Santander’s underlying profit for the first nine months of the year also fell to £731m, a 19 per cent decline on the previous year’s £904m.
The group said the decline and its 9.9 per cent drop in revenue from £3.4bn to £3.1bn reflected the “continued competitive pressure on mortgage margins” and £3bn of standard variable rate (SVR) attrition.
Santander’s new business gross mortgage lending increased by £200m year-on-year to £21.6bn, up from £21.4bn in the first nine months of last year.
It also saw its mortgage book net lending grow by £3.6bn during the period. However, the bank said its growth in mortgage lending was partially offset by a managed reduction in commercial real estate lending.
Retail mortgages accounted for £161.6m of this, slightly up from the previous year’s £158m.
It said it expected net mortgage lending growth to be around three per cent in 2019, affected by weaker buyer demand and subdued house prices.
PPI pain
In August, the bank was ordered by the Competition and Markets Authority to appoint an independent body to audit its PPI policies following a series of failures to send accurate reminders.
Its profits were also impacted by a £127m investment in its transformation programme.
Nathan Bostock, CEO, said: “The uncertain economic environment looks set to continue for some time, reinforcing our longstanding prudent approach to risk.
“We are delivering excellent customer experience while taking decisive steps to improve our efficiency and competitiveness.”
