In its financial results, Santander UK completed £10.6bn in gross mortgage lending in the first half of 2025, and this improved to £14.7bn in the last six months.
The bank also completed the sale of £1.2bn of high risk-weighted asset (RWA) mortgage loans in Q3, which resulted in positive capital generation.
Its mortgage book had a value of £169bn by the end of the year, a slight increase on the £167.2bn value at the end of 2024.
The share of homemovers on its mortgage book was flat at 42%, while remortgagors rose slightly from 27% to 28% year-on-year. The proportion of first-time buyers contracted from 22% to 21%, while buy-to-let (BTL) borrowers were stable at 9%.
The average loan to value (LTV) of new business was 65%, similar to 64% previously, while the LTV of its mortgage stock rose marginally from 51% to 52%.
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Some 92% of borrowers were on a fixed rate mortgage, up from 90% the year before.
TSB acquisition to make Santander third-largest bank
The report said Banco Santander’s acquisition of TSB was expected to complete in the first half of this year and it would be integrated into the Santander UK group, making it the third-largest bank for current accounts and fourth for mortgages.
The acquisition and integration remain subject to regulatory approvals.
Banco Santander plans to integrate technology across both Santander UK and TSB to enhance efficiencies and support long-term profitability through a “simplified, scalable digital banking model”.
The report added: “We are fully committed to ensuring a seamless integration, by leveraging our market-leading technology and significant experience. Maintaining the highest levels of service for customers across both banks will be a key priority and we will support all colleagues through the transition, as we invest in building a stronger bank for the future.”
Rising profit
Santander UK delivered a profit before tax of £1.5bn, a £180m increase on the year before. This was attributed to higher income, along with lower costs and provision charges.
Its net interest margin over 2025 improved by nine basis points to 2.23%; however, this slipped from 2.26% in the first half of the year to 2.19% in the second half. Santander UK said this was expected and due to market conditions.
The bank said its net interest margin would be stable this year and it was well-positioned for further bank rate reductions.
Mike Regnier (pictured), chief executive of Santander UK, said the business made “excellent progress” in its ambition to become “the best bank for customers”.
He added: “It is vital that the regulatory and fiscal environment is conducive to the banking sector helping people get onto the housing ladder or move home, and supporting businesses of all sizes. Healthy banks are critical for a healthy UK economy.
“The most significant change in 2026 is expected to be the acquisition of TSB, for which we hope to receive regulatory approval in the first half of the year. This landmark acquisition will create the UK’s third-largest bank by personal current account balances, enhancing the profitability of Santander UK and creating stronger competition and choice for customers.”
Regnier added: “In Q1 2026, I will step down as CEO following an exciting four years that have seen Santander UK become a more efficient, customer-centric, tech-driven bank, offering better products and returning to growth in loans and deposits to deliver greater value for shareholders.
“Over this time, we have worked closely and effectively with Banco Santander to harness local and global capabilities. I am hugely proud of all my colleagues for their dedication and hard work. As the TSB acquisition exemplifies, our progress has led to significant investment by Banco Santander in the UK, demonstrating confidence in its long-term economic potential and a strategic commitment to UK customers.”
Mahesh Aditya has been named as the incoming chief executive of Santander UK.
