Santander saw an 11 per cent increase in UK profits in 2010, up from £1.5bn in 2009 to £1.7bn.
The company’s gross mortgage market lending share fell by 1 per cent to 17.7 per cent.
Gross mortgage lending also fell from £26.4bn to £24.2bn.
Lending to small and med- ium-sized businesses rose by 26 per cent from £6.7bn to £8.5bn and retail deposits were up by 22 per cent from £5.6bn to £6.8bn.
Santander UK chief executive Ana Botín says: “We are working towards completing the acquisition of 318 RBS branches, a key step in fulfilling our ambition to be a full-service commercial bank. Our aim is to increase our lending to UK businesses and create new jobs as we open more business centres to serve them.”
Santander says it remains on track to deliver cost savings of £180m by the end of the year, a measure announced when the bank acquired Alliance & Leicester in 2008.
Email Mortgages chief executive Michael White says: “Everyone has been screaming at the banks to look after small businesses and to lend to the man in the street. Santander seems to be doing that.”