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Santander UK has set aside £295mn to cover the potential costs of a British court ruling on unlawful commissions that banks paid to car dealerships.
The lender on Wednesday became the largest institution to announce such a provision since the Court of Appeal ruled last month on the mis-selling of car loans.
The figure was published with Santander UK’s full third-quarter results, which the bank delayed last month in order to calculate the potential cost of the ruling.
The court said it was illegal for banks to pay a commission to a car dealer without getting the customer’s informed consent, a decision that increases the likelihood that the Financial Conduct Authority will establish a costly redress scheme for lenders.
