Santander UK has reported a fall in profits for the first nine months of 2026, despite its acquisition of TSB strengthening the balance sheet and efforts to reduce costs through “simplification and automation”.
The bank posted a pre-tax profit of £1.2 billion for the period, which was 6% lower than the same time last year. However, in the third quarter from July to September, profits rose to £630 million, up from £372 million in the previous year.
Charges and TSB Contribution
The decline across the year was mainly attributed to a charge in the first quarter related to historic motor finance commission payments and higher restructuring costs. Santander has set aside £616 million to cover potential costs of the UK watchdog’s compensation scheme for people who were mis-sold a car loan, though the scheme is currently held up due to legal challenges.
These costs were partly offset by TSB’s contribution to profits of £96 million from May to September. Customer deposits and the mortgage loan book also increased following the acquisition.
Integration and Cost Synergies
Santander said it was still integrating the smaller rival after nearly 1,000 of its staff moved over at the beginning of the month. The bank is expecting to find cost “synergies” worth around £400 million by the end of 2028 from the merger.
UK chief executive Mahesh Aditya said the bank was targeting further cost efficiency savings this year “driven by simplification and automation”. “We also continued to deliver against our wider strategic priorities to deepen customer relationships and enhance operational efficiency, while leveraging Banco Santander’s global technology platforms and AI capabilities to provide the support our customers need,” he said.
