed to Santander’s net interest income rising 17% and its NIM improving from 2.23% to 2.31% year-on-year.
The bank also added £96m to Santander’s profit before tax.
TSB’s contribution partially offset Santander’s £71m fall in profit before tax, which came to £1.12bn. The decline was mainly due to the Q1 charge related to historical motor finance commission payments and higher restructuring costs.
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Santander increased its credit impairment charge by £192m to £342m, primarily because of the TSB acquisition but also because of the deteriorating economic outlook.
TSB integration ‘well underway’
Santander said the TSB integration was on track, with customer experience, retention and Consumer Duty at “the heart of our design and delivery plan”.
It will transfer TSB’s banking business to Santander UK through a court-approved process and at the start of this October, nearly 1,000 TSB colleagues transferred their legal employer to Santander UK.
Mahesh Aditya, chief executive of Santander UK, said the bank made “good progress this quarter” and advanced the integration of TSB “at pace”.
He said its results showed “improving business performance, supported by TSB’s contribution to profit” and it continued to expect growth in its net lending.
Aditya said mortgage arrears remained low and, as part of its ongoing commitment to the government’s mortgage charter, it continued to identify customers who potentially needed support.
