Santander UK has reported a fall in profits for the first nine months of 2026, despite its takeover of TSB strengthening its balance sheet. The bank posted pre-tax profit of £1.2 billion for the nine months to 30 September, down 6% on the same period last year. The third quarter alone told a brighter story, with profit surging to £630 million from £372 million a year earlier.

What dragged profits down

The year-to-date decline was mainly driven by a charge in the first quarter linked to historic motor finance commission payments, along with higher restructuring costs. Santander has set aside £616 million to cover potential costs of the UK watchdog's compensation scheme for people mis-sold a car loan, although that scheme is currently held up by legal challenges. Restructuring and specific provisions rose sharply, to £495 million from £134 million a year earlier.

What TSB added

Against that, TSB contributed £96 million of pre-tax profit between May and September, while customer deposits and the mortgage loan book also grew following the acquisition, which Santander completed on 30 April in a £2.65 billion all-cash deal. Net interest income rose 17% to £3.9 billion, boosted by TSB's addition. Nearly 1,000 TSB staff moved over at the start of October as integration continues.

Chief executive Mahesh Aditya said the bank was targeting further cost-efficiency savings this year driven by simplification and automation, and expects cost synergies of around £400 million from the merger by the end of 2028. The results land on Budget day, but the figures themselves reflect the nine months to September, not any Budget announcement.

Sources: Hargreaves Lansdown (Evening Standard article) and Business Live / City AM.