Cut-throat competition in the mortgages market has seen profits fall at Santander amid what chief executive Nathan Bostock calls “uncertain times”.
Profit at the UK arm of the bank, which is big in Spain and Latin America, slumped 36% in the half year to £575 million.
He said: “These are uncertain times and our profitability has been impacted by a fall in income due to the highly competitive UK mortgage market.”
New players are fighting for market share and old ones seeing margins eroded, with interest rates stubbornly low.
Profit margins at Santander are down to a wafer-thin 1.69%. Arch-rival Lloyds has a net interest margin of closer to 3%.
Bostock said Santander is “becoming simpler and more focused, more effective at harnessing technology”.
The parent company is the eurozone’s largest bank in market cap. Profit was €1.39 billion (£1.25 billion), in the quarter to June.
