Local media reports that Santander UK lent small and medium-sized firms (SMEs) £9.6 billion in the first half of the year – up 27 per cent on the same period of 2010.

A news item in the Leicester Mercury published on Thursday July 28th reports that the Spanish bank said it had exceeded the amount it pledged to lend SMEs in a deal with the Government.

Santander, whose regional head office is in Narborough, made a pre-tax profit of £1.15 billion in the six months to June 30, down three per cent on the same period last year.

The fall in profit was partly the result of it writing off £538 million because of the likely cost of settlements to customers mis-sold payment protection insurance (PPI) over the past decade.

Chief executive Ana Botín said: “In line with other UK banks, a further provision for payment protection insurance remediation has also been made.

“Notwithstanding these factors, Santander UK has delivered profit in the first six months.”

Santander, which bought Alliance & Leicester in 2008, said the amount of money it had lent in new mortgages over the past six months was £9.7 billion – representing an estimated 15.4 per cent of the UK market share.

However, the total amount of mortgages with the bank fell by 11 per cent.

Deposit balances increased by three per cent, while customer lending grew by one per cent.

The bank said it had opened more than 400,000 current accounts and 274,000 credit card accounts in the first half of the year.

Santander’s decision to set aside money to pay customers who had been mis-sold PPI when taking out loans comes after other banks took similar action.

Profits at the entire Santander group, which has operations across the world, fell by 21 per cent to £3 billion.

The bank, which employs 2,500 people in Leicestershire, announced in May it would create hundreds of jobs by spending £200 million creating two new buildings at its regional head office in Carlton Park, Narborough.

She visited the group’s branch in Horsefair Street, Leicester, in April.