International bank Santander (BME:SAN) warned of a ‘challenging’ environment in the UK, reporting a 16 percent fall in earnings in the region.

The bank said it earned €3.75 billion in the January-to-June period, increasing its customer base by three million to 140 million. Global profits were up by 4 percent after strong growth in the US and Brazil.

However, earnings in the UK fell took a 16 percent hit on the back of higher investment costs and weaker revenues. The UK is one of the banks biggest markets, accounting for a fifth of the bank’s profits, in which earnings fell to €692 million.

Santander executive chair Ana Botin said the bank had delivered “strong growth in underlying revenue and improving credit quality, despite strong currency headwinds”.

Shares in Santander are currently trading up 0.73 percent at 4.78 (0928GMT).