Yes . . . . . . . No . . .X. . . .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

§	Santander UK continues to deliver improved performance and profitable growth:

 

o	trading profit before tax up over 10% with around 6% revenue growth;

 

o	trading cost-to-income ratio improved by over 2% relative to Half 1 2009  to around 39%, maintaining Santander UK’s ‘best in class’ position relative to UK peers 2 ;

 

o	improved funding position with growth in commercial deposits of 11%, more than twice the growth in commercial assets of 5%. As a result, the loan to deposit funding ratio improved by more than 8% to 124% 3 (H1’09: 132%, H1’08:167%); and

 

o	return on risk weighted assets increased by more than 50 basis points to c.2.4%, with an increase in the Tier 1 ratio from 9.5% in December 2009 to 10.6%.

 

§	Good progress in becoming a full service commercial bank:

 

o	introduced next stage of our loyalty strategy by launching the Loyalty Tracker Bond, available to our mortgage, investment and primary current account customers;

 

o	mortgage gross lending of £12.3bn, up 14%, with an estimated gross market share of 19%;

 

o	growth in lending to small and medium-sized enterprises 4 (SMEs) picking up pace, up over 20% on Half 1 2009;

 

o	loyalty strategy delivering c.150,000 Zero current account openings;

 

o	bank account balances up 11%, with a total of 519,000 new accounts opened, including a significant increase in higher-value current accounts;

 

 

 

 

 

o	credit card sales of 239,000 were 31% higher than a year ago; and

 

o	with the Part VII process completed, we remain on track to fully integrate and rebrand A&L to Santander by the end of the year.

 

§	Over 600 new hires planned in the second half of 2010 to support business growth.

 

§	Deleverage actions remain on track, with a 62% and 40% reduction in the A&L Treasury portfolio since December 2008 and December 2009 respectively, with credit performance slightly better than original expectations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

§

launched the Santander Zero Current Account.  The Zero account already has the lowest fees in the market with no overdraft fees and fee-free overseas ATM and point-of-sale transactions.  It is available to anyone who has their main banking relationship with Santander and holds a Santander mortgage or investment product.  With 40 million adults in the UK with at least one current account, we estimate the Santander Zero Current Account is now available to over 22 million consumers;

 

§	removed charges for using all 4,300 Santander ATMs in Spain for all customers who have their main current account with Santander UK;

 

§	waived the 3 per cent balance transfer fee on the Zero Credit Card for all existing customers with a mortgage or a current account with Santander or A&L;

 

§	extended the eligibility of Zero, the UK’s first and only fee-free current account to include all those who hold or open an investment with Santander.  This means the Zero Current Account is now available to almost six out of ten UK adults that have a current account;

§	kept the Flexi-ISA open for Santander Current Account customers, meaning they can still access the market leading 3.2% rate; and

 

§	increased the LTV to 90% on mortgages exclusively available to customers who hold their primary current account with Santander.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	Half 1 2009	Half 2 2009		Qtr 1 2010	Qtr 2 2010	Half 1 2010		Var H1'10 vs. H1'09
Gross mortgage lending (£bn)	10.8	15.6		5.7	6.6	12.3		14%
Capital repayments (£bn)	8.8	10.0		4.3	4.7	9.0		1%
Net mortgage lending (£bn)	2.0	5.6		1.4	1.9	3.3		67%
Stock (£bn)	161.2	166.8		168.3	170.2	170.2		6%
Market share – gross lending	16.3%	20.4%		18.9%	19.3%	19.1%		2.8%
Market share – capital repayments	13.6%	14.7%		14.6%	14.7%	14.6%		1.0%
Market share – stock	13.2%	13.5%		13.6%	13.7%	13.7%		0.5%
Total gross UPL lending (£bn)	0.9	0.7		0.4	0.3	0.7		(19%)
Total UPL stock (£bn)	4.9	4.3		4.0	3.8	3.8		(22%)
SME Lending - Stock (£bn)	6.2	6.7		7.0	7.5	7.5		21%
Market share SME Lending - Stock (%)	2.7%	2.9%		3.0%	3.2%	3.2%		0.5%
Total commercial (5) asset stock (£bn)	184.3	189.9		191.3	192.9	192.9		5%
Commercial (5) net deposit flows (£ bn)	4.9	10.0		3.0	1.6	4.6		(7%)
Investment sales – API (£ bn)	1.8	1.6		0.9	0.9	1.8		0%
Total Commercial (5) liability stock (£bn)	133.8	143.9		146.9	148.5	148.5		11%
Bank account openings (000's)	522	571		285	234	519		(1%)
Market Share - Bank Account Stock	8.7%	8.9%		8.9%	9.1%	9.1%		0.4%
Credit card sales (000's)	183	204		117	122	239		31%

 

 

§	funding jaws of 6% driven by commercial deposit growth of 11% to £148.5bn compared with commercial loans of £192.9bn up 5%;

 

§

gross mortgage lending of £12.3bn, with an estimated market share of 19.1% (H1’09: 16.3%). Lending continued to focus on affordability and lower LTV segments. The average LTV on new business completions in the first half of 2010 decreased slightly to 61% compared with 64% in Half 2 2009. The indexed stock LTV reduced further to 51% in the second quarter;

 

§	capital repayments of £9.0bn, were broadly flat at the level of repayments seen in Half 1 2009, with retention activity continuing to focus on the competitive low LTV segments;

 

§	net mortgage lending of £3.3bn, as the bank continued to be a consistent lender in the UK economy;

§	total gross UPL lending decreased by 19%, continuing the trend of last year with a continued focus on lending to existing customers with a strong, established credit history. Balances were down £1.1bn, or 22%;

 

§	in the first six months of the year Santander UK has continued to increase its lending to the UK SME market through its network of Corporate Business Centres and has grown its lending balances by over 20%;

 

§	net commercial deposit inflows of £4.6bn were underpinned by strong flows across Retail, Private and Corporate Banking.  Core retail flows market share in Half 1 2010 was estimated at 15.8%;

 

§

11% increase in bank account balances compared to the same point last year, including a significant increase in higher-value current accounts. The business continues to offer value for money products targeting existing loyal customers, including the Santander Zero Current Account, of which c. 150,000 accounts have been opened since launch; and

 

§	credit card sales up 31%, partly due to successful campaigns such as waiving the 3% balance transfer fee on Zero Credit Card for existing customers.

 

 

 

1

Trading profit before tax is management’s preferred profit measure when assessing the performance of the business and is the internal measure of segment profit required to be disclosed under IFRS 8.  It is calculated by adjusting statutory profit before tax for reorganisation and other costs, hedging and other variances, and capital and other charges, as detailed in Note 1 a) to the Financial Statements in the 2009 Annual Report.

 

2	For our internal review we compare to the PFS segments of Royal Bank of Scotland, Lloyds Banking Group and Barclays

 

3	Includes Equity

 

4	Excludes rundown balances

 

5	Includes Retail and Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Matthew Young Anthony Frost  Jonathan Burgess Israel Santos

(Communications Director) (Head of Corporate Communications)  (Investor Relations)  (Investor Relations)

020 7756 4232 020 7756 5536 020 7756 4182 020 7756 4275

 

 

 
 

[Missing Graphic Reference][Missing Graphic Reference]

 

 

		SANTANDER UK PLC
	Dated: 29 July 2010	By / s / Jessica Petrie (Authorised Signatory)

 

 

 

 

 

 

 

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