Santander UK (LON:BNC) said third quarter profit before tax rose slightly as income growth and tight cost controls mitigated provisions for the payment protection insurance mis-selling scandal.
The subsidiary of Spain’s Banco Santander reported a 1% year-on-year rise in pre-tax profit to £1.58bn in the nine months to 30 September despite provisions for liabilities, including PPI claims, increasing to £237mln from £141mln the same period a year ago.
READ: Santander rescues struggling rival Banco Popular after ECB says bank is likely to fail
The provisions were offset by a 4% increase in total operating income to £3.73bn, driven by an 8% increase in net interest income to £2.87bn. Non-interest income fell 8% due to adverse mark-to-market movements on hedging instruments.
The common equity tier 1 ratio, a measure of capital strength for banks, rose to 10.7% from 10.2%.
Banco Santander results
Separately, Banco Santander reported a 10% increase in attributable profit to €5.07bn in the first nine months of the year despite a €515mln impairment related to the acquisition of failing Banco Popular for €1 back in June.
Gross income increased by 12% to €36.3bn as net interest income and fee income rose 12% and 15% respectively
The CET1 ratio increased to 10.80% from 10.47% in the year-earlier period.
"Our business has delivered another solid quarter of results - with positive trends and further improvements in earnings quality across all of the markets in which we operate," executive chairman Ana Botin said.
“Our Latin American franchises continue to perform extremely well, with excellent growth in customer numbers and lending, and further improvements in credit quality,” she said. “And in Europe, our business is also performing strongly, despite market challenges.”