Santander has admitted missing it targets for attracting business customers in the UK, as it announced it was winning current account customers on the high street.
New targets will be set for the UK arm of the Spanish bank in September when the group chair, Ana Botín, sets out a strategy review.
Three years ago, the UK arm, which Botín ran until her promotion last year, had set a target of 20% of all lending to be to businesses in 2015. However, the £25bn of lending amounts to a 13% share.
But the bank said it had attracted one in four customers switching their current account under a new industry-wide service introduced 18 months ago. Santander’s UK arm has grown rapidly following the acquisition of Abbey National, Alliance & Leicester and parts of Bradford & Bingley.
As it reported first quarter profits in the UK of £470m, up from £416m a year earlier, the bank warned that the cost of implementing regulatory reforms would increase during the year.
Led by former Royal Bank of Scotland executive Nathan Bostock, Santander promised an update at the time of its half-year results on the ringfencing proposals outlined by Sir John Vickers. Vickers requires a ringfence between a bank’s high street operations and its investment banking divisions.
Santander did not take extra provision for payment protection insurance mis-selling but added £10m to compensate customers for other reasons.
Bostock said: “The UK economy continues to be supportive of our business in 2015. We await further clarification on the regulatory landscape this year, in relation to capital, leverage, conduct and banking structure. Early completion of these reforms, in a proportionate way, will help us to contribute fully to the UK’s ongoing economic recovery.”
The parent company is expected to float off the UK arm, although the plans have delayed following the reforms implemented since the banking crisis.
The UK is now one of three main markets for Santander, alongside Spain and Brazil, accounting for 20% of the total profits.
Botín took over the helm of Santander last year following the death of her father, Emilio.
