Banco Santander, S.A.

Auditor’s report, Annual accounts and director’s report for the year

ended 31 December 2024

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial

reporting framework applicable to Banco Santander in Spain (see notes 1 to 50). In the event of a discrepancy, the Spanish-

language version prevails.

Banco Santander, S.A.

Financial statements for the year ended 31 December 2024

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial

reporting framework applicable to Banco Santander in Spain (see notes 1 to 50). In the event of a discrepancy, the

Spanish-language version prevails.

1

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain

(see notes 1 to 50). In the event of a discrepancy, the Spanish-language version prevails.

Banco Santander, S.A.

BALANCE SHEETS AS OF 31 DECEMBER 2024 AND 2023
EUR Million

ASSETS	Note	2024	2023 A
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEPOSITS ON DEMAND	6	97,457	125,020
FINANCIAL ASSETS HELD FOR TRADING		160,425	114,197
Derivatives	9 & 11	52,462	46,516
Equity instruments	8	16,225	14,423
Debt securities	7	43,315	30,357
Loans and advances		48,423	22,901
Central banks	6	1,239	1,146
Credit institutions	6	23,428	10,755
Customers	10	23,756	11,000
Memorandum items: Lent or delivered as guarantees with disposal or pledge rights	31	27,581	26,768
NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS		2,127	2,305
Equity instruments	8	991	679
Debt securities	7	204	580
Loans and advances		932	1,046
Central banks	6	—	—
Credit institutions	6	—	—
Customers	10	932	1,046
Memorandum items: Lent or delivered as guarantees with disposal or pledge rights	31	30	326
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS		4,826	5,806
Debt securities	7	—	—
Loans and advances		4,826	5,806
Central banks	6	—	—
Credit institutions	6	580	701
Customers	10	4,246	5,105
Memorandum items: Lent or delivered as guarantees with disposal or pledge rights	31	—	—
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME		15,312	9,774
Equity instruments	8 & 25	1,245	983
Debt securities	7 & 25	8,873	4,456
Loans and advances		5,194	4,335
Central banks	6	—	—
Credit institutions	6	32	—
Customers	10	5,162	4,335
Memorandum items: Lent or delivered as guarantees with disposal or pledge rights	31	2,148	1,551

2

ASSETS	Note	2024	2023 A
FINANCIAL ASSETS AT AMORTIZED COST		392,443	379,110
Debt securities	7	65,917	56,627
Loans and advances		326,526	322,483
Central banks	6	218	149
Credit institutions	6	34,711	34,752
Customers	10	291,597	287,582
Memorandum items: Lent or delivered as guarantees with disposal or pledge rights	31	15,277	16,003
HEDGING DERIVATIVES	32	1,917	1,102
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK		(17)	(64)
INVESTMENTS	13	100,045	99,326
Group entities		97,674	97,144
Joint venture entities		322	334
Associated entities		2,049	1,848
TANGIBLE ASSETS	15	6,219	6,368
Property, plant and equipment		6,046	6,159
For own-use		5,144	5,253
Leased out under an operating lease		902	906
Investment property		173	209
Of which: Leased out under an operating lease		173	209
Memorandum items: Acquired in financial leasing		2,371	2,490
INTANGIBLE ASSETS	16	830	842
Goodwill		209	271
Other intangible assets		621	571
TAX ASSETS	24	10,353	10,837
Current tax assets		4,332	4,007
Deferred tax assets		6,021	6,830
OTHER ASSETS		2,637	2,289
Insurance contracts linked to pensions	14, 17 & 23	267	288
Inventories	17	—	—
Other	17	2,370	2,001
NON-CURRENT ASSETS HELD FOR SALE	12	266	430
TOTAL ASSETS		794,840	757,342

A. Presented for comparison purposes only (note 1.d).

The accompanying notes 1 to 50  and appendices are an integral part of the balance sheet as of 31 December 2024.

3

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain

(see notes 1 to 50). In the event of a discrepancy, the Spanish-language version prevails.

BALANCE SHEETS AS OF 31 DECEMBER 2024 AND 2023
EUR Million

LIABILITIES	Note	2024	2023A
FINANCIAL LIABILITIES HELD FOR TRADING		119,149	96,052
Derivatives	9 & 11	46,121	41,379
Short positions	9	25,518	17,837
Deposits		47,510	36,836
Central banks	18	9,123	5,453
Credit institutions	18	24,884	17,548
Customers	19	13,503	13,835
Marketable debt securities	20	—	—
Other financial liabilities	22	—	—
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS		33,257	37,424
Deposits		32,188	37,216
Central banks	18	1,774	1,209
Credit institutions	18	2,107	1,872
Customers	19	28,307	34,135
Marketable debt securities	20	1,069	208
Other financial liabilities	22	—	—
Memorandum items: Subordinated liabilities		—	—
FINANCIAL LIABILITIES AT AMORTIZED COST		552,080	536,211
Deposits		392,720	384,274
Central banks	18	5,117	11,682
Credit institutions	18	38,691	35,503
Customers	19	348,912	337,089
Marketable debt securities	20	146,113	139,870
Other financial liabilities	22	13,247	12,067
Memorandum items: Subordinated liabilities	20 & 21	28,142	24,218
HEDGING DERIVATIVES	32	2,516	3,099
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK		(19)	(20)
PROVISIONS	23	3,190	3,444
Pensions and other post-retirement obligations		647	748
Other long term employee benefits		699	696
Taxes and other legal contingencies		762	705
Contingent liabilities and commitments		175	184
Other provisions		907	1,111
TAX LIABILITIES	24	2,168	1,930
Current tax liabilities		190	165
Deferred tax liabilities		1,978	1,765
OTHER LIABILITIES	17	4,167	4,328
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE		—	—
TOTAL LIABILITIES		716,508	682,468

A.  Presented for comparison purposes only (note 1.d).

The accompanying notes 1 to 50 and appendices are an integral part of the balance sheet as of 31 December 2024.

4

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain

(see notes 1 to 50). In the event of a discrepancy, the Spanish-language version prevails.

BALANCE SHEETS AS OF 31 DECEMBER 2024 AND 2023
EUR Million

EQUITY	Note	2024	2023A
SHAREHOLDERS’ EQUITY	26	79,887	77,465
CAPITAL	27	7,576	8,092
Called up paid capital		7,576	8,092
Unpaid capital which has been called up		—	—
Memorandum items: Uncalled up capital		—	—
SHARE PREMIUM	28	40,079	44,373
EQUITY INSTRUMENTS ISSUED OTHER THAN CAPITAL	30	—	720
Equity component of compound financial instruments		—	—
Other equity instruments issued		—	720
OTHER EQUITY INSTRUMENTS	30	217	195
ACCUMULATED RETAINED EARNINGS	29	24,345	17,889
REVALUATION RESERVES		—	—
OTHER RESERVES	29	(899)	(706)
(-) OWN SHARES	30	—	(1,039)
RESULTS FOR THE PERIOD	4	10,101	9,239
(-) INTERIM DIVIDENDS	4	(1,532)	(1,298)
OTHER COMPREHENSIVE INCOME OR LOSS		(1,555)	(2,591)
ITEMS THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS	25	(1,669)	(2,399)
Actuarial gains or - losses in defined benefit pension plans		(827)	(1,141)
Non-current assets and disposal groups that have been classified as held for sale		—	—
Changes in the fair value of equity instruments measured at fair value with changes in other comprehensive income		(919)	(1,162)
Ineffectiveness of fair value hedges of equity instruments measured at fair value with changes in other comprehensive income		—	—
Changes in the fair value of equity instruments measured at fair value with changes in other comprehensive income [hedged item]		279	258
Changes in the fair value of equity instruments measured at fair value with changes in other comprehensive income [hedging instrument]		(279)	(258)
Changes in the fair value of financial liabilities at fair value through profit or loss attributable to changes in credit risk		77	(96)
ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS	25	114	(192)
Hedge of net investments in foreign operations [effective part]		—	—
Currency conversion		—	—
Hedging derivatives. Cash flow hedge reserve [effective part]		104	(182)
Changes in the fair value of debt instruments measured at fair value with changes in other comprehensive income		10	(10)
Hedging instruments [non-designated items]		—	—
Non-current assets and disposal groups that have been classified as held for sale		—	—
TOTAL EQUITY		78,332	74,874
TOTAL LIABILITIES AND EQUITY		794,840	757,342
MEMORANDUM ITEMS: OFF BALANCE SHEET AMOUNTS	31
Loan commitments granted		141,976	128,487
Financial guarantees granted		18,888	14,746
Other commitments granted		108,829	90,048

A.  Presented for comparison purposes only (note 1.d).

The accompanying notes 1 to 50 and appendices are an integral part of the balance sheet as of 31 December 2024.

5

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain

(see notes 1 to 50). In the event of a discrepancy, the Spanish-language version prevails.

INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR Million

	(Debit) Credit
	Note	2024	2023A
Interest income	34	27,027	22,580
Financial assets at fair value through other comprehensive income		619	504
Financial assets at amortized cost		18,180	14,282
Other interest income		8,228	7,794
Interest expense	35	(20,112)	(16,204)
Expenses for capital stock repayable on demand		—	—
Interest income/(changes)		6,915	6,376
Dividend income	36	8,447	9,652
Commission income	37	3,791	3,303
Commission expense	38	(866)	(675)
Gains or losses on financial assets and liabilities not measured at fair value through profit or loss, net	39	(97)	(232)
Financial assets at amortized cost		(47)	(234)
Other financial assets and liabilities		(50)	2
Gains or losses on financial assets and liabilities held for trading, net	39	704	723
Reclassification of financial assets at fair value through other comprehensive income		—	—
Reclassification of financial assets at amortized cost		—	—
Other gains (losses)		704	723
Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss, net	39	73	93
Reclassification of financial assets at fair value through other comprehensive income		—	—
Reclassification of financial assets at amortized cost		—	—
Other gains (losses)		73	93
Gains or losses on financial assets and liabilities measured at fair value through profit or loss, net	39	350	122
Gains or losses from hedge accounting, net	39	(6)	(4)
Exchange differences, net	40	(106)	(193)
Other operating income	41	575	530
Other operating expenses	41	(625)	(979)
Total income		19,155	18,716
Administrative expenses		(5,293)	(5,111)
Staff costs	42	(3,210)	(3,084)
Other general administrative expenses	43	(2,083)	(2,027)
Depreciation and amortisation cost	15 & 16	(598)	(598)
Provisions or reversal of provisions, net	23	(659)	(744)
Impairment or reversal of impairment at financial assets not measured at fair value through profit or loss and net gains or losses from changes	7 &10	(1,334)	(1,372)
Financial assets at fair value through other comprehensive income		(1)	(23)
Financial assets at amortized cost		(1,333)	(1,349)
Impairment or reversal of impairment of investments in subsidiaries, joint ventures and associates, net	44	(237)	(1,047)
Impairment or reversal on non-financial assets, net		(3)	21
Tangible assets	15 & 44	(3)	23
Intangible assets	16 & 44	—	(2)
Others		—	—
Gain or losses on non-financial assets, net	45	219	6

6

	(Debit) Credit
	Note	2024	2023A
Negative goodwill recognised in results		—	—
Gains or losses on non-current assets held for sale not classified as discontinued operations	12 & 46	(58)	(99)
Operating profit/(loss) before tax		11,192	9,772
Tax expense or income from continuing operations	24	(1,091)	(533)
Profit/(loss) from continuing operations		10,101	9,239
Profit/(loss) after tax		—	—
Profit/(loss) for the year		10,101	9,239

A. Presented for comparison purposes only (note 1.d).

The accompanying notes 1 to 50 and appendices are an integral part of the income statement for the year ended 31 December 2024.

7

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain

(see notes 1 to 50). In the event of a discrepancy, the Spanish-language version prevails.

STATEMENTS OF RECOGNISED INCOME AND EXPENSE  FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR Million

	Note	2024	2023A
PROFIT (LOSS) FOR THE YEAR		10,101	9,239
OTHER RECOGNISED INCOME AND EXPENSES	25	731	(57)
Items that will not be reclassified to profit or loss		425	(333)
Actuarial gains and losses on defined benefit pension plans		(16)	(14)
Other recognised income and expense of investments in subsidiaries, joint venture and associates		—	—
Changes in the fair value of equity instruments measured at fair value through other comprehensive income, net		262	(250)
Gains or losses resulting from the accounting for hedges of equity instruments measured at fair value through other comprehensive income, net		—	—
Changes in the fair value of equity instruments measured at fair value through other comprehensive income  (hedged item)		20	(31)
Changes in the fair value of equity instruments measured at fair value through other comprehensive income  (hedging instrument)		(20)	31
Changes in the fair value of financial liabilities at fair value through profit or loss attributable to changes in credit risk		247	(107)
Income tax relating to items that will not be reclassified	24	(68)	38
Items that may be reclassified to profit or loss		306	276
Hedges of net investments in foreign operations (effective portion)		—	—
Revaluation gains (losses)		—	—
Amounts transferred to income statement		—	—
Other reclassifications		—	—
Exchanges differences		—	—
Revaluation gains (losses)		—	—
Amounts transferred to income statement		—	—
Other reclassifications		—	—
Cash flow hedges (effective portion)		409	285
Revaluation gains or (losses)		140	(70)
Amounts transferred to income statement		269	355
Transferred to initial carrying amount of hedged items		—	—
Other reclassifications		—	—
Hedging instruments (items not designated)		—	—
Revaluation gains (losses)		—	—
Amounts transferred to income statement		—	—
Other reclassifications		—	—
Debt instruments at fair value with changes in other comprehensive income		29	103
Revaluation gains (losses)		(54)	64
Amounts transferred to income statement		83	39
Other reclassifications		—	—
Non-current assets held for sale		—	—
Revaluation gains (losses)		—	—
Amounts transferred to income statement		—	—
Other reclassifications		—	—
Income tax related to items that may be reclassified to profit or loss	24	(132)	(112)
Total recognised income and expenses for the year		10,832	9,182

A. Presented for comparison purposes only (note 1.d).

The accompanying notes 1 to 50 and appendices are an integral part of the statement of recognized income and expenses for the year ended 31

December 2024.

8

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain (see notes 1 to 50). In the event of a discrepancy, the Spanish-language version prevails.

STATEMENTS OF CHANGES IN TOTAL EQUITY FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR Million
	Capital	Share premium	Equity instruments issued (not capital)	Other equity instruments	Accumulated retained earnings	Revaluation reserves	Other reserves	(-) Own Equity shares	Result for the period	(-) Interim dividends	Other comprehensive income	Total
Balance at 31 December 2023A	8,092	44,373	720	195	17,889	—	(706)	(1,039)	9,239	(1,298)	(2,591)	74,874
Adjustments due to errors
Adjustments due to changes in accounting policies
Opening balance at 1 January 2024 A	8,092	44,373	720	195	17,889	—	(706)	(1,039)	9,239	(1,298)	(2,591)	74,874
Total recognised income and expense	—	—	—	—	—	—	—	—	10,101	—	731	10,832
Other changes in equity	(516)	(4,294)	(720)	22	6,456	—	(193)	1,039	(9,239)	(234)	305	(7,374)
Issuance of ordinary shares	—	—	—	—	—	—	—	—	—	—	—	—
Issuance of preferred shares	—	—	—	—	—	—	—	—	—	—	—	—
Issuance of other financial instruments	—	—	—	—	—	—	—	—	—	—	—	—
Maturity of other financial instruments	—	—	(751)	—	—	—	—	—	—	—	—	(751)
Conversion of financial liabilities into equity	—	—	—	—	—	—	—	—	—	—	—	—
Capital reduction	(516)	(4,294)	—	—	—	—	516	4,294	—	—	—	—
Dividends	—	—	—	—	(1,485)	—	—	—	—	(1,532)	—	(3,017)
Purchase of equity instruments	—	—	—	—	—	—	—	(3,740)	—	—	—	(3,740)
Disposal of equity instruments	—	—	—	—	—	—	—	485	—	—	—	485
Transfer from equity to liabilities	—	—	—	—	—	—	—	—	—	—	—	—
Transfer from liabilities to equity	—	—	—	—	—	—	—	—	—	—	—	—
Transfers between equity items	—	—	—	—	7,941	—	(305)	—	(9,239)	1,298	305	—
Increases (decreases) due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—
Share-based payment	—	—	—	(62)	—	—	—	—	—	—	—	(62)
Others increases or (-) decreases of the equity	—	—	31	84	—	—	(404)	—	—	—	—	(289)
Balance at 31 December 2024	7,576	40,079	—	217	24,345	—	(899)	—	10,101	(1,532)	(1,555)	78,332

A.  Presented for comparison purposes only (note 1.d).

The accompanying notes 1 to 50 and appendices are an integral part of the statement of changes in total equity for the year ended 31 December 2024.

9

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain (see notes 1 and 50). In the event of a discrepancy, the Spanish-language version prevails.

STATEMENTS OF CHANGES IN TOTAL EQUITY FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR Million
	Capital	Share premium	Equity instruments issued (not capital)	Other equity instruments	Accumulated retained earnings	Revaluation reserves	Other reserves	(-) Own Equity shares	Result for the period	(-) Interim dividends	Other comprehensive income	Total
Balance at 31 December 2022A	8,397	46,273	688	175	11,910	—	(1,195)	(614)	7,921	(979)	(2,530)	70,046
Adjustments due to errors	—	—	—	—	—	—	—	—	—	—	—	—
Adjustments due to changes in accounting policies	—	—	—	—	—	—	—	—	—	—	—	—
Opening balance at 1 January 2023 A	8,397	46,273	688	175	11,910	—	(1,195)	(614)	7,921	(979)	(2,530)	70,046
Total recognised income and expense	—	—	—	—	—	—	—	—	9,239	—	(57)	9,182
Other changes in equity	(305)	(1,900)	32	20	5,979	—	489	(425)	(7,921)	(319)	(4)	(4,354)
Issuance of ordinary shares	—	—	—	—	—	—	—	—	—	—	—	—
Issuance of preferred shares	—	—	—	—	—	—	—	—	—	—	—	—
Issuance of other financial instruments	—	—	—	—	—	—	—	—	—	—	—	—
Maturity of other financial instruments	—	—	—	—	—	—	—	—	—	—	—	—
Conversion of financial liabilities into equity	—	—	—	—	—	—	—	—	—	—	—	—
Capital reduction	(305)	(1,900)	—	—	—	—	305	1,900	—	—	—	—
Dividends	—	—	—	—	(963)	—	—	—	—	(1,298)	—	(2,261)
Purchase of equity instruments	—	—	—	—	—	—	—	(2,974)	—	—	—	(2,974)
Disposal of equity instruments	—	—	—	—	—	—	—	649	—	—	—	649
Transfer from equity to liabilities	—	—	—	—	—	—	—	—	—	—	—	—
Transfer from liabilities to equity	—	—	—	—	—	—	—	—	—	—	—	—
Transfers between equity items	—	—	—	—	6,942	—	4	—	(7,921)	979	(4)	—
Increases (decreases) due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—
Share-based payment	—	—	—	(60)	—	—	—	—	—	—	—	(60)
Other increases or (-) decreases of the equity	—	—	32	80	—	—	180	—	—	—	—	292
Balance at 31 December 2023A	8,092	44,373	720	195	17,889	—	(706)	(1,039)	9,239	(1,298)	(2,591)	74,874

A. Presented for comparison purposes only (note 1.d).

The accompanying notes 1 to 50 and appendices are an integral part of the statements of changes in total equity for the year ended 31 December 2024.

10

Translation of annual accounts originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to Banco Santander in Spain

(see notes 1 and 50). In the event of a discrepancy, the Spanish-language version prevails.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR Million

	Note	2024	2023A
A. CASH FLOWS FROM OPERATING ACTIVITIES		(31,135)	(8,512)
Profit or loss for the year	4	10,101	9,239
Adjustments made to obtain the cash flows from operating activities		(4,439)	(3,746)
Depreciation and amortization cost	15 & 16	598	598
Other adjustments		(5,037)	(4,344)
Net increase/(decrease) in operating assets		63,685	6,765
Financial assets held-for-trading		46,227	10,329
Non-trading financial assets mandatorily at fair value through profit or loss		(177)	(863)
Financial assets designated at fair value through profit or loss		(980)	(835)
Financial assets at fair value through other comprehensive income		5,309	(627)
Financial assets at amortized cost		14,701	2,364
Other operating assets		(1,395)	(3,603)
Net increase/(decrease) in operating liabilities		27,479	(6,880)
Financial liabilities held-for-trading		23,097	9,680
Financial liabilities designated at fair value through profit or loss		(3,921)	(1,251)
Financial liabilities at amortized cost		11,839	(9,968)
Other operating liabilities		(3,536)	(5,341)
Income tax recovered/(paid)		(591)	(360)
B. CASH FLOWS FROM INVESTING ACTIVITIES		6,629	5,422
Payments		2,915	5,458
Tangible assets	15	438	407
Intangible assets	16	221	197
Investments	13	2,256	4,854
Subsidiaries and other business units		—	—
Non-current assets held for sale and associated liabilities		—	—
Other payments related to investing activities		—	—
Proceeds		9,544	10,880
Tangible assets	15	164	140
Intangible assets	16	—	—
Investments	13 & 36	9,226	10,494
Subsidiaries and other business units		—	—
Non-current assets held for sale and associated liabilities		154	246
Other proceeds related to investing activities		—	—
C. CASH FLOW FROM FINANCING ACTIVITIES		(5,313)	(929)
Payments		11,423	7,214
Dividends	4	3,017	2,261
Subordinated liabilities	21	3,615	1,813
Redemption of own equity instruments		751	—
Acquisition of own equity instruments		3,740	2,974
Other payments related to financing activities		300	166
Proceeds		6,110	6,285
Subordinated liabilities	21	5,625	5,636
Issuance of own equity instruments		—	—
Disposal of own equity instruments		485	649
Other proceeds related to financing activities		—	—
D. EFFECT OF FOREIGN EXCHANGE RATE CHANGES		2,256	(1,044)

11

	Note	2024	2023A
E. NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS B		(27,563)	(5,063)
F. CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR		125,020	130,083
G. CASH AND CASH EQUIVALENTS AT END OF THE YEAR		97,457	125,020
MEMORANDUM ITEMS
COMPONENTS OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR
Cash		1,318	1,279
Cash equivalents at central banks		94,613	121,325
Other financial assets		1,526	2,416
TOTAL OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR		97,457	125,020

A. Presented for comparison purposes only (note 1.d).

B. During 2024, the variation is primarily due to balance sheet management, focusing on liquidity optimization and investment in liquid assets for

interest rate risk management, without resulting in any deterioration in the liquidity position, which has remained stable throughout the year (see

also Note 50, Liquidity Risk section).

The accompanying notes 1 to 50 and appendices are an integral part of the statement of cash flows for the year ended 31 December 2024.

12

Translation of annual accounts originally issued in

Spanish and prepared in accordance with the regulatory

financial reporting framework applicable to Banco

Santander in Spain (see notes 1 to 50). In case of

discrepancy, the Spanish version prevails.

Banco

Santander,

S.A.

Notes to the financial statements (annual accounts) for

the year ended 31 December 2024

1. Introduction, basis of

presentation of the financial

statements (annual accounts)

and other information

a) Introduction

Banco Santander, S.A. ('the Bank' or 'Banco Santander'),

is a private-law entity subject to the rules and

regulations applicable to banks operating in Spain,

where it was constituted and currently maintains its

legal domicile, which is paseo de Pereda, numbers 9 to

12, 39004, Santander, Spain.

The principal headquarters of Banco Santander are

located in Ciudad Grupo Santander, Avenida Cantabria s/

n, 28660, Boadilla del Monte, Madrid, Spain.

The corporate purpose of Banco Santander, S.A. mainly

entails carrying out all kinds of activities, operations and

services inherent to the banking business in general and

permitted by current legislation, and the acquisition,

holding, enjoyment and disposal of all kinds of

securities.

In addition to the operations carried on directly by it,

Banco Santander is the head of a group of subsidiaries

that engage in various business activities and which

compose, together with it, Grupo Santander ('Grupo

Santander' or 'the Group'). Therefore, Banco Santander is

obliged to prepare, in addition to its own separate

financial statements, the Group's consolidated financial

statements, which also include the interests in joint

ventures and investments in associates.

Banco Santander financial statements for 2023 were

approved by the shareholders at the group´s annual

general meeting on 22 March 2024. The Group's 2024

consolidated financial statements, the financial

statements of Banco Santander and of substantially all

the Group companies have not been approved yet by

their shareholders at the respective annual general

meetings. However, Banco Santander board of directors

considers that the aforementioned financial statements

will be approved without any significant changes.

Appendix VII includes the list of agents that assist Banco

Santander on the performance of its business activities in

Spain.

b) Basis of presentation of the financial statements

(annual accounts)

Banco Santander financial statements for the year ended

2024 have been authorised by the Bank’s directors (at

the Board of Directors meeting on February 25, 2025 ) in

accordance with Bank of Spain Circular 4/2017 and

subsequent amendments, and Spanish corporate and

commercial law applicable to the Bank, using the

accounting policies and measurement criteria applied by

the Bank as set forth in note 2, accordingly, they present

fairly the Bank’s equity and financial position as of 31

December 2024 and 2023, results of its operations,

recognized revenue and expense, changes in total equity

and cash flows pertaining 2024 and 2023. These annual

accounts have been prepared on the basis of the

accounting records held by Banco Santander.

The notes to the financial statements contain additional

information to that presented in the balance sheet,

income statement, statement of recognised income and

expense, statement of changes in total equity and

statement of cash flows. The notes provide, in a clear,

relevant, reliable and comparable manner, narrative

descriptions and breakdowns of these statements.

The figures of the annual accounts are presented in

millions of euros unless another alternative monetary

unit is indicated, rounded to the nearest million unit.

Adoption of new standards and related interpretations

The following is a summary of the main Bank of Spain

Circulars issued that became applicable to Banco 

Santander in financial year 2024:

Bank of Spain Circular 1/2024, of 26 January, to banks,

credit cooperatives, and other supervised entities,

regarding information on capital structure and amending

Circular/2009, of 18 December, to credit institutions, and

other supervised entities, concerning information on

capital structure and participation shares of credit

institutions, and their offices.

The Circular establishes the confidential information that

must be submitted to the Bank of Spain, related to

acquisitions, increases, and reductions in holdings in the

capital of the entities mentioned in the second provision,

as well as their capital structure.

The application of this circular had no significant effects

on the Bank´s annual accounts.

13

c)  Use of critical estimates

The results and the determination of  equity are sensitive

to the accounting policies, measurement bases and

estimates used by the directors of Banco Santander in

preparing the financial statements.

The main accounting policies and measurement bases

are set forth in note 2.

In the financial statements estimates were occasionally

made by the senior management of Banco Santander in

order to quantify certain of the assets, liabilities, income,

expenses and obligations reported herein. These

estimates, which were made on the basis of the best

information available, relate basically to the following:

• The impairment losses on certain assets: it applies to

financial assets at fair value through other

comprehensive income, financial assets at amortised

cost, non-current assets held for sale, investments,

tangible assets and intangible assets ( see notes 6, 7,  

10, 12, 13, 15, 16 and 50).

• The assumptions used in the actuarial calculation of

the post-employment benefit liabilities and

commitments and other obligations (see note 23).

• The useful life of the tangible and intangible assets

(see notes 15 and 16).

• Assessment of the impairment of investments in

group, joint venture and associated entities (see note

13).

• The measurement of goodwill (see note 16).

• The calculation of provisions and the consideration of

contingent liabilities (see note 23).

• The fair value of certain unquoted assets and

liabilities (see notes 6, 7, 8, 9, 10, 11, 18, 19 and 20).

• The recoverability of deferred tax assets (see note

24).

• The fair value of the identifiable assets acquired and

the liabilities assumed in business combinations

(see note 3).

To update the previous estimates, the Bank's

management has taken into account the current

macroeconomic scenario resulting from the complex

geopolitical situation and the changes in inflation levels

and interest rates .

For this reason, the management of the Bank has

particularly evaluated the uncertainties caused by the

current environment in relation to credit, liquidity and

market risk, taking into account the best information

available, to estimate the impact on the provisions for

impairment of the credit portfolio, on the rates of

interest, and in the valuation of debt instruments,

developing in the notes the main estimates made during

the period ended December 31, 2024 (see notes 13, 48

and 50).

Although these estimates have been made on the basis

of the best information available at the end of the year

2024, and considering information updated at the date

of preparation of these annual accounts, it is possible

that events that may take place in the future may make

it necessary to modify them (upwards or downwards) in

the coming years, which would be done, if appropriate,

in a prospective manner, recognising the effects of the

change in estimate in the corresponding income

statement.

d) Comparative information

The information contained in the 2024 annual accounts

for the 2023 financial year is presented, solely and

exclusively, for comparison with the information relating

to 2024.

e) Capital management

i. Regulatory and economic capital

Credit institutions must meet a series of minimum

capital and liquidity requirements. These minimum

requirements are regulated by the European Capital

Requirements Regulation (CRR) directly applicable under

the Spanish legal system, and by the Capital

Requirements Directive (CRD).

On 19 June 2024, the final update of the banking

package was published in the Official Journal of the

European Union  Regulation (EU) 2024/1623 (CRR3)

amending the CRR as  regards requirements for credit

risk, credit valuation adjustment risk, operational risk,

market risk and the output floor and also Directive (EU)

2024/1619 (CRD6), amending the CRD as regards

requirements for supervisory powers, sanctions, third-

country branches, and environmental, social and

governance risks.

The update of the banking package aims firstly to

implement Basel III final reforms and, secondly, to

enhance the standardisation of banking supervision in

the European Union (EU).

The CRR3 introduces greater sensitivity to standardised

metrics, to reduce the variability of risk-weighted assets

between institutions using internal models for capital

requirement calculation and facilitate the comparability

among banks.

The goal of achieving more robust supervision and

protection of financial stability in the CRD6 is expressed

in a series of provisions concerning fit-and-proper

requirements, extending the scope by revising certain

definitions and additions on the establishment of third-

country branches in the EU in order to achieve greater

regulatory harmonization and better supervision of this

type of entities.

14

The CRR3 and CRD6 came into force on 9 July 2024.

Although early implementation was established for

certain provisions, such as certain definitions that may

affect the scope of consolidation or the capital

requirements for crypto assets exposures, most of the

changes were not applicable until 1 January 2025. At the

same time the regulatory authority has imposed a delay

for certain changes, due to issues resulting from

difficulty in their implementation by institutions or to

level the playing field with respect to other comparable

jurisdictions. Specifically, the new regulation for the new

market risk capital calculation approach (FRTB), linked to

the standards already published by the Basel Committee

on Banking Supervision (BCBS) in 2017, will be delayed

to 1st of January 2026 at the earliest. The Commission

and the Council, without opposition from the Parliament,

have issued a delegated act stipulating a delay of 12

months for the application of this standard, which is

generating uncertainty regarding the form, content and

date of implementation of this approach in other

comparable jurisdictions, such as the UK and USA.

This delay, which was published in July 2024, is

accompanied by a delay in the rules regulating the

Trading and Banking Book Boundary allocating

instruments between investment and trading books for

prudential purposes, the definition of trading and

investment desks, the rules regarding the prudential

recognition of internal risk transfers between

investment and trading books, the treatment of

structural FX and newest market risk reporting and

disclosure framework.

For the calculation of the output floor banks have to use

the FRTB SA model for calculating the market share of

the output floor and compare it with the results from the

internal model or CRR2 market standardized model,

depending on the use by each institution. Therefore, this

is the only metric in which  FRTB SA is, as today official

and binding.

Other articles, such as the new regulation on calculating

capital by Credit Valuation Adjustment (CVA) risk, which

significantly impact the capital requirements, are not

affected by this delay and came into force as of 1 January

2025.

The changes regarding the CVA mainly affect the

methodological modifications for capital calculation and

establish a new standard model based on sensitivities

aligned with the new standard model for calculating

capital requirements for market risk.

Considering the regulation published to date, the

implementation of CRR III does not have a significant

impact in terms of capital on the Group.

In terms of resolution regulation, institutions must have

an adequate funding structure to ensure that, in the

event of financial distress, the institution has sufficient

liabilities to absorb losses in order to recover or resolve

its positions, while ensuring the protection of depositors

and financial stability. For this purpose global

systemically important institutions must therefore meet

several minimum loss-absorbing requirements, e.g.

Total Loss-Absorbing Capacity (TLAC), Minimum

Requirement for own funds and Eligible Liabilities

(MREL), which are regulated by the CRR and by the Bank

Recovery and Resolution Directive (BRRD).

The regulation on the prudential treatment for global

systemically important banks was published on 25

October 2022. This modified both the CRR and the BRRD

regarding the prudential treatment of global

systemically important banks (G-SIBs) with a multiple

point of entry (MPE) resolution strategy, as well as the

methods for indirect subscription of eligible instruments

(Daisy Chains) to meet the minimum requirement for

own funds and eligible liabilities. This regulation, known

as the 'Quick Fix', covers the following two objectives:

• The inclusion in BRRD and CRR of references to third

country subsidiaries to adjust the deduction for the

holding of TLAC instruments issued from subsidiaries in

third countries based on the excess TLAC/MREL existing

in those subsidiaries, as well as the adjustment where

the sum of the requirements for own funds and eligible

liabilities of G-SIBs under an MPE strategy is higher than

the theoretical requirement for the same group under a

single point of entry (SPE) strategy. The latter

adjustment is based on a comparison between the two

possible resolution strategies.

Additionally, for the subsidiaries in jurisdictions without

a resolution regime in place, the Regulation provides a

transitional period until 31 December 2024. During this

transitional period the institutions may adjust the

deductions based on the excesses above the capital

requirements in subsidiaries in third countries, if they

meet certain requirements.

• Inclusion of a deduction scheme for MREL instrument

holdings through entities of the same resolution group

other than the resolution entity. This regulation sets a

deduction for the intermediate entity (Daisy Chains) that

repurchases instruments, and, if there is such a

deduction, the intermediate entity is obliged to issue the

same amount as it is repurchasing, transferring the

internal MREL needs to the resolution entity, which will

cover it with external MREL.

This Regulation is applicable from 14 November 2022,

except for the provisions relating to Daisy Chains, which

applies from 1 January 2024.

In April 2024 Directive (EU) 2024/1174 was published,

which amends the Daisy Chain Act to exclude daisy chain

requirements in some cases, e.g. institutions that would

prefer liquidation rather than resolution.

15

Additionally, in 2024 the SRB amended the MREL policy

to adapt it to the latest amendments involving daisy

chains, among other aspects.

The Deposit Guarantee Schemes (DGSs)  are regulated

by the Deposit Guarantee Schemes Directive (DGSD),

which has not undergone any significant changes since

its publication in 2014.

The Directive aims to harmonise the DGSs of the

Member States, thus ensuring stability and balance in

the various different countries. The Directive creates an

appropriate framework for depositors to have improved

access to DGS through the establishment of a clear

scope of coverage, shorter repayment periods, the

requirement of a reliable information and robust funding

requirements of the DGS. This Directive is transposed

into Spanish law by Royal Decree 2606/1996, with

additional amendments set forth in Royal Decree

1041/2021.

To guarantee customers' deposits, the DGS collect

available financial means in the form of contributions

that members institutions have to make at least once a

year.  After the target level of 0.8% of the amount of

covered deposits was reached, with the contributions

raised until 2023, the Spanish DGS has not required the

additional contribution to its institution's deposits

compartment in 2024 (however, it will require a

contribution to its securities compartment in February

2025 according to institution's data as of December

2024). These annual contributions are established

depending on the total covered deposits and the risk

profile faced by the institutions involved in the DGS. The

method for calculation contributions is set out in the EBA

Guidelines (EBA/GL/2023/02.

The Council agreed on 19 June 2024 on its position on

the revision of the CMDI, which includes a broad set of

measures aiming to strengthen the current EU crisis

management framework. The trialogue process was

initiated in December 2024.

Within the sustainability field from a prudential

perspective, the CRR3 has introduced new requirements

for integrating ESG risks in this framework, in particular

including definitions, a 'more ecological' infrastructure

supporting factor, climate considerations in collateral

assessments and additional mandates to assess whether

the prudential treatment of exposures related to assets

or liabilities subject to the impact of environmental or

social factors should be adjusted. To assess precisely

whether specific prudential treatment is required, the

CRR3 provides three mandates for creating the reports

that assess data availability for the exposure categories,

evaluation of the actual risk situation of exposures that

affect environmental factors compared with the risk

situation of other exposures and the potential effects of

prudential treatment on financial stability. If considered

necessary, after publication of these reports, a

legislative proposal to amend the current prudential

framework may be submitted to the Commission by 31

December 2026 to ensure a prudential framework which

will continue supporting financial stability and a

sustainable transition.

Furthermore, the CRR3/CRD6 regulatory package

contains additional disclosure obligations concerning

ESG, obligations on reporting to competent authorities

and the obligation to establish specific plans for

addressing short-, medium- and long-term financial

risks derived from ESG factors, including  generated risks

as a consequence of the transition period.

In 2024 the EBA held a consultation on the Guidelines on

the management of ESG risks, highlighting among its

content mainly the following topics: reference

methodology for the identification and measurement of

ESG risks, minimum standards and reference

methodology for the management and monitoring of

ESG risks, and transition plans addressing the key

aspects included in the new CRD6.

At the international level and particularly regarding

reporting obligations on climate risks, it is important to

note that the Basel Committee published a consultation

paper at the end of 2023 (proposing a series of

qualitative and quantitative requirements which should

be disclosed in the entities' Pillar III reports). In this

document the Committee acknowledges that precise,

consistent and quality climate data is still evolving, but

also the Committee believes that the disclosure

requirements will expedite the availability of such

information and will facilitate banks' prospective risk.

In the digital field, due to the increase in international

crypto assets activities, significant adjustments have also

been made to the prudential framework. Following the

publication of the Basel standards, the European

regulation needs to be adapted to incorporate them.

Therefore, the CRR3 includes the mandate to the

Commission to issue a legislative proposal by 30 June

2025 that incorporates international standards on the

prudential regulation applicable in Europe. Until that

framework is fully integrated, the CRR3 has set out a

transitional framework for calculating own funds that

will be applied until the Basel standards are

incorporated. The implementation of this temporary

treatment is pending more comprehensive elaboration in

a technical standard to be issued by the EBA.

Apart from the treatment of exposures to this type of

assets, the regulation also covers obligations concerning

reporting to the competent authorities and disclosure to

preserve transparency and market discipline. All these

provisions have to be implemented before the

enforcement date of the CRR3, and compliance is

obligatory from 9 July 2024.

At 31 December 2024 the Bank met the minimum capital

requirements established by current legislation (see

note 50.d). Additionally, it should be noted that the

Group has filed an appeal with the Court of Justice of the

European Union (CJEU) requesting the annulment of a

16

decision by the European Central Bank (ECB) related to

the treatment of deferred tax assets generated at Banco

Santander Brasil, which, if resolved favourably, would

have a positive impact of approximately 17 basis points

on the Group's CET1, using the amounts at the end of the

year.

f) Environmental impact

In view of the business activities carried on by the Group

entities, and therefore the Bank, do not have any

environmental liability, expenses, assets, provisions or

contingencies that might be material with respect to its

financial position or results (see note 50.a).

g) Customer Care Service Annual Report

As required by the Article 17 of Ministry of Economy

Order ECO/734/2004, of 11 March, on the services and

departments of Customer Service and the Customer

Ombudsmen of Financial Institutions, the annual report

presented by the Head of the department to the board

meeting held on March 2025 is summarised in the

directors' report.

h) Deposit Guarantee Fund and Resolution Fund

i. Deposit Guarantee Fund

Banco Santander participates in the Deposit Guarantee

Fund (DGF). The annual contribution to be made by the

entities to this fund, established by Royal Decree - Law

16/2011 of October 14, by which the DGF is created in

accordance with the wording given by the Tenth Final

Disposition of Law 11/2015 of June 18 on Recovery and

Resolution of credit institutions and investment services

companies (in force since June 20, 2015), is determined

by the Management Committee of the DGF and is

established based on the guaranteed deposits of each

entity and their risk profile. The annual contribution to be

made by the entities to this fund is determined by the

Management Committee of the FGD, and consists of the

contribution based on the guaranteed deposits of each

entity corrected for their risk profile, which includes the

phase of the economic cycle and the impact of pro-

cyclical contributions, according to section 3 of article 6

of the Royal Decree-Law 16/2011.

The purpose of the FGD is to guarantee deposits, both

monetary and in securities, in credit institutions up to the

limit set forth in the mentioned Royal Decree-Law. The

expense incurred by the contributions accrued to this

organism in the year 2024 has amounted to EUR 16

million (EUR 247 million in the year 2023), after the

required amount by the current legislation has been

reached, which are recorded under ‘Other operating

expenses’ in the profit and loss account attached (see

note 41).

ii. National Resolution Fund

Law 11/2015 regulates the creation of the National

Resolution Fund, whose financial resources should

reach, by 31 December 2024, at least 1% of the amount

of secured deposits, through contributions from credit

institutions and investment firms established in Spain.

The details of the calculation of contributions to this

Fund is regulated by Commission Delegated Regulation

(EU) 2015/63 of 21 October 2014 and is calculated by

the Orderly Banking Resolution Fund, on the basis of the

information provided by each entity.

iii. Single Resolution Fund

On January 1, 2016, the Single Resolution Fund (SRF),

which was implemented by Regulation (EU) No.

806/2014 of the European Parliament and of the

Council, became operational. The rules governing the

banking union provide that banks will pay contributions

to the SRF over eight years.

The Single Resolution Board (SRB) is responsible for

calculating the contributions to be made by credit

institutions and investment firms to the SRF. These

contributions are based, as of fiscal year 2016, on: (a) a

flat-rate contribution (or base annual contribution), pro

rata with respect to the total liabilities, excluding own

funds, guaranteed deposits of all institutions authorized

in the territory of the participating member states; and

(b) a risk-adjusted contribution, which will be based on

the criteria set out in Article 103(7) of Directive 2014/59/

EU, taking into account the principle of proportionality,

without creating distortions between structures of the

banking sector of the member states. The amount of this

contribution will accrue from the 2016 financial year, on

an annual basis.

During 2024 it was confirmed that no request for

contributions to the SRF would be issued for this year, so

there has been no expenditure incurred in 2024 for

contributions made to the National Resolution Fund and

the Single Resolution Fund (235 million euros in 2023)

This expenditure was reflected in 2023 under the

heading ‘Other operating expenses’ of the income

statement (see note 41.b).

Likewise, in 2023 Banco Santander acquired an

Irrevocable Payment Commitment (IPC) in favor of the

Single Resolution Fund for EUR 120 million. This

commitment is guaranteed by constituting a cash

deposit of the same amount, delivered as a guarantee

that was recorded in the Balance Sheet Assets for which,

in accordance with the standard, no provision has been

recorded.

i) Merger by absorption

Cross-border extra-European merger by absorption

between Banco Santander, S.A. (absorbing company)

and Parasant SA and SIB Besaya, S.L. Unipersonal

(absorbed companies).

On April 29, 2024, the members of the respective boards

of directors of Banco Santander, S.A. (as the absorbing

company) and Parasant SA and SIB Besaya, S.L.

Unipersonal (as the absorbed companies) drafted and

signed a joint cross-border extra-European merger

project (as Parasant SA is a Swiss company, despite SIB

17

Besaya, S.L. Unipersonal being a Spanish national

company).

Under Articles 53.1 and 55 of RD 5/2023 of June 28,

transposing European Union Directives on structural

modifications of commercial companies (“RDLME”), it

was not necessary for the general meeting (or, where

applicable, the sole shareholder) of the absorbed

companies to approve the merger, as they are wholly

owned by Banco Santander, S.A., directly in the case of

Parasant SA, and indirectly through Parasant SA in the

case of SIB Besaya, S.L. Unipersonal. Nor was it

necessary for the shareholders' meeting of Banco

Santander, S.A. to approve it, as shareholders

representing at least 1% of the share capital did not

require it, in accordance with Article 55.1 of the RDLME.

Consequently, the board of directors of Banco Santander,

S.A. on June 25, 2024, approved the joint merger project

and the merger in question.

Once the mandatory authorizations have been obtained,

the corresponding merger deed was granted on

December 4, 2024, and, upon its registration in the

Commercial Registry of Madrid and Cantabria, the

dissolution without liquidation of Parasant SA and SIB

Besaya, S.L. Unipersonal occurred, with effect from

January 1, 2024, and the universal transfer of all their

respective assets to Banco Santander SA, which acquired

them by universal succession and without interruption. It

is noteworthy that the merger, for accounting purposes,

has been recorded by Banco Santander, S.A. in 2024.

Since the absorbed companies were entirely owned by

Banco Santander, S.A., directly in the case of Parasant

SA, and indirectly in the case of SIB Besaya, S.L.

Unipersonal, in accordance with Article 53 of the RDLME,

the Bank did not increase capital. With the merger

becoming effective on December 4, 2024, all shares and

interests of the absorbed companies were fully

amortized, extinguished, and nullified.

The merger balance sheets considered were those

included in the annual accounts for the fiscal year ended

December 31, 2023, prepared by the management

bodies of each of the companies involved in the merger.

The merger balance sheets of Banco Santander, S.A.,

Parasant SA, and SIB Besaya, S.L. Unipersonal were duly

verified by their respective auditors.

In accordance with the applicable accounting

regulations, for accounting purposes, January 1, 2024,

was set as the date from which the operations of the

absorbed companies were to be considered performed

by Banco Santander, S.A.

Furthermore, the aforementioned operation constitutes

a merger regulated under Article 76.1.c) of Law 27/2014,

of November 27, on Corporate Tax (“LIS”). In accordance

with Article 89.1 of the LIS, the merger was subject to

the tax regime established in Chapter VII of Title VII and

in the second additional provision of the LIS, as well as in

Articles 19.2.1º and 45, paragraph I.B.10 of the

Consolidated Text of the Transfer Tax and Stamp Duty

Law, approved by Royal Legislative Decree 1/1993, of

September 24. The information required in Article 86.1

of the aforementioned law regarding the merger is

included in this report (Annex VIII).

Below are the balance sheets of the absorbed companies

as of December 31, 2023:

PARASANT SA - (Thousand Swiss francs)

ASSETS	2023	EQUITY AND LIABILITIES	2023
NON-CURRENT ASSETS	1,081,281	EQUITY	1,193,575
Long-term investments in Group and associated companies	1,081,281	SHAREHOLDERS EQUITY	1,193,575
		Capital	1,215,000
		Legal reserves	151,052
		Reserves	(171,183)
		Loss of the period	(1,294)
CURRENT ASSETS	112,334	CURRENT LIABILITIES	40
Cash and Cash Equivalents	3,120	Accrual accounts	40
Short-term investments in Group and associated companies (Loans to companies)	108,926
Accrual adjustments	288
TOTAL ASSETS	1,193,615	TOTAL EQUITY AND LIABILITIES	1,193,615

SIB BESAYA, S.L.U - (Thousand euros)

ASSETS	2023	EQUITY AND LIABILITIES	2023
NON-CURRENT ASSETS	430,320	EQUITY	477,812
Long-term investments in Group and associated companies	430,320	SHREHOLDERS EQUITY	477,812
		Capital	7,579
		Reserves	183,330
		Loss from previous periods	(21,698)
		Other partner contributions	303,105
		Profit of the period	5,496
CURRENT ASSETS	47,587	CURRENT LIABILITIES	95
Short-term investments in Group and associated companies (Loans to companies)	45,084	Short-term debts with Group and associated companies	64
Cash and Cash equivalents	2,503	Trade creditors and other Accounts payables	31
TOTAL ASSETS	477,907	TOTAL EQUITY AND LIABILITIES	477,907

18

In accordance with the provisions of the applicable

regulations, as a result of the accounting record of the

aforementioned merger by absorption transaction

carried out by the Bank in the financial year 2024, an

increase in the Bank's voluntary reserves in that year

amounted to 166 million euros was evident due to the

decline in the participation of the companies acquired

(see note 29).

j) Events after the reporting period

On 20 January 2025, Banco Santander, S.A. prepaid all

the Tier 1 Contingently Convertible Preferred Securities

with ISIN code XS179325004 and common code

179325004 in circulation, for a total nominal amount of

EUR 187.6 million  and which trade on the Irish Stock

Market 'Global Exchange Market' (the 'PPCC').

Under the authorization of the 2023 annual general

meeting and also according to the 2024 shareholder

remuneration policy, on 4 February 2025 the board

resolved to execute a new share buyback programme for

a maximum amount of approximately EUR 1,587 million

The appropriate regulatory authorization has already

been obtained and the execution of which began on 6

February 2025.

2. Accounting policies

The following accounting principles, policies and

measurement criteria have been applied in the

preparation of the financial statements:

a) Foreign currency transactions

Banco Santander’s functional and presentation currency

is the euro.   Therefore, all balances and transactions

denominated in currencies other than the euro are

deemed to be denominated in foreign currency.

The balances in the financial statements whose

functional currency is not the euro are translated to

euros as follows:

• Assets and liabilities, at the closing rates.

• Income and expenses, at the average exchange rates

for the year.

• Equity items, at the historical exchange rates.

In general, balances denominated in foreign currencies,

including those branches in countries outside the

Monetary Union, have been converted to euros using the

official average exchange rates of the Spanish spot

currency market (through the US dollar's quotation on

local markets, for non-monetary currencies listed on the

Spanish market) at the end of each fiscal year.

The exchange differences arising on the translation of

foreign currency balances to the functional currency are

generally recognised at their net amount under

'Exchange differences, net' in the income statement,

except for exchange differences arising on financial

instruments at fair value through profit or loss, which

are recognised in the income statement without

distinguishing them from other changes in fair value,

and for exchange differences arising on non-monetary

items measured at fair value through equity, which are

recognised under 'Other comprehensive income–Items

that may be reclassified to profit or loss–Exchange

differences' except for exchange differences on equity

instruments, where the option to irrevocably elect to be

measured at fair value through changes in accumulated

other comprehensive income, which are recognised in

accumulated 'Other Comprehensive Income - Items not

to be reclassified to profit or loss - Changes in fair value

of equity instruments measured at fair value' through

other comprehensive income (see note 25).

b) Investments in subsidiaries, joint ventures and

associates

Group entities are those over which the Bank has the

capacity to exercise control; capacity which is generally

but not exclusively manifested by the direct or indirect

ownership of at least 50% of the voting rights of the

investees or, even if this percentage is lower or zero, if,

as in the case of agreements with their shareholders, the

Bank is granted such control.

Control is understood to be the power to direct the

financial and operating policies, by law, by statute or by

agreement, of an entity in order to obtain benefits from

its activities.

Joint ventures are deemed to be entities that are not

subsidiaries but which are jointly controlled by two or

more unrelated entities. This is evidenced by contractual

arrangements whereby two or more parties have

interests in entities so that decisions about the relevant

activities require the unanimous consent of all the

parties sharing control.

Associates are entities over which Banco Santander is in

a position to exercise significant influence, but not

control or joint control. It is presumed that Banco

Santander exercises significant influence if it holds 20%

or more of the voting power of the investee.

The shareholdings in group, multi-group and associated

entities, are presented on the balance sheet at their net

acquisition cost of any impairments that, where relevant,

those shares may have suffered.

Where there is evidence of impairment of these shares,

the amount of such deterioration is equivalent to the

difference between their recoverable amount and their

book value. Impairment losses are recorded under the

heading ‘Impairment or reversal of impairment of

investments in subsidiaries, joint ventures and

associates’ in the profit and loss account.

19

Appendices I and II contain significant information on

these companies. In addition, note 13 provides

information on the most significant acquisitions and

disposals in 2024 and 2023.

c) Classification of financial instruments

A financial instrument is any contract that gives rise to a

financial asset of one entity and a financial liability or

equity instrument of another entity.

The following transactions are not treated for accounting

purposes as financial instruments:

• Investments in subsidiaries, associates and joint

ventures (see note 13).

• Rights and obligations under employee benefit plans

(see note 23).

• Contracts and obligations relating to employee

remuneration based on own equity instruments  

(see note 30).

i. Classification of financial assets for measurement

purposes

Financial assets are initially classified into the various

categories used for management and measurement

purposes, unless they have to be presented as 'Non-

current assets held for sale' or they relate to 'Cash, cash

balances at central banks and other deposits on

demand', 'Changes in the fair value of hedged items in

portfolio hedges of interest rate risk (asset side)',

'Hedging derivatives and Investments', which are

reported separately.

Classification of financial instruments: the classification

criteria for financial assets depends on the business

model for their management and the characteristics of

their contractual flows.

Banco Santander´s business models refer to the way in

which it manages its financial assets to generate cash

flows. In defining these models , the Bank takes into

account the following factors:

• How key entity staff are assessed and reported on

the performance of the business model and the

financial assets held in the business model.

• The risks that affect the performance of the business

model (and the financial assets held in the business

model) and, specifically, the way in which these risks

are managed.

• How business managers are remunerated.

• The frequency, the calendar and volume of sales in

previous years, as well as expectations of future

sales and the reasons of the sales.

The analysis of the characteristics of the contractual

flows of financial assets requires an assessment of the

congruence of these flows with a basic loan agreement.

Banco Santander determines if the contractual cash

flows of its financial assets that are only principal and

interest payments on the outstanding principal amount

at the beginning of the transaction. This analysis takes

into consideration four factors (performance, clauses,

contractually linked products and currencies).

Furthermore, among the most significant judgements

used by  Banco Santander in carrying out this analysis,

the following ones are included:

• The return on the financial asset, in particular in

cases of periodic interest rate adjustments where the

term of the reference rate does not coincide with the

frequency of the adjustment. In these cases, an

assessment is made to determine whether or not the

contractual cash flows differ significantly from the

flows without this change in the time value of

money, establishing a tolerance level of 5%.

• When contractual clauses that may modify the cash

flows of the financial asset exist, the structure of the

cash flows before and after the activation of such

clauses is analysed, regardless of the probability of

occurrence of the contingent event. The evaluation of

contractual flows of financial assets with

characteristics associated with ESG is included in this

analysis.

• Financial assets whose cash flows have different

priority for payment due to a contractual link to

underlying assets (e.g. securitisations) require a

look-through analysis by the Bank so as to review

that both the financial asset and the underlying

assets are only principal and interest payments and

that the exposure to credit risk of the set of

underlying assets belonging to the tranche analysed

is less than or equal to the exposure to credit risk of

the set of underlying assets of the instrument.

Depending on these factors, the asset can be measured

at amortised cost, at fair value with changes in other

comprehensive income, or at fair value with changes

through profit and loss. Bank of Spain Circular 4/2017

also establishes an option to designate an instrument at

fair value with changes in profit or loss, when doing so

eliminates or significantly reduces a measurement or

recognition inconsistency (sometimes referred to as

'accounting asymmetry') that would otherwise arise

from measuring assets or liabilities or recognising gains

and losses on different bases.

Banco Santander uses the following criteria for the

classification of the financial debt instruments:

20

• Amortised cost: financial instruments under a

business model whose objective is to collect

principal and interest flows, over which there is no

significant unjustified sales and fair value is not a key

element in the management of these assets and

contractual conditions they give rise to cash flows on

specific dates, which are only payments of principal

and interest on the outstanding principal amount. In

this sense, unjustified sales are considered to be

those other than those related to an (i) increase in

the credit risk of the asset, (ii) unanticipated funding

needs (stress case scenarios) and (iii) those close to

maturity . Additionally, the characteristics of its

contractual flows represent substantially a 'basic

financing agreement'.

• Fair value with changes in other comprehensive

income: financial instruments held in a business

model whose objective is to collect principal and

interest cash flows and the sale of these assets,

where fair value is a key factor in their management.

Additionally, the contractual cash flow

characteristics substantially represent a 'basic

financing agreement'.

• Fair value with changes in profit or loss: financial

instruments included in a business model whose

objective is not obtained through the above

mentioned models, where fair value is a key factor in

managing of these assets, and financial instruments

whose contractual cash flow characteristics do not

substantially represent a 'basic financing

agreement'. In this section it can be enclosed the

portfolios classified under 'Financial assets held for

trading', 'Non-trading financial assets mandatorily at

fair value through profit or loss' and 'Financial assets

at fair value through profit or loss'. In this regard,

most of the financial assets presented in the

category of 'Financial assets designated at value

reasonable with change in results' are instruments

financial services that, not being part of the portfolio

of negotiation, are contracted jointly with other

financial instruments that are recorded in the

category of 'held for trading', and that by both are

recorded at fair value with changes in results, so your

record in any other category would produce

accounting asymmetries.

Equity instruments will be classified at fair value under

Bank of Spain Circular 4/2017 with changes in profit or

loss, unless the Bank, decides, for non-trading assets, to

classify them at fair value with changes in other

comprehensive income (irrevocably) at initial

recognition.

ii. Classification of financial assets for presentation

purposes

Financial assets are classified by nature into the

following items in the balance sheet:

• Cash, cash balances at Central Banks and other

deposits on demand: cash balances and balances

receivable on demand relating to deposits with

central banks and credit institutions.

• Loans and advances: includes the debit balances of

all credit and loans granted by the Bank, other than

those represented by securities, as well as finance

lease receivables and other debit balances of a

financial nature in favour of the Bank, such as

cheques drawn on credit institutions, balances

receivable from clearing houses and settlement

agencies for transactions on the stock exchange and

organised markets, bonds given in cash, capital calls,

fees and commissions receivable for financial

guarantees and debit balances arising from

transactions not originating in banking transactions

and services, such as the collection of rentals and

similar items. They are classified, on the basis of the

institutional sector to which the debtor belongs, into:

– Central banks: credit of any nature, including

deposits and money market transactions

received from the Bank of Spain or other central

banks.

21

– Credit institutions: credit of any nature, including

deposits and money market transactions, in the

name of credit institutions.

– Customers: includes the remaining credit,

including money market transactions through

central counterparties.

• Debt securities: bonds and other securities that

represent a debt for their issuer, that generate an

interest return, and that are in the form of

certificates or book entries.

• Equity instruments: financial instruments issued by

other entities, such as shares, which have the nature

of equity instruments for the issuer, other than

investments in subsidiaries, joint ventures or

associates. Investment fund units are included in this

item.

• Derivatives: includes the fair value in favour of the

Bank of derivatives which do not form part of hedge

accounting, including embedded derivatives

separated from hybrid financial instruments.

• Repurchase agreements and reverse repurchase

agreements: Purchases of financial instruments

under a non-optional resale (repurchase) agreement

at a fixed price (repos) are recognised in the

consolidated balance sheet as financing granted,

based on the nature of the debtor, under 'Loans and

advances with central banks', 'Loans and advances to

credit institutions' or 'Loans and advances to

customers. Differences between the purchase and

sale prices are recognised as interest over the

contract term.

• Changes in the fair value of hedged items in portfolio

hedges of interest rate risk: this item is the balancing

entry for the amounts credited to the income

statement in respect of the measurement of the

portfolios of financial instruments which are

effectively hedged against interest rate risk through

fair value hedging derivatives.

• Hedging derivatives: Includes the fair value in favour

of the Bank derivatives, including embedded

derivatives separated from hybrid financial

instruments, designated as hedging instruments in

hedge accounting.

iii. Classification of financial liabilities for measurement

purposes

Financial liabilities are initially classified into the various

categories used for management and measurement

purposes, unless they have to be presented as 'Liabilities

associated with non-current assets held for sale' or they

relate to 'Hedging derivatives' or changes in the fair

value of hedged items in portfolio hedges of interest rate

risk (liability side), which are reported separately.

In most cases, changes in the fair value of financial

liabilities designated at fair value through profit or loss,

caused by the entity's credit risk, are recognized in other

comprehensive income.

Financial liabilities are included for measurement

purposes in one of the following categories:

• Financial liabilities held for trading (at fair value

through profit or loss): this category includes

financial liabilities incurred for the purpose of

generating a profit in the near term from fluctuations

in their prices, financial derivatives not designated as

hedging instruments, and financial liabilities arising

from the outright sale of financial assets acquired

under reverse repurchase agreements ('reverse

repos') or borrowed (short positions).

• Financial liabilities designated at fair value through

profit or loss: financial liabilities are included in this

category when they provide more relevant

information, either because this eliminates or

significantly reduces recognition or measurement

inconsistencies (accounting mismatches) that would

otherwise arise from measuring assets or liabilities

or recognising the gains or losses on them on

different bases, or because a group of financial

liabilities or financial assets and liabilities is

managed and its performance is evaluated on a fair

value basis, in accordance with a documented risk

management or investment strategy, and

information about the group is provided on that basis

to the Bank's key management personnel.

Liabilities may only be included in this category on

the date when they are incurred or originated.

• Financial liabilities at amortised cost: financial

liabilities, irrespective of their instrumentation and

maturity, not included in any of the above-

mentioned categories which arise from the ordinary

borrowing activities carried on by financial

institutions.

iv. Classification of financial liabilities for presentation

purposes

Financial liabilities are classified by nature into the

following items in the balance sheet:

• Deposits: includes all repayable balances received in

cash by the Bank, other than those instrumented as

marketable securities and those having the

substance of subordinated liabilities (amount of the

loans received, which for credit priority purposes are

after common creditors), except for the debt

instruments. This item also includes cash bonds and

cash consignments received the amount of which

may be invested without restriction. Deposits are

classified on the basis of the creditor’s institutional

sector into:

22

– Central banks: deposits of any nature, including

credit received and money market transactions

received from the Bank of Spain or other central

banks.

– Credit institutions: deposits of any nature,

including credit received and money market

transactions in the name of credit institutions.

– Customer: includes the remaining deposits,

including money market transactions through

central counterparties.

• Marketable debt securities: includes the amount of

bonds and other debt represented by marketable

securities, other than those having the substance of

subordinated liabilities (amount of the loans

received, which for credit priority purposes are after

common creditors, and includes the amount of the

financial instruments issued by the Bank which,

having the legal nature of capital, do not meet the

requirements to qualify as equity, such as certain

preferred shares issued). This item includes the

component that has the consideration of financial

liability of the securities issued that are compound

financial instruments.

▪ Derivatives: includes the fair value, with a negative

balance for Banco Santander, separated from the

host contract, which do not form part of hedge

accounting.

• Short positions: includes the amount of financial

liabilities arising from the outright sale of financial

assets acquired under reverse repurchase

agreements or borrowed.

▪ Other financial liabilities: includes the amount of

payment obligations having the nature of financial

liabilities not included in other items (includes,

among others, the balance of lease liabilities), and

liabilities under financial guarantee contracts, unless

they have been classified as non-performing.

▪ Repurchase agreements and reverse repurchase

agreements: Sales of financial instruments under a

non-optional resale (repurchase) agreement at a

fixed price (repos) are recognised in the consolidated

balance sheet as financing received, based on the

nature of the creditor, under 'Deposits from central

banks', 'Deposits from credit institutions' or

'Customer deposits'. Differences between the

purchase and sale prices are recognised as interest

over the contract term.

• Changes in the fair value of hedged items in portfolio

hedges of interest rate risk: this item is the balancing

entry for the amounts charged to the income

statement in respect of the measurement of the

portfolios of financial instruments which are

effectively hedged against interest rate risk through

fair value hedging derivatives.

▪ Hedging derivatives: includes the fair value of the

Bank’s liability in respect of derivatives, including

embedded derivatives separated from hybrid

financial instruments, designated as hedging

instruments in hedge accounting.

▪ The preference shares contingently convertible into

ordinary shares eligible as Additional Tier 1 capital

(PPCC) -perpetual shares, which may be repurchased

by the issuer in certain circumstances, the interest on

which is discretionary, and would convert into

variable number of newly issued ordinary shares if

the capital ratio of the Bank or its consolidated group

falls below a given percentage (trigger event), as

those two terms are defined in the related issue

prospectuses are recognised for accounting purposes

by the Bank as compound instruments. The liability

component reflects the issuer’s obligation to deliver

a variable number of shares and the equity

component reflects the issuer’s discretion in relation

to the payment of the related coupons. In order to

effect the initial allocation, the Bank estimates the

fair value of the liability as the amount that would

have to be delivered if the trigger event were to

occur immediately and, accordingly, the equity

component, calculated as the residual amount, is

zero. In view of the aforementioned discretionary

nature of the payment of the coupons, they are

deducted directly from equity.

▪ Capital perpetual preference shares (PPCA), with the

possibility of purchase by the issuer in certain

circumstances, whose remuneration is discretionary,

and which will be amortised permanently, totally or

partially, in the event that the bank or its

consolidated group submits a capital ratio lesser

than a certain percentage (trigger event), as defined

in the corresponding prospectuses, are accounted for

by the Bank as equity instruments.

▪ Derivatives embedded in other financial instruments

or in other host contracts are accounted for

separately as derivatives if their risks and

characteristics are not closely related to those of the

host contracts, provided that the host contracts are

not classified as financial assets/liabilities

designated at fair value through profit or loss or as

'Financial assets/liabilities held for trading'.

d) Measurement of financial assets and liabilities

and recognition of fair value changes

In general, financial assets and liabilities are initially

recognised at fair value which, in the absence of

evidence to the contrary, is deemed to be the transaction

price.

In this regard, Bank of Spain Circular 4/2017 states that

regular way purchases or sales of financial assets shall

be recognised and derecognised on the trade date or on

the settlement date. Banco Santander has opted to make

such recognition on the trading date or settlement date,

23

depending on the convention of each of the markets in

which the transactions are carried out. For example, in

relation to the purchase or sale of debt securities or

equity instruments traded in the Spanish market,

securities market regulations stipulate their effective

transfer at the time of settlement and, therefore, the

same time has been established for the accounting

record to be made.

The fair value of instruments not measured at fair value

through profit and loss is adjusted by transaction costs.

Subsequently, and on the occasion of each accounting

close, they are valued in accordance with the following

criteria:

i. Measurement of financial assets

Financial assets are measured at fair value are valued

mainly at their fair value without deducting any

transaction cost for their sale.

The fair value of a financial instrument on a given date is

taken to be the price that would be received to sell an

asset or paid to transfer a liability in an orderly

transaction between market participants. The most

objective and common reference for the fair value of a

financial instrument is the price that would be paid for it

on an active, transparent and deep market (quoted price

or market price). At 31 December 2024, there were no

significant investments in quoted financial instruments

that had ceased to be recognised at their quoted price

because their market could not be deemed to be active.

If there is no market price for a given financial

instrument, its fair value is estimated on the basis of the

price established in recent transactions involving similar

instruments and, in the absence thereof, of valuation

techniques commonly used by the international financial

community, taking into account the specific features of

the instrument to be measured and, particularly, the

various types of risk associated with it.

All derivatives are recognised in the balance sheet at fair

value from the trade date. If the fair value is positive,

they are recognised as an asset and if the fair value is

negative, they are recognised as a liability. The fair value

on the trade date is deemed, in the absence of evidence

to the contrary, to be the transaction price. The changes

in the fair value of derivatives from the trade date are

recorded in the   income statement. Specifically,   the fair

value of financial derivatives traded in organised

markets included in the portfolios of financial assets or

liabilities held for trading is deemed to be their daily

quoted price and if, for exceptional reasons, the quoted

price cannot be determined on a given date, these

financial derivatives are measured using methods similar

to those used to measure derivatives.

The fair value of derivatives is taken to be the sum of the

future cash flows arising from the instrument,

discounted to present value at the date of measurement

(present value or theoretical close) using valuation

techniques commonly used by the financial markets: net

present value, option pricing models and other methods.

The amount of debt securities and loans and advances

under a business model whose objective is to collect the

principal and interest flows are valued at their amortised

cost, as long as they comply with the 'SPPI' (Solely

Payments of Principal and Interest) test, using the

effective interest rate method in their determination.

Amortised cost refers to the acquisition cost of a

corrected financial asset or liability (more or less, as the

case may be) for repayments of principal and the part

systematically charged to the income statement of the

difference between the initial cost and the

corresponding reimbursement value at expiration. In the

case of financial assets, the amortised cost includes, in

addition, the corrections to their value due to the

impairment. In the loans and advances covered in fair

value hedging transactions, the changes that occur in

their fair value related to the risk or the risks covered in

these hedging transactions are recorded.

The effective interest rate is the discount rate that

exactly matches the carrying amount of a financial

instrument to all its estimated cash flows of all kinds

over its remaining life.

For fixed rate financial instruments, the effective interest

rate coincides with the contractual interest rate

established on the acquisition date plus, where

applicable, the fees and transaction costs that, because

of their nature, form part of their financial return. In the

case of floating rate financial instruments, the effective

interest rate coincides with the rate of return prevailing

in all connections until the next benchmark interest reset

date.

Equity instruments and contracts related with these

instruments are measured at fair value. However, in

certain circumstances the Bank estimates cost value as a

suitable estimate of the fair value. This can happen if the

recent event available information is not enough to

measure the fair value or if there is a broad range of

possible measures and the cost value represents the

best estimates of fair value within this range.

The amounts at which the financial assets are recognised

represent, in all material respects, the Bank´s maximum

exposure to credit risk at each reporting date. Also Banco

Santander has received collateral and other credit

enhancements to mitigate its exposure to credit risk,

which consist mainly of mortgage guarantees, cash

collateral, equity instruments and personal security,

assets leased out under finance lease and full-service

lease agreements, assets acquired under repurchase

agreements, securities loans and credit derivatives.

24

ii. Measurement of financial liabilities

In general, financial liabilities are measured at amortised

cost, as defined above, except for those included under

'Financial liabilities held for trading' and 'Financial

liabilities designated at fair value through profit or loss'

and financial liabilities designated as hedged items (or

hedging instruments) in fair value hedges, which are

measured at fair value. The changes in credit risk arising

from financial liabilities designated at fair value through

profit or loss are recognised in accumulated other

comprehensive income, unless they generate or increase

an accounting mismatch, in which case changes in the

fair value of the financial liability in all respects are

recognised in the income statement.

iii. Valuation techniques

The financial instruments at fair value determined on the

basis of published price quotations in active markets

(level 1) include government debt securities, private-

sector debt securities, derivatives traded in organised

markets, securitised assets, shares, short positions and

fixed-income securities issued.

In cases where price quotations cannot be observed,

management makes its best estimate of the price that

the market would set, using its own internal models,

described in note 48. In most cases, these internal

models use data based on observable market

parameters as significant inputs (level 2) and, in cases,

they use significant inputs not observable in market data

(level 3). In order to make these estimates, various

techniques are employed, including the extrapolation of

observable market data. The best evidence of the fair

value of a financial instrument on initial recognition is

the transaction price, unless the fair value of the

instrument can be obtained from other market

transactions performed with the same or similar

instruments or can be measured by using a valuation

technique in which the variables used include only

observable market data, mainly interest rates.

iv. Recognition of fair value changes

As a general rule, changes in the carrying amount of

financial assets and liabilities are recognised in the

income statement. A distinction is made between the

changes resulting from the accrual of interest and

similar items, (which are recognised under Interest

income or Interest expense, as appropriate), and those

arising for other reasons, which are recognised at their

net amount under 'Gains/losses on financial assets and

liabilities'.                                                   

Adjustments due to changes in fair value arising from:

• 'Financial assets at fair value with changes in other

comprehensive income' are recorded temporarily, in

the case of debt instruments in 'Other

comprehensive income - Elements that can be

reclassified to profit or loss - Financial assets at fair

value with changes in other comprehensive income',

while in the case of equity instruments are recorded

in 'other comprehensive income - Elements that will

not be reclassified to line item - Changes in the fair

value of equity instruments valued at fair value with

changes in other comprehensive income'.

Exchange differences on debt instruments measured

at fair value with changes in other comprehensive

income are recognised under 'Exchange Differences,

net' of the income statement. Exchange differences

on equity instruments, in which the irrevocable

option of being measured at fair value with changes

in other comprehensive income has been chosen, are

recognised in 'Other comprehensive income - Items

that will not be reclassified to profit or loss -

Changes in the fair value of equity instruments

measured at fair value with changes in other

comprehensive income'.

• Items charged or credited to 'Items that may be

reclassified to profit or loss – Financial assets at fair

value through other comprehensive income' and

'Other comprehensive income – Items that may be

reclassified to profit or loss – Exchange differences in

equity' remain in the Bank´s equity until the asset

giving rise to them is impaired or derecognised, at

which time they are recognised in the income

statement.

• Unrealized capital gains on financial assets at fair

value through other comprehensive income

classified as 'Non-current assets held for sale'

because they form part of a disposal group or a

discontinued operation that  are recorded in the

equity balancing entry 'Other accumulated

comprehensive income - Items that can be

reclassified in income - Non-current assets as held

for sale.

v. Hedging transactions

Banco Santander uses financial derivatives for the

following purposes: i) to facilitate these instruments to

customers who request them in the management of

their market and credit risks; ii) to use these derivatives

in the management of the risks of the Group entities’

own positions and assets and liabilities (hedging

derivatives); and iii) to obtain gains from changes in the

prices of these derivatives (derivatives).

Financial derivatives that do not qualify for hedge

accounting are treated for accounting purposes as

trading derivatives. Additionally, certain financial assets

and liabilities can be designated as hedging instruments

to cover exchange rate risk.

25

A derivative qualifies for hedge accounting if all the

following conditions are met:

1. The derivative hedges one of the following three

types of exposure:

a. Changes in the fair value of assets and liabilities,

as well as firm commitments, due to

fluctuations, among others, in the interest rate

and/or exchange rate to which the position or

balance to be hedged is subject (fair value

hedge).

b. Changes in the estimated cash flows arising from

assets and liabilities, commitments and highly

probable forecast transactions (cash flow hedge).

c. The net investment in a foreign operation (hedge

of a net investment in a foreign operation).

2. It is effective in offsetting exposure inherent in the

hedged item or position throughout the expected

term of the hedge, which means that:

a. At the date of arrangement the hedge is

expected, under normal conditions, to be highly

effective (prospective effectiveness).

b. There is sufficient evidence that the hedge was

actually effective during the whole life of the

hedged item or position (retrospective

effectiveness). To this end, the Bank checks that

the results of the hedge were within a range of

80% to 125% of the results of the hedged item.

3. There must be adequate documentation evidencing

the specific designation of the financial derivative to

hedge certain balances or transactions and how this

hedge was expected to be achieved and measured,

provided that this is consistent with the Bank’s

management of own risks.

