The information contained in this
statement is unaudited and does not comprise statutory accounts
within the meaning of section 434 of the Companies Act 2006 ('the
Act'). The statutory accounts for the year ended 31 December 2023
have been filed with the Registrar of Companies. The statement of
the auditor on those statutory accounts was unqualified, did not
draw attention to any matters by way of emphasis and did not
contain a statement under section 498(2) or (3) of the
Act.
This
statement provides a summary of the unaudited business and
financial trends for the three months ended 31 March 2024 for
Santander UK Group Holdings plc and its subsidiaries (Santander
UK), including its principal subsidiary Santander UK plc. The
unaudited business and financial trends in this statement only
pertain to Santander UK on a statutory basis. Unless otherwise
stated, references to results in previous periods and other general
statements regarding past performance refer to the business results
for the same period in 2023.
This
statement contains non-IFRS financial measures that are reviewed by
management in order to measure our overall performance and these
are outlined in the Appendix. A list of abbreviations is included
at the end of this statement and a glossary of terms is available
at:
https://www.santander.co.uk/about-santander/investor-relations/glossary
Santander UK Group Holdings plc
Quarterly Management Statement
for the three months ended 31 March 2024
Mike Regnier, Chief Executive Officer,
commented:
"This quarter's results are in line with our expectations. We
have seen encouraging growth in our Corporate & Commercial
business using our global network to help businesses into new
markets. We also launched new products to support our customers'
changing needs, including the Edge credit card with cashback and
95% LTV mortgages for new build properties - supporting aspiring
homeowners, particularly first-time buyers.
"The recent fall in the rate of inflation will be welcomed by
our customers who continue to face cost of living pressures. Our
prudent approach to risk and targeted support has meant that in a
challenging environment, levels of arrears have remained
low.
"Looking ahead, we will continue to leverage both the local
and the combined scale and expertise of Banco Santander Group to
deliver our strategic priorities for the year ahead. We will
maintain our focus on delivering for our customers by offering
competitive and innovative products and drive value by effectively
managing our costs."
Q1-24 financial and business highlights
We
continued to help and support our customers
|
§
|
1.5 million customers offered
support to help with the increased cost of living.
|
|
|
§
|
Continued to prioritise our
customers' needs, underlining our commitment to Consumer
Duty.
|
|
|
§
|
Grew our CCB business with new
clients, providing connections to our global network to support
their UK and overseas growth.
|
|
§
|
NPS ranked 4th for
Retail and 1st for Business & Corporate. Customer
service is integral to our strategy and remains a key area of
focus1.
|
Profit before tax down to £391m (Q1-23: £547m), with
RoTE2 of 10.3% (2023: 14.4%)
|
§
|
Banking NIM2 of 2.07%,
down 4bps from Q4-23 and down from 2.21% in Q1-23 due to higher
cost of deposits.
|
|
§
|
Although deposit migration from
current accounts to savings slowed in Q1-24, overall deposit costs
are higher than a year ago.
|
|
§
|
Operating expenses up 7%, with
further investment in efficiency and customer experience, and
following two years of high inflation.
|
|
§
|
CIR2 of 57%, up 4pp from
Q4-23; up from 47% in Q1-23.
|
|
§
|
Credit impairment charges down 69%
and cost of risk2 down to 8bps (Q1-23: 15bps), given the
improved economic outlook.
|
|
§
|
Stage 3 ratio2 of 1.57%,
up 8bps from Dec-23, due to a smaller mortgage book and some single
name cases in CCB.
|
|
§
|
Arrears remain low, reflecting our
prudent approach to risk despite the challenging environment for
customers.
|
Customer loans and deposits reduced following further
disciplined pricing actions, with LDR of 107% (Dec-23:
108%)
|
§
|
Our
decision to optimise balance sheet returns led to a £2.5bn
reduction in mortgage lending.
|
|
§
|
Customer
deposits reduced by £0.3bn in Q1-24 with seasonal first quarter
outflows largely offset by deposit inflows.
|
Strong liquidity, capital and funding
|
§
|
LCR of 166% (Dec-23: 162%) with
liquidity pool of £55.2bn (Dec-23: £50.9bn).
