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Santander º£½ÇÊÓƵ has reported a significant decline in profits for the first half of the year, although it anticipates positive momentum for the remainder of 2024.

The Spanish-owned bank's º£½ÇÊÓƵ division announced a pretax profit of £804m for the initial six months, a decrease from £1.2bn recorded during the same period last year.

The drop in profit was attributed to rising deposit costs, leading to an 11% reduction in net interest income year-on-year. Net interest income is essentially the difference between the revenue generated from loans and the interest paid on deposits.

With persistently high-interest rates and customers searching for more advantageous rates, banks have been compelled to offer higher interest to attract and retain depositors.

Nevertheless, Santander º£½ÇÊÓƵ experienced an increase in its net interest margin, which rose to 2.09% compared to the previous quarter, as reported by .

As a result, despite the yearly downturn, interest income remained stable compared to the first quarter, thanks to what Santander described as "active margin management".

The bank also observed a £5.6bn decrease in customer deposits in the first half, attributing the decline to savings outflows following "repricing actions" in the second quarter.

The mortgage sector posed challenges, with a £4.4bn contraction in mortgage loans during the first half.