 has warned of a difficult year ahead, following pound weakness in the aftermath of the June referendum result.){kind=link}
Santander (LON:BNC) has warned of a difficult year ahead, following pound weakness in the aftermath of the June referendum result.
The bank announced that UK earnings had tumbled by almost 15 percent, following sterling currency movements. In addition, the bank said that the imposition of 8 percent bank corporation tax surcharge had also impacted its earnings.
Nathan Bostock, chief executive of Santander’s UK operations, said:
“Looking ahead, we expect to see a changeable and more challenging macro environment in 2017.”
In addition, he noted: “We believe the transformation we have made in putting the customer at the heart of our business, coupled with a continued focus on costs and risk management, gives us solid foundations to succeed and confidence in the future.”
In the UK revenue fell by 14.7 percent to €1.68 billion, including currency movements. As well as facing the impact of pound fluctuations, the bank also failed to increase total new customer signups, following the halving of its interest rates back in November. According to figures, 483,000 new current account customers were added in 2016, which marks a decrease of about a million the year previously.
Despite underwhelming UK figures, the Spanish based bank continued to see growth in its other divisions. Total earnings hit €6.2 billion (£5.3 billion) with global revenue rising by 4 percent. Across the period the bank also increased its customers base by four million to 125 million.
This follows investigations into Santander for its involvement in the payment protection insurance (PPI) mis-selling scandal that has hit many banks in recent years. In October, Lloyds Bank (LON:LLOY) announced their intention to set aside £1 billion in funds to tackle PPI related troubles. Similarly, Santander have since set aside £114 million in the fourth quarter for compensation relating to the issue.
Pre-tax profits in 9 out of 10 of its markets rose, with its largest Brazil market seeing a 9.5 percent increase.
Shares in Santander remained buoyant in Wednesday trading, up by 3.89 percent as of 11.28 AM (GMT).