Santander profits climb but bank coy on flotation

Nathan Bostock had no news on the planned UK sell-off
Nathan Bostock had no news on the planned UK sell-off
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Santander UK kicked off the banks’ reporting season yesterday with a jump in profits, but declined to be drawn on the timetable for its flagged flotation by its Spanish parent.

Nathan Bostock, the UK operation’s chief executive since Ana Botin recently became boss of the wider group, said he expected the bank’s momentum to continue in 2015 after unveiling a 26 per cent rise in full-year, pre-tax profit to £1.4 billion.

But he said: “In terms of the IPO [initial public offering], I am going to be boring. I have nothing to report on that.

“It remains a medium-term objective for the organisation… to build a business which at the right time is suitable for an IPO.”

Bostock, formerly an executive with Royal Bank of Scotland, said Santander UK was comfortable with the current Competition and Markets Authority investigation into the current accounts and small business lending markets.

“We are winning the switching battle,” he said. Bostock said 276,000 customers switched their current accounts to the bank last year following the launch of an easier inter-bank switching service in September 2013.

It came as Santander UK said its new mortgage lending rose to £26.3bn in 2014, up from £18.4bn in 2013. A total of £5.6bn of this went on mortgages for 40,300 first-time buyers.

Lending to corporates rose 8 per cent to £23.9bn, of which £12.6bn were loans to 70,100 small and medium-sized businesses. Group bad debts continued to fall, 46 per cent lower.

Bostock said there remained plenty to scope for growth, with more than two million of its customers holding current accounts who do not have one of its credit cards.

The bank increased its write-down for payment protection insurance (PPI) mis-selling by £95m in the second half of 2014, taking its total PPI hit to £846m. Other conduct provisions were increased by £45m. Santander UK said its 1.82 per cent net interest margin – the difference between what it charges on loans and pays on deposits – was likely to be similar this year.