The changes in value of financial instruments qualifying

for hedge accounting are recognised as follows:

a. In fair value hedges, the gains or losses arising on

both the hedging instruments and the hedged

items attributable to the type of risk being

hedged are recognised directly in the income

statement.

b. In fair value hedges of interest rate risk on a

portfolio of financial instruments, the gains or

losses that arise on measuring the hedging

instruments are recognised directly in the  

income statement, whereas the gains or losses

due to changes in the fair value of the hedged

amount (attributable to the hedged risk) are

recognised in the income statement with a

balancing entry under Changes in the fair value

of hedged items in portfolio hedges of interest

rate risk on the asset or liability side of the

balance sheet, as appropriate.

c. In cash flow hedges, the effective portion of the

change in value of the hedging instrument is

recognised temporarily in Other comprehensive

income – under Items that may be reclassified to

profit or loss – Hedging derivatives – Cash flow

hedges (effective portion) until the covered

element affects the results, when it is recognised

in the income statement, unless, if the forecast

transactions result in the recognition of non-

financial assets or liabilities, it is included in the

cost of the non-financial asset or liability.

d. In hedges of a net investment in a foreign

operation, the gains or losses attributable to the

portion of the hedging instruments qualifying as

an effective hedge are recognised temporarily in

Other comprehensive income under Items that

may be reclassified to profit or loss – Hedges of

net investments in foreign operations until the

gains or losses – on the hedged item are

recognised in profit or loss.

e. The ineffective portion of the gains or losses on

the hedging instruments of cash flow hedges and

hedges of a net investment in a foreign operation

is recognised directly under 'Gains/losses on

financial assets and liabilities (net)' in the

income statement, in Gains or losses from hedge

accounting, net.

If a derivative designated as a hedge no longer meets the

requirements described above due to expiration,

ineffectiveness or for any other reason, the derivative is

classified for accounting purposes as a trading

derivative.

When fair value hedge accounting is discontinued, the

adjustments previously recognised on the hedged item

are amortised to profit or loss at the effective interest

rate recalculated at the date of hedge discontinuation.

The adjustments must be fully amortised at maturity.

When cash flow hedge accounting is discontinued, any

cumulative gain or loss on the hedging instrument

recognised in equity under other comprehensive income

'Items that may be reclassified to profit or loss' (from the

period when the hedge was effective) remains in this

equity item until the forecast transaction occurs, at

which time it is recognised in profit or loss, unless the

transaction is no longer expected to occur, in which case

the cumulative gain or loss is recognised immediately in

profit or loss.

e) Derecognition of financial assets and liabilities

The accounting treatment of transfers of financial assets

depends on the extent to which the risks and rewards

associated with the transferred assets are transferred to

third parties:

26

1. If the Bank transfers substantially all the risks and

rewards to third parties unconditional -sale of

financial assets, sale of financial assets under an

agreement to repurchase them at their fair value at

the date of repurchase, sale of financial assets with a

purchased call option or written put option that is

deeply out of the money, securitisation of assets in

which the transferor does not retain a subordinated

debt or grant any credit enhancement to the new

holders, and other similar cases-, the transferred

financial asset is derecognised and any rights or

obligations retained or created in the transfer are

recognised simultaneously.

2. If the Bank retains substantially all the risks and

rewards associated with the transferred financial

asset -sale of financial assets under an agreement to

repurchase them at a fixed price or at the sale price

plus interest, a securities lending agreement in

which the borrower undertakes to return the same or

similar assets, and other similar cases-, the

transferred financial asset is not derecognised and

continues to be measured by the same criteria as

those used before the transfer. However, the

following items are recognised:

a. An associated financial liability, which is

recognised for an amount equal to the

consideration received and is subsequently

measured at amortised cost, unless it meets the

requirements for classification under 'Financial

liabilities designated at fair value through profit

or loss'.

b. The income from the transferred financial asset

not derecognised and any expense incurred on

the new financial liability, without offsetting.

3. If the Bank neither transfers nor retains substantially

all the risks and rewards associated with the

transferred financial asset -sale of financial assets

with a purchased call option or written put option

that is not deeply in or out of the money,

securitisation of assets in which the transferor

retains a subordinated debt or other type of credit

enhancement for a portion of the transferred asset,

and other similar cases- the following distinction is

made:

a. If the transferor does not retain control of the

transferred financial asset, the asset is

derecognised and any rights or obligations

retained or created in the transfer are recognised.

b. If the transferor retains control of the transferred

financial asset, it continues to recognise it for an

amount equal to its exposure to changes in value

and recognises a financial liability associated

with the transferred financial asset. The net

carrying amount of the transferred asset and the

associated liability is the amortised cost of the

rights and obligations retained, if the transferred

asset is measured at amortised cost, or the fair

value of the rights and obligations retained, if the

transferred asset is measured at fair value.

Accordingly, financial assets are only derecognised when

the rights to the cash flows they generate have expired

or when substantially all the inherent risks and rewards

have been transferred to third parties. Similarly, financial

liabilities are only derecognised when the obligations

they generate have been extinguished or when they are

acquired with the intention either to cancel them or to

resell them.

Regarding contractual modifications of financial assets ,

the Bank has differentiated them into two main

categories in relation to the conditions under which a

modification leads to the disposal of the financial asset

(and the recognition of a new financial asset) and those

under which the accounting of the original financial

instrument with the modified terms is maintained:

• Contractual modifications for commercial or market

reasons, which are generally carried out at the

request of the debtor to apply current market

conditions to the debt. The new contract is

considered a new transaction and, consequently, it is

necessary to derecognize the original financial asset

and recognize a new financial asset subject to the

classification and measurement requirements

established by Bank of Spain Circular 4/2017.  The

new financial asset will be recorded at fair value and,

if applicable, the difference between the carrying

amount of the asset derecognized and the fair value

of the new asset will be recognized in profit or loss.

27

• Modifications due to refinancing or restructuring, in

which the payment conditions are modified to allow

a customer that is experiencing financial difficulties

(current or foreseeable) to meet its payment

obligations and that, if such modification had not

been made, it would be reasonably certain that it

would not be able to meet such payment obligations.

In this case, the modification does not result in the

derecognition of the financial asset, but rather the

original financial asset is maintained and does not

require a new assessment of its classification and

measurement. When assessing credit impairment,

the current credit risk (considering the modified cash

flows) should be compared with the credit risk at

initial recognition. The gross carrying amount of the

financial asset (the present value of the renegotiated

or modified contractual cash flows that are

discounted at the original effective interest rate of

the financial asset) should be recalculated, with a

gain or loss recognized in profit or loss for the

difference.

f) Offsetting of financial instruments

Financial asset and liability balances are offset, i.e.

reported in the balance sheet at their net amount, only if

the Banco Santander currently have a legally

enforceable right to set off the recognised amounts and

intend either to settle on a net basis, or to realise the

asset and settle the liability simultaneously.

g) Impairment of financial assets

i. Definition

Banco Santander associates an impairment in the value

to financial assets measured at amortised cost, debt

instruments measured at fair value with changes in

other comprehensive income, lease receivables, assets

from contracts and loan commitments and the financial

guarantees issued that are not measured at fair value

through profit or loss.

The impairment for expected credit losses is recorded

with a charge to the income statement for the period in

which the impairment arises. In the event of occurrence,

the recoveries of previously recognised impairment

losses are recorded in the income statement for the

period in which the impairment no longer exists or is

reduced.

In the case of purchased or originated credit-impaired

assets, the Bank only recognizes at the reporting date

the changes in the expected credit losses during the life

of the asset since the initial recognition as a credit loss.

In the case of assets measured at fair value with changes

in other comprehensive income, the changes in the fair

value due to expected credit losses are charged in the

income statement of the year where the change

happened, reflecting the rest of the valuation in other

comprehensive income.

As a rule, the expected credit loss is estimated as the

difference between the contractual cash flows to be

recovered and the expected cash flows discounted using

the original effective interest rate. In the case of

purchased or originated credit-impaired assets, this

difference is discounted using the effective interest rate

adjusted by credit rating.

Depending on the classification of financial instruments,

which is mentioned in the following sections, the

expected credit losses may be along 12 months or during

the life of the financial instrument:

• 12-month expected credit losses: arising from the

potential default events, as defined in the following

sections that are estimated to be likely to occur

within the 12 months following the reporting date.

These losses will be associated with financial assets

classified as 'normal risk' as defined in the following

sections.

• Expected credit losses over the life of the financial

instrument: arising from the potential default events

that are estimated to be likely to occur throughout

the life of the financial instruments. These losses are

associated with financial assets classified as 'normal

risk under watchlist' or 'doubtful risk'.

With the purpose of estimating the expected life of the

financial instrument all the contractual terms have been

taken into account (e.g. prepayments, duration, purchase

options, etc.), being the contractual period (including

extension options) the maximum period considered to

measure the expected credit losses. In the case of

financial instruments with an uncertain maturity period

and a component of undrawn commitment (e.g.: credit

cards), the expected life is estimated through

quantitative analyses to determine the period during

which the entity is exposed to credit risk, also

considering the effectiveness of management

procedures that mitigate such exposure (e.g. the ability

to unilaterally cancel such financial instruments, etc.).

The following constitute effective guarantees:

a. Mortgage guarantees on housing as long as they are

first duly constituted and registered in favour of the

entity. The properties include:

i. Buildings and building elements,

distinguishing among:

– Houses.

– Offices, stores and multi-purpose

premises.

– Rest of buildings such as non-multi-

purpose premises and hotels.

ii. Urban and developable ordered land.

iii. Rest of properties that classify as: buildings

and building elements under construction,

such as property development in progress

28

and halted development, and the rest of land

types, such as rustic lands.

b. Collateral guarantees on financial instruments in the

form of cash deposits, debt securities or equity

instruments issued by creditworthy issuers.

c. Other types of real guarantees, including properties

received in guarantee and second and subsequent

mortgages on properties, as long as the entity

demonstrates its effectiveness. When assessing the

effectiveness of the second and subsequent

mortgages on properties the entity will implement

particularly restrictive criteria. It will take into

account, among others, whether the previous

charges are in favour of the entity itself or not and

the relationship between the risk guaranteed by

them and the property value.

d. Personal guarantees, as well as the incorporation of

new owners, covering the entire amount of the

financial instruments and implying direct and joint

liability to the entity of persons or other entities

whose solvency is sufficiently proven to ensure the

repayment of the loan on the agreed terms.

The different aspects that the Bank considers for the

evaluation of effective guarantees are set out below in

relation to the individual analysis.

ii. Financial instruments presentation

For the purposes of estimating the impairment amount,

and in accordance with its internal policies, the Bank

classifies its financial instruments (financial assets,

commitments and guarantees) measured at amortised

cost or fair value through other comprehensive income

in one of the following categories:

• Normal Risk ('stage 1'): includes all instruments that

do not meet the requirements to be classified in the

rest of the categories.

• Normal risk under watchlist ('stage 2'): includes all

instruments that, without meeting the criteria for

classification as doubtful or default risk, have

experienced significant increases in credit risk since

initial recognition.

In order to determine whether a financial instrument has

increased its credit risk since initial recognition and is to

be classified in stage 2, the Group and the Bank consider

the following criteria:

Quantitative criteria	Changes in the risk of a default occurring through the expected life of the financial instrument are analysed and quantified with respect to its credit level in its initial recognition. With the purpose of determining if such changes are considered as significant, with the consequent classification into stage 2, each Group, and therefore the Bank, unit has defined the quantitative thresholds to consider in each of its portfolios taking into account corporate guidelines ensuring a consistent interpretation in all units. Within the quantitative thresholds, two types are considered: A relative threshold is those that compare current credit quality with credit quality at the time of origination in percentage terms of change. In addition, an absolute threshold compares both references in total terms, calculating the difference between the two. These absolute/relative concepts are used homogeneously (with different values) in all geographies. The use of one type of threshold or another (or both) is determined in accordance with the process described in note 50, below, and is marked by the type of portfolio and characteristics such as the starting point of the average credit quality of the portfolio.
Qualitative criteria	In addition to the quantitative criteria indicated, various indicators are used that are aligned with those used by the Bank in the normal management of credit risk. Irregular positions of more than 30 days and renewals are common criteria applied by the Bank and common to all the Group's  units. Also, each unit can define other qualitative indicators, for each of its portfolios, according to the particularities and normal management practices in line with the policies currently in force (i.e. use of management alerts, etc.). The use of these qualitative criteria is complemented with the use of an expert judgement, under the corresponding governance.

In the case of forbearances, instruments classified as

'normal risk under watchlist' may be generally

reclassified to 'normal risk' in the following

circumstances: at least two years have elapsed from the

date of reclassification to that category or from its

forbearance date, the client has paid the accrued

principal and interest balance, and the client has no

other instruments with more than 30 days past due

balances.

• Doubtful Risk ('stage 3'): includes financial

instruments, overdue or not, in which, without

meeting the circumstances to classify them in the

category of default risk, there are reasonable doubts

about their total repayment (principal and interests)

by the client in the terms contractually agreed.

Likewise, off-balance-sheet exposures whose

payment is probable and their recovery doubtful are

considered in stage 3. Within this category, two

situations are differentiated:

– Doubtful risk for non-performing loans: financial

instruments, irrespective of the client and

guarantee, with balances more than 90

consecutive days on material arrears for

principal, interest or expenses contractually

agreed.

This category also includes all loan balances for a

client  when the operations with more than 90

consecutive days on material arrears are greater

than 20% of the amounts pending collection.

29

These instruments may be reclassified to other

categories if, as a result of the collection of part

of the past due balances, the reasons for their

classification in this category do not remain and

the client does not have balances more than 90

consecutive days on material arrears in other

loans.

– Doubtful risk for reasons other than non-

performing loans: this category includes doubtful

recovery financial instruments that are not more

than 90 consecutive days on material arrears.

Banco Santander considers that a financial instrument to

be doubtful for reasons other than delinquency when

one or more combined events have occurred with a

negative impact on the estimated future cash flows of

the financial instrument. To this end, the following

indicators, among others, are considered:

a) Negative net equity or decrease because of losses of

the client's net equity by at least 50% during the last

financial year.

b) Continued losses or significant decrease in revenue

or, in general, in the client's recurring cash flows.

c) Generalised delay in payments or insufficient cash

flows to service debts.

d) Significantly inadequate economic or financial

structure or inability to obtain additional financing by

the client.

e) Existence of an internal or external credit rating

showing that the client is in default.

f) Existence of overdue customer commitments with a

significant amount to public institutions or

employees.

These financial instruments may be reclassified to other

categories if, as a result of an individualised study,

reasonable doubts do not remain about the total

repayment under the contractually agreed terms and the

client does not have balances of 90 days on material

arrears .

In the case of forbearances, instruments classified as

doubtful risk may be reclassified to the category of

'normal risk under watchlist' when the following

circumstances are present: a minimum period of one

year has elapsed from the forbearance date, the client

has paid the accrued principal and interest amounts, and

the client has no other loan balances of 90 days on

material arrears.

• Default Risk: includes all financial assets, or part of

them, for which, after an individualised analysis, their

recovery is considered remote due to a notorious and

irrecoverable deterioration of their solvency.

In any case, except in the case of operations wit h real

guarantees that cover more than 10% of the amount of

the operation, in general the Bank considers as remote

recovery: the operations of holders that are in the

liquidation phase of the insolvency creditors, doubtful

operations due to delinquency that have been in this

category for more than 4 years and doubtful operations

due to delinquency whose part not covered by real

guarantees has been maintained with 100% credit risk

coverage for more than two years.

A financial asset amount is maintained in the balance

sheet until they are considered as a 'default risk', either

all or a part of it, and the write-off is registered against

the balance sheet.

In the case of operations that have only been partially

derecognised, for forgiveness reasons or because part of

the total balance is considered unrecoverable, the

remaining amount shall be fully classified in the

category of 'doubtful risk', except where duly justified.

The classification of a financial asset, or part of it, as a

'default risk' does not involve the disruption of

negotiations and legal proceedings to recover the

amount.

iii. Impairment valuation assessment

Banco Santander has policies, methods and procedures

in place to hedge its credit risk, both due to the

insolvency attributable to counterparties and its

residence in a specific country.

These policies, methods and procedures are applied in

the concession, study and documentation of financial

assets, commitments and guarantees, as well as in the

identification of their impairment and in the calculation

of the amounts needed to cover their credit risk.

The impairment represents the best estimation of the

financial assets expected credit losses at the balance

sheet date, assessed both individually and collectively.

• Individually: for the purposes of estimating the

provisions for credit risk arising from the insolvency

of a financial instrument, the Bank individually

assesses impairment by estimating the expected

credit losses on those financial instruments that are

considered to be significant and with sufficient

information to make such an estimate.

Therefore, this classification mostly includes

wholesale banking customers —Corporations,

specialised financing— as well as some of the largest

companies —Chartered and real estate developers—

from retail banking. The determination of the

perimeter in which the individualised estimate is

applied is detailed in a later section.

30

The individually assessed impairment estimate is

equal to the difference between the gross carrying

amount of the financial instrument and the

estimated value of the expected cash flows

receivable discounted using the original effective

interest rate of the transaction. The estimate of these

cash flows takes into account all available

information on the financial asset and the effective

guarantees associated with that asset. This

estimation process is detailed below.

• Collectively: the Bank also assesses impairment by

estimating the expected credit losses collectively in

cases where they are not assessed on an individual

basis. This includes, for example, loans with

individuals, sole proprietors or businesses in retail

banking  subject to a standardised risk management.

For the purposes of the collective assessment of

expected credit losses, the Bank has consistent and

reliable internal models. For the development of

these models, instruments with similar credit risk

characteristics that are indicative of the debtors'

capacity to pay are considered.

The credit risk characteristics used to group the

instruments are, among others: type of instrument,

debtor's sector of activity, geographical area of

activity, type of guarantee, aging of past due

balances and any other factor relevant to estimating

the future cash flows.

Banco Santander performs retrospective and monitoring

tests to evaluate the reasonableness of the collective

estimate.

On the other hand, the methodology required to

estimate the expected credit loss due to credit events is

based on an unbiased and weighted consideration by the

probability of occurrence of a series of scenarios,

considering a range of three to five possible future

scenarios, which could have an impact on the collection

of contractual cash flows, always taking into account the

time value of money, as well as all available, reasonable

and sustainable information on past events, current

conditions and forecasts of the evolution of

macroeconomic scenarios that are shown to be relevant

for the estimation of this amount (for example: GDP

(Gross Domestic Product), housing price, unemployment

rate, etc.).

The estimation of expected losses requires expert

judgment and the support of historical, current and

future information. The probability of loss is measured

considering past events, the present situation and future

trends of macroeconomic scenarios.

Banco Santander uses forward-looking information in

both internal risk management and prudential

regulation processes, so that for the calculation of the

impairment loss allowance, various scenarios are

incorporated that take advantage of the experience with

such information, thus ensuring consistency in obtaining

the expected loss.

The complexity of the estimation in this exercise has

been derived from the current macroeconomic scenario

as a consequence of the complex geopolitical situation,

as well changes in inflations levels and interest rates,

which has generated uncertainty in economic evolution.

Banco Santander has internally ensured the criteria to be

followed for guarantees received from government

bodies, both through credit lines and other public

guarantees, so that when they are adequately reflected

in each of the contracts, they are recognised as

mitigating factors of the potential expected losses, and

therefore of the provisions to be recognised, based on

the provisions of the applicable standard. Furthermore,

where applicable, these guarantees are appropriately

reflected in the mitigation of the significant increase in

risk, considering their nature as personal guarantees.

For the estimation of the parameters used in the

estimation of impairment provisions -EAD (exposure at

default), PD (probability of default), LGD (loss given

default)-, the Bank based their experience in developing

internal models for the estimation of parameters both in

the regulatory area and for management purposes,

adapting the development of the impairment provision

models under Bank of Spain Circular 4/2017 and

subsequent modifications.

• Exposure at default: is the amount of estimated risk

incurred at the time of the counterparty's analysis.

• Probability of default: is the estimated probability

that the counterparty will default on its principal

and/or interest payment obligations.

• Loss given default: is the estimate of the severity of

the loss incurred in the event of non-compliance. It

depends mainly on the updating of the guarantees

associated with the operation and the future cash

flows that are expected to be recovered.

In any case, when estimating the flows expected to be

recovered, portfolio sales are included. It should be

noted that due to the Bank's recovery policy and the

experience observed in relation to the prices of past

sales of assets classified as stage 3 and/or default risk,

there is no substantial divergence between the flows

obtained from recoveries after performing recovery

management of the assets with those obtained from the

sale of portfolios of assets discounting structural

expenses and other costs incurred.

31

The definition of default implemented by the Bank for

the purpose of calculating the impairment provision

models is based on the definition in Article 178 of

Regulation 575/2013 of the European Union (CRR),

which is fully aligned with the requirements of Bank of

Spain Circular 4/2017, which considers that a 'default'

exists in relation to a specific customer/contract when at

least one of the following circumstances exists: the

entity considers that there are reasonable doubts about

the payment of all its credit obligations or that the

customer/contract is in an irregular situation for more

than 90 consecutive days past due material balances

with respect to any significant credit obligation.

Banco Santander aligned partially and voluntarily during

2022 the accounting definition of Stage 3, as well as the

calculation of impairment provision models, to the New

Definition of Default, incorporating the criteria defined

by the EBA in its implementation guide of the definition

of default, capturing the economic deterioration of the

operations (days in default - on a daily basis - and

materiality thresholds - minimum amount in arrears).

The alignment of criteria was done taking into account

the criteria of IFRS 9 as well as the accounting principles

of unbiased presentation of financial information. Grupo

Santander registered an increase in the default rate at

around19 basis points, with no material impact on the

provision figures for credit risk.

In addition, the Bank considers the risk generated in all

cross-border transactions due to circumstances other

than the usual commercial risk of insolvency (sovereign

risk, transfer risk or risks arising from international

financial activity, such as wars, natural catastrophes,

balance of payments crisis, etc.).

Bank of Spain Circular 4/2017 includes a series of

practical solutions that can be implemented by entities,

with the aim of facilitating its implementation. In order

to achieve a complete and high-level implementation of

the standard, and following the best practices of the

industry, the  Bank these practical solutions adapting

them to their own characteristics and circumstances:

• Rebuttable presumption that the credit risk has

increased significantly, when payments are more

than 30 days past due: this threshold is used as an

additional, but not primary, indicator of significant

risk increase.

• Assets with low credit risk at the reporting date: the

Bank adopts this practice prioritizing its reduced and

punctual use and its systematic and periodic

justification through quantitative evidence.

This information is provided in more detail in note 50.b.

iv. Detail of individual estimate of impairment

For the individual estimate of the assessment for

impairment of the financial asset, the Bank has a specific

methodology to estimate the value of the cash flows

expected to be collected:

• Recovery through the debtor's ordinary activities

(going approach).

• Recovery through the execution and sale of the

collateral guaranteeing the operations (gone

approach).

Gone approach:

a.   Evaluation of the effectiveness of guarantees

Banco Santander assesses the effectiveness of all the

guarantees associated considering the following:

• The time required to execute these guarantees.

• Banco Santander's ability to enforce or assert these

guarantees in its favour.

• The existence of limitations imposed by each local

unit´s regulation on the foreclosure of collateral.

Under no circumstances the Bank considers that a

guarantee is effective if its effectiveness depends

substantially on the solvency of the debtor, as could be

the case:

• Promises of shares or other securities of the debtor

himself when their valuation may be significantly

affected by a debtor's default.

• Personal cross-collateralisation: when the

guarantor of a transaction is, at the same time,

guaranteed by the holder of that transaction.

The different types of effective guarantees have been

detailed in section i. Definition

b. Valuation of guarantees

Banco Santander assesses the guarantees on the basis of

their nature in accordance with the following:

• Mortgage guarantees on properties associated

with financial instruments, using complete

individual valuations carried out by independent

valuation experts and under generally accepted

valuation standards. If this is not possible,

alternative valuations are used with duly

documented and approved internal valuation

models.

• Personal guarantees are valued individually on the

basis of the guarantor´s updated information.

• The rest of the guarantees are valued based on

current market values.

c. Adjustments to the value of guarantees and

estimation of future cash flow inflows and outflows.

Banco Santander applies a series of adjustments to the

value of the guarantees in order to improve the

reference values:

• Adjustments based on the historical sales

experience for certain types of assets.

32

• Individual expert adjustments based on additional

management information.

Likewise, to adjust the value of the guarantees, the time

value of money is taken into account based on the

historical experience , estimating:

• Period of adjudication.

• Estimated time of sale of the asset.

In addition, the Bank takes into account all those cash

inflows and outflows linked to that guarantee until it is

sold:

• Possible future income commitments in favour of

the borrower which will available after the asset is

awarded.

• Estimated foreclosure costs.

• Asset maintenance costs, taxes and community

costs.

• Estimated marketing or sales costs.

Finally, since it is considered that the guarantee will be

sold in the future, the Bank applies an additional

adjustment ('index forward') in order to adjust the value

of the guarantees to future valuation expectations.

v. Impairment individual assessment scope

Banco Santander determines the perimeter over which it

makes an estimate of the assessment for impairment on

an individual basis based on a relevance threshold and

the stage in which the operations are located. In general,

the Group applies the individualised calculation of

expected losses to the significant exposures classified in

stage 3, although Banco Santander, S.A. has also

extended its analyses to some of the exposures

classified in stage 2.

It should be noted that, in any case and irrespective of

the stage in which their transactions are carried out, for

customers who do not receive standardised treatment, a

relational risk management model is applied, with

individualised treatment and monitoring by the assigned

risk analyst. In addition to wholesale customers

(Santander Corporate & Investment Banking or SCIB) and

large companies, this relational management model

also includes other segments of smaller companies for

which there is information and capacity for more

personalised and expert analysis and monitoring.  As

indicated in the Bank's wholesale credit model, the

individual treatment of the client facilitates the

continuous updating of information. The risk assumed

must be followed and monitored throughout its life

cycle, enabling anticipation and action to be taken in the

event of possible impairments. In this way, the

customer's credit quality is analysed individually, taking

into account specific aspects such as his competitive

position, financial performance, management, etc. In the

wholesale risk management model, every customer with

a credit risk position is assigned a rating, which has an

associated probability of customer default.

Thus, individual analysis of the debtor triggers a specific

rating for each customer, which determines the

appropriate parameters for calculating the expected

loss, so that it is the rating itself that initially modulates

the necessary coverage, adjusting the severity of the

possible loss to the guarantees and other mitigating

factors that the customer may have available. In

addition, if as a result of this individualised monitoring of

the customer, the analyst finally considers that his

coverage is not sufficient, he has the necessary

mechanisms to adjust it under his expert judgement,

always under the appropriate governance.

h) ‘Non-current assets’ and ‘liabilities associated

with non-current assets held for sale’

Non-current assets held for sale' includes the carrying

amount of individual items, disposal groups or items

forming part of a business unit earmarked for disposal

(discontinued operations), whose sale in their present

condition is highly likely to be completed within one year

from the reporting date. Therefore, the recovery of the

carrying amount of these items -which can be of a

financial nature or otherwise- will foreseeably be

effected through the proceeds from their disposal.

Specifically, property or other non-current assets

received by Banco Santander as total or partial

settlement of their debtors’ payment obligations to them

are deemed to be 'Non-current assets held for sale',

unless the Bank has decided to make continuing use of

these assets.

1 The assets in a situation of 'stopped development' are included under 'land

33

'Liabilities associated with non-current assets held for

sale' includes the balances payable arising from the

assets held for sale or disposal groups and from

discontinued operations.

'Non-current assets and disposal groups of items that

have been classified as held for sale' are generally

recognised at the date of their allocation to this category

and are subsequently valued at the lower of their fair

value less costs to sell or its book value. 'Non-current

assets and disposal groups of items that are classified as

held for sale' are not amortised as long as they remain in

this category.

The valuation of the portfolio of non-current assets held

for sale has been made in compliance with the

requirements of Bank of Spain Circular 4/2017, and

subsequent amendments, in relation to the estimate of

the fair value of tangible assets and the value-in-use of

financial assets.

The value of the portfolio is determined as the sum of

the values of the individual elements that compose the

portfolio, without considering any total or batch

grouping in order to correct the individual values.

For the purposes of its consideration in initial

recognition, the Bank obtains, at the time of award, the

fair value of the corresponding asset by requesting an

appraisal from external valuation agencies.

Banco Santander has in place a corporate policy that

ensures the professional competence and the

independence and objectivity of the external appraisal

agencies, in accordance with the regulations, which

require appraisal agencies to meet independence,

neutrality and credibility requirements, so that the use of

their estimates does not reduce the reliability of its

valuations. This policy establishes that all the appraisal

companies and agencies with which the Bank works in

Spain should be registered in the Official Register of the

Bank of Spain and that the appraisals performed by them

should follow the methodology established in Order

ECO/805/2003, of 27 March. The main appraisal

companies and agencies with which the Bank worked in

2024 are as follows: Tinsa Tasaciones Inmobiliarias,

S.A.U., Sociedad de Tasación, S.A., Global Valuation,

S.A.U., Instituto de Valoraciones, S.A., Euroevaluaciones,

S.A. and Valoraciones Mediterráneo, S.A.

At 31 December 2024 the fair value minus the costs to

sell of non-current assets held for sale exceeded their

carrying amount by EUR 161 million (EUR 212 million in

2023); however, in accordance with the applicable

legislation, this unrealised gain could not be recognised.

Banco Santander, in compliance with Bank of Spain

Circular 4/2017, and subsequent amendments, on public

and private financial reporting standards and financial

statement models, has developed a methodology that

enables it to estimate the fair value and costs of sale of

assets foreclosed or received in payment of debts. This

methodology is based on the classification of the

portfolio of foreclosed assets into different segments.

Segmentation enables the intrinsic characteristics of

Banco Santander's portfolio of foreclosed assets to be

differentiated, so that assets with homogeneous

characteristics are grouped by segment.

Thus, the portfolio is segmented into (i) finished assets

of a residential and tertiary nature, (ii) developments in

progress and (iii) land 1.

In determining the critical segments in the overall

portfolio, assets are classified on the basis of the nature

of the asset and its stage of development. This

segmentation is made in order to seek the liquidation of

the asset (which should be carried out in the shortest

possible time).

When making decisions, the situation and/or

characteristics of the asset are fundamentally taken into

account, as well as the evaluation of all the determining

factors that favour the recovery of the debt. For them,

the following aspects are analyzed, among others:

• The time that has elapsed since the adjudication.

• The transferability and contingencies of the

foreclosed asset.

• The economic viability from the real estate point of

view with the necessary investment estimate.

• The expenses that may arise from the marketing

process.

• The offers received, as well as the difficulties in

finding buyers.

In the case of real estate assets foreclosed in Spain,

which represent 81% of the Group’s total non-current

assets held for sale, the valuation of the portfolio is

carried out by applying the following models:

• Market Value Model used in the valuation of finished

properties of a residential nature (mainly homes and

car parks) and properties of a tertiary nature (offices,

commercial premises and multipurpose buildings).

For the valuation of finished assets whose

availability for sale is immediate, a market sale value

provided by a third party external to Banco Santander

is considered, calculated under the AVM

methodology by the comparable properties method

adjusted by our experience in selling similar assets,

given the term, price, volume, trend in the value of

these assets and the time elapsing until their sale

and discounting the estimated costs of sale.

2 Assets qualified as protected housing are taken into account. The maximum legal value of these assets is determined by the VPO module, obtained from the

result of multiplying the State Basic Module (MBE) by a zone coefficient determined by each autonomous community. To carry out the valuation of a protected

property, the useful surface area is used in accordance with current regulations.

34

The market value is determined on the basis of the

definition established by the International Valuation

Standards drawn up by the IVSC (International

Valuation Standards Council), understood as the

estimated amount for which an asset or a liability

should be exchanged on the measurement date

between a willing buyer and a willing seller, in an

arm's length transaction, after appropriate marketing,

and in which the parties have acted with sufficient

information, prudently and without coercion.

The current market value of the properties is estimated

on the basis of automated valuations obtained by

taking comparable properties as a reference;

simulating the procedure carried out by an appraiser in

a physical valuation according to Order ECO 805/2003:

selection of properties and obtaining the unit value by

applying homogenisation adjustments. The selection

of the properties is carried out by location within the

same real estate cluster and according to the

characteristics of the properties, filtering by type 2,

surface area range and age. The model enables a

distinction to be made within the municipality under

study as to which areas are similar and comparable

and therefore have a similar value in the property

market, discriminating between which properties are

good comparators and which are not.

Adjustments to homogenize the properties are made

according to: (i) the age of the property according to

the age of the property to be valued, (ii) the deviation

of the built area from the common area with respect to

the property to be valued and (iii) by age of the date of

capture of the property according to the price evolution

index of the real estate market.

In addition, for individually significant assets, complete

individual valuations are carried out, including a visit to

the asset, market analysis (data relating to supply,

demand, current sale or rental price ranges and

supply-demand and revaluation expectations) and an

estimate of expected income and costs.

For this segmentation of assets, when they are

completed, the real costs are known and the actual

expenses for the marketing and sale of the asset must

be taken into account. Therefore, Banco Santander

uses the actual costs in its calculation engine or, failing

that, those estimated on the basis of its observed

experience.

• Market Value Model according to Evolution of

Market Values used to update the valuation of

developments in progress. The valuation model

estimates the current market value of the properties

based on complete individual valuations by third

parties, calculated from the values of the feasibility

studies and development costs of the promotion, as

well as the selling costs, distinguishing by location,

size and type of property. The inputs used in the

valuation model for residential assets under

construction are actual revenues and costs.

For this purpose, in order to calculate the investment

flows, Banco Santander considers, on the basis of the

feasibility studies, the expenditure required for

construction, the professional fees relating to the

project and to project management, the premiums

for mandatory building insurance, the developer's

administrative expenses, licenses, taxes on new

construction and fees, and urban development

charges.

With respect to the calculation of income flows,

Banco Santander takes into account the square

metres built, the number of homes under

construction and the estimated selling price over 1.5

years.

The market value will be the result of the difference

between the income flows and the investment flows

estimated at each moment.

• Land Valuation model. The methodology followed by

the Bank regarding land valuation consists of

updating the individual reference valuation of each

of the land on an annual basis, through updated

valuation valuations carried out by independent

professionals and following the methodology

established in the Order ECO/805/2003, of 27

March, whose main verifications in the case of land

valuation, regardless of the degree of urbanisation of

the land, correspond to:

– Visual verification of the assessed property.

– Registry description.

– Urban planning.

– Visible easements.

– Visible state of occupation, possession, use and

exploitation.

– Protection regime.

– Apparent state of preservation.

– Correspondence with cadastral property.

35

– Existence of expropriation procedure,

expropriation plan or project, administrative

resolution or file that may lead to expropriation.

– Expiry of the urbanization or building deadlines.

– Existence of a procedure for failure to comply

with obligations.

– Verification of surfaces.

For the purposes of valuation, the land will be classified

in the following levels:

– Level I: It will include all the lands that do not

belong to level II.

– Level II: It shall include land classified as

undeveloped where building is not allowed for

uses other than agriculture, forestry, livestock or

linked to an economic exploitation permitted by

the regulations in force. Also included are lands

classified as developable that are not included in

a development area of urban planning or that, in

such an area, the conditions for its development

have not been defined.

In those cases where Banco Santander does not have an

updated reference value through an ECO valuation for

the current year, we use as a reference value the latest

available ECO valuation reduced or corrected by the

average annual coverage ratio of the land on which we

have obtained an updated reference value, through an

ECO valuation.

Banco Santander applies a discount to the

aforementioned reference values that takes into account

both the discount on the reference value in the sales

process and the estimated costs of marketing or selling

the land; discount on reference value = % discount on

sales + % marketing costs being:

– % discount on Sales: = 100 - (sales price /

updated appraisal value).

– marketing costs: calculated on the basis of our

historical experience in sales and in accordance

with the marketing management fees negotiated

with our suppliers of this type of service.

In this way Banco Santander obtains the corrected

market value, an amount that we compare with the net

cost of each piece of land to determine its correct

valuation and conclude with our valuation process.

In addition, in relation to the previously mentioned

valuations, less costs to sell, are contrasted with the

sales experience of each type of asset in order to confirm

that there is no significant difference between the sale

price and the valuation.

Impairment losses on an asset or disposal group arising

from a reduction in its carrying amount to its fair value

(less costs to sell) are recognised under 'Gains or (losses)

on non-current assets held for sale not classified as

discontinued operations' in the income statement.

The gains on a non-current asset held for sale resulting

from subsequent increases in fair value (less costs to

sell) increase its carrying amount and are recognised in

the consolidated income statement up to an amount

equal to the impairment losses previously recognised.

i) Insurance contracts linked to pensions

The item 'Insurance contracts linked to pensions',

included within the heading 'Other assets' (see note

2.m), will include the fair value of the insurance policies

to cover pension commitments that must be recorded as

a separate asset for not meeting the requirements

established in regulation 35 of Bank of Spain Circular

4/2017 and subsequent modifications, to be considered

plan assets.

j) Tangible assets

Tangible assets includes the amount of buildings, land,

furniture, vehicles, computer hardware and other

fixtures owned by Banco Santander or acquired under

finance leases. Tangible assets are classified by use as

follows:

i. Property, plant and equipment for own use

Property, plant and equipment for own use – including

tangible assets received by the Bank in full or partial

satisfaction of financial assets representing receivables

from third parties which are intended to be held for

continuing use and tangible assets acquired under

finance leases– are presented at acquisition cost, less

the related accumulated depreciation and any estimated

impairment losses (carrying amount higher than

recoverable amount).

Depreciation is calculated, using the straight-line

method, on the basis of the acquisition cost of the assets

less their residual value. The land on which the buildings

and other structures stand has an indefinite life and,

therefore, is not depreciated.

The annual tangible asset depreciation charge is

recognised in the income statement and are essentially

equivalent to the following amortization percentages

(determined based on the years of estimated useful life,

on average, of the different elements):

36

	Average annual rate
Buildings for own use	2.00%
Furniture	10.00%
Fixtures	5.00%
IT equipment	25.00%
Vehicles	16.00%
Other	5.00%
Lease use rights	Less than the lease term or the useful life of the underlying asset

At the end of each reporting period, Banco Santander

assesses whether there is any indication that the

carrying amount of an asset exceeds its recoverable

amount, in which case they write down the carrying

amount of the asset to its recoverable amount and

adjust future depreciation charges in proportion to its

adjusted carrying amount and to its new remaining

useful life, if the useful life needs to be re-estimated.

Similarly, if there is an indication of a recovery in the

value of a tangible asset, Banco Santander recognises

the reversal of the impairment loss recognised in prior

periods and adjust the future depreciation charges

accordingly. In no circumstances may the reversal of an

impairment loss on an asset raise its carrying amount

above that which it would have if no impairment losses

had been recognised in prior years.

The estimated useful lives of the items of property, plant

and equipment for own use are reviewed at least at the

end of the reporting period with a view to detecting

significant changes therein. If changes are detected, the

useful lives of the assets are adjusted by correcting the

depreciation charge to be recognised in the income

statement in future years on the basis of the new useful

lives.

Upkeep and maintenance expenses relating to property,

plant and equipment for own use are recognised as an

expense in the period in which they are incurred, since

they do not increase the useful lives of the assets.

ii. Investment property

'Investment property' reflects the net values of the land,

buildings and other structures held either to earn rentals

or for obtaining profits by sales due to future increase in

market prices.

The criteria used to recognise the acquisition cost of

investment property, to calculate its depreciation and its

estimated useful life and to recognise any impairment

losses thereon are consistent with those described in

relation to property, plant and equipment for own use.

In order to evaluate the possible impairment Banco

Santander determines periodically the fair value of its

investment property so that, at the end of the reporting

period, the fair value reflects the market conditions of

the investment property at that date. This fair value is

determined annually, taking as benchmarks the

valuations performed by independent experts. The

methodology used to determine the fair value of

investment property is selected based on the status of

the asset in question; thus, for properties earmarked for

lease, the valuations are performed using the sales

comparison approach, whereas for leased properties the

valuations are made primarily using the income

capitalisation approach and, exceptionally, the sales

comparison approach.

In the sales comparison approach, the property market

segment for comparable properties is analysed, inter

alia, and, based on specific information on actual

transactions and firm offers, current prices are obtained

for cash sales of those properties. The valuations

performed using this approach are considered as Level 2

valuations.

In the income capitalisation approach, the cash flows

estimated to be obtained over the useful life of the

property are discounted taking into account factors that

may influence the amount and actual obtainment

thereof, such as: (i) the payments that are normally

received on comparable properties; (ii) current and

probable future occupancy; (iii) the current or

foreseeable default rate on payments. The valuations

performed using this approach are considered as Level 3

valuations, since significant unobservable inputs are

used, such as current and probable future occupancy

and/or the current or foreseeable default rate on

payments.

iii. Assets leased out under an operating lease

'Property, plant and equipment' - Leased out under an

operating lease reflects the amount of the tangible

assets, other than land and buildings, leased out by the

Bank under an operating lease.

The criteria used to recognise the acquisition cost of

assets leased out under operating leases, to calculate

their depreciation and their respective estimated useful

lives and to recognise the impairment losses thereon are

consistent with those described in relation to property,

plant and equipment for own use.

k) Accounting for leases

The main aspects contained in the regulation Bank of

Spain Circular 2/2018 adopted by the Bank are included

below:

When the Bank acts as lessee, it recognises a right-of-

use asset representing its right to use the underlying

leased asset with a corresponding lease liability on the

date on which the leased asset is available for use by the

Bank.

37

Each lease payment is allocated between liability and

finance charge. The finance charge is allocated to the

income statement during the term of the lease in such a

way as to produce a constant periodic interest rate on

the remaining balance of the liability for each year.

The right-of-use asset is depreciated over the useful life

of the asset or the lease term, whichever is shorter, on a

straight-line basis. If the Bank is reasonably certain to

exercise a purchase option, the right-of-use asset is

amortized over the useful life of the underlying asset.

Assets and liabilities arising from a lease are initially

measured at present value. Lease liabilities include the

net present value of the following lease payments:

• Fixed payments (including inflation-linked

payments), less any lease incentive receivable.

• Variable lease payments that depend on an index or

rate.

• The amounts expected to be paid by the lessee under

residual value guarantees.

• The exercise price of a purchase option if the lessee

is reasonably certain that it will exercise that option.

• Lease termination penalty payments, if the term of

the lease reflects the lessee's exercise of that option.

Lease payments are discounted using the interest rate

implicit in the lease. When this interest rate cannot be

obtained, the interest rate used in these cases, is the

lessee's incremental borrowing rate at the related date.

For this purpose, the entity has calculated this

incremental borrowing rate taking as reference the listed

debt instruments issued by the Bank; in this regard, the

Bank has estimated different interest rate curves

depending on the currency and economic environment in

which the contracts are located.

In order to construct the incremental borrowing rate, a

methodology has been developed at the corporate level.

This methodology is based on the need for each entity to

consider its economic and financial situation, for which

the following factors must be considered:

• Economic and political situation (country risk).

• Credit risk of the company.

• Monetary policy.

• Volume and seniority of the company’s debt

instrument issues.

The incremental borrowing rate is defined as the interest

rate that a lessee would have to pay for borrowing, given

a similar period to the duration of the lease and with

similar security, the funds necessary to obtain an asset

of similar value to the right-of-use asset in a similar

economic environment. The Group entities have a wide

stock and variety of financing instruments issued in

different currencies to that of the euro (pound, dollar,

etc.) that provide sufficient information to be able to

determine an 'all in rate' (reference rate plus adjustment

for credit spread at different terms and in different

currencies) . In circumstances, where the Bank, has its

own financing, this has been used as the starting point

for determining the incremental borrowing rate.

Right-of-use assets are valued at cost which includes the

following:

• The amount of the initial measurement of the lease

liability.

• Any lease payment made at or before the

commencement date less any lease incentive

received.

• Any initial direct costs.

• Restoration costs.

Banco Santander recognises the payments associated

with short-term leases and leases of low-value assets on

a straight-line basis as an expense in the income

statement. Short-term leases are leases with a lease

term less than or equal to 12 months (a lease that

contains a purchase option is not a short term lease).

l) Intangible assets

Intangible assets are identifiable non-monetary assets

(separable from other assets) without physical

substance which arise as a result of a legal transaction or

which are developed internally by Banco Santander.

Only assets whose cost can be measured reliably and it

is likely that the Bank obtains future economic benefits

are recognised.

Intangible assets are recognised initially at acquisition or

production cost and are subsequently measured at cost

less any accumulated amortisation and any accumulated

impairment losses.

i. Goodwill

Any excess of the cost of the investments in the

subsidiaries, joint ventures and associates accounted for

using the equity method over the corresponding

underlying carrying amounts acquired, adjusted at the

date of first-time consolidation, is allocated as follows:

• If it is attributable to specific assets and liabilities of

the companies acquired, by increasing the value of

the assets (or reducing the value of the liabilities)

whose fair values were higher (lower) than the

carrying amounts at which they had been recognised

in the acquired entities’ balance sheets.

38

• If it is attributable to specific intangible assets, by

recognising it explicitly in the balance sheet provided

that the fair value of these assets within twelve

months following the date of acquisition can be

measured reliably.

▪ The remaining amount is recognised as goodwill,

which is allocated to one or more cash-generating

units (CGU) (a cash-generating unit is the smallest

identifiable group of assets that, as a result of

continuing operation, generates cash inflows that are

largely independent of the cash inflows from other

assets or groups of assets). The cash-generating

units represent the Bank’s geographical and/or

business segments.

Goodwill (only recognised when it has been acquired by

consideration) represents, therefore, a payment made by

the acquirer in anticipation of future economic benefits

from assets of the acquired entity that are not capable of

being individually identified and separately recognised.

Goodwill, in accordance with Bank of Spain Circular

4/2017, is to be amortized over a 10-year period unless

otherwise stated. The debits to the income statements

for the amortisation of these assets are recorded under

the section ‘Amortisation’ in the income statement.

At the end of each annual reporting period or whenever

there is any indication of impairment goodwill is

reviewed for impairment (i.e. a reduction in its

recoverable amount to below its carrying amount) and, if

there is any impairment, the goodwill is written down

with a charge to 'Impairment or reversal of impairment

on non-financial assets, net - Intangible assets' in the

income statement.

An impairment loss recognised for goodwill is not

reversed in a subsequent period.

In the event of sale or departure of an activity that is part

of a CGU, the part of the goodwill that can be assigned to

said activity would be written-off, taking as a reference

the relative value of the same over the total of the CGU

at the time of sale or abandonment. If applicable, the

distribution by currency of the remaining goodwill will

be performed based on the relative values of the

remaining activities.

ii. Other intangible assets

Other intangible assets includes the amount of

identifiable intangible assets, such as purchased

customer lists and computer software.

In accordance with Rule Twenty Eight of Bank of Spain

Circular 4/2017, for the financial statements (individual

and consolidated) not subject to the framework of

International Financial Reporting Standards, intangible

assets will be considered assets with a limited useful

life.

An intangible assets useful life may not exceed the

period during which the entity is entitled to use the

asset. If the right of use is for a limited period that can be

renewed, the useful life will include the renewal period

only when there is evidence that the renewal will be

carried out without significant cost.

Intangible assets shall be amortized in accordance with

their useful life. Banco Santander reviews, at least at the

end of each year, the amortisation period and the

amortisation method of each of its intangible assets and,

if it considers that they are not appropriate, the impact

will be treated as a change in its accounting estimates.

The intangible asset amortisation charge is recognised

under 'Depreciation and amortisation' in the income

statement.

In both cases Banco Santander recognises any

impairment loss on the carrying amount of these assets

with a charge to 'Impairment or reversal of impairment

on non-financial assets, net - Intangible assets in the

income statement.

The criteria used to recognise the impairment losses on

these assets and, where applicable, the reversal of

impairment losses recognised in prior years are similar

to those used for tangible assets (see note 2.j).

Internally developed computer software

Internally developed computer software is recognised as

an intangible asset if, among other requisites (basically

the Bank’s ability to use or sell it), it can be identified and

its ability to generate future economic benefits can be

demonstrated.

Expenditure on research activities is recognised as an

expense in the year in which it is incurred and cannot be

subsequently capitalised into the carrying amount of the

intangible asset.

m) Other assets

Other assets' in the balance sheet includes the amount

of assets not recorded in other items, the breakdown

being as follows:

• Inventories: this item includes the amount of assets,

other than financial instruments, that are held for

sale in the ordinary course of business, that are in the

process of production, construction or development

for such purpose, or that are to be consumed in the

production process or in the provision of services.

Inventories include land and other property held for

sale in the property development business.

Inventories are measured at the lower of cost and

net realisable value, which is the estimated selling

price of the inventories in the ordinary course of

business, less the estimated costs of completion and

the estimated costs required to make the sale.

39

Any write-downs of inventories -such as those due to

damage, obsolescence or reduction of selling price-

to net realisable value and other impairment losses

are recognised as expenses for the year in which the

impairment or loss occurs. Subsequent reversals are

recognised in the income statement for the year in

which they occur.

The carrying amount of inventories is derecognised

and recognised as an expense in the period in which

the revenue from their sale is recognised.

▪ Other: this item includes the balance of all

prepayments and accrued income (excluding accrued

interest, fees and commissions), the net amount of

the difference between pension plan obligations and

the value of the plan assets with a balance in the

entity’s favour, when this net amount is to be

reported in the balance sheet, and the amount of any

other assets not included in other items.

n) Other liabilities

'Other liabilities' includes the balance of all accrued

expenses and deferred income, excluding accrued

interest, and the amount of any other liabilities not

included in other categories.

o) Provisions and contingent liabilities (assets)

When preparing the financial statements of the Bank,

Banco Santander’s directors made a distinction between:

• Provisions: credit balances covering present

obligations at the reporting date arising from past

events which could give rise to a loss for the Banco

Santander, which is considered to be likely to occur

and certain as to its nature but uncertain as to its

amount and/or timing.

▪ Contingent liabilities: possible obligations that arise

from past events and whose existence will be

confirmed only by the occurrence or non-occurrence

of one or more future events not wholly within the

control of the Bank. They include the present

obligations of the Bank when it is not probable that

an outflow of resources embodying economic

benefits will be required to settle them. Banco

Santander does not recognise the contingent liability.

The Bank will disclose a contingent liability, unless

the possibility of an outflow of resources embodying

economic benefits is remote.

▪ Contingent assets: possible assets that arise from

past events and whose existence is conditional on,

and will be confirmed only by, the occurrence or non-

occurrence of one or more uncertain future events

not wholly within the control of the Bank. Contingent

assets are not recognised in the balance sheet or in

the income statement, but rather are disclosed in the

notes, provided that it is probable that these assets

will give rise to an increase in resources embodying

economic benefits.

Banco Santander´s financial statements include all the

material provisions with respect to which it is considered

that it is more likely than not the obligation will have to

be settled. In accordance with accounting standards,

contingent liabilities must not be recognised in the

consolidated financial statements, but must rather be

disclosed in the Notes.

Provisions (which are quantified on the basis of the best

information available on the consequences of the event

giving rise to them and are reviewed and adjusted at the

end of each year) are used to cater for the specific

obligations for which they were originally recognised.

Provisions are fully or partially reversed when such

obligations cease to exist or are reduced.

Provisions are classified according to the obligations

covered as follows (see note 23):

• Provision for pensions and similar obligations:

includes the amount of all the provisions made to

cover post-employment benefits, including

obligations to pre-retirees and similar obligations.

• Provisions for contingent liabilities and

commitments: include the amount of the provisions

made to cover contingent liabilities -defined as those

transactions in which the Bank guarantees the

obligations of a third party, arising as a result of

financial guarantees granted or contracts of another

kind- and contingent commitments -defined as

irrevocable commitments that may give rise to the

recognition of financial assets.

• Provisions for taxes and other legal contingencies

and Other provisions: include the amount of the

provisions recognised to cover tax and legal

contingencies and litigation and the other provisions

recognised by Banco Santander. Other provisions

includes, inter alia, any provisions for restructuring

costs and environmental measures.

p) Court proceedings and/or claims in process

At the end of 2024 certain court proceedings and claims

were in process against Banco Santander arising from

the ordinary course of their operations (see note 23).

q) Own equity instruments

Own equity instruments are those meeting both of the

following conditions:

▪ The instruments do not include any contractual

obligation for the issuer (i) to deliver cash or another

financial asset to a third party; or (ii) to exchange

financial assets or financial liabilities with a third

party under conditions that are potentially

unfavourable to the issuer.

40

▪ The instruments will or may be settled in the issuer’s

own equity instruments and are: (i) a non-derivative

that includes no contractual obligation for the issuer

to deliver a variable number of its own equity

instruments; or (ii) a derivative that will be settled by

the issuer through the exchange of a fixed amount of

cash or another financial asset for a fixed number of

its own equity instruments.

Transactions involving own equity instruments, including

their issuance and cancellation, are charged directly to

equity.

Changes in the value of instruments classified as own

equity instruments are not recognised in the financial

statements. Consideration received or paid in exchange

for such instruments, including the coupons on

preference shares contingently convertible into ordinary

shares and the coupons associated with CCPP, is directly

added to or deducted from equity.

r) Equity-instrument-based employee remuneration

Own equity instruments delivered to employees in

consideration for their services, if the instruments are

delivered once the specific period of service has ended,

are recognised as an expense for services (with the

corresponding increase in equity) as the services are

rendered by employees during the service period. At the

grant date the services received (and the related increase

in equity) are measured at the fair value of the equity

instruments granted. If the equity instruments granted

are vested immediately,   Banco Santander recognises in

full, at the grant date, the expense for the services

received.

When the requirements stipulated in the remuneration

agreement include external market conditions (such as

equity instruments reaching a certain quoted price), the

amount ultimately to be recognised in equity will

depend on the other conditions being met by the

employees (normally length of service requirements),

irrespective of whether the market conditions are

satisfied.

If the conditions of the agreement are met but the

external market conditions are not satisfied, the

amounts previously recognised in equity are not

reversed, even if the employees do not exercise their

right to receive the equity instruments.

s) Recognition of income and expenses

The most significant criteria used by Banco Santander to

recognise its income and expenses are summarised as

follows:

i. Interest income, interest expenses and similar items

Interest income, interest expenses and similar items are

generally recognised on an accrual basis using the

effective interest method. Dividends received from other

companies are recognised as income when the Banco

Santander right to receive them arises.

ii. Commissions, fees and similar items

Fee and commission income and expenses are

recognised in the income statement using criteria that

vary according to their nature. The main criteria are as

follows:

• Fee and commission income and expenses relating to

financial assets and financial liabilities measured at

fair value through profit or loss are recognised when

paid.

• Those arising from transactions or services that are

performed over a period of time are recognised over

the life of these transactions or services.

• Those relating to services provided in a single act are

recognised when the single act is carried out.

iii. Non-finance income and expenses

They are recognised for accounting purposes when the

good is delivered or the non-financial service is rendered.

To determine the amount and timing of recognition, a

five-step model is followed: identification of the contract

with the customer, identification of the separate

obligations of the contract, determination of the

transaction price, distribution of the transaction price

among the identified obligations and finally recording of

income as the obligations are satisfied.

iv. Deferred collections and payments

These are recognised for accounting purposes at the

amount resulting from discounting the expected cash

flows at market rates.

v. Loan arrangement fees

Loan arrangement fees, mainly loan origination,

application and information fees, are accrued and

recognised in income over the term of the loan.

t) Financial guarantees

Financial guarantees are considered contracts that

require the issuer to make specific payments to

reimburse the creditor for the loss it incurs when a

specific debtor defaults on its due date payment

obligation in accordance with the original or modified

conditions of debt instrument, regardless of its legal

form, which may be, among others, a deposit, financial

guarantee, insurance contract or credit derivative.

Banco Santander initially recognises the financial

guarantees provided on the liability side of the balance

sheet at fair value, which is generally the present value

of the fees, commissions and interest receivable from

these contracts over the term thereof, and

simultaneously the Bank recognises the amount of the

fees, commissions and similar interest received at the

inception of the transactions and a credit on the asset

side of the balance sheet for the present value of the

fees, commissions and interest outstanding.

41

Financial guarantees, regardless of the guarantor,

instrumentation or other circumstances, are reviewed

periodically so as to determine the credit risk to which

they are exposed and, if appropriate, to consider

whether a provision is required. The credit risk is

determined by application of criteria similar to those

established for quantifying impairment losses on debt

instruments carried at amortised cost (described in note

2.g above).

The provisions made for these transactions are

recognised under 'Provisions - Provisions for

commitments and guarantees given in the consolidated

balance sheet' (see note 23). These provisions are

recognised and reversed with a charge or credit,

respectively, to 'Provisions or reversal of provisions', net,

in the income statement.

u) Post-employment benefits

Under the collective agreements currently in force and

other arrangements, the Spanish banks included in the

Group and certain other Spanish and foreign

consolidated entities have undertaken to supplement

the public social security system benefits accruing to

certain employees, and to their beneficiary right holders,

for retirement, permanent disability or death, and the

post-employment welfare benefits.

Banco Santander’s post-employment obligations to its

employees are deemed to be defined contribution plans

when the Bank makes pre-determined contributions

(recognised under Personnel expenses in the income

statement) to a separate entity and will have no legal or

effective obligation to make further contributions if the

separate entity cannot pay the employee benefits

relating to the service rendered in the current and prior

periods. Post-employment obligations that do not meet

the aforementioned conditions are classified as defined

benefit plans (see note 23).

Defined contribution plans

The contributions made in this connection in each year

are recognised under 'Personnel expenses' in the income

statement.

The amounts not yet contributed at each year-end are

recognised, at their present value, under 'Provisions -

Provision for pensions' and similar obligations on the

liability side of the balance sheet.

Defined benefit plans

Banco Santander recognises under 'Provisions - Provision

for pensions and similar obligations on the liability side

of the balance sheet' (or under 'Other assets' on the

asset side, as appropriate) the present value of its

defined benefit post-employment obligations, net of the

fair value of the plan assets.

Plan assets are defined as those that will be directly

used to settle obligations and that meet the following

conditions:

• They are not owned by Banco Santander, but by a

legally separate third party that is not a party related

to the Bank.

• They are only available to pay or fund post-

employment benefits and they cannot be returned to

the Bank unless the assets remaining in the plan are

sufficient to meet all the benefit obligations of the

plan and of the entity to current and former

employees, or they are returned to reimburse

employee benefits already paid by the Bank.

If Banco Santander can look to an insurer to pay part or

all of the expenditure required to settle a defined benefit

obligation, and it is practically certain that said insurer

will reimburse some or all of the expenditure required to

settle that obligation, but the insurance policy does not

qualify as a plan asset, the  Bank recognises its right to

reimbursement -which, in all other respects, is treated as

a plan asset- under 'Insurance contracts linked to

pensions' on the asset side of the  balance sheet.

Banco Santander will recognise the following items in

the income statement:

• Current service cost, (the increase in the present

value of the obligations resulting from employee

service in the current period), is recognised under

'Staff costs'.

• The past service cost, which arises from changes to

existing post-employment benefits or from the

introduction of new benefits and includes the cost of

reductions, is recognised under 'Provisions or

reversal of provisions'.

• Any gain or loss arising from a liquidation of the plan

is included in the 'Provisions or reversion of

provisions'.

• Net interest on the net defined benefit liability

(asset), i.e. the change during the period in the net

defined benefit liability (asset) that arises from the

passage of time, is recognised under 'Interest

expense' and similar charges ('Interest and similar

income' if it constitutes income) in the income

statement.

The remeasurement of the net defined benefit liability

(asset) is recognised in 'Other comprehensive income'

under Items not reclassified to profit or loss and

includes:

• Actuarial gains and losses generated in the year,

arising from the differences between the previous

actuarial assumptions and what has actually

occurred and from the effects of changes in actuarial

assumptions.

• The return on plan assets, excluding amounts

included in net interest on the net defined benefit

liability (asset).

42

• Any change in the effect of the asset ceiling,

excluding amounts included in net interest on the net

defined benefit liability (asset).

v) Other long-term employee benefits

Other long-term employee benefits, defined as

obligations to pre-retirees -taken to be those who have

ceased to render services at the entity but who, without

being legally retired, continue to have economic rights

vis-à-vis the entity until they acquire the legal status of

retiree-, long-service bonuses, obligations for death of

spouse or disability before retirement that depend on

the employee’s length of service at the entity and other

similar items, are treated for accounting purposes,

where applicable, as established above for defined

benefit post-employment plans, except that actuarial

gains and losses are recognised under 'Provisions or

reversal of provisions', net, in the income statement (see

note 23).

w) Termination benefits

Termination benefits are recognised when there is a

detailed formal plan identifying the basic changes to be

made, provided that implementation of the plan has

begun, its main features have been publicly announced

or objective facts concerning its implementation have

been disclosed.

x) Income tax

The income tax expense is recognised in the income

statement, except when they arise from a transaction

whose results are recognised directly in equity.

The current income tax expense is calculated as the sum

of the current tax resulting from application of the

appropriate tax rate to the taxable profit for the year (net

of any deductions allowable for tax purposes), and of the

changes in deferred tax assets and liabilities recognised

in the income statement.

'Deferred tax assets' and liabilities include temporary

differences, which are identified as the amounts

expected to be payable or recoverable on differences

between the carrying amounts of assets and liabilities

and their related tax bases, and tax loss and tax credit

carryforwards. These amounts are measured at the tax

rates that are expected to apply in the period when the

asset is realised or the liability is settled.

'Tax assets' include the amount of all tax assets, which

are broken down into current -amounts of tax to be

recovered within the next twelve months- and deferred -

amounts of tax to be recovered in future years, including

those arising from tax loss or tax credit carryforwards.

Tax liabilities' includes the amount of all tax liabilities

(except provisions for taxes), which are broken down

into current -the amount payable in respect of the

income tax on the taxable profit for the year and other

taxes in the next twelve months- and deferred -the

amount of income tax payable in future years.

Deferred tax liabilities are recognised in respect of

taxable temporary differences associated with

investments in subsidiaries, associates or joint ventures,

except when the Bank is able to control the timing of the

reversal of the temporary difference and, in addition, it is

probable that the temporary difference will not reverse

in the foreseeable future .

Deferred tax assets are only recognised for temporary

differences to the extent that it is considered probable

that the Bank will have sufficient future taxable profits

against which the deferred tax assets can be utilised, and

the deferred tax assets do not arise from, in its initial

recognition of (i)a business combination, (ii) an operation

that does not affect either the tax result or the

accounting result or (iii) on the date of the transaction,

does not generate deductible and taxable temporary

differences for the same amount (in which case assets

and deferred tax liabilities). Other deferred tax assets

(tax loss and tax credit carryforwards) are only

recognised if it is considered probable that the Bank

entities will have sufficient future taxable profits against

which they can be utilised.

Differences generated by the different accounting and

tax treatment of any of the income and expenses

recorded directly in equity to be paid or recovered in the

future are accounted for as temporary differences. The

deferred tax assets and liabilities are reassessed at the

reporting date in order to ascertain whether any

adjustments need to be made on the basis of the

findings of the analyses performed.

Regarding taxes on profits arising from the application of

tax laws for the implementation of the Pillar Two model

rules, including those related to national minimum

complementary taxes, the Group applies the mandatory

and temporary exception to the recognition of deferred

tax assets and liabilities derived from said tax laws (see

note 27.f).

y) Residual maturity periods

In note 49 it is provided on analysis of the maturities of

the balances of certain items in the balance sheet.

Grupo and Banco Santander have recorded as 'time

liabilities' those recognised financial liabilities in which

the counterparty may require payments.

Likewise, when Grupo and Banco Santander have

committed to having amounts available at different

maturity periods, these amounts have been recorded in

the first year in which they may be required.

Additionally, for the financial guarantee contracts issued,

the Group and the Bank have recorded the maximum

amount of the financial guarantee issued in the first year

in which the guarantee can be executed.

z) Statement of recognised income and expenses

This statement presents the income and expenses

generated by the Bank as a result of its business activity

43

in the year, and a distinction is made between the

income and expenses recognised in the income

statement for the year and the other income and

expenses recognised directly in equity.

Accordingly, this statement presents:

a. The profit for the year.

b. The net amount of the income and expenses

recognised in 'Other comprehensive income' under

items that will not be reclassified to profit or loss.

c. The net amount of the income and expenses

recognised in Other comprehensive income under

items that may be reclassified subsequently to profit

or loss.

d. The income tax incurred in respect of the items

indicated in b and c above, except for the valuation

adjustments arising from investments in associates

or joint ventures accounted for using the equity

method, which are presented net.

e. Total recognised income and expense, calculated as

the sum of a) to d) above .

The statement presents the items separately by nature,

grouping together items that, in accordance with the

applicable accounting standards, will not be reclassified

subsequently to profit and loss since the requirements

established by the corresponding accounting standards

are met.

aa) Statement of changes in total equity

This statement presents all the changes in equity,

including those arising from changes in accounting

policies and from the correction of errors. Accordingly,

this statement presents a reconciliation of the carrying

amount at the beginning and end of the year of all the

equity items, and the changes are grouped together on

the basis of their nature into the following items:

a. Adjustments due to changes in accounting policies

and to errors: include the changes in equity arising as

a result of the retrospective restatement of the

balances in the financial statements, distinguishing

between those resulting from changes in accounting

policies and those relating to the correction of errors.

b. Income and expense recognised in the year: includes,

in aggregate form, the total of the aforementioned

items recognised in the statement of recognised

'Income and expense'.

c. Other changes in equity: includes the remaining

items recognised in equity, including, inter alia,

increases and decreases in capital, distribution of

profit, transactions involving own equity

instruments, equity-instrument-based payments,

transfers between equity items and any other

increases or decreases in equity.

ab) Statement of cash flows

The following terms are used in the statements of cash

flows with the meanings specified:

• Cash flows: inflows and outflows of cash and cash

equivalents, which are short-term, highly liquid

investments that are subject to an insignificant risk

of changes in value, irrespective of the portfolio in

which they are classified.

Banco Santander classifies as cash and cash

equivalents the balances recognised under 'Cash,

cash balances at central banks' and 'Other deposits

on demand' in the balance sheet.

• Operating activities: the principal revenue-producing

activities of credit institutions and other activities

that are not investing or financing activities.

• Investing activities: the acquisition or disposal of

long-term assets and other investments not included

in cash and cash equivalents.

• Financing activities: activities that result in changes

in the size and composition of the equity and

liabilities that are not operating activities.

During 2024, Banco Santander received interest

amounting to EUR 27,005 million and paid interest

amount to EUR 20,122 million (EUR 21,660 and 14,995

million, respectively, in 2023).

Also, the dividends received and paid by Banco

Santander are detailed in notes 4 and 36.

3. Grupo Santander

a) Banco Santander, S.A. and international Group

structure

The growth of Grupo Santander in the last decades has

led Banco Santander to also act, in practice, as a holding

entity of the shares of the various companies in its

Group, and its results are becoming progressively less

representative of the performance and earnings of the

Group. Therefore, each year the bank determines the

amount of the dividends to be distributed to its

shareholders on the basis of the consolidated net profit,

while maintaining the Group’s objectives of

capitalisation and taking into account that the

transactions of the Bank and of the rest of the Group are

managed on a consolidated basis (notwithstanding the

allocation to each company of the related net worth

effect).

At the international level, the various banks and other

subsidiaries, joint ventures and associates of the Group

are integrated in a corporate structure comprising

various holding companies which are the ultimate

shareholders of the banks and subsidiaries abroad.

44

The purpose of this structure, all of which is controlled

Banco Santander, is to optimise the international

organisation from the strategic, economic, financial and

tax standpoints, since it makes it possible to define the

most appropriate units to be entrusted with acquiring,

selling or holding stakes in other international entities,

the most appropriate financing method for these

transactions and the most appropriate means of

remitting the profits obtained by the group’s various

operating units to Spain.

The Appendices provide relevant data on the

consolidated group companies and on the companies

accounted for using the equity method.

b)  Acquisitions and disposals

Following is a summary of the main acquisitions and

disposals of ownership interests in the share capital of

other entities and other significant corporate

transactions performed in the last two years or pending

to be completed:

i. Agreement for the sale of the stake in Caceis

On 19 December 2024, Grupo Santander signed an

agreement with Crédit Agricole S.A. for the sale of its

30.5% stake in the share capital of CACEIS. Following the

execution of the planned transaction, Crédit Agricole S.A.

will control 100% of the share capital of CACEIS.

The transaction will generate an increase of around 10

basis points on the fully loaded CET1 ratio and will not

have a material impact on the Group's results or

earnings per share.

The closing of the transaction is subject to the usual

conditions for this type of transaction, including

obtaining the relevant regulatory authorizations, which

is expected to occur throughout 2025.

As a result of the above, as of 31 December 2024, this

participation has been reclassified, at its carrying value,

from the caption 'investments' to the caption 'Non-

current assets held for sale' in the consolidated balance

sheet.

The joint depositary, custody and asset servicing services

business of Grupo Santander and CACEIS in Latin

America is not included in the scope of the transaction

and will continue to be jointly controlled by Grupo

Santander and CACEIS.

ii.Accelerated placement of ordinary shares of Santander

Bank Polska 

On September 10, 2024, Banco Santander, S.A.

announced an accelerated placement of 5,320,000

ordinary shares of its subsidiary Santander Bank Polska

S.A., representing approximately 5.2% of its share

capital, at a price of PLN 463 (EUR 108) per ordinary

share. The transaction was settled on September 13,

with the total transaction amounting to PLN

2,463 million (EUR 575 million). Banco Santander will

continue to hold a majority stake in Santander Bank

Polska .S.A of 62.2% of the share capital (prior to this

transaction, the percentage of participation was 67.4%).

This sale has resulted in an increase in reserves and

valuation adjustments of EUR 158 million and EUR

57 million, respectively, and an increase in minority

equity of EUR 360 million.

iii.Tender offers for shares of Banco Santander México,

S.A., Institución de Banca Múltiple, Grupo Financiero

Santander México

On 21 October 2022, Banco Santander, S.A. ('Banco

Santander') announced that it intends to make

concurrent cash tender offers to acquire all of the shares

of Banco Santander México, S.A., Institución de Banca

Múltiple, Grupo Financiero Santander México

('Santander Mexico') in Mexico (Shares) and United

States (American Depositary Shares ('ADSs')) which were

not owned by Grupo Santander, which amount to

approximately  3.76% of Santander Mexico’s share

capital.

The offers were launched on 7 February 2023 and were

originally scheduled to close on 8 March 2023. On 1

March 2023, Banco Santander announced its decision to

extend the expiration date of the offers so that they

could be concluded on 10 April 2023. Finally, after the

offers' closing, 3.6% of the capital accepted the offer,

which raised the Group's stake in Santander México from

96.2% to 99.8% will be settled on 13 March 2023.

Shareholders who participated in the offerings received

24.52 Mexican pesos (approximately EUR 1.20 ) per

Share and USD 6.6876 in cash for each ADS (i.e., the

equivalent in United States dollars of 122.6 Mexican

pesos in cash for each ADS at the US dollar/Mexican peso

exchange rate on the expiration date of 10 April

2023),which corresponded to the book value of the

Santander México share according to the quarterly

report of Santander México corresponding to the fourth

quarter of the year 2022 in accordance with applicable

legislation, with a total disbursement by Banco

Santander of approximately EUR 300 million.

The operation led to an increase of EUR 13 million in

Reserves and a decrease of EUR 313 million in minority

interests of the consolidated balance sheet.

Once the offers were concluded and settled, Banco

Santander proceeded to: (i) withdraw the ADSs from the

listing on the New York Stock Exchange ('NYSE') and the

Shares from the registry before the Securities and

Exchange Commission ('SEC') in the United States and;

(ii) cancel the registration of the Shares in the National

Securities Registry of the National Banking and Securities

Commission ('CNBV') and withdraw the listing of the

Shares in the Mexican Stock Exchange, S.A.B. de C.V.

('BMV'). Said cancellation was approved by the

extraordinary general shareholders' meeting of

Santander México held on 30 November 2022, with the

favourable vote of the holders of the shares that

45

represent more than 95% of the shares of Santander

Mexico, as required by the Mexican Securities Market

La w.

Pursuant to Mexican law, on 12 May 2023, Banco

Santander and Santander México established a trust (the

'Repurchase Trust'), to which the holders of the Shares

that remain outstanding after the conclusion of the

offers, to sell said Shares to the repurchase trust, at the

same cash price that would have been paid to them in

the Mexican offer with respect to the same. At the end of

the year, said trust has already been liquidated and the

Group's effective participation amounts to 99.98% .

iv.  Agreement to acquire a significant holding in Ebury

Partners Limited

On 28 April 2020, the investment announced on 4

November 2019 in Ebury, a payments and foreign

exchange platform for SMEs, was completed. The

transaction involved a total disbursement of GBP

357 million (approximately EUR 409 million) of which

GBP 70 million (approximately EUR 80 million ) was for

new shares. By the end of 2019, the Group had already

acquired 6.4% of the company for GBP 40 million

(approximately EUR 45 million). Following the

disbursement made in April 2020, which gave the Group

50.38% of the economic rights of the company, without

the conditions to obtain control being met, this interest

was recorded under 'Investments  - Associated entities'

in the consolidated balance sheet.

In April 2022 Grupo Santander acquired a new package

of shares for GBP 113 million (approximately EUR

135 million) and subscribed in full to a new capital

increase, paying an additional GBP 60 million

(approximately EUR 72 million ). Following these

transactions, the Group holds 66.54% of the economic

rights and control of the company.

The total value of the net assets identified in the

business combination amounted to EUR 413 million,

mainly intangible assets (IT developments, customer

lists and brand) and resulted in the recognition of

goodwill of EUR 316 million .

No gain or loss was recorded for the difference between

the book value and the fair value of the previous holding

as this difference was not significant.

v. Purchase by SHUSA for shares of Santander Consumer

USA

In August 2021 Santander Holdings USA, Inc. ('SHUSA')

and Santander Consumer USA Holdings Inc. ('SC')

entered into a definitive agreement pursuant to which

SHUSA acquired all outstanding shares of common stock

of SC not already owned by SHUSA via an all-cash tender

offer (the 'Tender Offer') for USD 41.50 per SC common

share (the 'Offer Price'), followed by a second-step

consisting of a merge (together with the Offer, the

'Transaction') in which a wholly owned subsidiary of

SHUSA was merged with and into SC, with SC surviving

as a wholly owned subsidiary of SHUSA, and all

outstanding shares of common stock of SC not tendered

in the Tender Offer were converted into the right to

receive the Offer Price in cash. The Offer Price

represented a 14% premium to the closing price of SC

common stock of USD 36.43 as of 1 July 2021, the last

day prior to the announcement of SHUSA’s initial offer to

acquire the remaining outstanding shares of SC’s

common stock.

