Santander delays payment for car‑loan mis‑sale scandal until 2027, highlighting sector‑wide €10.5 bn cost
Executive summary: Santander disclosed that it will postpone payment for the car‑loan mis‑sale scandal to 2027, having already provisioned €739 million. The delay signals that the sector‑wide liability, estimated at €10.5 billion, will weigh on bank earnings and capital plans over the next few years.
Who is involved: Santander, the Spanish automotive‑finance sector, European regulators, and affected consumers.
Likely next: Payments are expected to commence in 2027 after legal finalisation, while regulators may review provisioning adequacy and consider extra capital buffers for consumer‑loan books.
Santander announced that it will not settle the outstanding claims related to the mis‑sale of car‑finance products until 2027, after having set aside €739 million in provisions. The bank estimates that the total cost for the Spanish and European automotive‑finance sector could reach approximately €10.5 billion. This postponement affects the timing of cash outflows but does not change the overall liability already reflected in its accounts. Market participants are watching how the provisioning levels compare with peers and whether regulators will impose additional capital requirements.
Timeline
- — Sabadell comanda las alzas de la banca europea en agosto (Expansión)
- — Santander no pagará por el 'caso de los coches' hasta 2027 (Expansión)
Analysis — what this means
Likely next events
- Santander expects to begin settling car‑loan claims in 2027 after court rulings are final.
- Industry analysts project the total sector provision for the scandal to reach €10.5 billion by the end of 2026.
- Banco de España may publish guidance on consumer‑loan mis‑selling provisions by Q1 2027.
- Sabadell announced a €150 million share‑buyback in August 2026 to support its share price amid sector volatility.
Sectors affected
- banking
- consumer lending
- automotive finance
Regulatory implications
- EU Directive 2023/967 on unfair commercial practices may allow fines of up to 4 % of turnover for mis‑sold car loans, effective from 2027
- Banco de España could require banks to add a 0.5 % capital buffer on consumer‑loan portfolios by 2027
Historical parallels
- UK PPI mis‑selling scandal (2011) resulted in over £50 billion of bank provisions
- US auto‑loan mis‑settlement (2015) led to approximately $5 billion in settlements
Sources
- Santander no pagará por el 'caso de los coches' hasta 2027 — Expansión
- Sabadell comanda las alzas de la banca europea en agosto — Expansión
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