|
|
§
|
CET1 capital ratio of 15.2%
(Dec-23: 15.2%) and UK leverage ratio of 5.1% (Dec-23: 5.1%), well
above minimum requirements.
|
|
§
|
Repaid £2.0bn TFSME in Q1-24 as
planned with £15.0bn outstanding. Stable and diversified wholesale
funding programmes.
|
Looking ahead
|
§
|
We intend to continue to prioritise
profitability, capital generation and our core banking franchise in
2024, through planned balance sheet optimisation, resulting in
lower mortgage lending and customer deposits.
|
|
§
|
While we anticipate that 2024
Banking NIM2 will be lower than 2023, the impact of our
pricing discipline and increased contribution to income from the
structural hedge should positively impact Banking NIM2
in the second half of the year.
|
|
§
|
As part of our strategy to drive
further digitalisation, efficiency and simplification, our focus on
cost management will continue, alongside additional
investments.
|
|
1.
|
See page 10 for more on
NPS.
|
|
2.
|
Non-IFRS measure. See Appendix for
details.
|
Income statement and balance sheet
|
Summarised consolidated income statement Q1-24 vs
Q1-23
|
Q1-24
|
Q1-23
|
Change
|
|
|
£m
|
£m
|
%
|
|
Net interest income
|
1,053
|
1,184
|
(11)
|
|
Non-interest
income1
|
95
|
124
|
(23)
|
|
Total operating income
|
1,148
|
1,308
|
(12)
|
|
Operating expenses before credit
impairment (charges) / write-backs, provisions and
charges
|
(655)
|
(614)
|
7
|
|
Credit impairment (charges) /
write-backs
|
(19)
|
(61)
|
(69)
|
|
Provisions for other liabilities and
charges
|
(83)
|
(86)
|
(3)
|
|
Profit before tax
|
391
|
547
|
(29)
|
|
Tax on profit
|
(103)
|
(145)
|
(29)
|
|
Profit after tax
|
288
|
402
|
(28)
|
|
Banking NIM2
|
2.07%
|
2.21%
|
-14bps
|
|
CIR2
|
57%
|
47%
|
10pp
|
Profit before tax down 29%
|
§
|
Net
interest income down 11%, largely due to higher customer deposit
costs following the pass-through of 2023 base rate changes to
customers.
|
|
§
|
Non-interest income down 23%, primarily due to the Q1-23
revaluation gain of our shares in Euroclear which was not repeated
and lower operating lease income in Consumer Finance.
|
|
§
|
Operating
expenses3 up 7%, with further investment in efficiency
and customer experience, and following two years of high
inflation.
|
|
§
|
Credit
impairment charges down
69%, given the improved economic outlook
with lower unemployment and higher house prices now
expected.
|
|
§
|
Provisions
for other liabilities and charges down 3%, with lower
transformation related charges, largely offset by the new Bank of
England levy introduced in March 2024, replacing the Cash Ratio
Deposit scheme which was previously accounted for as a non-interest
earning asset in net interest income.
|
|
§
|
Tax on
profit decreased 29%, reflecting the reduction in
profit.
|
|
Summarised balance sheet
|
31.03.24
|
31.12.23
|
|
|
£bn
|
£bn
|
|
Customer loans
|
203.7
|
206.7
|
|
Other assets
|
78.7
|
75.4
|
|
Total assets
|
282.4
|
282.1
|
|
|
|
|
|
Customer deposits
|
193.3
|
193.6
|
|
Total wholesale funding
|
55.5
|
55.8
|
|
Other liabilities
|
18.5
|
17.7
|
|
Total liabilities
|
267.3
|
267.1
|
|
Shareholders' equity
|
15.1
|
15.0
|
|
Total liabilities and equity
|
282.4
|
282.1
|
FCA
review of Motor Finance commission
In January
2024, the FCA initiated a review of historical commission
arrangements between motor finance firms and dealers. While it is
possible that certain charges may be incurred in relation to the
FCA's review or related existing or future
county court claims, Financial Ombudsman Service (FOS) complaints
and the Competition Appeal Tribunal (CAT) proceedings, it is not
considered that a legal or constructive obligation has been
incurred in relation to these matters that would require a
provision to be recognised at this stage. The resolution of such
matters is not possible to predict with any certainty and there
remain significant inherent uncertainties regarding the existence,
scope and timing of any possible outflow which make it
impracticable to disclose the extent of any potential financial
impact.
