US Edition 
Santander UK chief Ana Botin issues severe profits warning as economy stalls
Ana Botín, the chief executive of Santander's UK business, issued a severe profits warning as the lender faces rising costs and difficult market conditions.
After an investor presentation in London, analysts believe the bank is likely to lose out on £750m of profits over the next three years. The three-year shortfall compares with a 2010 profit at the UK arm of £1.5bn.
Ms Botín, who has led the business since last December, said returns were likely to fall in 2012 and 2013 as she committed to invest almost £500m to improve the bank's customer service levels.
She warned that Santander UK, which has delayed plans to list its shares on the London Stock Exchange, would be forced to contend with "a combination of strong headwinds", citing low GDP growth and regulatory costs as key concerns.
Speaking at the investor day, she added: "We believe the cumulative effect of a liquidity buffer, FSCS [Financial Services Compensation Scheme] and the bank levy, plus the costs of structural reforms, will increase ten-fold from where we were in 2008 to what we expect to see in 2013, impacting our profit before tax.
"That's a challenging backdrop for our business but Santander UK has an enormous opportunity in the UK and we have accomplished a lot so far."
Santander UK hopes to open 3m new current accounts over the next three years and increase the number of credit card customers by about 1.5m.
Ms Botín claimed the company hoped to be the "bank of choice for small and medium-sized businesses".
On Wednesday, Santander UK said it had poached a new head of strategy and regulation from rival Barclays. Stephen Jones was head of investor relations at Barclays and previously a senior debt and equity capital markets banker.