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Banco Santander SA is looking to sell over a dozen significant risk transfers (SRTs) to enhance profitability. These SRTs are linked to more than €20 billion of loans from various global operations, including the US, Germany, the UK, and Mexico. By utilizing SRTs, asset sales, and other hedging transactions, Santander aims to free up capital and improve returns, ultimately reshaping the bank's business model. The bank's new approach has led to a boost in its Common Equity Tier 1 ratio, with SRTs playing a key role in this capital management strategy. [Extracted from the article]

Santander's UK unit has allocated £295 million to cover potential legal costs and payments following a UK probe into the suspected mis-selling of car loans. The bank delayed the publication of third-quarter earnings to assess the impact of the investigation, which resulted in a decline in profit before tax. Despite the provision, Santander stated that the impact on the group as a whole would not be significant, with the CFO affirming that the bank would meet its targets for the year. [Extracted from the article]

Banco Santander SA's UK unit is allocating £295 million to cover potential legal costs and payments related to a car loans probe. The amount is intended to address operational and legal expenses, with the possibility of the final financial impact being significantly different. Santander delayed the release of third-quarter earnings in response to the probe, which was prompted by concerns about transparency in car loan agreements. [Extracted from the article]

A recent survey by the Federal Reserve Bank of New York revealed that US consumers faced increased difficulty in accessing credit in 2024, with rejection rates for auto loans and mortgage refinancing reaching the highest levels in over a decade. Despite stable demand, rejection rates for various forms of credit rose, leading to a more pessimistic outlook on credit access among Americans. Borrowers with credit scores below 680 were particularly affected, with rejection rates surpassing pre-pandemic levels. The study also indicated a decrease in the likelihood of people applying for loans in the coming year. [Extracted from the article]

US household debt reached a new high last quarter, totaling $17.9 trillion, driven by increased debt levels for mortgages, auto loans, credit cards, and student loans. While overall household incomes have risen more than debt, lower-income groups and younger consumers are facing financial strain. Delinquency rates have also increased, with more consumers experiencing financial difficulties, particularly in auto loans and mortgages. Despite the rise in debt, Americans' disposable income has also grown, but the Federal Reserve Bank of New York warns that different segments of the population are affected differently by non-housing debt balances. [Extracted from the article]

European investors are now being offered bonds backed by solar panel loans, a new asset-backed security in the public debt market. Companies like Perfecta Energia and HomeTree Marketplace Ltd. are planning to follow in the footsteps of Enpal GmbH, the first to sell a solar panel-backed security in Europe. While demand for these deals is strong, the risks associated with this nascent asset class are still being assessed by ratings agencies like Moody's. Investors are looking to the US for guidance, where solar-panel backed deals have been growing, despite recent industry challenges. [Extracted from the article]

Tesla Inc. recently sold $499 million of bonds backed by loans for solar equipment purchases. The deal, marketed by Deutsche Bank, received investment-grade ratings from Fitch Ratings due to the high credit scores of the customers. This issuance marks Tesla's return to solar asset-backed securities, following previous ventures in the field. The solar industry has seen an increase in debt offerings, but also a rise in delinquencies and challenges due to high interest rates. [Extracted from the article]

Banco Santander SA expects the UK probe into auto lending practices to have a profit impact below €600 million, according to Chief Financial Officer Jose Garcia Cantera. The recent court ruling on transparency in car loans has led to delays in publishing third-quarter earnings for Santander's UK unit. Close Brothers Group Plc plans to appeal the decision, anticipating "significant liabilities" for its business. Santander UK disagrees with the Court of Appeal's conclusions and is unable to estimate the financial impact accurately at this time. Analysts predict potential impacts ranging from £1.1 billion to £1.8 billion, but Cantera remains optimistic about meeting the company's targets for the year. [Extracted from the article]

