Santander has said lending to small and medium-sized businesses (SMEs) in the East Midlands rose by 38 per cent to £167 million in 2011.

The Spanish banking giant loaned £4.3 billion to UK SMEs in the year to December 31, higher than its £4 billion target under a deal with the Treasury.

The improvement followed the opening of five new UK corporate lending centres, bringing its total to 28, and the hiring of an additional 200 SME business advisers.

But Santander's bottom-line profits in the UK fell by 40 per cent to £993 million after it put aside £538 million to deal with claims from mis-sold payment protection insurance (PPI).

Excluding PPI, underlying profits were down 6 per cent to £1.5 billion.

Ana Botin, Santander's UK chief executive, warned 2012 was likely to be a tough year for UK banking.

Santander, which bought Alliance & Leicester in 2008, employs more than 2,200 people in Leicestershire at more than 300 branches, as well as a call centre in Narborough.