Spanish lender Banco Santander and UK banking giant Lloyds have both reported record profits in the latest quarter, fueled by surging interest rates and expanding customer bases.

Banco Santander announced on Wednesday a net profit of 2.9 billion euros ($3.1 billion) in the third quarter, marking a substantial 20-percent year-on-year increase. The bank’s chief executive, Ana Botin, highlighted the achievement of another record quarter, citing the addition of nine million customers, a 13 percent increase in revenues, and ongoing progress in simplifying the business. With a nine-month profit of 8.14 billion euros, Banco Santander is on track to potentially surpass the symbolic barrier of 10 billion euros in annual net earnings.

The global rise in interest rates has proven advantageous for Santander and many other banks, boosting margins on lending operations. The growing customer base, which now stands at 166 million, has further contributed to the bank’s robust performance.

Meanwhile, Lloyds, the UK’s largest mortgage lender, posted impressive profits of £1.9 billion for the third quarter, a substantial rise from £576 million in the same period last year. The banking group, which includes Halifax and Bank of Scotland, generated £3.4 billion in net interest income. However, the figure dipped slightly from the previous quarter due to increased payouts to savers.

Lloyds’ results echo a broader trend among banks benefiting from higher interest rates. The Bank of England’s efforts to address soaring consumer prices have led to multiple rate increases since 2021, impacting borrowing and savings rates. Despite concerns about the pace of rate adjustments, most banks, including Lloyds, have reported heightened profits, with customers paying more for mortgages, loans, and credit cards.

The current economic landscape, marked by elevated interest rates, leaves homeowners and first-time buyers under pressure. The average rate on a fixed two-year mortgage deal has climbed to 6.34%, according to financial information service Moneyfacts. As financial institutions navigate this environment, the industry is witnessing robust financial performances, setting the stage for potential further growth and challenges in the months ahead.