Santander’s UK division has seen healthy pre-tax profits in the first nine months of 2023, despite the fact that it has slashed UK mortgage lending amid higher interest rates.
The Spanish banking giant reported a pre-tax profit of £2.2bn for the period, up from £1.9bn in the same period last year. This was driven by a strong performance in its retail banking division, which saw a 7% increase in profits to £1.3bn.
However, the bank has cut its UK mortgage lending by more than £10bn in the same period, as it seeks to reduce its exposure to the volatile housing market. This is in line with the Bank of England’s decision to raise interest rates in order to cool the housing market.
The bank has also been reducing its exposure to other types of lending, such as consumer credit, as it looks to reduce its risk profile. It has also been increasing its focus on digital banking, with the launch of a new mobile banking app and a range of digital services.
The bank’s chief executive, Ana Botin, said that the bank was “well-positioned to deliver sustainable growth and returns” in the coming years. She added that the bank was “well-equipped to navigate the current environment”.
The bank’s decision to reduce its mortgage lending is likely to have a negative impact on the UK housing market, as fewer people will be able to access mortgages. This could have a knock-on effect on the wider economy, as fewer people will be able to purchase homes and stimulate the housing market.
However, the bank’s decision to focus on digital banking could be beneficial for customers, as it will make it easier for them to access banking services. The bank is also investing in technology to improve its customer service, with the launch of a new customer service chatbot.
Overall, Santander’s UK division has seen healthy pre-tax profits in the first nine months of 2023, despite the fact that it has slashed UK mortgage lending amid higher interest rates. The bank is focusing on digital banking and customer service in order to remain competitive in the current environment.
