Santander sees hike in UK profits

The banking giant posted underlying pre-tax profits of £2.03bn for 2016, up from £1.79bn the previous year.

But Spanish owner Banco Santander saw the Brexit-hit pound knock profits from its UK operation, leaving its British earnings 14.7 per cent lower last year.

Santander UK revealed a marked slowdown in the number of new customers signing up to its popular 123 current account after it halved the top interest rate in November.

It added another 483,000 123 customers in 2016, down from around one million in 2015.

Santander said its UK arm also put by another £114m in the fourth quarter of 2016 for the payment protection insurance (PPI) mis-selling scandal.

Nathan Bostock, chief executive of Santander UK, hailed a “strong performance” in 2016 as profits and lending grew, but cautioned over an uncertain 2017.

He said: “Looking ahead, we expect to see a changeable and more challenging macro environment in 2017.

“We believe the transformation we have made in putting the customer at the heart of our business, coupled with a continued focus on costs and risk management, gives us solid foundations to succeed and confidence in the future.”