Santander’s recovery continues as the retail sector is supported by rising interest rates

File photo dated 11/09/20 of a branch in Santander, as the bank has recorded an increase in profits despite the impact of the Ukraine conflict and inflation (Mike Egerton/PA)

Banking giant Santander weathered the impact of soaring inflation and the war in Ukraine to post a jump in first-quarter profits thanks to higher interest rates.

The Spanish banking giant said a strong performance in the UK and elsewhere in Europe helped its rebound.

Banco Santander reported a 58% rise in net profit to €2.54bn (£2.1bn) in the first three months of 2022.

It came as rival HSBC saw first-quarter profits slump following a hit from expected bad debt due to the economic backdrop.

Meanwhile Santander was boosted by its UK operation, which showed pre-tax profits of £495m for the quarter, up from £175m a year earlier.

Mike Regnier, who was appointed chief executive of Santander UK last year, said the company had “continued the momentum” it had during its pandemic recovery in 2021.

“This was supported by another strong performance in the mortgage market with £3.6bn of net lending,” he added.

“Our transformation program continues to focus on digitalization and meeting the changing needs of our customers.

“This is supported by our resilient balance sheet and our cautious approach to risk.”

Last week, the bank announced it would reduce opening hours at its branches in July as part of the transformation plan in response to changing customer behavior.

The British firm also said on Tuesday it was hiring 160 people to join its financial support team to help customers receive assistance amid the growing cost of living crisis.

Mr. Regnier added: “As households across the country face a rapidly rising cost of living, we stand ready to support our customers and provide them with practical advice and tools to help them manage their money.

“We continue to review the impact that the rising cost of living is having on our customers so that we can provide them with the right support.

“We remain committed to helping our customers navigate their way through the challenges facing the country.”

Stephen V. Lee