A recent London court ruling found UK banks lacking transparency in car loan agreements, potentially leading to billions in additional compensation payouts. The decision impacted bank shares, with Lloyds Banking Group seeing a significant decline. Analysts predict that the ruling could have far-reaching implications for the motor financing sector in Britain. The judgment has prompted legal challenges and raised concerns about consumer protection in the industry. [Extracted from the article]

Close Brothers Group Plc saw a significant drop in its shares after losing a court case regarding disclosure obligations for customers obtaining car loans. The company has halted new UK motor finance business temporarily to reassess its procedures following the ruling. This decision could potentially lead to substantial liabilities for the company, with analysts estimating industry-wide compensation costs ranging from £2 billion to £10 billion. The Financial Conduct Authority is closely monitoring the situation, as other lenders, including FirstRand Ltd., are also considering appeals in similar cases. [Extracted from the article]

Capital One Financial Corp. reported a net income of $1.78 billion, which was in line with the previous year, but beat analyst estimates with adjusted earnings per share of $4.51. The company's profit was driven by growth in its credit-card and auto-lending businesses. Capital One is currently seeking regulatory approval for its $35 billion acquisition of Discover Financial Services, with New York Attorney General Letitia James raising concerns about the deal's impact on consumers. Despite industry data showing higher-risk levels in post-pandemic loan originations, Capital One has managed to avoid significant consumer weakness affecting its earnings. [Extracted from the article]

The Consumer Financial Protection Bureau has finalized a rule requiring US banks to provide customers with access to their financial data, allowing them to transfer it to other financial services providers for free. This open banking rule aims to increase competition, lower loan prices, and improve services by enabling consumers to switch providers easily. While fintech companies stand to benefit from this new regulation, some Wall Street industry groups have expressed concerns about potential liabilities. Banks and credit unions over $850 million in assets must comply by April 2026, with smaller institutions given until April 2030 to adhere to the rule. [Extracted from the article]

Ally Financial Inc. has reduced new auto loans to manage consumers' debt loads, with third-quarter auto originations falling below expectations at $9.4 billion compared to an estimated $10.4 billion. The firm's CEO and CFO expressed concerns about high inflation and a weakening employment picture affecting borrowers, leading to increased provisions for credit losses. Despite these challenges, Ally reported adjusted earnings per share of 95 cents, exceeding the average estimate of 52 cents, with revenue reaching $2.1 billion. [Extracted from the article]

Ally Financial Inc. shares fell as the company provided a more negative outlook on loan charge-offs and lowered its net interest margin forecast due to consumer struggles with high debts. The firm has tightened its criteria for auto loan qualifications, leading to increased verification requirements and lower approvals for higher monthly payments. Despite challenges, the company remains confident that actions taken will reduce losses over time. Chief Financial Officer Russ Hutchinson noted that consumers are adapting to inflation and have more options in the used auto market, potentially improving future loan performance. [Extracted from the article]

Barclays Plc is challenging a court ruling regarding its car loan practices, arguing that the decision could have significant implications for the banking industry in the UK. The ruling stated that Barclays failed to treat a customer fairly due to an undisclosed commission arrangement with a broker, potentially resulting in a higher interest rate for the customer. The Financial Conduct Authority (FCA) has been reviewing historical commission for car loans and warned that additional costs may be incurred by lenders. While Barclays has not made a provision for the investigation, other banks, such as Lloyds Banking Group and Close Brothers Group, have set aside funds for possible compensation. The FCA has paused its probe pending the outcome of the legal challenge. [Extracted from the article]

The average consumer credit score in the US has remained steady after experiencing its first decline in a decade. The national average FICO credit score was 717 in July, the same as in April and October of the previous year. While missed payments on mortgages and auto loans have increased, they are still below pre-pandemic levels. However, missed payments on bankcards have surpassed pre-pandemic levels. FICO scores, which range from 300 to 850, provide insight into the health of the US consumer and are used by financial institutions to make lending decisions. The impact of the pandemic on credit scores has been uneven, with lower score consumers experiencing more difficulties compared to prime borrowers. [Extracted from the article]

