Santander takes fresh swipe at City watchdog as its car loan scandal bill tops £460m | Banco Santander

Santander takes fresh swipe at City watchdog as its car loan scandal bill tops £460m | Banco Santander

February 4, 2026 discoverhiddenusacom Business

Santander UK is facing scrutiny from the Financial Conduct Authority (FCA) over a £11 billion motor finance redress scheme, even as its parent company, Banco Santander, pursues significant expansion through acquisitions. The Spanish lender announced a $12 billion takeover of US-based Webster Bank on Tuesday night.

Motor Finance Scandal and FCA Concerns

Santander has voiced concerns regarding a lack of clarity surrounding the FCA’s plans for the motor finance scheme, intended to address issues stemming from car loans issued between 2007 and 2024. The bank has set aside a total of £461 million to cover potential compensation claims, including a further £183 million announced on Wednesday.

Did You Know? Santander cancelled a quarterly results update in October 2025 due to “uncertainties” over the redress scheme.

However, Santander argues that the FCA’s proposals “extend beyond reversing any damaging financial consequences caused by unfair relationships.” Mike Regnier, the UK boss of Santander, previously urged the government to intervene, warning of potential harm to consumers, jobs, and the broader economy.

Expansion Amidst Controversy

Despite the ongoing financial implications of the motor finance scandal, Banco Santander reported a 12% increase in net profit for 2025, reaching a record €14.1 billion (£12.1 billion). The acquisition of Webster Bank is expected to create the 10th-largest commercial and retail bank group in the US, adding 200 branches to Santander’s existing US footprint.

The deal will result in a US balance sheet with $327 billion (£238 billion) in assets, $185 billion in loans, and $172 billion in deposits. Banco Santander’s executive chair, Ana Botin, described the acquisition as an “exciting step” for the business.

Expert Insight: Santander’s simultaneous pursuit of expansion through acquisitions while navigating a significant financial liability highlights the complex strategic trade-offs facing multinational financial institutions. The bank is attempting to balance risk mitigation with growth opportunities in a challenging regulatory environment.

Despite the positive outlook from Banco Santander, investors reacted negatively to the news, causing its Spanish shares to fall by 3% on Wednesday.

Recent Acquisitions and UK Market Position

The Webster Bank takeover follows Santander’s July 2025 acquisition of TSB from Sabadell for £2.6 billion. This acquisition will position Santander as the third-largest UK bank in terms of personal current account deposits, behind Lloyds and NatWest.

TSB serves 5 million customers through 175 branches and employs 5,000 staff. Santander UK currently serves 14 million customers through 350 branches, with a workforce of 18,000 before recent job cuts. Analysts anticipate potential consolidation of roles and branches, and the possible discontinuation of the 215-year-old TSB brand.

Frequently Asked Questions

What is the nature of the motor finance scandal?

The scandal relates to unfair commission arrangements between lenders, such as Santander, and car dealers between 2007 and 2024, leading to drivers being overcharged on car loans.

How much has Santander set aside to cover the scandal?

Santander has set aside a total of £461 million to cover potential compensation claims related to the motor finance scandal.

What is the significance of Santander’s acquisition of Webster Bank?

The $12 billion takeover of Webster Bank will create the 10th-largest commercial and retail bank group in the US, expanding Santander’s US presence and adding 200 branches.

As Santander navigates these challenges and opportunities, will its strategy of simultaneous expansion and liability management prove successful in the long term?