Santander reveals £40m GMP cost

Santander has revealed it faces increased liabilities of £39.7m due to guaranteed minimum pension (GMP) equalisation.

In its final quarterly report of 2018, the banking company revealed that it’s operating expenses increased by 3 per cent, in part due to the increased costs relating to GMP equalisation.

The increased costs due to GMP were partially offset by “cost management programmes” and “operational and digital efficiencies”.

In October 2018, the High Court ruled that Lloyds Banking Group must equalise pension benefits for men and women in a landmark case, requiring other companies to do the same.

Santander’s report also revealed that its pre-tax UK profit fell by 14 per cent in a year, from £1.8bn to £1.6bn.

The profit decline occurred due to its net interest income falling by 4 per cent to £3.1bn, the bank incurring higher regulatory costs and being hit with a £32.8m fine for “serious failings” in processing deceased customer accounts.

Commenting on the report, Santander CEO, Nathan Bostock said: "Our 2018 financial performance reflects our strategy of selective growth, while actively managing costs in the competitive and uncertain operating environment.

“Our focus remained on earning loyalty through excellent service and compelling products, and we are encouraged by our customers' response."

“In the current uncertain environment, we will continue to do everything we can to support our customers and deliver on our purpose of helping people and business prosper across the UK.

"I believe we are well positioned to succeed by focusing on our core areas of strength, progressing our digital transformation and improving our operating efficiency while remaining strongly capitalised."

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