The Norwegian Financial Supervisory Authority published a supervisory report on Santander Consumer Bank AS focused on credit risk management and related governance and controls in asset-backed lending, particularly vehicle financing. The review found that several policies and procedures need to be clarified and that the bank’s assessment of customers’ debt-servicing capacity did not always reflect all relevant expenses under the lending regulation. The report highlights weaknesses in routines for assessing income stability, monitoring customers in arrears, complaints handling, and safeguarding customers’ interests. It also noted that the credit handbook did not reference key requirements in the Financial Contracts Act, including the duty to refuse credit, and that clearer guidance is needed for manual decisions on cases rejected by automated processes. In arrears management, an automated approach to termination lacked a holistic assessment of “material default”, and the bank plans by the third quarter of 2025 to shift its process so a termination warning is sent after the third missed instalment and termination occurs after the fourth, while still requiring a full assessment before termination. The Authority also recorded that the bank had ended its use of a foreign call centre for debt collection that lacked a Norwegian licence and that complaints routines were updated with effect from 1 January 2025 after practices that did not ensure written responses within 15 days. Further work flagged includes upgrading a corporate customer rating model that the Authority assessed as having clear weaknesses, with a new model under development and planned for completion by end-2026, and considering sensitivity analysis for larger and more complex corporate clients during 2025. The Authority will seek additional information on the bank’s commission model for loan distribution through car dealers and follow this up in a separate case.
Norwegian Finanstilsynet 2025-05-14
Norwegian Financial Supervisory Authority finds gaps in Santander Consumer Bank’s vehicle finance credit assessments and will follow up dealer commission model
The Norwegian Financial Supervisory Authority released a report on Santander Consumer Bank AS, highlighting deficiencies in credit risk management, particularly in vehicle financing. Key issues include inadequate assessment of customers' debt-servicing capacity, unclear policies, and weaknesses in arrears management and complaints handling. The bank plans to address these issues by updating processes and models, with significant changes expected by 2025.