Santander UK profits up 10% as expansion planned

Santander UK has reported its profits rose 10% in the first six months of 2010 to £875m.

The group, which writes a fifth of UK mortgages, said gross mortgage lending was up 14% on the same period last year to £12.3bn.

Santander UK also intends to create over 600 jobs in its British branches and call centres over the next few months to further its continued growth and improve customer service.

During H1 2010, Santander UK increased its lending to small and medium-sized businesses by 20%.

Santander UK said demand for credit remains subdued and the market challenging. While house purchase volumes are higher than a year ago, they are low compared to the past decade and house price inflation remains flat.

Santander UK said it expects interest rates to remain low for the rest of the year.

António Horta-Osório, chief executive of Santander UK, says: "We have had growth across all areas of the business, demonstrating that our transformation into a full-service commercial bank is progressing successfully."

Santander UK's strong performance was in marked contrast to parent Santander Group, which saw its half-year profits fall 1.6% to €4.445bn.