On 31 January 2022, after completion of the customary

closing conditions, the Transaction was performed and

SHUSA increased its share up to the 100% of SC's

common stock. The transaction  meant a disbursement

of USD 2,510 million (around EUR 2,239 million) for the

Group, with a decrease of reserves of EUR 487 million

and a decrease of EUR 1,752 million of minority

interests.

vi. Acquisition of Amherst Pierpont Securities LLC, a US

fixed-income broker dealer

On 15 July 2021, Santander Holdings USA, Inc. (SHUSA),

reached an agreement to acquire Amherst Pierpont

Securities LLC, a market-leading independent fixed-

income and structured products broker dealer, through

the acquisition of its parent holding company, Pierpont

Capital Holdings LLC, for a total consideration of

approximately USD 450 million (around EUR

405 million ). The operation was closed on 11 April 2022

once the pertinent regulatory approvals have been

obtained. Immediately after the acquisition, SHUSA lent

financing to the company for an amount of USD

163 million (approximately EUR 147 million ), which the

company used to cancel debt with third parties. Amherst

Pierpont Securities LLC (now Santander Capital Holdings

LLC, see note 17) is part of Santander Corporate &

Investment Banking, Global business line.

The business combination meant the recognition of a

goodwill of EUR 158 million and EUR 24 million of

intangible assets (mainly relationships with customers)

identified in the purchase price allocation, without other

relevant value adjustments to net assets of the business.

46

c) Offshore entities

Spanish regulation

According to current Spanish regulation (Law 11/2021,

of 9 July, Royal Decree 1080/1991, of 5 July and Order

HFP/115/2023, of 9 February), Grupo Santander has

three branches in the non-cooperative jurisdictions of

Jersey, the Isle of Man and the Cayman Islands (offshore

entities). Santander also has two other subsidiaries

incorporated in non-cooperative jurisdictions that are tax

resident in the UK and subject to British tax law.

i. Offshore subsidiaries

A subsidiary resident in Jersey was liquidated during

2024 so, at the reporting date, Grupo Santander does not

have subsidiaries in non-cooperative jurisdictions.

ii. Offshore branches

Grupo Santander has three offshore branches in the

Cayman Islands, the Isle of Man and Jersey. They report

to, and consolidate balance sheets and income

statements with, their foreign headquarters. They are

taxed either with their headquarters (the Cayman Islands

branch in Brazil) or in the territories they are located in

(Jersey and Isle of Man, pertain to the UK).

These three offshore branches have a total of

167employees as of December 2024.

iii. Subsidiaries in non-cooperative jurisdictions that are

tax resident in the United Kingdom

Grupo Santander also has two subsidiaries that were

incorporated in offshore jurisdictions ( one in Bermuda

without activity and one in Guernsey with leasing

activity), but are not deemed offshore entities because

they only operate from and are tax resident in the UK

and, thus, are subject to British tax law.

iv. Other offshore holdings

From Brazil, Grupo Santander manages Santander Brazil

Global Investment Fund SPC, a segregated portfolio

company located in the Cayman Islands. The Group also

has other non-controlling financial interest of a reduced

amount in entities located in non-cooperative

jurisdictions.

The European Union (EU)

In February 2025, the Council of the EU updated the

blacklist of non-cooperative jurisdictions for tax

purposes, which currently contains 11 jurisdictions.

Additionally, the EU grey list comprises 8 jurisdictions

which have sufficiently committed to adapt their

legislation to international tax standards, subject to

monitoring by the EU. Both lists are subject to

permanent review and update. Santander is not present

in any of the countries and territories included in these

lists.

Organization for Economic Cooperation and

Development (OECD)

Grupo Santander is not present in any jurisdiction non-

compliant with both OECD standards on transparency and

exchange of information for tax purposes (Automatic

exchange of information standard -AEOI- and Exchange of

information on request standard -EOIR-), according to the

last annual report of the OECD Global Forum on

Transparency and Exchange of Information for Tax

Purposes released in November 2024.

However, although The Bahamas and Chile -jurisdictions

where the Group is present- have complete legal and

regulatory frameworks in place for the application of the

AEOI standard, they need to improve the effectiveness of

this standard.

The Group's presence in offshore territories at the end of

2024 is as follows:

Presence of the Group in non- cooperative jurisdictions a	Spanish legislation		Council of the EU blacklist		OECDb
	Sub.	Branch	Sub.	Branch	Sub.	Branch
Jersey		1
Isle of Man		1
Cayman Islands		1
2024	—	3	—	—	—	—
2023c	1	3	1	1	—	—

a. Additionally, there are one subsidiary constituted in Guernsey and one

in Bermuda, but residents for tax purposes in the UK.

b. Jurisdictions non-compliant with both OECD standards on

transparency and exchange of information for tax purposes (AEOI and

EOIR). Jersey, the Isle of Man and the Cayman Islands continue to fully

comply with both OECD standards.

c. At the end of 2023, The Bahamas was included in the EU blacklist,

having Santander one subsidiary and one branch in this territory. The

Bahamas was removed from this list in February 2024 update.

Grupo Santander has the right mechanisms (risk

management, supervision, verification and review plans,

and regular reporting) to prevent reputational, tax and

legal risk in entities resident in non-cooperative

jurisdictions. Grupo Santander also maintains its policy

of limiting and reducing its presence in non-cooperative

jurisdictions when possible.

PwC member firms audited the financial statements of

Grupo Santander’s offshore entities in 2024 and 2023.

d) Consolidated balance sheet, income statement,

statement of recognized income and expenses,

statement of changes in total equity and cash-flow

statement

PwC (PricewaterhouseCoopers) member firms audited

the financial statements of Grupo Santander’s offshore

entities in 2024 and 2023 :

47

CONSOLIDATED BALANCE SHEETS AS OF 31 DECEMBER 2024 AND 2023
EUR million

ASSETS	2024	2023A
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEPOSITS ON DEMAND	192,208	220,342
FINANCIAL ASSETS HELD FOR TRADING	230,253	176,921
Derivatives	64,100	56,328
Equity instruments	16,636	15,057
Debt securities	82,646	62,124
Loans and advances	66,871	43,412
Central banks	12,966	17,717
Credit institutions	27,314	14,061
Customers	26,591	11,634
NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS	6,130	5,910
Equity instruments	4,641	4,068
Debt securities	447	860
Loans and advances	1,042	982
Central banks	—	—
Credit institutions	—	—
Customers	1,042	982
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS	7,915	9,773
Debt securities	2,897	3,095
Loans and advances	5,018	6,678
Central banks	—	—
Credit institutions	408	459
Customers	4,610	6,219
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME	89,898	83,308
Equity instruments	2,193	1,761
Debt securities	76,558	73,565
Loans and advances	11,147	7,982
Central banks	—	—
Credit institutions	363	313
Customers	10,784	7,669
FINANCIAL ASSETS AT AMORTIZED COST	1,203,707	1,191,403
Debt securities	120,949	103,559
Loans and advances	1,082,758	1,087,844
Central banks	16,179	20,082
Credit institutions	55,537	57,917
Customers	1,011,042	1,009,845
HEDGING DERIVATIVES	5,672	5,297
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK	(704)	(788)
INVESTMENTS	7,277	7,646
Joint venture entities	2,061	1,964
Associated entities	5,216	5,682
ASSETS UNDER INSURANCE OR REINSURANCE CONTRACTS	222	237

48

ASSETS	2024	2023A
TANGIBLE ASSETS	32,087	33,882
Property, plant and equipment	31,212	32,926
For own-use	12,636	13,408
Leased out under an operating lease	18,576	19,518
Investment properties	875	956
Of which leased out under an operating lease	749	851
INTANGIBLE ASSETS	19,259	19,871
Goodwill	13,438	14,017
Other intangible assets	5,821	5,854
TAX ASSETS	30,596	31,390
Current tax assets	11,426	10,623
Deferred tax assets	19,170	20,767
OTHER ASSETS	8,559	8,856
Insurance contracts linked to pensions	81	93
Inventories	6	7
Other	8,472	8,756
NON-CURRENT ASSETS HELD FOR SALE	4,002	3,014
TOTAL ASSETS	1,837,081	1,797,062

A. Presented for comparison purposes only.

49

CONSOLIDATED BALANCE SHEETS AS OF 31 DECEMBER 2024 AND 2023
EUR million

LIABILITIES	2024	2023A
FINANCIAL LIABILITIES HELD FOR TRADING	152,151	122,270
Derivatives	57,753	50,589
Short positions	35,830	26,174
Deposits	58,568	45,507
Central banks	13,300	7,808
Credit institutions	26,284	17,862
Customers	18,984	19,837
Marketable debt securities	—	—
Other financial liabilities	—	—
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS	36,360	40,367
Deposits	28,806	34,996
Central banks	1,774	1,209
Credit institutions	1,625	1,735
Customers	25,407	32,052
Marketable debt securities	7,554	5,371
Other financial liabilities	—	—
Memorandum items: subordinated liabilities	—	—
FINANCIAL LIABILITIES AT AMORTIZED COST	1,484,322	1,468,703
Deposits	1,126,439	1,125,308
Central banks	24,882	48,782
Credit institutions	90,012	81,246
Customers	1,011,545	995,280
Marketable debt securities	317,967	303,208
Other financial liabilities	39,916	40,187
Memorandum items: subordinated liabilities	35,813	30,912
HEDGING DERIVATIVES	4,752	7,656
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK	(9)	55
LIABILITIES UNDER INSURANCE CONTRACTS	17,829	17,799
PROVISIONS	8,407	8,441
Pensions and other post-retirement obligations	1,731	2,225
Other long term employee benefits	915	880
Taxes and other legal contingencies	2,717	2,715
Contingent liabilities and commitments	710	702
Other provisions	2,334	1,919
TAX LIABILITIES	9,598	9,932
Current tax liabilities	3,322	3,846
Deferred tax liabilities	6,276	6,086
OTHER LIABILITIES	16,344	17,598
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE	—	—
TOTAL LIABILITIES	1,729,754	1,692,821

A. Presented for comparison purposes only.

50

CONSOLIDATED BALANCE SHEETS AS OF 31 DECEMBER 2024 AND 2023
EUR million

EQUITY	2024	2023A
SHAREHOLDERS´ EQUITY	135,196	130,443
CAPITAL	7,576	8,092
Called up paid capital	7,576	8,092
Unpaid capital which has been called up	—	—
SHARE PREMIUM	40,079	44,373
EQUITY INSTRUMENTS ISSUED OTHER THAN CAPITAL	—	720
Equity component of the compound financial instrument	—	—
Other equity instruments issued	—	720
OTHER EQUITY	217	195
ACCUMULATED RETAINED EARNINGS	82,326	74,114
REVALUATION RESERVES	—	—
OTHER RESERVES	(5,976)	(5,751)
Reserves or accumulated losses in joint venture investments	1,831	1,762
Others	(7,807)	(7,513)
(-) OWN SHARES	(68)	(1,078)
PROFIT OR LOSS ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT	12,574	11,076
(-) INTERIM DIVIDENDS	(1,532)	(1,298)
OTHER COMPREHENSIVE INCOME OR LOSS	(36,595)	(35,020)
Items that will not be reclassified to profit or loss	(4,757)	(5,212)
Items that may be reclassified to profit or loss	(31,838)	(29,808)
NON-CONTROLLING INTEREST	8,726	8,818
Other comprehensive income or loss	(2,020)	(1,559)
Other items	10,746	10,377
TOTAL EQUITY	107,327	104,241
TOTAL LIABILITIES AND EQUITY	1,837,081	1,797,062
MEMORANDUM ITEMS: OFF BALANCE SHEET AMOUNTS
Loan commitments granted	302,861	279,589
Financial guarantees granted	16,901	15,435
Other commitments granted	134,493	113,273

A. Presented for comparison purposes only.

51

CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR million

	(Debit) Credit
	2024	2023A
Interest income	112,735	105,252
Financial assets at fair value through other comprehensive income	7,324	5,995
Financial assets at amortized cost	84,309	77,701
Other interest income	21,102	21,556
Interest expense	(66,067)	(61,991)
Interest income/(charges)	46,668	43,261
Dividend income	714	571
Income from companies accounted for using the equity method	711	613
Commission income	17,602	16,321
Commission expense	(4,592)	(4,264)
Gain or losses on financial assets and liabilities not measured at fair value through profit or loss, net	(114)	96
Financial assets at amortized cost	(190)	(3)
Other financial assets and liabilities	76	99
Gain or losses on financial assets and liabilities held for trading, net	1,459	2,322
Reclassification of financial assets at fair value through other comprehensive income	—	—
Reclassification of financial assets at amortized cost	—	—
Other gains (losses)	1,459	2,322
Gains or losses on non-trading financial assets and liabilities mandatorily at fair value through profit or loss	495	204
Reclassification of financial assets at fair value through other comprehensive income	—	—
Reclassification of financial assets at amortized cost	—	—
Other gains (losses)	495	204
Gain or losses on financial assets and liabilities measured at fair value through profit or loss, net	691	(93)
Gain or losses from hedge accounting, net	16	63
Exchange differences, net	(274)	41
Other operating income	803	1,104
Other operating expenses	(2,324)	(2,827)
Income from insurance and reinsurance contracts	470	460
Expenses from insurance and reinsurance contracts	(449)	(449)
Total income	61,876	57,423
Administrative expenses	(22,740)	(22,241)
Staff costs	(14,328)	(13,726)
Other general administrative expenses	(8,412)	(8,515)
Depreciation and amortisation cost	(3,294)	(3,184)
Provisions or reversal of provisions, net	(3,883)	(2,678)
Impairment or reversal of impairment at financial assets not measured at fair value through  profit or loss and net gains and losses from changes	(12,644)	(12,956)
Financial assets at fair value through other comprehensive income	—	(44)
Financial assets at amortized cost	(12,644)	(12,912)
Impairment or reversal of impairment of investments in subsidiaries, joint ventures and associates, net	—	—
Impairment or reversal of impairment on non-financial assets, net	(628)	(237)
Tangible assets	(386)	(136)
Intangible assets	(231)	(73)
Others	(11)	(28)
Gain or losses on non-financial assets and investments, net	367	313
Negative goodwill recognized in results	—	39

52

	(Debit) Credit
	2024	2023A
Gains or losses on non-current assets held for sale not classified as discontinued operations	(27)	(20)
Operating profit/(loss) before tax	19,027	16,459
Tax expense or income from continuing operations	(5,283)	(4,276)
Profit/(loss) from continuing operations	13,744	12,183
Profit/(loss) after tax from discontinued operations	—	—
Profit/(loss) for the year	13,744	12,183
Profit/(loss) attributable to non-controlling interests	1,170	1,107
Profit/(loss) attributable to the parent	12,574	11,076
Earnings/(losses) per share
Basic	0.77	0.65
Diluted	0.77	0.65

A. Presented for comparison purposes only.

53

CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSE FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR million

	2024	2023A
CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR	13,744	12,183
OTHER RECOGNISED INCOME AND EXPENSE	(2,339)	614
Items that will not be reclassified to profit or loss	219	(964)
Actuarial gains and losses on defined benefit pension plans	(584)	(1,038)
Non-current assets held for sale	—	—
Other recognised income and expense of investments in subsidiaries, joint ventures and associates	(3)	(5)
Changes in the fair value of equity instruments measured at fair value through other comprehensive income	447	(162)
Gains or losses resulting from the accounting for hedges of equity instruments measured at fair value through other comprehensive income, net	—	—
Changes in the fair value of equity instruments measured at fair value through other comprehensive income (hedged item)	20	(29)
Changes in the fair value of equity instruments measured at fair value through other comprehensive income (hedging instrument)	(20)	29
Changes in the fair value of financial liabilities at fair value through profit or loss attributable to changes in credit risk	277	(120)
Income tax relating to items that will not be reclassified	82	361
Items that may be reclassified to profit or loss	(2,558)	1,578
Hedges of net investments in foreign operations (effective portion)	420	(1,888)
Revaluation gains (losses)	420	(1,888)
Amounts transferred to income statement	—	—
Other reclassifications	—	—
Exchanges differences	(3,047)	1,017
Revaluation gains (losses)	(3,047)	1,009
Amounts transferred to income statement	—	8
Other reclassifications	—	—
Cash flow hedges (effective portion)	558	2,592
Revaluation gains (losses)	(698)	(30)
Amounts transferred to income statement	1,256	2,622
Transferred to initial carrying amount of hedged items	—	—
Other reclassifications	—	—
Hedging instruments (items not designated)	—	—
Revaluation gains (losses)	—	—
Amounts transferred to income statement	—	—
Other reclassifications	—	—
Debt instruments at fair value with changes in other comprehensive income	(493)	858
Revaluation gains (losses)	(447)	852
Amounts transferred to income statement	(46)	6
Other reclassifications	—	—
Non-current assets held for sale	—	—
Revaluation gains (losses)	—	—
Amounts transferred to income statement	—	—
Other reclassifications	—	—
Share of other recognised income and expense of investments	(108)	19
Income tax relating to items that may be reclassified to profit or loss	112	(1,020)
Total recognised income and expenses for the year	11,405	12,797
Attributable to non-controlling interests	709	1,401
Attributable to the parent	10,696	11,396

A. Presented for comparison purposes only.

54

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023
EUR million

												Non-controlling interest
	Capital	Share premium	Equity instruments issued (not capital)	Other equity instruments	Accumulated retained earnings	Revaluation reserves	Other reserves	(-) Own shares	Profit attributable to shareholders of the parent	(-) Interim dividends	Other comprehensive income	Other comprehensive income	Other items	Total
Balance at 31 December 2023A	8,092	44,373	720	195	74,114	—	(5,751)	(1,078)	11,076	(1,298)	(35,020)	(1,559)	10,377	104,241
Adjustments due to errors	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Adjustments due to changes in accounting policies	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Opening balance at 1 January 2024 A	8,092	44,373	720	195	74,114	—	(5,751)	(1,078)	11,076	(1,298)	(35,020)	(1,559)	10,377	104,241
Total recognised income and expense	—	—	—	—	—	—	—	—	12,574	—	(1,878)	(461)	1,170	11,405
Other changes in equity	(516)	(4,294)	(720)	22	8,212	—	(225)	1,010	(11,076)	(234)	303	—	(801)	(8,319)
Issuance of ordinary shares	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Issuance of preferred shares	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Issuance of other financial instruments	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Maturity of other financial instruments	—	—	(751)	—	—	—	—	—	—	—	—	—	(590)	(1,341)
Conversion of financial liabilities into equity	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Capital reduction	(516)	(4,294)	—	—	—	—	516	4,294	—	—	—	—	(93)	(93)
Dividends	—	—	—	—	(1,485)	—	—	—	—	(1,532)	—	—	(660)	(3,677)
Purchase of equity instruments	—	—	—	—	—	—	—	(4,038)	—	—	—	—	—	(4,038)
Disposal of equity instruments	—	—	—	—	—	—	8	754	—	—	—	—	—	762
Transfer from equity to liabilities	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Transfer from liabilities to equity	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Transfers between equity items	—	—	—	—	9,697	—	(215)	—	(11,076)	1,298	303	—	(7)	—
Increases (decreases) due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—	(8)	(8)
Share-based payment	—	—	—	(62)	—	—	—	—	—	—	—	—	—	(62)
Others increases or (-) decreases in equity	—	—	31	84	—	—	(534)	—	—	—	—	—	557	138
Balance at 31 December 2024	7,576	40,079	—	217	82,326	—	(5,976)	(68)	12,574	(1,532)	(36,595)	(2,020)	10,746	107,327

A. Presented for comparison purpose only .

55

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY FOR THE YEARS ENDED 31 DECEMBER 2023 AND 2022
EUR million

												Non-controlling interest
	Capital	Share premium	Equity instruments issued (not capital)	Other equity instruments	Accumulated retained earnings	Revaluation reserves	Other reserves	(-) Own shares	Profit attributable to shareholders of the parent	(-) Interim dividends	Other comprehensive income	Other comprehensi ve income	Other items	Total
Balance at 31 December 2022A	8,397	46,273	688	175	66,702	—	(5,454)	(675)	9,605	(979)	(35,628)	(1,856)	10,337	97,585
Adjustments due to errors	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Adjustments due to changes in accounting policies	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Opening balance at 1 January 2023A	8,397	46,273	688	175	66,702	—	(5,454)	(675)	9,605	(979)	(35,628)	(1,856)	10,337	97,585
Total recognised income and expense	—	—	—	—	—	—	—	—	11,076	—	320	294	1,107	12,797
Other changes in equity	(305)	(1,900)	32	20	7,412	—	(297)	(403)	(9,605)	(319)	288	3	(1,067)	(6,141)
Issuance of ordinary shares	—	—	—	—	—	—	—	—	—	—	—	—	1	1
Issuance of preferred shares	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Issuance of other financial instruments	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Maturity of other financial instruments	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Conversion of financial liabilities into equity	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Capital reduction	(305)	(1,900)	—	—	—	—	305	1,900	—	—	—	—	—	—
Dividends	—	—	—	—	(963)	—	—	—	—	(1,298)	—	—	(748)	(3,009)
Purchase of equity instruments	—	—	—	—	—	—	—	(3,109)	—	—	—	—	—	(3,109)
Disposal of equity instruments	—	—	—	—	—	—	13	806	—	—	—	—	—	819
Transfer from equity to liabilities	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Transfer from liabilities to equity	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Transfers between equity items	—	—	—	—	8,375	—	(37)	—	(9,605)	979	288	3	(3)	—
Increases (decreases) due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—	(364)	(364)
Share-based payment	—	—	—	(60)	—	—	—	—	—	—	—	—	—	(60)
Others increases or (-) decreases in equity	—	—	32	80	—	—	(578)	—	—	—	—	—	47	(419)
Balance at 31 December 2023A	8,092	44,373	720	195	74,114	—	(5,751)	(1,078)	11,076	(1,298)	(35,020)	(1,559)	10,377	104,241

A. Presented for comparison purposes only .

56

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 2024 AND 2023
EUR million

	2024	2023A
A. CASH FLOWS FROM OPERATING ACTIVITIES	(24,155)	5,015
Profit or loss for the year	13,744	12,183
Adjustments made to obtain the cash flows from operating activities	28,361	26,948
Depreciation and amortisation cost	3,294	3,184
Other adjustments	25,067	23,764
Net increase/(decrease) in operating assets	117,996	74,982
Financial assets held-for-trading	62,460	18,332
Non-trading financial assets mandatorily at fair value through profit or loss	31	286
Financial assets at fair value through profit or loss	(1,850)	874
Financial assets at fair value through other comprehensive income	10,225	(4,470)
Financial assets at amortized cost	45,995	60,525
Other operating assets	1,135	(565)
Net increase/(decrease) in operating liabilities	57,616	46,080
Financial liabilities held-for-trading	34,256	5,450
Financial liabilities designated at fair value through profit or loss	(3,854)	(11)
Financial liabilities at amortized cost	34,164	40,138
Other operating liabilities	(6,950)	503
Income tax recovered/(paid)	(5,880)	(5,214)
B. CASH FLOWS FROM INVESTING ACTIVITIES	(3,712)	(5,366)
Payments	11,355	15,056
Tangible assets	8,494	11,446
Intangible assets	2,104	2,197
Investments	686	139
Subsidiaries and other business units	71	1,274
Non-current assets held for sale and associated liabilities	—	—
Other payments related to investing activities	—	—
Proceeds	7,643	9,690
Tangible assets	5,966	7,074
Intangible assets	—	—
Investments	681	814
Subsidiaries and other business units	8	885
Non-current assets held for sale and associated liabilities	988	917
Other proceeds related to investing activities	—	—
C. CASH FLOW FROM FINANCING ACTIVITIES	(5,510)	(2,058)
Payments	14,045	10,187
Dividends	3,017	2,261
Subordinated liabilities	4,096	2,931
Redemption of own equity instruments	751	—
Acquisition of own equity instruments	4,038	3,109
Other payments related to financing activities	2,143	1,886
Proceeds	8,535	8,129
Subordinated liabilities	7,001	7,007
Issuance of own equity instruments	—	—
Disposal of own equity instruments	765	825
Other proceeds related to financing activities	769	297
D. EFFECT OF FOREIGN EXCHANGE RATE DIFFERENCES	5,243	(322)
E. NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	(28,134)	(2,731)

57

	2024	2023A
F. CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR	220,342	223,073
G. CASH AND CASH EQUIVALENTS AT END OF THE YEAR	192,208	220,342
COMPONENTS OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR
Cash	9,253	8,621
Cash equivalents at central banks	170,914	199,932
Other financial assets	12,041	11,789
Less, bank overdrafts refundable on demand	—	—
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR	192,208	220,342
In which, restricted cash	—	—

A. Presented for comparison purposes only .

58

4. Distribution of Banco

Santander's profit, shareholder

remuneration scheme and

earnings per share

a) Distribution of Banco Santander’s profit and

shareholder remuneration scheme

The distribution of the Bank's current annual results that

the board of directors will propose for approval by the

shareholders at the annual general meeting is as

follows:

EUR million
To dividends	3,181
Dividend paid at 31 December A	1,532
Complementary dividend B	1,649
To voluntary reserves C	6,920
Net profit for the year	10,101

A. Total amount paid as interim dividend, at the rate of EUR 10 fixed cents

per eligible share (recorded in 'Shareholders' equity - Interim

dividends').

B. Fixed complementary dividend of EUR 11 gross cents per eligible share,

payable in cash as from 2 May 2025. The total amount has been

estimated on the assumption that, as a result of the partial

implementation of the buyback program announced on February 5,

2025, the number of the Bank's outstanding shares eligible for the

dividend will be 14,988,884,075. Therefore, the total amount of the

complementary dividend may be higher if fewer shares are acquired in

the buyback program than expected, or lower in the opposite case.

C. Estimated amount corresponding to a complementary dividend of EUR

1,648,777,248.25. To be increased or reduced by the same amount by

which the total amount of the complementary dividend is respectively

lower or higher than the estimate of that complementary dividend.

The transcribed proposal comprises the part of the 2024

shareholder remuneration policy that is implemented

through cash dividends (the interim dividend paid in

November 2024 of EUR 10 cents per share with dividend

entitlement, approved by the board of directors on 24

September 2024, and the complementary dividend

expected to be paid as of 2 May 2025, of EUR 11 cents

per share with the dividend entitlement, proposed by the

board of directors on 25 February 2025, and therefore

subject to approval by the General Meeting of

Shareholders).

In addition, the 2024 remuneration policy also includes

expected shareholder remuneration through the

implementation of share buyback programs to which an

amount equivalent to 25% of the Group's ordinary profit

will be allocated. The first of these programs based on

the results of 2024, for an approximate amount of EUR

1,525 million, was completed between August 2024 and

January 2025. On 6 February 2025 a second buyback

program on account of the 2024 results was started for a

maximum amount of EUR 1,587 million. It also submits

to the general meeting of shareholders an agreement for

reduction of capital that will allow the amortization of

own shares acquired in this second repurchase program,

subject to the relevant regulatory authorization.

The accounting statement, prepared by the Bank

pursuant to legal requirements, evidencing the existence

of sufficient liquidity for the payment of the interim

dividend on the date and for the amount mentioned

above, was as follows:

EUR million
	31 August 2024
Profit before taxes	6,549
Tax expense	373
Dividends paid in cash	—
Distributable maximum amount	6,176
Available liquidity	87,847

Finally, and although it is not part of the remuneration

charged to the 2024 financial year, it should be noted

that pursuant to the resolution of the Bank's General

Meeting of Shareholders held on 22 March 2024, on 2

May 2024 the Bank paid a complementary cash dividend

of EUR 9.5 cents per share charged to the results of the

2023 financial year.  Finally, also charged to the results

of 2023, the Bank implemented two repurchase

programs. The first of them for a maximum amount of

EUR 1,310 million, which ended on January 2024 and the

second one, for a maximum amount of EUR

1,459 million, which ended in June 2024.

59

b) Earnings/loss per share from continuing and

discontinued operations

i. Basic earnings / loss per share

Basic earnings/loss per share are calculated by dividing

the net profit attributable to the Group, adjusted by the

after-tax amount of the remuneration of contingently

convertible preference shares (PPCC) recognised in

equity and the capital perpetual preference shares

(PPCA) (see note 21), if applicable, by the weighted

average number of ordinary shares outstanding during

that period, excluding the average number of own

shares held through that period.

Accordingly:

	2024	2023
Profit (Loss) attributable to the Parent (EUR million)	12,574	11,076
Remuneration of PPCC and PPCA (EUR million) (note 21)	(620)	(492)
	11,954	10,584
Of which:
Profit (Loss) from discontinued operations (non controlling interest net) (EUR million)	—	—
Profit (Loss) from continuing operations (non-controlling interest and PPCC and PPCA net) (EUR million)	11,954	10,584
Weighted average number of shares outstanding	15,497,607,269	16,172,084,714
Basic earnings (Loss) per share (euros)	0.771	0.654
Of which, from discounted operations (euros)	—	—
Basic earnings (Loss) per share from continuing operations (euros)	0.771	0.654

ii. Diluted earnings / loss per share

Diluted earnings/loss per share are calculated by

dividing the net profit attributable to the Group, adjusted

by the after-tax amount of the remuneration of

contingently convertible preference shares recognised in

equity (PPCC) recognised in equity and the capital

perpetual preference shares (PPCA) (see note 21) , by the

weighted average number of ordinary shares

outstanding during the year, excluding the average

number of treasury shares and adjusted for all the

dilutive effects inherent to potential ordinary shares

(share options, and convertible debt securities).

Accordingly, diluted earnings/loss per share were

determined as follows:

	2024	2023
Profit (Loss) attributable to the Parent (EUR million)	12,574	11,076
Remuneration of PPCC and PPCA (EUR million) (note 21)	(620)	(492)
Dilutive effect of changes in profit for the period arising from potential conversion of ordinary shares	—	—
	11,954	10,584
Of which:
Profit (Loss) from discontinued operations (net of non-controlling interests) (EUR million)	—	—
Profit (Loss) from continuing operations (net of non- controlling interests and PPCC and PPCA) (EUR million)	11,954	10,584
Weighted average number of shares outstanding	15,497,607,269	16,172,084,714
Dilutive effect of options/rights on shares	70,110,570	75,180,407
Adjusted number of shares	15,567,717,839	16,247,265,121
Diluted earnings (Loss) per share (euros)	0.768	0.651
Of which, from discounted operations (euros)	—	—
Diluted earnings (Loss) per share from continuing operations (euros)	0.768	0.651

60

5. Remuneration and other

benefits paid to the Bank's

directors and senior managers

The following section contains qualitative and

quantitative disclosures on the remuneration paid to the

members of the board of directors —both executive and

non-executive directors— and senior managers for 2024

and 2023 .

a) Remuneration of Directors

i. Bylaw-stipulated emoluments

The annual general meeting held on 22 March 2013

approved an amendment to the Bylaws, whereby the

remuneration of directors in their capacity as board

members became an annual fixed amount determined

by the annual general meeting. This amount shall

remain in effect unless the shareholders resolve to

change it at a general meeting. However, the board of

directors may elect to reduce the amount in any years in

which it deems such action justified.

The maximum remuneration established by the annual

general meeting was EUR 6 million in 2024 (EUR

6 million in 2023), with two components: (a) an annual

emolument and (b) attendance fees.

The specific amount payable for the above-mentioned

items to each of the directors is determined by the board

of directors. For such purpose, it takes into consideration

the positions held by each director on the board, their

membership of the board and the board committees and

their attendance to the meetings thereof, and any other

objective circumstances considered by the board.

The total Bylaw-stipulated emoluments earned by the

directors in 2024 amounted to EUR 5.4 million (EUR

5.3 million in 2023 ) .

Annual allotment

In accordance with the remuneration policy approved at

the general shareholders' meeting on 22 March 2024,

the annual allotment for board and committee

membership are for the same amounts for annual

allotments as those initially established for 2023, except

for the responsible banking, sustainability and culture

committee, which was updated to EUR 28,000 ,thus

equalizing its remuneration to other committees of

mandatory existence, considering the importance and

complexity of the matters addressed in it. Each director

received the amounts for serving on the board and its

committees and positions held in them included in the

chart below for 2023 and 2024:

Amount per director in euros	2024	2023
Members of the board of directors	98,000	98,000
Members of the executive committee	170,000	170,000
Members of the audit committee	43,000	43,000
Members of the appointments committee	28,000	28,000
Members of the remuneration committee	28,000	28,000
Members of the risk supervision, regulation and compliance committee	43,000	43,000
Members of the responsible banking, sustainability and culture committee	28,000	18,000
Members of the innovation and technology committee	28,000	28,000
Chair of the audit committee	70,000	70,000
Chair of the appointments committee	50,000	50,000
Chair of the remuneration committee	50,000	50,000
Chair of the risk supervision, regulation and compliance committee	70,000	70,000
Chair of the responsible banking, sustainability and culture committee	50,000	50,000
Chair of the innovation and technology committee	70,000	70,000
Lead independent directorA	110,000	110,000
Non-executive Vice Chair	30,000	30,000

A. Glenn Hutchins has been allocated EUR 700,000 (including

annual allowances and attendance fees) in minimum total

annual pay set for the required time and dedication to

perform his roles.

Attendance fees

The directors receive fees for attending board and

committee meetings, excluding executive committee

meetings, where no attendance fees are received.

Since we had not reviewed the attendance fees since

2016, shareholders at the 2024 AGM approved an

increase of 4% in respect of 2023. This increase

compensates for board members' greater time

commitment in relation to those of other comparable

banking groups, based on an independent expert

analysis carried out in 2023. So the amounts for 2024

and 2023 are as follows:

Attendance fees per director per meeting in euros
	2024	2023
Board of directors	2,704	2,600
Audit committee and risk supervision, regulation and compliance committee	1,768	1,700
Other committees (excluding executive committee)	1,560	1,500

61

ii. Salaries

The executive directors receive salaries. In accordance

with the policy approved by the annual general meeting,

salaries are composed of a fixed annual remuneration

and a variable one, which consists in a unique incentive,

which is a deferred variable remuneration plan linked to

multi-year objectives, which establishes the following

payment scheme:

• 40% of the variable remuneration amount,

determined at year-end on the basis of the

achievement of the established objectives, is paid

immediately.

• The remaining 60% is deferred over five years , to be

paid in five portions, provided that the conditions of

permanence in the Group and non-concurrence of

the malus clauses are met, and subject to long term

metrics, taking into account the following accrual

scheme:

– The accrual of the first and second portion

(payment in 2026 and 2027) will be conditional

on none of the malus clauses being triggered.

– The accrual of the third, fourth, and fifth portion

(payment in 2028 , 2029 and 2030 ), is linked to

objectives related to the period 2024— 2026 and

the metrics and scales associated with these

objectives. The fulfilment of the objectives

determines the percentage to be paid of the

deferred amount in these three annuities, and

these targets can reduce these amounts and the

number of deferred instruments, or increase

them up to a maximum achievement ratio of

125%, so executives have the incentive to exceed

their targets.

In accordance with current remuneration policies, the

amounts already paid will be subject to a possible

recovery (clawback) by the Bank during the period set

out in the policy in force at each moment.

The immediate payment (or short-term), as well as each

deferred payment (linked to long term metrics and not

linked to long-term metrics) will be settled 50% in cash

and the remaining 50% in instruments, consisting of

Banco Santander, S.A. shares and restricted stock units

(RSUs) of PagoNxt, split as:

• the amount of PagoNxt RSUs set for each year; and

• the rest, all in shares of Banco Santander, S.A.

Comparative of executive remuneration (Chair and CEO)

On the remuneration committee’s recommendation, and

due to the excellent business results and total

shareholder return in 2023, in order to ensure a

competitive remuneration compared to other peer

groups, the board resolved to increase 5% the annual

salary for Ana Botín and Héctor Grisi in 2024 versus

2023.

Variable contributions to pensions were not modified in

2024, so the amounts are  the 22% of the 30% of the

last three assigned bonus' average.

2024 was a groundbreaking year in our transformation.

We delivered solid operating performance and profitable

growth, with record attributable profit of EUR 12,574

million on the back of a strong increase in revenue that

grew far above costs, and all this progress with an

improvement in cost of risk. These excellent results

enabled us to achieve the targets we set for the year: a

CET1 ratio of 12.8% (far exceeding forecasts and driven

by strong net organic capital generation of over 200

basis points) and shareholder value creation (TNAV per

share plus cash DPS up 14% year on year and cash

dividend per share of up 39% year on year). All this,

coupled with our business model and robust balance

sheet, enabled us to achieve an initial bonus pool of

172.30%. However, to make this pool more consistent

with shareholder returns, the board approved a negative

adjustment of 27.30%.

Moreover, the ratio of executive directors’ total

remuneration to underlying attributable profit fell to

0.18% from 0.19% in 2023.

iii. Detail by director

The detail, by bank director, of the short-term

(immediate) and deferred (not subject to long-term

goals) remuneration for 2024 and 2023 is provided

below:

62

EUR thousand
	2024																		2023
	Bylaw-stipulated emoluments															Pension contributi on	Other remuneration1	Total	Total
	Annual emolument									Short-term and deferred (not subject to long-term goals) salaries of executive directors
	BoardF	Executive committee	Audit committee	Appointments committee	Remuneration committee	Risk supervision, regulation and compliance oversight committee	Responsible banking, sustainability and culture committee	Innovation and technology committee	Attendance fees and commissions	Fixed	Variable- immediate payment		Deferred variable		Total
											In cash	In instru ments	In cash	In instru ments
Ana Botín	98	170	—	—	—	—	—	44	56	3,435	1,851	1,851	1,110	1,111	9,358	1,339	1,062	12,127	11,544
Héctor GrisiA	98	170	—	—	—	—	—	28	56	3,150	1,279	1,279	767	768	7,243	1,105	437	9,137	8,257
José Antonio Álvarez	128	170	—	—	—	—	—	28	56	—	—	—	—	—	—	—	3,316	3,698	3,553
Glenn Hutchins	415	—	—	28	78	—	—	82	97	—	—	—	—	—	—	—	—	700	372
Bruce Carnegie- Brown A	22	—	—	18	6	—	—	—	31	—	—	—	—	—	—	—	—	78	576
Homaira Akbari	98	—	43	—	—	—	28	28	88	—	—	—	—	—	—	—	—	285	265
Javier Botín B	98	—	—	—	—	—	—	—	46	—	—	—	—	—	—	—	—	144	137
Sol Daurella	98	—	—	28	28	—	50	—	88	—	—	—	—	—	—	—	—	292	249
Henrique de Castro	98	—	43	—	28	—	—	28	103	—	—	—	—	—	—	—	—	300	284
Gina Díez	98	—	—	28	—	—	28	—	71	—	—	—	—	—	—	—	—	225	211
Luis Isasi	98	170	—	—	28	43	—	—	101	—	—	—	—	—	—	—	1,000	1,440	1,417
Ramiro MatoC	48	83	21	—	—	21	38	—	60	—	—	—	—	—	—	—	—	271	518
Belén Romana	98	170	43	67	—	59	6	28	128	—	—	—	—	—	—	—	—	599	572
Pamela Walkden	98	—	59	—	—	97	22	—	105	—	—	—	—	—	—	—	—	381	341
Germán de la Fuente	98	—	97	—	—	43	—	—	100	—	—	—	—	—	—	—	—	338	271
Carlos Barrabés D	50	—	—	14	—	—	18	14	31	—	—	—	—	—	—	—	—	128	—
Antonio Weiss E	50	—	—	—	—	—	—	—	22	—	—	—	—	—	—	—	—	72	—
Total 2024	1,791	933	306	183	168	263	190	280	1,240	6,585	3,130	3,130	1,877	1,879	16,601	2,444	5,815	30,214	—
Total 2023	1,700	1,147	328	162	191	285	139	287	1,096	6,271	3,000	3,000	1,800	1,800	15,871	2,110	5,251		28,567

A. Stepped down as director on 22 March 2024.

B. All amounts received were reimbursed to Fundación Botín.

C. Stepped down as director on 27 June 2024.

D. Director and member of the NC, RBSCC and ITC since 27 June 2024.

E. Director since 27 June 2024.

F. Also includes emoluments for other roles in the board.

Other remuneration includes EUR 1,000 thousand for the role as non-executive Chair of the Santander

España business unit and for attending its board and committee meetings for Luis Isasi. For José Antonio

Álvarez, this amount includes remuneration as strategic advisor of Grupo Santander, life and health

insurance contributions (EUR 856 thousand) and the supplement for having waived the death and

disability policy (EUR 710 thousand).

Changes in the chairship of the committees:

Germán de la Fuente was appointed Chair of the AC on 23 March 2024 replacing Pamela Walkden.

Belén Romana was appointed Chair of the NC on 23 March 2024, succeeding Bruce Carnegie-Brown.

Pamela Walkden was appointed Chair of the RSRCC on 23 March 2024, replacing Belén Romana.

Sol Daurella assumed the chairship of the RBSCC on 23 July 2024. Pamela Walkden joined to the RBSCC

on 23 March 2024, replacing Belén Romana.

Glenn Hutchins was appointed Chair of ITC on 23 March 2024, replacing Ana Botín.

63

Following is the detail by executive director of the

salaries linked to multi-year objectives at their fair Value,

which will only be received if the conditions of

permanence in the Group, non-applicability of malus

clauses and achievement of the established objectives

are met (or, as the case may be, of the minimum

thresholds thereof, with the consequent reduction of

amount agreed-upon at the end of the year) in the terms

described in note 42.

EUR thousand
	2024				2023
	Variable subject to Long-term objectives1
	In cash	In shares	In RSUs	Total	Total
Ana Botín	1,166	956	210	2,332	2,243
Héctor Grisi	806	629	176	1,611	1,537
Total	1,972	1,585	386	3,943	3,780

1. Corresponds with the fair value of the maximum amount they are

entitled to in a total of 3 years : 2028, 2029 and 2030, subject to

conditions of continued service, with the exceptions provided, and to

the non-applicability of malus clauses and achievement of the

objectives established.

The fair value has been determined at the grant date

based on the valuation report of an independent expert,

Willis Towers Watson. Based on the design of the plan

for 2024 and the levels of achievement of similar plans

in comparable entities, the fair value considered is 70%

of the variable remuneration subject to long-term

objectives (see note 42).

Note 5.e below includes disclosures on the shares

delivered from the deferred remuneration schemes in

place in previous years and for which delivery conditions

were met, as well as on the maximum number of shares

that may be received in future years in connection with

the aforementioned 2024 and 2023 variable

remuneration plans.

b) Remuneration of the board members as

representatives of the Bank

By resolution of the executive committee, all the

remuneration received by the Bank’s directors who

represent the Bank on the boards of directors of listed

companies in which the Bank has a stake, paid by those

companies and relating to appointments made on or

after 18 March 2002, accrues to the Group. In 2024 and

2023 the Bank’s directors did not receive any

remuneration in respect of these representative duties.

On the other hand, in their personal capacity, in 2024

Homaira Akbari was paid USD 100 thousand (EUR

96 thousand ) as member of the board of Santander

Consumer USA Holdings, Inc. and EUR 200 thousand as

member of the board of PagoNxt S.L., and Henrique de

Castro and José Antonio Álvarez were each paid the

same EUR 200 thousand as members of the board of

PagoNxt S.L. José Antonio Álvarez also received BRL

1,135 thousand (EUR 183 thousand ) as member of

Banco Santander (Brasil) S.A. Likewise, Pamela Walkden

was paid GBP 109 thousand (EUR 129 thousand) as

member of Santander UK plc and Santander UK Group

Holdings.  

Likewise, Luis Isasi was paid EUR 1,000 thousand as non-

executive Chair of the Santander España business unit

and for attending its board and committee meetings

(amounts paid by Banco Santander, S.A.).

And finally, José Antonio Álvarez, as strategic adviser of

Grupo Santander, received fixed remuneration of EUR

1,750 thousand . In addition, he received the life and

health insurance contributions and the supplement for

having waived the death and disability policy .

c) Post-employment and other long-term benefits

In 2012, the contracts of Ana Botín and other members

of the Bank's senior management with defined benefit

pension commitments were modified to transform these

commitments into a defined contribution system, which

covers the contingencies of retirement, disability and

death. From that moment on, the Bank makes annual

contributions to their pension system for their benefit.

This system gives them the right to receive benefits upon

retirement, regardless of whether or not they are active

at the Bank at such time, based on contributions to the

system, and replaced their previous right to receive a

pension supplement in the event of retirement.

The initial balance for Ana Botín in the new defined

benefits system corresponded to the market value of the

assets from which the provisions corresponding to the

respective accrued obligations had materialised on the

date on which the old pension commitments were

transferred into the new benefits system.

Since 2013 , the Bank has made annual contributions to

the benefits system for executive directors and other

members of executive team, in proportion to their

respective pensionable bases, until they leave Grupo

Santander or until their retirement within the Group,

death, or disability.

The benefit plan system is outsourced to Santander

Seguros y Reaseguros, Compañía Aseguradora, S.A., and

the economic rights of the foregoing directors under this

plan belong to them regardless of whether or not they

are active at the Bank at the time of their retirement,

death or disability.

64

In accordance with the provisions of the remuneration

regulations, contributions made calculated on variable

remuneration are subject to the discretionary pension

benefits regime. Under this regime, contributions are

subject to malus clauses and clawback according to the

policy in force at any given time and during the same

period in which the variable remuneration is deferred.

Furthermore, they must be invested in bank shares for a

period of five years from the date when the executive

director leaves the Group, regardless of whether or not

they leave to retire. Once that period has elapsed, the

amount invested in shares will be reinvested, along with

the remainder of the cumulative balance corresponding

to the executive director, or it will be paid to the

executive director or to their beneficiaries in the event of

a contingency covered by the benefits system.

As per the director´s remuneration policy approved at the

23 March 2018 general shareholder´s meeting, the

system was changed with a focus on:

• Aligning the annual contributions with practices of

comparable institutions.

• Reducing future liabilities by eliminating the

supplementary benefits scheme in the event of death

(death of spouse or parent) and permanent disability

of serving directors.

• Not increasing total costs for the Bank.

The changes to the system were the following:

• Fixed and variable pension contributions were

reduced to 22% of the respective pensionable bases.

The gross annual salaries and the benchmark

variable remuneration were increased in the

corresponding amount with no increase in total costs

for the Bank. The pensionable base for the purposes

of the annual contributions for the executive

directors is the sum of fixed remuneration plus 30%

of the average of their last three variable

remuneration amounts. This means complying with

Circular 2/2016 of the Bank of Spain, standard 41, on

pension benefits, by which a part of not less than

15% of the total contribution must be based on

variable components.

For Héctor Grisi, CEO from 1 January 2023, since he

has been in the position for two years, the

calculation of the variable portion was done using

the average of the last two variable remuneration

amounts.

• The death and disability supplementary benefits

were eliminated since 1 April 2018. A fixed

remuneration supplement (included in other

remuneration in section a.iii in this note) was

implemented the same date.

• The total amount insured for life and accident

insurance was increased.

The provisions recognised in 2024 and 2023 for

retirement pensions were as follows:

EUR thousand
	2024	2023
Ana Botín	1,339	1,144
Héctor Grisi	1,105	966
Total	2,445	2,110

Following is a detail of the balances relating to each of

the directors under the welfare system as of  31

December 2024 and 2023 :

EUR thousand
	2024	2023
Ana Botín	54,731	49,257
Héctor Grisi	1,299	585
José Antonio Álvarez	20,326	19,495
Total	76,356	69,338

d) Insurance

The Group pays for life insurance policies for the Bank’s

directors, who will be entitled to receive benefits if they

are declared disabled. In the event of death, the benefits

will be payable to their heirs. The premiums paid by the

Group are included in the 'Other remuneration' column

of the table shown in Note 5.a.iii above. Also, the

following table provides information on the sums

insured for the Bank’s directors:

Insured capital
EUR thousand
	2024	2023
Ana Botín	21,525	21,054
Héctor Grisi	12,600	50
José Antonio Álvarez	11,215	11,910
Total	45,340	33,014

The insured capital has been modified in 2018 for Ana

Botín  as part of the pension systems transformation set

out in note 5.c) above, which has encompassed the

elimination of the supplementary benefits systems

(death of spouse and death of parent) and the increase

of the life and accident insurance annuities.

During 2024 and 2023, the Group has disbursed a total

amount of EUR 13.5 million and EUR 13.2 million,

respectively, for the payment of civil-liability insurance

premiums. These premiums correspond to several civil-

liability insurance policies that hedge, among others,

directors, senior management and other managers and

employees of the Group and the Bank itself, as well as

its subsidiaries, in light of certain types of potential

claims of third parties. For this reason, it is not possible

to disaggregate or individualize the amount that

correspond to the directors and executives.

65

As of 31 December 2024 and 2023 , no life insurance

commitments exist for the Group in respect of any other

directors .

e) Deferred variable remuneration systems

The following information relates to the maximum

number of shares to which the executive directors are

entitled at the beginning and end of 2024 and 2023 due

to their participation in the deferred variable

remuneration systems, which instrumented a portion of

their variable remuneration relating to 2024 and prior

years, as well as on the deliveries, in shares or in cash,

made to them in 2024 and 2023 once the conditions for

the receipt thereof had been met (see note 42):

i. Deferred variable compensation plan linked to

multiannual objectives

In the annual shareholders meeting of 18 March 2016,

with the aim of simplifying the remuneration structure,

improving the ex-ante risk adjustment and increasing

the incidence of long-term objectives, the bonus plan

(deferred and conditioned variable compensation plan)

and ILP were replaced by one single plan.

The variable remuneration of executive directors and

certain executives (including senior management)

corresponding to 2024 has been approved by the board

of directors and implemented through the ninth cycle of

the deferred variable remuneration plan linked to multi-

year objectives. The application of the plan was

authorised by the annual general meeting of

shareholders, as it entails the delivery of shares to the

beneficiaries.

As indicated in section a.ii of this note, 60% of the

variable remuneration amount is deferred over five years

for executive directors, to be paid, where appropriate, in

five portions, provided that the conditions of

permanence in the Group, according to the following

accrual scheme:

• The accrual of the first and second parts (instalments

in 2026 and 2027 ) is conditional on none of the

malus clauses being triggered.

• The accrual of the third, fourth and fifth parts

(instalments in 2028, 2029 and 2030) is linked to

non-concurrence of malus clauses and the fulfilment

of certain objectives related to the 2024 ‑ 2026

period. These objectives and their respective weights

are:

– Banco Santander’s consolidated Return on

tangible equity (RoTE) target in 2026 (weight of

40% ).

– Relative performance of Banco Santander's total

shareholder return (TSR) in 2024 -2026 in respect

of the weighted TSR of a peer group comprising 9

credit institutions, with the appropriate TSR ratio

based on the group’s TSR among its peers

(weight of 40% ).

– Four sustainability metrics which have different

weighting (with a total weight of 20%).

The degree of compliance with the above objectives

determines the percentage to be applied to the deferred

amount in these three annuities, with a maximum

achievement ratio of 125%, so executives have the

incentive to exceed their targets.

Both the immediate (short-term) and each of the

deferred (long-term and conditioned) portions are paid

50% in cash and the remaining 50% in instruments.

The accrual of deferred amounts (whether or not subject

to performance measures) is conditioned, in addition to

the permanence of the beneficiary in the Group, to non-

occurrence, during the period prior to each of the

deliveries, of any the circumstances giving rise to the

application of malus as set out in the Group’s

remuneration policy in its chapter related to malus and

clawback. Likewise, the amounts already paid of the

incentive will be subject to clawback by the Bank in the

cases and during the term foreseen in said policy,  and in

accordance with the terms and conditions foreseen in it.

Malus and clawback clauses are triggered by poor

financial performance of Banco Santander, a division or

area, or exposures from staff as a result of an

executive(s)’s management of, at least, one of these

factors:

i. Significant failures in risk management

committed by the entity, or by a business unit or risk

control.

ii. The increase suffered by the entity or by a

business unit of its capital needs, not foreseen at the

time of generation of the exposures.

iii. Regulatory sanctions or judicial sentences from

events that could be attributable to the unit or the

personnel responsible for those. Also, the breach of

internal codes of conduct of the entity.

iv. Irregular conduct, whether individual or

collective. In this regard, the negative effects derived

from the marketing of inappropriate products and the

responsibilities of the people or bodies that made those

decisions will be specially considered.

In addition to the existing policy on malus and clawback

clauses of our remuneration policy, the addendum to our

remuneration policy entitled 'Financial Statement

Restatement Compensation' regulates the recoupment

of compensation received by the executive directors of

Banco Santander, S.A., and senior management, in the

event of a financial restatement (according to the

regulation) resulting from material noncompliance with

financial reporting requirements under US federal

securities laws.

66

The maximum number of shares to be delivered is

calculated by taking into account the average weighted

daily volume of the average weighted listing prices

corresponding to the fifty trading sessions prior to the

previous Friday (excluded) to the date on which the

bonus is agreed by the board of executive directors of

the Bank.

ii. Shares assigned by deferred variable remuneration

plans

The following table shows the number of Santander

shares assigned to each director already in service and

pending delivery as of 1 January 2023, 31 December

2023 and 31 December 2024, as well as the gross shares

that were delivered to them in 2023 and 2024, either in

the form of an immediate payment or a deferred

payment. In this case after having been appraised by the

board, at the proposal of the remuneration committee,

that the corresponding one-fifth of each plan had

accrued. They come from the deferred conditional and

linked to multi-year objectives in 2018, 2019, 2020,

2021, 2022, 2023 and 2024 were formalized.

Share-based variable remuneration
	Maximum number of shares to be delivered at January 1,2023	Shares delivered in 2023 (immediate payment 2022 variable remuneration)	Shares delivered in 2023 (deferred payment 2021 variable remuneration)	Shares delivered in 2023 (deferred payment 2020 variable remuneration)	Shares delivered in 2023 (deferred payment 2019 variable remuneration)	Shares delivered in 2023 (deferred payment 2018 variable remuneration)	Variable remuneration 2023 (Maximum number of shares to be delivered)
2018 variable remuneration
Ana Botín	68,800	—	—	—	—	(34,400)	—
José Antonio Álvarez	45,975	—	—	—	—	(22,988)	—
	114,776					(57,388)
2019 variable remuneration
Ana Botín	106,357	—	—	—	(35,452)	—	—
José Antonio Álvarez	71,079	—	—	—	(23,693)	—	—
	177,435				(59,145)
2020 variable remuneration
Ana Botín	149,095	—	—	(37,274)	—	—	—
José Antonio Álvarez	80,983	—	—	(20,246)	—	—	—
	230,078			(57,520)
2021 variable remuneration
Ana Botín	888,373	—	(177,675)	—	—	—	—
José Antonio Álvarez	599,555	—	(119,911)	—	—	—	—
	1,487,928		(297,586)
2022 variable remuneration
Ana Botín	631,829	(273,410)	—	—	—	—	—
José Antonio Álvarez	426,475	(184,521)	—	—	—	—	—
	1,058,305	(457,931)
2023 variable remuneration
Ana Botín	—	—	—	—	—	—	1,127,209
José Antonio Álvarez	—	—	—	—	—	—	749,143
							1,876,352
2024 variable remuneration 1
Ana Botín	—	—	—	—	—	—	—
Héctor Grisi	—	—	—	—	—	—	—

67

1. For each director, 40% of the shares indicated correspond to the short-term variable (or immediate payment). The remaining 60% is deferred for delivery,

where appropriate, by fifths in the next five years, the last three being subject to the fulfilment of multiannual objectives.

                           

Share-based variable remuneration
Maximum number of shares to be delivered at December 31, 2023	Instruments matured but not consolidated at January 1, 2024 2	Shares delivered in 2024 (immediate payment 2023 variable remuneration)	Shares delivered in 2024 (deferred payment 2022 variable remuneration)	Shares delivered in 2024 (deferred payment 2021 variable remuneration)	Shares delivered in 2024 (deferred payment 2020 variable remuneration)	Shares delivered in 2024 (deferred payment 2019 variable remuneration)	Shares delivered in 2024 (deferred payment 2018 variable remuneration)	Variable remuneration 2024 (Maximum number of shares to be delivered)	Maximum number of shares to be delivered at December 31, 2024
34,400	—	—	—	—	—	—	(34,400)	—	—
22,988	—	—	—	—	—	—	(22,988)	—	—
57,388							(57,388)
70,905	—	—	—	—	—	(35,452)	—	—	35,452
47,386	—	—	—	—	—	(23,693)	—	—	23,693
118,290						(59,145)			59,145
111,821	(18,674)	—	—	—	(31,049)	—	—	—	62,098
60,737	(10,143)	—	—	—	(16,865)	—	—	—	33,729
172,558	(28,817)				(47,914)				95,827
710,698	—	—	—	(177,675)	—	—	—	—	533,023
479,644	—	—	—	(119,911)	—	—	—	—	359,733
1,190,342				(297,586)					892,756
358,419	—	—	(62,334)	—	—	—	—	—	296,085
241,954	—	—	(42,079)	—	—	—	—	—	199,875
600,374			(104,413)						495,961
1,127,209	—	(469,286)	—	—	—	—	—	—	657,923
749,143	—	(321,645)	—	—	—	—	—	—	427,498
1,876,352		(790,931)							1,085,421
—	—	—	—	—	—	—	—	976,463	976,463
—	—	—	—	—	—	—	—	656,032	656,032
								1,632,495	1,632,495

2. The levels of achievement of the multi-year metrics of the long-term variable remuneration plans:

1) Sixth cycle of the deferred multi-year objectives variable remuneration plan 2021) : 91.6% of achievement for the period 2021 - 2023 .

a. CET1 metric at 100% of achievement for 2023 year-end period (target 12.00%). Weight of 33.3%.

b. Underlying BPA growth at 150% of achievement (target growth of 100%). Weight of 33.3% .

c. TSR metric at 25% of achievement (target of 33 to 66 percentile) 33.3%.

2) Fifth cycle of the deferred multi-year objectives variable remuneration plan ( 2020) : 83.0% of achievement for the period 2020 -2022 .

a. CET1 metric at 100% of achievement for 2022 year-end period (target 12.00% ). Weight of 33.3% .

b. Underlying BPA growth at 150% of achievement (target growth of 10% ). Weight of 33.3% .

c. TSR metric at 0% of achievement (minimum target of 33% not reached). Weight of 33.3% .

3) Forth cycle of the deferred multi-year objectives variable remuneration plan (2019 ): 33.3% of achievement for the period 2019 -2021.

a. CET1 metric at 100% of achievement for 2021 year-end period (target 12.00% ). Weight of 33.3%.

b. Underlying BPA growth at 0% of achievement (target growth of 15%). Weight of 33.3%.

c. TSR metric at 0% of achievement (minimum target of 33% not reached). Weight of 33.3% .

68

Furthermore, the maximum number of RSUs of PagoNxt,

S.L. to be delivered under the current plan is 10,621 and

8,921 units for Ana Botín and Héctor Grisi, respectively.

In addition, the table below shows the cash delivered in

2024 and 2023 , by way of either immediate payment or

deferred payment, in the latter case once the Board had

determined, at the proposal of the remuneration

committee, that one-fifth relating to each plan had

accrued:

EUR thousand
	2024		2023
	Cash paid (immediate payment 2023 variable remuneration)	Cash paid (deferred payments from 2022, 2021, 2020 and 2019 variable remuneration)	Cash paid (immediate payment 2022 variable remuneration)	Cash paid (deferred payments from 2021, 2020, 2019 and 2018 variable remuneration)
Ana Botín	1,780	1,419	1,689	1,117
Héctor Grisi	1,220	863	1,823	697
José Antonio Álvarez	0	945	1,140	737
Total	3,000	3,228	4,651	2,551

iii . Information on former members of the board of

directors

The chart below includes  information on the maximum

number of shares to which former members of the board

of directors, are entitled for their participation in the

various deferred variable remuneration systems, which

instrumented a portion of their variable remuneration

relating to the years in which they were executive

directors. Also set forth below is information on the

deliveries, whether in shares or in cash, made in 2024

and 2023 to former board members, upon achievement

of the conditions for the receipt thereof (see note 42):

Maximum number of shares to be delivered
	2024	2023
Deferred conditional variable remuneration plan and linked to objectives (2018)	—	29,860
Deferred conditional variable remuneration plan and linked to objectives (2019)	24,490	48,980
Deferred conditional variable remuneration plan and linked to objectives (2020)	71,024	106,536
Deferred conditional variable remuneration plan and linked to objectives (2021)	206,100	300,000
Deferred conditional variable remuneration plan and linked to objectives (2022)	—	—
Deferred conditional variable remuneration plan and linked to objectives (2023)	—	—

69

Number of shares delivered
	2024	2023
Deferred conditional variable remuneration plan and linked to objectives (2017)	—	6,145
Deferred conditional variable remuneration plan and linked to objectives (2018)	29,860	29,860
Deferred conditional variable remuneration plan and linked to objectives (2019)	24,490	24,490
Deferred conditional variable remuneration plan and linked to objectives (2020)	35,512	42,632
Deferred conditional variable remuneration plan and linked to objectives (2021)	12,911	75,000
Deferred conditional variable remuneration plan and linked to objectives (2022)	—	—
Deferred conditional variable remuneration plan and linked to objectives (2023)	—	—

In addition, EUR 650 thousand and EUR 1,471 thousand

relating to the deferred portion payable in cash of the

aforementioned plans were paid each in 2024 and 2023 .

f) Loans

Grupo Santander’s direct risk exposure to the bank’s

directors and the guarantees provided for them are

detailed below. These transactions were made on terms

equivalent to those that prevail in arm’s-length

transactions or the related compensation in kind was

recognized :

EUR thousand
	2024				2023
	Loans and credits	Guarantees	Total		Loans and credits	Guarantees	Total
Ana Botín	—	—	—		26	—	26
Héctor Grisi	—	—	—		8	—	8
José Antonio Álvarez	—	—	—		4	—	4
Glenn Hutchins	—	—	—		—	—	—
Antonio Francesco Weiss B	—	—	—		—	—	—
Belén Romana	—	—	—		—	—	—
Bruce Carnegie-Brown A	—	—	—		—	—	—
Germán de la Fuente	—	—	—		—	—	—
Gina Díez Barroso	5	—	5		1	—	1
Henrique de Castro	—	—	—		—	—	—
Homaira Akbari	—	—	—		—	—	—
Javier Botín	—	—	—		4	—	4
Juan Carlos Barrabés  C	138	—	138		—	—	—
Luis Isasi	—	—	—		—	—	—
Pamela Walkden	—	—	—		—	—	—
Ramiro Mato D	—	—	—		—	—	—
Sol Daurella	—	—	—		51	—	51
	143	—	143		94	—	94

A. Ceased as director of Banco Santander, S.A. on 22 March 2024.

B. Director since 27 June 2024.

C. Director since 27 June 2024.

D. Ceased as director of Banco Santander, S.A. on 27 June 2024.

70

g) Senior management

The table below includes the amounts relating to the

short-term remuneration of the members of senior

management at 31 December 2024 and those at 31

December 2023, excluding the remuneration of the

executive directors, which is detailed above. This amount

has been reduced by 39% compared to that reported in

2014 (EUR 80,792 thousand ):

EUR thousand
		Short-term salaries and deferred remuneration
			Variable remuneration (bonus) - Immediate payment			Deferred variable remuneration
Year	Number of persons	Fixed	In cash	In instruments 2		In cash	In instrumen ts3	Pensions	Other remuneration1	Total
2024	14	16,466	7,376	7,377		3,319	3,320	4,520	7,153	49,531
2023	14	17,109	7,355	7,356		3,219	3,220	4,775	7,135	50,169

1.Includes other remuneration items such as life and medical insurance premiums and localization aids and lastly RSUs from PagoNxt S.L., for his work as a

director in said entity.

2.The amount of immediate payment for 2024 is 1,611,965 shares( 1,567,930 Santander shares and 1,386,491 share options in 2023).

3.The deferred amount in instruments not linked to long-term objectives for 2024 is 725,399 shares ( 700,305 Santander shares and 554,597 share options in

2023).

In 2024 , the ratio of variable to fixed pay components

was 116% of the total for senior managers, well within

the maximum limit of 200% set by 2024 AGM.

Also, the detail of the breakdown of the remuneration

linked to long-term objectives of the members of senior

management at 31 December 2024 and 31 December

2023 is provided below. These remuneration payments

shall be received, as the case may be, in the

corresponding deferral periods, upon achievement of the

conditions stipulated for each payment (see note 42):

.

EUR thousand
		Variable remuneration subject to long-term objectives1
Year	Number of  people	Cash  payment	Instrument payment	Total
2024	14	3,485	3,486	6,971
2023	14	3,380	3,381	6,761

1. Relates to the fair value of the maximum annual amounts for years

2028, 2029 and 2030 of the ninth cycle of the deferred conditional

variable remuneration plan (2027, 2028 and 2029 for the eighth

cycle of the deferred variable compensation plan linked to annual

objectives for the year 2023).

Additionally, members of senior management who

stepped down from their roles in 2024 consolidated

salary remuneration and other remuneration for a total

amount of EUR 12,303 thousand (EUR 3,560 thousand in

2022). In 2024 rights regarding variable pay subject to

long-term objectives amounted to EUR 633 thousand

(this right has not been generated in 2023 for this

collective).

The maximum number of Santander shares that the

members of senior management at each plan grant date

(excluding executive directors) were entitled to receive

as of 31 December 2024 and 31 December 2023 relating

to the deferred portion under the various plans then in

force is the following (see note 42):

Maximum number of shares to be delivered
	2024	2023
Deferred conditional variable remuneration plan and linked to objectives (2018)	—	72,734
Deferred conditional variable remuneration plan and linked to objectives (2019)	71,294	176,704
Deferred conditional variable remuneration plan and linked to objectives (2020)	370,522	728,200
Deferred conditional variable remuneration plan and linked to objectives (2021)	966,680	1,824,824
Deferred conditional variable remuneration plan and linked to objectives (2022)	1,430,464	2,320,032
Deferred conditional variable remuneration plan and linked to objectives (2023)	1,395,815	—

Since the conditions established in the corresponding

deferred share-based remuneration schemes for prior

years had been met, the following number of Santander

shares was delivered in 2024 and 2023 to the senior

management, in addition to the payment of the related

cash amounts:

71

Number of shares delivered
	2024	2023
Deferred conditional variable remuneration plan and linked to objectives (2017)	—	11,046
Deferred conditional variable remuneration plan and linked to objectives (2018)	57,730	72,734
Deferred conditional variable remuneration plan and linked to objectives (2019)	71,294	88,352
Deferred conditional variable remuneration plan and linked to objectives (2020)	185,261	292,737
Deferred conditional variable remuneration plan and linked to objectives (2021)	351,777	456,206
Deferred conditional variable remuneration plan and linked to objectives (2022)	357,615	2,070,634
Deferred conditional variable remuneration plan and linked to objectives (2023)	1,212,984	—

As indicated in note 5.c above, senior management

participate in the benefit system created in 2012, which

covers the contingencies of retirement, disability and

death. Banco Santander makes annual contributions to

the benefit plans of its senior managers. In 2012, the

contracts of the senior managers with benefit pension

commitments were amended to transform them into a

contribution system. The system, which is outsourced to

Santander Seguros y Reaseguros, Compañía

Aseguradora, S.A., gives senior managers the right to

receive benefits upon retirement, regardless of whether

or not they are active at Banco Santander at such time,

based on contributions to the system. This new system

replaced their previous right to receive a pension

supplement in the event of retirement. In the event of

pre-retirement, and up to the retirement date, senior

managers appointed prior to September 2015 are

entitled to receive an annual allowance.

In addition, further to applicable remuneration

regulations, from 2016 (inclusive), a discretionary

pension benefit component of at least 15% of total

remuneration  in contributions to the pension system has

been included. Under the regime corresponding to these

discretionary benefits, the contributions that are

calculated on variable remunerations are subject to

malus and clawback clauses, subject to policies

applicable at each time, and during the same period in

which the variable remuneration is deferred.

Likewise, the annual contributions calculated on variable

remunerations must be invested in Bank shares for a

period of five years from the date that the senior

manager leaves the Group, regardless of whether or not

they leave to retire. Once that period has elapsed, the

amount invested in shares will be reinvested, along with

the remainder of the cumulative balance corresponding

to the senior manager, or it will be paid to the senior

manager or to their beneficiaries in the event of a

contingency covered by the benefits system.

The contracts of some members of senior management

were modified at the beginning of 2018 with the same

objective and changes indicated in section c of this note

for Ana Botín. The modifications, which are aimed at

aligning the annual contributions with the practices of

comparable institutions and reducing the risk of future

obligations by eliminating the supplementary scheme

for death (widowhood and orphanhood) and permanent

disability in service without increasing the costs to the

bank, are as follows:

• Contributions to the pensionable bases were

reduced. Gross annual salaries were increased in the

corresponding amount.

• The death and disability supplementary benefits

were eliminated since 1 January 2018 for some

members of senior management and since 1 April

2018 for executive directors. A fixed remuneration

supplement reflected in other remuneration in the

table above was implemented on the same date.

• The amounts insured for life and accident insurance

were increased.

All of the above was done without an increase in total

cost for the Bank.

The balance as of 31 December 2024 in the pension

system for those who were part of senior management

at year end amounted to EUR 51 million (EUR 57 million

at 31 December 2023).

The net charge to income corresponding to pension

amounted to EUR 4.5 million   in 2024 (EUR 4.7 million in

31 December 2023).

In 2024 and 2023 there have been no payments in the

form of a single payment of the annual voluntary pre-

retirement allowance.

Additionally, the capital insured by life and accident

insurance at 31 December 2024 of this group amounts

to EUR 83 million (EUR 84.4 million at 31 December

2023).

72

h) Post-employment benefits to former Directors  

and former senior executive vice presidents

The post-employment benefits and settlements paid in

2024 to former directors of the Bank, other than those

detailed in note 5.c amounted to EUR 5.6 million and

EUR 5.6 million in 2023, respectively. Also, the post-

employment benefits and settlements paid in 2024 to

former executive vice presidents amounted to EUR

12.7 million and EUR 15.0 million   in 2023, respectively.

Contributions to insurance policies that hedge pensions

to previous members of the Bank’s board of directors,

amounted to EUR 0.17 million in 2024 (EUR 0.17 million

in 2023). Likewise, contributions to insurance policies

that hedge pensions for previous senior managers

amounted to EUR 2.3 million in 2024 (EUR 3.3 million in

2023).

No releases or charges were recorded in the

consolidated income statement for pension

commitments and similar obligations held by the Group

with previous former members of the bank's board of

directors or former members of senior management in

2024 and 2023.

In addition, 'Provisions - Pension Fund and similar

obligations' in the consolidated balance sheet as at 31

December 2024 included EUR 46 million in respect of the

post-employment benefit obligations to former

Directors of the Bank (EUR 46 million at 31 December

2023) and EUR 96 million corresponding to former

members of senior management (EUR 88 million at 31

December 2023).

i) Pre-retirement and retirement

The board of directors approved an amendment to the

contracts of executive directors whereby they ceased to

have the right to pre-retire in case of termination of his

contract.

j) Contract termination

The executive directors and members of senior

management have indefinite-term employment

contracts. Executive directors or senior managers whose

contracts are terminated voluntarily or due to breach of

duties are not entitled to receive any economic

compensation. If Banco Santander terminates the

contract for any other reason, they will be entitled to the

corresponding legally-stipulated termination benefit,

without prejudice to any compensation that may  for

non-competition obligations, as detailed in the directors'

remuneration policy.

If Banco Santander were to terminate her contract, Ana

Botín would have to remain at Banco Santander’s

disposal for a period of 4 months in order to ensure an

adequate transition, and would receive her fixed salary

during that period.

k) Information on investments held by the directors

in other companies and conflicts of interest

None of the members of the board of directors have

declared that they or persons related to them may have

a direct or indirect conflict of interest with the interests

of Banco Santander, S.A., as set forth in article 229 of the

Corporate Enterprises Act.

73

6. Loans and advances to central

banks and credit institutions

The detail by classification, type and currency, of loans

and advances to central banks and credit institutions in

the balance sheet is as follows:

EUR million
	2024	2023
CENTRAL BANKS
Classification
Financial assets held for trading	1,239	1,146
Financial assets at amortised cost	218	149
	1,457	1,295
Type
Reverse repurchase agreements	1,239	1,146
Other term loans	177	147
Advances different from loans	41	2
Of which, impaired assets	—	—
Of which, valuation adjustments for impairment	—	—
	1,457	1,295
Currency
Euro	1,385	1,295
US Dollars	72	—
	1,457	1,295
CREDIT INSTITUTIONS
Classification
Financial assets held for trading	23,428	10,755
Financial assets designated at fair value through profit or loss	580	701
Financial assets designated at fair value through other comprehensive income	32	—
Financial assets at amortized cost	34,711	34,752
	58,751	46,208
Type
Reverse repurchase agreements	39,238	26,374
Other term loans	9,509	8,390
Non-loans advances	10,004	11,444
Of which, impaired assets	—	—
Of which, valuation adjustments for impairment	(1)	(5)
	58,751	46,208
Currency
Euro	41,951	29,728
Pound sterling	1,618	2,005
US dollar	14,480	14,112
Chilean pesos	7	27
Other currencies	695	336
	58,751	46,208
TOTAL	60,208	47,503

74

The loans and advances classified in the “Financial assets

held for trading” portfolio correspond, mainly, to

temporary acquisitions of assets from Spanish and

foreign institutions.

Deposits in credit institutions classified as "Financial

assets at amortized cost" are mainly term accounts and

guarantees given in cash to credit institutions.

In addition, at 31 December 2024, there were

outstanding balances with central banks and credit

institutions of EUR 94,612 million and EUR 1,526 million,

respectively (EUR 121,325 million and EUR 2,416 million

at 31 December 2023). These balances are included

under 'Cash, cash balances at central banks and other

deposits on demand'.

Note 49 shows the details of the maturity terms of

"Financial assets at amortized cost" and "Cash, cash  

balances at central banks and other deposits on

demand".

The breakdown at 31 December 2024 of the exposure

and the provision fund for financial assets subject to

impaired is EUR 34,963 million and EUR 1 million,

respectively, all in Phase 1 (EUR 34,906 million and EUR

5 million, also Phase 1, in 2023).

