Santander Consumer USA Holdings plans to exit personal lending and focus primarily on its auto-finance business.
The Dallas-based subprime lender – a unit of the Spanish banking giant Banco Santander— made the announcement Thursday in conjunction with its quarterly earnings report.
Santander Consumer reported a profit of $223.9 million in the third quarter, up 17% from a year earlier. Earnings per share were 62 cents, beating an estimate of analysts polled by Bloomberg by 11 cents.
The $36 billion-asset company said it plans to get out of the business of consumer lending. Personal loans accounted for about 6% of the company's $30 billion in average loans.
Santander Consumer has "determined to focus our attention on our core auto business as we want to make sure we are realizing the full value of our auto platform," Chief Executive Jason Kulas said in a press release Thursday.
The company also announced plans to change its method for calculating credit losses. The change contributed to a decrease in its provision by 3%, to $744 million.
Moreover, Kulas said during the call that the company delivered a "notice of termination" to a peer-to-peer platform company. More details were not immediately available.
Overall, asset sales -- which rose 30% to $3.1 billion -- drove profits in the third quarter. Total originations edged up 3%, to $7.6 billion.
Net interest and financing income rose 13%, to $1.3 billion. Fee-based income dipped 13%, to $130 million, mainly from lower gains on investments.
Operating expenses increased 42%, to $287 million.
Return on average equity was 21.1%, compared to 23.9% in the prior year.