The Spanish bank made a pre-tax profit of £785m, as it took a £169m charge from PPI, and invested £127m in a programme to transform the business by restructuring its branches.
In better news, the bank said it had cemented its position as the third largest mortgage lender in the UK, adding £3.6m in net new mortgages, while customer deposits grew £4.2bn.
Santander UK chief executive Nathan Bostock said: “The uncertain economic environment looks set to continue for some time, reinforcing our longstanding prudent approach to risk. We are delivering excellent customer experience while taking decisive steps to improve our efficiency and competitiveness.
“Our profitability for the first nine months of 2019 has been impacted by ongoing competitive income pressure, additional PPI costs as well as transformation programme investment.
“Despite this, we delivered our strongest quarterly net mortgage growth in almost 10 years, driven by a focus on customer service and retention. We have also increased customer deposits across the business, with further improvement in customer loyalty.”