Tesla Inc. has sold over $783 million of prime borrower leases to investors in its second asset-backed securities deal of the year. The sale was led by Societe Generale SA and the top-rated slice of the securitization was priced at a coupon of 4.827%. This sale comes as carmakers rush to complete asset-backed transactions before any potential credit market disruptions from the US election. Tesla's ABS issuance has slowed in 2024, with transactions totaling just over $1.5 billion so far. The resale value of Tesla vehicles has been affected by falling sticker prices on new electric vehicles, leading to lower residual values and declining lease sales. [Extracted from the article]

This article from Kiplinger Personal Finance discusses the downsides of leasing a car compared to buying one. While leasing may have lower monthly payments, it comes with hidden costs. The average transaction price for a new car has increased significantly in recent years, making buying a new car more expensive. Leasing is on the rise, with about 24% of new cars being leased in early 2024. However, leasing is more expensive in the long term because car payments never end. Leasing also has limitations, as it is mostly limited to new or gently used cars that may not be budget-friendly. Additionally, there are additional costs such as repair fees and penalties for exceeding mileage limits. Leasing may be a better choice for those who like to drive the latest car models and trade up frequently, or for those interested in all-electric or plug-in hybrid vehicles that qualify for federal clean-vehicle tax credits. To make a car purchase more affordable, buying a used car is recommended, and shopping around for competitive interest rates from local banks and credit unions is advised. [Extracted from the article]

US new car sales fell by 2.3% in the last quarter, with a total of 3.9 million cars and trucks sold. High prices, uncertainty surrounding the upcoming election, and the hope for lower financing costs have kept buyers away from showrooms. However, automakers are optimistic that the Federal Reserve's reduction in benchmark rates will lead to lower car loan rates, prompting Americans to buy an estimated 15.7 million cars and trucks this year. Despite the overall decline in sales, General Motors saw growth in retail deliveries and maintained high prices that boosted profits. Toyota's hybrid models remained popular, accounting for nearly half of its total sales volume. [Extracted from the article]

Car sales in the US have been sluggish, but analysts expect them to pick up later this year after the presidential election and the Federal Reserve's interest rate cuts. Many consumers have been hesitant to make big purchases due to uncertainty about the election and interest rates. However, once rates start to decrease and the election outcome is determined, sales are expected to increase. The Federal Reserve's rate cuts will take some time to translate into lower car loan rates, but industry experts project that Americans will buy 15.7 million cars and trucks this year, up 1.3% from last year. Despite this, the average selling price of new cars has increased, making them less affordable for some consumers. Monthly payments on car loans have also risen. While incentive spending on discounts has increased, automakers have been cautious about production, resulting in fewer blowout deals for car buyers. [Extracted from the article]

It's harder than it has been in a long time to get a car loan. Lenders are denying more than 14 percent of car-buying loan applicants, per the Federal Reserve. [...]

Citi analyst Arren Cyganovich raised the firm's price target on Ally Financial to $38 from $37 and keeps a Buy rating on the shares. The firm said shares are reacting [...]

Byline: Moneylife Digital Team Upholding the method adopted by a district commission for treating the depreciated value of a truck as equal to the insured declared value (IDV) of the [...]

Piper Sandler analyst Kevin Barker believes the Supreme Court ruling the Biden Administration does not have the right to forgive student debt will 'present an incremental burden' to spending and [...]

WITH THE AVERAGE price of used cars around $28,000 and interest on auto loans above 11 percent, many people are looking for good deals. One option: Buy from a rental [...]

The article focusses on the strong commitment from different automobile manufacturers to become all electric. Topics include the automobile company Volkswagen, Volvo and Nissan had set their goal to go all electric in future; the views of Carla Cosenzi, president of TommyCar Auto Group, on hybrid electric vehicle production; and high demand electric infrastructure electric vehicle in the market.