Gold prices bounce off 3-week lows; demand likely longer term
LONDON - Santander (BME:SAN) UK Group Holdings PLC announced on Wednesday a decrease in profit before tax for the first quarter of 2025, citing charges related to changes in its branch network. The bank reported a profit before tax of £358 million for the quarter ended March 31, 2025, an 8% decline from the £391 million reported in the same period last year.
The bank attributed the profit reduction primarily to charges amounting to £63 million associated with adjustments to its branch network. Despite these charges, Santander UK saw an increase in net interest income by 6% due to a lower cost of deposits and support from its structural hedge. Meanwhile, operating expenses dropped by 1%, thanks to the simplification and automation within the business.
Santander UK also noted an increase in credit impairment charges, which rose by £33 million, aligning more closely with pre-pandemic levels after a period of write-backs. Provisions for other liabilities and charges went up by 69%, driven by the branch network changes.
The bank’s net interest margin (NIM) improved to 2.30% from 2.07% in the first quarter of the previous year. The cost-to-income ratio (CIR) also showed improvement, moving from 57% to 54%.
Customer loans and deposits remained stable during the quarter, with mortgage loans unchanged at £167.2 billion. Santander UK maintained a strong liquidity and funding position, with a Common Equity Tier 1 (CET1) capital ratio of 14.7%.
Looking ahead, Santander UK anticipates a gradual return to net lending growth in 2025 and expects to continue benefiting from its structural hedge position and recent pricing decisions in the face of potential Bank Rate reductions.
The bank’s transformation through simplification and automation is expected to drive further cost efficiencies throughout the year. However, Santander UK remains cautious, monitoring increasing risks from geopolitical events and their potential impact on customers.
This financial update is based on a press release statement from Santander UK Group Holdings PLC.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.