Santander UK reports mortgage lending down

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Santander UK posted mortgage lending down £2.5bn in the first three months of its year, due to “disciplined pricing actions”.

The British arm of the international bank reported that home loans slipped 1.4% to £172.7m in March from the end of last year, according to a trading statement.

Overall, the lender said its UK pre-tax profits tumbled 29% to £391m, citing higher deposit and operating costs.

Its net interest margin — a key measure of interest paid on deposits against interest earned on loans – was down 4 basis points to 2.07% from the previous quarter and 14bps lower than a year ago.

The lender said: “We intend to continue to prioritise profitability, capital generation and our core banking franchise in 2024, through planned balance sheet optimisation, resulting in lower mortgage lending and customer deposits.”

Santander UK chief executive Mike Regnier added: “This quarter’s results are in line with our expectations. We have seen encouraging growth in our corporate and commercial business using our global network to help businesses into new markets.

“We also launched new products to support our customers’ changing needs, including the Edge credit card with cashback and 95% LTV mortgages for new build properties – supporting aspiring homeowners, particularly first-time buyers.

“The recent fall in the rate of inflation will be welcomed by our customers who continue to face cost of living pressures.”

The wider Santander group posted a rise in quarterly profit up 11% to €2.9bn (£2.5bn) as it benefitted from higher interest rates across its various markets around the world.