Santander UK has set aside £295mn to cover the potential costs of a British court ruling on unlawful commissions that banks paid to car dealerships. The lender on Wednesday became the largest institution to announce such a provision since the Court of Appeal ruled last month on the mis-selling of car loans. The figure was published with Santander UK’s full third-quarter results, which the Spanish-based bank delayed last month in order to calculate the potential cost of the decision.
Stephen Haddrill, head of the Finance and Leasing Association, the trade body that represents many car finance providers, said the UK regulatory regime was “not conducive to lending”. He said the FCA had “failed” by not ruling that commissions paid by finance companies to car dealerships should be disclosed long ago.