Santander recovery continues as retail arm buoyed by interest rate rises

Banking giant Santander has withstood the impact of soaring inflation and the war in Ukraine to post a jump in first quarter profits on the back of rising interest rates.

The Spanish banking giant said a strong showing in the UK and elsewhere in Europe helped to drive its rebound.

Banco Santander reported a 58% increase in net profits to 2.54 billion euros (£2.1 billion) in the first three months of 2022.

It came as rival HSBC saw profits for its first quarter tumble on the back of a hit from expected bad debts due to the economic backdrop.

Meanwhile, Santander’s was boosted by its UK operation, which revealed pre-tax profits of £495 million for the quarter, jumping from £175 million a year earlier.

Mike Regnier, who was appointed as Santander UK chief executive officer last year, said the company has “continued the momentum” it saw during its pandemic recovery in 2021.

“This has been underpinned by another strong performance in the mortgage market with £3.6 billion of net lending,” he added.

“Our transformation programme continues to focus on digitalisation and meeting the changing needs of our customers.

“This is backed up by our resilient balance sheet and prudent approach to risk.”

Last week, the banking firm said it would cut back its branch opening hours in July as part of the transformation plan as it reacts to changing customer behaviour.

The UK business also said on Tuesday that it is hiring 160 people to join its financially support team to help customers receive assistance amid the growing cost of living crisis.

Mr Regnier added: “As households across the country face rapidly increasing cost of living, we stand ready to support our customers and provide them with practical advice and tools to help them manage their money.

“We continue to look at the impact that the rising cost of living is having on our customers so we can provide them with the right support.

“We remain committed to helping our customers navigate their way through the challenges the country is facing.”