75

7. Debt securities 

The detail, by classification, sector and currency, of ‘Debt

instruments’ in the accompanying balance sheets is as

follows:

EUR millon
	2024	2023
Classification
Financial assets held for trading	43,315	30,357
Non-trading financial assets mandatorily at fair value through profit or loss	204	580
Financial assets designated at fair value through other comprehensive income	8,873	4,456
Financial assets at amortized cost	65,917	56,627
	118,309	92,020
Sector
Central banks	2,500	1,562
Public sector	77,927	54,782
Credit institutions	18,781	18,364
Other financial institutions	17,073	15,114
Non-financial institutions	2,028	2,198
Of which, impaired assets	164	148
Of which, value adjustments for impairment	(129)	(140)
	118,309	92,020
Currency
Euro	94,190	72,645
US dollar	10,944	7,542
Pound sterling	8,905	7,670
Brazilian real	1,584	1,777
Other currencies	2,686	2,386
	118,309	92,020

The increase in the year of the debt securities portfolio

under the heading  'Financial assets at fair value with

changes in other comprehensive income' is mainly due

to the increase in exposure to European Union sovereign

debt, as a result of greater activity in the markets

business, both its own and for distribution to clients.

At 31 December 2024, the nominal amount of the debt

securities subject to own obligations, mostly as

collateral for financing lines received by the Bank,

amounts to EUR 35,603 million (EUR 35,307 million at

31 December 2023), of which EUR 5,893 million

correspond to Spanish Public Debt (EUR 9,614 million at

31 December, 2023) .

The breakdown at 31 December 2024 of the exposure,

by phase of impairment, of the assets subject to

impairment is EUR 74,704 million in phase 1, EUR 51

million in phase 2 and EUR 164 million in phase 3. In

2023 it was EUR 61,075 million in phase 1 and EUR 148

million in phase 3.

The breakdown at 31 December 2024 of the provision

fund by phase of impairment of assets subject to

impairment is EUR 9 million in phase 1, EUR 2 million in

phase 2 and EUR 118 million in phase 3. In 2023 it was

EUR 19 million in phase 1 and EUR 121 million in phase

3.

Note 25.e) shows the details of ‘Other comprehensive

income‘ recognized in Equity for the  ‘Financial Assets

designated at fair value through other comprehensive

income‘.

Note 49 contains details of the maturity periods of 'Debt

securities' classified in the 'financial assets at fair value

through other comprehensive income' and 'financial

assets at amortized cost' portfolios.

76

8. Equity instruments

a) Breakdown

The detail, by classification and type, of Equity

instruments in the accompanying balance sheets is as

follows:

EUR million
	2024	2023
Classification
Financial assets held for trading	16,225	14,423
Non-trading financial assets mandatorily at fair value through profit or loss	991	679
Financial assets designated at fair value through other comprehensive income	1,245	983
	18,461	16,085
Type
Shares of Spanish companies	3,682	3,526
Shares of foreign companies	14,280	12,090
Shares of investments funds	499	469
	18,461	16,085

Note 25.c) contains a detail of the ‘Other comprehensive

income’, recognized in equity, on ‘Financial assets

designated at fair value through other comprehensive

income’.

b) Changes

The changes in ‘Non-trading financial assets mandatorily

at fair value through profit or loss’ and ‘Financial assets

at fair value through other comprehensive income’

duri ng 2024 and 2023 were as follows:

EUR million
	2024	2023
Balance at beginning of the year	983	1,268
Purchases and capital increases	3	—
Disposals and capital reductions	(2)	(1)
Other comprehensive income and other conceptsA	261	(284)
Balance at end of the year	1,245	983

A. During 2024 and 2023 there were significant changes in value due,

among others, to the increase and decrease, respectively, in the prices

of listed companies included in this heading .

The main changes in fair value included in Other

Comprehensive Income correspond to the variation in

value of Bank of Shanghai Co. Ltd. (increase of EUR 414

million in 2024 and decrease of EUR 39 million in 2023)

and the reduction in the fair value of the stake in Project

Quasar Investments 2017, S.L. derived from the updates

of the valuation of the assets of that company (EUR 155

and 250 million in 2024 and 2023).

c) Notifications of acquisitions of investments

The notifications of the acquisitions and disposals of

holdings in investees made by the Bank in 2024 , in

compliance with Article 155 of the Spanish Limited

Liability Companies Law and Article 105 of Spanish

Securities Market Law 24/1998, are listed in appendix IV.

9. Trading Derivatives (assets

and liabilities) and short

positions

a) Trading derivatives

The detail, by type of inherent risk, of the fair value of

the trading derivatives arranged by Banco Santander at

31 December 2024 and 2023 is as follows:

EUR million
	2024		2023
	Debit balance	Credit balance	Debit balance	Credit balance
Interest rate	30,265	23,347	30,064	23,204
Equity instruments	1,473	1,482	1,148	955
Currency and gold	19,476	19,647	14,780	16,445
Credit	1,124	1,447	500	667
Commodities	98	97	—	—
Others	26	101	24	108
Total	52,462	46,121	46,516	41,379

b) Short positions

The following is a breakdown of short positions

(liabilities):

EUR million
	2024	2023
Borrowed Securities
Equity instruments	358	312
Representative values of debt	1,347	1,383
Short sales
Debt instruments	23,813	16,142
Total	25,518	17,837

77

10. Loans and advances to

customers

a) Detail

The detail, by classification, of ‘Loans and advances to

customers’ on the balance sheets is as follows:

EUR million
	2024	2023
Financial assets held for trading	23,756	11,000
Non-trading financial assets mandatorily at fair value through profit or loss	932	1,046
Financial assets designated at fair value through profit or loss	4,246	5,105
Financial assets at fair value through other comprehensive income	5,162	4,335
Financial assets at amortized cost	291,597	287,582
Loans and advances to customers (carrying amount)	325,693	309,068
Of which
Impairment losses	(3,959)	(3,982)
Cumulative negative changes in fair value due to credit risk from doubtful exposures	(24)	(24)
Loans and advances to customers (gross amount)	329,676	313,074

‘Note 49 shows the details of the maturity periods of

financial assets at amortized cost.’

At 31 December 2024 and 2023, there were no loans

and advances to customers for material amounts

without fixed maturity dates.

b) Breakdown

The following is a breakdown of the loans and advances

granted to Banco Santander´s customers, which, reflect

the bank´s exposure to credit task in it´s main activity

without considering the balance of impairment losses

taking into account the type and situation of the

transactions, the geographical area of their residence

and type of interest rate on the transactions:

78

EUR million
	2024	2023
Loan type and status
On demand and with a short prior period	188	2,673
Credit cards receivables	1,492	1,318
Commercial credit	32,105	33,148
Finance leases	2,918	2,864
Reverse repurchase agreements	40,348	22,978
Other term loans	238,299	237,048
Non loans advances	10,343	9,039
Of which
Impaired assets	7,052	7,597
Impairment losses	(3,959)	(3,982)
Cumulative negative changes in fair value due to credit risk from doubtful exposures	(24)	(24)
Book value	325,693	309,068
Gross book value	329,676	313,074
Geographical area
Spain	185,135	190,894
European Union (excluding Spain)	34,504	34,728
United States of America and Puerto Rico	54,261	35,546
Other OECD countries	29,004	26,748
Latin America (non-OECD)	9,754	11,347
Rest of the world	17,018	13,811
	329,676	313,074
Interest rate:
Fixed rate	161,092	136,595
Floating rate	168,584	176,479
	329,676	313,074

At 31 December 2024 and 2023 the Bank had EUR

15,837 million and EUR 14,761 million, respectively, of

loans and advances granted to Spanish public

administrations whose rating at 31 December 2024 is A

(rating at 31 December 2023 was A) and with  EUR 4,719

million and EUR 2,653 million, respectively, granted to

the Public Sector of other countries (at 31 December

2024 this amount was composed, based on the rating of

the issuer as follows: 8% AAA, 14% AA, 41% A, 15% BBB

and 23% lower than BBB).

The above-mentioned ratings were obtained by

converting the internal ratings awarded to customers by

Banco Santander (see note 50) into the external ratings

classification established by Standard & Poor's, in order

to make them more readily comparable.

Without considering Public Administrations, the amount

of loans and advances at 31 December 2024 amounts to

EUR 309,120 million, of which EUR 302,068 million are

in a non-doubtful situation (at 31 December 2023, they

amounted to EUR 295,660 million and EUR 288,063

million respectively).

79

The following is a detail, by activity, of the loans to customers at 31 December 2024 , net of impairment losses:

EUR million
	TotalA	Without collateral	Secured loans
			Net exposure		Loan-to-value ratioC
			Of which, property collateral	Of which, other collateral	Less than or equal to 40%	More than 40% and less than or equal to 60%	More than 60% and less than or equal to 80%	More than 80% and less than or equal to 100%	More than 100%
Public sector	18,156	16,469	157	1,530	72	69	13	1,532	1
Other financial institutions and individual traders (business financial activity)	89,446	45,316	1,510	42,620	637	564	319	42,189	421
Non-financial companies and individual entrepreneurs (non-financial business activity) (broken down by purpose)	131,440	89,976	17,802	23,662	7,078	7,064	3,546	19,391	4,385
Of which
Construction and property development(including land)	2,459	9	2,450	—	604	756	496	194	400
Civil engineering construction	1,986	1,293	22	671	14	22	1	611	45
Large companies	88,230	65,850	4,166	18,214	1,579	1,909	925	14,879	3,088
SMEs and individual traders	38,765	22,824	11,164	4,777	4,881	4,377	2,124	3,707	852
Other households (broken down by purpose)	76,309	11,238	63,912	1,159	19,522	21,994	19,012	3,387	1,156
Of which
Residential	60,135	754	59,280	101	17,702	20,264	17,858	2,789	768
Consumer loans	8,874	8,309	256	309	142	104	186	108	25
Other purposes	7,300	2,175	4,376	749	1,678	1,626	968	490	363
TotalA	315,351	162,999	83,381	68,971	27,309	29,691	22,890	66,499	5,963
Memorandum item
Refinanced and restructured transactionsB	5,494	2,533	2,252	709	938	722	349	214	738

A.Not including advances that are not loans.

B.Includes the net balance of value adjustments associated with impaired assets.

C.The ratio is the carrying amount of the transactions at 31 December 2024 calculated using  the latest available appraisal value of the collateral.

80

Note 50 contains information relating to the forborne

loan portfolio .

Below is a breakdown of the movement in gross

exposure by impairment stage of loans and advances

from customers recorded under the headings ‘Financial

assets at amortized cost’ and ‘Financial assets at fair

value through other comprehensive income’ under Bank

of Spain Circular 4/2017 to 31 December 2024 and

2023:

2024
EUR million
	Stage 1	Stage 2	Stage 3A	Total
Balance at beginning of the year	272,599	15,703	7,597	295,899
Movements
Transfers
Transfer to Stage 2 from Stage 1	(7,994)	7,994		—
Transfer to Stage 3 from Stage 1	(848)		848	—
Transfer to Stage 3 from Stage 2		(1,616)	1,616	—
Transfer to Stage 1 from Stage 2	3,928	(3,928)		—
Transfer to Stage 2 from Stage 3		471	(471)	—
Transfer to Stage 1 from Stage 3	10		(10)	—
Net changes on financial assets	8,745	(1,398)	(1,143)	6,204
Write-offs			(1,385)	(1,385)
Differences in change and other movements
Balance at end of the year	276,440	17,226	7,052	300,718

A. The movement of Phase 3 includes portfolio sales for EUR 952

million.

2023
EUR million
	Stage 1	Stage 2	Stage 3A	Total
Balance at the beginning of year	290,103	13,631	9,017	312,751
Movements
Transfers
To stage 2 from stage 1	(6,876)	6,876		—
To stage 3 from stage 1	(1,206)		1,206	—
To stage 3 from stage 2		(1,668)	1,668	—
To stage 1 from stage 2	1,671	(1,671)		—
To stage 2 from stage 3		645	(645)	—
To stage 1 from stage 3	32		(32)	—
Net changes on financial assets	(11,125)	(2,110)	(1,420)	(14,655)
Write-offs	—	—	(2,197)	(2,197)
Differences in change and other movements	—	—	—	—
Balance at end of the year	272,599	15,703	7,597	295,899

A. The movement of Phase 3 includes portfolio sales for EUR 1,055

million.

At 31 December 2024, the total net exposure of loans

and advances to the Bank's customers is EUR 296,760

million, of which EUR 276,057 million correspond to

phase 1, EUR 16,635 million to phase 2 and EUR 4,067

million to phase 3 (EUR 291,917 million, EUR 272,202

million, EUR 15,078 million and EUR 4,637 million

respectively at 31 December, 2022).

This exposure includes EUR 31 million (EUR 48 million at

31 December 2023) in impaired assets purchased with

impairment, classified in phase 3, which correspond

mainly to the business combination carried out by the

Bank.

81

c) Impairment losses on loans and advances to

customers at amortized cost and at fair value

through other comprehensive income

The changes in the impairment losses on the assets

making up the balances of financial assets at amortized

cost and at fair value through other comprehensive

income ‘Loans and advances to customers ’:

EUR million
	2024	2023
Balance at beginning of the year	3,982	4,729
Net impairment losses charged to income for the year	1,445	1,565
Of which
Impairment losses charged to profit or loss	2,764	2,751
Impairment losses reversed with a credit to profit or loss	(1,319)	(1,186)
Write-off of impaired balances against recorded impairment allowance	(1,385)	(2,197)
Exchange differences and other changes	(83)	(115)
Balance at end of the year	3,959	3,982
Of which
By status of the asset
Impaired assets	2,985	2,960
Of which, due to country risk	8	10
Other assets	966	1,012
Balance at end of the year	3,959	3,982
Of which
Individually calculated	783	891
Collective calculated	3,176	3,091

The net provision that has an impact on the results for

the year includes provisions for renegotiation or

contractual modification of EUR 21 million (EUR 45

million at 31 December 2023).

Taking into account the assets in suspense recovered,

which amount to EUR 95 million at 31 December, 2024

(EUR 158 million at 31 December, 2023) and adding to

the net provision of the previous table, the impairment

of 'Credit Entities  and Debt Securities' (see notes 6 and

7), the amount recorded under the heading 'Impairment

or reversal of impairment of financial assets not

measured at fair value through profit or loss and net

gains or losses' , due to changes in 'Financial assets at

fair value with changes in other comprehensive income'

and 'Financial assets at amortized cost', amounts to EUR

1,334 million at 31 December, 2024 (EUR 1,372 million

at 31 December, 2022).

The following is the movement of impairment losses 

broken down by impairment stage of loans and advances

to customers, during 2024 and 2023 :

2024
EUR million
	Stage 1	Stage 2	Stage 3	Total
Balance at beginning of the year	397	625	2,960	3,982
Transfers
Transfer to Stage 2 from Stage 1	(124)	191		67
Transfer to Stage 3 from Stage 1	(8)		318	310
Transfer to Stage 3 from Stage 2		(161)	485	324
Transfer to Stage 1 from Stage 2	15	(102)		(87)
Transfer to Stage 2 from Stage 3		59	(134)	(75)
Transfer to Stage 1 from Stage 3	2		(9)	(7)
Net changes of the exposure and modifications in the credit risk	109	(21)	825	913
Changes due to update in the methodology of estimates of the entity
Write-offs			(1,385)	(1,385)
FX and other movements	(8)	—	(75)	(83)
Gross carrying amount at end of the year	383	591	2,985	3,959

82

2023
EUR million
	Stage 1	Stage 2	Stage 3	Total
Balance at beginning of the year	487	658	3,584	4,729
Transfers
Transfer to Stage 2 from Stage 1	(98)	250		152
Transfer to Stage 3 from Stage 1	(10)		337	327
Transfer to Stage 3 from Stage 2		(115)	361	246
Transfer to Stage 1 from Stage 2	7	(69)		(62)
Transfer to Stage 2 from Stage 3		50	(154)	(104)
Transfer to Stage 1 from Stage 3	15		(24)	(9)
Net changes of the exposure and modifications in the credit risk	(57)	(149)	1,221	1,015
Changes due to update in the methodology of estimates of the entity
Write-offs			(2,197)	(2,197)
FX and other movements	53	—	(168)	(115)
Gross carrying amount at end of the year	397	625	2,960	3,982

d) Impaired assets

The detail of the movement in the balance of financial

assets classified as ‘ Loans and advances to customers ’

and considered to be impaired by reason of their credit

risk during 2024 and 2023 is:

EUR million
	2024	2023
Balance at beginning of the year	7,597	9,017
Net additions	840	777
Written-off assets	(1,385)	(2,197)
Other changes	—	—
Balance at end of the year	7,052	7,597

This amount, once the corresponding provisions have

been deducted, is Banco Santander´s best estimate of

the discounted value of the  cashflows that are expected

to be recovered from impaired assets.

At 31 December 2024, the balance of the assets written-

off amounted to EUR 6,043 million (6,084 millon EUR at

31 of december 2023).

The following are the credit impaired financial assets

and related guarantees maintained to mitigate potential

losses as of 31 December, 2024:

EUR million
	Gross amount	Allowance recognized	Estimated collateral valueA
Without associated real collateral	3,500	1,671	—
With associated real collateral	2,837	1,100	1,631
With other collateral	715	214	439
Total	7,052	2,985	2,070

A. Collects the maximum value of the collateral associated with each loan,

limited to the net carrying amount. Consequently, it does not include any

other cash flow that could be obtained, such as those from the personal

guarantees of the accredited.

When classifying assets in the previous table, the main

factors considered by Banco Santander to determine

whether an asset has become impaired are the existence

of amounts past due -assets impaired due to arrears- or

other circumstances may be arise which will not result in

all contractual cash flow being recovered, such as a

deterioration of the borrower's financial situation, the

worsening of its capacity to generate funds or difficulties

experienced by it in accessing credit.

e) Transferred credits

The heading 'Loans and advances to customers' includes,

among others, those loans transferred to third parties by

securitisation on which risks and profits are maintained,

albeit partially, which is why and in accordance with the

accounting regulations that apply, they cannot be

removed from the balance sheet. This is mainly due to

mortgage loans, loans to companies and consumer

loans. The breakdown of securitised loans held on the

balance sheet, taking into account the nature of the

financial instrument from which they originate, is shown

below:

EUR million
	2024	2023
Retained on the balance sheetA	12,250	12,969
Of which, mortgage assets are securitized through:
Mortgage transfer certificates	7,277	8,369
TotalA	12,250	12,969

A. Note 19 reports the liabilities associated with securitization operations,

discounting the bonds of the securitization funds repurchased by the

Bank.

83

The evolution of this activity responds to its use as a

regulatory capital management tool and as a resource

for the diversification of Banco Santander's liquidity

sources. During 2024 and 2023 the Bank didn't

derecognized any of the securitizations carried out in

years mentioned before, and the balance derecognized

at those dates corresponds to securitizations carried out

in previous years and portfolio sales.

On the other hand, at 31 December 2024, Banco

Santander has credits derecognized from the balance

sheet and on which the administration maintains for an

amount of EUR 4,000 million. (EUR 3,845 millon at 31

December 2023). Within the total loans written off the

balance sheet, at 31  December 2024, there are EUR 497

million (EUR 595 million in 2023) of securitized assets.

84

11. Trading derivatives

The detail of the notional and/or contractual amounts

and the market values of the trading derivatives held by

the Bank in 2024 and 2023 is as follows:

EUR million
	2024		2023
	Notional value	Market value	Notional value	Market value
Held for trading:
Interest rate	8,170,664	6,918	6,245,262	6,860
Options	201,120	(361)	190,946	(460)
Other	7,969,544	7,279	6,054,316	7,320
Equity instruments	139,272	(9)	51,966	193
Options	44,286	(805)	33,011	(486)
Other	94,986	796	18,955	679
Currency and gold	1,093,647	(171)	936,532	(1,665)
Options	115,216	337	64,407	189
Other	978,431	(508)	872,125	(1,854)
Credit	46,923	(323)	22,737	(167)
Hedging default derivative and total through out	46,923	(323)	22,737	(167)
Securities and commodities derivatives and other	5,288	(74)	6,646	(84)
Total	9,455,794	6,341	7,263,143	5,137

12. Non-current assets held for

sale

The detail of non-current assets held for sale in the

balance sheets is as follows:

EUR million
	2024	2023
Foreclosed assets	237	401
Other assets leased out under an operating lease	29	29
Investment property	—	—
Total	266	430

At 31 December 2024, reducing the balance of this

heading, there were EUR 365 million corresponding to

value adjustments due to impairment of those assets,

which entails a coverage of 58% of them (EUR 441

million, with a coverage of 51%, in the 2023 financial

year) of which EUR 61 million have been recorded during

the 2024 financial year (EUR 59 million in the 2023

financial year) under the heading 'Gains or losses from

non-current assets and groups disposal of items

classified as held for sale not eligible as discontinued

operations' (see note 46).

At 31 December 2024 there are no liabilities associated

in disposable groups of items that have been classified

as held for sale associated with other 'non-current

assets and alienable groups of items that have been

classified as held for sale'.

13. Investments

a) Subsidiaries

‘Investments - Subsidiaries’ includes the equity

instruments owned by Banco Santander and issued by

subsidiaries belonging to Grupo Santander.

Relevant information on these companies is provided in

Appendix I.

i. Breakdown

The detail, by currency and listing status, of ‘Investments

- Subsidiaries’ on the balance sheets at 31 December

2024 and 2023 is as follows:

EUR million
	2024	2023
Currency:
Euro	53,197	52,497
Pound Sterling	14,338	13,613
Other currencies	30,139	31,034
	97,674	97,144
Listing status:
Listed	4,275	4,576
Unlisted	93,399	92,568
	97,674	97,144

85

ii. Changes

The changes in 2024 and 2023 in ‘Investments -

Subsidiaries’, disregarding impairment losses, were as

follows:

EUR million
	2024	2023
Balance at beginning of the year	109,567	102,876
Acquisitions, contributions, capital increase payments and mergers	4,554	8,245
Of which
Santander Group Properties, S.L.U.	1,062	—
Deuda contingentemente convertibles (AT1)	782	1,371
Banco Santander International SA	517	—
Santander Bank & Trust, LTD	389	—
Moon GC&P Investments, S.L.U.	300	—
Cántabro Catalana de Inversiones, S.A.	263	—
Deva Capital Holding Company, S.L. Unipersonal	254	62
Tresmares Santander Direct Lending SICC, S.A.	174	349
PagoNxt, S.L.	170	331
Grupo Financiero Santander México, S.A. de C.V.	110	—
Santander Insurance, S.L.	—	3,139
Landcompany 2020, S.L. Unipersonal	—	1,362
Altamira  Santander Real Estate, S.A.	—	618
Banco Santander México, S.A. Institución de Banca Múltiple, Grupo Financiero Santander México	—	312
Disposals, capital reductions and mergers	(3,880)	(3,526)
Of which
Parasant SA	1,012	—
Santander Global Services, S.L.Unipersonal	570	—
Santander Insurance, S.L.	443	—
Santander Facility Management Espana, S.L. Unipersonal	393	—
Santander Bank Polska S.A.	357	—
Cántabra de Inversiones, S.A. Unipersonal	263	—
Consulteam Consultores de Gestão, Unipessoal, Lda.	209	—
Moon GC&P Investments, S.L.U.	209	—
Santander UK Investments	119	—
Luri 6, S.A. Unipersonal	—	(1,957)
Santander Seguros y Reaseguros, Comapañía Aseguradora, S.A.	—	(1,188)
Transfers	—	—
FX and other movements	(330)	1,972
Balance at end of the year	109,911	109,567

86

In February 2024, members of the company MOON

GC&P Investments, S.L.U were bought and contributed

for an amount of EUR 300 million, with the aim of

acquiring an indirect majority stake in Adprotel Strand

(hotel investment). Throughout the year, the company

has made a premium refund of EUR 209 million.

In March 2024, as part of the reorganization process of

several companies of the Santander Group, the holding

company called Santander Group Properties, S.L.U. Was

established, which will act as the head entity of the real

estate companies that own the Group’s corporate

buildings. In addition, 26 March 2024 the Bank made a

capital increase in the company from non-cash

contributions consisting of the participation of the

company Santander Facility Management España, S.L.U,

amounting to EUR 413 million. The reduction of the

participation was made for the amount of EUR 393

million and there has been a payment in reserves for the

amount of EUR 19 million (see note 29). With the same

date, a capital increase of the same characteristics was

made, consisting of the contribution of its participation in

Santander Global Services, S.L. Unipersonal, amounting

to EUR 373 million. The reduction of the participation

was made for EUR 551 million (since previously the

company made a refund of EUR 20 million) and there has

been a use of the impairment fund of EUR 178 million

(see note 13.a.iii).

On July 16, 2024 the Bank made another capital increase

in this company of the same characteristics, consisting of

the contribution of the participation in Santander UK

Investments amounting to EUR 114 million. The

reduction of the participation has been made by the

value in euros at the date of the contribution of GBP 100

million. On October 22,  2024 a contribution of partners

was made, in kind, consisting of the participation of

Santander Global Sport, S.A, amounting to EUR 15

million. The reduction of the portfolio has been made in

the amount of EUR 42 million, which has meant a

release of the impairment fund of EUR 27 million (see

note 13.a.iii). In addition, the Bank has also made a

monetary contribution to this company amounting to

EUR 147 million.

The 11 July 2024 signed the merger by absorption of

Cántabro Catalana de Inversiones, S.A. (acquiring

company) and Cántabra de Inversiones, S.A. Unipersonal

(acquired company), with the dissolution without

liquidation of the company acquired and the transfer of

its assets in block to the acquiring company, As part of

the process of streamlining the corporate structure

within the Group, with the aim of simplifying its

management, facilitating the efficient allocation of

resources and reducing administrative costs.

In September 2024, Banco Santander, S.A sold 5.21% of

its stake in Santander Banks Polska, S.A for an amount of

EUR 575 million. This has resulted in a reduction in the

cost of participation of EUR 357 million and a net profit

of EUR 209 million (see note 45).

On December 4, 2024 has been raised to the public the

deed of merger by cross-border non-European

absorption of the companies SIB Besaya, S.L.U. and

Parasant SA (companies acquired) by Banco Santander,

S.A. (Acquiring company), including among other assets,

the companies Banco Santander International SA,

Santander Bank & Trust Ltd, Santander Investments

Chile Limitada and Santander Inversiones, S.A., the net

amount registered under this heading for this operation

was EUR 1,065 million, with a reserve payment of EUR

166 million (see note 1).

In December 2024, was carried out the liquidation of the

company Consulteam Consultores de Gestão,

Unipessoal, Lda. for an amount of EUR 209 million,

which has meant a use of the fund endowed with the

same amount (see Note 13.a.iii).

Throughout 2024, Banco Santander has subscribed

capital increases and has made contributions from

partners in other companies, the most relevant being:

EUR 254 million in Deva Capital Holding Company, S.L.

Unipersonal, EUR 110 million in Grupo Financiero

Santander México, S.A. de C.V., 174 million in Tresmares

Santander Direct Lending, SICC, S.A. and EUR 170 million

in PagoNxt, S.L (of which EUR 48 million is contribution

in kind). Additionally, the company Santander Insurance,

S.L. has made premium refunds of EUR 443 million.

In March of 2023, as part of the process of reordering the

holding and administration of the shareholdings of the

insurance companies of the Santander Group, a company

called Santander Insurance, S.L., which acts as the head

entity of the Insurance Group, was established. In

addition, 3 August 2023 the Bank made a capital

increase in the company from non-cash contributions

consisting of the participation of the company Santander

Seguros y Reaseguros Compañía Aseguradora, S.A,

amounting to EUR 1,536 million. The reduction of the

participation was made for the amount of EUR 1,188

million and there was a payment in reserves of EUR 348

million. A capital increase with the same characteristics

was made with the same date 12 December 2023,

consisting of the participation of the companies Zurich

Santander Insurance América, S.L., CNP Santander

Insurance Life Designated Activity Company, CNP

Santander Insurance Europe Designated Activity

Company and CNP Santander Insurance Services Ireland

Limited, for the amount of EUR 1,322 million. The

reduction of the shares was made in the amount of EUR

1,057 million and there was a payment in reserves

amounting to EUR 265 million (see note 13.c.ii). In 2023,

the Bank also made a monetary contribution to this

company amounting to EUR 281 million.

With 26 June 2023 date, the company LURI 6, S.A.U.

made a partial monetary distribution of the issuance

premium for an amount of EUR 1,000 million. This

resulted in a reduction in the cost of participation of EUR

1,339 million and an impairment application of EUR 339

87

million (see note 133.a.iii). In addition, 19 September

2023 was raised to public the merger by absorption of

LURI 6, S.A.U. (company absorbida) by Altamira

Santander Real Estate, S.A., with unliquidated

dissolution of the company acquired and universally

transferring its assets to the acquiring company.

The 19 September 2023, the Bank made a purchase on

the partipation that Altamira Santander Real Estate, S.A.

maintained on the company Landcompany 2020, S.L.

Unipersonal for an amount of EUR 1,362 million,

reaching 100% of it.

During 2023, within the framework of the Public Offer

for the acquisition of shares of Banco Santander México,

S.A., Institución de Banca Multiple, Grupo Financiero

Santander México, for up to all of the Serie B shares

representing the share capital, Banco Santander

acquired 3.74% of the company’s shares, both in Mexico

and the United States. This meant an outlay of EUR 312

million, including the costs of the operation.

Also, throughout the year 2023 Banco Santander

subscribed capital increases and has made contributions

from partners, the most important being: EUR 349

million in Tresmares Santander Direct Lending, SICC, S.A.

and EUR 331 million in PagoNxt, S.L.

iii. Impairment losses

The changes in the balance of this item were as follows:

EUR million
	2024	2023
Balance at beginning of the year	12,423	11,940
Net impairment losses (reversals) (note 44)	171	954
Other changes	(357)	(471)
Balance at end of the year	12,237	12,423

The Management carries out an analysis of the potential

loss of value of the investments in subsidiaries, joint

ventures and associates that it has registered with

respect to their book value. Said analysis is carried out

using different parameters, such as equity value, listed

value and recoverable value, which is obtained from

estimates of expected cash flows or net worth corrected

by tacit capital gains existing on the date of the

valuation.

In accordance with the above, Banco Santander has

carried out the evaluation of its investees in December

2024. Among the impairment allowances made by the

Bank during the financial year 2024 are EUR 94 million

from Altamira Santander Real Estate, S.A and EUR 70

million from Uro Properties Holdings, S.A.

Following the same criteria, Banco Santander carried out

in December 2023 the evaluation of its investees. The

impairment charges made by the Bank in 2023 included

EUR 423 million from PagoNxt, SL and EUR 238 million

from Altamira Santander Real Estate, S.A.

b) Joint venture entities

The cost of the investees recorded under this Caption at

December 31, 2024 amounted to EUR 640 million, while

the impairment recorded at that date was EUR 318

million (EUR 597 million and EUR 263 million,

respectively, in 2023).

In October 2024, UCI, S.A. approved a capital increase

through the contribution of perpetual subordinated

obligations contingently convertible into shares,

corresponding to Banco Santander EUR 41 million.

On June 9, 2023, Santander Bank signed an agreement

to acquire from Pacific Partnership 49% of the share

capital of Glenrowan Solar Holding Pty Ltd, owner of

Glenrowan Solar Farm in Australia. During that year,

contributions amounting to EUR 28 million were made.

In December 2023, UCI, S.A. approved a capital increase,

corresponding to Banco Santander an amount of EUR 44

million.

During 2024, Banco Santander has provided impairment

for a net amount of EUR 55 million (EUR 62 million in

2023) for the entities recorded under this caption,

mainly for UCI, S.A.

c) Associated entities

‘Investments - Associated’ in the accompanying balance

sheets includes Banco Santander`s ownership interests

in associates (see note 2.b).

Appendix II contains a detail of these companies,

indicating the percentages of direct or indirect ownership

and other relevant information.

At 31 December 2024, there were no capital increases in

progress at any associated company.

i. Breakdown

The detail of the balance of this heading of the attached

balances, based on the contracting currency and the

admission or non-listing of the securities, is as follows:

EUR million
	2024	2023
Currency:
Euro	2,049	1,848
Foreign Currency	—	—
	2,049	1,848
Listing status:
Listed	1,988	1,793
Unlisted	61	55
	2,049	1,848

88

ii. Changes

The changes in 2024 and 2023 in ‘Investments -

Associates’’, disregarding impairment losses, were as

follows, (see note 13.c.iii):

EUR million
	2024	2023
Balance at the beginning of the year	2,134	3,221
Purchases, capital increases and mergers	246	3
Of which
Merlín Properties, SOCIMI, S.A.	231	3
Disposals, reductions and mergers:	(47)	(1,101)
Of which
Metrovacesa, S.A.	(47)	(44)
Zurich Santander Insurance América, S.L.	—	(757)
CNP Santander Insurance Life Designated Activity Company	—	(193)
CNP Santander Insurance Europe Designated Activity Company	—	(105)
CNP Santander Insurance Services Ireland Limited	—	(2)
Transfers	—	—
Other changes (net)	—	11
Balance at end of the year	2,333	2,134

In July 2024, the Board of Directors of MERLIN

PROPERTIES, SOCIMI, S.A. approved an increase in equity

capital through monetary contributions, as part of an

accelerated placement operation. Banco Santander has

subscribed shares for an amount of EUR 226 million.

In April and December 2024, Metrovacesa, S.A. has

made two dividend distributions from the freely

available reserve (issuance premium), having received

two payments of EUR 17 and EUR 16 million

respectively. These operations have resulted in a

reduction in the cost of participation of EUR 47 million

and an impairment application of EUR 13 million (see

note 13.c.iii).

In April and December of 2023, Metrovacesa, S.A. made

dividend distributions from the free disposal reserve

(issuance premium), having received Banco Santander

two payments of EUR 16 million each. These operations

resulted in a reduction in the cost of participation of EUR

44 million and an impairment application of EUR 12

million (see note 13.c.iii).

iii. Impairment losses

The changes in the balance of this item were as follows:

EUR million
	2024	2023
Balance at the beginning of the year	286	267
Net impairment losses (reversals) (note 44)	11	31
Other changes	(13)	(12)
Balance at end of the year	284	286

14. Insurance contracts linked to

pensions

The detail of Insurance contracts linked to pensions in

the balance sheets are as follows:

EUR million
	2024	2023
Assets relating to insurance contracts covering post-employment benefit plan obligations (notes 17 and 23)	267	288
Total	267	288

89

15. Tangible assets

a) Changes

The changes in 2024 and 2023 in ‘Tangible assets’ in the

balance sheet were as follows:

EUR million
	Tangible assets				Of which: For leasing
	For own use	Leased out under an operating lease	Investment property	Total	For own use	Leased out under an operating lease	Investment property	Total
Cost
Opening balance at 1 January 2023	8,131	1,159	370	9,660	3,136	—	—	3,136
Additions/disposals (net)	37	49	—	86	(73)	—	—	(73)
Transfers and other	(1,071)	—	(27)	(1,098)	133	—	—	133
Balance at 31 December 2023	7,097	1,208	343	8,648	3,196	—	—	3,196
Additions/disposals (net)	(2)	3	—	1	(147)	—	—	(147)
Transfers and others	(201)	—	(45)	(246)	83	—	—	83
Balance at 31 December 2024	6,894	1,211	298	8,403	3,132	—	—	3,132
Accumulated depreciation
Opening balance at 1 January 2023	(2,621)	(281)	(36)	(2,938)	(761)	—	—	(761)
Charge for the year	(385)	(130)	(3)	(518)	(228)	—	—	(228)
Disposals	39	109	—	148	39	—	—	39
Transfers and others	1,189	—	1	1,190	—	—	—	—
Balance at 31 December 2023	(1,778)	(302)	(38)	(2,118)	(950)	—	—	(950)
Charge for the year	(362)	(138)	(2)	(502)	(209)	—	—	(209)
Disposals	194	131	—	325	193	—	—	193
Transfers and others	260	—	2	262	—	—	—	—
Balance at 31 December 2024	(1,686)	(309)	(38)	(2,033)	(966)	—	—	(966)
Impairment losses
Opening balance at 1 January 2023	(118)	—	(92)	(210)	—	—	—	—
Charge for the year	(1)	—	—	(1)	—	—	—	—
Disposals	24	—	—	24	—	—	—	—
Transfers and others	29	—	(4)	25	—	—	—	—
Balance at 31 December 2023	(66)	—	(96)	(162)	—	—	—	—
Charge for the year	(3)	—	—	(3)	2	—	—	2
Disposals	—	—	—	—	—	—	—	—
Transfers and others	5	—	9	14	(2)	—	—	(2)
Balance at 31 December 2024	(64)	—	(87)	(151)	—	—	—	—
Tangible assets, net
Balance at 31 December 2023	5,253	906	209	6,368	2,246	—	—	2,246
Balance at 31 December 2024	5,144	902	173	6,219	2,166	—	—	2,166

90

b) Property, plant and equipment - for own use

The detail, by class of asset, of ‘Property, plant and

equipment - For own use’ on the balance sheets in 2024

and 2023   is as follows:

EUR million
	Cost	Accumulated depreciation	Impairment losses	Carrying amount	Of which, right-of- use for operating lease
Land and buildings	5,684	(1,230)	(66)	4,388	2,246
Furniture, fixtures and vehicles	986	(245)	—	741	—
Computer hardware	370	(303)	—	67	—
Other	57	—	—	57	—
Balance at 31 December 2023	7,097	(1,778)	(66)	5,253	2,246
Land and buildings	5,610	(1,290)	(64)	4,256	2,166
Furniture, fixtures and vehicles	968	(241)	—	727	—
Computer hardware	249	(155)	—	94	—
Other	67	—	—	67	—
Balance at 31 December 2024	6,894	(1,686)	(64)	5,144	2,166

The carrying amount at 31 December 2024 in the table

above includes the following approximate amounts:

• EUR 5 million (EUR 4 million at 31 december 2023)

relating to property, plant and equipment owned by

Banco Santander's branches located abroad.

• EUR 217 million (EUR 309 million at 31 December

2023) relating to property, plant and equipment held

under finance leases by Banco Santander, of which

EUR 205 million related to leases in effect as of 31

December 2024 (EUR 245 million at 31 December

2023).

c) Tangible assets - Leased out under an operating

lease

Banco Santander has assets assigned under operating

lease where the company is the lessor and they do not

meet the accounting requirements to be classified as

financial leases. The net cost of these leases is recorded

as an asset and is depreciated on a straight-line basis

over the contractual term of the lease up to the expected

residual value.

The expected residual value and, consequently, the

monthly depreciation expense may change during the

term of the lease. The Bank estimates expected residual

values using independent data sources and internal

statistical models. Likewise, it evaluates the estimate of

the residual value of said leases and adjusts the

depreciation rate based on the change in the expected

value of the asset at the end of the lease.

Banco Santander periodically evaluates its investment in

operating leases and whenever there are indications of

impairment, such as a systemic and material decrease in

the values of the assigned assets. If assets leased under

operating leases are considered to be impaired,

impairment is measured as the amount by which the

assets' carrying amount exceeds fair value as estimated

by discounted cash flows. During the years 2024 and

2023, the Bank has not recorded any material

impairment for this concept.

During the years 2024 and 2023, no significant variable

payments have been made not included in the valuation

of lease assets.

d) Tangible assets - Investment property

The fair value of the investment property at 31

December  2024 and 2023 amounts to EUR 259 million

and EUR 303 million, respectively. A comparison of the

fair value of investment property at 31 December  2024

and 2023 with the net book value results in gross

unrealised gains of EUR 86 million and EUR 94 million

for each of these years, respectively, attributed to the

Bank in full.

Rental income from investment properties and direct

expenses related to both investment properties that

generated income during 2024 and 2023 and those

investment properties that did not generate income

during 2024 and 2023 are not material in the context of

the entity's annual accounts.

91

16. Intangible assets

a) Goodwill

The detail of the 'Goodwill', on the balance sheets is as

follows:

EUR million
	2024	2023
Santander España	623	623
Amortization charge	(414)	(352)
Balance at end of year	209	271

The movement during the years 2024 and 2023 has

been as follows:

EUR million
	2024	2023
Balance at beginning of the year	271	334
Additions (note 3)	—	—
Amortization charge	(62)	(63)
Impairment losses	—	—
Disposals or changes in scope	—	—
Balance at end of year	209	271

Neither in 2024, nor in 2023 has goodwill been

generated.

All of the goodwill recorded at the end of the 2024 and

2023 financial years comes from the following corporate

operations that were carried out in the 2018 financial

year:

• Merger by absorption of Banco Popular Español,

S.A.U. On June 7, 2017, Banco Santander acquired

100% of the share capital of Banco Popular Español,

S.A.U. Subsequently, on September 28, 2018, the

deed of merger by absorption of Banco Popular

Español, S.A.U. was registered in the Mercantile

Registry of Cantabria by Banco Santander, S.A. with

accounting effects January 1, 2018, transferring to

the books of Banco Santander a gross goodwill of

EUR 248 million.

• Repurchase of the credit and debit card business

marketed by Grupo Banco Popular in Spain and

Portugal generating the business combination a

goodwill of EUR 375 million.

In accordance with Bank of Spain Circular 4/2017, the

goodwill is amortized within a period of ten years. In

addition, the Bank periodically reviews the term and

method of amortization and, if deemed inappropriate,

the impact will be treated as a change in accounting

estimates.

As of 31 December 2024 and 2023 the amount of

goodwill recorded by Banco Santander, net of

accumulated depreciation, amounted to EUR 209 million

and EUR 271 million, respectively.

Banco Santander, at least annually and whenever there

are signs of impairment, conducts an analysis of the

potential loss of value of the trade funds it has recorded

in respect of their recoverable value.

The first step in carrying out this analysis requires the

identification of the cash-generating units, which are the

smallest identifiable groups of assets in Banco

Santander  that generate cash inflows and are largely

independent of the cash flows of other assets or asset

groups.

For the purposes of those mentioned in the preceding

paragraph, the Bank's administrators have identified the

commercialbanking business in Spain as the cash-

generating unit to which to allocate goodwill arising

both by the acquisition and subsequent merger by

absorption of Banco Popular Español, S.A.U. and by the

repurchase of the credit and debit cards from Grupo

Banco Popular.

Its carrying value is determined taking into account the

book value of all the assets and liabilities that make up

the commercial banking business in Spain, together with

the corresponding goodwill. Said book value is compared

with its recoverable amount in order to determine if

there is impairment.

The recoverable amount of Santander España cash-

generating unit has been determined as the fair value of

such cash-generating unit obtained using quotes, market

references (multiples) or internal estimates. At the end

of the fiscal year said value exceeded the book value.

Based on previous data, and in accordance with the

estimates of the Bank's administrators, during the years

2024  and 2023 the Bank has not recorded any amount

under the heading 'Impairment in value or reversal of

impairment in value of non-financial assets - intangible

assets' in concept of impairment of goodwill.

b) Other intangible assets

i. Breakdown

The detail of Intangible assets  ‘Other intangible assets’

on the balance sheets is as follows:

EUR million
	2024	2023
With finite useful life
IT Developments	1,480	1,436
Accumulated amortization	(859)	(865)
Balance at end of year	621	571

92

ii. Changes

The changes in Intangible assets ‘Other intangible

assets’ on the balance sheets were as follows:

EUR million
	2024	2023
Balance at 31 of december of prior year	571	525
Additions	222	195
Disposals	(178)	—
Amortization charge	(172)	(147)
Amortization charge disposals	178	—
Impairments losses	—	(2)
Balance at end of year	621	571

17. Other assets and Other

liabilities

The detail of ‘Other assets and Other liabilities’ on the

accompanying balance sheets is as follows:

EUR million
	Assets		Liabilities
	2024	2023	2024	2023
Transactions in transit	—	—	5	11
Insurance contracts linked to pensions (note 14)	267	288	—	—
Inventory	—	—	—	—
Prepayments and accrued income	522	463	2,856	2,731
OtherA	1,848	1,538	1,306	1,586
Total	2,637	2,289	4,167	4,328

A. Includes, mainly, unsettled transactions.

93

18. Deposits from central banks

and credit institutions

The detail by classification, type and currency of

‘Deposits from central banks’ and ‘Deposits from credit

institutions’ on the accompanying balance sheets is as

follows:

EUR million
	2024	2023
CENTRAL BANKS
Classification
Financial liabilities held for trading	9,123	5,453
Financial liabilities designated at fair value through profit or loss	1,774	1,209
Financial liabilities at amortized cost	5,117	11,682
	16,014	18,344
Type
Current accounts / Intraday deposits	404	116
Time deposits	4,960	10,731
Deposits available with prior notice	—	—
Repurchase agreements	10,650	7,497
	16,014	18,344
Currency
Euro	7,991	11,424
US dollar	5,432	4,270
Pound Sterling	2,513	2,350
Other currencies	78	300
	16,014	18,344
CREDIT INSTITUTIONS
Classification
Financial liabilities held for trading	24,884	17,548
Financial liabilities designated at fair value through profit or loss	2,107	1,872
Financial liabilities at amortized cost	38,691	35,503
	65,682	54,923
Nature
Current accounts / Intraday deposits	4,752	5,103
Time deposits	18,222	17,990
Deposits available with prior notice	—	—
Repurchase agreements	42,708	31,830
	65,682	54,923
Currency
Euro	38,693	31,524
US dollar	22,011	17,586
Pound Sterling	2,866	5,135
Other currencies	2,112	678
	65,682	54,923
Total	81,696	73,267

94

Banco Santander, following the various long-term

financing programmes of the European Central Bank

(TLTRO, targeted longer-term refinancing operation),

does not mantain, on December 31, 2024, deposits at

amortized cost from the TLTRO III programme (EUR

5,562 million at 31 December 2023). At December 2024,

the expense recognized in the profit and loss account, for

the amounts held up to March 2024 corresponding to

TLTRO III, is EUR 53 million.

The deposits classified in the 'Liabilities held for trading'

portfolio correspond to temporary transfers of assets of

Spanish and foreign institutions.

Note 49 contains a detail of the residual maturity periods

of financial liabilities at amortized cost.

95

19. Customer deposits

The detail by classification, type, sector and geographical

area, of ‘Customer deposits’ is as follows:

EUR million
	2024	2023
Classification
Financial liabilities held for trading	13,503	13,835
Financial liabilities designated at fair value through profit or loss	28,307	34,135
Financial liabilities at amortized cost	348,912	337,089
	390,722	385,059
Type
Current accounts / Intraday deposits	256,576	250,109
Time depositsA	99,289	106,829
Deposits available with prior notice	—	—
Repurchase agreements	34,857	28,121
Of which, subordinated deposits	—	—
Of which, issued securities	3,609	2,402
	390,722	385,059
Sector
Public sector	41,299	31,752
Other financial companies	87,905	94,544
Non-financial companies	110,029	107,982
Households	151,489	150,781
	390,722	385,059
Geographical area
Spain	272,053	259,233
European Union (excluding Spain)	63,936	69,306
United States and Puerto Rico	34,172	32,479
Other OECD countries	4,874	6,501
Latin America (non-OECD)	4,850	8,573
Rest of the world	10,837	8,967
	390,722	385,059

A. Of the total time deposits, EUR 21,077 million correspond to branches of the entity abroad (EUR 26,802 million in 2023).

The item issued securities in the table above include the

liabilities associated with securitisation transactions (see

note 10.e).

Note 49 contains a detail of the residual maturity periods

of financial liabilities at amortized cost.

96

20. Marketable debt securities

a) Breakdown

The detail by classification and type, of ‘Marketable debt

securities’ in the accompanying balance sheets is as

follows:

EUR million
	2024	2023
Classification:
Financial liabilities at amortized cost	146,113	125,969
Financial liabilities designated at fair value through profit or loss	1,069	208
	147,182	140,078
Type:
Certificates of deposit	9,633	10,820
Guaranteed bonds	50,774	52,131
Mortgage-backed bonds	39,903	41,881
Others mortgage-backed bonds and guaranteed bonds	10,871	10,250
Other issued securities (note 21)	114,982	105,185
Of which, subordinated liabilities	28,142	24,218
Treasury sharesA	(29,539)	(28,681)
Valuation adjustments	1,332	623
	147,182	140,078

A. At 31 December  2024 y 2023, the registered balance corresponds mainly to guaranteed bonds.

Note 49 contains a detail of the residual maturity periods

of financial liabilities at amortized cost.

b) Certificates of deposit

The detail of certificates of deposits by currency of

issuance is as follows:

			2024
	EUR million		Outstanding issue amount in foreign currency (million)	Annual interest rateA
Currency of issuance	2024	2023
US dollar	6,005	7,316	6,240	5.52%
Pound Sterling	2,947	3,246	2,444	4.91%
Hong Kong dollar	605	258	4,881	4.37%
Chinese Yuan	76	—	577	3.15%
Balance at end of the year	9,633	10,820

A. Average interest rates for different issue based on their nominal values.

97

i. Changes

The changes in certificate of deposit on the balance

sheet for the years 2024 and 2023 are  as follows:

EUR million
	2024	2023
Balance at end of the prior year	10,820	11,611
Issues	17,184	26,549
Redemptions	(18,965)	(27,147)
Exchange differences and other changes	594	(193)
Balance at end of the year	9,633	10,820

At 31 December 2024, the Bank issued certificates of

deposit amounting to EUR 17,184 million (EUR 26,549

million as at 31 December 2023), with an average

maturity of 7 months (5 months during the 2023

financial year), of which EUR 18,965 million have been

amortized (EUR 27,147 million at December 2023).

c) Marketable Mortgage- backed securities 

The detail by currency of issuance, of ‘Marketable

mortgage-backed securities’ is as follows:

			2024
	EUR million		Annual interest rate A
Currency of issuance	2024	2023
Euros	39,903	41,881	1.61%
Balance at end of the year	39,903	41,881

A. Average interest rate of the various issues based on their nominal

values.

The issuing entity may repay the mortgage bonds early,

if this has been expressly established in the final

conditions of the issue in question and in the conditions

established there.

None of the mortgage bonds issued by Banco Santander

have replacement assets involved.

During 2023, the Bank of Spain has published Circular

1/2023 of 4 February , which modifies Circular 4/2017,

repealing the breakdown in the annual accounts and the

information related to internal accounting development

and management control.

d) Other mortgage bonds and guaranteed bonds

The balance of ‘Other mortgage bonds and guaranteed

bonds’ relates to the rest of covered bonds and

certificates. The breakdown, by issue currency and

interest rate, is as follows:

			2024
Currency of issuance	EUR million		Annual interest rateA
	2024	2023
Euro	4,807	4,550	3.08%
US dollar	6,064	5,700	5.52%
Balance at end of the year	10,871	10,250

A. Average interest rate of the various securities at 31 December 2024

based on their nominal amounts.

e) Guarantee

The mortgage-backed bonds (‘ cédulas hipotecarias’) are

secured by mortgage loans with average maturities of

more than ten years. In order to calculate the amount of

the qualifying assets in accordance with Royal Decree-

Law 24/2021 transposing the European Union directive

on covered bonds, the following transactions are

excluded from the total base of the unsecuritized

mortgage portfolio:

– Transactions classified as at pre-action stage and

procedural stage.

– Transactions without appraisal by a specialist

valuer.

– Transactions exceeding 80% of the appraized

value in residential financing and 60% in the case

of other assets.

– Second mortgages or mortgages with insufficient

collateral.

– Transactions without insurance or with

insufficient insurance.

The asset-backed securities, including asset-backed

securities and notes issued by special-purpose vehicles

(SPVs), are secured by:

– Mortgage loans to individuals to finance the

acquisition and refurbishment of homes with an

average maturity of more than ten years.

– Personal consumer finance loans with no specific

guarantee and unsecured loans with an average

maturity of five years.

98

– Loans to SMEs (non-financial small and medium-

sized enterprises) secured by State guarantees,

and loans to companies (SMEs -self-employed,

microbusinesses, small and medium-sized

enterprises- and large companies) secured by

property mortgages, the borrower's personal

guarantee, guarantees and other collateral other

than property mortgages, with an average

maturity of 7 years.

– Mortgage and non-mortgage loans to finance

municipalities, autonomous communities and

subsidiaries with an average maturity of more

than 10 years.

– Commercial credit of Banco Santander (ordinary

and occasional invoice discounting and advances

to customers on legitimate receivables) with an

average maturity of 45 days.

Additionally, Banco Santander, issues

internationalization certificates, which are securities

whose capital and interest are guaranteed by loans and

credits that are linked to the financing of export

contracts or the internationalization of companies. These

internationalization bonds have been repurchased in

their entirety by Banco Santander.

The fair value of the guarantees received by Banco

Santander (financial and non-financial assets) which the

Group is authorised to sell or pledge even if the owner of

the guarantee has not defaulted is scantly material

taking into account the Bank's financial statements as a

whole.

21. Other issuances

a) Breakdown

The following is a breakdown of the balance under this

heading on the attached balance sheets, taking into

account their nature and currency of the transactions:

EUR millionA
	2024	2023
Type
Other issuances	114,982	105,185
Of which, subordinated liabilities	28,142	24,218
	114,982	105,185
Currency
Euro	59,999	53,955
US dollar	43,616	41,852
Pound Sterling	5,360	4,830
Other currenciesB	6,007	4,548
	114,982	105,185

A. This amount includes the principal, in other currencies.

B. At 31 December 2024, the most significant currencies are: Swiss franc

(EUR 2,476 million), Australian dollar (EUR 1,895 million) and Norwegian

krone (EUR 401 million). At 31 December 2023, the most significant

currencies were: Japanese yen (EUR 634 million), Swiss franc (EUR 1,627

million) and Australian dollar (EUR 1,255 million).

b) Changes

The changes in ‘Other issuances ’ in the foregoing table

for the years 2024 and 2023 are as follows:

EUR million
	2024	2023
Balance at the end of prior year	105,185	93,192
Issues	40,824	51,771
Redemptions	(33,871)	(38,505)
Exchange differences	2,844	(1,273)
Balance at end of the year	114,982	105,185

Within the sub-heading ’Other issuances’ there are

commercial paper issues as well as other issuances

made by Banco Santander.

• Commercial paper

On March 14, 2024, Banco Santander approved the

annueal renewal of the "European Comercial Paper

Issuance Program" for an overall maximum nominal

amount up to EUR 20,000 million. On November 15,

2024, the "American Commercial Paper Issuance

Program" was renewed for an aggregate nominal

amount of up to USD 25,000 million.

At 31 December 2024 the average nominal interest rate

for European Commercial Paper is 4.06% per annum and

for American Commercial Paper 5.45% per annum. At

99

year-end 2023, the average interest rate was 4.75% per

annum.

As regards renewals in 2023, on March 14, 2023, Banco

Santander approved the annual renewal of the

"European Commercial Paper Issuance Programme" for

a maximum aggregate nominal amount of up to EUR

20,000 million. On November 16, 2023, the "American

Commercial Paper Issuance Program" was renewed for

an aggregate nominal amount of up to USD 25,000

million.

• Remaining emissions

During fiscal year 2024, Banco Santander, S.A. has

reported 76 issues of "Other non-convertible securities"

for a nominal amount of EUR 20,253 million (no

perpetual issues were made in 2024, see note 21.c), of

which the Bank has repurchased a balance of EUR 370

million. The average remuneration of these issues has

been set at 4.53% per year.

During the 2023 fiscal year, Banco Santander, S.A. has

reported 31 issues for a nominal amount of EUR 16,945

million (no perpetual issues were made in 2023, see

note 21.c), of which the Bank has repurchased a balance

of EUR 1,290 million. The average remuneration of these

issues has been set at 5.02% per year.

c)  Other disclosures

This caption includes contingent convertible or

redeemable preferred participations, as well as other

subordinated financial instruments issued , which do not

qualify as equity (preferred shares).

Preferred shares do not have voting rights and are non-

cumulative. They have been subscribed by third parties

outside the Group and are redeemable by decision of the

issuer, according to the terms of each issue.

Banco Santander's contingently convertible preferred

participations are subordinated debentures and rank

after common creditors and any other subordinated

credit that by law and/or by their terms, to the extent

permitted by Spanish law, ranks higher than the

contingently convertible preferred participations. Their

remuneration is conditioned to the obtainment of

sufficient distributable profits, and to the limitations

imposed by the regulations on shareholders' equity, and

they have no voting rights. The other issues of Banco

Santander, S.A. mentioned in this caption are also

subordinated debentures and, for credit ranking

purposes, they rank behind all the common creditors of

the issuing entities and ahead of any other subordinated

credit that ranks pari passu with the Bank's contingently

convertible preferred participations.

The main issues of subordinated debt securities issued,

broken down by company, are detailed below:

Issues by Banco Santander, S.A.

On 11 September 2024, Banco Santander, S.A.,

proceeded to redeem in advance the entirety of the

issuance called 'First Issue of Special Subordinated Debt

of Banco Pastor, S.A.', with ISIN code ES0213770011,

with an original nominal amount issued of EUR

300 million and a current nominal amount of EUR

11.5 million.

On 1 August 2024, Banco Santander, S.A. carried out a

placement of preference shares contingently convertible

into newly issued ordinary shares of the Bank (PPCC), for

a nominal amount of USD 1,500 million (valued at EUR

1,356 million). The issuance has been made at par and

the remuneration of the PPCC, whose payment is subject

to certain conditions and is also discretionary, has been

set at 8% annually for the firstten years, being reviewed

every five years thereafter by applying a margin of

391.1 basis points over the 5-year mid-swap rate.

On 20 May 2024, Banco Santander, S.A., proceeded to

partially redeem in advance the contingently convertible

preferred shares with ISIN code XS1793250041, for a

total nominal amount of EUR 1,312 million and which

are traded on the market of the Irish Stock Exchange

'Global Exchange Market' (the 'PPCC'), leaving the

amount in circulation at EUR 187.6 million.

On 20 May 2024, Banco Santander, S.A. carried out a

placement of preference shares contingently convertible

into newly issued ordinary shares of the Bank (PPCC), for

a nominal amount of EUR 1,500 million. The Issuance

has been made at par and the remuneration of the PPCC,

whose payment is subject to certain conditions and is

also discretionary, has been set at 7% annually for the

first six years, being reviewed every five years thereafter

by applying a margin of 443.2 basis points over the 5-

year mid-swap rate.

On 14 March 2024, Banco Santander, S.A. issued

subordinated obligations for an amount of USD

1,250 million (valued at EUR 1,158 million) for a term of

10 years. The issuance was made at par and the issue

coupon was set at 6.35% per year, payable bi-annually.

On 8 February 2024, Banco Santander, S.A., proceeded

to prepay all of the contingently convertible Tier 1

preferred shares with ISIN code XS1951093894, for a

total nominal amount of USD 1,200 million (valued at

EUR 1,110 million) and that were traded on the Irish

Stock Exchange 'Global Exchange Market' (the 'PPCC').

On 22 January 2024, Banco Santander, S.A. issued

subordinated bonds for an amount of EUR 1,250 million

for a term of 10 years and 3 months. The issue was

carried out at 99.74% and the issue coupon was set at

5% per year for the first 5 years and 3 months, with an

amortization option in April 2029, reviewing the coupon,

in case of non-amortization, at a fixed rate equivalent to

a margin of 250 points plus the 5-year Euro swap rate.

100

At 29 December 2023,  Banco Santander, S.A., proceeded

to prepay all the Tier 1 Contingently Convertible

Preferred Securities with ISIN code  XS1692931121 for a

total nominal amount of EUR 1,000 million and which

were traded on the Irish Stock Market 'Global Exchange

Market' (the 'PPCC').

At 21 November 2023, Banco Santander, S.A., carried out

a placement of two series of contingently convertible

preferred shares into newly issued ordinary shares of the

Bank, for a total nominal amount of USD 1,150 million

(EUR 1054.000 million at the exchange rate on the day

of issue) and USD 1,350 million (EUR 1235.000 million at

the exchange rate on the day of issue), respectively.

The issue was carried out at par and the remuneration of

the PPCC, whose payment is subject to certain conditions

and is also discretionary, was set (i) for the first Series at

9.625% annually for the first five years and six months,

being reviewed every five years thereafter by applying a

margin of 530.6 basis points on the five -year UST rate

( 5 -year UST), and (ii) for the second Series at 9.625%

annually for the first ten years, being reviewed

thereafter every five years , applying a margin of 529.8

basis points on the five -year UST rate.

At 8 August 2023, Banco Santander, S.A. carried out an

issue of subordinated obligations for an amount of

2,000 million dollars (1,821 million euros at the

exchange rate on the day of issuance) . The issue was

carried out at par coupon was set at 6.921% per year,

payable semiannually during the 10 -year life of the

operation.

At 23 May 2023, Banco Santander, S.A. issued

subordinated bonds for an amount of 1,500 million

euros for a term of 10 years and 3 months. The issue was

carried at 99.739% and the coupon of the issue was set

at 5.75% annually for the first 5 years and 3 months,

with the option of amortization in August 2028, revising

the coupon, in case of non-amortization, at a margin of

285 points plus the Euro Swap type 5 years .

At 6 July 2022 and 20 July 2022, two subordinated

issues matured for a nominal amount of EUR 114 million

and EUR 25 million, respectively.

At 25 April 2022, Banco Santander, S.A. proceeded to

prepay all the Tier 1 Contingently Convertible Preferred

Securities with ISIN code XS1602466424 and common

code 160246642 in circulation, for a total nominal

amount of EUR 750 million and which were traded on

the Irish Stock Market 'Global Exchange Market' (the

'PPCC').

At  22  November 2021, Banco Santander, S.A. issued

subordinated debentures for a term of eleven years, with

a redemption option on the tenth anniversary of the

issue date, in the amount of USD 1,000 million (EUR

1,007 million at the exchange rate on the day of issue).

The issue bears interest at an annual rate of 3.225% ,

payable semi-annually, for the first ten years . This issue

has an early redemption option in the tenth year from

the issue date and if the redemption is not executed in

the tenth year, the coupon is repriced at a margin of160

points over the one-year US government bond.

At 4 October 2021, Banco Santander, S.A. issued

subordinated debentures for a term of eleven years, with

a redemption option on the sixth anniversary of the issue

date, amounting to GBP 850 million (EUR 887 million at

the exchange rate on the day of issue). The issue bears

interest at an annual rate of 2.25%, payable annually for

the first six years (then repricing at a margin of 165

points over the 5-year UK government bond).

At 21 September 2021, Banco Santander, S.A. carried out

a placement of preferential shares contingently

convertible into newly issued ordinary shares of the

Bank ('PPCC') for a nominal amount of EUR 1,000 million

(issue placed on the market EUR 997 million). The

issuance was carried out at par and the remuneration of

the PPCC, whose payment is subject to certain conditions

and is also discretionary, was set at 3.625% per year for

the first eight years, being reviewed every five years

applying a margin of 376 basis points over the 5 -year

Mid-Swap Rate.

At 12 May 2021, Banco Santander, S.A. placed the issue

of preference shares contingently convertible into newly

issued ordinary shares of the Bank, previously

announced, for a total nominal amount of  EUR

1,578 million, issued in a Series in Dollars of  USD

1,000 million (EUR 828 million at the exchange rate on

the day of issue) and a Series in Euros for an amount of

EUR 750 million. The issuance was carried out at par and

the remuneration of the PPCC, whose payment is subject

to certain conditions and is also discretionary, was set (i)

for the Series in Dollars at 4.750% per annum for the

first six years, being revised every five years applying a

margin of 375.3 basis points over the 5 -year UST rate

and (ii) for the Series in Euros by 4.125% per annum for

the first seven years, being revised every five years

applying a margin of 431.1 basis points over the

applicable 5-year euro mid-swap.

At 3 December 2020, Banco Santander, S.A. issued

subordinated debentures with a ten-year term of USD

1,500 million (EUR 1,222 million at the date of issue).

The issue bears interest at an annual rate of 2.749%,

payable semiannually.

At 22 October 2020, it carried out a ten-year

subordinated debenture issue for an amount of EUR

1,000 million. The issue bears interest at an annual rate

of 1.625%, payable annually.

101

At 14 January 2020, it carried out a placement of

contingently convertible preferred participations into

newly issued ordinary shares of the Bank (the 'PPCCs'),

excluding the pre-emptive subscription rights of its

shareholders and for a nominal amount of  EUR

1,500 million (the 'Issue' and the 'PPCCs'). The Issue was

made at par and the remuneration of the PPCCs, the

payment of which is subject to certain conditions and is

also discretionary, was set at 4.375% per annum for the

first six years, revised every five years thereafter by

applying a margin of 453.4 basis points over the 5 -year

mid-Swap Rate (5 -year mid-Swap Rate).

At 19 March 2018, a 'PPCC' issue was carried out, for a

nominal amount of EUR 1,500 million. The remuneration

of the issue, the payment of which is subject to certain

conditions and is also discretionary, was set at 4.75% per

annum, payable quarterly, for the first seven years

(revised thereafter by applying a margin of 410 basis

points over the Mid-swap rate).

At 8 February 2018, a ten-year subordinated debenture

issue of EUR 1,250 million was carried out. The issue

accrues annual interest of 2.125% payable annually.

22. Other financial liabilities

a) Breakdown

The following is a detail of ‘Other financial liabilities’ on

the accompanying balance sheets:

EUR million
	2024	2023
Trade payables	780	889
Payment obligations	2,693	2,728
Public agency revenue collection accounts	4,864	4,038
Unsettled financial transactions	3,199	1,336
Other accounts	1,711	3,076
Total	13,247	12,067

b) Average payment period to suppliers

Set forth below are the disclosures required by

Additional Provision Three of Law 15/2010, of 5 July

(amended by Final Provision Two of Law 31/2014, of 3

December), prepared in accordance with the Spanish

Accounting and Audit Institute (ICAC) Resolution of 29

January 2016 on the disclosures to be included in notes

to financial statements in relation to the average period

of payment to suppliers in commercial transactions.

	2024	2023
	Days
Average period of payment to suppliers	11	12
Ratio of transactions paid	11	12
Ratio of transactions pending payments	19	49
	EUR million
Total payments made	3,840	3,380
Total payments outstanding	10	1

Additionally, the data for Grupo Santander in Spain, in

the financial year 2024, are as follows:

	2024
	Days
Average period of payment to suppliers	14
Ratio of transactions paid	13
Ratio of transactions pending payments	90
	EUR million
Total payments made	9,337
Total payments outstanding	116

In accordance with the ICAC Resolution, the average

period of payment to suppliers was calculated by taking

into account commercial transactions relating to the

supply of goods or services for which payment has

accrued since the date of issuance of Law 31/2014, of

December, 3.

Additionally, in accordance with Law 18/2022 of

September 28, listed commercial companies must report

the average payment period to suppliers, the monetary

volume and number of invoices paid in a period less than

the maximum established in the delinquency

regulations. and the percentage that it represents over

the total number of invoices and over the total monetary

payments to its suppliers.

Payments to suppliers made sooner than maximum  period established by the regulations	2024	2023
Average payment period to suppliers (days)	9	11
Number of invoices paid	523,490	449,262
Invoices paid in a period sooner than the maximum established over the total number of invoices paid	99,81%	99,82%
Total payments made (EUR million)	3,755	3,355
Invoices paid in a period less than the maximum on the total amount of invoices paid	97,79%	99,26%

102

Additionally, the data for Grupo Santander in Spain, in

the financial year 2024, are as follows:

Payments to suppliers made sooner than maximum  period established by the regulations	2024
Average payment period to suppliers (days)	11
Number of invoices paid	703,911
Invoices paid in a period sooner than the maximum established over the total number of invoices paid	99,40%
Total payments made (EUR million)	9,118
Invoices paid in a period less than the maximum on the total amount of invoices paid	97,65%

For the sole purpose of the disclosures provided in the

Resolution, suppliers are considered to be commercial

creditors for debts with suppliers of good and services.

“Average period of payment to suppliers” is taken to be

the period that elapses from the delivery of the goods of

the provision of the services by the supplier to the

effective payment of the operation.

Note 49 contains a detail of the maturity periods of

‘Other financial liabilities’ at each year-end.

c) Lease liabilities

The cash outflow of leases in 2024 was EUR 293 million

(in 2023 it was EUR 305 million). The analysis of the

maturities corresponding to the lease liabilities at 31

December 2024 and 2023, is as follows:

EUR million
	2024	2023
Maturity Analysis – Discounted payments
Within 1 year	273	283
Between 1 and 3 years	472	466
Between 3 and 5 years	342	346
Later than 5 years	1,255	1,330
Total Discounted payments at 31 December 2023	2,342	2,425

During 2024 and 2023, no significant variable payments

have been made not included in the valuation of lease

liabilities.

103

23. Provisions

a) Breakdown

The detail of ‘Provisions’ in the balance sheets at 31

December 2024 and 2023 is as follows:

EUR million
	2024	2023
Provision for pensions and similar obligations	1,346	1,444
Of which
Pensions and similar defined benefit obligations post-employment	647	748
Other long-term remunerations to employees	699	696
Restructuring	408	409
Provisions for taxes and other legal contingencies	762	705
Provisions for commitments and guarantees given	175	184
Other provisions	499	702
Total	3,190	3,444

b) Changes

The changes in ‘Provisions’ in 2024 and 2023 were as

follows:

EUR million
	2024					2023
	Post- employment	Long – Term	Contingent liabilities and commitments	Other provisions	Total	Post- employment	Long - Term	Contingent liabilities and commitments	Other provisions	Total
Balance at end of prior year	748	696	184	1,816	3,444	1,220	781	220	1,665	3,886
Changes in value recognized in equity	16	—	—	—	16	14	—	—	—	14
Additions charged to income	8	256	(13)	445	696	29	171	(32)	632	800
(Interest income)/ Interest expense (notes 34 and 35)	13	22	—	—	35	27	27	—	—	54
Staff costs (note 42)	1	1	—	—	2	1	1	—	—	2
Provisions or reversal of  provision	(6)	233	(13)	445	659	1	143	(32)	632	744
Payments to pensioners and pre-retirees	(79)	(253)	—	—	(332)	(118)	(256)	—	—	(374)
Employer contributions	(58)	—	—	—	(58)	(408)	—	—	—	(408)
Amounts used and other changes	12	—	4	(592)	(576)	11	—	(4)	(481)	(474)
Balances at end of year	647	699	175	1,669	3,190	748	696	184	1,816	3,444

104

c) Provision for pensions and similar obligations

The detail of ‘Provision for pensions and similar

obligations’ at 31 December 2024 and 2023 is as

follows:

EUR million
	2024	2023
Provisions for pensions and similar defined benefit plan obligations	1,346	1,444
Of which
Provisions for pensions	647	748
Provisions for similar obligations	699	696
Of which, pre-retirements	688	686
Provisions for pensions and similar defined contribution plan obligations	—	—
Total provisions for pensions and similar obligations	1,346	1,444

i. Defined contribution plans

At the end of 2012, Banco Santander reached an

agreement with workers' representatives to transform

the defined benefit commitments derived from the

collective agreement into defined contribution plans.

Similarly, the contracts for senior management staff

with pension commitments in the defined benefit

modality were amended to transform them into a

defined contribution provision system.

Almost all of the pension commitments with active

personnel correspond to defined contribution plans. The

total contributions made to these plans during 2024

amounted to EUR 108 million (EUR 101 million during

2023) (see note 42).

ii. Defined Benefit Plans

In addition to the previous defined contribution plans, at

31 December 2024, Banco Santander maintained

definite service commitments. Below is the present

value of the Bank`s commitments in post-employment

remuneration for defined benefit programs, as well as

the value of the reimbursement entitlements for

insurance contracts linked to those obligations at 31

December 2024 and preceding year:

EUR million
	2024	2023
Present value of the obligations
To current employees	26	31
To retired employees	1,840	1,924
Other	—	—
	1,866	1,955
Fair value of plan assets	(1,226)	(1,224)
Assets not recognized	3	4
Provisioned assets on the balance sheet	4	13
Provisions - Provisions for pensions	647	748
Of which
Internal provisions for pensions	380	460
Insurance contracts linked to pensions (note 14)	267	288
Of which
Group insurance entities	186	195
Other insurers	81	93

The amount of the defined benefit obligations was

determined on the basis of the work performed by

independent actuaries using the following actuarial

techniques:

1. Valuation method: projected unit credit method,

which sees each period of service as giving rise to an

additional unit of benefit entitlement and measures

each unit separately.

2. Actuarial assumptions used: unbiased and mutually

compatible. Specifically, the most significant

actuarial assumptions used in the calculations were

as follows:

EUR million
	2024	2023
Annual discount rate	3.00%	3.35%
Expected return on plan assets rate	3.00%	3.35%
Mortality tables	PER2020 M/F Col. Orden 1	PER2020 M/F Col. Orden 1
Cumulative annual CPI growth	2.00%	2.00%
Annual salary increase rate	1.25%	1.25%
Annual pension increase rate	2.12%	2.12%

3. The discount rate used for the flows was determined

referencing to high-quality corporate bonds.

4. The estimated retirement age of each employee is

the first at which the employee is entitled to retire or

the agreed-upon age, as appropriate.

5. The fair value of insurance contracts was determined

as the present value of the related payment

obligations, taking into account the following

assumptions:

105

EUR million
	2024	2023
Expected rate of return on plan assets	3.00%	3.35%
Expected rate of return on  reimbursement rights	3.00%	3.35%

The amounts recognized in the accompanying income

statements in relation to the aforementioned defined

benefit obligations are as follows:

EUR million
	2024	2023
Service cost:
Current service cost (note 42)	1	1
Past service cost (including reductions)	3	2
Pre-retirement cost	—	—
Reductions/liquidations	(9)	(1)
Net interest (note 35)	27	41
Expected return on insurance contracts linked to pensions (note 34)	(14)	(14)
Total	8	29

In addition, in 2024 ‘Other comprehensive income –

items not reclassified to profit or loss - Actuarial gains or

(-) losses on defined benefit pension plans, has led to an

actuarial loss of EUR 15 million with respect to benefit

commitments defined (actuarial loss of EUR 14 million in

the year 2023).

The changes in 2024 and 2023 of the present value of

the accrued defined benefit obligations were as follows:

EUR million
	2024	2023
Present value of the obligations at beginning of the year	1,955	2,043
Current service cost (note 42)	1	1
Interest cost	69	81
Pre-retirement cost	—	—
Reductions/liquidations	(9)	(1)
Benefits paid for settlements	—	—
Other benefits paid	(200)	(207)
Past service cost	3	2
Actuarial (gains)/lossesA	42	39
Exchanges rate differences and others	5	(3)
Present value of the obligations at end of the year	1,866	1,955

A. Included  in 2024 are demographic actuarial profits of EUR 1 million

and financial actuarial losses of EUR 41 million (2023: demographic

actuarial profits of EUR 2 million and financial actuarial losses of EUR

41 million).

