Santander takes £448m hit for loan losses due to pandemic

The Spanish-owned group posted a 44 per cent slump in UK pre-tax profits to £552m for 2020, with the Covid-19 provisions sending total credit impairment losses surging to £645m.

On an underlying basis, full-year profits fell 45 per cent to £710m.

Santander cautioned it expects to continue cutting costs as part of an ongoing overhaul and gave a "cautious" outlook for the UK economy, though it expects growth to recover later in the year thanks to the vaccine rollout.

The economic bounce-back is set to help drive down defaults on loans from struggling households, it added.

Santander said it expects mortgage lending to rise by about 2 per cent in 2021, but house prices to fall 2 per cent.

Nathan Bostock, chief executive of Santander UK, said: "Although Covid-19 materially impacted our results, the decisive actions we have taken have helped to deliver a very resilient performance despite the difficult environment.

"We have achieved strong lending growth, particularly in mortgages, grown customer deposits, delivered further efficiency savings and a notable improvement in income in the second half of the year.

"With vaccines being rolled out at pace and the ratification of the Brexit trade agreement, we are well positioned to support the UK's economic recovery over the coming years."

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