According to Santander’s half-year results, mortgage loans were flat during the period at around £167.2bn and redemptions and repayments stand at £10.6bn.
Looking at borrower profiles, around 41% were homemovers, 28% were remortgages, 22% were first-time buyers and 9% were buy-to-let (BTL) customers. This is in line with the prior period.
Internal transfers came in at around £15.1bn during the period. The firm added that 76% of mortgage internal transfers were retained online.
On the arrears side, arrears over 90 days past due came to 0.74%, which is down from 0.8% at the end of last year.
Santander’s profit before tax for the period was £746m, a drop from £804m in the same period last year, which the firm said was due to “higher transformation-related charges”.
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Looking ahead, the bank said it anticipated a “gradual return to net lending growth in 2025” and noted that it had a “good mortgage pipeline” heading in to the second half of the year.
Sabadell acquisition will make Santander ‘third-largest bank’ in the UK
Regarding the TSB acquisition from Sabadell, the firm confirmed that it had a valuation of £2.65bn in all-cash transactions. Completion is expected in the first quarter of 2026.
TSB has around 175 branches, serves around five million customers and has £34bn in mortgages – equal to 2% market share – and £35bn in deposits.
The report said: “The acquisition further strengthens Banco Santander’s position in one of its core markets, expanding its customer base and lending capacity across the UK. Banco Santander intends to integrate TSB in the Santander UK group.
“Santander UK would become the third-largest bank in the country by personal current account balances and number four in mortgages. The integration would be subject to regulatory and other approvals.
“When combined, the two banks would serve nearly 28 million retail and business customers nationwide, giving TSB customers access to Banco Santander’s international network and allowing them to benefit from Banco Santander’s leading technology platforms.”
Santander’s half-year performance showing growing momentum
Mike Regnier, Santander UK’s CEO, said in the first six months of 2025, it had “continued to build momentum in our strategy to become the best bank for customers in the UK by investing in technology and service, and improving our processes and efficiency”.
He added: “Banco Santander’s recent agreement to acquire 100% of TSB from Sabadell accelerates our transformation, allowing us to enhance our customer proposition and invest more in innovative products and our digital offering. This is an excellent deal for customers, combining two strong and complementary banks. The transaction remains subject to regulatory and other approvals.
“Our H1 2025 results demonstrate that business performance continues to improve, with an increase in net interest income and a reduction in operating expenses. However, profit before tax reduced to £764m due to higher transformation-related charges as we invest in our future to become simpler, more agile, and better able to innovate to meet the challenges and expectations of our customers.
“I would like to thank outgoing Santander UK chair, William Vereker, for his invaluable leadership over the past five years, and warmly welcome our new chair, Sir Tom Scholar. I look forward to working with him as we build on our current momentum, and begin to plan the integration of TSB into the wider business, subject to regulatory and other approvals.”
