Abbey, which is owned by Santander, the Spanish banking group, said that profits had risen by 37 per cent in the first nine months of the year as it increased its share of the British mortgage market.

Santander, which also owns Alliance & Leicester and Bradford & Bingley, said that profits had leapt from £849 million to £1.16 billion in the first three quarters in the UK.

Abbey, whose name will change to Santander next year, has raised its share of the mortgage market over the past year.

The bank has taken almost a fifth of the total mortgage market this year, compared with its 13 per cent historic share. Its share of new mortgages of £5.1 billion — overall lending, less repayments — represented more than half the entire market.

Abbey said that it had achieved the growth despite tightening its lending criteria because of worsening economic conditions.

The number of customers behind on repayments for three months or more was flat at 1.34 per cent of the mortgage book, compared with the industry average of 2.43 per cent.

Santander snapped up Abbey five years ago in a distressed sale. Spain’s largest bank has since built a reputation for buying assets at bargain prices, last year adding Alliance & Leicester and the deposit book of Bradford & Bingley to its empire. The UK is Santander’s third-most important region. The bank is widely thought to be interested in buying more assets, particularly on the small business banking side, if they go on sale as a result of the state aid imposed on Lloyds Banking Group and Royal Bank of Scotland by the European Commission.

More than 800,000 new bank accounts were opened at Abbey in the first nine months of the year, putting it on target to open more than one million in 2009.

At group level, Santander’s profits slid 3 per cent to €6.74 billion (£6.12 billion) in the first nine months. In the third quarter, profits were €2.2 billion — about the same level as a year ago.

Provisions for possible loan losses and impairment charges in the quarter, to the end of September, rose to €2.94 billion, from €1.76 billion.

The bank said that “against a very difficult environment in international banking, owing to economic contraction and market volatility”, it had been able to “continue generating high recurrent results and to strengthen its balance sheet and capital base”. The figures, it said, “highlight the advantages of geographical and business diversification”. Despite the strong performance, the group said that the British economy remained “fragile”.

The Spanish group has emerged from the banking crisis with no need for state aid and its reputation intact.

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