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Need to know: Santander UK profits crash 44% as motor finance scandal bill hits £633m
- Santander UK’s profits have crashed by 44% in the first quarter as the banking giant sets aside nearly £180 million more for the motor finance mis-selling scandal.
- The high street bank posted pre-tax profits of just £202 million, down from £358 million a year earlier. The additional provision brings Santander’s total bill for the motor finance saga to a staggering £633 million.
- The bank also recorded a £73 million charge for bad debts – up 40% year-on-year – as it downgraded its outlook for the UK economy due to the Iran war. Santander now expects the economy to scrape just 0.5% growth in 2026, with unemployment forecast to hit 5.5%.
- New chief executive Mahesh Aditya said: “While we are not yet seeing any significant impact of the current uncertain global economic environment on our customers, we have put measures in place including a proactive outreach programme offering support.”
- The bank is fighting back with cost-cutting measures, including plans to close 44 more branches and put nearly 300 jobs at risk. Operating expenses dropped 7% in the first quarter as Santander pushes ahead with “simplification and automation”.
- Santander confirmed it won’t contest the Financial Conduct Authority’s motor finance redress proposals and will pay compensation for its share of unfair deals. Around 12.1 million customers are due compensation averaging £829 each.
- Meanwhile, the bank’s £2.65 billion takeover of rival TSB is “expected imminently” following regulatory approval.
- READ THE FULL STORY: Santander issues major Wednesday update before £829 payouts to customers
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