Santander 海角视频 has announced a delay in its third-quarter earnings report due to "uncertainty" surrounding the Financial Conduct Authority's motor finance redress scheme.
The Spanish banking behemoth was scheduled to release its financial report for the third quarter on Wednesday, but has postponed it "pending greater clarity regarding the [Financial Conduct Authority]'s proposals".
Mike Regnier, the bank's 海角视频 chief, said: "We believe that the level of concern in the industry and market is such that material changes to the proposed FCA redress scheme should be an active consideration for the 海角视频 Government."
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He cautioned that if the government does not step in, "the unintended consequences for the car finance market, the supply of credit and the resulting negative impact on the automotive industry and its supply chain could significantly impact jobs, growth and the broader 海角视频 economy."
Currently, Santander is liable for £295m in the car mis-selling scandal, as reported by .
RBC analyst Benjamin Toms commented: "Our best estimate, based on peers provisioning levels, is that the bank needed to take an incremental provision of around £500m."
A spokesperson for the FCA responded: "We've set out in detail the thinking behind our proposals and welcome considered feedback.
"We believe a compensation scheme is the best way to settle, for both lenders and consumers, liabilities that exist no matter what. Alternatives would cost more and take longer. It's vital we draw a line under the issue so a trusted motor finance market can continue to serve millions of families every year."
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A Treasury spokesperson said: "The independent Financial Conduct Authority has set out its consultation and it's vital that all stakeholders take part. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms."
After the City watchdog offered additional clarity on its regulatory redress scheme, lenders throughout the sector including Lloyds, Close Brothers and Barclays have increased their provisions for the scandal.
Banking heavyweights have also criticised the FCA for what they described as a "disproportionate" redress scheme.
The chief executive of Lloyds has cautioned that the motor finance redress scheme could wipe out two decades of profitability from the car finance sector.
The FTSE 100 giant has not held back in its critique of the Financial Conduct Authority's (FCA) compensation scheme for the car mis-selling scandal, accusing the regulator of misconstruing the Supreme Court's August ruling.
Charlie Nunn, the bank's leader, said: "When you look at the implication of what's been proposed by the FCA, it's going to potentially take 20 years of profitability off the car finance industry."
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