Santander has seen its profits fall because of "competitive pressures" in the UK mortgage market.
The bank saw its profits before tax for the first quarter of 2018 fall by 21 per cent to £414m.
Net interest margin - the difference between the interest generated from mortgages to that paid out on deposits - was 1.83 per cent, less than in 2017 because of competition in mortgage pricing and the decline in the standard variable rate balance.
Attrition, driven by refinancing and concerns that interest rates will go up, led to a reduction in balances on the SVR of £5.5bn in 2017 and Santander predicted a similar result for 2018.
Nathan Bostock, chief executive of Santander, said: "Our first quarter results have been impacted by ongoing competitive pressures in the UK. However, we have continued to make progress across key areas of the bank, fulfilling our purpose to help people and businesses prosper.
"We have delivered exceptional growth in mortgage lending this quarter, and continued to support our corporate customers through our international offering as they expand into overseas markets.
"With ongoing investment in business transformation and growth initiatives and our relentless focus on cost management, we expect to achieve stronger results over the course of the year and deliver on the majority of our 2016-18 commitments, as previously guided."
Santander saw net mortgage growth of £1.9bn in the first quarter of 2018, with the bank saying its increased approvals were driven by the decision to focus on customer service and retention rather than price.
During the first quarter Santander carried out gross mortgage lending of £7.6bn, compared to £5.3bn in the same period for 2017.
Santander's interest income dropped from £940m to £906m.
The Spanish-owned bank also saw its credit impairment losses increase to £60m, in part because of a drawdown by Carillion, which collapsed earlier this year.