Spanish bank Santander's most profitable market is the UK, it has emerged, with recent figures showing that one-fifth of the bank's profits during the first half of 2015 came from Britain.
In addition, the company has seen pre-tax profits in the UK rise from £74 million to £928 million. Revenues were also up five per cent.
Commenting on the results, chief executive of Santander UK, Nathan Bostock, said that the company had a positive outlook but also warned that new charges in chancellor George Osborne's summer budget could have an impact on future performance.
"We are well placed to benefit from the positive economic outlook, although future earnings will be impacted by the bank corporation tax surcharge announced in the recent UK budget," he explained.
"Nevertheless, I am confident that we can continue to grow the business, whilst maintaining balance sheet strength," he added.
On Thursday (July 30th), Jose Garcia Cantera, Santander's chief financial officer, warned that higher UK tax rates and the bank levy would result in a £500m hit to the UK operations by 2020.
When asked about whether the UK business could float in the near future, Mr Bostock said it would be unlikely in the next couple of years.
During the second quarter, UK lending rose nearly three per cent. The strong pound and an increased focus on business loans also benefited the bank overall.
Santander has also recently taken over the sponsorship of London's bicycles for hire scheme from Barclays. The seven-year sponsorship cost nearly £44 million.
Beyond the UK
Overall, the bank's attributable profits rise by almost a quarter (24 per cent) to €3.24 billion (£2.28 billion). At the pre-tax level, however, the results were flat at €2.99 billion.
Spain accounted for 16 per cent of the company's profits. Europe accounted for 54 per cent.
In Spain, profits were up 50 per cent to €771 million. This was despite a dip in revenues as charges against bad debts has dropped.
Santander's Brazilian operation saw profits rise by nine per cent to €1 billion – this was 20 per cent of overall profit.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.