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Santander UK plans more cost cuts after car loan mis-selling charges and TSB takeover costs drive a 6% profit fall

Santander UK set aside a £616m provision against motor finance mis-selling claims as nine-month pre-tax profit fell 6% to £1.2bn, with restructuring costs surging 269%.
Santander UK set aside a £616m provision against motor finance mis-selling claims as nine-month pre-tax profit fell 6% to £1.2bn, with restructuring costs surging 269%.

Santander UK set aside £616 million in the first quarter of 2026 against potential car loan mis-selling liabilities — its single largest drag on earnings — while reporting nine-month pre-tax profit to September of £1.2 billion, down 6% year on year despite a 17% rise in net interest income to £3.9 billion. The bank chose not to fight the Financial Conduct Authority's redress scheme, though it warns that any compensation outcome remains highly uncertain while other lenders press their challenge against the regulator at the Upper Tribunal.

TSB, whose acquisition closed in April, contributed £96 million in profit but brought with it £327 million in operating costs and a £62 million one-off credit charge.

Restructuring and integration provisions surged 269% to £495 million, driven in part by the expense of absorbing the first 1,000 TSB staff into Santander's organisation.

UK chief executive Mahesh Aditya is aiming for cost 'synergies' of around £400 million from the TSB merger by the end of 2028.

MoreThe TimesCar finance redress hits Santander profit despite TSB deal - The TimesLBCSantander UK bolstered by TSB takeover as it targets cost ‘synergies’City A.M.Santander UK turns to more cost-cutting after profit slipMarketScreenerSantander Shares Fall After Integration Costs Eat Into ProfitScottish Financial NewsSantander UK profits slip 6% as motor finance and TSB restructuring costs Bite - Scottish Financial NewsAOL.co.ukSantander UK plans more cost cuts after pre-tax profit falls 6% - AOL.co.uk
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