- The UK division of Spanish bank Santander posted a large rise in year-to-date profit as interest margins and credit quality both improved.

Pre-tax profit from continuing operations for the nine months through September jumped to $1.44 billion, up from £299 million year-on-year.

Adjusted banking net interest margin rose 32 basis points to 1.91%, while the company also booked a £170 million gain from credit impairment write-backs, largely related to the UK economic recovery.

'Although GDP has recovered in 2021, uncertainties remain for the UK economy,' the company said.

'We anticipate the ongoing effects of Covid-19, supply chain disruption and dislocation in the labour market are likely to have an impact on the sustainability of the recovery while inflationary pressures and the impact on interest rates are likely to have implications for bank earnings.'

Banking net interest margin in the fourth quarter was expected to be in line with the first nine months of the year.

'Increased competition for lending has affected mortgage application pricing which is likely to impact mortgage margins in the near term,' Santander said.

Story provided by