Santander UK reported a 6 percent decline in pre-tax profit for the first nine months of 2026, despite gains linked to its recent acquisition of TSB Bank. The lender posted a pre-tax profit of £1.2 billion for the period ending September 30, down from the previous year. However, the third quarter showed a notable improvement, with profits rising to £630 million from £372 million a year earlier.

The bank attributed the overall profit decline primarily to charges related to a motor finance mis-selling scandal. Santander set aside £361 million to cover restructuring costs and redress claims, including a £179 million charge booked in the first quarter. These provisions contributed significantly to the profit reduction, partially offset by TSB’s contribution of £96 million in profit from May through September, following Santander’s £2.65 billion acquisition of the UK lender last year.

Santander’s net interest income, reflecting the difference between interest earned and paid, rose by 17 percent to £3.9 billion over the nine-month period. Customer deposits increased substantially to £229.2 billion, up from £190.2 billion, while credit impairment charges more than doubled to £342 million compared to £150 million previously. Operating expenses rose by 8 percent to £2.1 billion, largely due to integration costs from the TSB takeover, although cost increases were partially mitigated through ongoing simplification and automation initiatives.

As part of the merger process, about 1,000 TSB staff were formally transferred to Santander employment on October 1. The group is preparing for a court hearing in November concerning the legal transfer of TSB’s assets and liabilities. Both the UK’s Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority are overseeing regulatory approvals to ensure that customers and stakeholders are protected during the transition.

Santander UK’s parent company, Banco Santander, reported a 1.6 percent increase in total income to €15.96 billion in the third quarter and a 2 percent rise in pre-tax profit to €5.42 billion. Executive chairwoman Ana Botín highlighted the group’s strong commercial activity as a driver of these results.

Santander UK’s chief executive, Mahesh Aditya, emphasized the company’s ongoing efforts to integrate TSB rapidly, aiming to combine the strengths of both businesses to benefit customers. The bank expects to realize merger savings totaling around £400 million by the end of 2028 as it progresses with the consolidation.