Santander completed £7.4bn in gross mortgage lending in the first six months of the year, higher than the £4.5bn it lent last year.
In its Q2 trading update, the lender said this coincided with a fall in its mortgage portfolio, which has contracted by £4.4bn since December. It stood at £170.8bn by the end of June. However, Santander said it started to see “improved new business margins and gross lending” by the second quarter.
The average loan-to-value (LTV) bracket of its mortgage book was 51%, flat on December, and the average new loan size was £234,000.
Santander said arrears from recent internal transfers stayed low and less than 1% had gone into arrears in the last 12 months.
By the end of June, some 0.84% of its mortgage accounts were in more than three months of arrears, a slight increase from a share of 0.7% of accounts at the end of 2023.
The bank noted that a fifth of its mortgage portfolio was due to mature in the next 12 months, and 77% of accounts reaching the end of their incentive period had stayed with Santander.
Santander sees falling profit
The bank reported a post-tax profit of £597m for the first half of the year, a 30% decline on the same period last year.
Santander’s net interest margin (NIM) came to 2.08% in H1, down from 2.21% last year. Quarter-on-quarter, this rose from 2.07% to 2.09%. Its net interest income (NII) stayed unchanged at £1.05bn.
Mike Regnier, chief executive of Santander, said: “We remain focused on supporting our customers and delivering products and services that help them make the most of their money.
“Our first half financial results were in line with our expectations, with a more positive trajectory reflecting improvements in the second quarter.”
Regnier said Santander’s prudent approach to risk and balance sheet management left the bank “well-capitalised” and it expected its pricing actions to improve its NIM in the second half of the year.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
