Santander hikes lending to SMEs

Spanish bank Santander says it has increased lending to small business by 34% in the first half of the year in Northern Ireland, providing £26m of new lending to small businesses in the region.

The firm has been lending to the sector in Northern Ireland since 2009.

Announcing results for the first six months of the year, the UK’s third biggest bank, which is owned by Spanish parent Banco Santander, said it was aiming to change the focus of the retail bank, by growing the SME business and continuing a focus on IT investment and efficiency.

The institution has focused heavily on lending to the small business sector and on attracting customer deposits and current accounts.

Overall, Santander reported negative net mortgage lending of £2.8bn in the first half of the year.

But Santander, which is the owner of the former Abbey and Alliance & Leicester building societies, has been hit by high funding costs and low interest rates, which left income 16% lower.

The group said underlying profits slumped 43% to £725m, after stripping out the effect of last year’s £731m provision for mis-selling of payment protection insurance (PPI).