Santander UK has delayed its third quarter results while it tries to determine the impact of the City regulator’s £11billion car finance compensation scheme on the business.

Without revealing specifics, its global results highlight improved profitability in its UK mortgage business.

But the bank has taken a strong stance on the motor finance payout proposals, calling on ministers to intervene.

It warns that if the scheme goes ahead as suggested, it could have ramifications for the availability of loans for consumers, for the jobs market and for the wider economy.

Santander says it is in the process of reviewing the FCA’s consultation on redress for the mis-selling of car finance in detail.

It claims that the FCA’s approach “differs in important respects” from the Supreme Court’s ruling in August, meaning there is uncertainty over the scale of redress and their financial implications for the bank itself and the wider sector. 

However, Santander says that “even in a severe downside scenario” any increase to the money it has set aside for compensation would not have a “material adverse impact” on its liquidity or operations. 

The bank has already earmarked £295m for car finance redress.

In its worldwide results today, the bank reported pre-tax profits of €15.5bn (£13.65bn) for the first nine months of the year, up 7% on the same period last year.

Although it did not disclose a detailed breakdown of UK business, it noted having benefitted from “higher mortgage lending profitability and lower cost of deposits” here.

Santander UK’s outgoing chief executive Mike Regnier says: “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 UK Government. 

“Without such change, 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 UK economy. 

“This could also cause significant detriment to the consumer.

“While the FCA considers the outcome of its consultation, we believe it is our duty to do all we can to secure an orderly and fair outcome from this consultation process. 

“This is not a question of investor versus customer interest, quite the reverse. 

“What is at stake is the supply of credit that customers need and that supports a very important sector for the economy.”