Santander UK is focusing on a strategy of "selective growth" as profits have fallen against a backdrop of continued income and cost pressures.
In its quarterly statement for the year ended December 31, 2018, published today (January 30), the bank reported increased regulatory, risk and control costs had been "partly" offset by cost management programmes over the course of last year.
Despite this Santander saw its pre-tax profit drop 14 per cent from £1.81bn in 2017, to £1.56bn last year.
Nathan Bostock, chief executive at Santander UK Group Holdings, said: "Our 2018 financial performance reflects our strategy of selective growth, while actively managing costs in the competitive and uncertain operating environment."
The bank’s total operating income also dropped, coming in at £3.6bn compared with £3.8bn the previous year.
But Santander saw positive net mortgage growth last year of £3.3bn, its strongest lending in more than three years.
Mr Bostock said the bank had helped more than 27,000 first-time buyers last year and had also seen solid growth in lending to trading businesses.
He added: "Our focus remained on earning loyalty through excellent service and compelling products - from bringing new features to our mobile app to launching our new 1I2I3 Business Current Account - and we are encouraged by our customers' response.
"I am pleased with the improvements in our customer experience, with retail customer satisfaction in line with the average of our three highest performing peers, and corporate customer satisfaction now 7pp above the market average.
"In the current uncertain environment, we will continue to do everything we can to support our customers and deliver on our purpose of helping people and business prosper across the UK."
The bank reported it expects to see costs increase slightly in 2019 as it invests further in "business transformation, face an intensifying regulatory change agenda and manage inflationary pressures".
Santander has also planned digital investments in its automation process and adjustments to its systems and platforms, all of which are expected to improve customer experience and deliver "operational efficiencies".