The changes in 2024 and 2023 in the fair value of the

plan assets are as follows:

EUR million
	2024	2023
Fair value of plan assets at beginning of year	1,224	851
Expected return on plan assets	42	40
Benefits paid	(121)	(89)
Contributions payable by the employer	58	408
Settlements gains/(losses)	—	—
Exchange rate differences and others	(5)	(11)
Actuarial gains/(losses)	28	25
Fair value of plan assets at end of year	1,226	1,224

The changes in 2024 and 2023 in the fair value of the

insurance contracts linked to pensions are as follows:

EUR million
	2024	2023
Fair value of insurance contracts linked to pensions at beginning of the year	288	313
Expected return on insurance contracts (note 34)	14	14
Actuarial gains/(losses)	(1)	(2)
Premiums paid/(surrenders)	—	1
Benefits paid	(34)	(38)
Exchange rate differences and others	—	—
Fair value of insurance contracts linked to pensions at end of the year (note 14)	267	288

Plan assets and pension insurance contracts linked to

pensions are mainly based in insurance policies.

iii. Other long-term employee benefits

In various years, Banco Santander offered to some

certain of its employees, the possibility of leaving its

employ prior to their retirement. Therefore, provisions

are recognized to cover the obligations to pre-retirees -in

terms of salaries and other employee benefit costs- from

the date of their pre-retirement to the date of their

effective retirement.

106

The present value of the aforementioned obligations and

the fair value of the assets arising from insurance

contracts linked to these obligations at 31 December

2024 and for the previous  exercises are as follows:

EUR million
	2024	2023
Present value of the obligations:
Early retirement	693	693
Long-service bonuses and other benefits	11	10
	704	703
Fair value of plan assets	(5)	(7)
Provisions - Provisions for pensions	699	696
Insurance plans linked to pensions	—	—
Group insurers	—	—
Other insurance entities	—	—

In 2023, the provisions made to cover commitments

with 405 employees under early retirement and

voluntary redundancy plans amounted to EUR 127

million.

In 2024, the provisions made to cover commitments to

603 employees under early retirements and voluntary

redundancy plans amounted to EUR 237 million.

The amount of the other long-term remuneration

commitments defined benefit has been determined on

the basis of work performed by independent actuaries,

applying the following criteria to quantify them:

1. Valuation method: projected unit credit method.

2. Actuarial assumptions used: unbiased and mutually

compatible. Specifically, the most significant

actuarial assumptions used in the calculations were

as follows:

EUR million
	2024	2023
Annual discount rate	3.00%	3.35%
Expected return on plan assets rate	3.00%	3.35%
Mortality tables	PE2020 M/F Col. Orden 1	PE2020 M/F Col. Orden 1
Cumulative annual CPI growth	2.00%	2.00%
Annual benefit increase rate	Between 0% and 1.5%	Between 0% and 1.5%

3. The discount rate used for the flows was determined

by reference to high-quality corporate bonds.

4. The estimated retirement age of each employee is

the first at which the employee is entitled to retire or

the agreed-upon age, as appropriate.

5. The amounts recognised in the income statement in

relation to the aforementioned defined benefit

obligations are as follows:

EUR million
	2024	2023
Service cost:
Current service cost (note 42)	1	1
Interest cost (note 35)	22	27
Extraordinary charges	—	—
Past service cost		13
Actuarial (gains)/losses recognized in the year	1	6
Pre-retirement cost	237	127
Other	(5)	(3)
Total	256	171

The changes in 2024 and 2023 in the present value of

the accrued obligations for other long-term benefits

were as follows:

EUR million
	2024	2023
Present value of the obligations at beginning of the year	703	789
Current service cost	1	1
Cost per interest (note 35)	22	27
Past service cost	—	13
Pre-retirement cost	237	127
Effect of curtailment/settlement	(4)	(1)
Benefits paid	(255)	(258)
Actuarial (gains)/losses	1	6
Other	(1)	(1)
Present value of the obligations at end of the year	704	703

The movement that has occurred, during the years 2024

and 2023, in the fair value of the assets of the plan, has

been as follows:

EUR million
	2024	2023
Fair value of plan assets at the beginning of the year	7	8
Expected return on plan assets	—	—
Benefits paid	(2)	(2)
Contributions by the employer	—	—
Contributions by the employee and others	—	1
Actuarial gains / (losses)	—	—
Present value of the obligations at end of the year	5	7

107

iv. Sensitivity analysis

Variations in the main assumptions may affect the

calculation of commitments. At 31 December 2024, in

the event that the discount interest rate had decreased

or increased by 50 basis points, there would have been

an increase or decrease in the current value of post-

employment obligations of 4.18% and -3.88%

respectively, and an increase or decrease in the current

value of long-term obligations of 1.11% and -1.08%.

These variations would be partially offset by increases or

decreases in the fair value of assets and insurance

contracts linked to pensions.

The following table shows the estimate of benefits to be

paid as of December 31, 2024 for the next ten years:

EUR Million
2025	402
2026	352
2027	300
2028	252
2029	209
2030 to 2034	700

d) Provisions for taxes and other legal contingencies

and Other provisions

'Provisions - Provisions for taxes and other legal

contingencies' and 'Provisions - Other provisions', which

include, inter alia, provisions for restructuring costs and

tax-related and non-tax-related proceedings, were

estimated using prudent calculation procedures in

keeping with the uncertainty inherent to the obligations

covered. The definitive date of the outflow of resources

embodying economic benefits for the Bank depends on

each obligation. In certain cases, these obligations have

no fixed settlement period and, in other cases, depend

on the legal proceedings in progress.

‘Provisions for taxes and other legal contingencies’

include proceedings and other legal proceedings such as

judicial, arbitral or administrative proceedings initiated

against Banco Santander. Qualitative information on the

main disputes is provided in note 23.e. For their part, the

provisions for restructuring include only costs arising

from restructuring processes incurred at Banco

Santander.

The Bank general policy is to record provisions for tax

and legal proceedings in which the Group assesses the

chances of loss to be probable and the Group does not

record provisions when the chances of loss are possible

or remote. Banco Santander determines the amounts to

be provided for as its best estimate of the expenditure

required to settle the corresponding claim based, among

other factors, on a case-by-case analysis of the facts and

the legal opinion of internal and external counsel or by

considering the historical average amount of the loss

incurred in claims of the same nature. The definitive date

of the outflow of resources embodying economic

benefits for the Bank depends on each obligation. In

certain cases, the obligations do not have a fixed

settlement term and, in others, they depend on legal

proceedings in progress.

As for the 'Other provisions' contains very atomized and

individually insignificant provisions, such as the

provisions corresponding to cover other operational risks

of the Bank.

e) Litigation and other matters

i. Tax-related litigation

At 31 December 2024 the main tax-related proceedings

concerning the Bank were as follows:

• Legal actions filed by Banco Santander (Brasil) S.A.

and other Group entities to avoid the application of

Law 9.718/98, which modifies the basis to calculate

Programa de Integraçao Social (PIS) and Contribuição

para Financiamento da Seguridade Social (COFINS),

extending it to all the entities income, and not only to

the income from the provision of services. In relation

of Banco Santander (Brasil) S.A. process, in 2015 the

Federal Supreme Court (FSC) admitted the

extraordinary appeal filed by the Federal Union

regarding PIS, and dismissed the extraordinary

appeal lodged by the Brazilian Public Prosecutor's

Office regarding COFINS contribution, confirming the

decision of Federal Regional Court favourable to

Banco Santander (Brasil) S.A. of August 2007. The

Federal Supreme Court also admitted the appeals

related to the other Group entities both for PIS and

COFINS. On June 13, 2023, the Federal Supreme

Court ruled unfavorably two cases through General

Repercussion (Theme 372), including Banco

Santander (Brasil) S.A. case. The Bank has filed a new

appeal, considering the possible loss as a contingent

liability. The cases of the other Group entities are no

longer susceptible of appeal and a provision has

been recognized for the amount of the estimated

loss.

108

• Banco Santander (Brasil) S.A. and other Group

companies in Brazil have appealed against the

assessments issued by the Brazilian tax authorities

questioning the deduction of loan losses in their

income tax returns (Imposto sobre a Renda das

Pessoas Jurídicas - IRPJ - and Contribuçao Social

sobre o Lucro Liquido -CSLL-) in relation to different

administrative processes of various years on the

ground that the requirements under the applicable

legislation were not met. The appeals, which

involves several cases, are pending decision in

different administrative and judicial instances. No

provision was recognised in connection with the

amount considered to be a contingent liability.

• Banco Santander (Brasil) S.A. and other Group

companies in Brazil are involved in administrative

and legal proceedings against several municipalities

that demand payment of the Service Tax on certain

items of income from transactions not classified as

provisions of services. There are several cases in

different judicial instances. A provision was

recognised in connection with the amount of the

estimated loss.

• Banco Santander (Brasil) S.A. and other Group

companies in Brazil are involved in administrative

and legal proceedings against the tax authorities in

connection with the taxation for social security

purposes of certain items which are not considered

to be employee remuneration. There are several

cases in different judicial instances. A provision was

recognised in connection with the amount of the

estimated loss.

• In May 2003 the Brazilian tax authorities issued

separate infringement notices against Santander

Distribuidora de Títulos e Valores Mobiliarios, Ltda.

(DTVM, actually Santander Brasil Tecnología S.A.)

and Banco Santander (Brasil) S.A. in relation to the

Provisional Tax on Financial Movements

(Contribuição Provisória sobre Movimentação

Financeira) of the years 2000 to 2002. The

administrative discussion ended unfavourably for

both companies, and on July 3, 2015, they filed a

lawsuit requesting the cancellation of both tax

assessments. The lawsuit was judged unfavourably

in first instance. Therefore, both plaintiffs appealed

to the court of second instance. On December 2020,

the appeal was decided unfavourably. Against the

judgment, the bank filed a motion for clarification

which has not been accepted. Currently it is  

appealed to higher courts. There is a provision

recognized for the estimated loss.

• In December 2010 the Brazilian tax authorities

issued an infringement notice against Santander

Seguros S.A. (Brasil), (currently Zurich Santander

Brasil Seguros e Previdência S.A.), as the successor

by merger to ABN AMRO Brasil dois Participações

S.A., in relation to income tax (IRPJ and CSLL) for

2005, questioning the tax treatment applied to a sale

of shares of Real Seguros, S.A. The administrative

discussion ended unfavourably, and the CARF

decision has been appealed at the Federal Justice. As

the former parent of Santander Seguros S.A. (Brasil),

Banco Santander (Brasil) S.A. is liable in the event of

any adverse outcome of this proceeding. No

provision was recognised in connection with this

proceeding as it is considered to be a contingent

liability.

• In November 2014 the Brazilian tax authorities

issued an infringement notice against Banco

Santander (Brasil) S.A. in relation to corporate

income tax (IRPJ and CSLL) for 2009 questioning the

tax-deductibility of the amortisation of the goodwill

of Banco ABN AMRO Real S.A. performed prior to the

absorption of this bank by Banco Santander (Brasil)

S.A., but accepting the amortisation performed after

the merger. The Bank appealed before the Higher

Chamber of CARF, and a final favourable decision

was obtained in April 2024. No provision was

recognised in connection with this proceeding as it

was considered to be a contingent liability.

• Banco Santander (Brasil) S.A. has also appealed

against infringement notices issued by the tax

authorities questioning the tax deductibility of the

amortisation of the goodwill arising on the

acquisition of Banco Comercial e de Investimento

Sudameris S.A from years 2007 to 2012. No

provision was recognised in connection with this

matter as it was considered to be a contingent

liability.

• Banco Santander (Brasil) S.A. and other companies of

the Group in Brazil are undergoing administrative

and judicial procedures against Brazilian tax

authorities for not admitting tax compensation with

credits derived from other tax concepts, not having

registered a provision for the amount considered to

be a contingent liability.

• Banco Santander (Brasil) S.A. is involved in appeals in

relation to infringement notices issued  by tax

authorities regarding the offsetting of tax losses in

the CSLL of year 2009 and 2019. The appeals are

pending decision at the administrative level. No

provision was recognised in connection with this

matter as it is considered to be a contingent liability.

109

• Banco Santander (Brasil) S.A. filed a suspensive

judicial measure aiming to avoid the withholding

income tax (Imposto sobre a Renda Retido na Fonte -

IRRF),  on payments derived from technology

services provided by Group foreign entities. A

favorable decision was handed down and an appeal

was filed by the tax authority at the Federal Regional

Court, where it awaits judgment. No provision was

recognized as it is considered to be a contingent

liability .

• Brazilian tax authorities have issued infringement

notices against Getnet Adquirência e Serviços para

Meios de Pagamento S.A and Banco Santander

(Brasil) S.A. as jointly liable in relation to corporate

income tax (IRPJ and CSLL) for 2014 to 2018

questioning the tax-deductibility of the amortization

of the goodwill from the acquisition of Getnet

Tecnologia  Proces S.A., considering that  the

company would not have complied with the legal

requirements for such amortization. The tax

assessment notices were appealed to the CARF. In

2024, the CARF issued a favourable partial decision

on both infraction notices. In December 2024, the tax

authorities issued a new infringement notice for

2019 and 2020.  No provision was recognized as it is

considered to be a contingent liability.

  The total amount for the aforementioned Brazil

lawsuits that are fully provisioned is EUR 711 million,

and for lawsuits that qualify as contingent liabilities

is EUR 4,740 million.

• Banco Santander appealed before European Courts

the Decisions 2011/5/CE of 28 October 2009 (First

Decision), and 2011/282/UE of 12 January 2011

(Second Decision) of the European Commission,

ruling that the deduction of the financial goodwill

regulated pursuant to Article 12.5 of the Corporate

Income Tax Law constituted illegal State aid. On

October 2021 the Court of Justice definitively

confirmed these Decisions. The dismissal of the

appeal, that only affects these two decisions, had no

impact on results.

At the date of approval of these annual accounts, there

are other less significant tax disputes.

ii. Non-tax-related proceedings

At 31 December 2024 the main non-tax-related

proceedings concerning the Group and the Bank were as

follows:

• Payment Protection Insurance (PPI): AXA France IARD

and AXA France Vie (former GE Capital Corporation

Group entities (GE Capital), known as Financial

Insurance Company Ltd (FICL) and Financial

Assurance Company Ltd (FACL), acquired by AXA SA

in 2015) (together, AXA France) have brought a claim

for GBP 552 million (EUR 665.6 million) (plus

interest) against (i) Santander Cards UK Limited

(former GE Capital entity known as GE Capital Bank

Limited (GECB), which was acquired by Banco

Santander SA in 2008 and subsequently transferred

to Santander UK plc); and (ii) Santander Insurance

Services UK Limited (a Banco Santander SA

subsidiary) (together the Santander Entities).  The

claim relates to the allocation of liability for

compensation and associated costs in respect of a

large number of PPI policies distributed by GECB

pre-2005, which were underwritten by FICL and

FACL. Axa France reduced their claim from GBP

670 million (EUR 807.9 million) to GBP 552 million

(EUR 665.6 million) (plus interest) in their Re-Re-

Amended Particulars of Claim dated 29 June 2023. 

Trial has been fixed for six weeks, beginning on 3

March 2025.

There are ongoing factual issues to be resolved

which may have legal consequences including in

relation to liability.  These issues create uncertainties

which mean that it is difficult to reliably predict the

outcome or the timing of the resolution of the matter.

The provision recognized includes the best estimate

of the Santander Entities' liability to the specific

portfolio.

• Motor Finance Broker Commissions: following the

Financial Conduct Authority’s (FCA) Motor Market

review in 2019 which resulted in a change in rules in

January 2021, Santander Consumer (UK) plc (SCUK)

has received a number of county court claims and

complaints in respect of its historical use of

discretionary commission arrangements (DCAs) prior to

the 2021 rule changes. In January 2024 the FCA

commenced a review of the use of DCAs between

lenders and credit brokers (the FCA Review) and

paused the handling of these complaints originally

until September 2024. The FCA announced in July

2024 that it expected to share the outcome of its

Review by May 2025 and that the pause in respect of

handling of these complaints was extended to 4

December 2025. In December 2024, the FCA

announced the expansion of this pause on DCA

complaints handling to other motor finance

commission complaints received on or after 26

October 2024, also until 4 December 2025. A claim

has also been issued against SCUK, Santander UK plc

and others in the Competition Appeal Tribunal (CAT),

alleging that SCUK’s historical DCAs in respect of

used car financing operated in breach of the

Competition Act 1998. This is currently paused until

110

the end of July 2025 connected to the outcome of the

FCA Review.

In a judicial proceeding brought against other financial

entities, on 25 October 2024, the Court of Appeal

issued a judgment establishing certain criteria which,

after the corresponding assessment by SCUK, has led it

to recognise a provision of GBP 293 million (EUR

353.3 million) 2024, although the referred judgment

has been appealed before the Supreme Court.  This

includes estimates for operational and legal costs

(including litigation costs) reached after considering

various scenarios which take into account the differences

and similarities between the cases in the referred

judgment and SCUK’s situation, as well as the outcome of

the Supreme Court appeal, the scope, nature and

timeframe of any redress scheme, applicable time

periods, claims, rates and compensatory interest rates.

The outcome of the FCA’s Review and/or adverse

outcomes from litigation could result in material costs.

The outcome of the FCA’s Review may be informed by

the judgment of the Court of Appeal handed down on 25

October 2024 in relation to cases against other lenders

involving DCAs, as well as the anticipated judgment of

the Supreme Court on appeal (noting that permission for

leave to appeal to the Supreme Court has been granted

relating to these cases, with the hearing listed for 1 to 3

April 2025). The FCA’s Review might also be informed by

the outcome of a judicial review of a final decision by the

Financial Ombudsman Service (FOS) against another

lender that was heard in October 2024. Judgment in this

case was handed down in December 2024 and

permission for leave to appeal to the Court of Appeal

has been granted.

These matters, mean that there are currently

significant uncertainties as to the extent of any

misconduct, if any, as well as the perimeter of

commission models, nature, extent and timing of any

remediation action if required. As such, the ultimate

financial impact could be materially different than the

amount provided and it is not practicable to quantify

the extent of any remaining contingent liability.

• Delforca: dispute arising from equity swaps entered

into by Gaesco (now Delforca 2008, S.A. (Delforca))

on shares of Inmobiliaria Colonial, S.A. Banco

Santander, S.A. is claiming to Delforca before the

Court of Barcelona in charge of the bankruptcy

proceedings, a total of EUR 66 million from the

liquidation resulting from the early termination of

financial transactions due to Delforca's non-payment

of the equity swaps. In the same bankruptcy

proceedings, Delforca and Mobiliaria Monesa, S.A.,

parent of Delforca (Monesa) have in turn claimed the

Bank to repay EUR 57 million, which the Bank

received for the enforcement of the agreed

guarantee, as a result of the aforementioned

liquidation. On 16 September 2021 the Commercial

Court Number 10 of Barcelona has ordered Delforca to

pay the Bank EUR 66 million plus EUR 11 million in

interest and has dismissed the claims filed by

Delforca. This decision has been appealed by

Delforca, Monesa and the bankruptcy administrator.

On 1 June 2023, the appeal hearing took place and

on 15 November 2023 the Provincial Court of

Barcelona rendered a judgment dismissing the

appeals filed by Delforca, Monesa and the

bankruptcy administrator and confirming the first

instance judgment. Delforca and Monesa (not the

bankruptcy administrator) have filed an appeal in

cassation before the Supreme Court against the

judgment of the Provincial Court of Barcelona.

Separately,  Monesa, filed in 2009 a civil procedure

with the Courts of Santander against the Bank

claiming damages that have not been specified to

date. The procedure is suspended.

• Former employees of Banco do Estado de São Paulo

S.A., Santander Banespa, Cia. de Arrendamiento

Mercantil: class action filed by AFABESP (an

association of retirees and former Banespa

employees) claiming payment of a semi-annual

bonus provided for in the Bank's bylaws. The final

decision rendered on the merits was unfavorable to

Santander. However, a favorable decision was

subsequently rendered stating that each beneficiary of

the decision shall file an individual lawsuit to receive

the due amount.

Since the judgments adopted different positions for

each case, a procedure called Incident for the

Resolution of Repetitive Demands (IRDR) was

commenced before the Regional Labor Court (TRT)

with the purpose of establishing objective criteria

regarding the arguments brought by the Bank,

mainly the statute of limitations and limitation of

payments until December 2006 (Plan V). On 11

March 2024, the IRDR was admitted for future

judgment, and it was determined that all cases filed

in São Paulo - Capital remained suspended from its

second instance (TRT).

111

Finally, due to the divergence between the

interpretation of the Federal Constitution, an Action

for Allegation of Non-Compliance with a

Fundamental Precept (ADPF) was also filed, so that

the Federal Supreme Court (STF) settles the issue

and indicates the correct statute of limitations to be

used in the individual cases filed.

On 27 June 2024, an agreement was signed with the

indication of a nominal and exhaustive list of 7,299

retirees who, according to the criteria presented by

the Bank, are entitled to payment of the amounts

related to semi-annual bonuses. The maximum value

of the agreement was of BRL 2.7 billion (EUR

420.1 million); though it ultimately depended on the

individual and voluntary adherence of each

beneficiary (the Agreement). At the end of the

voluntary adherence period in August 2024 6,501

people had adhered to the agreement (89% of the

total), out of which 6,500 agreements were finally

approved at the deadline for judicial approvals set on

15 October 2024, totaling BRL 2.44 billion (EUR

379.6 million). The bank has made the necessary

contributions to the fund Banesprev to comply with

the payments derived from the Agreement. As to the

beneficiaries who have not adhered to the

Agreement, as of the date of these annual

consolidated accounts, there are ongoing factual and

legal issues that make it impossible to reliably

predict the potential impact.

• 'Planos Económicos': like the rest of the banking

system in Brazil, Santander Brazil has been the

target of customer complaints and collective civil

suits stemming mainly from legislative changes and

its application to bank deposits (economic plans). At

the end of 2017, an agreement between regulatory

entities and the Brazilian Federation of Banks

(Febraban) with the purpose of closing the lawsuits

was reached and was approved by the Supremo

Tribunal Federal. Discussions focused on specifying

the amount to be paid to each affected client

according to the balance in their notebook at the

time of the Plan. Finally, the total value of the

payments will depend on the number of adhesions

there may be and the number of savers who have

proved the existence of the account and its balance

on the date the indexes were changed. In November

2018, the STF ordered the suspension of all

economic plan proceedings for two years from May

2018. On 29 May 2020, the STF approved the

extension of the agreement for5 additional years

starting from 3 June 2020. Condition for this

extension was to include in the agreement actions

related to the 'Collor I Plan'. On 31 December 2024,

the provision recorded for the economic plan

proceedings amounts to EUR   167.0 million .

• Floor clauses:  as a consequence of the acquisition of

Banco Popular Español, S.A.U. (Banco Popular), the

Group has been exposed to a material number of

transactions with floor clauses. The so-called floor

clauses are those under which the borrower accepts

a minimum interest rate to be paid to the lender,

regardless of the applicable reference interest rate.

Banco Popular included floor clauses in certain asset-

side transactions with customers. In relation to this

type of clauses, and after several rulings issued by

the Court of Justice of the European Union (CJEU) and

the Spanish Supreme Court, and the extrajudicial

process established by the Spanish Royal Decree-

Law 1/2017, of 20 January, Banco Popular made

provisions that were updated in order to cover the

effect of the potential return of the excess interest

charged for the application of the floor clauses

between the contract date of the corresponding

mortgage loans and May 2013. On 31 December

2024, after having processed most of the customer

requests, the potential residual loss associated with

ongoing court proceedings is estimated at EUR 51.3

million, amount which is fully covered by provisions.

• Banco Popular´s acquisition: after the declaration of

the resolution of Banco Popular, some investors filed

claims against the EU’s Single Resolution Board

decision, and the FROB's resolution executed in

accordance with the aforementioned decision.

Likewise, numerous appeals were filed against

Banco Santander, S.A. alleging that the information

provided by Banco Popular was erroneous and

requesting from Banco Santander, S.A. the restitution

of the price paid for the acquisition of the investment

instruments or, where appropriate, the

corresponding compensation.

112

In relation to these appeals, on the one hand, the

General Court of the European Union (GCUE)

selected 5 appeals from among all those filed before

the European courts by various investors against the

European institutions and processed them as pilot

cases. On 1 June 2022, the GCUE rendered five

judgements in which it completely dismissed the

appeals, (i) supporting the legality of the resolution

framework applied to Banco Popular, (ii) confirming

the legality of the action of the European institutions

in the resolution of Banco Popular and (iii) rejecting,

in particular, all the allegations that there were

irregularities in the sale process of Banco Popular to

Banco Santander, S.A. Although four of these five

judgments were initially appealed in cassation

before the CJEU, in July 2023 one of the appellants

withdrew his appeal. In June 2024, the CJEU upheld

the appeal in case C-551/22-P brought by the

Commission, in the sense of attributing to the later

the responsibility of the contested decision. On 4

October 2024 the CJEU dismissed the appeals in

cases C-535/22-P, C-541/22-P and subsequently, on

14 October the appeal in case C-448/22-P.

Therefore, all appeals before the CJEU have already

been resolved.

On the other hand, in relation to the lawsuits

initiated by investors directly against Banco

Santander, S.A. derived from the acquisition of Banco

Popular, on 2 September 2020, the Provincial Court

of La Coruña submitted a preliminary ruling to the

CJEU in which it asked for the correct interpretation

of the Article 60, section 2 of Directive 2014/59/EU

of the European Parliament and of the Council of 15

May, establishing a framework for the restructuring

and resolution of credit institutions and investment

services companies. Said article establishes that, in

the cases of redemption of capital instruments in a

bank resolution, no liability will subsist in relation to

the amount of the instrument that has been

redeemed. On 5 May 2022, the CJEU rendered its

judgement confirming that Directive 2014/59/EU of

the European Parliament and of the Council does not

allow that, after the total redemption of the shares

of the share capital of a credit institution or an

investment services company subject to a resolution

procedure, the shareholders who have acquired

shares within the framework of a public subscription

offer issued by said company before the start of such

a resolution procedure, exercise against that entity or

against its successor, an action for liability for the

information contained in the prospectus, under

Directive 2003/71/EC of the European Parliament

and of the Council, or an action for annulment of the

subscription contract for those shares, which, taking

into account its retroactive effects, gives rise to the

restitution of the equivalent value of said shares,

plus the interest accrued from the date of execution

of said contract.

Regarding this judgment, the Supreme Court

submitted  three preliminary rulings about the

application of the judgment of 5 May 2022 to other

capital instruments such as subordinated

obligations, preferred stocks and subordinated

bonds. On 5 September 2024, the CJEU ruled that

Directive 2014/59 precludes, after the total write

down of the shares in a credit institution under

resolution, that persons who have purchased (i)

capital instruments that have been converted into

shares in that credit institution before the adoption

of resolution measures against it, or (ii) capital

instruments which, in the context of that procedure,

have been converted into shares in that credit

institution, which were subsequently transferred to

another credit institution, from bringing, against that

institution or against its successor entity, an action

for damages on the basis of flawed and incorrect

information provided in the prospectus or a

declaration of nullity. Currently, there are five

preliminary rulings pending: (i) three preliminary

rulings referred by the First Instance Court 3 of Santa

Coloma de Farners in April 2023 concerning pre-

emptive subscription rights and the compatibility of

the principles of proportionality and legal certainty

with the bringing of legal actions by former holders

of pre-emptive subscription rights and shares against

the entity issuing the securities or against the entity

succeeding it, which is currently suspended; and (ii)

two preliminary rulings referred by the Supreme

Court in November 2023, which complement the

ones requested in December 2022, regarding to a

holder of subordinated bonds who filed a claim

against Banco Popular before the resolution.

113

On 4 March 2024, in the context of preliminary

proceedings 42/2017, the Central Court of Instruction

No. 4 issued a ruling transforming the proceedings into

Summary Proceedings and terminating the

investigation phase. This ruling considers that the

circumstantial evidence resulting from the

investigation which could constitute a crime is

basically  the following: (i) an alleged

misrepresentation in the prospectus of the 2016

capital increase of Banco Popular; and (ii) an alleged

misrepresentation in the annual accounts of Banco

Popular for 2015, the interim financial statements for

2016 and the annual accounts for 2016; and (iii) the

offer to the market of a distorted amount of regulatory

capital, after the capital increase of 2016 (for allegedly

having been granted by Banco Popular financing to

clients for the subscription of shares in the

aforementioned capital increase, without discounting

it from the regulatory capital). According to the

aforementioned ruling, these facts could constitute the

crimes of fraud of investors (art. 282 of the Criminal

Code) and accounting falsehood (art. 290 of the

Criminal Code). All appeals filed against the ruling

have been dismissed. The accusing parties, including

the Public Prosecutor's Office, filed their indictment

briefs on 28 October 2024, which included requests for

compensation for civil liability and the request that not

only the defendants but also several entities are held

liable for such compensation, including Banco

Santander, S.A., the auditing firm and several

insurance companies. Following the filing of the

indictment briefs, on 22 November 2024, the Court

(Investigating Judge) issued an order for the opening of

the oral trial against the defendants and civil liability

parties, including Banco Santander, S.A. as a possible

civil liable party. However, in line with what was

determined by the Spanish National Court and

confirmed by the Supreme Court concerning the

hypothetical succession of Banco Popular by Banco

Santander, S.A., the oral trial has not been opened

against the Bank as possible direct civil liable party.

The order to open the oral trial states that the plaintiffs

have requested compensation for civil liability for a

total amount of EUR 2,277.65 million Additionally, the

order rejects the imposition of the guarantee

requested by several of the accusing parties,

considering that it is unnecessary to secure the

outcome of the trial.

The defendants and potential civil liable parties were

granted until 4 February 2025 to file their defense

writs. After that, the proceedings will be forwarded to

the Criminal Chamber of the National Court for the oral

trial. Regarding the civil liability, notwithstanding that

the Bank considers that in light of the CJEU’s rulings

dated 5 May 2022 and 5 September 2024 it has no

subsidiary civil liability the Spanish National Court has

stated that this issue shall be resolved within the

ongoing proceedings.

The estimated cost of any compensation to

shareholders and bondholders of Banco Popular

recognized in the 2017 accounts amounted to EUR

680 million, of which EUR 535 million were applied to

the commercial loyalty program. On 15 December

2024, Banco Santander, S.A., proceeded to redeem in

advance voluntarily all bonds in circulation regarding

such commercial action (vid. note 34 of these

consolidated annual accounts).The CJEU judgements of

5 May 2022 and of 5 September 2024 referred above,

represented a very significant reduction in the risk

associated with these claims.

• German shares investigation: the Cologne Public

Prosecution Office is conducting an investigation

against the Bank, and other group entities based in

UK - Santander UK plc, Santander Financial Services

Plc and Cater Allen International Limited -, in relation

to a particular type of tax dividend linked

transactions known as cum-ex transactions.

The Group is cooperating with the German

authorities. According to the state of th e

investigations, the result and the effects for the Group,

which may potentially include the imposition of

material financial consequences (penalties, and/or

disgorgement of proceeds) cannot be anticipated.  For

this reason, the Bank has not recognized any provisions

in relation to the potential imposition of financial

penalties.

• Banco Santander, S.A.  was sued in a legal

proceeding in which the plaintiff alleges that the

Bank breached his contract as CEO of the institution:

in the lawsuit, the claimant mainly requested a

declaratory ruling upholding the existence, validity

and effectiveness of such contract and its

enforcement together with the payment of certain

amounts. For the case that the main request is not

granted, the claimant sought a compensation for a

total amount of approximately EUR 112 million or,

an alternative relief for other minor amounts. Banco

Santander, S.A. answered to the legal action stating

that the conditions to which the appointment of that

position was subject to were not met; that the

executive services contract required by law was not

concluded; and that in any case, the parties could

terminate the contract without any justified cause.

• On 17 May 2021, the plaintiff reduced his claims for

compensation to EUR 61.9 million. On 9 December

2021, the Court upheld the claim and ordered the

Bank to compensate the claimant in the amount of

EUR 67.8 million. By court order of 13 January 2022,

the Court corrected and supplemented its judgment,

reducing the total amount to be paid by the Bank to

EUR 51.4 million and clarifying that part of this

amount (buy out) was to be paid under the terms of

the offer letter, i.e., entirely in Banco Santander

shares, within the deferral period for this type of

remuneration at the plaintiff's former employer and

subject to the performance metrics or parameters of

114

the plan in force at the Bank, which was that of 2018.

As explained in note 5 of the report of the

consolidated annual accounts of the year 2022, the

degree of performance of these objectives was

33.3%.

  The Bank filed an appeal against the judgment before

the Madrid Court of Appeal, which was opposed by

the plaintiff. At the same time, the plaintiff filed an

application for provisional enforcement of the

judgment in the First Instance Court. A court order

was issued ordering enforcement of the judgment,

and the Bank deposited in the court bank account the

full amount provisionally awarded to the claimant,

including interest, for an approximate sum of EUR.

35.5 million, within the voluntary compliance period.

  On 6 February 2023, Banco Santander was notified

with the judgment of 20 January 2023 by which the

Madrid Court of Appeal partially upheld the appeal

filed by the Bank. The judgment has reduced the

amount to be paid by EUR 8 million, which, to the

extent that this amount was already paid in the

provisional partial enforcement of the judgement of

first instance court, must be returned to the Bank

together with other amounts for interest, which the

appeal judgement also rejects.The plaintiff deposited

circa EUR 9.6 million. This amount was received by

the Bank on 11 July 2023.

• On 11 April 2023, the Bank filed an extraordinary

appeal for procedural infringement and an appeal in

cassation against the Madrid Court of Appeal’s

judgment before Spanish Supreme Court. Existing

provisions cover the estimated risk of loss.

• Universalpay Entidad de Pago, S.L. (Upay): has filed a

lawsuit against Banco Santander, S.A. for breach of

the marketing alliance agreement (MAA) and claims

payment (EUR 1,050 million). The MAA was

originally entered into by Banco Popular and its

purpose is the rendering of acquiring services (point

of sale payment terminals) for businesses in the

Spanish market. The lawsuit was mainly based on the

potential breach of clause 6 of the MAA, which

established certain obligations of exclusivity, non-

competition and customer referral. On 16 December

2022, the Court ruled in favour of the Bank and

dismissed the plaintiff's claim in its entirety.  The

decision was appealed before the Provincial Court of

Madrid and the Bank filed its opposition to Upay's

appeal. On 4 October 2024 the Court of Appeal issued

an order scheduling the date for the vote and decision

of the appeal on 14 November 2024. On 20 December

2024, the parties reached an agreement by which the

MAA and ancillary agreements, which duration would

have elapsed in over five years’ time, were terminated

and, as a result, they have made an application to the

Court to terminate the proceedings. The agreement will

not have a material impact in the consolidated annual

accounts. 

• CHF Polish Mortgage Loans: on 3 October 2019, the

CJEU rendered its decision in relation to a judicial

proceeding against an unrelated bank in Poland

regarding the consequences of potentially unfair

contractual clauses in CHF-indexed loan agreements.

The CJEU left it up to national courts to decide in this

regard, indicating that it is possible to invalidate a

contract if it cannot be maintained without  abusive

terms and there are no explicit supplementary

provisions that can replace these terms.

On 15 June 2023, the CJEU issued its judgment in Case

C-520/21, in which it confirmed that it is national law

that is relevant to determine the effect of cancellation

of a contract - respecting the principles arising from

Directive 93/13/EEC. According to the ruling of the

CJEU in that case, the bank's claims in excess of the

repayment of the nominal amount of the loan's

principal and, as the case may be, the payment of

default interest are contrary to the objectives of

Directive 93/13/EEC if they were to lead to a profit

analogous to the one it intended to make from the

performance of the contract and thus eliminate the

deterrent effect.

On 25 April 2024, the Civil Chamber of the Supreme

Court rendered a decision according to which: (i) in the

event that a provision of an indexed or denominated

loan agreement relating to the manner of determining

the exchange rate of a foreign currency constitutes an

abusive contractual term and is not binding, based on

the current case law, it is not possible for this provision

to be replaced by any other method of determining

exchange rates under the law or prevailing practices;

(ii) in the event that it is not possible to determine a

foreign currency exchange rate binding for the parties

in an indexed or denominated credit agreement, the

agreement is not binding. Further, referring to the

issues related to the cancellation of a credit

agreement, the Supreme Court pointed out that: (i) if

the bank has paid all or part of the credit amount to the

borrower and the borrower has made repayments of

the credit, independent claims for the repayment of

the undue payment arise in favour of each party (the

so-called two condition theory); (ii) the limitation

period of the bank's claim for reimbursement of

amounts paid under the credit begins from the day

following the day on which the borrower challenged

the bindingness of the terms of the agreement; (iii)

there is no legal basis for either party to claim interest

or other benefits for the use of its funds during the

period between the undue payment and the date when

the repayment became due. The criteria set out by the

Supreme Court in its decision could clarify the previous

decisions described above. Nine judges of the Supreme

Court declined to participate in the resolution raising

questions of a constitutional nature and six judges

submitted dissenting opinions mainly on issues related

to the maintenance of the agreement after the

elimination of abusive clauses.

115

Santander Bank Polska and Santander Consumer Bank

Poland estimate legal risk using a model which

considers different possible outcomes and regularly

monitor court rulings on foreign currency loans to

verify changes in case law practice, including the

impact of the aforementioned Supreme Court

resolution on this case law. The Bank is reaching

settlements with customers who have taken legal

action as well as with those who have not yet decided

to file a lawsuit. The settlement scenario is reflected in

the model used to calculate provisions for legal risks.

As of 31 December 2024, Santander Bank Polska S.A.

and Santander Consumer Bank S.A. maintained a

portfolio of loans affected by the legal risk connected

with CHF mortgage for an approximate gross amount

of PLN 5,173.7 million (EUR 1,210.1 million). As of 1

January 2022, in accordance with IFRS 9 and based on

the new best available information, the accounting

methodology was adapted so that the gross carrying

amount of mortgage loans denominated and indexed

in foreign currencies is reduced by the amount in which

the estimated cash flows are not expected to cover the

gross amount of loans, including as a result of legal

controversies relating to these loans.  In the absence of

exposure or insufficient gross exposure, a provision

according to IAS 37 is recorded. 

As of 31 December 2024, the total value of adjustment

to gross carrying amount in accordance with IFRS9 as

well as provisions recorded under IAS37, amount to

PLN 6,592.0 million (EUR 1,541.9 million). PLN 4,676.8

million (EUR 1,093.1 million) corresponds to

adjustment to gross carrying amount under IFRS 9 and

PLN 1,915.3 million (EUR 448.0 million) to provisions

recognized in accordance with IAS 37. The adjustment

to gross carrying amount in accordance with IFRS9 in

2024 amounted to PLN 1,268.9 million (EUR 294.8

million) and the additional provisions under IAS37

amounted to PLN 1,248.8 million (EUR 290.1 million).

Other costs related to the dispute amounted to PLN

536.9 million (EUR 124.7 million).

These provisions represent the best estimate as at 31

December 2024. Santander Bank Polska and Santander

Consumer Bank Poland will continue to monitor and

assess appropriateness of those provisions.

• Banco Santander Mexico: dispute regarding a

testamentary trust constituted in 1994 by Mr. Roberto

Garza Sada in Banca Serfin (currently Santander

Mexico) in favor of his four sons in which he affected

shares of Alfa, S.A.B. de C.V. (respectively, Alfa and the

Trust). During 1999, Mr. Roberto Garza Sada instructed

Santander México in its capacity as trustee to transfer

36,700,000 shares from the Trust's assets to his sons

and daughters and himself. These instructions were

ratified in 2004 by Mr. Roberto Garza Sada before a

Notary Public. 

Mr. Roberto Garza Sada passed away on 14 August

2010 and subsequently, in 2012, his daughters filed a

complaint against Santander Mexico alleging it had

been negligent in its trustee role. The lawsuit was

dismissed at first instance in April 2017 and on appeal

in 2018. In May 2018, the plaintiffs filed an appeal

(recurso de amparo) before the First Collegiate Court

of the Fourth Circuit based in Nuevo León, which ruled

in favor of the plaintiffs on 7 May  2021, annulling the

2018 appeal judgment and condemning Santander

Mexico to the petitions claimed, consisting of the

recovery of the amount of 36,700,000 Alfa shares,

together with dividends, interest and damages.

Santander Mexico has filed various constitutional

reviews and appeals against the recurso de amparo

referred to above, which have been dismissed by the

Supreme Court of Justice of the Nation. As of this date,

an amparo review filed by the Bank is pending to be

resolved in the Collegiate Courts in the State of Nuevo

León, thus the judgment is not final.

On 29 June 2022, Santander México, within the

framework of the amparo review filed by the Bank,

requested the First Collegiate Court in Civil Matters of

the Fourth Circuit of Nuevo León the recusal of two of

the three Magistrates who rendered against Santander

Mexico, which was resolved in favour of Santander

Mexico. Plaintiffs  requested the recusal of the third

Magistrate who ruled with a dissenting vote against

the recurso de amparo referred above and this was

resolved in favour of Plaintiffs, and consequently the

matter was referred to the Second Collegiate Court of

the Fourth Circuit based in Nuevo León. The President

of this Court considered that the Seventh Civil Chamber

of the Superior Court of Justice of Nuevo León had

fulfilled the Amparo granted to Mrs. Garza, therefore

the Bank presented disconformity 'inconformidad',

which was sent for resolution by the Second Collegiate

Court of the Fourth Circuit based in Nuevo León.

However, on 22 April 2024, the Bank asked the

Supreme Court of Justice of the Nation to take up the

matter. This has been accepted and consequently, the

Supreme Court of Justice will resolve the matter. In

addition, the Bank presented a Recurso de Reclamación

for procedural defects, which is pending to be resolved

by the Supreme Court of Justice of the Nation.

Santander México believes that the actions taken

should prevail and reverse the decision against it. The

impact of a potential unfavorable resolution for

Santander México will be determined in a subsequent

proceeding and will also depend on the additional

actions that Santander México may take in its defense,

so it is not possible to determine it at this time. At the

current stage of the proceedings, the provisions

recorded are considered to be sufficient to cover the

risks deriving from this claim.

116

• URO Property Holdings, S.A. (before URO Property

Holdings, SOCIMI SA): on 16 February 2022, legal

proceedings were commenced in the Commercial

Court of London against Uro Property Holdings S.A.

(Uro), a subsidiary of Banco Santander, S.A., by BNP

Paribas Trust Corporation UK Limited (BNP) in its

capacity as trustee on behalf of certain bondholders

and beneficiaries of security rights. The litigation

concerns certain terms of a financing granted to Uro

which was supported by a bond issue in 2015. The

claimant seeks a declaration by the Court and a

monetary award against Uro, in connection with an

additional premium above the nominal value of the

financing repayment because of Uro having lost its

status as SOCIMI (Sociedad Anónima Cotizada de

Inversión Inmobiliaria), such loss causing the

prepayment of the bond issue and, in the opinion of

the claimant BNP, also the obligation to pay the

additional premium by Uro. Uro denies being liable to

pay that additional premium and filed its defense

statement and a counterclaim against the claimant.

Furthermore, Uro filed a summary judgement

application for BNP's claim to be dismissed before

trial.  The dismissal of this application by the

Commercial Court was confirmed by the Appeal Court.

It is estimated that the maximum loss associated with

this possible contingency, amounts to approximately

EUR 250 million. In November 2024, Uro reached an

agreement with bondholders and beneficiaries of

security rights, which determine termination of the

proceedings. The agreement does not have a material

impact in the consolidated annual accounts.

• Mortgage Expenses: In December 2015 the Spanish

Supreme Court ruled that mortgage clauses relating to

the payment of fees associated to formalizing the

mortgage were abusive. On 27 November 2018, the

Supreme Court agreed that the taxpayer of the

documented legal acts stamp duty tax (IAJD) on the

mortgage loans should be the borrower. On 9

November 2018, RDL 17/2018 came into force and

modified the Law of the IAJD, establishing that the

taxpayer is the Bank. On 23 January 2019, the

Supreme Court ruled the distribution of the same must

be 50% between the Bank and the borrower in public

notary expenses and agency expenses. The Supreme

Court also ruled that the Bank must pay 100% of the

Registry. On 26 October 2020, the Supreme Court

ruled that the Bank is fully responsible for the

management expenses; and on 27 January 2021, the

Supreme Court ruled that the Bank is also responsible

for the valuation expenses.

In September 2020, the Barcelona Court of Appeal,

rendered a decision stating that the commencement

(dies a quo) for the statute of limitation starts running

from the day the consumer fully paid mortgage

expenses. The judgment has been appealed to the

Supreme Court, which referred a preliminary matter to

the ECJ for the establishment of the dies a quo from

which the limitation period for the refund action starts

running (C-561/21).

On 25 January 2024 the ECJ rendered a judgment (joint

cases C‑810/21 and C‑813/21) stating that Directive

93/13 must be fixed on a case-by-case basis by

national courts based on the moment when the

consumer was aware of the unfair nature of the clause

and the legal consequences of such unfair nature.

Further, on 25 April 2024, two additional judgments

were rendered (cases C-561/21 and C-484/21) in

which the ECJ stated that the dies a quo of the statute

of limitations for the annulment of the mortgage

expenses shall be fixed on the moment when the

consumer has an effective knowledge of the abusive

nature of the clause and its effects and that this date

must not be fixed (a) on the date of payment of such

expense nor of the execution of the agreement; (b)

when the Supreme Court has handed down judgments

stating the abusive nature of a clause similar to the

one included in the consumer contract; nor (c) when

the ECJ has handed down judgments confirming that

the statute of limitations for the annulment of

contractual provisions is valid subject to its compliance

with the principles of equivalence and effectiveness.

117

The Supreme Court has confirmed this criterion in its

14 June 2024 judgment, establishing that the public

dissemination of case-law declaring the abusive nature

of a clause does not necessarily give rise to the

limitation period of the reimbursement action derived

from similar clauses. However, the 4 July 2024

judgment, rendered in the case C-450/22, the ECJ has

established that it cannot be excluded a priori that, as a

consequence of the occurrence of an objective event or

of a notorious event, such as the amendment of the

applicable legislation or a widely disseminated and

debated development of jurisprudence, the court

considers that the average consumer's overall

perception of the floor clause has changed during the

reference period and has enabled him to become

aware of the potentially significant economic

consequences arising from such clause. A further

preliminary question concerning the statute of

limitations of the annulment of mortgage expenses

has been raised before the ECJ by the First Instance

Court No 8 of La Coruña. In December in 2024, the

Supreme Court handed down two additional

judgments regarding statute of limitations, in which it

determines that the date to be considered for the

purposes of the application of Directive 93/1994 and,

consequently, the statute of limitations detailed in its

previous judgments, is 31 December 1994 (i.e. the

date when the deadline for its transposition ended).

This is based on the principle of interpretation in

accordance with directives not transposed (applicable

once their transposition period has expired). The

recorded provision includes the best estimate of

Group’s liability for this matter.

Banco Santander and the other Group companies are

subject to claims and, therefore, are party to certain

judicial and administrative proceedings incidental to

the normal course of their business including those in

connection with lending activities, relationships with

employees and other commercial or tax matters

additional to those referred to here.

With the information available to it, the Bank considers

that, at 31 December 2024, it had reliably estimated

the obligations associated with each proceeding and

had recognized, where necessary, sufficient provisions

to cover reasonably any liabilities that may arise as a

result of these tax and legal risks. Disputes in which

provisions have been registered but are not disclosed

is justified on the basis that it would be prejudicial to

the proper defense of the Bank. Subject to the

qualifications made, it also believes that any liability

arising from such claims and proceedings will not

have, overall, a material adverse effect on the Bank’s

business, financial position, or results of operations.

24. Tax matters

a ) Consolidated Tax Group

In accordance with current Spanish legislation, the

Consolidated Tax Group includes Banco Santander, S.A.

(as the parent) and Spanish subsidiaries that meet the

requirements provided for in Spanish legislation

regulating the taxation of the consolidated profits of

corporate groups (as the controlled entities).

b) Years open for review by the tax authorities

In January 2024, the Spanish tax authorities formalized

acts with agreement, conformity and non-conformity,

relating to corporate income tax for financial years 2017

to 2019. The adjustments signed in conformity and with

agreement had no impact on results.

In June 2024, the tax authorities notified the final

assessments derived from the adjustments in non-

conformity, which have been appealed at the Central

Economic Administrative Court. Banco Santander, S.A.,

as the parent of the Consolidated Tax Group, considers,

in accordance with the advice of its external lawyers,

that the assessments should not have a significant

impact on the consolidated financial statements, as

there are sound arguments as proof in the appeals filed

against tax years 2017 to 2019, as well as in the appeals

against previous tax audits that are pending at the

National Appellate Court (tax years 2003 to 2011) and at

the Central Economic Administrative Court (tax years

2012 to2015). Consequently, no provision has been

recorded for this concept. It should also be noted that, in

those cases where it has been considered appropriate,

the mechanisms available to avoid international double

taxation have been used.

In April 2024, the Spanish tax authorities have initiated

partial tax audits to verify corporate income tax for the

year 2020, as well as value added tax (VAT) for years

2020 to 2022.

At the date of approval of these consolidated annual

accounts, subsequent years up to and including 2024,

are subject to review.

The other entities have the corresponding years open for

review, pursuant to their respective tax regulations.

Because of the possible different interpretations which

can be made of the tax regulations, the outcome of the

tax audits of the rest of years subject to review might

give rise to contingent tax liabilities which cannot be

objectively quantified. However, the Group’s tax advisers

consider that it is unlikely that such tax liabilities will

materialize, and that in any event the tax charge arising

therefrom would not materially affect the Bank´s

financial statements.

118

c) Reconciliation

The reconciliation between the income tax expense at

the applicable tax rate (30%) and the income tax

expense recorded (in EUR millions) is shown below:

EUR million
	2024	2023
Profit before taxes	11,192	9,772
Corporate tax at the applicable rate of 30%	3,358	2,932
Dividends and capital gains	(2,354)	(2,702)
Impairment of non-deductible shares	8	303
Global Minimum Tax Pillar Two	8	—
Remaining permanent differences and others	71	—
Expense/(Incomes) taxes recorded	1,091	533

d) Tax recognized in equity

Regardless of the income tax incurred in profit and loss

accounts, Banco Santander has passed on the net worth

the following amounts during 2024 and 2023 :

EUR million
	Amounts receivable/ (Amounts payable)
	2024	2023
Fair value changes of debt instruments measured at fair value with changes in other comprehensive income	(9)	(26)
Equity instruments valued at fair value with changes in other comprehensive income	2	—
Cash flow hedges	(123)	(86)
Other valuation adjustments (note 25)	(209)	38
Total	(339)	(74)

e) Deferred taxes

The balance under the heading 'Deferred tax assets' of

the balance sheets includes the debit balances with the

Public Treasury for Advance Tax; in turn, the balance

under the heading 'Deferred tax liabilities' includes the

liabilities corresponding to the different deferred taxes

of Banco Santander.

In accordance with EU Regulation 575/2013 on

prudential requirements for credit institutions and

investment firms (CRR), and subsequently amended by

EU Regulation 2019/876 of the European Parliament and

of the Council, those deferred tax assets that do not rely

on future profitability arising from temporary differences

(referred to hereinafter as 'monetizable deferred tax

assets’), meeting certain conditions, should not be

deducted from regulatory capital and should not be risk-

weighted at 250% according to the thresholds set out in

Article 48 of the said Regulation, but shall apply a risk

weight of 100% under Article 39.

The detail of deferred tax assets at 31 December 2024

and 2023 is as follows:

EUR million
	2024	2023
Tax assets:	10,353	10,837
CurrentA	4,332	4,007
Deferred	6,021	6,830
Of which
Relating to pensionsB	2,384	2,807
Relating to allowances for loan lossesB	2,007	2,007
Relating to deductions and negative tax bases	681	681
Tax liabilities:	2,168	1,930
Of which, deferred tax liabilities	1,978	1,765

A. The increase in current tax assets corresponds mainly to the

installment payments made to the Corporation Tax account for the

year 2024.

B. In 2023, the Spanish Economic Administrative Court ruled that in

2017 the requirements for the conversion of part of the monetizable

assets of Popular Group into a credit against the Tax Administration

were met, allowing the conversion to 995 million euros. Banco

Santander was refunded without impact on results. The favorable

Economic Administrative Court decision was declared harmful to the

public interests and challenged at the National Appellate Court by the

Tax Administration. The estimation of this appeal, which is pending at

the National Appellate Court,  would imply that Grupo Santander

should repay the amount refunded and would, once again, credit

these monetizable assets with no impact on results except for late

payment interests. However, it is considered that there are strong

defense arguments in relation to this appeal.

The deferred tax assets and liabilities are reassessed at

the reporting date in order to ascertain whether any

adjustments need to be made on the basis of the

findings of the analyses performed.

These analyses take into consideration all evidence, both

positive and negative of the recoverability of these such

deferred tax assets, including (i) the results generated in

prior years, (ii) projected results, (iii) the estimated

reversal of the various temporary differences based on

their nature and (iv) the period and limits established in

current legislation for the recovery of the various

deferred tax assets, thereby concluding on the Bank's

ability to recover its recorded deferred tax assets.

The projections of results used in this analysis are based

on the financial budgets approved by both the local

managements of the respective units and by Banco

Santander's directors. The Group's budget estimation

process is common for all units, including the Bank.

Group management prepares its financial budgets based

on the following key assumptions:

a. Microeconomic variables of the entities that make up

the tax group at each location: consideration is taken

of the existing balance sheet structure, the mix of

products offered and the commercial strategy at any

time defined by the local authorities in this regard

based on the competition, regulatory and market

environment.

119

b. Macroeconomic variables: estimated growth is based

on the evolution of the economic environment

considering the expected evolution in the gross

domestic product of each location and the forecasts

on of interest rates, inflation and exchange rates

fluctuations. These data is provided by Grupo

Santander's economic forecasting group, and based

on external sources of information.

Additionally, the Group performs retrospective contrasts

(backtesting) on the variables projected in the past. The

differential behaviour of these variables with respect to

the real market data is considered in the projections

estimated in each fiscal year. Thus, and in relation to

Spain, the deviations identified by the Directors in recent

past years are due to non-recurring events outside the

operation of the business, such as the impacts due to the

first application of new regulations, the costs assumed

for the acceleration of the restructuring plans and the

changing effect of the current macroeconomic

environment. 

Finally, and given the degree of uncertainty of the

assumptions on the referred variables, Grupo Santander

conducts a sensitivity analysis of the most significant

assumptions considered in the deferred tax assets’

recoverability analysis, considering any reasonable

change in the key assumptions on which the projections

of results of each tax entity or group and the estimate of

the reversal of the different temporary differences are

based.

In relation to Spain, the sensitivity analysis consisted of

adjusting 50 basis points for growth (gross domestic

product) and adjusting 50 basis points for inflation.

Following this analysis, the maximum recovery period of

deferred tax assets recorded at December 31, 2024 is

maintained for 15 years.

In addition, the Spanish Tax Group, of which Banco

Santander, S.A. is the dominant entity, has not

recognized deferred tax assets of approximately EUR

10,986 million of which EUR 6,527 million correspond to

tax losses, EUR 3,424 million to deductions and EUR

1,035 million to other items.

f) Global Minimum Tax (Pillar II of the OECD

Inclusive Framework)

In December 2021, the OECD's Inclusive Framework on

base erosion and profit shifting (BEPS) approved the

model rules of the Global Minimum Tax, known as Pillar

Two. Pillar Two applies to multinational groups with a

turnover of more than EUR 750 million and entails a

minimum tax of 15% calculated on adjusted accounting

profit on a jurisdiction-by-jurisdiction basis. The OECD

has completed these rules by approving administrative

guidances and a report on Safe Harbors in order to

simplify their application during the first three years.

In the European Union, in December 2022, the Council

adopted Directive 2022/2523 ensuring an overall

minimum level of taxation for multinational groups and

large domestic groups in the EU, entering into force on 1

January 2024. The Directive implements at EU level the

Pillar Two rules of the OECD's Inclusive Framework,

extending its application to large national groups.

In Spain, Law 7/2024 was approved on 20 December

2024, establishing a complementary tax to ensure an

overall minimum level of taxation for multinational

groups and large domestic groups with effects from 1

January 2024. This law transposes Council Directive

2022/2523 and establishes a national complementary

tax adapted to Pillar Two Rules. In other jurisdictions, the

new global minimum tax is in force in the United

Kingdom, Switzerland, the Bahamas and most of the EU

member states, and in 2025 will enter into force in other

jurisdictions where the Group is present, such as Poland,

Brazil, Hong Kong, Singapore, Jersey or the Isle of Man.

The Group is within the scope of this new regulation.

Pilar Two rules require the calculation of the effective

tax rate resulting from the income tax expense and the

accounting result, both with some adjustments, in each

jurisdiction where the Group is present. If in a jurisdiction

this rate is under 15%, Banco Santander, as the ultimate

parent entity, must pay the difference to the Spanish tax

authorities as a Top-up Tax, unless there is a Domestic

Top-up Tax payable to the local tax authorities,

according to the rules of Pillar Two in that jurisdiction

(Qualified Domestic Top-up Tax).

Both Banco Santander, S.A., as the ultimate parent

entity, and subsidiaries in jurisdictions with Domestic

Top-up taxes in force, have estimated these additional

taxes, considering the application of transitional Safe

Harbors in 2024, 2025 and 2026. These Safe Harbors

entail that no Top-up Tax is due, either in the parent

entity or in jurisdictions that have approved a Qualified

Domestic Top-up Tax, as long as one of the following

conditions is met: (i) the effective tax rate calculated

from the Country-by-country reporting exceeds 15% in

2024, 16% in 2025 and 17% in 2026, (ii) the Group’s

presence in a jurisdiction is not significant, considering

so when  income is less than € 10 million and profit

before tax is less than € 1 million, or (iii) the profit before

tax is lower than the result of adding fixed tangible

assets and staff costs, weighted by a certain percentage

that varies annually.

Top-up taxes registered by Banco Santander are not

significant, since the effective tax rates calculated under

Pillar Two rules in most jurisdictions in which the Group

operates are above 15%. However, the new rules require

to provide a large amount of information to the tax

authorities of the different jurisdictions where the Group

is present, broken down by entity, which entails relevant

administrative burden.

g ) Regulatory changes

The following significant tax reforms were approved in

2024 and previous years:

120

In Spain, in 2022, Law 38/2022 established a new

temporary levy on credit institutions and financial credit

institutions for fiscal years 2023 and 2024. The levy is

calculated as 4.8% of net interest and fees earned in the

business carried out in Spain in the precedent year and

the payment obligation arises on the first day of each

period. The recorded levy totals 189 million euros in

2023 and 290 million euros in 2024, although the tax

authorities have reviewed the tax year 2023 and

consider that an additional amount is payable due to

discrepancies in the criteria applied in determining the

tax base, which are being disputed by Banco Santander.

Additionally, this law also established for 2023 a 50%

limitation on the integration of negative individual tax

bases into the consolidated group’s tax base, with a 10-

year deadline for the reversal of this positive adjustment.

On 20 December 2024, Law 7/2024 was approved. This

law establishes, among others, a tax on net interest and

commissions obtained in the Spanish territory by certain

financial institutions that will be accrued on 1 January

2025, 2026, and 2027. The tax base, with some

modifications compared to the temporary levy tax base,

is now calculated on an individual basis for each financial

institution and the tax liability is determined according to

a progressive scale of tax rates from 1% to 7%, with

certain deductions. On 24 December 2024, Royal

Decree-Law 9/2024 was published in the Spanish State

Official Gazette modifying certain technical aspects of

the tax and postponing its accrual to 31 January. This

Royal Decree-Law has been repealed on 22 January

2025. No expense for this new tax has been recorded in

these annual Accounts in accordance with the legislation

in force.

The above-mentioned Law has extended during 2024

and 2025, the 50% limitation on the integration of

negative individual tax bases into the consolidated

group’s tax base, with a 10-year deadline for the reversal

of this positive adjustment. Besides, this law

reintroduces the limits established by Royal Decree-Law

3/2016, that was annulled by the Spanish Constitutional

Court, on the offsetting of monetizable deferred tax

assets and tax losses (from 70% to 25%) and double

taxation deductions (from 0 to 50%) and mandatory

reversal of impairment losses that were deducted in

previous years in the next three years, irrespective of the

recovery of the value of the investments.

h ) Other information

In compliance with the disclosure requirement

established in the listing rules instrument 2005

published by the UK Financial Conduct Authority, it is

hereby stated that shareholders of the Bank resident in

the United Kingdom will be entitled to a tax credit for

taxes paid abroad in respect of withholdings that the

Bank has to pay on the dividends to be paid to such

shareholders if the total income of the dividend exceeds

the amount of exempt dividends of GBP 500 for the year

2024/25 (GBP 1,000 for the year 2023/24). The

shareholders of the Bank resident in the United Kingdom

who hold their ownership interest in the Bank through

Santander Nominee Service will be informed directly of

the amount thus withheld and of any other data they

may require to complete their tax returns in the United

Kingdom. The other shareholders of the Bank resident in

the United Kingdom should contact their bank or

securities broker.

Banco Santander, S.A., is part of the Large Business

Forum and has adhered since 2010 to the Code of Good

Tax Practices in Spain.

25. Other comprehensive

income

The balances of 'Other comprehensive income' include

the amounts, net of the related tax effect, of the

adjustments to assets and liabilities recognised in equity

through the statement of recognised income and

expense.

Respect to items that may be reclassified to profit or

loss, the statement of recognised income and expense

includes changes in other comprehensive income as

follows:

• Revaluation gains (losses): includes the amount of

the income, net of the expenses incurred in the year,

recognised directly in equity. The amounts

recognised in equity in the year remain under this

item, even if in the same year they are transferred to

the income statement or to the initial carrying

amount of the assets or liabilities or are reclassified

to another line item.

• Amounts transferred to income statement: includes

the amount of the revaluation gains and losses

previously recognised in equity, even in the same

year, which are recognised in the income statement.

• Amounts transferred to initial carrying amount of

hedged items: includes the amount of the

revaluation gains and losses previously recognised in

equity, even in the same year, which are recognised

in the initial carrying amount of assets or liabilities as

a result of cash flow hedges.

• Other reclassifications: includes the amount of the

transfers made in the year between the different

"Other comprehensive income" items.

121

a) Breakdown of Other accumulated comprehensive

income - Items that will not be reclassified in results

and Items that can be classified in results

EUR million
	2024	2023
Other accumulated comprehensive income	(1,555)	(2,591)
Items that will not be reclassified in results	(1,669)	(2,399)
Actuarial gains and losses on defined benefit pension plans	(827)	(1,141)
Non-current assets held for sale	—	—
Changes in the fair value of equity instruments measured at fair value through other comprehensive income	(919)	(1,162)
Ineffectiveness  of fair value hedges of equity instruments measured at fair value with changes in other comprehensive income	—	—
Changes in the fair value of equity instruments measured at fair value through other comprehensive income (hedged item)	279	258
Changes in the fair value of equity instruments measured at fair value through other comprehensive income (hedging instrument)	(279)	(258)
Changes in the fair value of financial liabilities at fair value through profit or loss attributable to changes in credit risk	77	(96)
Items that can be classified in results	114	(192)
Hedges of net investments in foreign operations (effective portion)	—	—
Exchange differences	—	—
Cash flow hedges (effective portion)	104	(182)
Changes in the fair value of debt instruments measured at fair value through changes in other comprehensive income	10	(10)
Hedging instruments (items not designated)	—	—
Non-current assets held for sale	—	—

b) Other accumulated comprehensive income-

Items not reclassified to profit or loss – Actuarial

gains or losses on defined benefit pension plans

'Other comprehensive income  —Items not reclassified

to profit or loss—  Actuarial gains or losses on defined

benefit pension plans' include the actuarial gains and

losses and the return on plan assets, less the

administrative expenses and taxes inherent to the plan,

and any change in the effect of the asset ceiling,

excluding amounts included in net interest on the net

defined benefit liability (asset), attributed to the group

net of taxes.

Its variation is shown in the statement of recognised

income and expense.

122

c) Other accumulated comprehensive income -

Items that will not be reclassified in results -

Changes in the fair value of equity instruments

measured at fair value with changes in other

comprehensive income.

Includes the net amount of unrealized fair value changes

of equity instruments at fair value with changes in other

comprehensive income.

The following is a breakdown of the composition of the

balance as of 31 December 2024 and 2023 under ‘Other

accumulated comprehensive income - Items that will not

be reclassified to profit or loss - Changes in the fair value

of equity instruments measured at fair value with

changes in other global result‘ (see note 8):

EUR million
	2024				2023
	Capital gains by valuation	Capital losses by valuation	Net gains/ losses by valuation	Fair value	Capital gains by valuation	Capital losses by valuation	Net gains/ losses by valuation	Fair value
Equity instruments	382	(1,301)	(919)	1,245	52	(1,214)	(1,162)	983

Since the entry into force of Bank of Spain Circular

4/2017, no impairment analysis is performed on equity

instruments measured at fair value through other

comprehensive income. Bank of Spain Circular 4/2017

eliminates the need to estimate the impairment of this

type of equity instruments and the reclassification to

profit or loss of gains and losses on derecognition of

these assets, which are recognised at fair value through

equity.

d) Other accumulated comprehensive income -

Items that may be reclassified to profit or loss -

Hedging derivatives – Cash flow hedges (Effective

portion)

‘Other comprehensive income – Items that may be

reclassified to profit or loss - Cash flow hedges’ includes

the gains or losses attributable to hedging instruments

that qualify as effective hedges. These amounts will

remain under this heading until they are recognized in

the income statement in the periods in which the hedged

items affect it (see note 11).

123

e) Other accumulated comprehensive income -

Items that may be reclassified to profit or loss –

Changes in the fair value of debt instruments

measured at fair value with changes in other

comprehensive income

Includes the net amount of unrealized changes in the fair

value of assets classified as items than can be

reclassified in results ‘Changes in the fair value of debt

instruments measured at fair value with changes in

other comprehensive income‘ (see note 7).

Below is a breakdown of the balance composition as of

December 31, 2024 and 2023 of ‘Other accumulated

global income - Items that can be reclassified in results -

Changes in the fair value of the instruments of debt

valued at fair value with changes in other comprehensive

income’ depending on the type of instrument:

EUR million
	2024				2023
	Revaluation gains	Revaluation losses	Net revaluation gains/ (losses)	Fair value	Revaluation gains	Revaluation losses	Net revaluation gains/ (losses)	Fair value
Debt instruments	52	(42)	10	8,873	32	(42)	(10)	4,456

As of December 31, 2024 and 2023, the handicaps

recorded in the ‘Other cumulative comprehensive

income - Elements that can be reclassified into profit or

loss - Changes in the fair value of debt instruments

measured at fair value through other comprehensive

income’ are not significant.

26. Shareholders’ equity

The changes in ‘Shareholders' equity’ are presented in

the statement of changes in total equity. Significant

information on certain items of ‘Shareholders' equity’

and the changes therein in 2024 are set forth below.

124

27. Issued capital

a) Changes

On 21 March 2023, there was a capital reduction

amounting EUR 170,203,286 through the redemption of

340,406,572 shares, corresponding to the share buyback

program carried out in 2022 and ended in January 2023.

Likewise, on 30 June 2023, there was a capital reduction

of EUR 134,924,476.50 through the redemption of

269,848,953 shares, corresponding to the share buyback

program during the first half of 2023.

Therefore, Banco Santander's share capital at 31

December 2023 consisted of EUR 8,092 million ,

represented by 16,184,146,059 shares of EUR 0.50 of

nominal value each and all of them of a unique class and

series; including 286,842,316 shares corresponding to

the first buyback program of 2023 .

On 5 February 2024, a capital reduction of EUR

179,283,743.50 took place through the redemption of

358,567,487 shares, corresponding to the share buyback

program carried out in 2023 and ended in January 2024.

On 1 July 2024, a capital reduction of EUR 165,652,500

took place through the redemption of 331,305,000

shares, corresponding to he share buyback program

carried out between February and June 2024.

On 20 December 2024, a capital reduction of EUR

170,890,625  took place through the redemption of

341,781,250 shares, corresponding to he share buyback

program carried out during the second semester of

2024.

Therefore, Banco Santander's share capital at 31

December 2024 consisted of EUR 7,576 million,

represented by 15,152,492,322 shares of EUR 0.50 of

nominal value each and all of them of a unique class and

series.(See note 1.j.).

Banco Santander’s shares are listed on the Spanish Stock

Market Interconnection System and on the New York,

London and Warsaw Stock Exchanges, and all of them

have the same features and rights. Santander shares are

listed on the London Stock Exchange under Crest

Depository Interest (CDI), each CDI representing one

Bank’s share. They are also listed on the New York Stock

Exchange under American Depositary Shares (ADS), each

ADS representing one share. Additionally, Banco

Santander's shares were listed on the traditional listing

of the Mexican Stock Exchange (BMV) and since 29

December 2023, they were listed only in the

International Quotation System of said stock exchange.

As of 31 December 2024, no Banco Santander

shareholder individually held more than 3% of its total

share capital (which is the threshold generally provided

for in Spanish regulations for mandatory notification of a

significant participation in a listed company). Even

though at 31 December 2024, certain custodians

appeared in our shareholder registry as holding more

than 3% of our share capital, we understand that those

shares were held in custody on behalf of other investors,

none of whom exceeded that threshold individually.

These custodians were State Street Bank (15.26%), The

Bank of New York Mellon Corporation (7.16%), Chase

Nominees Limited (6.01%), Citibank New York (3.99%),

BNP (3.36%).

At 31 December 2024, neither Banco Santander's

shareholder registry nor the CNMV's registry showed

any shareholder residing in a non-cooperative

jurisdiction with a shareholding equal to, or greater than,

1% of our share capital (which is the other threshold

applicable under Spanish regulations).

b) Other considerations 

Under Spanish law, only shareholders at the general

meeting have the authority to increase share capital.

However, they may delegate the authority to approve or

execute capital increases to the board of directors. Banco

Santander´s Bylaws are fully aligned with Spanish law

and do not establish any different conditions for share

capital increases.

At 31 December 2024 the shares of the following

companies were listed on official stock mark ets:  Banco

Santander - Chile; Banco Santander (Brasil) S.A. and

Santander Bank Polska S.A.

At 31 December 2024 the number of Banco Santander

shares owned by third parties and managed by Group

management companies (mainly portfolio, collective

investment undertaking and pension fund managers) or

jointly managed was 40 million shares, which

represented 0.26% of Banco Santander’s share capital

(36 million shares, representing 0.22% of the share

capital in 2023).In addition, the number of Banco

Santander shares owned by third parties and received as

security was 78 million shares (equal to 0.51% of the

Bank’s share capital).

125

28. Share premium

Share premium includes the amount paid up by the

Bank’s shareholders in capital issues in excess of the par

value.

The Corporate Enterprises Act expressly permits the use

of the share premium account balance to increase capital

at the entities at which it is recognised and does not

establish any specific restrictions as to its use.

The change in the balance of share premium

corresponds to the capital reductions detailed in (note

27.a).

The decrease produced in 2023 by an amount of EUR

1,595 million was the consequence of the difference

between the purchase value of the redeemed shares

(EUR 1,900 million) and the par value of said shares (EUR

305 million ) (see note 4.a and statements of changes in

total equity) as a consequence of the capital decreases

described in note 27.a.

The decrease produced in 2024 by an amount of EUR

3,778 million has been the consequence of the

difference between the purchase value of the redeemed

shares (EUR 4,294 million) and the par value of said

shares (EUR 516 million) (see note 4.a and consolidated

statements of changes in total equity) as a consequence

of the capital decreases described in note 27.a.

Likewise, in accordance with the applicable legislation, a

reserve has been provided in 2024 for amortized capital

charged to the issue premium for an amount equal to the

nominal value of said amortized shares ascending to EUR

516 million (EUR 305 million and EUR 273 million euros

in 2023 and 2022 respectively).

29. Accumulated retained

earnings

a) Definitions

The balance of 'Equity - Accumulated gains and Other

reserves' includes the net amount of the accumulated

results (profits or losses) recognised in previous years

through the income statement which in the profit

distribution were allocated in equity, the expenses of

own equity instrument issues, the differences between

the amount for which the treasury shares are sold and

their acquisition price, as well as the net amount of the

results accumulated in previous years, generated by the

result of non-current assets held for sale, recognised

through the income statement.

b) Breakdown

The detail of ‘Shareholders' equity - reserves’ at 31

December 2024 and 2023 is as follows:

EUR million
	2024	2023
Restricted reserves	3,084	2,899
Legal reserveA	1,515	1,618
Own shares	421	649
Revaluation reserve Royal Decree-Law 7/1996	43	43
Reserve for retired capital	1,105	589
Unrestricted reserves	20,362	14,284
Voluntary reserves	20,362	14,284
Total	23,446	17,183

A. The board of directors has proposed to the general shareholders'

meeting the reclassification of the excess that the amount of the

balance of the legal reserve account shows over the figure that is

equivalent to 20% of the resulting share capital after the executed

capital reductions, to be included in the voluntary reserves account.

i. Legal reserve

Under the Consolidated Spanish Corporate Enterprises

Act, 10% of net profit for each year must be transferred

to the legal reserve. These transfers must be made until

the balance of this reserve reaches 20% of the share

capital. The legal reserve can be used to increase capital

provided that the remaining reserve balance does not

fall below 10% of the increased share capital amount.

During 2023, Banco Santander reduced the legal reserve

by EUR 116 million.

During 2024, the legal reserve has been reduced by EUR

103 million to adjust that the amount of the legal

reserve is equivalent to 20% of the share capital, after

the executions of the capital reductions made in the

year. This amount has been incorporated into the

voluntary reserves account.

The amount of the legal reserve amounted to 20% of the

share capital figure on December 31, 2024.

ii. Reserve for equity shares

According to the Corporate Enterprises Act, an

unavailable reserve equivalent to the amount for which

Banco Santander's shares owned by subsidiaries are

recorded. This reservation shall be freely available when

the circumstances which have obliged its constitution

disappear. In addition, this reserve covers the

outstanding balance of loans granted by the Group with

Banco Santander's share guarantee and the amount

equivalent to the credits granted by the Group

companies to third parties for the acquisition of own

shares.

126

iii. Revaluation reserve Royal Decree Law 7/1996, of 7

June

The balance of Revaluation reserve Royal Decree-Law

7/1996 can be used, free of tax, to increase share capital.

