Move could add fuel to speculation over the banking giant's UK future
Santander is reportedly considering a separation of its UK car finance business after a major court ruling in October 2024 found it unlawful for car dealers to accept lender commissions without customer consent.
According to RBC Capital Markets, the Spanish banking group could face up to £1.9 billion in compensation claims from affected borrowers. The Sun reported that Santander has already set aside £295 million to cover initial repayments.
Analysts also believe that removing the motor finance division could make Santander’s UK operations more appealing to prospective buyers. The potential move follows reports that the bank has been exploring ways to scale back or exit the British market. Speculation intensified after William Vereker, chair of Santander UK and a former investment banker, announced plans to step down later this year.
By distancing the car finance unit from its core activities, Santander may aim to smooth the path for a future sale. “Shifting of the consumer finance business out of the UK subsidiary could be an important step in this sale process,” Benjamin Toms, an analyst at RBC Capital Markets, told The Telegraph. “Given the ongoing litigation in the motor finance space, removing this product from the equation, will likely help with the marketability of the Santander UK asset.”
Santander paves way for UK exit in major strategic shake-uphttps://t.co/tQuuhkPJmf
— GB News (@GBNEWS) April 23, 2025
In February, Santander group chief executive Ana Botín dismissed speculation about a full UK withdrawal. Speaking to The Sunday Times, she said: “The UK is not for sale. We love the UK, and the UK will remain a core market.”
Santander UK, headquartered in Milton Keynes, employs around 18,000 people. In October, it confirmed 1,400 job cuts as part of a cost-reduction programme. In February, the bank said it was reviewing further “simplification and automation” measures to drive efficiencies into 2025.
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