LONDON, Sept 14 (Reuters) - Santander's British armis to more than double the fees for its current accountcustomers and also raise charges on its credit cards, blamingrising costs and low interest rates.
Santander UK's 123 products have attracted hundreds ofthousands of customers from Britain's "big four" banks - Lloyds, Barclays, HSBC and Royal Bank ofScotland - and attracted the highest number of"switchers" after rules were changed two years ago to make theprocess easier.
Santander said on Monday its 3.8 million 123 current accountcustomers will be charged 5 pounds (nearly $8) a month fromJanuary, up from 2 pounds currently.
It is also increasing the fees on its main credit card to 36pounds a year from 24 pounds, which it said was due to a changein European Union laws that will reduce the profits banks makefrom transactions. It has 1.9 million 123 credit card customers.
"Since launching the products, the financial landscape haschanged significantly," Santander UK said on Monday. "Savingsrates have fallen and remained low, and the ongoing costs ofrunning a UK bank have increased as a result of changes tobanking legislation and regulation."
Many Britons have been attracted by "cashback" offers tocustomers who pay for services from their 123 accounts or byusing their 123 cards, and the bank said most of those paymentswill not change.
Santander this year hit its target of getting 4 millioncustomers for its 123 products ahead of target, but warnedcompetitive pressures were rising and could hurt its margins andgrowth. ($1 = 0.6478 pounds) (Reporting by Steve Slater; Editing by Ruth Pitchford)