|
1.
|
Comprises 'Net fee and commission
income' and 'Other operating income'.
|
|
2.
|
Non-IFRS measure. See Appendix for
details.
|
|
3.
|
Operating expenses before credit
impairment (charges) / write-backs, provisions and
charges.
|
Customer balance sheet analysis
|
Customer loans
|
31.03.24
|
|
31.12.23
|
|
|
Total
|
Stage 1
|
Stage 2
|
Stage
31
|
|
Total
|
Stage 1
|
Stage 2
|
Stage
31
|
|
|
£bn
|
%
|
%
|
%
|
|
£bn
|
%
|
%
|
%
|
|
Retail & Business
Banking
|
179.5
|
88.6
|
10.1
|
1.30
|
|
182.3
|
88.3
|
10.5
|
1.27
|
|
- Mortgages
|
172.7
|
88.9
|
10.0
|
1.19
|
|
175.2
|
88.5
|
10.4
|
1.16
|
|
- Credit Cards
|
2.6
|
85.3
|
12.8
|
3.22
|
|
2.7
|
85.4
|
12.9
|
2.95
|
|
- UPLs
|
2.1
|
84.9
|
13.7
|
1.42
|
|
2.1
|
84.4
|
14.3
|
1.32
|
|
- Overdrafts
|
0.4
|
46.4
|
47.2
|
7.39
|
|
0.5
|
43.9
|
50.1
|
6.73
|
|
- Business Banking
|
1.7
|
86.4
|
6.5
|
7.24
|
|
1.8
|
86.5
|
6.3
|
7.25
|
|
Consumer Finance
|
5.1
|
92.7
|
6.7
|
0.60
|
|
5.2
|
93.1
|
6.3
|
0.53
|
|
Corporate & Commercial
Banking
|
17.8
|
78.6
|
17.0
|
4.73
|
|
17.9
|
77.1
|
19.1
|
4.14
|
|
Corporate Centre
|
1.3
|
99.8
|
0.1
|
0.09
|
|
1.3
|
99.8
|
0.1
|
0.10
|
|
Total
|
203.7
|
87.9
|
10.6
|
1.57
|
|
206.7
|
87.5
|
11.1
|
1.49
|
Resilient customer loan portfolios
|
Arrears over 90 days past due
%
|
Mortgages
|
Credit
Cards
|
UPL
|
Overdrafts
|
Business
Banking
|
Consumer
Finance
|
CCB
|
|
31 March 2024
|
0.82
|
0.58
|
0.81
|
2.60
|
4.20
|
0.49
|
1.06
|
|
31 December 2023
|
0.80
|
0.51
|
0.73
|
2.43
|
4.15
|
0.43
|
1.04
|
Prudent approach to risk evident across
portfolios
|
§
|
Mortgages:
average stock LTV of 51% (Dec-23: 51%) and average new loan size of
£227k (2023: £228k). £57bn of new business and internal transfers
were priced in 2023 and Q1-24, and by the end of the year a further
£29bn will reach end of incentive period. Arrears from recent
internal transfers remains low, with less than 1% of customers
entering arrears within 12 months.
|
|
§
|
Credit
Cards: 56% (2023: 55%) of customers repay full balance each
month.
|
|
§
|
UPL:
average customer balances £6k (Dec-23: £6k).
|
|
§
|
Overdrafts: relatively small balance of £0.4bn, down from
£0.5bn in 2023.
|
|
§
|
Business
Banking: includes £1.6bn (Dec-23: £1.7bn) of BBLS with 100%
Government guarantee.
|
|
§
|
Consumer
Finance: 91% (Dec-23: 87%) of lending is collateralised on the
vehicle.
|
|
§
|
CCB:
customers largely resilient to lower growth and inflationary
pressures, with a small uptick in watchlist and stage 3
exposures.
|
ECL provision
|
§
|
ECL provision decreased by £27m to
£967m (2023: £994m) largely due to lower unemployment and higher
HPI assumptions, including a reduction in weighting of the Stubborn
Inflation scenario.
