Santander UK reported a sharp increase in its mortgage book after completing its acquisition of TSB.

Mortgage balances rose to £204.7 billion at the lender’s half-year results to the end of June, up from £169 billion at the end of 2025, a rise of £35.7 billion.

The deal makes Santander the UK’s fourth-largest mortgage lender.

Gross mortgage lending also increased to £14.7 billion in the first half of 2026, compared with £10.6 billion a year earlier.

Chief executive Mahesh Aditya said the integration of TSB was a major piece of work for the lender, following the acquisition finalising on 30 April.

He added that the enlarged bank now serves four million additional customers and has become the UK’s third-largest provider of personal current accounts.

Santander said it expects net lending growth to continue throughout 2026.

Banking net interest margin is forecast to remain stable, while the lender expects cost efficiencies to improve further as it integrates TSB and continues simplifying and automating its operations.

Asset quality across the mortgage portfolio remained strong, according to the bank.

Mortgage arrears stayed low during the period, while the Stage 3 loan ratio fell to 0.85%, partly due to a previously-completed sale of higher-risk mortgage assets.

Customer deposits also increased to £227.2 billion, largely due to the TSB acquisition and continued demand for fixed-term savings products, providing ongoing support for mortgage lending.

Santander’s pre-tax profit fell 31% year-on-year to £528 million, mostly due to payouts for historical motor finance commission claims and restructuring costs.

The bank said underlying lending activity was resilient.