Santander hit by £60m sour loans
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.