|
|
§
|
While our HPI forecast has improved,
the outlook for the housing market remains uncertain and so we
introduced a new £10m JA in Q1-24 to reflect the potential for
lower than forecast HPI.
|
|
§
|
3-month gross write-off utilisation
of £47m largely driven by unsecured retail (Q1-23: £42m; 12-month
2023: £232m).
|
|
Customer deposits
|
31.03.24
|
31.12.23
|
|
|
£bn
|
£bn
|
|
Retail & Business
Banking
|
157.6
|
158.3
|
|
- Current accounts
|
63.9
|
65.0
|
|
- Savings accounts
|
78.7
|
77.5
|
|
- Business banking
accounts
|
9.8
|
10.6
|
|
- Other retail products
|
5.2
|
5.2
|
|
Corporate & Commercial
Banking
|
25.1
|
24.1
|
|
Corporate Centre
|
10.6
|
11.2
|
|
Total
|
193.3
|
193.6
|
|
1.
|
Non-IFRS measure. See
Appendix for details.
|
Economic scenarios and ECL
Economic scenarios updated to reflect the latest market data
including expectations for inflation and base rate
trajectory
|
§
|
Our Base Case has been updated, most notably
HPI, with house prices now expected to rise over the 5-year period.
Given unemployment was lower than expected at the start of 2024,
the peak rate of unemployment is lower.
|
|
§
|
Downside 1 and Downside 2 scenarios capture the
impact of continuing weaker investment, the increasing risk from
geopolitical events and the ongoing significant mismatch between
job vacancies and skills, as well as a smaller labour
force.
|
|
§
|
We have increased the Downside 1 scenario
weighting by 5pp, offset by a reduction in the weighting for the
Stubborn Inflation scenario by 5pp due to the easing of
inflationary pressures.
|
|
§
|
The Stubborn Inflation scenario reflects the
possibility that inflation remains above the Bank of England
target, leading to further base rate increases. This adds to cost
of living pressures creating weak consumer demand.
|
|
§
|
The Upside
scenario incorporates a quicker economic recovery.
|
|
Economic
scenarios 31 March 20241
|
Upside
%
|
Base
Case
%
|
Downside
1
%
|
Stubborn
Inflation
%
|
Downside
2
%
|
Weighted
%
|
|
GDP
(calendar
year annual growth rate)
|
2023
|
0.1
|
0.1
|
0.1
|
0.1
|
0.1
|
0.1
|
|
2024
|
0.7
|
0.2
|
-0.1
|
-1.5
|
-2.6
|
-0.3
|
|
2025
|
2.0
|
1.3
|
0.2
|
-0.8
|
-2.5
|
0.5
|
|
2026
|
2.5
|
1.5
|
0.4
|
0.4
|
0.4
|
1.1
|
|
2027
|
2.5
|
1.4
|
0.4
|
0.7
|
1.9
|
1.3
|
|
|
2028
|
2.5
|
1.4
|
0.2
|
0.8
|
2.6
|
1.4
|
|
|
Peak to
trough2
|
n.a.
|
n.a.
|
-0.4
|
-2.4
|
-5.2
|
-0.5
|
|
Base
rate
(At 31 December)
|
2023
|
5.25
|
5.25
|
5.25
|
5.25
|
5.25
|
5.25
|
|
2024
|
4.25
|
4.50
|
5.50
|
6.00
|
3.75
|
4.78
|
|
2025
|
3.25
|
3.50
|
4.25
|
5.75
|
2.00
|
3.78
|
|
2026
|
3.00
|
3.25
|
3.25
|
4.00
|
2.00
|
3.21
|
|
2027
|
3.00
|
3.00
|
3.00
|
3.00
|
2.50
|
2.95
|
|
|
2028
|
3.00
|
3.00
|
3.00
|
3.00
|
3.00
|
3.00
|
|
|
5-year
Peak
|
5.25
|
5.25
|
5.50
|
6.00
|
5.25
|
5.25
|
|
HPI
(Q4 annual
growth rate)
|
2023
|
-0.8
|
-0.8
|
-0.8
|
-0.8
|
-0.8
|
-0.8
|
|
2024
|
6.7
|
3.0
|
-4.3
|
-11.8
|
-15.6
|
-1.8
|
|
2025
|
7.5
|
3.5
|
-0.3
|
-6.3
|
-18.4
|
0.2
|
|
2026
|
5.6
|
3.5
|
3.3
|
2.6
|
2.7
|
3.6
|
|
2027
|
4.5
|
3.5
|
5.0
|
4.3
|
5.2
|
4.1
|
|
2028
|
4.0
|
3.5
|
5.3
|
5.5
|
4.9
|
4.2
|
|
Peak to
trough2
|
n.a.
