Santander has reported a 74% drop in profit before tax to £147m in the first half the financial year, compared with £575m in the same period last year.
The bank attributed the coronavirus pandemic to the loss, reporting a 13% decrease in operating income to £1.8bn compared with £2.1bn in 2019.
Santander reported £376m of credit impairment charges, up from £69m, largely due to Covid-19, as well as related income pressures. Loan allowances increased by 37% due to the economic fallout of the pandemic.
Return on tangible equity (RoTE) also decreased to 1.9% compared with 7.8% in 2019.
However, Santander’s Spanish arm reported a “record” loss of €11.1bn (£10bn) in its second quarter.
It reported €12.6bn worth of writedowns amid the Covid-19 pandemic and said the impairments would have “no impact” on its liquidity.
Nathan Bostock, CEO, 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.
“I am extremely proud of how our people have worked at an extraordinary pace to substantially change the way we operate so we can continue to provide essential banking services for all our customers, despite the material impact the crisis has had on our business operations and our colleagues themselves.”
He added: “Having quickly and successfully adapted our operating model as the crisis developed, we have created a safe working environment with more flexibility for our colleagues – I am incredibly grateful for how they have worked tirelessly in recent months to support one another, our customers and communities.
“Decisive management actions have helped us to mitigate some of the impact this crisis could have had on our results and business operations and ensure we are well positioned as the UK emerges from the lockdown. With strong foundations and a resilient balance sheet, we remain fully committed to our purpose – to help people and businesses prosper.”