Profits at high street bank Santander soared 266% to £1.86 billion last year as the lender released more money set aside to cover the potential financial fallout from the Covid-19 pandemic.
Bosses revealed that £233 million was put back into the bank, after £448 million was put aside in 2020 when the virus first hit.
However, operating costs jumped 5% to £278 million due to costs associated with shutting 111 branches and reducing head office space by 40% as it aims to slim down operations.
The bank also highlighted a notable rise in fraud, with costs linked to repaying customers hit by scams increasing 26%.
Around £379 million was spent on liabilities, including £116 million related to the branch closures, and £249 million spent on liabilities, including fraud.
Santander also revealed that £130 million mistakenly paid out on Christmas Day in a series of duplicate payments to customers at other banks has largely been recovered.
Bosses were keen to highlight they had a strong year in growing their mortgage book.
We have further cemented our position as the UK’s third largest mortgage lender, helping customers with £7.5 billion of net mortgage lending, and attracted 19,000 new current account customers through our switcher campaign
Chief executive Nathan Bostock said: “We have further cemented our position as the UK’s third largest mortgage lender, helping customers with £7.5 billion of net mortgage lending, and attracted 19,000 new current account customers through our switcher campaign.
“At the same time, we have grown income, realised the savings from our investment programme and continued to simplify our operations.
“Our strategy means we are in good shape thanks to our prudent approach to risk, strong capital and resilient balance sheet, and we are well placed to continue growing as the UK economy recovers.”
Profit margins – or net interest margins – rose 29 percentage points to 1.92% and the cost-to-income ratio, a key banking measure, fell from 63% to 56%.
Globally, the Spanish lender revealed total income of 46 billion euros (£38.4 billion), a 4% rise on 2020.
The bank said it enjoyed strong growth in activity, with loans and deposits up 4% and 6% respectively.
