Santander reports jump in profits

Santander has reported a £2 billion increase in total mortgage lending

Abbey and Alliance & Leicester parent Santander has said pre-tax profits rose by more than 30% in a "very good" first half performance.

The Spanish bank's UK operation - which now includes A&L, Abbey and the savings business of Bradford & Bingley - saw revenues rise by over 20% in the six months to June 30.

Santander reported improving conditions in lending and bad debts, with second quarter bad debt charges in line with the previous three months and a drop in the number of homes being repossessed.

Santander reported pre-tax profits of £790 million for its UK bank business, which is being rebranded under the group name by the end of 2010 in a move marking the end of the UK high street brands A&L, B&B and Abbey.

The group is now the UK's second biggest mortgage lender and third largest savings bank following last autumn's dramatic moves to snap up A&L and the savings arm of B&B.

It said the deals increased the value of loans by 43% and savings deposits by 66% year-on-year in the half-year period.

The UK business now accounts for around a third of all group loans and spans 1,300 branches.

The wider Santander parent group posted a 4% fall in half-year profit compared with a year ago, at 4.52 billion euros (£3.9 billion), although this was up 9% on the final six months of 2008.

Loan loss provisions for the group soared by 61% to 4.6 billion euros (£4 billion).

But in the UK, Santander said impairments dropped slightly to £176 million in the second quarter from £189 million in the first, albeit at higher levels than a year ago.