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Santander profits dive 43% from mortgage competition and PPI

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Santander’s UK business saw profits before tax fall to £785m for the nine months to September, a 43 per cent drop on the same period last year as the bank was hit by £169m in mis-sold payment protection insurance (PPI) charges.

Santander’s underlying profit for the first nine months of the year also fell to £731m, a 19 per cent decline on the previous year’s £904m. 

The group said the decline reflected the “continued competitive pressure on mortgage margins” and £3bn of standard variable rate (SVR) attrition.

In August, the bank was ordered by the Competition and Markets Authority to appoint an independent body to audit its PPI policies following a series of failures to send accurate reminders. 

In better news, Santander’s new business gross mortgage lending increased by £200m year-on-year to £21.6bn, up from £21.4bn in the first nine months of last year.

It also saw its mortgage book net lending grow by £3.6bn during the period. 

Chief executive Nathan Bostock said: “The uncertain economic environment looks set to continue for some time, reinforcing our longstanding prudent approach to risk.  

“We are delivering excellent customer experience while taking decisive steps to improve our efficiency and competitiveness.”

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