Santander UK has seen its half-year profits more than halve, hit by needing to allocate £731m for compensating customers who were mis-sold payment protection insurance (PPI).
Its pre-tax profit for the six months to 30 June was £549m, down from £1.2bn a year earlier.
The £731m figure is an increase on the £548m Santander UK said last month that it had put aside to cover PPI claims.
Most of the UK's largest banks are paying out PPI compensation.
Lloyds Banking Group has set aside £3.2bn, followed by Barclays (£1bn), Royal Bank of Scotland (£850m) and HSBC (£269m).
Santander UK is the British arm of Spanish lender Banco Santander.
It bought Abbey National in 2004, Bradford & Bingley in 2008, and Alliance & Leicester in 2010.
PPI is supposed to cover loan repayments if someone becomes ill or loses their job. But it has emerged that many of the policies were mis-sold, either because people were not aware they were paying for the insurance or because they would not be covered.
In April, the banking industry lost its High Court challenge to new rules on the sale of PPI.
Among other things, the rules require sellers of PPI polices to review all their past sales to see if their customers have a claim for mis-selling, whether or not they have actually complained.