Santander Consumer USA Holdings on Wednesday reported a sharp drop in profits, due to losses tied to its exit from personal lending.

The Dallas-based subprime lender — a unit of Banco Santander — earned $67.7 million in the fourth quarter, down 73% from a year earlier.

"Recognizing our reported results for the quarter are challenging, there are several factors that are not a true reflection of the earnings power of our franchise," Jason Kulas, the chief executive of the $36.5 billion-asset company, said in a press release.

Accounting changes related to Santander's planned exit from personal lending — announced in October — drove profits lower.

Santander recorded a $225.6 million loss on investments, due to the reclassification of personal loans on its balance sheet, compared with a $21.3 million gain a year earlier. The company attributed the losses to consumer defaults, as well as "market discounts on seasonally higher balances."

Overall, noninterest lines of business — including the investments — produced a loss of $96.4 million, compared to a gain of $133.4 million a year earlier.

Loan growth helped offset the investment losses. Total originations rose 2%, to $6.2 billion. Net finance and interest income jumped 17%, to $1.2 billion.

The company's set-aside for problem loans rose 43%, to $800 million.

Santander in October overhauled the way it calculates its loan-loss provision. Those changes have raised questions about the transparency of its loan book.

Operating expenses edged up 3%, to $239.3 million.

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