Santander's Global Success Contrasts with UK Challenges
Spanish banking giant Santander has announced its fourth consecutive year of record-breaking profits at the group level for the 2025 financial year. The financial powerhouse recorded an impressive €20.9 billion in pre-tax profit over the last twelve months, with total revenue climbing to €62.4 billion. This strong performance was significantly bolstered by a five per cent increase in fee income, which reached a new record of €13 billion. Operating expenses also saw a modest decline of one per cent, falling to €25.8 billion.
UK Operations Hampered by Motor Finance Scandal
Despite this global success, Santander's progress in the United Kingdom has notably lagged behind the wider group. The high street bank was forced to set aside a substantial £295 million to cover costs related to the ongoing motor finance scandal. This hefty provision took a significant chunk out of the bank's bottom line, resulting in flat profits for its UK arm at approximately €1.3 billion.
The situation became so uncertain that Santander's UK division did not release its third-quarter results in October 2025, citing the "uncertainty" surrounding the Financial Conduct Authority's motor finance redress scheme. Santander UK's outgoing chief executive, Mike Regnier, issued a stark warning about the potential consequences. He stated that without government intervention, "the unintended consequences for the car finance market, the supply of credit and the resulting negative impact on the automotive industry and its supply chain could significantly impact jobs, growth and the broader UK economy."
There was a slight silver lining, however, as the bank reported a lower provision in the fourth quarter of 2025 for complaints related to motor finance dealer commissions. This figure stood at £134 million, compared to £223 million in the previous year.
Santander's Strategic US Acquisition
In a major strategic move, Santander confirmed it has struck a monumental $12.2 billion deal to acquire US-based Webster Financial. This acquisition is a clear bid to dramatically ramp up the bank's presence in the American market. Upon completion, the takeover is expected to place Santander among the top ten largest retail and commercial banks in the United States when measured by total assets.
Under the terms of the agreement, Webster Financial is valued at $75 per share, with $48.75 paid in cash and the remainder settled in Santander stock. This deal represents the latest chapter in Santander's aggressive mergers and acquisitions strategy. It follows the bank's successful blockbuster takeover of TSB last year, a deal speculated to be worth around £2.9 billion, where Santander was thought to have outmanoeuvred its UK peers.
The TSB acquisition is set to add approximately five million new customers, £34 billion in mortgages, and £35 billion in deposits to Santander's expanding portfolio. It also brings 218 physical branches into the Santander network.
Leadership Transition at Santander UK
The bank is also undergoing a significant leadership change in its UK operations. Mike Regnier announced his departure last year, stating his intention to "move on after 4-5 years" due to "other interests [he] would like to pursue." He is expected to exit in the first quarter of 2026. Regnier explained that the integration of TSB was taking "considerably longer" than anticipated, and he suggested his departure to the board to allow ample time to find a suitable successor.
Last week, Santander named Mahesh Aditya, the group's chief risk officer, as the new chief executive for its UK operations. Aditya is scheduled to take the helm on 1 March 2026, tasked with steering the UK business through its current challenges and capitalising on the opportunities presented by the recent acquisitions.