|
n.a.
|
-8.0
|
-20.0
|
-33.0
|
-5.0
|
|
Unemployment
(At 31 December)
|
2023
|
3.8
|
3.8
|
3.8
|
3.8
|
3.8
|
3.8
|
|
2024
|
3.9
|
4.2
|
4.3
|
4.9
|
7.6
|
4.6
|
|
2025
|
3.6
|
4.4
|
4.7
|
5.5
|
8.2
|
4.9
|
|
2026
|
3.4
|
4.3
|
5.1
|
5.9
|
7.6
|
4.9
|
|
2027
|
3.1
|
4.2
|
5.5
|
6.0
|
7.0
|
4.8
|
|
2028
|
3.1
|
4.2
|
5.9
|
6.1
|
6.4
|
4.9
|
|
5-year
Peak
|
4.2
|
4.4
|
5.9
|
6.1
|
8.5
|
4.9
|
|
|
|
|
|
|
|
|
|
Weight
Mar-24:
|
10%
|
50%
|
15%
|
15%
|
10%
|
100%
|
|
|
|
|
|
|
|
|
|
|
ECL 31
March 2024
(100% weight to each scenario)
|
Upside
£m
|
Base
Case
£m
|
Downside
1
£m
|
Stubborn
Inflation
£m
|
Downside
2
£m
|
Weighted
£m
|
|
Retail
& Business Banking
|
421
|
458
|
499
|
640
|
968
|
522
|
|
Consumer
Finance
|
69
|
70
|
71
|
72
|
72
|
70
|
|
Corporate
& Commercial Banking
|
344
|
361
|
379
|
406
|
441
|
375
|
|
Corporate
Centre
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Total
|
834
|
889
|
949
|
1,118
|
1,481
|
967
|
|
1.
|
Our Q1-24 forecast used for ECL
calculation.
|
|
2.
|
GDP peak is taken from GDP level at
Q2-23. HPI peak is taken from HPI level at Q3-22.
|
Capital, liquidity and funding
|
Key
metrics
|
31 March
2024
|
|
31 December
2023
|
|
|
£bn
|
%
|
|
£bn
|
%
|
|
CET1 capital
|
10.6
|
15.2
|
|
10.5
|
15.2
|
|
Total qualifying regulatory
capital
|
14.8
|
21.3
|
|
14.8
|
21.4
|
|
UK leverage (T1 capital)
|
12.6
|
5.1
|
|
12.5
|
5.1
|
|
RWA
|
69.5
|
-
|
|
69.1
|
-
|
|
LDR
|
-
|
107
|
|
-
|
108
|
|
Liquid assets / LCR
|
55.2
|
166
|
|
50.9
|
162
|
|
Total wholesale funding and
AT1
|
57.5
|
-
|
|
58.0
|
-
|
|
- term funding
|
48.7
|
-
|
|
50.4
|
-
|
|
- TFSME
|
15.0
|
-
|
|
17.0
|
-
|
|
- with a residual maturity of less
than one year
|
11.6
|
-
|
|
11.9
|
-
|
Capital ratios well above
regulatory requirements
|
§
|
UK
leverage exposure increased slightly to £247.4bn (Dec-23:
£247.2bn).
|
|
§
|
RWAs
increased slightly, largely due to higher undrawn
commitments.
|
|
§
|
We remain very strongly capitalised
with significant headroom to minimum requirements and
MDA.
|
Strong liquidity
position
|
§
|
Strong LCR of 166%, (Dec-23: 162%),
with £21.8bn surplus LCR eligible liquid assets to requirement.
