Abbey takes 16% share of mortgage market

Abbey and Alliance & Leicester has become the second biggest mortgage bank in the UK by claiming a 16.3% share of gross mortgage lending in the first half of 2009.

Santander's UK arm, which includes Abbey, Alliance & Leicester and the deposit book of Bradford & Bingley, reported a 30% profit jump for the first six months of the year.

Santander is also now the third largest player in the UK for retail deposits, posting a £790m profit for the first six months of the year. The bank said it grew revenues by a fifth.

It has attributed its increase in revenues to prudent lending decisions taken during the housing boom, when Abbey scaled back in mortgages.

The acquisitions of B&B and A&L last year boosted Santander's UK profit by 62.8% compared to the same time last year. B&B contributed £7m in profit and A&L £137m.

Meanwhile, the average loan to value for new loans has remained at 60% over the last nine months, while the stock loan to value rose to 53% from 52% in March.

Santander will rebrand Abbey and B&B as Santander in January and A&L will also take on the name later next year.

António Horta-Osório, chief executive of Abbey, attributes the success in profits to it buying B&B's £21bn deposit book in a £612m deal.

He says: "We have delivered an excellent increase in revenue and profit despite tough market conditions, underpinned by market share gains and growth across all business divisions. Our net interest margin is increasing because we do not need to use expensive funding as we have £20bn of B&B deposits," he said.