Santander Consumer USA to Restate Financial Reports

Santander Consumer USA Holdings Inc. said Friday it would restate years of financial reports as they can no longer be relied upon because of material weaknesses in internal control. The company is restating its reports from the full-year 2013 until the first quarter of 2016.

It says that the issues included its methodology for accreting dealer discounts, its lack of consideration of net discounts when estimating the allowance for credit losses and the discount rate used in determining the impairment for loans accounted for as troubled debt restructurings.

"Since the identification of errors in our financial reporting, we have been completely focused on ensuring we correct everything as quickly and transparently as possible," Chief Executive Jason Kulas said.

The company expects the cumulative impact of the errors to increase total equity of about 1%, as of March 31. The company also said that the restatements will increase previously reported net income for the quarter ended in March by about $9 million, or 2 cents a share.

The company said it is working to file its report for the quarter ended in June as soon as possible and said it has received waivers for some debt facilities that require timely filings.

Santander Consumer is a consumer finance company focused on vehicle finance and third-party servicing.

Shares rose 11.7% in morning trading.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

September 23, 2016 11:15 ET (15:15 GMT)

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