From 1 January 2007, the balance of this account can be

taken to unrestricted reserves, provided that the

monetary surplus has been realised. The surplus will be

deemed to have been realised in respect of the portion

on which depreciation has been taken for accounting

purposes or when the revalued assets have been

transferred or derecognised.

If the balance of this reserve were used in a manner

other than that provided for in Royal Decree law 7/1996,

of 7 June, it would be subject to taxation.

iv. Voluntary Reserve

During the financial year 2024 there was an increase in

voluntary reserves of EUR 6,078 million, which is

explained by the application of the result of the financial

year 2023, amounting to EUR 6,456 million; an increase

of EUR 103 million due to the reclassification of the

excess legal reserve; a decrease of EUR 536 million for

the interest of the PPCCs (see note 21); an increase of

EUR 185 million for the merger reserve with Parasant SA

and SIB Besaya, S.L. Unipersonal and the non-cash

contribution to Santander Group Properties, S.L.U. (see

notes 1 and 13); an increase of EUR 21 million in profits

on sale of equity instruments measured at fair value

from other cumulative comprehensive income and a

decrease of EUR 151 million in transfers between equity

items and other items.

30. Other equity instruments

and own shares

a) Equity instruments issued not capital and other

equity instruments

Other equity instruments includes the equity component

of compound financial instruments, the increase in

equity due to personnel remuneration, and other items

not recognised in other 'Shareholders’ equity' items.

On July 13, 2017, Banco Santander and Banco Popular

Español, S.A.U. (hereinafter, Banco Popular)

communicated that they had decided to launch a

commercial action with the purpose of building loyalty

among retail customers of their networks affected by

the resolution of Banco Popular (the ‘Loyalty Action’).

Under the Loyalty Action, customers who met certain

conditions and have been affected by Banco Popular's

decision could receive, without disbursement by their

part, marketable securities issued by Banco Santander

for a nominal amount equivalent to the investment in

shares or in certain bonds subordinates of Banco Popular

(with certain limits) of which they held at the date of

Banco Popular's resolution. In order to avail itself of such

action, it was necessary for the client to waive legal

action against the Group.

The Loyalty Action would be carried out by providing the

customer with contingently amortizable perpetual

obligations ('Loyalty Bonds’) of Banco Santander, S.A.

Loyalty Bonds will accrue a cash coupon, discretionary,

non-cumulative, payable for completed quarters.

This issuance was made by Banco Santander, S.A. on 8

September 2017 for a nominal amount of EUR 981

million, fully subscribed by Banco Popular Español, S.A.

As at 31 December 2024, there is no cost recorded under

the heading 'Equity instruments issued other than

capital' on Banco Santander balance sheet (EUR 720

million as at 31 December 2023) since the issuance was

amortized in advance on 15 December 2024..

Loyalty Bonds are perpetual securities; however, they

may be fully amortized at the will of Banco Santander,

S.A., with prior authorization from the European Central

Bank, on any of the dates of payment of the coupon,

seven years after its issuance, which where satisfied this

year 24.

Additionally, at 31 December 2024 the Bank had other

equity instruments amounting to EUR 217 million.

b) Own shares

‘Shareholders' equity - Own shares’ includes the amount

of equity instruments held by Banco Santander.

Transactions involving own equity instruments , including

their issuance and cancellation, are recognised directly in

equity, and no profit or loss may be recognised on these

transactions. The costs of any transaction involving own

equity instruments are deducted directly from equity,

net of any related tax effect.

The Bank’s shares owned by the consolidated companies

accounted for 0.10% of issued share capital at 31

December 2024 (December 31, 2023 1.84%).

During the 2024 financial year, 858,386,755 Bank shares

have been acquired at an average price of EUR 4.36 per

share, of which 71,725,171 correspond to the fifth share

repurchase program that started at September 28, 2023,

331,305,000 correspond to the sixth share repurchase

program that started on February 20 and 341,781,250

shares correspond to the new buy-back program started

on August 27. Likewise, 1,031,653,737  shares have

been redeemed and 113,575,334 shares have been

transferred at an average price of EUR 4.27 per share.

Banco Santander also transferred 22,167,105 shares in a

donation to the Fundación Banco Santander.

127

31. Memorandum items

Memorandum items relate to balances representing

rights, obligations and other legal situations that in the

future may have an impact on net assets, as well as any

other balances needed to reflect all transactions even

though they may not impinge on its net assets.

a) Guarantees and contingent commitments

granted

Guarantees include transactions for which an entity

secures obligations of a third party arising from financial

guarantees granted by the entity or other types of

contracts. ‘Contingent liabilities’ include all transactions

under which an entity guarantees the obligations of a

third party and which result from financial guarantees

granted by the entity or from other types of contract. The

detail is as follows:

EUR million
	2024	2023
Loans commitment granted	141,976	128,487
Available in lines of credit	141,976	128,487
Deposits in the future	—	—
Financial guarantees granted	18,888	14,746
Financial guarantees	82	177
Credit derivatives sold	18,806	14,569
Other commitments granted	108,829	90,048
Irrevocable documentary credits	4,320	4,436
Other guarantees and guarantees granted	47,211	42,817
Other	57,298	42,795
Of which:
Subscribed securities pending disbursement	1	1
Conventional asset acquisition contracts	35,617	21,083
Other contingent commitments	21,680	21,711
Total Other guarantees and commitments	269,693	233,281

The breakdown at December 31, 2024 of off-balance

sheet exposures and allowance fund (see note 23) by

impairment phase under Bank of Spain Circular 4/2017

are EUR 261,861 million and EUR 61 million in phase 1,

EUR 7,232 million and EUR 44 million in phase 2 and EUR

600 million and EUR 70 million in phase 3, respectively.

In addition, the breakdown at December 31, 2023 of

exposures and the allowance fund were EUR 228,367

million and EUR 56 million in phase 1, EUR 4,286 million

and EUR 50 million in phase 2 and EUR 628 million and

EUR 78 million in phase 3, respectively.

A significant part of these amounts will mature without

any payment obligation material for the Bank; therefore,

the aggregate balance of these commitments cannot be

considered as a real future need for financing or liquidity

to be granted to third parties by Banco Santander.

Income from guarantee instruments is recognized under

‘Fee and commission income’ in the income statements

and is calculated by applying the rate established in the

related contract to the nominal amount of the

guarantee.

i. Loan commitments granted

Firm commitments to provide credit under pre-

established conditions and terms, except for those that

meet the definition of derivatives because they may be

settled in cash or through the delivery or issuance of

another financial instrument. They include those

available in lines of credit and forward deposits.

ii. Financial guarantees granted

Include financial guarantee contracts such as financial

guarantees, credit derivatives sold, derivative risks

contracted on behalf of third parties and others.

iii. Other commitments granted

Other contingent liabilities include all commitments that

could give rise to the recognition of financial assets not

included in the above items, such as technical

guarantees and guarantees for the import and export of

goods and services.

b) Other information

i. Assets advanced as collateral

In addition to collateral assets, there are assets owned

by Banco Santander which guarantee both transactions

carried out by the Bank or by third parties and various

contingent liabilities and liabilities over which the

assignee has the right, by contract or custom, to re-

transfer and pledge them.

The carrying value of Banco Santander's financial assets

delivered as collateral for such contingent and

assimilated liabilities or liabilities is the following:

EUR million
	2024	2023
Financial assets held for trading	27,581	26,768
Of which	—	—
Public debt Public Sector Agencies	4,236	5,294
Fix rent instruments	19,970	18,274
Equity instruments	3,375	3,200
Non-trading financial assets mandatorily at fair value through profit or loss	30	326
Financial assets at fair value through other comprehensive income	2,148	1,551
Financial assets at amortized cost	15,277	16,003
Total	45,036	44,648

128

32. Hedging derivatives

Banco Santander, within its financial risk management

strategy, and in order to reduce asymmetries in the

accounting treatment of its operations, enters into

hedging derivatives on interest, exchange rate, credit risk

or variation of stock prices, depending on the nature of

the risk covered.

Based on its objective, Banco Santander classifies its

hedges in the following categories:

• Cash flow hedges: cover the exposure to the variation

of the cash flows associated with an asset, liability or

a highly probable forecast transaction. This cover the

variable-rate issues in foreign currencies, fixed-rate

issues in non-local currency, variable-rate interbank

financing and variable-rate assets (bonds, commercial

loans, mortgages, etc.).

• Fair value hedges: cover the exposure to the variation

in the fair value of assets or liabilities, attributable to

an identified and hedged risk. This covers the interest

risk of assets or liabilities (bonds, loans, bills, issues,

deposits, etc.) with coupons or fixed interest rates,

interests in entities, issues in foreign currencies and

deposits or other fixed rate liabilities.

• Hedging of net investments abroad: cover the

exchange rate risk of the investments in subsidiaries

domiciled in a country with a different currency from

the functional one of the Bank.

The details of the coverage derivatives of Banco

Santander, S.A. according to the type of coverage, the

risk they cover and the product, can be found in the

following table:

129

EUR million
	31 December 2024
	Notional Value	Carrying amount		Changes in fair value used for calculating hedge ineffectiveness	Balance sheet items
		Assets	Liabilities
Fair Value Hedges	71,778	1,140	(2,169)	267
Interest rate risk	62,071	736	(1,629)	202	Hedging derivatives
Of which:
Interest Rate Swap	59,187	688	(1,626)	162
Forward	2,500	43	—	43
Exchange rate risk	1,165	4	(24)	1	Hedging derivatives
Of which:
Fx forward	1,165	4	(24)	1
Interest rate and exchange risk	8,042	400	(516)	64	Hedging derivatives
Of which:
Interest Rate Swap	882	5	(65)	17
Currency Swap	7,160	394	(451)	48
Credit Risk	—	—	—	—	Hedging derivatives
Of which:
CDS	—	—	—	—
Base risk	500	—	—	—	Hedging derivatives
Of which:
Interest Rate Swap	500	—	—	—
Cash flow Hedges	13,381	121	(120)	405
Interest rate risk	12,020	72	(57)	410	Hedging derivatives
Of which:
Interest Rate Swap	5,820	66	(4)	328
Fx forward	6,200	6	(53)	82
Exchange rate risk	223	2	—	—	Hedging derivatives
Of which:
Fx forward	223	2	—	—
Interest rate and exchange risk	1,138	47	(63)	(5)	Hedging derivatives
Of which:
Interest Rate Swap	297	—	(13)	(8)
Currency exchange	841	47	(50)	3
Inflation rate risk	—	—	—	—	Hedging derivatives
Of which
Interest Rate Swap	—	—	—	—
Floor	—	—	—	—
Net Investments hedges abroad	21,131	656	(227)	453
Exchange rate risk	21,131	656	(227)	453	Hedging derivatives
Of which:
Fx forward	21,131	656	(227)	453
Total	106,290	1,917	(2,516)	1,125

130

EUR million
	31 December 2023
	Notional Value	Carrying amount		Changes in fair value used for calculating hedge ineffectiveness	Balance sheet line items
		Assets	Liabilities
Fair value hedges	49,598	983	(2,198)	655
Interest rate risk	41,095	772	(1,849)	595	Hedging derivatives
Of which:
Interes Rate Swap	40,716	766	(1,847)	597
Exchange rate risk	1,486	12	(11)	(11)	Hedging derivatives
Of which:
Fx forward	1,486	12	(11)	(11)
Interest rate and exchange rate risk	7,017	199	(338)	71	Hedging derivatives
Of which:
Interest Rate Swap	1,218	6	(82)	59
Currency Swap	5,798	193	(256)	12
Credit risk	—	—	—	—	Hedging derivatives
Of which:
CDS	—	—	—	—
Cash flow hedges	11,724	63	(437)	285
Interest rate risk	10,000	—	(388)	288	Hedging derivatives
Of which:
Interest rate swap	10,000	—	(388)	288
Exchange rate risk	149	—	—	4	Hedging derivatives
Of which:
Fx forward	149	—	—	4
Interest rate and exchange rate risk	1,575	63	(49)	(6)	Hedging derivatives
Of which:
Currency swap	1,276	63	(36)	(12)
Inflation rate risk	—	—	—	(1)	Hedging derivatives
Of which
Interest Rate Swap	—	—	—	—
Floor	—	—	—	(1)
Net investment hedges abroad	16,497	56	(464)	(1,873)
Exchange rate risk	16,497	56	(464)	(1,873)	Hedging derivatives
Of which:	—	—	—	—
Fx forward	16,497	56	(464)	(1,873)
Total	77,819	1,102	(3,099)	(933)

Banco Santander covers the risks of its balance sheet in a

variety of ways. On the one hand, documented as fair

value hedges, it covers the interest rate and foreign

exchange risk of fixed-income portfolios at a fixed rate

(REPOs are included in this category). Resulting, in an

exposure to changes in their fair value due to variations

in market conditions based on the various risks hedged,

which has an impact on Banco Santander's income

statement. To mitigate these risks, Banco Santander

contracts derivatives, mainly Interest Rate Swaps, Cross

Currency Swaps, Cap&floors and Forex Forward.

On the other hand, the interest and exchange rate risk of

loans granted to corporate clients at a fixed rate or

variable rate is covered. These hedges, are carried out

through interest rate swaps, cross currency swaps and

exchange rate derivatives (forex swaps and forex

forward).

In addition, Banco Santander, S.A. manages the interest

and exchange risk of debt issues in its various categories

(issuing covered bonds, perpetual, subordinated and

senior bond) and in different currencies, denominated at

fixed rates, and therefore subject to changes in their fair

131

value. These issues are covered through interest rate

swaps and cross currency swaps.

The methodology used by Banco Santander to measure

the effectiveness of fair value hedges is based on

comparing the market values of the hedged items (based

on the objective risk of the hedge) and of the hedging

instruments in order to analyse whether the changes in

the market value of the hedged items are offset by the

market value of the hedging instruments, thereby

mitigating the hedged risk and minimizing volatility in

the income statement.

Prospectively, the same analysis is performed,

measuring the theoretical market values in the event of

parallel variations in the market curves of a positive

basis point.

There is a macro hedge of structured loans in which the

interest rate risk of fixed-rate loans (mortgage, personal

or with other guarantees) granted to legal entities in

commercial or corporate banking and wealth clients in

the medium-long term is hedged. This hedge is

instrumented as a macro hedge of fair value, the main

hedging instruments being Interest Rate Swap and

Cap&floors. In case of total or partial cancellation or

early repayment, the customer is obliged to pay/receive

the cost/income of the cancellation of the interest rate

risk hedge managed by the Bank.

Regarding cash flow hedges, the objective is to hedge

the cash flow exposure to changes in interest rates and

exchange rates.

For retrospective purposes, the hypothetical derivative

methodology is used to measure effectiveness. By

means of this methodology, the hedged risk is modelled

as a derivative instrument -not real-, created exclusively

for the purpose of measuring the effectiveness of the

hedge, and which must comply with the fact that its

main characteristics coincide with the critical terms of

the hedged item throughout the period for which the

hedging relationship is designated. This hypothetical

derivative does not incorporate characteristics that are

exclusive to the hedging instrument. Additionally, it is

worth mentioning that any risk component not

associated with the hedged objective risk and effectively

documented at the beginning of the hedge is excluded

for the purpose of calculating the effectiveness. The

market value of the hypothetical derivative that

replicates the hedged item is compared with the market

value of the hedging instrument, verifying that the

hedged risk is effectively mitigated and that the impact

on the income statement due to potential

ineffectiveness is residual.

Prospectively, the variations in the market values of the

hedging instrument and the hedged item (represented

by the hypothetical derivative) are measured in the event

of parallel shifts of a positive basis point in the affected

market curves.

There is another macro-hedge, this time of cash flows,

the purpose of which is to actively manage the risk-free

interest rate risk (excluding credit risk) of a portion of the

floating rate assets of Banco Santander, S.A., through

the arrangement of interest rate derivatives whereby the

bank exchanges floating rate interest flows for others at

a fixed rate agreed at the time the transactions are

arranged. The items affected by the Macro-hedging have

been designated as those in which their cash flows are

exposed to interest rate risk, specifically the floating rate

mortgages of the Banco Santander, S.A. network

referenced to Euribor 12 Months or Euribor Mortgage,

with annual renewal of rates, classified as sound risk and

which do not have a contractual floor (or, if not, this floor

is not activated). The hedged position affecting the

Macro Cash Flow Hedge at the present time is near to

EUR 5,000 million.

Regarding net foreign investments hedges, basically,

they are allocated in Banco Santander, S.A. Grupo

Santander assumes as a priority risk management

objective to minimize -to the limit determined by the

Group's Financial Management- the impact on the

calculation of the capital ratio of its permanent

investments included within the Group's consolidation

perimeter, and whose shares or equity interests are

legally denominated in a currency other than that of the

Group's parent company.   For this purpose, financial

instruments (generally derivatives) are contracted to

hedge the impact on the capital ratio of changes in

forward exchange rates.  Grupo Santander mainly

hedges the risk for the following currencies: BRL, CLP,

MXN, COP, CNY, GBP, CHF, NOK, USD, PLN, UYU and

PEN. The instruments used to hedge the risk of these

investments are forex swaps, forex forward and spot

currency purchases/sales.

For this type of hedges, ineffectiveness scenarios are

considered to be of low probability, given that the

hedging instrument is designated considering the

position determined and the spot rate at which the

position is located.

132

Additionally, the profile information of maturities and

the price/average rate for Banco Santander is shown:

EUR million
	31 December 2024
	Up to one month	One to three months	Three months  to one year	One year to five years	More than five years	Total
Fair value hedges	1,916	4,999	8,520	38,683	17,660	71,778
Interest rate risk
Interest rate instruments
Nominal	1,431	4,446	6,878	33,324	15,991	62,070
Average fixed interest rate (%) GBP	—	0.02	3.12	2.64	5.37
Average fixed interest rate (%) EUR	1.34	0.01	2.00	3.46	3.17
Avarage  fixed interest rate (%)  CZK	—	—	—	2.00	—
Avarage  fixed interest rate (%) NOK	—	—	—	—	2.40
Avarage  fixed interest rate (%) AUD	—	—	—	—	3.82
Average fixed interest rate (%) RON	—	3.61	—	4.20	—
Average fixed interest rate (%) USD	0.01	3.50	2.74	4.46	4.72
Average fixed interest rate (%) HKD	—	—	—	1.96	—
Average fixed interest rate (%) NZD	—	—	—	—	3.25
Exchange rate risk
Exchange rate instruments
Nominal	473	405	287			1,165
CNY/EUR average exchange rate	7.71	7.71	7.71	–	–
MXN/EUR average exchange rate	21.78	–	–	–	–
Interest rate and exchange risk
Instruments of exchange rate and interest
Nominal	12	148	1,355	4,859	1,669	8,043
Average fixed interest rate (%) AUD/EUR				5.69	6.10
Average fixed interest rate (%) CZK/EUR	—	—	—	4.19	—
Average fixed interest rate (%) RON/EUR	—	—	—	—	6.97
Average fixed interest rate (%) HKD/EUR	—	—	—	4.62
Average fixed interest rate (%) JPY/EUR	—	—	—	1.30	1.41
Average fixed interest rate (%) NOK/EUR	—	—	—	3.44	4.50
Average  fixed interest rate (%) CHF/EUR	—	—	—	2.03	2.25
Average fixed interest rate (%) USD/COP	—	12.75	10.58	10.54	7.76
Average  fixed interest rate (%) EUR/GBP	6.69	—	—	—	—
Average  fixed interest rate (%) USD/MXN	—	—	11.30	—
AUD/EUR average exchange rate	—	—	—	1.5992	1.5837
NZD/EUR average exchange rate	—	—	—	—	1.6660
CZK/EUR average exchange rate	—	—	26.0300	25.6338	—
EUR/GBP average exchange rate	1.1885	—	—	—	—
EUR/USD average exchange rate	—	—	0.9818	0.9433	—
HKD/EUR average exchange rate	—	—	—	8.4879	—
JPY/EUR average exchange rate	—	—	—	134.1510	129.2289
MXN/EUR average exchange rate	—	—	—	19.0828	—
NOK/EUR average exchange rate	—	—	—	9.5190	10.4288
RON/EUR average exchange rate	—	4.8100	—	4.9398	4.9800
CHF/EUR average exchange rate	—	—	—	1.0194	0.9315
USD/COP average exchange rate	—	0.0003	0.0002	0.0002	0.0003
USD/MXN average exchange rate	—	—	0.0517	—	—

133

EUR million
	31 December 2024
	Up to one month	One to three months	Three months  to one year	One year to five years	More than five years	Total
Basis Risk
Basis risk instruments
Nominal	—	—	—	500	—	500
Others riks
Exchange instruments
Nominal	—	—	—	—	—
Cash flow hedges	14	83	6,325	6,875	84	13,381
Interest rate and exchange rate risk
Interest rate and exchange instruments
Nominal	—	—	—	1,055	84	1,139
Average fixed interest rate (%) AUD/EUR	—	—	—	3.52	—
Average fixed interest rate (%) CHF/EUR	—	—	—	3.11	—
AUD / EUR average exchange rate	—	—	—	1.5800	1.5600
RON / EUR average exchange rate	—	—	—	4.9400	—
CHF / EUR average exchange rate	—	—	—	1.0000	—
Interest rate risk
Interest Rate Swaps
Nominal	—	—	6,200	5,820	—	12,020
Average fixed interest rate (%) EUR	—	—	—	2.91
Exchange rate risk
FX Swap
Nominal	14	83	125			222
GBP/EUR average exchange rate	1.20	1.17	1.19
Others riks
Exchange instruments
Nominal						—
Net investment hedges abroad	3,240	5,070	12,821	—	—	21,131
Exchange rate risk
Exchange rate instruments
Nominal	3,240	5,070	12,821	—	—	21,131
BRL / EUR average exchange rate	5.99	6.12	6.27	—	—
CLP / EUR average exchange rate	1,052.78	1,066.58	1,045.09	—	—
COP / EUR average exchange rate	—	4,703.00	—	—	—
GBP / EUR average exchange rate	0.86	0.85	0.85	—	—
MXN / EUR average exchange rate	20.28	19.83	21.97	—	—
USD / EUR average exchange rate	1.09	1.08	1.09	—	—
PLN / EUR average exchange rate	4.37	4.41	4.41	—	—
CAD / EUR average exchange rate	—	1.50	—	—	—
CHF / EUR average exchange rate	—	0.94	—	—	—
UYU / EUR average exchange rate	45.82	45.16	48.29	—	—
Total	5,170	10,152	27,666	45,558	17,744	106,290

134

EUR million
	31 December 2023
	Up to one month	One to three months	Three months to one year	One year to five years	More than five years	Total
Fair value hedges	1,840	894	9,854	27,085	9,925	49,598
Interest rate risk
Interest rate instruments
Nominal	1,532	194	7,880	22,714	8,775	41,095
Average fixed interest rate (%) GBP	—	—	1.38	4.48	2.04
Average fixed interest rate (%) EUR	0.09	0.02	2.09	2.42	3.42
Avarage  fixed interest rate (%)  CZK	—	—	—	—	—
Avarage  fixed interest rate (%) NOK	—	—	—	—	—
Avarage  fixed interest rate (%) AUD	—	—	—	—	—
Average fixed interest rate (%) CHF	—	—	1.01	—	—
Average fixed interest rate (%) JPY	—	—	—	—	—
Average fixed interest rate (%) RON	—	—	—	—	—
Average fixed interest rate (%) USD	0.02	3.69	2.60	3.80	4.45
Average fixed interest rate (%) HKD	—	—	—	—	—
Average fixed interest rate (%) NZD	—	—	—	—	—
Exchange rate risk
Exchange rate instruments
Nominal	278	634	524	50	—	1,486
GBP/EUR average exchange rate	—	—	—	—	—
USD/EUR average exchange rate	—	—	—	—	—
COP/USD average exchange rate	4,159.19	3,998.06	—	—	—
PEN/USD average exchange rate	3.78	3.75	—	—	—
AUD/EUR average exchange rate	1.65	1.67	—	—	—
SAR/EUR average exchange rate	—	—	—	—	—
CNY/EUR average exchange rate	—	7.32	7.73	7.72	—
JPY/EUR average exchange rate	—	—	—	—	—
MXN/EUR average exchange rate	—	19.36	—	—	—
MAD/EUR average exchange rate	10.93	11.06	—	—	—
PEN/EUR average exchange rate	4.09	4.11	—	—	—
Interest rate and exchange risk
Instruments of exchange rate and interest
Nominal	30	66	1,450	4,321	1,150	7,017
Average fixed interest rate (%) AUD/EUR	—	—	—	4.80	3.62
Average fixed interest rate (%) EUR/USD	—	—	(0.14)	—	—
Average fixed interest rate (%) CZK/EUR	—	—	—	2.00	—
Average fixed interest rate (%) EUR/COP	—	—	—	—	—
Average fixed interest rate (%) RON/EUR	5.13	—	—	3.97	—
Average fixed interest rate (%) HKD/EUR	—	—	2.58	5.27	—
Average fixed interest rate (%) JPY/EUR	—	—	0.47	1.30	1.41
Average fixed interest rate (%) NOK/EUR	—	—	—	3.44	4.50
Average fixed interest rate (%) USD/CLP	—	—	3.45	—	—
Average fixed interest rate (%) USD/COP	—	17.98	6.15	13.21	7.15
Average  fixed interest rate (%) EUR/GBP	—	—	—	—	—
Average  fixed interest rate (%) NZD/EUR	—	—	—	—	—
Average  fixed interest rate (%) USD/MXN	—	—	14.25	—	—

135

EUR million
	31 December 2023
	Up to one month	One to three months	Three months to one year	One year to five years	More than five years	Total
Average  fixed interest rate (%) CHF/EUR	—	—	—	1.24	—
AUD/EUR average exchange rate	—	—	—	1.50	1.55
NZD/EUR average exchange rate	—	—	—	—	1.67
CZK/EUR average exchange rate	—	—	—	25.83	—
EUR/GBP average exchange rate	—	—	—	—	—
EUR/COP average exchange rate	—	—	—	—	—
EUR/USD average exchange rate	—	—	0.89	0.96	—
HKD/EUR average exchange rate	—	—	8.78	8.67	—
JPY/EUR average exchange rate	—	—	120.57	134.15	129.23
MXN/EUR average exchange rate	—	—	—	—	19.08
NOK/EUR average exchange rate	—	—	—	9.52	10.43
RON/EUR average exchange rate	4.71	—	—	4.89	—
CHF/EUR average exchange rate	—	—	—	1.10	—
USD/CLP average exchange rate	—	—	—	—	—
USD/COP average exchange rate	—	—	—	—	—
USD/MXN average exchange rate	—	—	0.06	—	—
Credit risk
Credit Risk Instruments
Nominal	—	—	—	—	—	—
Cash flow hedges:	763	1,525	8,275	1,075	86	11,724
Interest rate and exchange rate risk
Interest rate and exchange instruments
Nominal	—	—	414	1,075	86	1,575
Average fixed interest rate (%) AUD/EUR	—	—	—	3.52	—
Average fixed interest rate (%) USD/COP	—	—	—	—	—
Average fixed interest rate (%) EUR/PEN	—	—	—	—	—
Average fixed interest rate (%) EUR/AUD	—	—	—	—	—
Average fixed interest rate (%) CHF/EUR	—	—	—	3.11	—
EUR / PEN average exchange rate	—	—	—	—	—
EUR / USD average exchange rate	—	—	—	—	—
AUD / EUR average exchange rate	—	—	1.63	1.58	1.56
RON / EUR average exchange rate	—	—	—	4.94	—
JPY / EUR average exchange rate	—	—	—	—	—
CHF / EUR average exchange rate	—	—	—	1.00	—
EUR / GBP average exchange rate	—	—	1.17	—	—
NOK / EUR average exchange rate	—	—	—	—	—
CZK / EUR average exchange rate	—	—	—	—	—
EUR / AUD average exchange rate	—	—	—	—	—
Interest rate risk
Interest Rate Swaps
Nominal	750	1,500	7,750	—	—	10,000
Average fixed interest rate (%) EUR	(0.12)	(0.09)	0.02	—	—
Average fixed interest rate (%) USD	—	—	—	—	—
Average fixed interest rate (%) AUD	—	—	—	—	—
Bond Forward Instruments
Nominal	—	—	—	—	—
Inflation rate risk

136

EUR million
	31 December 2023
	Up to one month	One to three months	Three months to one year	One year to five years	More than five years	Total
Interest Rate Swaps
Nominal	—	—	—	—	—
Average fixed interest rate (%) EUR	—	—	—	—	—
Exchange rate risk
FX Swap
Nominal	13	25	111	—	—	149
GBP/EUR average exchange rate	1.15	1.15	1.14	—	—
Net investment hedges abroad	3,593	4,870	8,034	—	—	16,497
Exchange rate risk
Exchange rate instruments
Nominal	3,593	4,870	8,034	—	—	16,497
BRL / EUR average exchange rate	5.57	5.51	5.48	—	—
CLP / EUR average exchange rate	916.72	936.17	987.20	—	—
COP / EUR average exchange rate	—	4,525.66	—	—	—
GBP / EUR average exchange rate	0.87	0.87	0.88	—	—
MXN / EUR average exchange rate	20.08	20.59	20.21	—	—
USD / EUR average exchange rate	—	1.13	1.08	—	—
PLN / EUR average exchange rate	4.66	4.75	4.58	—	—
CAD / EUR average exchange rate	—	1.46	—	—	—
CHF / EUR average exchange rate	—	0.94	—	—	—
UYU / EUR average exchange rate	43.24	43.52	44.40	—	—
Total	6,196	7,289	26,163	28,160	10,011	77,819

137

Regarding the hedged items, in the following table we

have the detail of the type of coverage, the risk that is

covered and what products are being covered as of

December 31, 2024 and 2023 , mainly they are loaned

deposits, financial and corporate bonds and corporate

repos:

EUR million
	31 December 2024
	Amount in books of the item covered		Cumulative amount of fair value adjustments on the covered line		Change in the fair value of the item covered for inefficiency assessment	Cash flow hedge reserve / foreign currency conversion
	Assets	Liabilities	Assets	Liabilities		Coverage continues	Discontinuous coverage
Fair value hedges	9,218	49,919	(134)	(872)	(249)	—	—
Interest rate risk	7,391	45,169	(117)	(830)	(188)	—	—
Exchange rate risk	1,165	—	—	—	—	—	—
Interest rate and exchange rate risk	662	4,750	(17)	(42)	(61)	—	—
Credit risk	—	—	—	—	—	—	—
Basis risk	—	—	—	—	—	—	—
Other risks	—	—	—	—	—	—	—
Cash flow hedges					(409)	26	122
Interest rate risk					(414)	18	122
Exchange rate risk					—	—	—
Interest rate and exchange rate risk					5	8	—
Inflation rate risk					—	—	—
Other risks					—	—	—
Net investment hedges abroad	21,132	—	(453)	—	(453)	—	—
Exchange rate risk	21,132	—	(453)	—	(453)	—	—
Total	30,350	49,919	(587)	(872)	(1,111)	26	122

EUR million
	31 December 2023
	Amount in books of the item covered		Cumulative amount of fair value adjustments on the covered line		Change in the fair value of the item covered for inefficiency assessment	Cash flow hedge reserve / foreign currency conversion
	Assets	Liabilities	Assets	Liabilities		Coverage continues	Discontinuou s coverage
Fair value hedges	6,438	35,079	(212)	(1,105)	(659)	—	—
Interest rate risk	5,600	29,690	(187)	(991)	(640)	—	—
Exchange rate risk	285	—	(1)	—	7	—	—
Interest rate and exchange rate risk	553	5,389	(24)	(114)	(26)	—	—
Credit risk	—	—	—	—	—	—	—
Cash flow hedges	—	—	—	—	(285)	(259)	(1)
Interest rate risk	—	—	—	—	(288)	(271)	(1)
Exchange rate risk	—	—	—	—	(4)	—	—
Interest rate and exchange rate risk	—	—	—	—	6	12	—
Inflation rate risk	—	—	—	—	1	—	—
Net investment hedges abroad	16,497	—	1,873	—	1,873	—	—
Exchange rate risk	16,497	—	1,873	—	1,873	—	—
Total	22,935	35,079	1,661	(1,105)	929	(259)	(1)

138

The cumulative amount of adjustments of the fair value

hedging instruments that remain in the balance for

hedges items that are no longer adjusted by profit and

loss of coverage as at 31 December 2024 is EUR 33

million (EUR 48  million in 2023).

The following table contains information regarding the

effectiveness of the hedging relationships designated by

Banco Santander, as well as the impacts on profit or loss

and other comprehensive income as of 31 December

2024 and 2023:

EUR million
	31 December 2024
	Earnings / (losses) recognized in Other accumulated global income	Coverage inefficiency recognized in the income statement	Line of the income statement that includes ineffective coverage	Reclassified amount of reserves to the income statement due to:
				Covered transaction that affects the income statement	Line of the income statement that includes reclassified amounts
Fair value hedges	—	(7)	Gain or losses of financial assets/ liabilities
Interest rate risk	—	(11)
Exchange rate risk	—	1
Interest and Exchange rate risk	—	4
Credit risk	—	(1)
Other risks	—	—
Cash flow hedges	409	(3)	Gain or losses of financial assets/ liabilities	269	Net interest income/ Gains or losses of financial assets/ liabilities
Interest rate risk	414	(3)		278
Exchange rate risk	—	—		—
Interest and Exchange rate risk	(5)	—		(9)
Inflation rate risk	—	—		—
Other risks	—	—		—
Total	409	(10)		269

139

EUR million
	31 December 2023
	Earnings / (losses) recognized in Other accumulated global income	Coverage inefficiency recognized in the income statement	Line of the income statement that includes ineffective coverage	Reclassified amount of reserves to the income statement due to:
				Covered transaction that affects the income statement	Line of the income statement that includes reclassified amounts
Fair value hedges	—	(4)	Gain or losses of financial assets/ liabilities
Interest rate risk	—	(45)
Exchange rate risk	—	(4)
Interest and Exchange rate risk	—	45
Credit risk	—	—
Cash flow hedges	285	—	Gain or losses of financial assets/ liabilities	355	Net interest income/ Gains or losses of financial assets/ liabilities
Interest rate risk	288	—		362
Exchange rate risk	4	—		—
Interest and Exchange rate risk	(6)	—		(7)
Inflation rate risk	(1)	—		—
Total	285	(4)		355

The following table shows a reconciliation of each component of equity and an analysis of other comprehensive income in

relation to hedge accounting at 31 December 2024 and 2023:

EUR million
	2024	2023
Balance at the end of the previous year	(182)	(381)
Amount recognized in Other accumulated global income
Cash flow hedges	409	285
Interest rate risk and interest rate and exchange rate risk	409	285
Changes in equity by discharge at P&L	269	355
Remains of equity movements	140	(70)
Other risks	—	—
Changes in equity by discharge at P&L	—	—
Remains of equity movements	—	—
Taxes	(123)	(86)
Balance at year end	104	(182)

140

33. Off-balance-sheet funds

under management

As of 31 December 2024, Banco Santander held off-

balance-sheet funds under management, namely

investment funds and assets under management,

amounting to EUR 108,663 million (31 December 2023,

EUR 93,539 million). Marketed but not held under

management amounted to EUR 28,971 million (31

December 2023, EUR 22,220 million).

34. Interest income

Interest and similar income in the accompanying income

statements comprises the interest accruing in the year

on all financial assets with an implicit or explicit return,

calculated by applying the effective interest method,

irrespective of measurement at fair value, and the

rectifications of income as a result of hedge accounting.

Interest is recognized gross, without deducting any tax

withheld originally.

The detail of the main items of interest and similar

income earned in 2024 and 2023 is as follows:

EUR million
	2024	2023
Derivatives - Trading	57	135
Of which: Interest income derived from economic hedges	57	135
Debt instruments	4,100	2,890
Central Banks	80	53
Public sector	2,258	1,230
Credit entities	832	868
Other financial companies	845	601
Non-financial companies	85	138
Loans and advances	19,247	14,792
Central Banks	45	75
Public sector	526	409
Credit entities	3,137	1,770
Other financial companies	5,403	3,634
Non-financial companies	7,022	6,337
Households	3,114	2,567
Other assets	3,489	4,833
Of which, insurance contracts linked to pensions (note 23.c)	14	14
Deposits	73	71
Central Banks	—	31
Public sector	12	—
Credit entities	7	8
Other financial companies	51	28
Non-financial companies	3	4
Households	—	—
Hedging derivatives - Interest rate risk	61	(150)
Other financial liabilities	—	9
Debt securities issued	—	—
Total	27,027	22,580

Most of the interest and similar income was generated

by Banco Santander's financial assets that are measured

either at amortized cost or at fair value through Other

comprehensive income.

141

35. Interest expense

Interest expense and similar charges in the

accompanying income statements includes the interest

accruing in the year on all financial liabilities with an

implicit or explicit return, including remuneration in kind,

calculated by applying the effective interest method,

irrespective of measurement at fair value; the

rectifications of cost as a result of hedge accounting; and

the interest cost attributable to provisions recorded for

pensions.

The detail of the main items of interest expense and

similar charges accrued in 2024 and 2023 is as follows:

EUR million
	2024	2023
Derivatives - Trading	77	54
Of which: interest income from derivatives in economic hedges	77	54
Debt securities Issued	4,948	4,062
Debt securities	30	60
Central Banks	—	—
Public sector	6	12
Credit entities	2	3
Other financial companies	21	43
Non-financial companies	1	2
Loans and advances	13	60
Central Banks	—	—
Public sector	—	—
Credit entities	8	10
Other financial companies	5	50
Non-financial companies	—	—
Households	—	—
Deposits	12,901	10,245
Central Banks	695	775
Public sector	1,205	713
Credit entities	2,697	2,298
Other financial companies	4,672	3,705
Non-financial companies	2,871	2,316
Households	761	438
Other financial liabilities	785	598
Hedging derivatives - Interest rate risk	1,309	1,057
Pensions and other obligations of defined post-employment benefits (note 23)	49	68
Others	—	—
Total	20,112	16,204

Most of the interest expense and similar charges was

generated by Banco Santander's financial liabilities that

are measured at amortized cost.

36. Dividend income

‘Dividend income’ includes the dividends and payments

on equity instruments out of profits generated by

investees after the acquisition of the equity interest.

The detail of income from equity instruments is as

follows:

EUR million
	2024	2023
Financial assets held for trading	513	408
Non-trading financial assets mandatorily at fair value through profit or loss	9	12
Financial assets at fair value through other comprehensive income	90	50
Investments in subsidiaries, jointly controlled entities and associates	7,835	9,182
Group entities	7,787	8,888
Associates	48	294
Total	8,447	9,652

142

Investments in subsidiaries, jointly controlled entities

and associates

The detail of the main items of interest expense and

similar charges accrued in 2024 and 2023 is as follows:

EUR million
	2024	2023
Detail of the companies:
GRUPO FINANCIERO SANTANDER MEXICO, S.A. DE C.V.	1,292	1,444
SANTANDER UK GROUP HOLDINGS PLC	1,203	1,385
SANTANDER HOLDINGS USA, INC	1,066	2,760
SANTANDER TOTTA, SGPS, S.A.	979	661
SANTANDER BANK POLSKA S.A.	711	369
SANTANDER CONSUMER FINANCE, S.A.	500	607
BANCO SANTANDER MEXICO, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México	476	497
SANTANDER INSURANCE, S.L.	413	—
SANTANDER HOLDING USA, Inc.	164	84
SANTANDER UK GROUP HOLDINGS PLC (AT1)	145	114
SANTANDER INVESTMENT, S.A.	110	—
SAM INVESTMENT HOLDINGS, S.L.	97	23
SANTANDER CONSUMER FINANCE SA  (AT1)	93	94
BANCO SANTANDER S.A. (Uruguay)	69	74
OPEN BANK, S.A.	63	—
TEATINOS SIGLO XXI INVERSIONES S.A.	58	84
TRESMARES SANTANDER DIRECT LENDING, SICC, S.A.	54	19
MERLIN PROPERTIES, SOCIMI, S.A.	42	39
SANTANDER INVESTMENT CHILE LIMITADA	35	—
NAVIERA TRANS ORE, A.I.E.	32	—
SANTANDER FACTORING Y CONFIRMING, S.A. UNIPERSONAL, E.F.C.	28	79
BANCO SANTANDER PERÚ S.A.	27	21
SANTANDER CHILE HOLDING S.A.	27	43
PEREDA GESTION, S.A.	24	11
SANTADER GLOBAL TECHNOLOGY AND OPERATIONS, S.L. UNIPERSONAL	23	35
SANTANDER SEGUROS Y REASEGUROS, COMPAÑÍA ASEGURADORA, S.A.	—	400
ZURICH SANTANDER INSURANCE AMERICA, S.L.	—	202
CNP SANTANDER INSURANCE LIFE DESIGNATED ACTIVITY COMPANY	—	51
Other companies	104	86
Total	7,835	9,182

37. Commission income

Fee and commission income comprise the amount of all

fees and commissions accruing in favour of Banco

Santander in the year, except those that form an integral

part of the effective interest rate on financial

instruments.

The detail of fee and commission income in the

accompanying income statements for 2024 and 2023 is

as follows:

EUR million
	2024	2023
Collection and payment services:	594	572
Current Accounts	186	185
Credit and debit cards	230	211
Transfers and other payment orders	138	134
Other commission income in connection with payment services	40	42
Marketing of non-banking financial products:	752	689
Collective Investment	556	454
Insurance	195	234
Other	1	1
Securities services:	288	260
Securities underwriting and placement	163	139
Transfer orders	19	16
Other	106	105
Clearing and settlement	73	63
Asset management	161	111
Custody	70	71
Structured finance	517	383
Loan granted commitments granted	384	388
Financial granted guarantees granted	329	267
Other:	623	499
Foreign currency exchange	159	131
Other concepts	464	368
Total	3,791	3,303

143

38. Commission expense

Fee and commission expense show the amount of all

fees and commissions paid or payable by Banco

Santander in the year, except those that form an integral

part of the effective interest rate on financial

instruments.

The detail of fee and commission expense in the

accompanying income statements for 2024 and 2023 is

as follows:

EUR million
	2024	2023
Clearing and settlement	69	49
Loan commitments received	—	—
Financial guarantees received	180	174
Custody	1	—
Other A	616	452
Total	866	675

A. Other Includes mainly commissions paid for financial and

mediation services, as well as credit cards.

39. Gains or losses on financial

assets and liabilities

The following information is presented below regarding

the gains or losses on financial assets or liabilities:

a) Breakdown

The detail, by classification of the related instrument, of

Gains/losses on financial assets and liabilities in the

accompanying income statements for 2024 and 2023 is

as follows:

EUR million
	2024	2023
Gains or losses on financial assets and liabilities not measured at fair value through profit or loss, net	(97)	(232)
Financial assets at amortized cost	(47)	(234)
Other financial assets and liabilities	(50)	2
Of which, debt instruments	(61)	(5)
Of which, equity instruments	—	—
Gains or losses on financial assets and liabilities held for trading, net A	704	723
Gains or losses on non-trading financial assets and liabilities mandatory at fair value through profit or loss	73	93
Gains or losses on financial assets and liabilities measured at fair value through profit or loss, net A	350	122
Gains or losses from hedge accounting, net	(6)	(4)
Total	1,024	702

A. Includes the net income obtained from transactions with debt securities,

capital instruments, derivatives and short positions included in this

portfolio when the Banco Santander jointly manages its risk in those

instruments.

b) Financial assets and liabilities at fair value

through profit or loss

The detail of the amount of the asset balances is as

follows:

EUR million
	2024	2023
Loans and receivables	54,181	29,753
Central Banks	1,239	1,146
Credit institutions	24,008	11,456
Customers	28,934	17,151
Debt instrumentsA	43,519	30,937
Equity instruments	17,216	15,102
Derivatives	52,462	46,516
Total	167,378	122,308

A. Include EUR 36,497 million related to Spanish and foreign

government debt securities at 31 December 2024 (31 December

2023 , EUR 24,937 million).

The foregoing table shows the maximum credit risk

exposure of these assets at 31 December 2024 and

2023 , respectively. Banco Santander mitigates and

reduces this exposure as follows.

With respect to derivatives, Banco Santander has

entered into framework agreements with a large

number of credit institutions and customers for the

netting-off of asset positions and the provision of

collateral for non-payment.

'Loans and receivable' to credit institutions and loans

and receivable to 'customers' included reverse repos

amounting to EUR 80,003 million at 31 December 2024

(31 December 2023: EUR 50,001 million).

In addition, assets amounting to EUR 578 million have a

mortgage guarantee at 31 December 2024 (31

December 2023: EUR 775 million).

At 31 December 2024 and 2023, the amount of the

change in the year in the fair value of financial assets at

fair value through profit or loss attributable to variations

in their credit risk (spread) was not material.

The detail of the amount of the liability balances is as

follows:

EUR million
	2024	2023
Deposits	79,698	74,052
Central Banks	10,897	6,662
Credit Institutions	26,991	19,420
Customers	41,810	47,970
Marketable debt instruments	1,069	208
Short positions	25,518	17,837
Derivatives	46,121	41,379
Total	152,406	133,476

144

At 31 December 2024 and 2023, the amount of the

change in the fair value of financial liabilities at fair value

through profit or loss attributable to changes in their

credit risk during the year is not material.

40. Exchange differences, net

This chapter basically includes the results obtained in the

purchase and sale of currencies, the differences that

arise when converting monetary items in foreign

currency to functional currency and those from non-

monetary assets in foreign currency at the time of

disposal.

The detail of ‘Exchange differences (net)’ in the

accompanying income statements for 2024 and 2023 is

as follows:

EUR million
	2024	2023
Foreign currency purchases and sales	(106)	(193)

Banco Santander manages the currencies to which it is

exposed together with the arrangement of derivative

instruments and, accordingly, the changes in this line

item should be analyzed together with those recognized

under Gains or losses on financial assets and liabilities

(see note 39).

41. Other operating income and

other operating expenses

The detail of ‘Other operating income’ in the

accompanying income statements for 2024 and 2023 , is

as follows:

EUR million
	2024	2023
Exploitation of real estate investments and operating leases	277	261
Others	298	269
Total	575	530

The detail of ‘Other operating expenses’ in the

accompanying income statements for 2024 and 2023 is

as follows:

EUR million
	2024	2023
Contribution to Deposit Guarantee Fund (note 1.h)	(16)	(247)
Contribution to Resolution FundA (note 1.h)	—	(235)
Other operating expensesB	(609)	(497)
Total	(625)	(979)

A. Includes the expense incurred by contribution to the National

Resolution Fund and to the Single Resolution Fund.

B. It includes EUR 290 million (EUR 189 million at 31 December 2023)

for the temporary tax on credit institutions (Law 38/2022).

145

42. Staff costs

a) Breakdown

The detail of ‘Staff costs’ in 2024 and 2023 is as follows:

EUR million
	2024			2023
	Of which, in Spain	Of which, foreign branches	Total	Of which, in Spain	Of which, foreign branches	Total
Wages and salaries	1,862	638	2,500	1,805	573	2,378
Social security costs	378	63	441	358	54	412
Additions to provisions for defined benefit pension plans (note 23)	2	—	2	2	—	2
Contributions to defined contribution pension funds	82	26	108	80	21	101
Equity-instrument-based remuneration	—	—	—	—	—	—
Other staff costs	124	35	159	159	32	191
Total	2,448	762	3,210	2,404	680	3,084

b) Headcount

The average number of employees at the Bank, by

professional category, is as follows:

Average number of employees
	2024	2023
Executive directors and Senior management	15	16
Other employees	21,642	22,112
Branches abroad	2,182	1,933
Total	23,839	24,061

The number of employees, as of December 31, 2024 and

December 31, 2023, is 23,569 and 24,123, respectively.

The functional breakdown, by gender, at 31 December

2024 , is as follows:

	Breakdown by gender
	Executives		Other line personnel
	Men	Women	Men	Women
Breakdown by gender	81%	19%	50%	50%

The labour relations between employees and the various

Group companies and, therefore, the Bank are governed

by the related collective agreements or similar

regulations.

The number of employees with disabilities greater than

or equal to 33%, distributed by professional categories

at December 31, 2024 and 2023 , is as follows:

	2024	2023
Senior executives	—	—
Other executives	27	36
Other employees	405	400
Total	432	436

The average number of employees of Banco Santander

with a disability greater than or equal to 33%, during the

year 2024 was 435 (428 at 2023).

c) Share-based payments

The main share-based payments granted by the Group in

force at 31 December,  2024 and 2023 are described

below.

i. Bank

The variable remuneration policy for the Bank’s

executive directors and certain executive personnel of

the Bank and of other Group companies includes Bank

share-based payments, the implementation of which

requires, in conformity with the law and the Bank’s

Bylaws, specific resolutions to be adopted by the general

meeting.

Were it necessary or advisable for legal, regulatory or

other similar reasons, the delivery mechanisms

described below may be adapted in specific cases

without altering the maximum number of shares linked

to the plan or the essential conditions to which the

delivery thereof is subject.

These adaptations may involve replacing the delivery of

shares with the delivery of cash amounts of an equal

value.

146

The plans that include share-based payments are as

follows: (i) Deferred and Conditional Variable

Remuneration Plan; (ii) Deferred Multiyear Objectives

Variable Remuneration Plan; (iii) Digital Transformation

Award, (iv) Digital Transformation Award 2022, Digital

Transformation Award 2023 and (vi) Digital

Transformation Award 2024. The characteristics of the

plans are set forth below:

Deferred variable remuneration systems	Description and plan beneficiaries	Conditions	Calculation Base
(i) Deferred and conditional variable remuneration plan (2015, 2016, 2017, 2018, 2019, 2020, 2021,  2022, 2023 and 2024)	The purpose of these cycles is to defer a portion of the variable remuneration of the beneficiaries over a period of three years for the sixth cycles, over three or five years for the fifth, seventh, eighth, ninth, tenth and eleventh cycles, and over four or five years for the twelfth cycle, for it to be paid, where appropriate, in cash and in Santander shares. The other portion of the variable remuneration is also to be paid in cash and Santander shares, upon commencement of the cycles, in accordance with the rules set forth below. Beneficiaries: • Executive directors and certain executives (including senior management) and employees who assume risk, who perform control functions or receive an overall remuneration which puts them on the same remuneration level as executives and employees who assume risks (fifth cycle) • In the case of the sixth, seventh, eighth, ninth, tenth, eleventh twelfth and thirteenth cycle and fourteenth, the beneficiaries are Material Risk Takers (Identified staff) that are not beneficiaries of the Deferred Multiyear Objectives Variable Remuneration Plan.	For the fifth and sixth cycles (2015 to 2016), the accrual of the deferred compensation is conditioned, in addition to the requirement that the beneficiary remains in the Group's employ, with the exceptions included in the plan regulations on none of the following circumstances existing during the period prior to each delivery, pursuant to the provisions set forth in each case in the plan regulations: • Poor financial performance of the Group. • Breach by the beneficiary of internal regulations, including, in particular, those relating to risks. • Material restatement of the Group's consolidated financial statements, except when it is required pursuant to a change in accounting standards. • Significant changes in the Group’s economic capital or risk profile In the case of the seventh, eighth, ninth, tenth, eleventh, twelfth and thirteenth cycles (2017 to 2022), the accrual of deferred compensation is conditioned, in addition to the permanence of the beneficiary in the Group, with the exceptions contained in the plan's regulations, to non-occurrence of a poor performance of the entity as a whole or of a specific division or area of the entity or of the exposures generated by the personnel: i. significant failures in risk management by the entity , or by a business unit or risk control unit. ii. the increase suffered by the entity or by a business unit of its capital needs, not foreseen at the time of generation of the exposures. iii. Regulatory sanctions or judicial sentences for events that could be attributable to the unit or the personnel responsible for those. Also, the breach of internal codes of conduct of the entity. iv. Irregular behaviours, whether individual or collective, considering in particular the negative effects derived from the marketing of inappropriate products and the responsibilities of the persons or bodies that made those decisions.	Fifth cycle (2015): • Executive directors and members of the Identified Staff with total variable remuneration higher than 2.6 million euros: 40% paid immediately and 60% deferred over 5 years deferral period. • Division managers, country heads (of countries which represent at least 1% of Group's economic capital), other executives of the Group with a similar profile and members of the Identified Staff  with total variable remuneration between 1.7 million euros (1.8 million in fourth cycle) and 2.6 million euros: 50% paid immediately and 50% deferred over  5 years (fifth cycle) • Other beneficiaries: 60% paid immediately and 40% deferred over 3 years. Sixth cycle (2016): • 60% of bonus will be paid immediately and 40%  deferred over a three years period. Seventh, eighth, ninth, tenth and eleventh cycle (2017, 2018, 2019, 2020 and 2021): • Beneficiaries of these plans with target total variable remuneration higher or equal to 2.7 million euros: 40%  paid immediately and 60% deferred over 5 years • Beneficiaries of these plans with target total variable remuneration between 1.7 million euros and 2.7 million euros: 50% paid immediately and 50%paid over 5 years • Other beneficiaries of these plans: 60% paid immediately and 40% deferred over 3 years. Twelfth (2022),thirteenth (2023) and fourteenth (2024)cycle: • Beneficiaries of these plans with target total variable remuneration higher or equal to 2.7 million euros: 40% paid immediately and 60% deferred over 5 years • Beneficiaries of these plans with target total variable remuneration between 1.7 million euros and 2.7 million euros: 50% paid immediately and 50% paid over 5 years • Other beneficiaries of these plans: 60% paid immediately and 40% deferred over 4 years . T

147

Deferred variable remuneration systems	Description and plan beneficiaries	Conditions	Calculation Base
(ii)Deferred Multiyear Objectives Variable Remuneration Plan (2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023 and 2024)	The aim is simplifying the remuneration structure, improving the ex ante risk adjustment and increasing the impact of the long- term objectives on the Group’s most relevant roles. The purpose of these cycles is to defer a portion of the variable remuneration of the beneficiaries over a period of three or five years (four or five years for the seventh cycle) for it to be paid, where appropriate, in cash and in Santander shares; the other portion of the variable remuneration is also to be paid in cash and Santander shares (regarding the instruments part, executive directors in the seventh cycle have the opportunity to choose all in share options or half in share options and half in shares), upon commencement of the cycles, in accordance with the rules set forth below. The accrual of the last third of the deferral (in the case of 3 years deferral), the last 2 fourths (in the case of 4 years deferral) and the last three fifths (in the case of 5 years deferral) is also subject to long-term objectives. Beneficiaries Executive directors, senior management and certain executives of the Group’s first lines of responsibility.	In 2016 the accrual is conditioned, in addition to the permanence of the beneficiary in the Group, with the exceptions contained in the plan’s regulations, to non- occurrence of the following circumstances during the period prior to each of the deliveries in the terms set forth in each case in the plan’s regulations: i. Poor performance of the Group. ii. Breach by the beneficiary of the internal regulations, including in particular that relating to risks. iii. Material restatement of the Group’s consolidated financial statements, except when appropriate under a change in accounting regulations. iv. Significant changes in the Group’s economic capital or risk profile. In 2017, 2018, 2019, 2020 and 2021 the accrual is conditioned, in addition to the beneficiary' permanence in the Group, with the exceptions contained in the plan’s regulations, to the non-occurrence of poor financial performance from the entity as a whole or of a specific division or area thereof or of the exposures generated by the personnel, taking into account the following factors: v. Significant failures in risk management committed by the entity, or by a business unit or risk control unit. vi. the increase suffered by the entity or by a business unit of its capital needs, not foreseen at the time of generation of the exposures. vii. Regulatory sanctions or court rulings for events that could be attributable to the unit or the  personnel responsible for those. Also, the breach  of internal codes of conduct of the entity. viii. Irregular behaviours, whether individual or collective, considering in particular negative effects derived from the marketing of inappropriate products and responsibilities of persons or bodies that made those decisions. Paid half in cash and half in shares. In the seventh cycle, and only for executive directors: half in cash and 25% in share options and 25% in shares (unless the director chooses to receive options only). The maximum number of shares to be delivered is calculated by taking into account the weighted average daily volume of weighted average prices for the fifteen trading sessions prior to the previous Friday (excluding) on the date on which the board decides the bonus for the Executive directors of the Bank. In the eighth cycle, and for all Identified Staff: half in cash and 25% in shares and 25% in share options, or half in cash and half in shares, according to each executive´s choice. In the ninth cycle, half in cash and half in shares.	First cycle (2016): Executive directors and members of the Identified Staff with total variable remuneration higher than or equal to 2.7 million euros: 40% paid immediately and 60% deferred over a 5 years  period. Senior managers, country heads of countries representing at least 1% of the Group´s capital and other members of the identified staff whose total variable remuneration is between 1.7 million and 2.7 million euros: 50% paid immediately and 50% deferred over a 5 years period. Other beneficiaries: 60% paid immediately and 40% deferred over a 3 years period. The second, third, fourth, fifth and sixth cycles (2017, 2018, 2019,2020 and 2021 respectively) are under the aforementioned deferral rules, except that the  variable remuneration considered is the target for each executive and not the actual award. In 2016 the metrics for the deferred portion subject to long-term objectives (last third or last three fifths, respectively, for the cases of three years and five years deferrals) are: Earnings per share (EPS) growth in 2018 over 2015. Relative Total Shareholder Return (TSR) in the 2016-2018 period measured against a group of credit institutions. Compliance with the fully-loaded common equity tier 1 (“CET1”) ratio target for financial year 2018. Compliance with Grupo Santander’s underlying return on risk-weighted assets (“RoRWA”) growth target for financial year 2018 compared to financial year 2015. In the second, third, fourth, fifth and sixth cycle (2017, 2018, 2019, 2020 and 2021) the metrics for the deferred portion subject to long-term objectives (last third or last three fifths, respectively, for the cases of three years and five years deferrals) are: EPS growth in 2019, 2020, 2021, 2022 and 2023 (over 2016, 2017, 2018, 2019 and 2020, for each respective cycle) Relative Total Shareholder Return (TSR) measured against a group of 17 credit institutions (second and third cycles) in the periods 2017-2019 and 2018-2019, respectively, and against a group of 9 entities (fourth, fifth and sixth cycle) for the 2019-2021, 2020-2022 and 2010-2023  period. Compliance with the fully-loaded common equity tier 1 (“CET1”) ratio target for financial years 2019, 2020, 2021,2022 and 2023, respectively. In the seventh (2022), eighth cycle (2023) and ninth cycle (2024), the metrics for the deferred portion subject to long-term objectives (two last fourths and last three fifths, for the cases of four years and five years deferrals) are: • Banco Santander's consolidated Return on tangible equity (RoTE) target in 2024 (7th cycle) and 2025 (8th cycle) and 2026 (9th cycle). • Relative Total Shareholder Return (TSR) measured against a group of 9 credit institutions for the period 2022-2024 (7th cycle), 2023-2025 (8th cycle) and 2024-2026 (9th cycle). • Progress level in the public targets of our Sustainability agenda.

148

Deferred variable remuneration systems	Description and plan beneficiaries	Conditions	Calculation Base
(iii) Digital Transformation Award (2019, 2020 and 2021)	The 2019, 2020 and 2021 Digital Transformation Incentive (the “Digital Incentive”) is a variable remuneration system that includes the delivery of Santander shares and share options. The aim of the Digital Incentive is to attract and retain the critical skill sets to support and accelerate the digital transformation of the Group. By means of this program, the Group offers a remuneration element which is competitive with the remuneration systems offered  by other market operators who also compete for digital talent. The number of beneficiaries is limited to a maximum of 250 employees and the total amount of the incentive is limited to 30 million euros.	The funding of this incentive is subject to meeting important milestones that are aligned with the Group´s digital roadmap and have been approved by the board of directors, taking into account the digitalization strategy of the Group, with the aim of becoming the best open, responsible global financial services platform. Performance of 2019 incentive was measured based on achievement of the following milestones: (i) Launch of a Global Trade Services (GTS) platform; (ii) launch of a Global Merchant Services (GMS) platform; (iii) migration of our fully digital bank, OpenBank, to a "next generation" platform and launch in 3 markets; (iv) extension of SuperDigital in Brazil to at least one other country; (v) and launch of our international payments app based on blockchain Pago FX to non- Santander customers. The milestones for the 2020 Digital Transformation Award were: (i) rolling out the global merchant services (GMS) platform in 3 new geographies, enhancing the platform functionality and achieving volume targets for transactions and participating merchants; (ii) doing the commercial rollout of the global trade services (GTS) platform in 8 new geographies, enhancing platform functionality, and achieving  volume targets for on- boarded clients and monthly active users; (iii) launching OpenBank in a new market and migrating the retail banking infrastructure to “new-mode” bank; (iv) launch the global platform SuperDigital in at least 4 countries, driving target active user growth; (v) deploying machine learning across pre-defined markets for 4 priority use cases, rolling out Conversion Rate Optimization (Digital marketing) for at least 40 sales programs, delivering profit targets, and driving reduction of agent handled calls in contact centers; (vi) successfully implementing initiatives related to on- board and identity services, common API (application programming interface) layer, payment hubs, mobile app for SMEs and virtual assistant services; and (vii) launching the PagoFX global platform in at least 4 countries. The milestones for 2021 were: (i)in relation to Pago Nxt Consumer payment platform: implementation of Superdigital platform in seven countries, acquisition of over 1.5 million active customer base and accelerating growth through B2B (business to business) and B2B2C (business to business to customer) partnerships, acquiring more than 50% of the new customers through these channels, which are more cost-effective; (ii)in relation to Digital Consumer Bank: launching online API for checkout lending in the European Union and completion of controllable items for Openbank launch in USA; (iii)in relation to One Santander strategy: implementation in Europe of One Common Mobile Experience and, specifically, implementation of Europe ONE app for individual customers in at least three of the four countries by December 2021; and be among the three-top rated entities in terms of Mobile NetPromoter Score (Mobile NPS) in at least two of the four countries by December 2021; (iv) In relation to cloud adoption: host 75% of migratable virtual machines on cloud technology (either public cloud or OHE) by December 2021. For these purposes, mainframes, physical servers and servers with non-x86 operating systems will be considered non-migratable. .	The Digital Incentive is structured 50% in Santander shares and 50% in options over Santander shares, taking into account the fair value of the option at the moment in which they are granted. For Material Risk Takers subject to five years deferrals, the Digital Incentive (shares and options over shares) shall be delivered in thirds, on the third, fourth and fifth anniversary from their granting. For Material Risk Takers subject to three years deferrals and employees not subject to deferrals, delivery shall be done on the third anniversary from their granting. Any delivery of shares, either directly or via exercise of options overs shares, will be subject generally to the Group’s general malus & clawback provisions as described in the Group’s remuneration policy and to the continuity of the beneficiary within the Group Santander. In this regard, the board may define specific rules for non-Identified Staff. Vested share options can be exercised until maturity, with all options lapsing after ten years (for granting the 2019 incentive) and eight years (for granting the 2020 and 2021 incentive). The total achievement for 2021 Digital Incentive was 77.5% (85% en 2020 and 83% en 2019).

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Deferred variable remuneration systems	Description and plan beneficiaries	Conditions	Calculation base
(iv) Digital Transformation Award (2022)	The board of directors approved the 2022 Digital Transformation Incentive. It is a variable remuneration scheme splits in two different blocks: • The first one, with the same mechanism than previous years, that delivers Santander shares and share options if the group hits major milestones on its digital roadmap. This is aimed at a group of up to 250 (is limited to 30 million euros)employees whose functions are deemed essential to Santander’s growth. • And the second one, which delivers PagoNxt, S.L. RSUs and premium prices options (PPOs), and is aimed at up to 50 employees (and limited to 15 million euros) whose roles are considered key to PagoNxt’s success. The aim of the Digital Incentive is to attract and retain the critical skill sets to support and accelerate the digital transformation of the Group. By means of this program, the Group offers a remuneration element which is competitive with the remuneration systems offered  by other market operators who also compete for digital talent.	Performance of the first block of the  incentive shall be measured based on achievement of the following milestones: i. Edelweiss: Our Santander future retail architecture EDELWEISS will mean moving from our current Core centric banking architecture towards a Customer and Data-Centric Core supported by lean Record Processing engines. ii. Simplification: Speed up the simplification of our technology platform and business model by Reducing the total number of applications in production and reducing number of products in the regions. iii. Agile: Agile ways of working enable a better and faster reaction to customers’ needs and is based on a value-driven delivery that increases efficiency by reducing time-to-market and development costs, and increasing quality. People working in Agile are more collaborative, engaged, empowered and creative. iv. In Digital Consumer Bank: a) To create the BNPL platform connected to at least one merchant in Netherlands and Germany, and to make sure the platform is ready to connect in Spain. b) To support the definition of Openbank US’s IT digital strategy and achieve 2022 milestones in it. c) To have the new leasing platform connected to dealers in Italy. d) To expand the Wabi B2B online business to Germany. To execute the first B2B deal with an Original Equipment Manufacturer or mobility player in at least one country. To expand coches.com business and platform to Portugal. And in regard to the second block of digital incentive: the consolidation of PagoNxt Core Perimeter.	The first block of thee Digital Incentive is structured 50% in Santander shares and 50% in options over Santander shares, taking into account the fair value of the option at the moment in which they are granted. For Material Risk Takers subject to five years deferrals, the Digital Incentive (shares and options over shares) shall be delivered in thirds, on the third, fourth and fifth anniversary from their granting. For Material Risk Takers subject to three years deferrals and employees not subject to deferrals, delivery shall be done on the third anniversary from their granting. Any delivery of shares, either directly or via exercise of options overs shares, will be subject generally to the Group’s general malus & clawback provisions as described in the Group’s remuneration policy and to the continuity of the beneficiary within the Grupo Santander. In this regard, the board may define specific rules for non-Identified Staff. Vested share options can be exercised until maturity, with all options lapsing after ten years . The total achievement for 2022 Digital Incentive was 96.5%. The second block of Digital Incentive is structures in restricted stock units (RSUs) and premium priced Options (PPOs) of PagoNxt, S.L. in a percentage determined by the internal category of the beneficiary. The total achievement for 2022 was 100%.

(iv) Digital Transformation Award (2023)	The board of directors approved the 2023 Digital Transformation Incentive. It is a variable remuneration scheme  which delivers PagoNxt, S.L. RSUs and premium prices options (PPOs), and is aimed at up to 50 employees (and limited to 15 million euros) whose roles are considered key to PagoNxt’s success. With this program, the Group offers a remuneration element which is competitive with the remuneration systems offered  by other market operators who also compete for digital talent.	And the performance conditions were focus on key digital projects related with PagoNxt's main businesses (Trade, Merchant and Payments) in its core geographies.	This incentive  is structures in restricted stock units (RSUs) and premium priced Options (PPOs) of PagoNxt S.L. in a percentage determined by the internal category of the beneficiary. The average achievement for 2023 was 88%.

(iv) Digital Transformation Award (2024)	The board of directors approved the 2024 Digital Transformation Incentive. It is a variable remuneration scheme  which delivers PagoNxt, S.L. RSUs, and is aimed at approximately to 50 employees (and limited to 15 million euros) whose roles are considered key to PagoNxt’s success. With this program, the Group offers a remuneration element which is competitive with the remuneration systems offered  by other market operators who also compete for digital talent.	And the performance conditions were focus on key digital projects related with PagoNxt's main businesses (Trade, Merchant and Payments) in its core geographies.	This incentive  is structures in restricted stock units (RSUs) of PagoNxt S.L. in a percentage determined by the internal category of the beneficiary. The average achievement for 2024 was 77%.

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iii. Fair value

The fair value of the performance share plans was

calculated as follows:

– Deferred variable compensation plan linked to multi-

year objectives 2023 and 2024 :

The Group calculates at the grant date the fair value of

the plan based on the valuation report of an independent

expert, Willis Towers Watson. According to the design of

the plan for 2023 and 2024 and the levels of

achievement of similar plans in comparable entities, it

has been considered that the fair value is 70% .

43. Other general

administrative expenses

a) Breakdown

The detail of Other general administrative expenses in

the accompanying income statements for 2024 and

2023 is as follows:

EUR million
	2024	2023
Technology and systems	761	718
Fixtures and supplies	124	113
Other administrative expenses	734	689
Technical reports	148	181
Advertising	98	108
Per diems and travel expenses	66	61
Surveillance and cash courier services	39	33
Communications	33	31
Taxes other than income tax	61	79
Insurance premiums	19	14
Total	2,083	2,027

b) Technical reports and other

Technical reports includes the fees from the various

Group companies (detailed in the accompanying

appendices) for the services provided by their respective

auditors, the detail being as follows:

EUR million
	2024A	2023A
Audit	120.1	117.5
Audit-related services	13.6	8.6
Tax services	0.9	1.6
All other	7.4	5.9
Total	142.0	133.6

A. Of those corresponding to Banco Santander, S.A. EUR 32.2 million,

EUR 3.6 million , EUR 0,1 million and EUR 1.1 million, respectively, as

of December 31, 2024 (EUR 32.2 million, EUR 2.8 million, EUR 0

million and EUR 2.5 million, respectively, as of December 31, 2023);

and Branches of Banco Santander, S.A., EUR 0.7 million, EUR 1.9

million, EUR 0 million and EUR 0 million, respectively, as of December

31, 2024 (EUR 0.7 million, EUR 0.1 million, EUR 0 million and EUR 0

million, respectively as of December 31, 2023).

The audit services and main non-audit services included

for each item in the above breakdown are detailed as

follows:

• Audit services: audit of the individual and

consolidated financial statements of Banco

Santander and its subsidiaries (which PwC or another

network firm is the external auditor); audit of the

interim consolidated financial statements of Banco

Santander; integrated audits prepared in order to file

the Form 20-F  with the SEC  and the internal control

audits (SOx) for required Group's entities; limited

reviews of financial statements; and  regulatory

reports required to the external auditors on Group's

entities.

• Audit-related services: issuance of comfort letters,

verification services of financial and non-financial

information required by regulators, and other

reviews of documentation to be submitted to

domestic or foreign authorities that, due to their

nature, are typically provided by the external auditor.

• Tax services: tax compliance and advisory services

provided to Group companies mainly outside Spain,

which have no direct effect on the audited financial

statements and are permitted in accordance with the

applicable independence regulations.

• Other services: agreed-upon procedure reports,

assurance reports and special reports performed

under the accepted profession's standards; as well as

other reports required by the regulators.

The 'Audit' heading includes the fees for the year's audit,

regardless of the date the audit was completed. Any

subsequent adjustments, which are not significant, and

for purposes of comparison, are shown in this note for

each year. The fees corresponding to the rest of the

services are shown by reference to when the audit

committee approved them.

The services commissioned from the Group's auditors

meet the independence requirements under applicable

European and Spanish law, the SEC rules and the Public

Company Accounting Oversight Board (PCAOB),

applicable to the Group, and they did not involve in any

case the performance of any work that is incompatible

with the auditor's role.

Lastly, the Group commissioned services from audit

firms other than PwC amounting to EUR 206.2 million in

2024 (EUR 174.1 million in 2023 ).

151

c) Number of branches

The number of offices according to their geographical

location at 31 December 2024 and 2023 is as follows:

Number of branches
	Group
	2024	2023
Spain	1,877	1,924
Group	6,134	6,594
	8,011	8,518

Number of branches
	Of which, Banco Santander
	2024	2023
Spain	1,800	1,846
International	10	10
Total	1,810	1,856

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44. Impairment or reversal of

the impairment of investments

in subsidiaries, joint ventures

and associates or non-financial

assets

The detail of ‘Impairment losses on other assets (net)’ in

the accompanying income statements for 2024 and

2023 is as follows:

EUR million
	2024	2023
Investments in subsidiaries, joint ventures or associates (note 13)	(237)	(1,047)
Non-financial assets (notes 15 and 16)	(3)	21
Total	(240)	(1,026)

45. Gains or losses on non-

financial assets and

investments, net

The detail of ‘Gains/(losses) on disposal of assets not

classified as non-current assets held for sale’ in the

accompanying income statements for 2024 and 2023 is

as follows:

EUR million
	2024	2023
On disposal of tangible assets	5	1
On disposal of investments in subsidiaries, jointly controlled entities and associates	214	5
Total	219	6

46. Gains or losses on non-

current assets held for sale not

classified as discontinued

operations

The detail of ‘Gains/(losses) on non-current assets held

for sale not classified as discontinued operations’ in the

accompanying income statements for 2024 and 2023 is

as follows:

EUR million
	2024	2023
Impairment of non-current assets held for sale (note 12)	(61)	(59)
Gain / (loss) on disposal	3	(40)
Total	(58)	(99)

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47. Related parties

The parties related to Banco Santander are deemed to

include, in addition to its subsidiaries, associates and

jointly controlled entities, Banco Santander's key

management personnel (the members of its Board of

Directors and the executive vice presidents, together

with their close family members) and the entities over

which the key management personnel may exercise

significant influence or control.

Following is a detail of the transactions performed by

Banco Santander with its related parties at 31 December

2024 and 2023, distinguishing between subsidiaries,

joint venture entities and associated entities, members

of Banco Santander's board of directors, Banco

Santander's executive vice presidents, and other related

parties, Related party transactions were made on terms

equivalent to those that prevail in arm's-length

transactions or, when this was not the case, the related

compensation in kind was recognized.

EUR million
	2024
	Subsidiaries, joint ventures and associated entities	Members of the Board of Directors A	Senior Management	Other related parties A
Assets	148,025	—	14	226
Equity instruments	100,142	—	—	—
Debt instruments	17,429	—	—	5
Loans and advances	30,454	—	14	221
From which: impaired financial assets	158	—	—	—
Others	—	—	—	—
Liabilities	21,703	9	7	292
Deposits credit institution and clients	20,558	9	7	292
Marketable debt securities	1,145	—	—	—
Income statement	10,181	—	—	4
Interest and similar income	1,998	—	—	9
Interest expense and similar charges	(544)	—	—	(5)
Interest from equity instruments	7,803	—	—	—
Gains / (Losses) on financial instruments and other	828	—	—	—
Fee and commission income	132	—	—	1
Fee and commission expense	(36)	—	—	(1)
Other	17,889	4	3	216
Contingent liabilities	7,796	3	2	64
Contingent commitments	10,093	1	1	20
Financial instruments - derivatives	—	—	—	132

A. Includes transactions carried out with both Banco Santander and with other entities of Grupo Santander .

154

EUR million
	2023
	Subsidiaries, joint ventures and associated entities	Members of the board of directors A	Senior Management	Other related parties A
Assets	149,221	—	12	186
Equity instruments	99,576	—	—	—
Debt instruments	17,593	—	—	1
Loans and advances	32,052	—	12	185
From which: impaired financial assets	164	—	—	—
Liabilities	16,126	14	5	150
Deposits credit institution and clients	14,947	14	5	150
Marketable debt securities	1,179	—	—	—
Income statement	11,464	—	—	11
Interest and similar income	1,719	—	—	9
Interest expense and similar charges	(512)	—	—	(1)
Interest from equity instruments	9,179	—	—	—
Gains / (Losses) on financial instruments and other	754	—	—	—
Fee and commission income	108	—	—	3
Fee and commission expense	216	—	—	—
Other	17,889	3	2	1,094
Contingent liabilities	7,796	2	1	861
Contingent commitments	10,093	1	1	9
Financial instruments - derivatives	—	—	—	224

A. Includes transactions carried out with both Banco Santander and with other entities of Grupo Santander.

Additionally, the above-mentioned breakdown shows

pension insurance contracts with Grupo Santander

insurance companies amounting to EUR 186 million on

December 31 of 2024 (EUR 195 million on December 31

of 2023).

