Banco Santander SA is preparing to restructure its UK operations by carving out its consumer finance unit, including the division affected by mounting motor finance litigation, according to Bloomberg News.
Citing unnamed sources familiar with the matter, Bloomberg reported that the Spanish lender is seeking regulatory consent to move its consumer finance business out of Santander UK Plc. The affected unit includes the bank’s motor finance operations, which have been caught up in the wider UK car loan mis-selling scandal.
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The planned reorganisation forms part of a broader effort to implement a standardised operating model for Santander’s consumer and auto finance activities across Europe and the Americas. A Santander spokesperson declined to comment.
The litigation risk stems from a 2023 Court of Appeal ruling that deemed it unlawful for lenders to pay commissions to car dealers without informing customers. The judgment prompted a wave of compensation claims and forced banks to review historic lending practices. Santander UK has made a £295 million provision in response, which contributed to a 36% drop in pretax profit last year.
Under Executive Chair Ana Botín, Santander has shifted investment focus toward the Americas, while de-emphasising European operations. Although Botín has described the UK as a “core market,” the bank has previously examined asset sales in Britain and may revisit that option, according to Bloomberg’s sources.
The affected unit is part of Santander’s Digital Consumer Bank (DCB), which also includes legacy provisions from litigation over foreign currency mortgages in Poland. In 2023, DCB was the least profitable of Santander’s five main operating segments.
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By GlobalDataSantander has recently moved from a geographic to a product-based reporting structure. Its retail operations now sit within a Retail & Commercial Banking division, while most consumer finance activity, including auto loans, is reported under DCB.
