Business

Santander profits up on branch focus

  • 3 February 2015
  • From the section Business
Ana Patricia Botin

Santander has reported a 32% jump in annual pre-tax profits to €9.72bn (£7.33bn) and says it will continue to focus on retail banking in 2015.

The eurozone's largest bank said new loans rose by 5% in the year to €7.6bn, while it reduced costs by 1%.

Net income for the last three months of 2014 was 70% higher at €1.46bn compared with a year earlier, the bank added.

Santander said profits rose in all its 10 key markets for the first time since the start of the financial crisis.

Europe contributed 52% to the group´s overall profits led by the UK (19%) and Spain (14%). Latin America accounted for 38% of profits, with Brazil (19%) and Mexico (8%) leading the way, while the remaining profit came from the US.

The annual results are the first under new chair Ana Botin, who replaced her father Emilio Botin after his death in September 2014.

Ms Botin has moved away from the serial acquisitions of her late father, though she has said she wants to preserve Santander's international presence which has helped to shield the group from local crises.

UK banking

The UK recorded a 26% rise in pre-tax profit to £1.4bn in 2014. compared with £1.1bn a year earlier.

Santander UK reported a 43% rise in mortgage lending in the year to £26.3bn, while current account balances rose to £41.4bn - an increase of £1bn a month since the end of 2012.

The bank said one in four UK current account customers who have switched banks have moved to Santander UK since the introduction of the current account switching service in September 2013.

The bank has also set an ambitious target to grow its current account customer base by 700,000 to four million by the end of this year.

Business lending rose 23% to £7.9bn worth of new loans advanced to small and medium-sized businesses.

Santander UK set aside a further £129m for Payment Protection Insurance (PPI) compensation claims.

The additional provisions followed a review of recent claims activity, which "indicated that claims are expected to continue for longer than originally anticipated," the bank said.

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