Santander has accused the City watchdog of overreach after its bill for the UK motor finance scandal reached £461m, as the Spanish lender signed a $12bn takeover of an American bank.
The bank – which announced the surprise takeover of US-based Webster Bank on Tuesday night – took a fresh swipe at the Financial Conduct Authority (FCA) on Wednesday over a compensation scheme for the scandal.
Santander UK had been concerned over what it claimed was a lack of clarity around the regulator’s plans for an £11bn redress scheme, which was meant to draw a line under the ballooning motor finance scandal.
Santander said on Wednesday it had put aside a further £183m to compensate drivers who were overcharged via unfair commission arrangements between lenders and car dealers.
However, the bank said this was based on the FCA’s proposals for payouts, which it criticised for going too far. The lender said the scheme “extends beyond reversing any damaging financial consequences caused by unfair relationships”.
Its UK boss, Mike Regnier, had already urged the government to intervene, claiming current proposals could end up inflicting “significant” harm to consumers, jobs and the broader economy. Last October, Santander cancelled a quarterly results update due to “uncertainties” over the redress scheme.
The latest amount brings Santander’s total provision for the scandal to £461m, though it still reported a 14% rise in annual pre-tax profit for 2025 to £1.5bn in the UK on Wednesday.
Its Spanish parent company, Banco Santander, announced a 12% jump in net profit for 2025 to a record €14.1bn (£12.1bn).
The new figures came hot on the heels of Banco Santander announcing the $12.2bn takeover of Webster.
The cash-and-shares deal will create the 10th‑largest commercial and retail bank group in the US, adding 200 branches to Santander’s US footprint, which had previously been focused on sub-prime or near-prime car loans.
Banco Santander’s executive chair, Ana Botin, said it was an “exciting step” for the business, helping it make further inroads into the American market. Once completed, the takeover will give Santander a US balance sheet with $327bn (£238bn) in assets, $185bn in loans and $172bn of deposits. The bank said the deal would cut costs and boost profitability.
However, investors seemed unconvinced, sending its Spanish shares down 3% on Wednesday morning.
The Webster deal is the latest acquisition by Santander in the Anglo market, having in July announced the takeover of the UK high street lender TSB from its Spanish rival Sabadell for £2.6bn.
The takeover will make Santander the third-largest UK bank in terms of personal current account deposits, behind Lloyds and NatWest. TSB serves 5 million customers through its 175 branches and 5,000 staff. Santander UK has about 14 million customers served out of 350 branches across the country, with 18,000 staff before the latest job cuts.
Analysts are keen to see whether or not Santander strips out duplicate roles and branches, and scraps the 215-year-old TSB brand.
