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Santander UK sees profits tumble, more cuts in Europe planned

Underlying profit in the UK fell by 62% to €318mln

ATM

Santander said it expects to cut an extra €1billion in costs from its European operations by the end of 2022.

In a statement with its third-quarter results, the Spanish bank said it was ahead of schedule with its existing plan to cut €1bn of costs by the end of 2020.

The bank added it now expects to gain an extra €1bn in savings in Europe by the end of 2022 though there were no details of where these cuts might occur.

Santander's UK arm saw profits slide in the three months to end September due to the impact of the coronavirus (COVID-19) pandemic and rising bad debts.

Underlying profit in the UK fell by 62% to €318mln though the bank said there was a strong rebound in underlying profits during the period after it rejigged the pricing of its 123 account in April.

That change drove a surge in net interest income, said the bank, which prompted net interest income to rise and the efficiency ratio to improve.

Santander said total group profit in the quarter was €1.75bn, up 18% from the second quarter on a constant currency basis, with a strong recovery in revenues (+7%) and lower loan-loss provisions (-4%).

Net operating income rose by 3% to €17.9bn and operating expenses fell by 2% or 5% in real terms.

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