155

48. Fair value of financial

instruments

a) Detail

The following table summarises the fair values, at

the end of each of the years indicated, of the

financial assets and liabilities listed below,

classified according to the different valuation

methodologies used by the Bank to determine their

fair value:

EUR million
	2024			2023
	Published price quotations in active Markets (Level 1)	Internal Models (Level 2 and 3)	Total	Published price quotations in active Markets (Level 1)	Internal Models (Level 2 and 3)	Total
Financial assets held for trading	59,302	101,123	160,425	44,442	69,755	114,197
Non-trading financial assets mandatorily at fair value through profit or loss	21	2,106	2,127	64	2,241	2,305
Financial assets designated at fair value through profit or loss	—	4,826	4,826	—	5,806	5,806
Financial assets at fair value through other comprehensive income	9,511	5,801	15,312	4,929	4,845	9,774
Hedging derivatives (assets)	—	1,917	1,917	—	1,102	1,102
Financial liabilities held for trading	26,037	93,112	119,149	18,126	77,926	96,052
Financial liabilities designated at fair value through profit or loss	—	33,257	33,257	—	37,424	37,424
Hedging derivatives (liabilities)	—	2,516	2,516	—	3,099	3,099

Grupo Santander has developed a formal process for

the systematic valuation and management of financial

instruments, which has been implemented worldwide

across all the Group´s units. The governance scheme for

this process, applicable to the Bank, distributes

responsibilities between two independent divisions:

Treasury (development, marketing and daily

management of financial products) and Risk (on

a periodic basis, validation of pricing models and daily

risk certification of market data, computation of risk

metrics, new transaction approval policies,

management control  of market risk and

implementation of fair value adjustment policies).

The approval of new products follows a sequence of

steps (request, development, validation, integration in

corporate systems and quality assurance) before the

product is brought into production. This process ensures

that pricing systems have been properly reviewed and

are stable before they are used.

The following subsections set forth the most important

products and families of derivatives, and the related

valuation techniques and inputs, by asset class:

Fixed income and inflation

The fixed income asset class includes basic instruments

such as interest rate forwards, interest rate swaps and

cross currency swaps, which are valued using the net

present value of the estimated future cash flows

discounted taking into account basis (swap and cross

currency spreads) determined on the basis of the

payment frequency and currency of each leg of the

derivative. Vanilla options, including caps, floors and

swaptions, are priced using the Black-Scholes model,

which is one of the benchmark industry models. More

exotic derivatives are priced using more complex

models which are generally accepted as standard

across institutions.

156

These pricing models are fed with observable market

data such as deposit interest rates, futures rates, cross

currency swap and constant maturity swap rates, and

basis spreads, on the basis of which different yield

curves, depending on the payment frequency, and

discounting curves are calculated for each currency. In

the case of options, implied volatilities are also used as

model inputs. These volatilities are observable in the

market for cap and floor options and swaptions, and

interpolation and extrapolation of volatilities from the

quoted ranges are carried out using generally accepted

industry models. The pricing of more exotic derivatives

may require the use of non-observable data or

parameters, such as correlation (among interest rates

and cross-asset), mean reversion rates and prepayment

rates, which are usually defined from historical data or

through calibration.

Inflation-related assets include zero-coupon or year-

on-year inflation-linked bonds and swaps, valued with

the present value method using forward estimation and

discounting. Derivatives on inflation indices are priced

using standard or more complex internal models.

Valuation inputs of these models consider inflation-

linked swap spreads observable in the market and

estimations of inflation seasonality, on the basis of

which a forward inflation curve is calculated. Also,

implied volatilities taken from zero-coupon and year-

on-year inflation options are also inputs for the pricing

of more complex derivatives.

Equity and foreign exchange

The most important products in these asset classes are

forward and futures contracts; they also include vanilla,

listed and OTC (Over-The-Counter) derivatives on single

underlying assets and baskets of assets. Vanilla options

are priced using the standard Black-Scholes model and

more exotic derivatives involving forward returns,

average performance, or digital, barrier or callable

features are priced using generally accepted industry

models or internal models, as appropriate. For

derivatives on illiquid stocks, hedging takes into

account the liquidity constraints in models.

The inputs of equity models consider yield curves, spot

prices, dividends, asset funding costs (repo margin

spreads), implied volatilities, correlation among equity

stocks and indices, and cross-asset correlation. Implied

volatilities are obtained from market quotes of

European and American-style vanilla call and put

options. Various interpolation and extrapolation

techniques are used to obtain continuous volatility for

illiquid stocks. Dividends are usually estimated for the

mid and long term. Correlations are implied, when

possible, from market quotes of correlation-dependent

products. In all other cases, proxies are used for

correlations between benchmark underlyings or

correlations are obtained from historical data.

The inputs of foreign exchange models include the yield

curve for each currency, the spot foreign exchange rate,

the implied volatilities and the correlation among

assets of this class. Volatilities are obtained from

European call and put options which are quoted in

markets as of-the-money, risk reversal or butterfly

options. Illiquid currency pairs are usually handled by

using the data of the liquid pairs from which the illiquid

currency can be derived. For more exotic products,

unobservable model parameters may be estimated by

fitting to reference prices provided by other non-quoted

market sources.

Credit

The most common instrument in this asset class is the

credit default swap (CDS), which is used to hedge credit

exposure to third parties. In addition, models for first-

to-default (FTD), n-to-default (NTD) and single-tranche

collateralised debt obligation (CDO) products are also

available. These products are valued with standard

industry models, which estimate the probability of

default of a single issuer (for CDS) or the joint

probability of default of more than one issuer for FTD,

NTD and CDO.

Valuation inputs are the yield curve, the CDS spread

curve and the recovery rate. For indices and important

individual issuers, the CDS spread curve is obtained in

the market. For less liquid issuers, this spread curve is

estimated using proxies or other credit-dependent

instruments. Recovery rates are usually set to standard

values. For listed single-tranche CDO, the correlation of

joint default of several issuers is implied from the

market. For FTD, NTD and internal CDO, the correlation

is estimated from proxies or historical data when no

other option is available.

Valuation adjustment for counterparty risk or default

risk

The Credit valuation adjustment (CVA) is a valuation

adjustment to over the counter (OTC) derivatives as a

result of the risk associated with the credit exposure

assumed to each counterparty.

The CVA is calculated taking into account potential

exposure to each counterparty in each future period.

The CVA for a specific counterparty is equal to the sum

of the CVA for all the periods. The following inputs are

used to calculate the CVA:

• Expected exposure: including for each transaction

the mark-to-market (MtM) value plus an add-on for

the potential future exposure for each period.

Mitigating factors such as collateral and netting

agreements are taken into account, as well as a

temporary impairment factor for derivatives with

interim payments.

157

• Severity: percentage of final loss assumed in a

counterparty credit event/default.

• Probability of default: for cases where there is no

market information (the CDS quoted spread curve,

etc.), proxies based on companies holding

exchange-listed CDS, in the same industry and with

the same external rating as the counterparty, are

used.

• Discount factor curve.

The Debit Valuation Adjustment (DVA) is a valuation

adjustment similar to the CVA but, in this case, it arises

as a result of the Bank’s own risk assumed by its

counterparties in OTC derivatives.

The CVA at 31 December 2024, at a consolidated level,

amounted to EUR 272 million (resulting in a decrease of

7.2% compared to 31 December 2023) and DVA

amounted to EUR 317 million (resulting in a decrease of

3.9% compared to 31 December 2023). These

decreases are mainly due to the declines in the EUR and

USD interest rate markets, lower inflation and the

movements in credit markets whose spread levels have

reduced moderately compared to those of December

2023.

The CVA at 31 December 2023 amounted to EUR

293 million (resulting in a decrease of 16.5% compared

to 31 December 2022) and DVA amounted to EUR

330 million (resulting in a decrease of 9.3% compared

to 31 December 2022).

Regarding the Bank, At the end of December 2024,  CVA

amounted to EUR 180 million (EUR 177 million to 31

December 2023) and DVA amounted to EUR 134 million

(EUR 115 million to 31 December 2023). The increase is

mainly due to an increase in exposure from new

transactions , partially offset by the reduction in credit

spreads during the year.

In addition, the Group amounts the funding fair value

adjustment (FFVA) is calculated by applying future

market funding spreads to the expected future funding

exposure of any uncollateralised component of the OTC

derivative portfolio. This includes the uncollateralised

component of collateralised derivatives in addition to

derivatives that are fully uncollateralised. The expected

future funding exposure is calculated by a simulation

methodology, where available. The FFVA impact is not

material for the consolidated annual accounts as of 31

December 2024 and 2023.

During 2024, the Group has continued to apply the

criteria for classifying financial instruments within the

levels of the fair value hierarchy established to comply

with regulatory expectations. These criteria, based on

information from the price contributors and real market

transactions, represent a significant reduction in the use

of expert judgement to determine observability and

allow the measurement of the significance of non-

observable valuation inputs based on objective criteria.

There has been increase in the instruments classified as

Level 3, especially during the last quarter of the year.

This increase has been due to increases in the portfolio

due to new operations, with no significant

reclassifications having been detected due to changes in

the market observability conditions of the valuation

inputs for the rest of the positions. The main increases

include long-term repo/reverse repo operations,

structured notes and short-term financing operations

for which there is no observable market price based on

the criteria used. These increases have been only

partially offset by some non-material reclassifications

in derivatives and energy positions due to access to new

sources of observability and the sale of certain debt

instruments.

In 2024, the amount reclassified to Level 3 by Banco

Santander is EUR 754 million (EUR 1,232 million in

2023).

Valuation adjustments due to model risk

The valuation models described above do not involve a

significant level of subjectivity, since they can be

adjusted and recalibrated, where appropriate, through

internal calculation of the fair value and subsequent

comparison with the related actively traded price.

However, valuation adjustments may be necessary

when market quoted prices are not available for

comparison purposes.

The sources of risk are associated with uncertain model

parameters, illiquid underlying issuers, and poor quality

market data or missing risk factors (sometimes the best

available option is to use limited models with

controllable risk). In these situations, the Group and the

Bank calculate and apply valuation adjustments in

accordance with common industry practice. The main

sources of model risk are described below:

• In the interest rate markets, the sources of model

risk include interest rate indexes correlations, basis

spread modelling, the risk of calibrating model

parameters and the treatment of near-zero or

negative interest rates. Other sources of risk arise

from the estimation of market data, such as

volatilities or yield curves, whether used for

estimation or cash flow discounting purposes.

• In the stock markets, the sources of model risk

include forward skew modelling, the impact of

stochastic interest rates, correlation and multi-curve

modelling. Other sources of risk arise from

managing hedges of digital callable and barrier

option payments. Also worthy of consideration as

sources of risk are the estimation of market data

such as dividends and correlation for quanto and

composite basket options.

158

• For specific financial instruments relating to home

mortgage loans secured by financial institutions in

the UK (which are regulated and partially financed

by the Government) and property asset derivatives,

the main input is the Halifax House Price Index

(HPI). In these cases, risk assumptions include

estimations of the future growth and the volatility

of the HPI, the mortality rate and the implied credit

spreads.

• Inflation markets are exposed to model risk

resulting from uncertainty around modelling the

correlation structure among various Consumer Price

Index (CPI) rates. Another source of risk may arise

from the bid-offer spread of inflation-linked swaps.

• The currency markets are exposed to model risk

resulting from forward skew modelling and the

impact of stochastic interest rate and correlation

modelling for multi-asset instruments. Risk may

also arise from market data, due to the existence of

specific illiquid foreign exchange pairs.

• The most important source of model risk for credit

derivatives relates to the estimation of the

correlation between the probabilities of default of

different underlying issuers. For illiquid underlying

issuers, the CDS spread may not be well defined.

Set forth below are the financial instruments of Grupo

Santander at fair value whose measurement was based

on internal models (levels 2 and 3) at 31 December

2024 and 2023 :

159

EUR million
	Fair values calculated using internal models at
	2024 A
	Level 2	Level 3	Valuation techniques	Main assumptions
ASSETS	163,941	15,319
Financial assets held for trading	138,176	3,930
Central banksB	12,966	—	Present value method	Yield curves, FX market prices
Credit institutionsB	26,546	769	Present value method	Yield curves, FX market prices
CustomersB	24,602	1,801	Present value method	Yield curves, FX market prices
Debt and equity instruments	11,115	413	Present value method	Yield curves, FX market prices
Derivatives	62,947	947
Swaps	47,519	556	Present value method, Gaussian Copulac	Yield curves, FX market prices, HPI, Basis, Liquidity
Exchange rate options	1,583	2	Black-Scholes Model	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate options	1,879	30	Black's Model, multifactorial advanced models interest rate	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate futures	1,445	—	Present value method	Yield curves, FX market prices
Index and securities options	465	241	Black's Model, multifactorial advanced models interest rate	Yield curves, Volatility surfaces, FX & EQ market prices, Dividends,   Liquidity
Other	10,056	118	Present value method, Advanced stochastic volatility models and other	Yield curves, Volatility surfaces, FX and EQ market prices, Dividends, Correlation, HPI, Credit, Others
Hedging derivatives	5,652	20
Swaps	5,390	20	Present value method	Yield curves, FX market prices, Basis
Interest rate options	2	—	Black's Model	Yield curves, FX market prices, Volatility surfaces
Other	260	—	Present value method, Advanced stochastic volatility models and other	Yield curves, Volatility surfaces, FX market prices, Credit, Liquidity, Others
Non-trading financial assets mandatorily at fair value through profit or loss	1,505	2,588
Equity instruments	763	1,841	Present value method	Market price, Interest rates curves, Dividends and Others
Debt securities	205	242	Present value method	Yield curves
Loans and receivables	537	505	Present value method, swap asset model & CDS	Yield curves and Credit curves
Financial assets designated at fair value through profit or loss	5,065	106
Credit institutions	408	—	Present value method	Yield curves, FX market prices
CustomersC	4,590	20	Present value method	Yield curves, FX market prices, HPI
Debt securities	67	86	Present value method	Yield curves, FX market prices
Financial assets at fair value through other comprehensive income	13,543	8,675
Equity instruments	5	375	Present value method	Market price, Yield curves, Dividends and Others
Debt securities	9,644	1,047	Present value method	Yield curves, FX market prices
Loans and receivables	3,894	7,253	Present value method	Yield curves, FX market prices and Credit curves

160

EUR million
	Fair values calculated using internal models at
	2024 A
	Level 2	Level 3	Valuation techniques	Main assumptions
LIABILITIES	179,766	1,352
Financial liabilities held for trading	121,243	934
Central banksB	13,300	—	Present value method	FX market prices, Yield curves
Credit institutionsB	26,284	—	Present value method	FX market prices, Yield curves
Customers	18,984	—	Present value method	FX market prices, Yield curves
Derivatives	56,205	934
Swaps	41,283	479	Present value method, Gaussian Copulac	Yield curves, FX market prices, Basis, Liquidity, HPI
Exchange rate options	1,057	—	Black-Scholes Model	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate options	2,295	79	Black's Model, multifactorial advanced models interest rate	Yield curves, Volatility surfaces, FX market prices, Liquidity
Index and securities options	1,160	294	Black-Scholes model	Yield curves, FX market prices
Futures on interest rate and variable income	1,276	—	Present value method	Yield curves, Volatility surfaces, FX & EQ market prices, Dividends, Correlation, Liquidity, HPI
Other	9,134	82	Present value method, Advanced stochastic volatility models	Yield curves, Volatility surfaces, FX & EQ market prices, Dividends, Correlation, Liquidity, HPI, Credit, Others
Short positions	6,470	—	Present value method	Yield curves ,FX & EQ market prices, Equity
Hedging derivatives	4,740	12
Swaps	4,618	12	Present value method	Yield curves ,FX & EQ market prices, Basis
Interest rate options	3	—	Black's Model	Yield curves , Volatility surfaces, FX market prices and Liquidity
Other	119	—	Present value method, Advanced stochastic volatility models and other	Yield curves , Volatility surfaces, FX market prices, Credit, Liquidity, Other
Financial liabilities designated at fair value through profit or lossD	36,200	160	Present value method	Yield curves, FX market prices
Liabilities under insurance contracts	17,583	246	Present Value Method with actuarial techniques	Mortality tables and interest rate curves

A. Level 2 internal models use data based on observable market parameters, while level 3 internal models use significant non-observable inputs in market

data.

B. Includes mainly short-term loans/deposits and repurchase/reverse repurchase agreements with corporate customers (mainly brokerage and investment

companies).

C. Includes, mainly, structured loans to corporate clients.

D. It mainly includes short-term deposits that are managed based on their fair value.

161

EUR million
	Fair values calculated using internal models at
	2023A
	Level 2	Level 3	Valuation techniques
ASSETS	133,874	10,351
Financial assets held for trading	106,993	2,086
Central banksB	17,717	—	Present value method
Credit institutionsB	14,061	—	Present Value method
CustomersB	11,418	24	Present Value method
Debt and equity instruments	8,683	915	Present Value method
Derivatives	55,114	1,147
Swaps	44,987	577	Present Value method, Gaussian Copula
Exchange rate options	836	9	Black-Scholes Model
Interest rate options	2,210	153	Black's Model, advanced multifactor interest rate models
Interest rate futures	33	—	Present Value method
Index and securities options	126	235	Black's Model, advanced multifactor interest rate models
Other	6,922	173	Present Value method, Advanced stochastic volatility models and other
Hedging derivatives	5,297	—
Swaps	4,665	—	Present Value method
Interest rate options	2	—	Black’s Model
Other	630	—	Present Value method, Advanced stochastic volatility models and other
Non-trading financial assets mandatorily at fair value through profit or loss	2,050	2,095
Equity instruments	815	1,495	Present Value method
Debt securities issued	539	313	Present Value method
Loans and receivables	696	287	Present Value method, swap asset model & CDS
Financial assets designated at fair value through profit or loss	6,846	181
Credit institutions	459	—	Present Value method
CustomersC	6,189	31	Present Value method
Debt securities	198	150	Present Value method
Financial assets  at fair value through other comprehensive  income	12,688	5,989
Equity instruments	5	492	Present Value method
Debt securities	9,638	559	Present Value method
Loans and receivables	3,045	4,938	Present Value method

162

EUR million
	Fair values calculated using internal models at
	2023A
	Level 2	Level 3	Valuation techniques
LIABILITIES	166,542	1,227
Financial liabilities held for trading	101,103	869
Central banksB	7,808	—	Present Value method
Credit institutionsB	17,862	—	Present Value method
CustomersB	19,837	—	Present Value method
Derivatives	49,380	869
Swaps	39,395	388	Present Value method, Gaussian Copula
Exchange rate options	549	8	Black-Scholes Model
Interest rate options	2,207	139	Black's Model, advanced multifactor interest rate models
Index and securities options	466	187	Black's Model, advanced multifactor interest rate models
Interest rate and equity futures	101	—	Present Value method
Other	6,662	147	Present Value method, Advanced stochastic volatility models and other
Short positions	6,216	—	Present Value method
Hedging derivatives	7,650	6
Swaps	6,866	6	Present Value method
Other	783	—	Present Value method, Advanced stochastic volatility models and other
Financial liabilities designated at fair value through profit or loss D	40,313	29	Present Value method
Liabilities under insurance contractsE	17,476	323	Present Value method with actuarial techniques

A. Level 2 internal models use data based on observable market parameters, while level 3 internal models use significant non-observable inputs in market

data.

B. Includes mainly short-term loans/deposits and repurchase/reverse repurchase with corporate customers (mainly brokerage and investment companies).

C. Includes, mainly, structured loans to corporate clients.

D. Includes, mainly, short-term deposits that are managed based on their fair value

163

The same information from the previous table, but referred to Banco Santander, S.A., is presented below:

EUR million
	Fair values calculated using internal models at
	2024A
	Level 2	Level 3	Valuation techniques	Main assumptions
ASSETS	106,339	9,434
Financial assets held for trading	97,361	3,762
Central banksB	1,239	—	Present value method	Yield curves, FX market prices
Credit institutionsB	22,659	768	Present value method	Yield curves, FX market prices
CustomersB	21,768	1,800	Present value method	Yield curves, FX market prices
Debt and equity instruments	323	259	Present value method	Yield curves, FX market prices
Derivatives	51,372	935
Swaps	38,847	688	Present value method, Gaussian Copula	Yield curves, FX market prices, HPI, Basis, Liquidity
Exchange rate options	8,247	9	Black-Scholes Model	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate options	1,949	37	Black’s Model, multifactorial advanced models interest rate	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate futures	1,045	—	Present value method	Yield curves, FX market prices
Index and securities options	277	144	Present value method, Advanced stochastic volatility models and other	Yield curves, Volatility surfaces, FX & EQ market prices, Dividends,  Liquidity
Other	1,007	57	Present value method, Advanced stochastic volatility models and other	Yield curves, Volatility surfaces, FX and EQ market prices, Dividends, Correlation, HPI, Credit, Others
Hedging derivatives	1,889	28
Swaps	1,837	28	Present value method	Yield curves, FX market prices, Basis
Exchange rate options	2	—	Black-Scholes Model	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate options	50	—	Black´s Model	Yield curves, FX market prices, Volatility surfaces
Non-trading financial assets mandatorily at fair value through profit or loss	1,125	981
Equity instruments	32	938	Present value method	Market price, Interest rates curves, Dividends and Others
Debt securities	161	43	Present value method	Yield curves
Loans and receivables	932	—	Present value method	Yield and credit curves
Financial assets designated at fair value through profit or loss	4,826	—
Credit institutions	580	—	Present value method	Interest rates curves, FX market prices
CustomersC	4,246	—	Present value method	Interest rates curves, FX market prices, HPI
Financial assets at fair value through other comprehensive incomeD	1,138	4,663
Equity instruments	—	88	Present value method	Market price, Interest rates curves, Dividends and Others
Debt securities	12	506	Present value method	Interest rates curves, FX market prices
Loans and receivables	1,126	4,069	Present value method	Interest and credit curves, FX market prices

164

EUR million
	Fair values calculated using internal models at
	2024A
	Level 2	Level 3	Valuation techniques	Main assumptions
LIABILITIES	127,590	1,295
Financial liabilities held for trading	92,064	1,048
Central banksB	9,122	—	Present value method	Interest rates curves, FX market prices
Credit institutionsB	24,884	—	Present value method	Interest rates curves, FX market prices
Customers	13,503	—	Present value method	Interest rates curves, FX market prices
Derivatives	44,555	1,048	Present value method, Gaussian Copula, Black-Scholes Model, , multifactorial advanced models interest rate, advanced stochastic volatility models and other	Yield curves, Volatility surfaces, FX and EQ market prices, Dividends, Correlation, HPI, Credit, Others
Swaps	31,589	654	Present value method, Gaussian Copula	Yield curves, FX market prices, Basis, Liquidity, HPI
Exchange rate options	7,584	—	Black-Scholes Model	Yield curves, Volatility surfaces, FX market prices, Liquidity
Index and securities options	2,243	85	Black's Model, multifactorial advanced models interest rate	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate options	1,036	232	Black-Scholes Model	Yield curves, FX market prices, Volatility surfaces, Liquidity
Futures on interest rate and variable income	697	—	Present value method	Yield curves, Volatility surfaces, FX & EQ market prices, Dividends, Correlation, Liquidity, HPI
Other	1,406	77	Present value method, Advanced stochastic volatility models	Yield curves, Volatility surfaces, FX & EQ market prices, Dividends, Correlation, Liquidity, HPI, Credit, Others
Hedging derivatives	2,504	12
Swaps	2,449	11	Present value method	Yield curves ,FX & EQ market prices, Basis
Exchange rate options	—	—	Black-Scholes Model	Yield curves, Volatility surfaces, FX market prices, Liquidity
Interest rate options	55	1	Black's Model	Yield curves , Volatility surfaces, FX market prices, Liquidity
Other	—	—	Present value method, Advanced stochastic volatility models and other	Yield curves , Volatility surfaces, FX market prices, Credit, Liquidity, Other
Financial liabilities designated at fair value through profit or loss D	33,022	235	Present value method	Yield curves, FX market prices
Central banks	1,774	—	Present value method	Yield curves, FX market prices
Credit institutions	2,107	—	Present value method	Yield curves, FX market prices
Customers	29,141	235	Present value method	Yield curves, FX market prices
Liabilities under insurance contracts	—	—	Present Value Method with actuarial techniques	Mortality tables and interest rate curves

A. Level 2 internal models use data based on observable market

parameters, while level 3 internal models use significant non-

observable inputs in market data.

B. Includes mainly short-term loans/deposits and repurchase/reverse

repurchase with corporate customers (mainly brokerage and

investment companies). 

C. Includes, mainly, structured loans to corporate clients.

D. Includes, mainly, short-term deposits that are managed based on

their fair value.

165

EUR million
	Fair values calculated using internal models at
	2023A
	Level 2	Level 3	Valuation techniques
ASSETS	77,096	6,653
Financial assets held for trading	68,331	1,424
Central banksB	1,146	—	Present value method
Credit institutions B	10,755	—	Present value method
CustomersB	10,785	24	Present value method
Debt and equity instruments	231	366	Present value method
Derivatives	45,414	1,034
Swaps	36,461	861	Present value method, Gaussian Copula
Exchange rate options	5,826	10	Black-Scholes Model
Interest rate options	1,911	151	Black’s Model, multifactorial advanced models interest rate
Interest rate futures	666	—	Present value method
Index and securities options	172	12	Present value method, Advanced stochastic volatility models and other
Other	378	—	Present value method, Advanced stochastic volatility models and other
Hedging derivatives	1,093	9
Swaps	1,034	9	Present value method
Exchange rate options	57	—	Black-Scholes Model
Interest rate options	2	—	Black´s Model
Non-trading financial assets mandatorily at fair value through profit or loss	1,556	685
Equity instruments	41	574	Present value method
Debt securities	487	93	Present value method
Loans and receivables	1028	18	Present value method
Financial assets designated at fair value through profit or loss	5,603	203
Credit institutions	701	—	Present value method
Customers	4,902	203	Present value method
Financial assets at fair value through other comprehensive incomeD	513	4,332
Equity instruments	—	252	Present value method
Debt securities	224	34	Present value method
Loans and receivables	289	4,046	Present value method

166

EUR million
	Fair values calculated using internal models at
	2023A
	Level 2	Level 3	Valuation techniques
LIABILITIES	117,217	1,232
Financial liabilities held for trading	77,000	926
Central banks B	5,453	—	Present value method
Credit institutions B	17,548	—	Present value method
Customers	13,834	—	Present value method
Derivatives	40,165	926	Present value method, Gaussian Copula, Black- Scholes Model, , multifactorial advanced models interest rate, advanced stochastic volatility models and other
Swaps	30,582	593	Present value method, Gaussian Copula
Exchange rate options	5,576	14	Black-Scholes Model
Index and securities options	2,463	136	Black's Model, advanced multifactor interest rate models
Interest  rate options	666	39	Black-Scholes Model
Futures on interest rate and variable income	388	—	Present value method
Other	490	144	Present value method, Advanced stochastic volatility models
Hedging derivatives	3,093	6
Swaps	2,628	6	Present value method
Exchange rate options	464	—	Black-Scholes Model
Interest rate options	1	—	Black's Model
Other	—	—	Present value method, Advanced stochastic volatility models and other
Financial liabilities designated at fair value through profit or loss D	37,124	300	Present value method
Central banks	1,209	—	Present value method
Credit institutions	1,872	—	Present value method
Customers	34,043	300	Present value method
Liabilities under insurance contracts	—	—	Present Value Method with actuarial techniques

A. Level 2 internal models use data based on observable market parameters, while level 3 internal models use significant non-observable inputs in market

data.

B. Includes mainly short-term loans/deposits and repurchase/reverse repurchase with corporate customers (mainly brokerage and investment companies).

C. Includes, mainly, structured loans to corporate clients.

D. Includes, mainly, short-term deposits that are managed based on their fair value

167

b) Financial Instruments (level 3)

Financial Instruments (level 3)

Set forth below are the Group and the Bank´s main

financial instruments measured using unobservable

market data as significant inputs of the internal models

(level 3):

• HTC&S (Held to collect and sale) syndicated loans

classified in the fair value category with changes in

other comprehensive income, where the cost of

liquidity is not directly observable in the market, as

well as the prepayment option in favour of the

borrower.

• Illiquid equity in non-trading portfolios, classified at

fair value through profit or loss and at fair value

through equity.

• Instruments in Santander UK’s portfolio (loans, debt

securities and derivatives) linked to the House Price

Index (HPI). Even if the valuation techniques used for

these instruments may be the same as those used to

value similar products (present value in the case of

loans and debt securities, and the Black-Scholes

model for derivatives), the main factors used in the

valuation of these instruments are the HPI spot rate,

the growth and volatility thereof, and the mortality

rates, which are not always observable in the market

and, accordingly, these instruments are considered

illiquid.

• Callable interest rate derivatives (Bermudan-style

options) where the main unobservable input is mean

reversion of interest rates.

• Trading derivatives on interest rates, taking as an

underlying asset titling and with the amortization

rate (CPR, Conditional prepayment rate) as

unobservable main entry.

• Derivatives from trading on inflation in Spain, where

volatility is not observable in the market.

• Equity volatility derivatives, specifically indices and

equities, where volatility is not observable in the

long term.

• Derivatives on long-term interest rate and FX in

some units (mainly South America) where for certain

underlyings it is not possible to demonstrate

observability to these terms.

• Debt instruments referenced to certain illiquid

interest rates, for which there is no reasonable

market observability.

The measurements obtained using the internal models

might have been different if other methods or

assumptions had been used with respect to interest rate

risk, to credit risk, market risk and foreign currency risk

spreads, or to their related correlations and volatilities.

Nevertheless, the Banco Santander directors consider

that the fair value of the financial assets and liabilities

recognised in the balance sheet and the gains and losses

arising from these financial instruments are reasonable.

The net amount recorded in the results of 2024 the

financial year derived from valuation models whose

significant inputs are unobservable market data (Level 3)

amounts to a profit of EUR 471 million (of which EUR 14

million are losses already realized and EUR 485 million

correspond to profits from the valuation of operations in

force at the end of the year). In 2023 the net amount

recorded in the results was a profit of EUR 210 million.

The table below shows the effect, at 31 December  2024

and 2023 on the fair value of the main financial

instruments classified as level 3 of a reasonable change

in the assumptions used in the valuation. This effect was

determined by applying the probable valuation ranges of

the main unobservable inputs detailed in the following

table:

168

2024
Portfolio/Instrument	Valuation technique	Main unobservable inputs	Range	Weighted average	Impacts (EUR million)
(Level 3)					Unfavourable scenario	Favourable scenario
Financial assets held for trading
Loans and advances to customers
Repos/Reverse repos	Other	Long-term repo spread	n.a.	n.a.	(0.08)	—
Debt securities
Corporate debt	Discounted Cash Flows	Credit spread	0% - 10%	5.01%	(1.90)	1.90
Government debt	Discounted Cash Flows	Discount curve	0% - 8%	3.99%	(7.77)	7.72
Derivatives
CCS	Forward estimation	Interest rate	(6)bps - 6bps	0.40pb	(0.90)	1.03
CDS	Credit default models	Illiquid credit default spread curves	100bps - 200bps	149.14pb	(0.14)	0.14
EQ Options	EQ option pricing model	Volatility	0% - 70%	44.39%	(0.51)	0.89
EQ Options	Local volatility	Volatility	10% - 90%	50.00%	(1.26)	1.26
FX Options	FX option pricing model	Volatility	0% - 40%	20.81%	(0.55)	0.59
Inflation Derivatives	Asset Swap model	Inflation Swap Rate	2% - 8%	4.18%	(0.28)	0.16
IR Options	IR option pricing model	Volatility	0.4% - 32.2%	18.86%	(0.29)	0.41
IRS	Others	Others	5% - n.a.	n.a.	(1.25)	—
IRS	Discounted Cash Flows	Credit spread	2.6% - 8.3%	5.60%	(1.97)	2.18
IRS	Discounted Cash Flows	Swap rate	9.4% - 9.8%	9.60%	(1.01)	0.95
IRS	Forward estimation	Interest rate	(5.2)bps - 5.2bps	0.09pb	(0.03)	0.03
IRS	Prepayment modelling	Prepayment rate	2.5% - 9.0%	8.92%	—	0.05
Property derivatives	Option pricing model	Growth rate	(5)% - 5%	—	(3.92)	3.92
Securitisation Swap	Discounted Cash Flows	Constant prepayment rates	(22.30)% - 27.20%	2.47%	(4.95)	4.95
Structured notes	Price based	Price	(10)% - 10%	—	(1.53)	1.53
Financial assets designated at fair value through profit or loss
Loans and advances to customers
Loans	Discounted Cash Flows	Credit spreads	0.1% - 3%	1.55%	(0.21)	0.21
Mortgage portfolio	Black Scholes model	Growth rate	(5)%- 5%	0.00%	(0.23)	0.23
Debt securities
Other debt securities	Others	Inflation Swap Rate	0% - 8%	3.89%	(4.48)	4.25
Non-trading financial assets mandatorily at fair value through profit or loss
Debt securities
Property securities	Probability weighting	Growth rate	(5)% - 5%	0.00%	(0.35)	0.35
Equity instruments
Equities	Price Based	Price	90% - 110%	100.00%	(149.49)	149.49

169

2024
Portfolio/Instrument	Valuation technique	Main unobservable inputs	Range	Weighted average	Impacts (EUR million)
(Level 3)					Unfavourable scenario	Favourable scenario
Financial assets at fair value through other comprehensive income
Loans and advances to customers
Loans	Discounted Cash Flows	Credit spread	n.a.	n.a.	(20.80)	—
Loans	Discounted Cash Flows	Interest rate curve	4.6% - 9.0%	6.80%	(0.68)	0.68
Loans	Discounted Cash Flows	Margin of a reference portfolio	(1)bp - 1bp	0bp	(20.30)	20.30
Loans	Forward estimation	Credit spread	167.7bps - 365.8bps	167.74pb	(3.46)	—
Loans	Market price	Market price	(10)% - 20%	0.00%	(5.02)	2.51
Debt securities
Corporate debt	Discounted Cash Flows	Margin of a reference portfolio	(1)% - 1%	0.00%	(0.09)	0.09
Government debt	Discounted Cash Flows	Interest rate	0% - 2%	0.99%	—	—
Equity instruments
Equities	Price Based	Price	90% - 110%	100.00%	(49.24)	49.24
Financial liabilities held for trading
Derivatives
Cap&Floor	Volatility option model	Volatility	10% - 90%	39.03%	(0.45)	0.25
CMS	Discounted Cash Flows	Volatility	10% - 90%	47.66%	—	—
FX Options	Volatility option model	Volatility	10% - 90%	28.09%	(0.45)	0.13
IRS	Discounted Cash Flows	Inflation Swap Rate	10% - 90%	39.03%	(0.45)	0.25
Swaptions	Volatility option model	Volatility	10% - 90%	35.55%	(0.21)	0.10

1. For each instrument, the valuation technique, the unobservable inputs are shown in the 'Main observable inputs' column under probable scenarios, variation range, average value and impact resulting from

valuing the position in the established maximum and minimum range.

2. The breakdown of impacts is shown by type of instrument and unobservable inputs.

3. The estimation of the range of variation of the unobservable inputs has been carried out taking into account plausible movements of said parameters depending on the type of instrument.

4. Zero impacts from fully hedged or back-to-back transactions have not been included in this exercise.

170

2023
Portfolio/ Instrument	Valuation technique	Main unobservable inputs	Range	Weighted average	Impacts (EUR million)
(Level 3)					Unfavourable scenario	Favourable scenario
Financial assets held for trading
Debt securities
Corporate debt	Discounted Cash Flows	Credit spread	0% - 20%	10.07%	(1.38)	1.40
Corporate debt	Price based	Market price	85% - 115%	100.00%	—	—
Government debt	Discounted Cash Flows	Discount curve	0% - 10%	4.92%	(8.34)	8.07
Derivatives
CCS	Discounted Cash Flows	Interest rate	(0.7)% - 0.7%	0.00%	—	—
CCS	Forward estimation	Interest rate	(4)bps - 4bps	0.42bps	(0.06)	0.07
CDS	Discounted Cash flows	Credit Spread	14.9bps - 42.1bps	21.99bps	(0.05)	0.02
EQ Options	EQ option pricing model	Volatility	0% - 90%	61.30%	(0.23)	0.48
EQ Options	Local volatility	Volatility	10% - 90%	50.00%	(1.05)	1.05
FRAs	Asset Swap model	Interest rate	0% - 6%	2.71%	(1.16)	0.95
Fx Swap	Others	Others	n.a.	n.a	(1.37)	1.37
Inflation Derivatives	Asset Swap model	Inflation Swap Rate	0% - 10%	3.41%	(0.21)	0.11
Inflation Derivatives	Volatility option model	Volatility	0% - 40%	17.37%	(0.14)	0.11
IR Options	IR option pricing model	Volatility	0% -60%	35.82%	(0.30)	0.44
IRS	Asset Swap model	Interest rate	0% - 15%	9.20%	(0.05)	0.08
IRS	Discounted Cash Flows	Credit spread	1.25% - 6.29%	3.89%	(2.25)	2.47
IRS	Discounted Cash Flows	Swap rate	8.6% - 9.1%	8.84%	(0.02)	0.03
IRS	Forward estimation	Interest rate	(6)bps - 6bps	0.13bps	(0.04)	0.04
IRS	Others	Others	5% - n.a.	n.a	(11.58)	—
IRS	Prepayment modelling	Prepayment rate	2.5% - 6.2%	4.17%	(0.06)	0.05
Others	Forward estimation	Price	0% -2%	0.62%	(0.53)	0.24
Property derivatives	Option pricing model	Growth rate	(5)% - 5%	0.00%	(5.75)	5.75
Financial assets designated at fair value through profit or loss
Loans and advances to customers
Loans	Discounted Cash Flows	Credit spreads	0.1% - 2%	1.05%	(0.18)	0.18
Mortgage portfolio	Black Scholes model	Growth rate	(5)% - 5%	0.00%	(0.8)	0.8
Debt securities
Other debt securities	Others	Inflation Swap Rate	0% - 10%	4.74%	(4.25)	3.83

171

2023

Portfolio/ Instrument

Valuation technique

Main unobservable inputs

Range

Weighted average

Impacts (EUR million)

(Level 3)

Unfavourable scenario

Favourable scenario

Non-trading financial assets mandatorily at fair value through profit or loss

Corporate debt

Discounted Cash Flows

Margin of a reference portfolio

(1)bp - 1bp

0.01pbs

(0.33)

0.33

Property securities

Probability weighting

Growth rate

(5)% - 5%

0.00%

(0.68)

0.68

Equity instruments

Equities

Price Based

Price

90% - 110%

100.00%

(126.87)

126.87

Financial assets at fair value through other comprehensive income

Loans and advances to customers

Loans

Discounted Cash Flows

Credit spread

n.a.

n.a

(24.10)

—

Loans

Discounted Cash Flows

Interest rate curve

0.8% - 1.0%

0.88%

(0.08)

0.08

Loans

Discounted Cash Flows

Margin of a reference portfolio

(1)bp - 1bp

0bp

(17.51)

17.51

Loans

Forward estimation

Credit spread

2.56% - 3.4%

2.56%

(0.49)

—

Debt securities

Government debt

Discounted Cash Flows

Interest rate

(0.4)% -  1.6%

0.63%

(0.01)

0.01

Equity instruments

Equities

Price Based

Price

90% - 110%

100.00%

(70.04)

70.04

Financial liabilities held for trading

Derivatives

Cap&Floor

Volatility option model

Volatility

10% - 90%

40.73%

(0.29)

0.18

Financial liabilities designated at fair value through profit or loss

Loans and advances to customers

Repos/Reverse repos

Others

Long-term repo spread

n.a.

n.a.

(0.13)

—

1. For each instrument, the valuation technique, the unobservable inputs are shown in the 'Main observable inputs' column under probable scenarios, variation range, average value and impact resulting from valuing the

position in the established maximum and minimum range.

2. The breakdown of impacts is shown by type of instrument and unobservable inputs.

3. The estimation of the range of variation of the unobservable inputs has been carried out taking into account plausible movements of said parameters depending on the type of instrument.

4. Zero impacts from fully hedged or back-to-back transactions have not been included in this exercise.

172

Lastly, the changes in the financial instruments classified as Level 3, at Grupo Santander, in 2024 and 2023:

	01/01/2024		Changes							31/12/2024
EUR million	Fair value calculated using internal models (Level 3)		Purchases/ Issuances	Sales/ Settlements	Changes in fair value recognised in profit or loss	Changes in fair value recognised in equity	Level reclassifications	Other		Fair value calculated using internal models (level 3)
Financial assets held for trading	2,086		3,205	(813)	302	—	(715)	(135)		3,930
Customers	24		1,808	(24)	(7)	—	—	—		1,801
Debt securities	914		355	(384)	(39)	—	(377)	(56)		413
Equity instruments	1		—	—	(1)	—	—	—		—
Trading derivatives	1,147		272	(405)	350	—	(338)	(79)		947
Swaps	577		184	(278)	186	—	(152)	39		556
Exchange rate options	9		—	(1)	—	—	(6)	—		2
Interest rate options	153		13	(42)	(20)	—	(74)	—		30
Index and securities options	235		42	(44)	128	—	(106)	(14)		241
Other	173		33	(40)	56	—	—	(104)		118
Financial assets at fair value through profit or loss	181		417	(300)	13	—	(201)	(4)		106
Loans and advances to customers	31		—	—	(5)	—	(23)	17		20
Debt securities	150		417	(300)	18	—	(178)	(21)		86
Non-trading financial assets mandatorily at fair value through profit or loss	2,095		719	(349)	73	—	132	(82)		2,588
Customers	287		390	(128)	(31)	—	41	(54)		505
Debt instruments	313		4	(96)	10	—	11	—		242
Equity instruments	1,495		325	(125)	94	—	80	(28)		1,841
Financial assets at fair value through other comprehensive income	5,989		6,707	(3,781)	—	(136)	6	(110)		8,675
Loans and advances	4,938		5,962	(3,685)	—	43	—	(5)		7,253
Debt securities	559		743	(81)	—	(74)	6	(106)		1,047
Equity instruments	492		2	(15)	—	(105)	—	1		375
TOTAL ASSETS	10,351		11,048	(5,243)	403	(136)	(779)	(325)		15,319
Financial liabilities held for trading	869		472	(200)	(95)	—	(266)	154		934
Trading derivatives	869		472	(200)	(95)	—	(266)	154		934
Swaps	388		371	(20)	(205)	—	(105)	50		479
Exchange rate options	8		—	(5)	—	—	(3)	—		—
Interest rate options	139		—	(54)	3	—	(10)	1		79
Index and securities options	187		54	(14)	113	—	(40)	(6)		294
Others	147		47	(107)	(6)	—	(108)	109		82
Hedging derivatives (Liabilities)	6		—	—	—	—	—	6		12
Swaps	6		—	—	—	—	—	6		12
Financial liabilities designated at fair value through profit or loss	29		41	(5)	1	—	94	—		160

173

Liabilities under insurance contracts	323		—	—	(26)	—	—	(51)		246
TOTAL LIABILITIES	1,227		513	(205)	(120)	—	(172)	109		1,352

174

	01/01/23		Changes							31/12/23
EUR million	Fair value calculated using internal models (level 3)		Purchases /Issuances	Sales/ Settlements	Changes in fair value recognized in profit or loss	Changes in fair value recognized in equity	Level reclassifications	Other		Fair value calculated using internal models (level 3)
Financial assets held for trading	383		496	(149)	194	—	1,162	—		2,086
Debt securities	42		126	(63)	30	—	773	6		914
Equity instruments	1		—	—	—	—	—	—		1
Trading derivatives	340		347	(86)	163	—	389	(6)		1,147
Swaps	139		90	(4)	179	—	191	(18)		577
Exchange rate options	4		1	—	4	—	—	—		9
Interest rate options	39		—	—	2	—	112	—		153
Index and securities options	48		132	(4)	(20)	—	76	3		235
Other	110		124	(78)	(2)	—	10	9		173
Financial assets at fair value through profit or loss	427		51	—	(21)	—	22	(298)		181
Loans and advances to customers	5		—	—	4	—	22	—		31
Debt securities	422		51	—	(25)	—	—	(298)		150
Non-trading financial assets mandatorily at fair value through profit or loss	1,833		345	(238)	107	—	(6)	54		2,095
Customers	239		99	(73)	13	—	—	9		287
Debt instruments	325		38	(48)	(5)	—	—	3		313
Equity instruments	1,269		208	(117)	99	—	(6)	42		1,495
Financial assets at fair value through other comprehensive income	5,647		3,322	(3,411)	—	(204)	231	404		5,989
Loans and advances	4,718		3,322	(3,408)	—	36	160	110		4,938
Debt securities	229		—	—	—	5	71	254		559
Equity instruments	700		—	(3)	—	(245)	—	40		492
TOTAL ASSETS	8,290		4,214	(3,798)	280	(204)	1,409	160		10,351
Financial liabilities held for trading	415		276	(167)	(118)	—	476	(13)		869
Trading derivatives	415		276	(167)	(118)	—	476	(13)		869
Swaps	235		53	(83)	(58)	—	257	(16)		388
Exchange rate options	—		6	—	2	—	—	—		8
Interest rate options	19		4	(5)	(16)	—	137	—		139
Index and securities options	42		88	(13)	(15)	—	82	3		187
Others	119		125	(66)	(31)	—	—	—		147
Hedging derivatives (Liabilities)	14		—	—	(3)	—	(5)	—		6
Swaps	14		—	—	(3)	—	(5)	—		6
Financial liabilities designated at fair value through profit or loss	151		32	(151)	(3)	—	—	—		29
Liabilities under insurance contracts	345		—	—	—	(40)	—	18		323
TOTAL LIABILITIES	925		308	(318)	(124)	(40)	471	5		1,227

175

The same information on the movement of financial instruments classified in Level 3, but referred to Banco Santander, S.A., in 2024  and 2023, is presented below:

	01/01/2024	Changes						31/12/2024
EUR million	Fair value calculated using internal models (Level 3)	Purchases/ Issuances	Sales/ Settlements	Changes in fair value recognised in profit or loss	Changes in fair value recognised in equity	Level reclassifications	Other	Fair value calculated using internal models (level 3)
Financial assets held for trading	1,424	3,067	(763)	313	—	(364)	85	3,762
Credit entities	—	770	—	—	—	(2)	—	768
Loans and advances to customers	24	1,806	(24)	—	—	(6)	—	1,800
Debt instruments and equity instrument	366	261	(363)	(2)	—	(3)	—	259
Trading derivatives	1,034	230	(376)	315	—	(353)	85	935
Swaps	861	184	(298)	161	—	(276)	56	688
Exchange rate options	10	—	(2)	3	—	(2)	—	9
Interest rate options	151	13	(42)	(17)	—	(70)	2	37
Index and securities options	12	—	(1)	117	—	(5)	21	144
Other	—	33	(33)	51	—	—	6	57
Hedging derivatives (Assets)	9	—	—	14	—	(1)	6	28
Swaps	9	—	—	14	—	(1)	6	28
Financial assets at fair value through profit or loss	203	—	—	—	—	(203)	—	—
Credit entities	—	—	—	—	—	—	—	—
Loans and advances to customers	203	—	—	—	—	(203)	—	—
Debt securities	—	—	—	—	—	—	—	—
Non-trading financial assets mandatorily at fair value through profit or loss	685	294	(95)	22	—	75	—	981
Customers	18	—	(18)	—	—	—	—	—
Debt securities	93	17	(55)	(12)	—	—	—	43
Equity instruments	574	277	(22)	34	—	75	—	938
Financial assets at fair value through other comprehensive income	4,332	3,754	(3,252)	—	(171)	—	—	4,663
Loans and advances	4,046	3,255	(3,203)	—	(29)	—	—	4,069
Debt securities	34	501	(34)	—	5	—	—	506
Equity instruments	252	—	(15)	—	(149)	—	—	88
TOTAL ASSETS	6,653	4,539	(4,086)	349	(171)	(485)	91	9,434
Financial liabilities held for trading	926	460	(178)	(133)	—	(111)	85	1,048
Trading derivatives	926	460	(178)	(133)	—	(111)	85	1,048
Swaps	593	371	(36)	(237)	—	(92)	56	654
Exchange rate options	14	—	(7)	—	—	(7)	—	—
Interest rate options	136	2	(54)	2	—	(3)	2	85
Index and securities options	39	42	(6)	146	—	(9)	20	232
Securities and interest rate futures	—	—	—	—	—	—	—	—
Others	144	45	(75)	(44)	—	—	7	77
Hedging derivatives (Liabilities)	6	—	—	1	—	—	5	12
Swaps	6	—	—	—	—	—	5	11

176

Interest rate options	—	—	—	1	—	—	—	1
Financial liabilities designated at fair value through profit or loss	300	103	(5)	2	—	(165)	—	235
TOTAL LIABILITIES	1,232	563	(183)	(131)	—	(276)	90	1,295

177

	01/01/2023	Changes						31/12/2023
EUR million	Fair value calculated using internal models (level 3)	Purchases /Issuances	Sales/ Settlements	Changes in fair value recognized in profit or loss	Changes in fair value recognized in equity	Level reclassifications	Other	Fair value calculated using internal models (level 3)
Financial assets held for trading	485	196	(35)	188	—	659	(69)	1,424
Customers	—	23	—	1	—	—	—	24
Debt instruments and equity instrument	2	45	(2)	(4)	—	325	—	366
Trading derivatives	483	128	(33)	191	—	334	(69)	1,034
Swaps	420	123	(19)	192	—	214	(69)	861
Exchange rate options	3	1	—	6	—	—	—	10
Interest rate options	39	—	—	2	—	110	—	151
Index and securities options	8	4	(1)	(9)	—	10	—	12
Other	13	—	(13)	—	—	—	—	—
Hedging derivatives (Assets)	—	—	—	9	—	—	—	9
Swaps	—	—	—	9	—	—	—	9
Financial assets at fair value through profit or loss	—	47	—	134	—	22	—	203
Credit entities	—	—	—	—	—	—	—	—
Customers	—	47	—	134	—	22	—	203
Debt securities	—	—	—	—	—	—	—	—
Non-trading financial assets mandatorily at fair value through profit or loss	649	188	(214)	50	—	12	—	685
Customers	19	2	(3)	—	—	—	—	18
Debt securities	190	31	(142)	2	—	12	—	93
Equity instruments	440	155	(69)	48	—	—	—	574
Financial assets at fair value through other comprehensive income	4,536	2,833	(2,974)	—	(257)	194	—	4,332
Loans and advances	4,038	2,833	(2,974)	—	(11)	160	—	4,046
Debt securities	—	—	—	—	—	34	—	34
Equity instruments	498	—	—	—	(246)	—	—	252
TOTAL ASSETS	5,670	3,264	(3,223)	381	(257)	887.00	-69	6,653
Financial liabilities held for trading	675	213	(168)	(73)	—	349	(70)	926
Trading derivatives	675	213	(168)	(73)	—	349	(70)	926
Swaps	513	69	(97)	(56)	—	233	(69)	593
Exchange rate options	—	7	—	7	—	—	—	14
Interest rate options	20	4	(5)	(14)	—	131	—	136
Index and securities options	27	9	—	19	—	(15)	(1)	39
Securities and interest rate futures	—	—	—	—	—	—	—	—
Others	115	124	(66)	(29)	—	—	—	144
Hedging derivatives (Liabilities)	14	—	—	(3)	—	(5)	—	6
Swaps	14	—	—	(3)	—	(5)	—	6
Financial liabilities designated at fair value through profit or loss	147	50	(147)	250	—	—	—	300
TOTAL LIABILITIES	836	263	(315)	174	—	344	(70)	1,232

178

49. Other disclosures

a) Residual maturity periods

The detail, by maturity, of the balances of certain items

in the balance sheets as of 31 December 2024 and 2023

is as follows:

EUR million
	31 December 2024
	On demand	Within 1 month	1 to 3 months	3 to 12 months	1 to 5 years	More than 5 years	Total
Assets
Cash, cash balances at central banks and other demand deposits	97,457	—	—	—	—	—	97,457
Financial assets at fair value with changes in other comprehensive income
Representative values of debt	—	409	1,626	214	1,451	5,173	8,873
Financial assets at amortized cost
Representative values of debt	—	201	238	6,464	21,641	37,373	65,917
Loans and advances
Central banks	—	177	—	41	—	—	218
Credit institutions	1,321	1,545	4,794	3,835	8,110	15,106	34,711
Customer	1,358	35,364	34,029	46,355	86,837	87,654	291,597
	100,136	37,696	40,687	56,909	118,039	145,306	498,773
Liabilities:
Financial liabilities at amortized cost
Deposits
Central banks	—	1,228	2,457	1,425	—	7	5,117
Credit institutions	2,578	8,154	3,464	6,836	10,242	7,417	38,691
Customer deposits	256,779	36,267	19,031	22,664	6,048	8,123	348,912
Marketable debt securities	—	6,538	10,572	19,918	58,667	50,418	146,113
Other financial liabilities	7,290	750	19	606	3,720	862	13,247
	266,647	52,937	35,543	51,449	78,677	66,827	552,080
Difference (assets less liabilities)	(166,511)	(15,241)	5,144	5,460	39,362	78,479	(53,307)

179

EUR million
	31 December 2023
	On demand	Within 1 month	1 to 3 months	3 to 12 months	1 to 5 years	More than 5 years	Total
Assets:
Cash, cash balances at Central Banks and other deposits on demand	125,020	—	—	—	—	—	125,020
Financial assets at fair value through other comprehensive income
Representative values of debt	—	777	1,312	115	1,176	1,076	4,456
Financial assets at amortized cost
Loans and advances	—	3,337	1,501	2,899	12,395	36,495	56,627
Loans and advances
Central banks	—	147	—	2	—	—	149
Credits institutions	54	3,733	6,793	4,376	7,617	12,179	34,752
Customers	7,213	20,711	36,527	39,600	92,250	91,281	287,582
	132,287	28,705	46,133	46,992	113,438	141,031	508,586
Liabilities:
Financial liabilities at amortized cost
Deposits
Central banks	—	2,470	7,040	700	1,454	18	11,682
Credit institutions	2,423	6,249	5,024	4,212	10,943	6,652	35,503
Customer deposits	250,014	40,521	16,219	20,779	4,109	5,447	337,089
Debt securities issued	—	5,098	8,153	25,573	56,980	44,066	139,870
Other financial liabilities	7,462	405	164	221	2,998	817	12,067
	259,899	54,743	36,600	51,485	76,484	57,000	536,211
Difference (assets less liabilities)	(127,612)	(26,038)	9,533	(4,493)	36,954	84,031	(27,625)

180

b)  Equivalent euro value of assets and liabilities

The detail of the main foreign currency balances in the

balance sheets as of 31 December 2024 and 2023 , based

on the nature of the related items, is as follows:

Countervalue in EUR million
	2024	2023
Assets	251,663	231,985
Cash, cash balances at central banks and other deposits on demand	32,283	40,319
Financial assets held for trading	51,655	37,360
Non-trading financial assets mandatorily at fair value through profit or loss	276	620
Financial assets designated at fair value through profit or loss	212	214
Financial assets at fair value through other comprehensive income	6,968	5,539
Financial assets at amortized cost	114,278	102,280
Hedging derivatives	508	369
Changes in the fair value of hedged items in portfolio hedges of interest rate risk	—	—
Investments	44,507	44,676
Tangible assets	10	12
Intangible assets	28	13
Tax assets	180	106
Other assets	758	477
Non-current assets held-for-sale	—	—
Liabilities	205,004	191,894
Financial liabilities held for trading	34,949	28,306
Financial liabilities designated at fair value through profit or loss	10,995	9,972
Financial liabilities at amortized cost	156,495	151,136
Hedging derivatives	1,349	1,373
Changes in the fair value of hedged items in portfolio hedges of interest risk rate	—	—
Provisions	169	104
Tax liabilities	95	61
Refundable equity on demand	—	—
Other liabilities	952	942
Liabilities associated with non-current assets held-for-sale	—	—

c) Fair value of financial assets and liabilities not

measured at fair value

Financial assets are measured at fair value in the

accompanying balance sheets, except for loans and

receivables under a business model whose objective is to

collect the flows of principal and interest , equity

instruments whose market value cannot be estimated

reliably and derivatives that have these instruments as

their underlying and are settled by delivery thereof.

Similarly, financial liabilities except for financial

liabilities held for trading, those measured at fair value

and derivatives having equity instruments whose market

value cannot be estimated reliably as their underlying-

are measured at amortized cost in the accompanying

balance sheets.

The following is a comparison between the value of

Grupo Santander's financial instruments valued using

other criteria rather than fair value and their

corresponding fair value at year-end:

Financial assets and liabilities measured at other than

fair value

The fair value of financial instruments measured at

amortized cost as of 31 December 2024 was as follows:

a. The fair value of debt securities is 1.60% higher

than the carrying amount.

b. The fair value of the loans and advances is 1.84% 

lower than the carrying amount.

c. The fair value of deposits is 0.22% lower than the

carrying amount.

d. The fair value of marketable debt securities is

0.53%  lower than the carrying amount.

181

Set forth below are the main valuation methods and

inputs used in the estimates made at 31 December 2024

to determine the fair values of the financial assets and

liabilities recognized at cost detailed above:

• Loans and receivables: The fair value has been

estimated using the present cost method, the

estimation has considered factors such as the

expected maturity of the portfolio, market interest

rates, spreads of new concession of operations, or

market spreads – If these were available.

• Held to maturity portfolio: The fair value has been

determined based on market prices for those

instruments.

• Financial liabilities at amortized cost:

a. The fair value of deposits at Central Banks has

been assimilated to their carrying amount

because they are mainly short-term balances.

b. Credit Institutions: Fair value has been obtained

using the present value technique by applying

interest rates and market spreads.

c. Customer deposits: Fair value has been

estimated using the present value technique. The

estimation has considered factors such as the

expected maturity of the operations and the

current financing cost of Grupo Santander in

similar operations. On demand accounts are not

valued.

d. Marketable debt securities: Fair value has been

determined based on market prices for these

instruments, when available, or using the

present value technique, by applying interest

rates and market spreads.

Additionally, the fair value of Cash, Cash Balances at

central banks and other deposits on demand has been

assimilated to its carrying amount, mainly because of

short-term balances.

f) Offsetting of financial instruments

On the table below is the detail of financial assets and

liabilities that were offset on the balance sheet as of 31

December 2024 and 2023 :

EUR million
	2024
Assets	Gross amount of financial assets	Gross amount of financial assets offset on the balance sheet	Net amount of financial assets presented on the balance sheet
Derivatives	133,335	(78,956)	54,379
Repos	112,443	(32,440)	80,003
Total	245,778	(111,396)	134,382

EUR million
	2023
Assets	Gross amount of financial assets	Gross amount of financial assets offset on the balance sheet	Net amount of financial assets presented on the balance sheet
Derivatives	131,384	(83,766)	47,618
Repos	92,320	(42,319)	50,001
Total	223,704	(126,085)	97,619

EUR million
	2024
Liabilities	Gross amount of financial liabilities	Gross amount of financial liabilities offset on the balance sheet	Net amount of financial liabilities presented on the balance sheet
Derivatives	127,593	(78,956)	48,637
Repos	120,653	(32,440)	88,213
Total	248,246	(111,396)	136,850

EUR million
	2023
Liabilities	Gross amount of financial liabilities	Gross amount of financial liabilities offset on the balance sheet	Net amount of financial liabilities presented on the balance sheet
Derivatives	128,244	(83,766)	44,478
Repos	109,766	(42,319)	67,447
Total	238,010	(126,085)	111,925

At December 31, 2024 the balance sheet amounts EUR

133,139 million on derivatives and temporary

acquisition of assets and EUR 136,037 million on

derivatives and repos as liabilities that are subject to

netting and collateral arrangements (EUR 96,608 million

and EUR 111,374 million in 2023, respectively).

182

50. Risk management

a) Risk principles and culture

The principles on which Grupo and Banco Santander's

risk management and control are based are detailed

below. They take into account regulatory requirements,

best market practices and are mandatory:

1. All employees are risk managers who must

understand the risks associated with their functions

and not assume risks that will exceed the Bank’s risk

appetite or have an unknown impact.

2. Senior managers must be involved to promote

consistent risk management and control through

their conduct, action and communications, as well as

reviewing the risk culture and making sure Grupo

Santander keeps the risk profile within risk appetite .

3. Independent risk management and control functions,

according to the three lines of defence model of

Grupo   and Banco Santander.

4. Grupo and Banco Santander take  a forward-looking

and comprehensive approach to management and

control all businesses and risk types, which should

analyse trends over different time periods and under

different scenarios.

5. Grupo and Banco Santander keep effective

information management to identify, assess,

manage and disclose risks at appropriate levels.

1. Key risk types

Grupo and Banco Santander’s risks categorization allows

effective risk management, control and reporting, and

includes, among others the following risk types:

• Credit risk relates to financial loss arising from the

default or credit quality deterioration of a customer

or counterparty, to which Grupo and Banco

Santander have directly provided credit or assumed a

contractual obligation.

• Market risk is the risk incurred as a result of the

effect of changes in market factors interest rates,

exchange rates, equities and commodities, among

others, may have on profits or capital.

• Liquidity risk is the risk that Santander Group does

not have the liquid financial resources to meet its

obligations when they fall due or can only obtain

them at high cost.

• Structural Risk is the risk of changes in the value or

margin generation of the assets or liabilities in the

banking book resulting from changes in market

factors and balance sheet behaviour. It also includes

risks associated with insurance and pension

activities.

• Capital risk , included within the scope of structural

risk, is the risk that arises from the possibility of

having an inadequate quantity or quality of capital to

meet internal business objectives, regulatory

requirements or market expectations.

Grupo and Banco Santander also take into account, on an

ongoing basis in its risk management, operational

(includes fraud, technological, cyber, legal and conduct

risks), financial crime (includes, among others, money

laundering, terrorism financing, violation of international

sanctions, corruption, bribery and tax evasion), model,

reputational and strategic risks.

Besides, environmental and climate-related risk drivers

are considered as factors that could impact the existing

risks across significant time horizons. These elements

include, on the one hand, those derived from the

physical effects of climate change and, on the other

hand, those derived from the process of transition to a

development model with lower emissions, including

legislative, technological or behaviour of economic

agents changes.

Given the nature of its operations, the Group and Bank

have no environment-related liabilities, expenses, assets

or contingencies of a material relevance to its

consolidated equity, financial situation and results.

Most exposures in sectors potentially affected by climate

change risk, according to market consensus and to the

execution of our materiality assessment, are with

wholesale clients, whose preliminary reviews, credit

approval and credit ratings take such risk into account.

Customers’ ratings determine the parameters for

calculating loan loss (typically in terms of probability of

default or PD). Thus, when climate factors are relevant,

in conjunction with other elements of analysis, they have

an impact on the loan loss calculations which support

capital and provisions. Additionally, potential future

losses due to climatic events, such as the floods suffered

in Valencia at the end of October 2024, have been

considered through an overlay, which is not material

compared to total Group and the Bank´s loan loss

reserves.

Additionally, the Group and the Bank have participated in

different regulatory and supervisory climate stress

exercises carried out recently. In particular, in the latest

scenario analysis exercise (Fit-for-55) carried out by the

European Banking Authority (EBA), the results highlight

the resilience of the banking sector to climate-related

shocks under the scenarios analysed and, in particular,

indicate that first-round losses have a limited impact on

the financial system. All this is consistent with the

previous top-down stress test exercises carried out by

the European Central Bank (ECB), across relevant time

horizons.

183

In the aforementioned exercise, the EBA points out the

importance to include climate risks in risk management.

In this sense, the Group , and therefore the Bank,

continue working to embed climate and environmental

aspects into management, adopting a risk-based

approach to those factors, focusing on the most material

sectors. We consider the risks stemming from climate

and environmental factors in the overall risk

management cycle, including a materiality assessment

that informs the Group´s sustainability strategy.

Therefore, based on the best information available at the

time these annual financial statements were prepared,

the Group, and therefore the Bank, sees no additional

environmental or climate change risk having a

substantial impact on its equity, financial situation and

results in 2024.

Still, this matter is constantly changing, and, like other

banks, the Group, and therefore the Bank, are working

on developing more methodologies to better measure

potential loan loss considering the idiosyncrasies of each

of the regions in which the Group and the Bank are

present regarding management, best industry practices

and regulatory/supervisory requirements. In particular,

the Group and the Bank are in the process of analysing

and implementing the recent EBA guidelines on ESG Risk

Management published in January 2025 and Scenario

Analysis which are in the consultation process. Both

guidelines will apply from January 2026.

2. Risk and compliance governance

Grupo and Banco Santander  robust risk and compliance

governance structure allows us to conduct effective

oversight in line with our risk appetite. Grupo and Banco

Santander stand on three lines of defence, a structure of

committees and strong Group-subsidiary relations,

guided by our risk culture, Risk Pro.

2.1 Lines of defence

Grupo and Banco Santander’s model of three lines of

defence effectively manages and controls risks:

• First line: formed by business and support areas that

take or originate risks are primarily responsible for

managing them. The first line of defence detects,

measures, controls, monitors and reports on the risks

it originates according to internal risk management

policies, models and procedures. Risk management

must be consistent with the approved risk appetite

and related limits. The first line executes the

mitigation plans for the risks where we have

identified shortcomings in their control environment.

• Second line: formed by risk and compliance

functions,  independently oversees and challenges

risk management at the first line of defence. Its

duties include ensuring that risks will be managed

according to the risk appetite approved by senior

management and strengthening our risk culture

across the Group. The second line must supervise

and challenge the control environment implemented

by the first line.

• Third line: internal audit function, is fully

independent to give the board and senior managers

assurance of high-quality and efficient risk

governance and management to preserve our value,

solvency and reputation.  

Risk, Compliance and Internal Audit are sufficiently

separate and autonomous functions, with direct access

to the board and its committees. The risk and compliance

functions report to the risk supervision, regulation and

compliance committee and the internal audit function

reports to the audit committee.

2.2 Risk committee structure

The board of directors has final oversight of risk and

compliance management and control to promote a

sound risk culture and review and approve risk appetite

and frameworks, with support from its risk, regulation

and compliance committee (RSRCC) and its executive

committee. The Group and the Bank's risk governance

keeps risk control and risk-taking areas separate.

Our governance structure includes key positions and

executive level committees that enable us to perform

effective risk control and oversight.

The Group chief risk officer (CRO), who leads the

application and execution of risk strategy and promotes

proper risk culture, is in charge of overseeing all risks

and challenging and advising business lines on risk

management.

The Group chief compliance officer (CCO) leads the

application and execution of the compliance and conduct

risk strategy and reports the status of risks being

monitored in order to provide the Chief Risk Officer with

a comprehensive view of all risks.

The CRO and the CCO report directly to both the risk

supervision, regulation and compliance committee and

the board of directors.

The executive risk, risk control and compliance and

conduct committees are executive committees with

powers delegated from the board.

Furthermore, risk functions have forums and regular

meetings to manage and control the risks within their

purview. Executive committees also delegate some

duties to subordinate forums.

184

Their responsibilities include:

• Inform the CRO, the CCO, the risk control committee

and the compliance and conduct committee if risks

are being managed within risk appetite;

• Regularly monitor each key risk type; and

• Overseeing measures to meet supervisors and

auditors' expectations.

Besides, Grupo and Banco Santander, in order to

establish an adequate control environment for the

management of each risk types, the risk and compliance

functions have effective internal regulation to create the

right environment to manage and control all risks.

Grupo and Banco Santander can establish additional

governance measures for special situations. The Group

has upgraded the monitoring of all risks, with special

attention to the main macroeconomic indicators,

liquidity, vulnerable sectors and customers,

cybersecurity reinforcement, among other areas. The

special situations forums we have set up are enabling us

to cope with the geopolitical and macroeconomic

environment landscape resiliently.

2.3 The Group's relationship with subsidiaries

Grupo Santander subsidiaries have a model for

managing risk and compliance that is consistent with the

frameworks approved by the group’s board of directors,

which they adhere to through their own boards and can

only adapt to higher standards according to local law

and regulation.

Furthermore, the Group's aggregate oversight area

advises and validates subsidiaries on internal regulation

and operations. This reinforces a common risk

management model across Grupo Santander.

The risk and compliance functions will continue to

support global businesses and control at a global and

local level. In 2024, Grupo Santander continued to build

on our group-subsidiary relations model (GSGM) by

leveraging our global scale to uncover synergy under a

common operating model and platform. The model

promotes process simplification and more enhanced

control to help grow the business.

The GSGM sets out the principles that govern the

relationship between Group and subsidiary key positions

to safeguard the independence of the second lines of

defence in local units. The CRO and the CCO are involved

in appointing, setting objectives for, reviewing and

compensating their country-unit counterparts and

assessing whether risks are properly controlled.

Country and regional units work closely to effectively

strengthen group-subsidiary relations through these

common initiatives:

• Restructuring based on subsidiary benchmarks,

strategic vision, and advanced risk

management infrastructures and practices.

• Exchange of best practices that will strengthen

processes, drive innovation and result in a

quantitative impact.

• Promoting internal talent and encouraging

geographic and functional mobility, which we

placed special emphasis on in 2024.

3. Management processes and tools

Grupo and Banco Santander have these effective risk

management processes and tools:

3.1 Risk appetite and structure of limits

Risk appetite is the aggregate level and types of risk that

Grupo Santander deems prudent for our business

strategy, even in unforeseen circumstances. In Grupo

and Banco Santander, these principles influence risk

appetite:

• Risk appetite is part of the board's duties. It prepares

the risk appetite statement (RAS) for the whole

Group and the Banks every year. In a cascading down

process, each subsidiary's board also sets its own

risk appetite.

• Comprehensiveness and forward-looking approach.

The Bank’s appetite includes of all material risks that

Santander are exposed to and defines our target risk

profile for the current and medium term with a

forward-looking view considering stress scenarios.

• Common standards and embedding in the risk

management. The Group and the Bank share the

same risk appetite model, which sets common

requirements for processes, metrics, governance

bodies, controls and standards. It also enables an

effective and traceable embedding of our appetite

into management policies and more granular limits.

• Continuous adaptation to market best practices,

regulatory requirements and supervisors’

expectations.

• Aligning with business plans and strategy. The risk

appetite is a key point of reference for strategic and

business planning. The Group and the Bank verify

that the three-year strategic plans, the annual

budget and capital and liquidity planning are within

the limits set in the RAS before Santander approves

them.

Grupo and Banco Santander’s risk appetite and business

model rest on the following elements:

• A medium-low and predictable target risk profile,

customer focus, internationally diversified

operations and a strong market share;

• Stable, recurrent earnings and shareholder

remuneration, sustained by a sound base of capital,

liquidity and sources of funding;

• Autonomous subsidiaries that are self-sufficient in

terms of capital and liquidity with risk profiles that

185

won't compromise the Group and the Bank’s risk

profile;

• An independent Risk function and a senior

management actively engaged in supporting a

robust control environment and risk culture; and

• A conduct model that protects our customers and our

Simple, Personal and Fair culture.

The risk appetite is expressed through qualitative

statements and limits on metrics representative of the

bank’s risk profile at present and under stress. Those

metrics cover all risk types according to our corporate

risk framework. Grupo Santander articulates them in five

axes that provide the Bank with a holistic view of all risks

it incurs in the development of its business model. These

five axes are applicable to all Santander's key risk types,

and comprise:

• P&L volatility: control of P&L volatility of business

plan under baseline and stressed conditions (under

normal and stressed conditions).

• Solvency: control of capital ratios under baseline and

stressed scenarios (aligned with ICAAP).

• Liquidity: control of liquidity ratios under base and

stress scenarios (aligned with ILAAP).

• Concentration: control of credit concentration on top

clients, portfolios and industries.

• Non financial risk and control environment: robust

control on non financial risks aimed to minimize

events which could lead to financial loss, operative,

technological, legal and regulatory breaches,

conduct issues or reputational damage.

b) Credit risk

1. Introduction to the credit risk treatment

Grupo and Banco Santander take a holistic view of the

credit risk cycle, including the transaction, the customer

and the portfolio, in order to identify, analyse, control

and decide on credit risk.

Credit risk identification facilitates active and effective

portfolio management and control. Grupo and Banco

Santander classify external and internal risk in each

business to adopt any corrective or mitigating measures

through:

1.1. Planning

Grupo and Banco Santander´s planning helps to set

business targets and draw up action plans within our risk

appetite statement.

Strategic commercial plans (SCP) are a management and

control tool the business and risk areas prepare for

Grupo and Banco Santander's credit portfolios. They

determine commercial strategies, risk policies, resources

and infrastructure, ensuring a holistic view of the

portfolios.

They provide an updated view of portfolio credit quality

to measure credit risk, run internal controls on credit

strategy, regularly monitor and detect significant risk

deviation and potential impacts, enable decision-making

and take corrective action.

They are suited to the Group and the Bank's risk appetite

and subsidiaries’ capital targets, having been reviewed

and pre-approved by senior managers before Group

management revises and validates them.

1.2. Risk assessment and credit rating

Risk approval generally depends on the applicant’s

ability to repay the debt. Grupo and Banco Santander

review their regular sources of income, including funds

and net cash flows from any businesses.  

