Santander UK has revealed a hike in annual profits despite putting by another £183 million to cover costs of the motor finance mis-selling scandal and warned over further cost-cutting over the year ahead.
The Spanish-owned lending giant reported a 14% rise in pre-tax profits to £1.51 billion for 2025.
It added the additional provision for motor finance compensation and costs, on top of £295 million for the saga in 2024, having earlier cancelled third quarter results to assess the impact of the Financial Conduct Authority’s redress scheme.
But it cautioned “there continue to be significant uncertainties as to the nature, extent and timing of redress payments”.
“The ultimate financial impact could be materially higher or lower than the amount provided,” the bank said.
In full-year results it also set the scene for more cost-cutting in 2026, less than a week after it revealed plans to shut another 44 branches, putting nearly 300 jobs at risk.
Santander said it expects further cost efficiencies in 2026 “driven by simplification and automation of our business”.
Last week’s branch closures will leave it with 244 full branches, although it will add more through the deal to take over smaller rival TSB.
It said it expects to complete the £2.65 billion TSB deal in the first half of 2026.
The UK bank results came after its Spanish owner banco Santander announced a 12.2 billion US dollar (£8.9 billion) deal to buy American rival Webster Bank.
Banco Santander reported a better-than-expected net income of 3.76 billion euro (£3.24 billon) for the fourth quarter, having brought the results forward by a day due to the announcement of the deal.
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