Santander Consumer USA shareholders were given a rude awakening on Friday after the subprime car loans company said it would need to restate three years’ worth of financial statements due to “errors.”

The company, a unit of Spain’s largest bank, said in a statement that financial statements and disclosures issued for the full years in 2013, 2014 and 2015, and the quarters within 2014 and 2015, as well as the first quarter of 2016, “should no longer be
relied upon”.

Scusa said the restatements are being made to correct for the way it accounts for the discounts at which it buys loans from dealers, and its allowances for credit losses.

As the FT’s Ben McLannahan noted, governance questions at the Dallas-based unit have long been a headache for Ana Botín, executive chairman of Santander, who vowed to get a better grip on the US business after taking over the top job of Spain’s biggest bank from her late father in September 2014.

Earlier this year, Scusa’s parent company, Santander Holdings USA, set an unenviable record by becoming the first bank to fail the annual stress test carried out by the Federal Reserve for the third year in a row.

Scusa also released some unaudited preliminary figures for the second quarter. Provision for credit losses for the period is $511m while total loan origination totaled $5.4bn.

Shares in the company, down by more than 50 per cent over the past 12 months, were unchanged in pre-market trading.

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