‘Brexit marks end of an era’ – Santander

Britain’s decision to leave the European Union has ushered in the end of an era of stability for the UK banking sector, according to the head of one of the UK’s biggest high street players.

The chaos and uncertainty caused as a result of the decision has left the nation facing the prospect of record low interest rates and wider economic volatility, and Nathan Bostock, chief executive of Santander UK, has spoken out about the consequences for the banking industry as the lender issued a half-yearly trading update.

It also comes just a day after it was confirmed that Santander was cutting the rate of interest on its popular 123 current accounts leading to speculation that other banks may soon to follow.

Santander said it is well positioned to navigate through the current storms brought on as a result of the impending Brexit, as it announced a solid performance for the first half of the year.

The lender increased pre-tax profits by 16 per cent to £1.1 billion in the half year to June 30, while total operating income rose to £2.4 billion, up from £2.3 billion.

Mr Bostock said: “The UK referendum on EU membership on June 23 2016 marked the end of a period of relative stability for the UK banking sector.”

He added that the low interest rate environment, which shows little prospect for increases in the short term, created a challenging environment for income growth.

Interest rates were slashed to a new historic low of 0.25 per cent earlier this month and the Bank of England has pushed the button on another £170 billion of monetary stimulus to stop the economy sliding back into recession in the wake of the UK’s Brexit vote.

“Despite the uncertainties we face, we believe we have the resilience and capabilities to sustain profitability and deliver on our strategy,” Bostock said.