Santander º£½ÇÊÓƵ has seen a significant increase in provisions as it aggressively pursues its transformation strategy, which includes cutting down its branch network and reducing its workforce.
The bank reported that provisions for other liabilities and charges soared by 74% to £249m, attributed mainly to "higher transformation related charges". The financial institution also noted a substantial rise of 119.8% in losses and provisions to €340m (£296m), as reported by .
In line with strategic shifts, operating expenses dropped by two per cent in the first half, credited to "due to simplification and automation" after the bank reduced its staff numbers by 2,000 over the past year.
The number of Santander's º£½ÇÊÓƵ branches saw a yearly decrease of 5.4%, bringing the total down to 420.
This uptick in provisions follows a 69% jump in the first quarter of 2025 to £140m, amidst strong criticism over the bank's decision to close branches.
Pre-tax profits for the first half were impacted by the increased provisions, falling by £40m to £764m.
These developments are part of the lender's broader strategy to streamline operations and boost investment in technology.
In June 2025, Santander º£½ÇÊÓƵ shut down 95 branches, opting instead for a "community bankers scheme" to maintain face-to-face support in local areas.
Santander hit by stamp duty changes
Additionally, Santander made headlines with its acquisition of TSB Bank at the start of July, a move expected to exceed £2.9bn.
Mike Regnier, the chief executive, commented on the deal, stating it "accelerates our transformation, allowing us to enhance our customer proposition and invest more in innovative products and our digital offering."
In other developments, the company's net interest margin – a crucial measure of a bank's profitability from lending – fell by eight basis points quarter-on-quarter.
This was largely due to an increase in customers settling their loans or mortgages ahead of the agreed due date in the first quarter, in an attempt to outpace changes to the stamp duty threshold that came into effect on 31 March.
Despite higher gross mortgage lending of £10.6 billion compared to £7.4 billion in the first half of 2024, mortgage loans remained steady at £167.2 billion.
Net interest income saw a five per cent rise to £2.2 billion, while non-interest income experienced a 12 per cent drop to £172 million.
The firm is among leading British lenders, including Lloyds and Close Brothers, who are eagerly awaiting Friday's landmark Supreme Court ruling on the motor finance scandal. The bank could potentially face a £295 million liability for its activities in this sector, and there is speculation that it may spin off its litigation-hit division as part of an operational overhaul.
