Santander bumped up pre-tax profits by 30 per cent and captured more of the UK banking market after seeing a rise in new bank accounts and mortgage lending last year.

The Spanish-owned bank which absorbed Bradford & Bingley’s savings and branches arm is also expanding its business lending.

The lender, which recently completed the rebranding of its Abbey and Bradford & Bingley branches, increased annual trading pre-tax profits to £1.54 billion in the year to December 31.

Its share of the gross mortgage market rose to more than 18 per cent in 2009, from around 14 per cent the previous year, as net home lending climbed to £7.6 billion.

Growth in net deposits was said to be strong, with gains of £14.9 billion from retail, corporate and private banking customers, which Santander said showed the bank was seen as a “safe haven” for savers.

The proportion of its mortgages more than three months behind on payments rose slightly to 1.37 per cent in the last quarter of 2009, compared with an industry average figure of 2.4 per cent in September. It had 820 properties in possession last year, down from 969 in 2008.

The bank slashed unsecured personal loans by 36 per cent to £1.5 billion as it continued to shift its focus to existing customers. As part of the same policy, credit card sales dropped 18.5 per cent from 2008.

The addition of Alliance & Leicester boosted Santander’s plans to grow its corporate banking operations as lending to small and medium-sized businesses grew by 16 per cent.

Santander UK chief executive Antonio Horta-Osorio said the full-year figures demonstrated that the bank’s business model was “delivering superior results”.

“Our focus on efficiency means we can continue to share the benefits of this cost advantage with our customers through competitive products,” he said.

“This has enabled Santander UK to write significant new business and continue to support the UK economy with increased lending to homeowners and businesses.”

Meanwhile, new figures from the Halifax show that house prices rose for the seventh month in a row during January, but the rate at which they are increasing slowed.

The average cost of a UK home climbed by 0.6 per cent during the month to £169,777, Halifax said – 9.9 per cent higher than when prices hit their trough in April last year.

But the increase was the lowest in the past six months, when monthly gains have averaged 1.1 per cent, building on previous evidence that the recent strong recovery may be running out of steam.