Santander says business thriving as profits soar

The Spanish group, which recently completed rebranding Bradford & Bingley and Abbey branches, now holds 10 per cent of the UK retail banking market.

The group, which has emerged relatively unscathed from the banking crisis, said UK pre-tax profits for 2009 rose to 1.5 bn.

The group said 1.1 million new bank accounts were opened over the year, helping its loan to deposit ratio improve to 126 per cent compared to 135 per cent a year earlier.

Antnio Horta-Osrio, chief executive of Santander UK, said: "Our full year results demonstrate clearly our business model and strategy are delivering superior results, allowing us to increase profits and revenues, balanced against controlled costs and prudent lending.

"Our ongoing focus on efficiency means we can continue to share the benefits of this cost advantage with our customers through competitive products, demonstrated by us having more 'best buy' mentions than any other high street bank. This has enabled Santander UK to write significant new business and continue to support the UK economy with increased lending to homeowners and businesses."

The group said rebranding of Alliance & Leicester will take place in the fourth quarter, and it remains on track to deliver 180m of savings from the acquisition of A&L.

Santander said it is seeing "better than expected" performance in its mortgage book, thanks to a high quality mortgage portfolio and focus on collection, as well as low interest rates and the improving housing market.

It said its total arrears rate in the fourth quarter stood at 1.71 per cent, up from 1.65 per cent in the thrid quarter. However, this was significantly below the Council for Mortgage Lenders' 2.4 per cent third quarter arrears rate.