PRE-TAX profits at Santander UK plunged by 44 per cent to £202million in the first quarter of the year.
It is partly due to setting aside a further £179million for vehicle finance mis-selling — taking the bank’s total provision for the scandal to £633million.
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Santander UK has set aside a total of £633million to account for the vehicle finance mis-selling scandal Credit:
TSB is set to be integrated into the Santander UK group Credit: Getty
The high street lender, which partnered with TV duo Ant and Dec for six years of adverts, said profits were hit by higher costs and bad debt charges.
Santander has cut its UK economic outlook, citing the impact of the Iran War on inflation, growth and unemployment.
It now expects UK growth of 0.5 per cent in 2026 and forecasts for interest rates to remain at 3.75 per cent.
Separately, the bank’s £2.65billion takeover of TSB is expected to be completed imminently.
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Meanwhile, over at Lloyds Banking Group, the first quarter saw pre-tax profits rise 33 per cent to £2billion.
But it has also downgraded its outlook for the UK economy.
Like Santander, it fears war in the Middle East could slow growth and hike inflation and unemployment.
And Lloyds also now expects UK GDP growth of 0.5 per cent in 2026.
It said unemployment could hit 5.6 per cent and inflation 3.9 per cent by the final quarter.
War is hell on leisure
HOSPITALITY is at a fresh crunch point amid fresh pressure from the Iran crisis.
Analysis shows nearly 70 per cent of hotels and 66 per cent of leisure firms are in a “critical” position, having already been hit by high taxes and labour costs.
Researchers at Begbies Traynor have now pointed to new Middle East pain.
The group’s Julie Palmer said: “Businesses will have been hoping consumer confidence would make a comeback.
“Instead, rising energy bills, interest rates and unemployment will see people tightening their belts.”
Late take off
HOLIDAYMAKERS are booking summer flights closer to departure dates due to fears of fuel shortages, Jet2 has said.
The travel group reported summer bookings are 6.2 per cent higher than last year, despite the Iran War.
It forecasts an annual operating profit of £435million to £440million — slightly down from £446.5million last year. It has also increased its summer seats by 7.7 per cent.
Fraser vision
FRASERS GROUP has bought two huge retail centres — York Designer Outlet and East Midlands Designer Outlet — with a total annual footfall of almost eight million.
York has 250,000 sq ft of space, around 120 brands and 4.3million visitors, while East Midlands has 170,000 sq ft, 65 brands and 3.5million visitors.
Frasers — formerly Sports Direct — now owns over a fifth of the UK outlet market.
