UK's Santander delays results as it considers landmark car lending ruling | Banco Santander

Santander UK delayed publishing its third-quarter results at the last minute as it rushed to review last week's landmark court ruling on bad sales of car finance that some analysts say could cost lenders $1.1 billion in losses. .

The bank, along with its Spanish parent Banco Santander, were due to release their latest quarterly earnings report on Tuesday morning. But the UK branch announced on Monday evening that it was withholding the report while it reviewed Friday's appeal court ruling on the payment of fees on car loans.

The ruling, which said it was unlawful for lenders to pay commissions to car dealers without the borrowers' knowledge, could have implications for the Financial Conduct Authority's ongoing investigation and could ultimately lead to lenders such as Santander paying customers billions of pounds. They may force you to pay compensation.

It is not practical to reliably estimate the extent of the potential financial impact at this time, the bank said. However, Santander UK Group Holdings plc is taking its time to consider its judgment and potential exposure to Santander UK Group.

Analysts at RBC Capital believe it could ultimately cost Santander as much as $1.1 billion. Benjamin Toms, equity analyst at RBC, said it was our understanding that the bank would need additional time to make legal comments on the matter alongside its third-quarter results or risk being shut out of the money markets.

Santander is one of three large banks that could be forced to make payments if the FCA decides to implement a customer compensation scheme. Lloyds, which has the largest exposure, has already set aside $450 million in potential dividends, but some analysts suggest that figure could be as high as $1.5 billion. Lloyds said on Monday it was assessing the potential impact and wider implications of the decision. The ruling could cost Barclays $357 million.

Santander said the Court of Appeal ruling, which ruled against specialist lenders FirstRand and Close Brothers, set a high bar for disclosing fee arrangements and ensuring customers can consent to loans. The British government said it believed the ruling went beyond what was necessary under British regulations.

FirstRand and Close Brothers plan to appeal the decision.

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Santander UK Group Holdings plc disagrees with the court's conclusions and said the decision could set a precedent for similar claims, but both defendant companies have said publicly that they will appeal the decision to the UK Supreme Court.

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