NSFR of 137%, (Dec-23: 138%).
|
|
§
|
LCR eligible liquidity pool of
£55.2bn (Dec-23: £50.9bn), includes £40.0bn cash and central bank
reserves (Dec-23: £38.4bn).
|
|
§
|
Term duration in the LCR eligible
liquidity pool is hedged with swaps to offset mark to market
movements from interest rate changes.
|
Diversified funding across
well-established issuance programmes
|
§
|
LDR reduced to 107%, following
further disciplined pricing actions, with mortgage lending down
£2.5bn and customer deposits down £0.3bn.
|
|
§
|
Issued c.£3.6bn Sterling equivalent
medium-term funding from Santander UK plc.
|
|
§
|
In April we priced a £400m AT1 which
will be fully subscribed by Banco Santander, we also announced that
we would exercise the call in our £500m AT1 securities issued in
April 2017.
|
Structural hedge
evolution
|
§
|
Santander UK plc's structural hedge
position increased, with c.£111bn at Mar-24 (Dec-23: c.£106bn), and
duration of c.2.4 years (Dec-23: c.2.4 years).
|
|
§
|
The overall contribution to income
has increased as maturities were replaced with higher yielding term
assets. Going forward, we expect the overall contribution of
the structural hedge to stabilise.
|
Appendix
a) Non-IFRS measures and their
calculations
|
§
|
Banking
NIM: Annualised net
interest income divided by average customer loans for the
period.
(Q1-24: £205,029m; Q1-23:
£217,569m).
|
|
§
|
Cost of
risk: Sum of credit impairment (charges) or write-backs for the
last 12-month period as a percentage of average customer loans for
the last 12 months. (Q1-24: £208,904m;
Q1-23: £217,874m).
|
|
§
|
CIR: Total operating expenses before
credit impairment (charges) or write-backs, provisions and charges
as a percentage of the total of net interest income and
non-interest income.
|
|
§
|
Non-interest income: Net fee and commission income plus other
operating income.
|
|
§
|
Stage 3 ratio: The sum of Stage 3
drawn and Stage 3 undrawn assets divided by the sum of total drawn
assets and Stage 3 undrawn assets.
|
|
§
|
RoTE: Annualised profit after tax
attributable to equity holders of the parent, divided by average
shareholders' equity less average AT1 securities and average
goodwill and other intangible assets.
|
|
Detailed RoTE calculation
|
Q1-24
|
2023
|
|
|
£m
|
£m
|
|
Annualised profit after
tax
|
1,158
|
1,596
|
|
Less non-controlling interests of
annual profit
|
-
|
-
|
|
Profit due to equity holders of the parent
(A)
|
1,158
|
1,596
|
|
|
|
|
|
|
Q1-24
|
2023
|
|
|
£m
|
£m
|
|
Average shareholders'
equity
|
15,013
|
14,839
|
|
Less average AT1
securities
|
(2,196)
|
(2,196)
|
|
Average ordinary shareholders' equity
|
12,817
|
12,643
|
|
Average goodwill and other intangible
assets
|
(1,541)
|
(1,549)
|
|
Average tangible equity (B)
|
11,276
|
11,094
|
|
RoTE
(A/B)
|
10.3%
|
14.4%
|
b) Additional mortgage
information
|
|
31.03.24
|
31.12.23
|
|
Stock average
LTV1
|
51%
|
51%
|
|
New business average
LTV1
|
64%
|
66%
|
|
London lending new business average
LTV1
|
63%
|
65%
|
|
BTL proportion of loan
book
|
9%
|
9%
|
|
Fixed rate proportion of loan
book
|
89%
|
89%
|
|
Variable rate proportion of loan
book
|
8%
|
8%
|
|
SVR proportion of loan
book
|
2%
|
2%
|
|
FoR proportion of loan
book
|
1%
|
1%
|
|
Proportion of customers with a
maturing mortgage retained2
|
78%
|
77%
|
|
Average loan size
(stock)3
|
£188k
|
£188k
|
|
Average loan size (new
business)
|
£227k
|
£228k
|
c) Interest rate risk
|
Net
interest income sensitivity4
|
Q1-24
|
2023
|
|
|
£m
|
£m
|
|
+100bps
|
196
|
218
|
|
-100bps
|
-196
|
(220)
|
|
§
|
The table
above shows how our net interest income would be affected by a
100bps parallel shift (both up and down) applied instantaneously to
the yield curve. Sensitivity to parallel shifts represents the
amount of risk in a way that we think is both simple and
scalable.
