Bank says new rules caused 9% profits fall
Santander UK said that new rules which force it to hold more cash to protect against future financial crises were behind a 9% fall in profits and warned the impact is likely to be felt until 2013.
The UK's fifth biggest bank said regulatory costs had increased by £253m as profits in the nine months to September slipped to £1.65bn.
Santander warned it expects lower interest rates and higher costs of borrowing to affect profits over the next two years.
The UK arm of the Spanish bank has 25 million customers and 1,400 branches after a series of purchases of British banks including Abbey National and Alliance -amp; Leicester.
The bank said net profits for the nine months fell to £659m from £1.28bn after a £538m provision for mis-selling payment protection insurance announced earlier in the year.
Santander UK said it had also overhauled its customer complaints process, recruited 1,100 customer facing staff and relocated its call centres back in the UK to improve its service.
The bank admitted that it still had more ground to cover in improving customer service to levels of satisfaction in other areas.
The group was the UK's third most complained about bank behind Barclays and Lloyds in the first half of the year.