Daily Mail

Santander hit by £60m sour loans

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STIFF competitio­n and a £60m hit from ailing clients have hit profits at Santander.

The lender’s UK operation made a £414m profit in the first three months of 2018, 21pc lower than a year earlier.

It lost £60m on soured loans, up from £13m. The vast majority of this was made up of debt owed by collapsed contractor Carillion and another struggling firm thought to be constructi­on business Interserve. The pair’s financial difficulti­es mean they are unable to repay the money, so it has been written off.

Chief executive Nathan Bostock highlighte­d the impact of tough markets on the bank, and vowed to slash costs – likely meaning further cuts to the lender’s 800-strong branch network.

A price war has kept fixed-rate mortgages close to record lows despite a hike to the Bank of England’s base interest rate.

Santander UK’s Spanish parent group, Banco Santander, posted profits of £1.8bn, up 10pc on a year earlier.

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