The rise was also driven by lower provision charges, but partially offset by higher taxes which rose by 66% to £154m due to the 8% bank corporation tax surcharge.
Gross mortgage lending totalled £7.1bn in Q1 with net mortgage lending of £1.3bn. In a statement, Santander said the figure is "slightly higher than expected" and attributed the rise to investors completing ahead of April to avoid the new stamp duty charge.
Its mortgage borrower mix remained broadly the same, with the majority of total stock consisting of home movers and re-mortgagers, at 44% and 33% respectively. First-time buyers represented 19% of total stock while buy-to-let represented 4%.
Nathan Bostock, Chief Executive Officer, said:
“I am pleased to report a solid start to 2016, underpinned by strong business flows and lower loan loss provisions. We had net lending growth across all three customer business segments, with an improved NPL ratio of 1.53%.
"Our support for UK companies continued with lending up 10% to £27.5bn year on year, despite an increasingly competitive market. Alongside this, gross mortgage lending was £7.1bn with net mortgage lending of £1.3bn.
"We expect the improving trend in UK lending growth seen in 2015 to continue, but are conscious of prevailing market volatility from macro-economic and geopolitical factors, uncertain prospects for policy interest rates, and the upcoming UK referendum on EU membership."
