Santander braces for recession amid fears of loan repayments
Santander has warned that the looming recession could mean borrowers struggle to repay loans as more cash is made available to cover bad debts.
The UK arm of the Spanish bank is braced for a 10% fall in property prices that will take them back to 2021 levels, as rising interest rates hit demand from homebuyers and the economy is expected to contract by 1.3% this year.
Full-year figures showed the group set aside £321m in loan provisions last year, including a further £65m in the fourth quarter, versus £233m in 2021.
And while mortgage delinquencies remain low so far, the main lender saw a small number of business customers default in the final months of last year.
The bank saw its pre-tax profit rise 2 per cent to £1.89 billion last year, with its interest rates boosted by a series of rate hikes.
It also hit £9.8 billion in net mortgage lending – well above where it was £7.5 billion in 2021.
However, Santander UK Chief Executive Mike Regnier said: “The end of 2022 saw a significant slowdown in mortgage lending and with the uncertain economic outlook for 2023, we will remain focused on managing risk prudently as we encourage people and businesses to… help success. ‘
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https://metro.co.uk/2023/02/03/santander-readies-for-recession-amid-fears-of-loan-repayments-18214604/ Santander braces for recession amid fears of loan repayments