ao link
0 £0.00
This item was added to your basket
Credit Strategy homepage
Intelligence, Insight and community for responsible professionals in credit

Analysis: Santander UK has £40bn of loans and cards under payment holidays

Santander UK now has more than £40bn of loans and cards under payment holidays, according to a half-yearly report published yesterday (July 29) that also shows its H1 pre-tax profit fell 74%.

The UK bank within the group reported a statutory pre-tax profit of £147m for the first six months of 2020, marking a 74% drop on the same period in 2019.


The results also show the UK bank took a £376m hit through credit impairment charges during the first half of 2020, compared to £69m in the first half of 2019. This £307m increase, according to the report, was largely due to Covid-19, as well as related income pressures.


Santander’s results also show a huge seismic shift in its customers’ spending habits, with unsecured retail loans falling by £800m due to lower consumer spending during lockdown.


Payment holidays

Santander UK reported £40.1bn in loans and credit cards under payment holidays, most of which is from mortgages where 239,000 customers have taken a deferral.


Payment holidays

Number of customers

Loan balance

% of loan book





Unsecured personal loans




Credit cards




Consumer (auto) finance




Businesses and corporates





According to the report, as of the first quarter of 2020, over 95% of mortgage customers taking a payment holiday were up to date with repayments.


Santander UK said that the granting of a payment holiday on its own was not considered to mark a significant increase in credit risk event, nor was it considered a default under regulatory definitions.


The report detailed that the overall impact of its mortgage payment holiday review, together with a review of unsecured and consumer (auto) finance portfolios, was an increase in estimated credit losses of £38m in the second quarter of 2020.


Losses and write offs

Santander UK increased its loan loss allowances by 37%, from £863m in December 2019 to £1.18bn in June 2020. According to the report, Santander UK’s portfolio performance remains resilient with low write-offs.


Having made allowances for losses in retail banking of £762m, this is a substantial rise on £591m of the same period last year. Some £101m of loans have been written off in the first six months of 2020.


Retail banking

Six-month gross write offs (£m)

Loan loss allowances (£m)




Business banking



Consumer (auto) finance



Other unsecured lending





The results show that Santander has outlined and prepared for a worst-case scenario in the economy where a “W” shape recession unfolds. This would be a double dip depression, where a second lockdown is imposed to combat the re-emergence of the virus in the second half of 2020, combined with no Brexit trade deal.


Nathan Bostock, chief executive of Santander UK, said: “The Covid-19 crisis has been a huge challenge for all of us and our top priority throughout has been the welfare of our people, our customers and the communities in which we operate.”


“We understand how hard it has been for our customers and we have supported many thousands of individuals and businesses with a range of measures including payment holidays on mortgages, personal loans and credit cards as well as taking an active part in government loan schemes to help businesses through these uncertain times.”


Bostock added: “With strong foundations and a resilient balance sheet, we remain fully committed to our purpose – to help people and businesses prosper.”


Please login to continue reading this article.

Not a member?

Become a member

FREE registration. No credit card required

Register now
  • Stay up-to-date with industry news and appointments
  • Hear about events first
  • Read 1 free Premium article per month

Become a premium member

From as little as £3.48 per week

Become Premium
  • All the perks of a standard member plus:
  • Access to the entire Credit Strategy website
  • 12 months subscription to Credit Strategy Magazine
  • 25% discount to all conferences
  • Exclusive access to Premium Member only roundtables
  • 50% off award entry fees


Upcoming events

Credit Strategy
LinkedIn page

Member of

Did you find our website useful?

Thank you for your input

Thank you for your feedback – an online news and information service for the UK’s commercial and consumer credit industry. is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace. @ Copyright Shard Media Group