Santander UK has said its profits fell this year, despite its acquisition of TSB boosting the balance sheet and efforts to bring down costs through “simplification and automation”.
The bank reported a pre-tax profit of £1.2 billion for the first nine months of 2026, which was 6% lower than the same period last year.
However, for the third quarter – July to September – profits surged to £630 million, from £372 million last year.
It said the decline across the year was mainly due to a charge in the first quarter relating to historic motor finance commission payments and higher restructuring costs.
Santander has set aside £616 million to cover potential costs of the UK watchdog’s compensation scheme for people who were mis-sold a car loan, but which is currently held up due to legal challenges.
The costs were partly offset by TSB’s contribution to profits of £96 million from May to September, while customer deposits and the mortgage loan book also increased following the acquisition.
Santander said it was still integrating the smaller rival after nearly 1,000 of its staff moved over at the beginning of the month.
But it is also expecting to find cost “synergies” worth around £400 million by the end of 2028 from the merger.
UK chief executive Mahesh Aditya also said the bank was targeting further cost efficiency savings this year “driven by simplification and automation”.
“We also continued to deliver against our wider strategic priorities to deepen customer relationships and enhance operational efficiency, while leveraging Banco Santander’s global technology platforms and AI capabilities to provide the support our customers need,” he said.
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