Santander announces profits growth - graduate jobs

Santander banking group could soon be offering more jobs to graduates as it continues to boost its UK profits.

The high street banking giant, which is becoming an increasing force in UK banking after snapping up a raft of players including Abbey and Alliance & Leicester, has announced that its UK profits were up by a fifth in the third quarter.

Its pre-tax trading profits rose by 20% to £619 million in the three months to September 30 thanks to a performance boost from better margins.

But the bank also saw its UK retail deposits fall in the third quarter, at £700 million against £4 billion a year earlier, as it faced aggressive competition for savings.

More expensive funding costs since the credit crunch have seen banks and building societies clamber to secure deposits to finance lending, driving intense competition.

Santander also saw a sharp drop in net mortgage lending in the third quarter compared with a year earlier - £1.8 billion compared with £3.1 billion - although the group said it had maintained its share of a dwindling market.

Its Spanish parent has warned that new rules in Spain forcing banks to bring forward charges for loan losses in their accounts mean 2010 profits for the wider group are set to fall short of expectations.

The move also left third quarter figures down sharply as Santander booked a 472 million euro (£413 million) bad debt provision.