Santander in the UK

Following the Santander Group's entry into the UK in 2004, Abbey, the Bradford & Bingley savings and Alliance & Leicester business were all rebranded to Santander during 2010. Santander customers can now enjoy access to around 1,400 branches throughout the UK making face-to-face banking easier and more convenient.

“Santander UK has delivered another solid set of results for the first nine months of 2011 despite the difficult market conditions, maintaining its strong track record of profitability while strengthening the balance sheet. This performance reinforces our standing as a UK-focused bank, which has c. 85% of assets originated in the country and a clear weighting towards secured prime mortgages, which represent over 80% of customer loans.

Trading profit after tax, and excluding regulatory impacts, for the nine months to 30 September 2011 increased c. 10% compared to 2010, demonstrating the robust nature of our underlying business and the quality of our assets, where we benefited from a better credit performance than expected. Revenues were negatively impacted by higher costs of funding and the impact of interest rates remaining low for longer.

We have continued our strong support for UK homeowners and business. In the first nine months of the year our share of gross mortgage lending was c. 16%, which is well above our stock share, and means we are writing one-in-six UK mortgages. In the last two quarters, we have recorded positive net lending despite weak demand, while in SME lending, we are running ahead of our commitments made under the Merlin agreement. Lending to this vital sector was up 27% on the same point last year.

In terms of our funding mix, we have made a conscious decision to move away from short-term wholesale and retail funds where we feel margins are unsustainable, towards medium-term funding. To date we have raised c. £24bn (compared to £17bn in 2010) across a range of products and geographies at attractive rates.

We recently announced our plans for the next three years, as we aim to complete the commercial turnaround of the UK business. Our goal is to develop Santander UK into a full service, diversified, customer centred franchise. In the last quarter, we have made good progress, with market leading and innovative new current account and credit card offers, an agreed timeline for the integration of the RBS branches being acquired, and improvements in terms of customer service.

It will take two to three years to build on the platform we have today and complete the commercial turnaround to which Santander UK has committed a £490m IT investment programme.

All banks in the UK are facing headwinds given market conditions, regulatory uncertainty and persistent low interest rates. Notwithstanding this, Santander UK is well positioned in our core businesses to perform strongly for the rest of this year and beyond.”

Ana Botín, Chief Executive Officer, Santander UK

For more information on Santander please visit www.movingtosantander.co.uk