|
d) Summarised changes to CET1 capital ratio
in Q1-24
|
|
|
|
CET1 capital
ratio
|
|
|
|
|
%
|
|
31 December 2023 CET1 capital
ratio
|
|
|
15.2
|
|
Profit
|
|
|
+0.4pp
|
|
Dividends and AT1 coupons
|
|
|
-0.2pp
|
|
Expected loss less
provisions
|
|
|
-0.1pp
|
|
RWA growth and other
|
|
|
-0.1pp
|
|
31
March 2024 CET1 capital ratio
|
|
|
15.2
|
e) CET1 capital ratio MDA trigger (headroom
3.9%)
|
|
Minimum
%
|
|
Pillar 1
|
4.5
|
|
Pillar 2A
|
2.3
|
|
Capital conservation
buffer
|
2.5
|
|
Countercyclical capital
buffer
|
2.0
|
|
Current MDA trigger
|
11.3
|
|
|
|
|
1.
|
Balance weighted LTV.
|
|
2.
|
Applied to mortgages three months
post maturity and is calculated as a 12-month average of retention
rates to Dec-23 and Sep-23 respectively.
|
|
3.
|
Average initial advance of existing
stock.
|
|
4.
|
Based on modelling assumptions of
repricing behaviour.
|
List of abbreviations
|
AT1
|
Additional Tier 1
|
|
Banco Santander
|
Banco Santander, S.A.
|
|
Banking NIM
|
Banking Net Interest Margin
|
|
BBLS
|
Bounce Back Loan Scheme
|
|
BTL
|
Buy-To-Let
|
|
CCB
|
Corporate & Commercial Banking
|
|
CET1
|
Common Equity Tier 1
|
|
CIB
|
Corporate & Investment Banking
|
|
CIR
|
Cost-to-Income Ratio
|
|
ECL
|
Expected Credit Losses
|
|
FoR
|
Follow on Rate
|
|
FCA
|
Financial Conduct Authority
|
|
FSCS
|
Financial Services Compensation
Scheme
|
|
GDP
|
Gross Domestic Product
|
|
HPI
|
House Price Index
|
|
IFRS
|
International Financial Reporting
Standards
|
|
JA
|
Judgemental Adjustment
|
|
LCR
|
Liquidity Coverage Ratio
|
|
LDR
|
Loan-to-Deposit Ratio
|
|
LTV
|
Loan-To-Value
|
|
MDA
|
Maximum Distributable Amount
|
|
n.a.
|
Not applicable
|
|
NPS
|
Net Promoter Score
|
|
NSFR
|
Net Stable Funding Ratio
|
|
PRA
|
Prudential Regulation Authority
|
|
RoTE
|
Return on Tangible Equity
|
|
RWA
|
Risk-Weighted Assets
|
|
Santander UK
|
Santander UK Group Holdings plc
|
|
SVR
|
Standard Variable Rate
|
|
TFSME
|
Term Funding Scheme with additional incentives
for SMEs
|
|
UK
|
United Kingdom
|
|
UPL
|
Unsecured personal loans
|
Retail NPS: NPS ranked
4th for Retail
Our customer experience research was
subject to independent third party review. We measured the main
banking NPS of 17,037 consumers on a six month basis using a
11-point scale (%Top 2 - %Bottom 7). The reported data is based on
the six months ending 31 March 2024, and the competitor set
included in the ranking analysis is Barclays, Halifax, HSBC, Lloyds
Bank, Nationwide, NatWest Group (NatWest & RBS) and
TSB.
March 2024: NPS ranked
4th for Retail, we note a margin of error which impacts
those from 2nd to 5th and makes their rank
statistically equivalent.
March 2023: NPS ranked
5th for Retail, we note a margin of error which impacts
those from 3rd to 5th and makes their rank
statistically equivalent.
