TORONTO, Aug 1 (Reuters) - Spanish bank Banco Santander

SA has received a key approval from Canada's government

that could allow it to expand its consumer banking business in

the country where it currently offers auto loans.

The Finance Department, in its June edition of the Canada

Gazette, the official newspaper of the government, said it had

issued letters patent incorporating Santander Consumer Bank as a

federally regulated financial institution, effective April 30.

The approval was first reported by Bloomberg News earlier on

Thursday.

Santander made its foray into Canada in 2015 through the

acquisition of auto financing company Carfinco and relaunched

the business as Santander Consumer in 2021.

The move is significant for a highly saturated banking

market in Canada that is dominated by six big players and a

handful of other lenders that focus on everyday banking and

short term loans.

The Office of the Superintendent (OSFI), the country's main

banking regulator, will begin its review to ensure the bank has

enough capital, compliance and other systems in place and issue

an order to conduct business if all the requirements are passed.

The guidelines also state that the Superintendent has up to

one year to make an order.

OSFI said it cannot comment on confidential actions or any

correspondence related to the approvals processes.

Santander declined to comment on the matter.