Feb 4 (Reuters) - Santander UK reported a 14% rise in annual pretax profit on Wednesday, supported by higher net interest income, lower costs, and reduced provision charges. The company reported a
Santander UK Increases Motor Finance Redress Provision to £461 Million
Santander's Motor Finance Redress Update
Feb 4 (Reuters) - Santander UK lifted its motor finance redress provision to 461 million pounds ($632.31 million) on Wednesday, following the British Financial Authority's (FCA) consultation on a proposed compensation scheme.
Details of the Increased Provision
The lender's updated provision includes an additional 183 million pounds for potential redress costs. Santander previously set aside 295 million pounds for motor finance provisions.
Impact of FCA Proposals
In August, Britain's FCA proposed a redress scheme for consumers with compensation claims following a Supreme Court ruling. Complaints involving Santander's car finance business are also on hold until May 2026.
Financial Performance Overview
Santander said it continues to engage constructively with the FCA on its proposals, although there is significant uncertainty regarding the scheme's outcome.
The bank also reported a 14% rise in annual pretax profit for 2025, after withholding its third-quarter results to assess the financial implications of Britain's proposed motor finance redress scheme.
The company reported a pretax profit of 1.51 billion pounds ($2.07 billion), compared with 1.33 billion pounds a year ago, supported by higher net interest income, lower costs, and reduced provision charges.
Santander UK had withheld publication of its third-quarter results in October, citing the need for clarity on regulatory proposals regarding the mis-selling of motor finance loans.
($1 = 0.7291 pounds)
(Reporting by Nithyashree R B in Bengaluru; Editing by Rashmi Aich)
