Plunge in profits turns up heat on Santander chief

37pc slide comes as bank slashes savings rates and raises overdraft fees

sANtANDeR’s profits in the uK fell by more than a third last year – piling pressure on chief executive Nathan Bostock.

they plunged 37pc on the year before to £981m, after the bank booked £169m of PPI charges and £155m of losses relating to a restructuring that saw 140 branches shut.

the figures were published as it faced criticism over its treatment of customers following a cut in interest rates for savers and a raise in overdraft fees.

experts think santander may have ‘shot itself in the foot’ after it cut the interest rate on its popular 123 current account to just 1pc, and slapped customers with a 40pc overdraft charge.

this week, the Financial Conduct Authority demanded that major banks, including santander – which has recently launched a series of television ads starring Ant and Dec ( pictured

right) – explain how the new overdraft charges were set, after it introduced rules forcing them to simplify the costs.

Many lenders settled around the 40pc interest rate mark that leaves around 8m sensible borrowers worse off.

Guy Anker, of Moneysavingexpert, said: ‘If they want to be the stand-out bank, they have shot themselves in the foot. they will see an outflow of savvy customers from the 123 account which has slowly been watered down.’

the interest rate on 123 will fall from 1.5pc to 1pc in May, meaning a customer who kept £20,000 in it would receive £100 less in a year. And the amount of cashback customers can earn will be capped at £15 per month.

But Bostock ( picturedinset) insisted the bank was still backing customers. He said: ‘ Our 2019 results were impacted by competitive income pressure on mortgages and PPI charges, but they also include the investment we are making to transform the bank. We delivered our strongest net mortgage growth in a decade, reinforcing our position as the uK’s third- largest mortgage lender.’

But Ros Altmann, the former pensions minister, said: ‘ How is santander supporting its customers?

‘It’s treating them like little children who can be fobbed off, and it’s only the bank itself and the shareholders who will benefit. Branch closures are cutting off elderly and vulnerable customers from their services, and the 40pc flat charge on overdrafts is encouraging people to be reckless with their borrowing because it no longer matters whether they had a prearranged overdraft or not. ‘We should be encouraging customers to stay out of debt, but to borrow carefully when they need to.’ shareholders in Banco santander, which is the lender’s spain-listed parent company, have been suffering as the stock slumped by 15pc over the past year amid rising competition in the mortgage market and attempts to cut costs in the uK and Poland.

Many Britons own Banco santander stock. Former customers of Abbey National were handed shares when it converted from a building society to a listed bank, and then received a stake in Banco santander when it bought Abbey National in 2004.

But they were given a slight reprieve yesterday when Banco santander’s shares lifted 4.4pc to €3.71 in Madrid. Pre-tax profits for 2019 at the group as a whole, which also operates across Latin America, edged up 1pc to £12.6bn, with strong performance in Brazil and Mexico.