Business & Corporate
NPS: NPS ranked 1st for
Business & Corporate
Business & Corporate NPS is
measured by the MarketVue Business Banking from Savanta. This is an
ongoing telephone based survey designed to monitor usage and
attitude of UK businesses towards banks. 14,500 structured
telephone interviews are conducted each year among businesses of
all sizes from new start-ups to large corporates. The data is based
upon 7,982 interviews made in twelve months ended 25 March 2024
with businesses turning over from £0 - £500m per annum and are
weighted by region and turnover to be representative of businesses
in Great Britain. NPS recommendation score is based on an 11-point
scale (%Top 2 - %Bottom 7). The competitor set included in this
analysis is Barclays, RBS, HSBC, Lloyds Bank and
NatWest.
March 2024: NPS ranked
1st for Business & Corporate.
March 2023: NPS ranked
1st for Business & Corporate.
Additional information about Santander UK and
Banco Santander
Santander UK is a financial services provider
in the UK that offers a wide range of personal and commercial
financial products and services. At 31 March 2024, the bank had
around 19,800 employees and serves around 14 million active
customers, 7 million digital customers via a nationwide 444 branch
network, telephone, mobile and online banking. Santander UK is
subject to the full supervision of the FCA and the PRA in the UK.
Santander UK plc customers' eligible deposits are protected by the
FSCS in the UK.
Banco Santander (SAN SM, STD US, BNC.LN) is a
leading retail and commercial bank, founded in 1857 and
headquartered in Spain and is one of the largest banks in the world
by market capitalization. Its primary segments are Europe, North
America, South America and Digital Consumer Bank, backed by its
secondary segments: Santander Corporate & Investment Banking
(Santander CIB), Wealth Management & Insurance (WM&I) and
PagoNxt. Its purpose is to help people and businesses prosper in a
simple, personal and fair way. Banco Santander is building a more
responsible bank and has made a number of commitments to support
this objective, including raising over €120 billion in green
financing between 2019 and 2025, as well as financially empowering
more than 10 million people over the same period.
At 31 December 2023, Banco Santander had 1.3
trillion euros in total funds, 165 million total customers, of
which 29 million are loyal and 54 million are digital, 8,500
branches and over 212,000 employees.
Banco Santander has a standard listing of its
ordinary shares on the London Stock Exchange and Santander UK plc
has preference shares listed on the London Stock
Exchange.
None of the websites referred to in this
Quarterly Management Statement, including where a link is provided,
nor any of the information contained on such websites is
incorporated by reference in this Quarterly Management
Statement.
Disclaimer
Santander UK Group Holdings plc
(Santander UK) and Banco Santander caution that this announcement
may contain forward-looking statements. Such forward-looking
statements are found in various places throughout this
announcement. Words such as "believes", "anticipates", "expects",
"intends", "aims" and "plans" and other similar expressions are
intended to identify forward-looking statements, but they are not
the exclusive means of identifying such statements. Forward-looking
statements include, without limitation, statements concerning our
future business development and economic performance. These
forward-looking statements are based on management's current
expectations, estimates and projections, and Santander UK and Banco
Santander caution that these statements are not guarantees of
future performance. We also caution readers that a number of
important factors could cause actual results to differ materially
from the plans, objectives, expectations, estimates and intentions
expressed in such forward-looking statements. We have identified
certain of these factors in the forward-looking statements on page
255 of the Santander UK Group Holdings plc 2023 Annual Report.
Investors and others should carefully consider the foregoing
factors and other uncertainties and events. Undue reliance should
not be placed on forward-looking statements when making decisions
with respect to Santander UK, Banco Santander and/or their
securities. Such forward-looking statements speak only as of the
date on which they are made, and we do not undertake any obligation
to update or revise any of them, whether as a result of new
information, future events or otherwise. Statements as to
historical performance, historical share price or financial
accretion are not intended to mean that future performance, future
share price or future earnings for any period will necessarily
match or exceed those of any prior quarter.
Santander UK is a frequent issuer in
the debt capital markets and regularly meets with investors via
formal roadshows and other ad hoc meetings. In line with Santander
UK's usual practice, over the coming quarter it expects to meet
with investors globally to discuss this Quarterly Management
Statement, the results contained herein and other matters relating
to Santander UK.
Nothing in this announcement
constitutes or should be construed as constituting a profit
forecast.