Santander Plans Strategic Split of UK Motor Finance Unit Amid Regulatory & Legal Pressures

In a significant restructuring of its global banking operations, Banco Santander SA is pursuing regulatory approval to separate its UK-based motor finance business from its Santander UK Plc division. The move comes as the Spanish banking giant grapples with intensifying legal pressures and underperformance within its consumer auto finance segment, according to sources familiar with internal strategy discussions.

Why Santander Is Splitting Its Motor Finance Business

The targeted business unit has come under heavy scrutiny due to mounting litigation over automotive lending practices in the UK. Santander’s auto finance operations—currently under its Digital Consumer Bank (DCB) division—have been especially impacted by a landmark appeals court ruling in October 2024. The court deemed it unlawful for banks to pay car dealerships to promote loans without fully informing customers—an industry-wide issue that now exposes banks to billions in damages.

While Santander UK Plc has already absorbed a £295 million ($394 million) financial hit related to this regulatory crackdown, the fallout is expected to continue. By restructuring and carving out this underperforming arm, Santander aims to isolate the legal risks and protect its broader UK banking operations.

Global Strategy: Realigning Santander’s Consumer Finance Model

This pivot aligns with Santander Executive Chair Ana Botín’s global strategy, which prioritizes streamlining operations across geographies. Botín has publicly committed to developing a “single global model” for Santander’s consumer and auto lending businesses, which span Europe, Latin America, and North America.

Botín has previously identified the UK as a core market, but with mounting losses and regulatory challenges, the bank is now reportedly reconsidering asset divestments—a path it evaluated in 2023. Simultaneously, Santander is pursuing new growth opportunities in the Americas and reevaluating its presence in Eastern Europe, including a potential sale of its majority stake in Santander Bank Polska.

Motor Finance Litigation Fuels Broader Restructuring

The UK motor finance scandal has reshaped the entire lending industry. Santander, like many peers, was caught off-guard by the court’s ruling, which forced an industry-wide reckoning. Consumer advocacy groups are calling for restitution to customers who were misled into accepting dealer-linked auto loans with undisclosed commission structures.

The Digital Consumer Bank (DCB)—home to Santander’s consumer finance, auto lending, and retail installment loan services—was the least profitable among the bank’s five major divisions last year. Alongside UK litigation costs, DCB has also faced headwinds from legal challenges related to Polish mortgages, prompting a company-wide reassessment.

Internal Realignment: From Geography to Product-Focused Reporting

As part of its global realignment, Santander has transitioned from reporting results based on country operations to a product-centered model. Consumer finance now resides within the DCB unit, while traditional retail banking sits under the Retail & Commercial Banking division.

This shift reflects a growing emphasis on cross-border product unification, designed to optimize efficiency, centralize oversight, and manage risk exposure.

GlobalWorldCitizen.com Insight: Banking, Reform & the New Global Economy

This potential split in the UK highlights the growing risks tied to auto lending transparency, regulatory enforcement, and consumer protection—especially in advanced financial markets.
Santander’s restructuring underscores the importance of agility in a rapidly changing global financial environment.
As legal and compliance costs rise, multinational banks are shifting capital and operational focus to more favorable jurisdictions—particularly in the Americas and Asia.
This story is part of a larger trend where regulation, litigation, and strategy are reshaping global finance.