Santander UK’s banking arm, which recently completed its rebranding of Abbey and Bradford & Bingley branches, posted a 30% rise in annual pre-tax profits to £1.54bn in 2009.
This has prompted speculation that it may bid for the 318 branches due to be sold off by Royal Bank of Scotland.
Net lending for the UK businesses, which also includes Alliance & Leicester, rose to £7.6bn in 2009 from £6.1bn in 2008.
Repossessions fell from 969 in 2008 to 820 last year, and the proportion of cases in arrears by three months or more was 1.37%, compared to the industry average of 2.4% in September 2009.
The average LTV of the book was 52% for existing stock and 64% for new business.
Overall, the Santander Group posted a profit of €8.9bn (£7.8bn), up 1% from 2008.
Anthony Frost, head of corporate communications at Santander UK, said its strong financial backing had allowed it to offer competitive mortgage products.
He added: “Our competitive deals allowed us to write significant new business and increase our lending as part of a deliberate attempt to grow our market share while others withdrew.”
Fahim Antoniades, group director at Mortgage Centre IFA, said he hoped the results would spark other banks into offering some competition as he feared having two dominant market players.
He added: “I would not be surprised if Santander did try to acquire branches as it wants to compete with Lloyds on market share. I just hope these results will persuade other lenders to finally step up and increase their 2010 lending, as I suspect that many were much better capitalised than they admitted during 2009.”
