Finance
Santander UK criticises motor finance scheme as it withholds third-quarter results
Published by Global Banking & Finance Review®
Posted on October 29, 2025
3 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 29, 2025
3 min readLast updated: January 21, 2026
Santander UK delays Q3 results, seeking clarity on FCA's motor finance redress scheme, which could impact the automotive industry.
(Reuters) -Santander UK criticised Britain's motor finance redress scheme and said on Wednesday it decided not to publish its third-quarter results as it seeks clarity on the financial regulator's proposals related to the mis-selling scandal.
The UK unit of Spain's Santander said that it did not expect a material impact on its capital or liquidity even in the event of any potential increase to its existing motor finance provision, which was previously estimated at 295 million pounds ($396 million) to cover compensation.
Asked if Santander UK would have to set aside more provisions, Santander's Chief Executive Officer Hector Grisi told a press conference: "For the moment, no, because the FCA report is provisional and still under public consultation."
Other banks in the UK, such as Lloyds and Barclays, recently set aside additional charges related to the scheme to compensate consumers who signed unfair car loans between 2007 and 2024.
UK REGULATOR'S PROPOSED COMPENSATION SCHEME
Many of the loans, which were packaged up by car dealers, stem from discretionary commission agreements, in which lenders allowed the dealerships to earn higher fees by ramping up the interest rates consumers paid on the loans.
In August, Britain's Financial Conduct Authority proposed a redress scheme for consumers with compensation claims following a Supreme Court ruling, estimating the cost at between 9 billion and 18 billion pounds.
Santander UK said on Wednesday it was reviewing the consultation to understand its potential implications, noting that the FCA's proposed approach differed in important respects from the Supreme Court ruling.
It also said there was uncertainty regarding the final scope, methodology and timing of any redress scheme that may ultimately be implemented.
"We believe that the level of concern in the industry and market is such that material changes to the proposed FCA redress scheme should be an active consideration for the UK Government," Santander's UK Chief Executive Mike Regnier said in a statement.
He also warned that without such change, the unintended consequences for the car finance market, the supply of credit and the resulting negative effect on the automotive industry and its supply chain could significantly hurt jobs, growth and the broader British economy.
"This could also cause significant detriment to the consumer," he added.
($1 = 0.7451 pounds)
(Reporting by Yadarisa Shabong in Bengaluru and Jesús Aguado in Madrid; Editing by Janane Venkatraman and Emelia Sithole-Matarise)
The Financial Conduct Authority (FCA) is a regulatory body in the UK that oversees financial markets and firms to ensure consumer protection and maintain market integrity.
A motor finance redress scheme is a program designed to compensate consumers who were mis-sold car loans or finance agreements, particularly those with unfair terms.
Consumer protection in finance involves laws and regulations designed to ensure the rights of consumers are upheld, preventing unfair practices and promoting transparency.
Provisions in banking are funds set aside to cover potential losses from loans or other financial obligations, ensuring that banks remain solvent and can meet their liabilities.
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