Santander UK gains 440,000 new student account customers

Santander UK enjoyed having 440,000 new students sign up for its 1|2|3 current account in the nine months ending 30 September 2016.

The bank’s 1|2|3 Student Current Account catered for university students aged 18 and over, offers a free four year 16-25 railcard, interest on balance and an interest-free and fee-free arranged overdraft.

Retail current account balances also grew to £11.3bn.

The total retail customer base continued to grow by 86,000 since the end of 2015, with total deposits by customers with a primary banking relationship up 10% to £94bn.

Digital customers also continued to grow, with more than 2m customers using the bank’s mobile apps each month.

The Spanish bank’s profit before tax rose by 9% to £1.55bn during the period.

Non-interest income rose by 24% to £935m adjusting for the £119m gain on sale of the bank’s Visa Europe limited shareholding in the second quarter, which rose 8% mainly due to higher 1|2|3 current account fees.

Customer loans rose by £2.6bn to £201.2bn, with net mortgage lending and net corporate lending of £1bn and £1.9bn respectively.

Operating costs were down by £7m at £1,792m when adjusted for the 3% fall in £55m banking reform costs due to digitalisation and product simplification.

Chief executive Nathan Bostock said: "I am pleased to report a strong set of results for the first nine months of the year, with solid business performance, continued cost discipline, and good credit quality. We also continue to see the benefits that our customer-centric and innovative approach is delivering in an improved customer experience and increased loyalty across our business."

The bank expects net positive inflows from the 1I2I3 current account offering to continue in the future.

However with the uncertainty surrounding the upcoming Brexit the bank expects consumer confidence in the short term to fall with lower economic growth in the long run. The firm also expects higher inflation due to the devaluation of the pound and the ongoing increases in oil prices.

“Although we have not seen a material impact on our business in the short period since the EU referendum, we do expect a more challenging macroeconomic environment ahead. Santander UK is well positioned to succeed despite macroeconomic headwinds. Our business is adaptable, innovative and efficient, giving me confidence in our ability to continue to give outstanding value to our customers,” said Bostock.

Banco Santander

Overall, the parent company Banco Santander made an underlying profit of €4.61bn during the period, down 22.5% compared to the previous period due to the impact of extraordinary items.

Gross income decreased to €32.74m from €34.38m in the previous period.

Banco Santander group executive chairman Ana Botín said: “We have delivered strong performance during the first nine months of 2016, earning the loyalty of a further one million customers, while maintaining our position as one of the most profitable banks in our peer group.

"While the low interest rate environment within developed economies remains a challenge for parts of our business, the resilience of our business model has allowed us to continue to deliver, with our Latin American and consumer finance franchises growing particularly well throughout the year.”

The share price for Banco Santander rose 0.84% to 401.60p at 1052 BST on Wednesday.