Spain's Banco Santander is reaping the benefits of a mammoth IT integration programme at its UK banking subsidiaries Abbey National, Alliance & Leicester and Bradford & Bingley which have seen profits for the first nine months jump by a third to EUR1.3 billion.
In an otherwise downbeat trading statement, Santander says it is on track to deliver a further £180 million in costs savings at its UK operations by 2011, as the three banks are migrated to the unified Partenon core banking platform, with work "well underway to remove duplicated back office and support functions across the business".
Abbey National says the five-year switch to Partenon has enabled it to reduce its cost to income ratio from 70% to 41%, well below the sector average of 56%.
Mortgage lender B&B is the latest to complete the migration to Partenon, a move which has allowed the firm to expand the range of products offered through the branch network to include current accounts, credit cards and mortgages.
Santander says the transfer of A&L's branches and customers onto the unified platform is expected to be completed in the fourth quarter of 2010.
The move to Partenon has provided the cue for a massive rebranding exercise, with Abbey and B&B expected to adopt the Santander labal in early 2010, followed by A&L at the end of the year when the IT integration programme is completed.
"This will deliver significant benefits for customers, enabling them to transact in 1000 branches from early next year, rising to 1300 by the end of 2010 with the addition of A&L," says the bank in a statment.
Despite the positive results, Santander said the UK economy was "still fragile". Across the group as a whole, profits had stagnated in the third quarter while the bank continued to set aside billions in provisions for worsening economic conditions.