The risk function monitors credit rating drivers to

calibrate the decisions and ratings that the Group’s and

the Bank´s credit quality assessment models determine.

Risk management uses these ratings for many things

like underwriting process (application of limits and pre-

approvals), risk monitoring and credit pricing policies.

The Group and the Bank then use rating models to

measure ability to pay. Depending on each segment,

credit rating drivers can be :

• Rating: from mathematical algorithms that have a

quantitative model based on balance sheet ratios or

macroeconomic variables, and a qualitative module

supplemented by the credit analyst’s expert

judgement. It is used for large corporates,

corporates, institutional and SME segments (with

individualised treatment).

• Scoring: system of automatic evaluation of loan

applications. It automatically assigns customers an

individual score retail on which the subsequent

decision is based. It is used for individual customers

and SME segments without an assigned analyst.

Grupo and Banco Santander's parameter estimation

models, based on econometric models of past defaults

and losses, calculate economic and regulatory capital as

well as IFRS 9 and Bank of Spain circular 4/2017

provisions for each portfolio or customer.

Grupo and Banco Santander regularly monitors and

evaluates models'  suitability, predictive capacity,

performance, granularity, and compliance with policies,

among other factors.

In addition, ratings are reviewed with the latest available

financial information and other relevant data. Grupo

Santander has also increased reviews of customers who

are subject to more in-depth monitoring or who have

early warnings in risk management systems, enhancing

proactive credit risk management.

186

This allows the Group, and therefore the Bank, to align

credit portfolios management and control with Group´s

credit risk appetite and its target risk profile.  Grupo and

Banco Santander use SCPs to define limits for each

portfolio, counterparty and for new originations up to a

level deemed acceptable the Group and the Bank´s .

Grupo and Banco Santander´s limits, pre-classifications

and pre-approvals processes, which are highly

automated and digitalized, determine the risk Grupo and

Banco Santander can assume with each customer. Limits

are approved by the executive risk committee (or

delegated committees) and should reflect a transaction’s

expected risk-return. The Group and the Bank also uses

risk-based pricing tools to make sure portfolio growth is

sustainable.

Grupo and Banco Santander apply various limits models

to each segment:

• Large corporate groups are subject to a pre-

classification model based on a system for measuring

and monitoring economic capital. Pre-classification

models express the level of risk Grupo and Banco

Santander are willing to assume in transactions with

customers/groups.

• Corporates and institutions that meet certain

requirements (rating, profitability, etc.) are subject to

a simpler pre-classification model aimed at the main

products of customer's recurring operations. Internal

limits are established in nominal terms that sets a

recommended risk level for each customer, based on

factors such as their payment capacity and level of

indebtedness.

Transactions with large corporates, corporates and

institutions above certain limits or with special

characteristics could require approval with a specific

admission process.

• For individual customers and SMEs with low turnover,

Grupo Santander manages large volumes of credit

transactions with automatic decision models to

classify customers and transactions.

1.3. Scenario analysis

Grupo and Banco Santander’s scenario analyses

determine the potential risks in its credit portfolios and

provide a better understanding of our portfolios'

performance under various macroeconomic conditions.

They allow us to anticipate management strategies that

will avoid future deviations from defined plans and

targets.

They simulate the impact of alternative scenarios in

portfolios’ credit parameters (PD, LGD) and expected

credit losses. Grupo Santander compares findings with

portfolios’ credit profile indicators to find the right

measures for managers to take. Credit risk management

of portfolios and SCPs incorporate scenario analyses.

1.4. Monitoring

Regularly monitoring business performance and

comparing it to pre-defined plans is key to our

management of risk. Grupo and Banco Santander's

holistic monitoring of customers helps detect impacts on

risk performance and credit quality early.

The monitoring process considers projections on the

performance of the operations and their characteristics,

in addition to any variation in their classification.

Anticipation and preventive monitoring uses

transactional data sources and advanced analytics (early

warning engine) which determines specific actions at the

client level, based on the assigned monitoring

classification. Monitoring is performed by local and

global risk teams and is based on customer

segmentation:

• For large corporate groups, monitoring is initially a

function of business managers and risk analysts

which provide an up-to-date view of customers’

credit quality to predict a potential customer's

deterioration.

• For commercial banking, institutions and SMEs with

an assigned a credit analyst, Grupo and Banco

Santander track customers requiring closer

monitoring and review their ratings based on

relevant indicators.

• Monitoring of individual customers, businesses and

smaller SMEs follows a system of automatic alerts to

detect shifts in portfolios’ performance.

Monitoring uses the Santander Customer Assessment

Note (SCAN) tool. It helps set individual monitoring

levels and frequencies, policies, and actions for

customers based on credit quality and particular

circumstances. It assigns a monitoring level, specific

management actions, identification of those responsible

and a monitoring frequency.In addition to monitoring

customer credit quality, Grupo and Banco Santander

define control procedures to analyse portfolios and

performance, as well as to detect any deviations from

planning or approved alert levels.

1.5. Credit risk mitigation techniques

Grupo and Banco Santander generally approves risk

according to a borrower’s ability to make due payment,

regardless of any additional collateral or personal

guarantees Santander may require to modulate

exposure.

To determine ability to pay, the Group and the Bank

analyses funds or cash flows from businesses or other

regular income, not including guarantors or loan

collateral which are always considered at credit approval

as a secondary means of recourse.

187

In general, guarantees are to reinforce a credit

transaction and mitigate a loss if the borrower defaults.

The Group and the Bank techniques to mitigate credit

risk cover various types of customer and product. Some

are for specific transactions (e.g. real estate guarantees)

or a series of transactions (e.g. derivatives netting and

collateral). The Group and the Bank group them by

personal guarantees (with a solvent guarantor),

collateral and hedges with credit derivatives.

The correct acceptance of these mitigation techniques is

established by verifying their legal enforceability in all

jurisdictions. The entire process is subject to internal

control and effective monitoring of the valuation of the

guarantees, especially real estate guarantees.

1.6. Collections & recoveries management

Collections & recoveries (C&R), an important area in risk

management, develops a global management strategy

based on local economic conditions, business models

and other recovery-related particulars, with a full

approach and general action lines for our subsidiaries.

Recovery management follows regulatory requirements

set out in the EBA Guidelines on the management of

non-performing and forborne exposures.

For effective and efficient recoveries management, the

area segments customers based on certain aspects,

using new digital channels that help create value in

Collections & Recoveries function. It follows hi-tech,

digital procedures to handle large groups of similar

customer profiles and products; but it also adapts

management for customers who need an assigned

manager and tailored approach.

Collections & Recoveries splits recoveries into four

phases: arrears/early delinquency, default, write-offs

and foreclosed assets. To recover debt, the Group and

the Bank always seek alternatives to court action, like

forbearance and other arrears management techniques.

Write-off category includes debt instruments, due or

not, for which recovery is considered remote after an

individualized analysis, due to a notorious and

irrecoverable deterioration of transaction or customer's

solvency. This category implies the total or partial

cancellation of transaction's gross carrying amount and

derecognition from the assets, which does not imply that

the Group and the Bank will interrupt negotiations and

legal proceedings to recover debt.

In markets where the real estate risk exposure is high,

Grupo and Banco Santander can take action to quickly

dispose of assets, like selling off portfolios or foreclosed

assets through efficient sales instruments to recover as

many on-balance-sheet assets as possible.

188

2. Main aggregates and variations

Below are the main aggregates relating to credit risk

from our activities with customers:

Main credit risk performance metrics from activity with customersA
December data
	Credit risk with customers        (EUR million)B			Credit impaired loans (EUR million)			NPL ratio (%)
	2024	2023		2024	2023		2024	2023
Europe	640,094	624,696		13,774	14,495		2.15%	2.32%
Spain	285,883	278,569		7,672	8,529		2.68%	3.06%
UK	248,061	247,360		3,299	3,518		1.33%	1.42%
Portugal	41,418	39,503		993	1,024		2.40%	2.59%
Poland	44,704	39,329		1,636	1,397		3.66%	3.55%
North America	198,607	190,720		8,375	7,805		4.22%	4.09%
US	148,643	137,893		7,012	6,303		4.72%	4.57%
Mexico	49,927	52,785		1,352	1,489		2.71%	2.82%
South America	171,301	177,380		9,287	10,142		5.42%	5.72%
Brazil	104,519	113,937		6,418	7,479		6.14%	6.56%
Chile	44,590	46,565		2,394	2,332		5.37%	5.01%
Argentina	8,411	3,903		173	78		2.06%	1.99%
Digital Consumer Bank	141,312	135,608		3,527	2,877		2.50%	2.12%
Corporate Centre	5,959	5,494		301	301		5.06%	5.48%
Total Group	1,157,274	1,133,898		35,265	35,620		3.05%	3.14%

	NPL coverage ratio (%)			Loan-loss provisions C (EUR million)			Cost of risk (%/risk) D
	2024	2023		2024	2023		2024	2023
Europe	50%	49%		1,862	2,533		0.32%	0.44%
Spain	53%	49%		1,259	1,522		0.50%	0.62%
UK	29%	30%		64	247		0.03%	0.10%
Portugal	79%	83%		11	77		0.03%	0.20%
Poland	62%	73%		511	674		1.38%	2.08%
North America	70%	74%		3,786	3,733		2.04%	2.05%
US	64%	68%		2,507	2,593		1.82%	1.92%
Mexico	100%	100%		1,277	1,135		2.64%	2.43%
South America	77%	78%		5,478	5,401		3.50%	3.36%
Brazil	83%	85%		4,487	4,701		4.51%	4.77%
Chile	50%	53%		497	365		1.19%	0.80%
Argentina	177%	166%		284	150		4.59%	6.64%
DCB Europe	83%	88%		1,209	792		0.88%	0.62%
Corporate Centre	25%	33%		(3)	-2		(0.05)%	(0.04)%
Total Group	65%	66%		12,333	12,458		1.15%	1.18%

A. Management perimeter according to the reported segments.

B. Includes gross loans and advances to customers, guarantees and documentary credits.

C. Post write-off recoveries (EUR 1,606 million).

D. Provisions to cover losses due to impairment of loans in the last 12 months / average customer loans and advances of the last 12 months.

189

Key figures by geographic region are described below at

31 December 2024:

• Europe: the NPL ratio fell17 bps to 2.15% from 2023

due to portfolio growth mainly in Spain, the UK, and

Portugal, with a 5% decrease in credit impaired in

these geographies, compared to 2023.

• North America: the NPL ratio increased 13 bps to

4.22% from 2023, mainly due to increases at SC USA

(normalization of the portfolio) and SBNA despite of

good performance of the Mexican portfolio.

• South America: the NPL ratio decreased 30 bp from

2023 to 5.42%, due to the positive performance of

Brazil.

• DCB Europe: the NPL ratio climbed 38 bps to 2.50%,

due to an increase in impaired loans (mainly in

Germany) on the back of a delay in classifying write-

offs due to a policy change and growth in used car

business.

Information on the estimation of impairment losses

The calculation of provisions for credit risk losses is

performed at financial asset level, estimating potential

credit losses through the difference between the

contractual cash flows and the expected cash flows,

ensuring that the results are adequate considering the

status of the transaction, economic conditions and

available forward-looking information.

The Bank of Spain circular 4/2017 impairment model

applies to financial assets valued at amortized cost; debt

instruments valued at fair value with changes in other

comprehensive income; leasing receivables; and

commitments and guarantees not valued at fair value.

The portfolio of financial instruments subject to the Bank

of Spain circular 4/2017 has three credit risk categories

(or stages) according to the status of each instrument in

relation to its level of credit risk:

• Stage 1: financial instruments with no significant

increase in risk since initial recognition – the

impairment provision reflects expected credit losses

from defaults over the 12 months from the reporting

date.

• Stage 2: financial instruments with a significant

credit risk increase since initial recognition but no

materialized impairment event – the impairment

provision reflects expected losses from defaults over

the financial instrument’s residual life.

• Stage 3: financial instruments with true signs of

impairment as a result of one or more events

resulting in a loss – the impairment provision reflects

expected losses for credit risk over the instrument’s

expected residual life.

The classification of financial instrument in the Bank of

Spain circular 4/2017 stages is carried out in accordance

with the guidelines through the risk management

policies of the Bank, which are consistent with the

Group's policies.

Estimation of expected loss

Grupo and Banco Santander calculate impairment losses

using parameters (mainly EAD, PD, LGD, and discount

rate) based on the internal models infrastructure used

for the calculation of regulatory capital and the

experience acquired from regulatory and management

fields, as well as the stages in which each financial asset

is classified. However, far from being a simple

adaptation, Santander built and validated them under

the specific requirements of IFRS 9, as well as other

guidelines issued by regulators, supervisors, and other

international bodies (EBA, NCA, BIS, GPPC, etc.), which

includes forward-looking information, point-in-time

(PiT) vision, multiple scenarios, calculation of losses for

the entire life of the transaction through lifetime PD,

among others.

Determination of significant increase in credit risk

In order to determine the classification in stage 2, the

Group and the Bank assess whether there has been a

significant increase in credit risk (SICR) since the initial

recognition of the transactions, considering a series of

common principles throughout the Bank to assess all

financial instruments are subject to it, which considers

the particularities of each portfolio and type of product

on the basis of various quantitative and qualitative

indicators. Furthermore, transactions are subject to the

expert judgement of the analysts, who set the

thresholds under an effective integration in

management and implemented according to the

approved governance.

The criteria thresholds used by the Group and the Bank

are based on a series of principles, and develop a set of

techniques. The principles are as follows:

• Universality: all financial instruments subject to a

credit rating must be assessed for their possible

SICR.

• Proportionality: the definition of the SICR must take

into account the particularities of each portfolio.

• Materiality: its implementation must be also

consistent with the relevance of each portfolio so as

not to incur in unnecessary costs or efforts.

• Holistic vision: the approach selected must be a

combination of the most relevant credit risk aspects

(e.g. quantitative and qualitative).

190

• Application of IFRS 9 and Bank of Spain Circular

4/2017: the approach must take into consideration

IFRS 9 and Bank of Spain Circular 4/2017

characteristics, focusing on a comparison with credit

risk at initial recognition, as well as considering

forward-looking information.

• Risk management integration: the criteria must be

consistent with those metrics considered in the day-

to-day risk management.

• Documentation: appropriate documentation must be

prepared.

The techniques are summarised below:

• Stability of stage 2: in the absence of significant

changes in the portfolios credit quality, the volume

of assets in stage 2 should maintain a certain

stability as a whole.

• Economic reasonableness: at transaction level, stage

2 is expected to be a transitional rating for exposures

that could eventually move to a deteriorating credit

status at some point or stage 3, as well as for

exposures that have suffered credit deterioration and

whose credit quality is improving and returns to

stage 1.

• Predictive power: it is expected that the SICR

definition avoids, as far as possible, direct migrations

from stage 1 to stage 3 without having been

previously classified in stage 2.

• Time in stage 2: it is expected that the exposures do

not remain categorized as stage 2 for an excessive

time.

The application of the aforementioned techniques,

conclude in the setting of one or several thresholds for

each portfolio in each geography. Likewise, these

thresholds are subject to a regular review by means of

calibration tests, which may entail updating the

thresholds types or their values.

Identifying a significant increase in credit risk: when

classifying financial instruments under stage 2, Banco

Santander considers:

• Quantitative criteria: Banco Santander reviews and

quantifies changes in the risk of default during their

expected life based on their credit risk level on initial

recognition.

In order to consider significant changes when

financial instruments are classified in stage 2, each

subsidiary has defined the quantitative thresholds of

its portfolios in accordance with the Group's

guidelines, ensuring a consistent interpretation in all

our geographies. These thresholds can be expressed

as an absolute or relative increase in the probability

of default.

  Within the aforementioned quantitative thresholds

we consider two types: we understand a relative

threshold as one that compares the current credit

quality with the credit quality at the time of granting

the operation in percentage terms of variation. For its

part, an absolute threshold compares both

references in total terms, calculating the difference

between them. These absolute/relative concepts are

used homogeneously (with different values) in all

geographies. The calibration of these two thresholds

will depend on the type of portfolio and

characteristics such as the starting point of the

average credit quality of the portfolio.

In addition to these quantitative criteria, a backstop is

set at the relative threshold of 200%. This means that

those operations whose credit quality has currently

deteriorated by more than three times compared to

the quality they had at the time of operation granted

will be transferred from stage 1 to stage 2.

• Qualitative criteria: several indicators aligned with

ordinary credit risk management indicators (e.g. past

due for over 30 days, forbearance, early warning

indicators system, etc.). Each subsidiary has defined

these indicators for their portfolios, with special

attention to reinforcing these qualitative criteria

through expert judgment and aligning them to the

criteria used in management.

      When the presumption of a significant deterioration

of credit risk is removed, due to a sufficient

improvement of the credit quality, the obligor can be

re-classified to stage 1, without any probationary

period in stage 2.

• Definition of default: Grupo and Banco Santander

incorporated the new definition to provisions

calculation according to the EBA’s guidelines; the

Bank is also considering applying it to prudential

framework. In addition, the default definition and

stage 3 have been aligned.

  This definition considers the following criteria to

classify exposures as stage 3: financial instruments

with one or more payments more than 90

consecutive days past due, representing at least 1%

of the client's total exposure or the identification of

other criteria demonstrating, even in the absence of

defaults, that it is unlikely that the counterparty is

unlikely to meet all of its financial obligations.

The Group and the Bank apply the default criteria to

all exposures of the impaired client. Where an

obligor belongs to a group, the default criteria may

also be applied to all exposures of the group.

The default classification is maintained during the 3-

month test period following the disappearance of all

default indicators described above, and this period is

extended to one year for forbearances that have

been classified as default.

191

• Expected life of financial instruments: Grupo and

Banco Santander estimate the expected life of

financial instruments according to their contractual

terms (e.g. prepayments, duration, purchase options,

etc.).

The contractual period (including extension options)

is the maximum time frame for measuring the

expected credit loss. If financial instruments have an

undefined maturity period and undrawn amounts

(e.g. credit cards), the Group and the Bank estimate

their expected life based on the total exposure period

and effective management practices to mitigate

exposure.

1. Forward-looking vision

To estimate expected losses, Grupo and Banco

Santander require a great deal of expert analysis as well

as past, present and future data. The Group and the Bank

quantify expected losses from credit events using an

unbiased, weighted consideration of up to five future

scenarios that could affect our ability to collect

contractual cash flows. These scenarios take into

account the time value of money, the relevant

information available about past events and current

conditions, and projections of macroeconomic factors

that are considered important to estimate this amount

(e.g. GDP, house prices, rate of unemployment, among

others).

Grupo and Banco Santander use forward-looking

information in internal management and regulatory

processes under several scenarios. The Bank's guidelines

and governance seek synergy and consistency between

these different processes.

2. Additional elements

Additional elements will be required when necessary

because they have not been captured under the two

previous elements. This has included, among others, the

analysis of sectors most affected if their impacts are not

sufficiently captured by the macroeconomic scenarios.

Also collective analysis techniques, when the potential

impairment in a group of clients cannot be identified

individually.

With the elements indicated above, Grupo and Banco

Santander have evaluated the evolution of the credit

quality of its customers, for the purposes of classifying

them into stages and consequently calculating expected

loss  Grupo  Santander .

Management overlays

During fiscal year 2024, the Group has strengthened its`

overlay governance by creating a corporate guide for

post Model adjustments (PMAs), which has enabled a

better design, monitoring and implementation of the

overlays.

In addition, the adjustments associated with the

uncertainty resulting from the inflationary

macroeconomic context of the past years have been

gradually withdrawn. On the other hand, among the

most relevant overlays, losses associated with climatic

events have been anticipated, such as the Valencia flood

suffered at the end of October 2024 for Santander

España. The amount of overlays at the end of the 2024

financial year is not material compared to total Group

loan-loss reserves.

Exposure and loan-loss reserves

Then, considering the most relevant units of the Group

(United Kingdom, Spain, United States, Brazil, also Chile,

Mexico, Portugal, Poland, Argentina and Santander

Consumer Finance), which represent approximately 95%

o f the total Group's provisions. The table below shows

the loan-loss reserves associated with each stage as of

31 December 2024 and 2023. In addition, depending on

the transactions credit quality, the exposure is divided

into four categories according to Standard & Poor's

rating scale:

Exposure and impairment losses by stage
EUR million
	2024
Credit qualityA	Stage 1	Stage 2	Stage 3	Total
From AAA to AA-	108,977	2,599	—	111,576
From A+ to BB	431,544	16,600	—	448,144
From BB- to B-	288,302	45,129	—	333,431
CCC and below	10,431	17,088	32,901	60,421
Total exposure B	839,255	81,416	32,901	953,572
Impairment losses C	3,276	4,715	13,669	21,661

Exposure and impairment losses by stage
EUR million
	2023
Credit qualityA	Stage 1	Stage 2	Stage 3	Total
From AAA to AA-	147,065	2,261	—	149,326
From A+ to BB	421,449	13,910	—	435,359
From BB- to B-	262,954	41,237	—	304,191
CCC and below	11,829	19,376	33,838	65,043
Total exposureB	843,297	76,784	33,838	953,919
Impairment losses C	3,592	5,055	14,131	22,778

1. Detail of credit quality ratings calculated for Group management

purposes.

2. Total exposure includes loan balances (drawn amounts) and off

balance (letters of credit + guarantees) and excludes REPOs, FV

portfolio, trading portfolio and undrawn commitments.

3. Includes provisions for undrawn authorized lines (loan commitments).

The remaining units that form the totality of the Group

exposure, contributed EUR 80,541 million in stage 1;

EUR 2,534 million in stage 2, and EUR 874 million in

stage 3 (in 2023 EUR 68,788 million in stage 1; EUR

1,504 million in stage 2, and EUR 658 million in stage 3) ,

and loan-loss reserves of EUR 165 million in stage 1; EUR

117 million for stage 2, and EUR 295 million in stage 3

192

(in 2023, EUR 199 million, EUR 73 million and EUR

161 million).

The remaining exposure, including all financial

instruments not included before, amounts to EUR

665,476 million (EUR 598,385 million in  2023), and it

includes all undrawn authorized lines (loan

commitments).

As of 31 December 2024, the Group had EUR 559 million

net of provisions (EUR 743 million at 31 December 2023)

of purchased credit-impaired assets, which relate mainly

to the business combinations carried out by the Group.

Regarding the evolution of credit risk provisions, Grupo

and Banco Santander, in collaboration with the main

geographical areas, monitors them by carrying out

sensitivity analyses considering changes in

macroeconomic scenarios and main variables that have

an impact on the financial assets distribution in the

different stages and calculating credit risk provisions.

Additionally, based on consistent macroeconomic

scenarios, Grupo and Banco Santander also perform

stress tests and sensitivity analysis in a regular basis,

such as ICAAP, strategic plans, budgets and recovery and

resolution plans. In this sense, a prospective view of the

sensitivity of each of the Group’s loan portfolio is created

in relation to the possible deviation from the base

scenario, considering both the macroeconomic

developments in different scenarios and the three year

evolution of the business. These tests include potentially

adverse and favourable scenarios.

3. Credit risk management

Following is the risk information relating to the

geography of Grupo España portfolio in terms of

exposure and risk allowances.

This information includes sensitivity analysis, consisting

on simulations of +/-100 bp in the main macroeconomic

variables. A set of specific and complete scenarios is

used in each geography, where different shocks that

affect both the reference macroeconomic variable as

well as the rest of the parameters is simulated, with

different intensities. These shocks collect mainly the

most relevant risks and may be originated by

productivity, tax, wages or exchange and interest rates

factors.

Sensitivity is measured as the average variation on

expected loss corresponding to the aforementioned

movement of +/-100 bp. Following a conservative

approach, the negative movements take into account

one additional standard deviation in order to reflect  the

potential higher variability of losses.

3.1. Credit portfolio in Spain

Portfolio overview

Santander España’s credit risk totalled EUR

285,883 million (25% of Grupo Santander’s total). It is

appropriately diversified among products and customer

segments.

The credit portfolio’s NPL ratio was 2.68%, 38 bps lower

than in December 2023. This decrease was based on the

good performance of the portfolio driven by the

management of single names and portfolio sales.

The NPL coverage ratio remained at 53%(+4 p.p. year-

on-year). The cost of risk decreased to 0.50% (-12 bps

vs. December 2023) mainly due to SMEs and Corporates,

only partially offset by the portfolio of individuals.

The Spanish economy will slightly moderate its growth

rate, but that it will continue to maintain a dynamic pace

well above the Eurozone average, since the Spanish

economy has been sustained largely by greater domestic

demand in the face of a weaker than expected foreign

sector.

Residential mortgage portfolio

Residential mortgages in Spain, including Santander

Consumer Finance business, amounted to EUR

59,316 million in 2024 (EUR 61,097 millions  in 2023),

99.65% of which have a mortgage guarantee (99.65% in

2023).

193

EUR million
	2024
	Santander Group Spain		Of Which, Banco Santander, S.A.
	Gross amount	Of which: impaired	Gross amount	Of which: Non- performing
Home purchase loans to families	59,316	789	59,113	785
Without mortgage collateral	208	11	209	11
With mortgage collateral	59,108	778	58,904	774

EUR million
	2023
	Santander Group Spain		Of Which, Banco Santander, S.A.
	Gross amount	Of which: impaired	Gross amount	Of which: Non- performing
Home purchase loans to families	61,097	924	60,040	874
Without mortgage collateral	215	16	214	17
With mortgage collateral	60,882	908	59,826	857

The NPL ratio for the residential mortgages portfolio

stood at 1.33%, with a reduction of 18 bps, compared to

31 December 2023, mainly due to by portfolio sales,

although credit risk registered a reduction of 2.9%

compared to December 2023.

The mortgage portfolio for the acquisition of homes in

Spain is characterised by its medium-low risk profile,

which limits expectations of any potential additional

impairment:

• Principal is repaid on all mortgages from the start.

• Early repayment is common so the average life of the

transaction is well below that of the contract.

• High quality of collateral, concentrated almost

exclusively in financing for first homes.

• The average affordability rate stood at 24% (24%

in2023).

• The 93% of the portfolio has a LTV below 80%

calculated as total risk/latest available house

appraisal.

• All customers applying for a residential mortgage are

subject to a rigorous credit risk and viability

assessment, analysing whether their income is

sufficient to meet all repayments and will remain

stable over the term of the loan.

Breakdown of the credit with mortgage guarantee to

households for house acquisition, according to the

percentage that the total risk represents on the amount

of the latest available valuation (loan to value):

194

EUR million
	2024
	Loan to value ratio
	Less than or equal to 40%	More than 40% and less than 60%	More than 60% and less than 80%	More than 80% and less than or equal to 100%	More than 100%	Total
Santander Group
Gross amount	17,205	20,085	17,955	2,925	938	59,108
Of which impaired	114	167	189	130	178	778
Of which, Banco Santander, S.A.
Gross amount	17,126	20,014	17,912	2,915	937	58,904
Of which,  impaired	114	166	188	129	177	774

In November 2022, Royal Decree-Law 19/2022 was

published, which establishes a Code of Good Practices in

response to the rise in interest rates on mortgage loans

for primary residences and Royal Decree-Law 6/2012 of

protection measures for mortgage debtors without

resources. The code of good practices is focused on

granting capital grace periods and extending the term of

the operations. The requests made have not been

significant.

Corporate & SME financing

Credit risk with SME and corporates in commercial

banking amounted to EUR 102,342 million, lower than

December 2023, mainly due to the fall in the portfolio of

SMEs of 4.4%. This portfolio accounting for 36% of the

total, compared to 38% of CIB's portfolio, which from

2022 includes branches in Europe.

Most of the portfolio corresponds to clients who have

been assigned a credit analyst, who performs continuous

management of said clients during all phases of the risk

cycle.

The portfolio is broadly diversified and not concentrated

by sector of activity.

The Bank has continued to rely on its support and

proximity to SMEs and the self-employed and has

positioned itself as the leading entity in ICO Loans in

2024 with 816 million euros of financing, which

represents a 39% share in the Spanish financial system.

The majority of this financing was allocated to the ICO

Companies and Entrepreneurs Lines and to a lesser

extent to the ICO International Line and to housing

rehabilitation.

The ICO loans that were granted as a result of the

pandemic (25,428 million euros) are being repaid

normally and there is a balance of EUR 12.7 billion, so

they now represent only around 4.4% of Santander

Spain's total portfolio.

In the case of delinquent operations with ICO guarantee,

the transfer of the overdue guaranteed amounts will

take place as the guarantee is executed, regardless of

whether the guarantor is subrogated to the right to

receive said amounts, according to the regulation of

these guarantees. The de-recognition of the transferred

guaranteed amounts will entail the recognition, at its fair

value, of a collection right against the guarantor.

The portfolio’s NPL ratio stood at 5.07% in December

2024. The NPL ratio decreased by 20 bps compared to

December 2023, due to a reduction in the delinquency

stock in SMEs, due to the proactive management of

delinquent positions with the support of portfolio sales

along with management of single names.

Support measures for those affected by the Dana

The flash floods caused by the Dana on 29 October

exceeded expectations, causing serious impacts, victims

and material losses. From the outset, Santander took

immediate measures to protect employees, customers

and facilities, in addition to working closely with the

authorities to adopt support measures. Management

was regulated through the Group's Crisis Management

Framework and a Dana Crisis Steering Committee was

also created.

RDL 6/2024 of 6 November included the Government's

support measures for households, companies and the

self-employed. i) Public guarantees of 80% for EUR

5 billion until the end of 2025 to cover losses in the

affected area. ii) Moratoriums: capital and interest grace

period for the first 3 months, plus an additional 9

months of capital grace period (for individuals and

companies with income up to EUR 6 million). iii)

Extension of the Code of Good Practices until December

2025. iv) Director support: to alleviate personal and

material damage to equipment, homes, and industrial,

commercial and service sites.

In response to these measures, Santander Spain has

worked on a response framework that pivots on four

management domains according to client typology:

companies, SMEs, self-employed and individuals.

195

Real estate activity

Santander has specialized teams that are in charge of

managing real estate business production and risk areas

that cover the entire life cycle of these operations.

The changes in gross property development loans to

customers were as follows:

EUR million
	2024	2023
Balance at beginning of year	2,433	2,327
Foreclosed assets	—	(1)
Net variation	112	115
Written-off assets	0	(8)
Balance at end of year	2,545	2,433

The NPL ratio of this portfolio (considering only the on

balance amount) ended the year at 2.28% (compared

with 3.04% at December 2023) . The table below shows

the distribution of the portfolio. The coverage ratio of the

real estate doubtful exposure in Spain stands at 36.21%

(39.19% and in 2023).

196

EUR million
	2024
	Santander Group			Of which,  Banco Santander, S.A.
EUR Million	Gross amount	Excess of gross exposure over maximum recoverable amount of effective collateral	Specific allowance	Gross amount	Excess of gross exposure over maximum recoverable amount	Specific allowance
Financing for construction and property development (including land) (business in Spain)	2,545	278	28	2,566	278	-28
Of which impaired	58	6	21	58	6	(21)
Memorandum items written-off assets	338			338	—	—

Memorandum items: Data from the public balance sheet
EUR million
	2024
	Carrying amount
	Santander Group	Of which, Banco Santander, S.A.
Total loans and advances to customers excluding the Public sector (business in Spain) (Book value)	235,824	227,786
Total consolidated assets (Total business) (Book value)	1,837,081	794,840
Impairment losses and credit risk allowances. Coverage for unimpaired assets (business in Spain)	1,132	1,043

At year-end, the distribution of this portfolio was as

follows:

EUR Million
	Loans: Gross amount
	Santander Group	Of which,  Banco Santander, S.A.
1. Without mortgage guarantee	13	14
2. With mortgage guarantee	2,532	2,552
2.1 Completed buildings	934	936
2.1.1 Residential	634	636
2.1.2 Other	300	300
2.2 Buildings and other constructions under construction	1,580	1,598
2.2.1 Residential	1,534	1,552
2.2.2 Other	46	46
2.3 Land	18	18
2.3.1 Developed consolidated land	13	13
2.3.2 Other land	5	5
Total	2,545	2,566

Foreclosed properties

At 31 December 2024, the net balance of these assets

amounted to EUR 2,131 million (EUR 2,448 million at 31

December 2023 ), gross amount of EUR 4,823 million

(EUR 5,506 million at 31 December 2023); recognised

allowance of EUR 2,692 million (EUR 3,058 million at 31

December 2023).

The following table shows the detail of the assets

foreclosed by the businesses in Spain at the end of 2024:

197

EUR million
	2024
	Gross carrying amount	Valuation adjustments	Of which impairment losses on assets since time of foreclosure	Net Carrying amount
Property assets arising from financing provided to construction and property development companies	4,329	2,456	1,804	1,873
Of which:
Completed buildings	707	452	382	255
Residential	197	106	87	91
Other	510	346	295	164
Buildings under construction	95	41	30	54
Residential	0	0	0	0
Other	95	41	30	54
Land	3,527	1,963	1,392	1,564
Developed land	1,000	533	318	467
Other land	2,527	1,430	1,074	1,097
Property assets from home purchase mortgage loans to households	390	183	123	207
Other foreclosed property assets	104	53	42	51
Total property assets	4,823	2,692	1,969	2,131

The same information in the previous table reference to Banco Santander, S.A. is presented below:

EUR million
	2024
	Gross carrying amount	Valuation adjustments	Of which impairment losses on assets since time of foreclosure	Carrying amount
Property assets arising from financing provided to construction and property development companies	376	240	200	136
Of which:
Completed buildings	369	236	197	133
Residential	95	51	42	44
Other	274	185	155	89
Buildings under construction	—	—	—	—
Residential	—	—	—	—
Other	—	—	—	—
Land	7	4	3	3
Developed land	3	2	1	1
Other land	4	2	2	2
Property assets from home purchase mortgage loans to households	356	166	112	190
Other foreclosed property assets	86	41	34	45
Total property assets	818	447	346	371

198

In addition, the Group has shareholdings in entities

holding foreclosed assets amounting to EUR 27 million

and equity instruments foreclosed or received in

payment of debts amounting to EUR 13 million.

In recent years, the Group and the Bank have considered

foreclosure to be an option to resolve cases of default

instead of legal proceedings. The Group and the Bank

initially recognise foreclosed assets at the lower of the

carrying amount of the debt (net of provisions) and the

fair value of the foreclosed asset (less estimated costs to

sell). Subsequent to initial recognition, the assets are

measured at the lower of fair value (less costs to sell)

and the amount initially recognised.

The fair value of this type of assets is determined by the

market value (appraisal) adjusted with discounts

obtained according to internal valuation methodologies

based on the entity's sales experience in goods with

similar characteristics.

The management of real estate assets on the balance

sheet is carried out through companies specializing in

the sale of real estate that is complemented by the

structure of the commercial network. The sale is realised

with at prices in accordance with the market situation

and the offer of wholesale buyers.

The gross movement in foreclosed properties were as

follows (EUR billion):

	2024	2023
Gross additions	0.1	0.3
Disposals	(0.8)	(1.2)
Difference	(0.7)	(0.9)

Information on the estimation of impairment losses

The detail of Santander Spain exposure and loan-loss

reserves associated with each of the stages at 31

December, 2024 and  2023 is shown below. In addition,

the exposure is divided in four tranches of the Standard

& Poor's rating scale, according to their current credit

quality:

Exposure and impairment losses by stage
EUR million
	2024
Credit qualityA	Stage 1	Stage 2	Stage 3	Total
From AAA to AA-	35,347	110	—	35,456
From A+ to BB	104,197	1,124	—	105,322
From BB- to B-	37,413	8,844	—	46,257
CCC and below	2,084	3,199	6,618	11,900
Total exposureB	179,041	13,277	6,618	198,936
Impairment losses C	340	570	2,953	3,863

Exposure and impairment losses by stage
EUR million
	2023
Credit qualityA	Stage 1	Stage 2	Stage 3	Total
From AAA to AA-	46,827	48	—	46,875
From A+ to BB	101,079	780	—	101,859
From BB- to B-	33,905	9,789	—	43,694
CCC and below	1,513	4,517	7,536	13,566
Total exposureB	183,324	15,134	7,536	205,994
Impairment losses C	300	663	2,959	3,922

A. Detail of credit quality ratings calculated for Group management

purposes. Excluding the SCIB branches business

B. Total exposure includes loan balances (drawn amounts) and off

balance (letters of credit + guarantees) and excludes REPOs, FV

portfolio, trading portfolio and undrawn commitments.

C. Includes provisions for undrawn authorized lines (loan

commitments).

From the information detailed above, Banco Santander,

S.A. reaches a total gross exposure of EUR 330,370

million in the heading of financial assets at amortized

cost (see note 6 and 10) and EUR 141,976 million in loan

commitments granted for off-balance sheet exposures

(see note 31) Impairment losses amount to EUR 3,843

and EUR 175 million, respectively. (The amount of losses

due to impairment of off-balance sheet exposures

includes the coverage of financial guarantees and other

commitments granted in addition to the aforementioned

loan commitments).

For the estimation of the expected losses, the

prospective information is taken into account.

Specifically, Santander Spain considers three

macroeconomic scenarios, which are updated

periodically. The projected evolution for a period of five

years of the main macroeconomic indicators used by

Santander Spain for estimating expected losses as of

2024, is presented below:

	2025-2029
Variables	Pessimistic scenario	Base scenario	Optimistic scenario
Interest rate	3.3%	2.7%	2.5%
Unemployment rate	12.5%	10.1%	8.9%
Housing price change	(0.7)%	2.9%	4.1%
GDP growth	0.3%	1.7%	2.8%

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Each macroeconomic scenarios is associated with a given

weight. As for its allocation, Santander Spain associates

the Base scenario with the highest weight, while

associating the lower weights to the most extreme

scenarios:

	2024	2023
Pessimistic scenario	30%	30%
Base scenario	40%	40%
Optimistic scenario 1	30%	30%

The sensitivity analysis of the main portfolios expected

loss to variations of +/-100 bp for the macroeconomic

variables used in the construction of the scenarios, at

December 31 2024, is as follows:

	Change in Provision
	Mortgages	Corporates	Others
GDP Growth
-100 bp	2.3%	4.9%	2.1%
100 bp	(1.0)%	(4.2)%	(1.1)%
Housing price change
-100 bp	1.6%	8.0%	1.9%
100 bp	(1.3)%	(2.8)%	(0.7)%

Regarding the stage 2 classification determination, the

quantitative criteria applied in Santander Spain are based

on identifying whether any increase in the PD for the

entire expected life of the operation is greater than a

relative or absolute threshold. The established threshold

is different for each portfolio depending on the

characteristics of the operations, and an operation is

considered to exceed said threshold when the PD for the

entire life of the operation increases a certain amount

over the PD it had at the time of initial recognition. The

values of these thresholds depend on their calibration,

carried out periodically, as indicated in previous

paragraphs. Additionally, Santander Spain has

implemented a backstop to the relative threshold in all

portfolios. Consequently, contracts whose current PD

has increased more than twice with respect to its PD at

the time of its origination will be classified in stage 2.

In addition, a series of specific qualitative criteria are

defined that indicate that the exposure has had a

significant increase in credit risk, regardless of the

evolution of its PD since the moment of initial

recognition. Santander Spain, among other criteria,

considers that an operation presents a significant

increase in risk when it presents irregular positions for

more than 30 days or if it is determined based on a

system of early warning indicators.

4. Other credit risk aspects

4.1. Credit risk by activity in the financial markets

This section covers credit risk from treasury, with money

market financing and counterparty risk products to

satisfy the needs of customers (especially credit

institutions) and the Bank.

Counterparty credit risk is the risk that a customer will

default before the final settlement of a transaction’s

cash flows. It creates a bilateral credit risk because it can

affect both parties to a transaction. It is also uncertain

because it depends on market factors, which can be

volatile.

As part of counterparty credit risk exposure, an

additional risk known as wrong-way risk can arise. This

risk occurs when the exposure to a portfolio or

counterparty increases as the credit quality of the

counterparty deteriorates. In other words, there is

wrong-way risk when there is an increase in default risk,

and consequently, the exposure to the counterparty

increases. Santander has specific models to measure this

risk.

Regarding settlement risk, this occurs when the

settlement of a transaction involves a bilateral exchange

of flows or assets between two counterparties. For

example, when a counterparty buys dollars in exchange

for euros, the settlement of the transaction involves one

party delivering euros and receiving an equivalent

amount of dollars from the other. Settlement risk is the

risk that one of the parties fails to meet their settlement

obligations. Grupo Santander has also developed a

global infrastructure and specific models to measure this

risk.

To manage and control counterparty risk, it is essential

to have an infrastructure that allows measuring current

and potential exposure at different levels of aggregation

and granularity in an agile and dynamic way, ensuring

the generation of reports with sufficient detail to

facilitate the understanding of exposures and the

decision-making process.

To measure exposure, Grupo Santander follows two

methodologies: mark-to-market (MtM or replacement

value in derivatives) plus potential future exposure (add-

on), and Monte Carlo simulation for calculating exposure

for some countries and products. Additionally, Santander

calculates capital at risk or unexpected loss, which is the

loss that constitutes economic capital net of guarantees

and recoveries, after deducting the expected loss.

After market close, Grupo Santander recalculates

exposures by adjusting all operations to their new time

horizon, adapting the potential future exposure and

applying mitigation measures (netting, collateral, among

others), so that exposures can be controlled daily against

the limits approved by senior management within the

risk appetite. Santander performs risk control through a

real-time integrated system, which allows the Group to

200

know at any moment the available exposure limit with

any counterparty, in any product and term, and across all

subsidiaries.

4.2. Concentration risk

Concentration risk control is a vital part of our

management. the Group and the Bank continuously

monitors the degree of concentration of its credit risk

portfolios using various criteria: geographic areas and

countries, economic sectors and groups of customers.

The board, via the risk appetite framework, determines

the maximum levels of concentration.

In line with these maximum levels and limits, the

executive risk committee establishes the risk policies

and reviews the appropriate exposure levels for the

effective management of the degree of concentration in

Santander’s credit risk portfolios.

Grupo and Banco Santander must adhere to the

regulation on large risks contained in the CRR, according

to which the exposure contracted by an entity with a

customer or group of associated customers will be

considered a large exposure when its value is equal to or

greater than 10% of eligible capital.

In addition, in order to limit large exposures, no entity

may assume exposures exceeding 25% of its eligible

capital with a single customer or group of associated

customers, having factored in the credit risk mitigation

effect contained in the regulation.

At the end of December, after applying risk mitigation

techniques, no group reaches the above-mentioned

thresholds.

Regulatory credit exposure with the 20 largest groups

within the scope of large risks represented 5.5% of the

outstanding credit risk with customers (lending to

customers plus off-balance sheet risks) as of December

2024. While the regulatory credit exposure with the 40

largest groups represents 8.4% of the credit risk.

The detail, by activity and geographical area of the

Group's risk concentration at 31 December 2024 is as

follows:

EUR million
	2024A
	Total	Spain	Other EU countries	America	Rest of the world
Central banks and Credit institutions	359,739	76,925	82,039	130,073	70,702
Public sector	253,851	73,743	71,610	98,828	9,670
Of which:
Central government	221,877	59,921	65,821	86,677	9,458
Other central government	31,974	13,822	5,789	12,151	212
Other financial institutions (financial business activity)	189,113	14,698	50,470	83,470	40,475
Non-financial companies and individual entrepreneurs (non- financial business activity) (broken down by purpose)	450,349	106,017	107,575	175,493	61,264
Of which:
Construction and property development	24,736	3,702	4,323	10,691	6,020
Civil engineering construction	5,515	2,337	1,890	1,218	70
Large companies	274,798	50,487	63,963	114,597	45,751
SMEs and individual entrepreneurs	145,300	49,491	37,399	48,987	9,423
Households – other (broken down by purpose)	568,540	86,734	110,909	146,673	224,224
Of which:
Residential	351,331	61,388	38,502	45,953	205,488
Consumer loans	199,156	17,793	70,064	95,189	16,110
Other purposes	18,053	7,553	2,343	5,531	2,626
Total	1,821,592	358,117	422,603	634,537	406,335

A. For the purposes of this table, the definition of risk includes the following items in the public balance sheet: 'Loans and advances to credit institutions', 'Loans

and advances to Central Banks', 'Loans and advances to Customers', 'Debt securities', 'Equity Instruments', 'Trading Derivatives', 'Hedging derivatives',

'Investments and financial guarantees given'.

201

The same information in the previous table referring to Banco Santander, S.A. it is presented below:

EUR million
	2024A
	Total	Spain	Other EU countries	America	Rest of the world
Central banks and Credit institutions	236,054	94,953	58,451	54,755	27,895
Public sector	100,128	56,430	28,580	5,906	9,212
Of which:
Central government	83,689	42,691	26,736	5,906	8,356
Other central government	16,439	13,739	1,844	—	856
Other financial institutions (financial business activity)	224,710	52,405	57,203	76,968	38,134
Non-financial companies and individual entrepreneurs (Non- financial business activity) (broken down by purpose)	207,788	98,616	35,771	37,892	35,509
Of which:
Construction and property development	2,459	2,446	12	1	—
Civil engineering construction	3,861	2,027	1,056	708	70
Rest of purposes	201,468	94,143	34,703	37,183	35,439
Large companies	155,742	50,208	34,323	35,952	35,259
SMEs and individual entrepreneurs	45,726	43,935	380	1,231	180
Households – other (broken down by purpose)	76,636	74,884	502	561	689
Of which:
Residential	60,135	58,709	405	417	604
Consumer loans	8,874	8,824	9	23	18
Other purposes	7,627	7,351	88	121	67
Total	845,316	377,288	180,507	176,082	111,439

A. For the purposes of this table, the definition of risk includes the following items in the public balance sheet: 'Loans and advances to credit institutions', 'Loans

and advances to Central Banks', 'Loans and advances to Customers', 'Debt securities', 'Equity Instruments', 'Trading Derivatives', 'Hedging derivatives',

'Investments and financial guarantees given'.

4.3 Sectors identification and management

Grupo and Banco Santander conduct a quarterly review

of exposure to customers operating in sectors that could

be more affected by macroeconomic conditions (energy

consumption, commodity prices, and key

macroeconomic variables). This monitoring is

complemented by the use of internal tools that allow

projecting the behaviour and evolution of clients in each

sector under different macroeconomic scenarios.

Additionally, this process considers, among other things,

the following information at the sector level:

• Market information: Industries’ stock market

performance.

• Analysts’ EBITDA forecasts for the coming years.

• Internal information: Changes in credit exposure,

defaults (in different timelines) and stagings.

• Our industry experts’ opinion, based on specific

details about our exposures and our relationships

with customers.

The Group, adn therefore the Bank, continued to build up

our analysis of potential losses to the highest level of

granularity by enhancing our sector-level methodology

and projection tool based on the resilience of each

company’s financial statements to different

macroeconomic scenarios. Santander considered their

pledge to meet energy commitments through possible

transition plans by quantifying impacts under the

assumptions of an orderly, disorderly or non-existent

transition to be able to keep our management of the

portfolio one step ahead.

4.4. Sovereign risk and exposure to other public sector

entities

Sovereign risk occurs in transactions with a central bank.

It includes the regulatory cash reserve, issuer risk with

the Treasury (public debt portfolio) and risk from

transactions with government institutions whose

funding only come from the state’s budgetary revenue

and not commercial operations.

Grupo Santander's standard for sovereign risk differs

somewhat from the European Banking Authority's (EBA)

standard for regular stress testing. In particular, the EBA

does not consider deposits with central banks, exposures

with insurance companies or indirect exposures from

guarantees and other financial instruments. However, its

standard does generally include entities run by regional,

local and central governments.

202

Grupo and Banco Santander continue to track and

manage transactions with sovereign risk based on

available information, such as reports by rating agencies

and international organizations. Grupo and Banco

Santander monitor each country where the Group and

the Bank have cross-border1 and sovereign risk. The

Group and the Bank analyse events that could affect the

country’s political or institutional stability and assign its

government or central bank a credit rating. This helps us

set limits for transactions with sovereign risk.

At the end of December 2024, Grupo and Banco

Santander´s local sovereign exposure, in currencies other

than the official currency of the country of issuance, is

not significant (EUR 4,459 million, 1.1% of total

sovereign risk) according to our management criteria.

Furthermore, exposure to non-local sovereign issuers

involving cross-border risk is even less significant2EUR

11,494 million, 2.8% of total sovereign risk).

Sovereign exposure in Latin America is mostly in local

currency, and is recognised in the local accounts and

concentrated in short- term maturities.

Over the past few years, total exposure to sovereign risk

has remained in line with regulatory requirements and

our strategy to manage this portfolio.

The shifts observed in the different countries exposure is

due to our liquidity management strategy and the

hedging of interest and exchange rates risks. Santander's

exposure spreads among countries with varied

macroeconomic outlooks and dissimilar scenarios in

terms of growth, interest and exchange rates.

Our investment strategy for sovereign risk considers

country’s credit quality to set the maximum exposure

limits. The following table shows the percentage of

exposure by ratingA:

	2024	2023
AAA	21%	18%
AA	18%	19%
A	41%	41%
BBB	11%	12%
Less than BBB	9%	10%

A.    Internal ratings are applied.

1 Risks with domestic public or private borrowers in foreign currency and originated outside the country.

2  Countries that are not considered low risk by Banco de España.

203

Sovereign exposure at the end of 31 December 2024

is shown in the table below (data in million euros):

	2024						2023
	Portfolio
Country	Financial assets held for trading and Financial assets designated as FV with changes in results	Financial assets at fair value through other comprehensive income	Financial assets at amortised cost	Non-trading financial assets mandatorillly at fair value through profit or loss	Total net direct exposure		Total net direct exposure
Spain	8,096	3,841	44,356	—	56,293		39,627
Portugal	89	1,240	6,323	—	7,652		6,859
Italy	4,830	452	7,633	—	12,915		5,594
Greece	—	—	—	—	—		—
Ireland	—	—	—	—	—		—
Rest Eurozone	595	567	5,050	—	6,212		8,124
UK	375	1,376	7,021	—	8,772		3,787
Poland	434	5,570	8,282	—	14,286		11,267
Rest of Europe	(6)	424	536	—	954		2,793
US	5,630	4,560	14,736	—	24,926		21,304
Brazil	9,185	13,824	3,632	—	26,641		27,733
Mexico	6,051	8,964	6,627	—	21,642		20,825
Chile	316	1,425	5,159	—	6,900		6,285
Rest of America	190	1,745	2,496	—	4,431		2,250
Rest of the World	15	3,502	3,486	—	7,003		4,527
TOTAL	35,800	47,490	115,337	—	198,627		160,975

204

5. Forborne loan portfolio

Grupo and Banco Santander's customer debt redirection

policy incorporates the regulatory requirements of the

EBA guidelines on the management of non-performing

exposures, refinancing and restructuring. This policy acts

as a reference for the transposition in our subsidiaries

and shares the applicable supervisory expectations.

This policy also sets down rigorous criteria for

evaluating, classifying and monitoring forbearances to

ensure the strictest possible care and diligence in

recovering due amounts. Thus, it dictates that Grupo and

Banco  Santander must adapt payment obligations to

customers' current circumstances. Our forbearance

policy also defines classification criteria to ensure Grupo

and Banco Santander recognize risks appropriately. They

must remain classified as non-performing or in watch-

list for a prudential period for reasonable certainty of

repayment. In no case will repayments be used to delay

the immediate recognition of losses or so that their use

distorts the timely recognition of the risk of non-

payment.

At 31 December 2024, forbearance stock fell again and

stood at EUR 27,144 million, due to the good payment

behaviour in the main geographies. In terms of credit

quality, 54% of the loans is classified as credit impaired,

with a coverage ratio of 41%. In addition, 46% of the

portfolio is classified as performing.

The following terms are used with the meanings

specified below:

• Refinancing transaction: transaction that is granted

or used, for reasons relating to current or

foreseeable financial difficulties of the borrower, to

repay one or more of the transactions granted to it,

or through which the payments on such transactions

are brought fully or partially up to date, in order to

enable the borrowers of the cancelled or refinanced

transactions to repay their debt (principal and

interest) because they are unable, or might

foreseeably become unable, to comply with the

conditions there of in due time and form.

• Restructured transaction: transaction with respect to

which, for economic or legal reasons relating to

current or foreseeable financial difficulties of the

borrower, the financial terms and conditions are

modified in order to facilitate the payment of the

debt (principal and interest) because the borrower is

unable, or might foreseeably become unable, to

comply with the aforementioned terms and

conditions in due time and form, even if such

modification is envisaged in the agreement.

205

Current refinancing and restructuring balances
Amounts in EUR million, except number of transactions that are in units
	2024
	Total							Of which, non-performing/Doubtful
	Without real guarantee		With real guarantee					Without real guarantee		With real guarantee
					Maximum amount of the actual collateral that can be considered		Impairment of accumulated value or accumulated losses in fair value due to credit risk					Maximum amount of the actual collateral that can be considered		Impairment of accumulated value or accumulated losses in fair value due to credit risk
	Number of transactions	Gross amount	Number of transactions	Gross amount	Real estate guarantee	Rest of real guarantees		Number of transactions	Gross amount	Number of transactions	Gross amount	Real estate guarantee	Rest of real guarantees
Credit entities	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Public sector	23	9	9	2	2	—	4	8	3	7	1	1	—	3
Other financial institutions and: individual shareholder	946	70	605	306	199	52	93	574	21	512	125	70	14	85
Non-financial institutions and individual shareholder	543,934	5,515	47,854	6,668	3,678	1,398	3,011	353,838	2,956	31,259	3,106	1,622	543	2,624
Of which financing for constructions and property development	12,688	103	1,765	828	672	30	171	8,789	64	1,116	218	154	20	127
Other warehouses	3,308,884	4,534	483,714	10,040	4,375	3,754	4,038	2,073,312	2,623	285,857	5,850	2,188	2,299	3,285
Total	3,853,787	10,128	532,182	17,016	8,254	5,204	7,146	2,427,732	5,603	317,635	9,082	3,881	2,856	5,997
Financing classified as non-current assets and disposable groups of items that have been classified as held for sale	—	—	—	—	—	—	—	—	—	—	—	—	—	—

206

The same information in the previous table referring to Banco Santander, S.A. it is presented below:

Current refinancing and restructuring balances
Amounts in EUR million, except number of transactions that are in units
								2024
	Total							Of which, non-performing/Doubtful
	Without real guarantee		With real guarantee					Without real guarantee		With real guarantee
					Maximum amount of the actual collateral that can be considered		Impairment of accumulated value or accumulated losses in fair value due to credit risk					Maximum amount of the actual collateral that can be considered		Impairment of accumulated value or accumulated losses in fair value due to credit risk
	Number of transactions	Gross amount	Number of transactions	Gross amount	Real estate guarantee	Rest of real guarantees		Number of transactions	Gross amount	Number of transactions	Gross amount	Real estate guarantee	Rest of real guarantees
Credit entities	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Public sector	14	6	4	2	2	—	(1)	—	—	2	1	1	—	—
Other financial companies and sole proprietorships (financial business activity)	174	65	59	217	164	12	(75)	63	17	37	106	68	6	(73)
Non-financial corporations and sole proprietorships (non-financial business activity)	24,255	2,607	6,251	2,874	1,568	484	(1,097)	7,540	1,171	4,220	1,601	916	223	(1,004)
Of which, financing for construction and real estate development (including land)	4	—	115	84	83	—	(17)	4	—	65	41	40	—	(15)
Other warehouses	12,249	188	15,002	1,217	1,104	5	(323)	1,790	29	8,152	668	584	3	(265)
Total	36,692	2,866	21,316	4,310	2,838	501	(1,495)	9,393	1,217	12,411	2,376	1,569	232	(1,342)
Financing classified as non-current assets and disposable groups of items that have been classified as held for sale	—	—	—	—	—	—	—	—	—	—	—	—	—	—

207

In 2024, the amortised cost of financial assets whose

contractual cash flows were modified during the year

when the corresponding loss adjustment was valued at

an amount equal to the expected credit losses over the

life of the asset amounted to EUR   3,940 million

(2,902 million in 2023), without these modifications

having a material impact on the income statement. Also,

during 2024, the total of financial assets that have been

modified since the initial recognition, and whose

correction for expected loss has gone from being valued

during the entire life of the asset to the following twelve

months, amounts to EUR  2,950 million (2,804 million in

2023).

In 2024, the amortised cost of financial assets owned by

the Bank whose contractual cash flows were modified

during the year when the corresponding loss adjustment

was valued at an amount equal to the expected credit

losses over the life of the asset amounted to EUR 291

million, without these modifications having a material

impact on the income statement. Also, during 2024, the

total of financial assets owned by the Bank that have

been modified since the initial recognition, and whose

correction for expected loss has gone from being valued

during the entire life of the asset to the following twelve

months, amounts to EUR 1,746 million.

The transactions presented in the foregoing tables were

classified at 31 December 2024 by nature, as follows:

• Credit impaired: Operations that rest on an

inadequate payment scheme will be classified within

the non-performing category, regardless they

include contract clauses that delay the repayment of

the operation throughout regular payments or

present amounts written off the balance sheet for

being considered irrecoverable.

• Performing: Operations not classifiable as non-

performing will be classified within this category.

Operations will also be classified as normal if they

have been reclassified from the non-performing

category for complying with the specific criteria

detailed below:

a A period of a year must have passed from the

refinancing or restructuring date.

b The owner must have paid for the accrued

amounts of the capital and interests, thus

reducing the rearranged capital amount, from the

date when the restructuring of refinancing

operation was formalised.

c The owner must not have any other operation

with amounts past due by more than 90

consecutive days of material delay on the date of

the reclassification to the normal risk category. 

Attending to the credit attention 46% of the forborne

loan transactions are classified as other than non-

performing. Particularly noteworthy are the level of

existing guarantees (50% of transactions are secured by

collateral) and the coverage provided by specific

allowances (representing 26% of the total forborne loan

portfolio and 41% of the non-performing portfolio).

c) Market, structural and liquidity risk

1. Activities subject to market risk and types of market

risk

Activities exposed to market risk encompass transactions

where risk is assumed as a consequence of potential

changes in interest rates, inflation rates, exchange rates,

stock prices, credit spreads, commodity prices, volatility

and other market factors; the liquidity risk from our

products and markets, and the balance-sheet liquidity

risk. Therefore, they include trading risks and structural

risks.

• Interest rate risk arises from movements in interest

rates that reduce the value of a financial instrument,

a portfolio or the Group or the Bank . It can affect

loans, deposits, debt securities, most assets and

liabilities held for trading, and derivatives.

• Inflation rate risk arises from movements in inflation

that can reduce the value of a financial instrument, a

portfolio or the Group or the Bank. It can affect loans,

debt securities and derivatives (e.g. inflation swaps

and futures) whose profitability is linked to inflation.

• Exchange rate risk is the possibility of loss because

the currency of a long or open position will

depreciate against the base currency. It can affect

debt in subsidiaries whose local currency is not the

euro, as well as loans denominated in a foreign

currency.

• Equity risk is the possibility of loss from open

positions in securities if their market price or

expected future dividends fall. It affects shares, stock

market indices, convertible bonds and derivatives

with shares as the underlying asset (put, call, equity

swaps, etc.).

• Credit spread risk is the possibility of loss from open

positions in fixed-income securities or credit

derivatives if their yield curve, or the recovery rate of

their issuer or type change. A spread is the yield

difference between financial instruments against a

benchmark (e.g. the internal rate of return (IRR) of

government bonds and interbank interest rates).

• Commodity price risk is the possibility of loss from

movements in commodity prices. Grupo and Banco

Santander's commodity exposure is minor and stems

mainly from commodity derivatives.

208

• Volatility risk is the possibility of loss caused by

movements in interest rates, exchange rates, the

stock market, credit spreads and other risk factors

affecting portfolio value. It is inherent to all financial

instruments whose value considers volatility

(especially options contracts).

Derivative contracts (such as options, futures, forwards

and swaps) can mitigate market risks partially or fully.

Additionally, other more complex coverage market risks

are considered, such as correlation risk, market liquidity

risk, prepayment or cancellation risk and subscription

risk.

• Correlation risk is the possibility of loss due to an

adverse correlation between risk variables that affect

portfolio value. Risk variables could be the same (e.g.

two FX rates) or different (e.g. an interest rate and a

commodity price).

• Market liquidity risk is the possibility that fewer

market makers or institutional investors, a large

number of transactions, market instability and other

factors will cause the Group or a subsidiary to exit a

position at a worse market price or trade cost.

Exposure to different products and currencies can

also increase this risk.

• Pre-payment or cancellation risk originates when

mortgages, deposits and other on-balance-sheet

instruments give holders the option to buy or sell

them, thus altering future cash flows. Potential

mismatches on the balance sheet pose a risk since

cash flows may have to be reinvested at an interest

rate that is potentially lower (assets) or higher

(liabilities).

• Underwriting risk is the possibility that the bank will

have to hold part of a debt issue it has underwritten

or agreed to place if it cannot all be placed among

potential buyers.

Balance sheet liquidity risk (unlike market liquidity risk)

is the possibility of loss caused by forced disposal of

assets or cash flow imbalance if the bank meets its

payment obligations late or at excessive cost. It can

cause losses by forced asset sales or impacts on margins

due to the mismatch between expected cash inflows and

outflows.

Pension and actuarial risks (explained at the end of this

section) also depend on market variables.

Grupo and Banco Santander aim to comply with the

Basel Committee’s Fundamental Review of the Trading

Book (FRTB) and the EBA’s Guidelines on the

management of interest rate risk arising from non-

trading book activities. The purpose of several projects

Grupo Santander runs is to provide risk control managers

and teams with the best market risk management tools

under the right governance framework for the models

Grupo Santander uses for metric reporting; and to

comply with regulation on the risks mentioned above.

2. Trading market risk management

Setting market risk limits in a dynamic process according

to the risk appetite in the annual limits plan prepared by

senior management and extended to all subsidiaries.

The standard methodology for risk management and

control in trading, measures the maximum expected loss

with a specific level of confidence and time frame. The

standard for historical simulation is a confidence level of

99% over one day.

Grupo and Banco Santander apply statistical

adjustments efficiently to incorporate recent

developments affecting our levels of risk. Our time

frame is two years or at least 520 days from the

reference date of the VaR calculation.

209

The balance sheet items in the Group’s consolidated

position that are subject to market risk are shown below,

distinguishing those positions for which the main risk

metric is VaR from those for which risk monitoring is

carried out using other metrics:

EUR million
		Main market risk metric
	Balance sheet amount	VaR	Other	Main risk factor for 'Other' balance
Assets subject to market risk
Cash, cash balances at central banks and other deposits on demand	192,208		192,208	Interest rate
Financial assets held for trading	230,253	230,253
Non-trading financial assets mandatorily at fair value through profit or loss	6,130	4,641	1,489	Interest rate, spread
Financial assets designated at fair value through profit or loss	7,915		7,915	Interest rate, spread
Financial assets designated at fair value through other comprehensive income	89,898	2,193	87,705	Interest rate, spread
Financial assets at amortized cost	1,203,707		1,203,707	Interest rate, spread
Hedging derivatives	5,672		5,672	Interest rate, exchange rate
Changes in the fair value of hedged items in portfolio hedges of interest risk	(704)		(704)	Interest rate
Other assets	102,002
Total assets	1,837,081
Liabilities subject to market risk
Financial liabilities held for trading	152,151	152,151
Financial liabilities designated at fair value through profit or loss	36,360		36,360	Interest rate, spread
Financial liabilities at amortized cost	1,484,322		1,484,322	Interest rate, spread
Hedging derivatives	4,752		4,752	Interest rate, exchange rate
Changes in the fair value of hedged items in portfolio hedges of interest rate risk	(9)		(9)	Interest rate
Other liabilities	52,178
Total liabilities	1,729,754
Equity	107,327

210

The following table displays the latest and average VaR

values at 99% by risk factor over the last three years. It

also shows the minimum and maximum VaR values in

2024 and 97.5% ES at the end of December 2024:

VaR statistics and expected shortfall by risk factorA
EUR million. VaR at 99% and ES at 97.5% with one day time horizon
	2024					2023
	VaR (99%)				ES (97.5%)	VaR
	Min	Average	Max	Latest	Latest	Average	Latest
Total Trading	11.6	17.1	23.0	18.7	19.6	11.7	13.5
Diversification effect	(11.0)	(19.8)	(42.1)	(27.3)	(21.8)	(14.9)	(17.1)
Interest rate	11.4	17.0	23.1	20.2	19.8	12.2	11.1
Equities	2.8	6.0	18.8	9.5	6.5	3.2	6.0
Exchange rate	2.8	5.8	11.1	5.9	7.0	5.3	4.8
Credit spread	3.6	4.9	7.0	5.3	4.9	4.3	6.1
Commodities	2.0	3.2	5.1	5.1	3.2	1.6	2.6
Total Europe	9.0	12.7	17.4	16.0	16.0	9.4	11.8
Diversification effect	(9.9)	(15.4)	(33.3)	(18.4)	(15.9)	(10.5)	(13.8)
Interest rate	8.8	12.0	17.6	14.4	15.4	9.1	8.2
Equities	3.3	5.9	16.9	8.8	6.2	2.8	5.8
Exchange rate	3.1	5.1	8.9	5.8	5.3	3.5	5.2
Credit spread	3.6	4.9	7.0	5.3	4.9	4.3	6.1
Commodities	0.1	0.2	0.3	0.1	0.1	0.2	0.3
Total North America	4.9	6.9	9.3	6.4	6.8	4.0	5.0
Diversification effect	(0.2)	(1.1)	(4.3)	(0.8)	(0.8)	(0.7)	(0.5)
Interest rate	4.7	6.9	10.0	6.6	6.9	3.7	5.0
Equities	—	0.2	1.3	0.1	0.1	0.2	0.0
Exchange rate	0.4	0.9	2.3	0.5	0.6	0.8	0.5
Total South America	4.4	9.0	15.0	9.5	8.0	7.3	7.0
Diversification effect	(2.5)	(6.9)	(18.1)	(5.5)	(5.2)	(6.2)	(6.6)
Interest rate	4.5	8.8	14.7	6.5	5.5	7.3	5.6
Equities	—	1.2	4.4	2.1	1.6	1.4	2.4
Exchange rate	0.4	2.7	8.9	1.3	3.0	3.2	3.0
Commodities	2.0	3.2	5.1	5.1	3.1	1.6	2.6

A. In South and North America, VaR levels of credit spreads and commodities are not shown separately due to their low or null materiality.

VaR at the end of December (EUR 18.7 million was EUR

5.2 million igher compared to the end of 2023, reflecting

the spike in market volatility caused by geopolitical risk,

inflation and its impact on central banks’ monetary

policy, and greater exposure to interest rate risk in North

America.

In 2024, average VaR (EUR 17.1 million was higher than

2023 and for all risk factors, especially interest rates.

Temporary VaR increases owe more to short-term price

volatility than to significant changes in positions.

By region, average VaR, was higher in the three regions

where we operate, with the increase due to interest

rates risk factor in North America, and more distributed

among the other factors in the other regions.

Backtesting

Actual losses can differ from predicted losses because of

the VaR’s limitations. The Bank and the Group measures

the accuracy of the VaR calculation model to make sure it

is reliable. The most important tests Grupo Santander

and Banco run involve backtesting:

• At backtesting of hypothetical P/L and of the entire

trading book no exception was observed during

2024 (daily loss greater than the VaR or daily profit

211

greater than VaE) to VaR and VaE with a confidence

level of 99%.

• The exceptions observed in the past year are

consistent with the assumptions of the VaR calculation

model.

IBOR reform

Since 2013, different supranational organizations and

authorities (IOSCO and FSB) have promoted and

monitored initiatives aimed at carrying out reforms to

strengthen interest rate indices. The main objective was

to facilitate the transition to the risk-free indices

identified in different jurisdictions, highlighting the

SONIA index as a replacement for the LIBOR references

in pounds, the SOFR for the LIBOR in dollars, and the

€STR for the LIBOR in euros.

In this sense and as a result of the joint effort of

authorities and market participants, this transition

process has been materialized in different milestones

during the period between 2019 and 2024. From March

and September 2024, the terms of the 3-month pound

LIBOR, and the 1-month, 3-month and 6-month dollar

LIBOR have ceased permanently, thus completing the

transition.

The Group and the Bank have carried out the operational

and technological changes necessary to undertake the

transition of these reference indexes.

3. Structural balance sheet risks

3.1. Main aggregates and variations

Consistent with previous years, the market risk profile of

Grupo and Banco Santander’s balance sheet remained

moderate in 2024 in terms of asset, shareholders’ equity

and NII volumes, each subsidiaries.

Each subsidiary’s finance division manages interest rate

risk from commercial banking and is responsible for

handling structural risk from interest rate fluctuations.

To measure interest rate risk, Grupo Santander uses

statistical models based on strategies to mitigate

structural risk with interest-rate instruments (such as

bonds and derivatives) to keep risk profile within risk

appetite.

The NII and EVE sensitivities below are based on

scenarios of parallel interest rate movements from -100

to +100 basis points.

212

Structural VaR

With such a homogeneous metric as VaR, Grupo

Santander can fully monitor market risk in the banking

book (excluding CIB trading activity). The Bank

differentiates fixed income based on interest rates and

credit spreads in ALCO portfolios, FX rates and shares.

In general, the structural VaR of Grupo and Banco

Santander total assets and equity is minor.

Structural VaR
EUR million. Structural VaR 99% with a temporary horizon of one day.
	2023				2022
	Minimum	Average	Maximum	Latest	Average	Latest
Structural VaR	620.7	747.7	910.0	687.5	705.0	749.5
Diversification effect	(237.2)	(386.4)	(575.5)	(268.6)	(416.6)	(444.7)
VaR Interest Rate	210.7	412.0	685.6	235.2	348.4	380.2
VaR Exchange Rate	526.9	571.7	629.8	594.4	580.4	642.9
VaR Equities	120.3	150.4	170.1	126.5	192.8	171.1

1. Includes credit spread VaR on ALCO portfolios.

Structural interest rate risk:

– Europe

At the end of December, the net interest income (NII) of

our main balance sheets showed positive sensitivities to

increases in interest rates. On the same date, in the case

of the economic value of equity (EVE), it showed

negative sensitivity to increases in interest rates in the

case of the UK and positive sensitivity in the case of

Spain in the same scenario.

At the end of December, under the scenarios previously

described, significant risk of NII sensitivity to the euro

amounted to EUR 877 million; to the pound sterling, EUR

211 million; to the US dollar, EUR 54 million; and to the

Polish złoty, EUR 61 million, all with risk of rate cuts.

Significant risk of EVE sensitivity to yield curves of the

euro was EUR 753 million; of the pound sterling, EUR

662 million; of the US dollar, EUR 132 million euros; and

of the Polish złoty, EUR 244 million euros, mostly with

risk of rate cuts, except for the US dollar.

Exposure was moderate in relation to annual budget and

capital levels in 2024.

– North America

At the end of December, sensitivity of NII on our North

America balance sheet to interest rate hikes was

positive, while EVE sensitivity was negative.

Exposure was moderate in relation to annual budget and

capital levels in 2024.

At the end of December, significant risk to NII was

mainly in the US and amounted to EUR 125 million.

The most significant risk to EVE was in the US and

amounted to EUR 639 million.

– South America

EVE and NII on our main South American balance sheets

are positioned for interest rate cuts.

Exposure in all countries was moderate in relation to the

annual budget and capital levels in 2024.

At the end of December, most significant risk to NII was

mainly in Brasil (EUR 124 million ) and in Chile (EUR

4 million).

Most significant risk to EVE was recorded in Brasil (EUR

411 million) and in Chile (EUR 323 million).

Structural foreign currency rate risk/results hedging

Grupo Santander's structural FX risk stems mainly from

the income and hedging of foreign currency transactions

for permanent financial investments. In the dynamic

management of this risk, Grupo Santander aims to limit

the impact of FX rate movements on the core capital

ratio. In 2024, the hedged of the different currencies that

have an impact on our core capital ratio was close to

100%.

In December 2024, our permanent exposures (with

potential impact on shareholders’ equity) were, from

largest to smallest, in US dollars, British pounds sterling,

Brazilian reais, Mexican pesos, Polish złoty and Chilean

pesos.

213

Grupo and Banco Santander use FX derivatives to hedge

part of those permanent positions. The Finance division

manages FX risk and hedging for the expected profits

and dividends of subsidiaries whose base currency is not

the euro.

Structural equity risk

Grupo Santander holds equity positions in its banking

and trading books. They are either equity instruments or

stock, depending on the share of ownership or control.

At the end of December 2024, the equities and

shareholdings in the banking book were diversified

among Spain, China, Morocco, Poland and other

countries. Most of them invest in the financial and

insurance sectors. Grupo Santander has minor equity

exposure to property and other sectors.

Structural equity positions are exposed to market risk.

The Group calculates its VaR with a set of market prices

and proxies. At the end of the year 2024, VaR at a 99%

confidence level over a one-day horizon was EUR

127 million (EUR 171 million in 2023).

3.2.Methodologies

Structural interest rate risk

The Group and the Bank measure the potential impact of

interest rate movements on EVE and NII. Because

changing rates may generate impacts, Grupo Santander

must manage and control many subtypes of interest rate

risk, such as repricing risk, curve risk, basis risk and

option risk (e.g. behavioural or automatic).

Interest rate risk in the balance sheet and market

conditions and outlooks could necessitate certain

financial measures to achieve Group and Bank’s desired  

risk profile (such as selling positions or setting interest

rates on products markets).

The metrics uses to monitor IRRBB include NII and EVE

sensitivity to interest rate movements.

• Net interest income sensitivity

Net interest income (NII) is the difference between

interest income from assets and the interest cost of

liabilities in the banking book over a typical one- to

three-year horizon (one year being standard in Grupo

Santander). Because NII sensitivity is the difference in

income between a selected scenario and the base

scenario, its values can be as many as considered

scenarios. It enables us to see short-term risks and

supplement economic value of equity (EVE) sensitivity.

• Economic value of equity sensitivity

Economic value of equity (EVE) is the difference between

the current value of all assets minus the current value of

all liabilities in the banking book. It does not include

shareholders’ equity and non-interest-bearing

instruments. The sensitivity of the economic value of

own funds is obtained as the difference between said

economic value calculated with a selected scenario and

that calculated with a base scenario.

Because EVE sensitivity is the difference in EVE between

a selected scenario and the base scenario, it can have as

many values as considered scenarios. It enables us to

see long-term risks and supplement NII sensitivity.

Structural exchange-rate risk/hedging of results

Every day, Grupo Santander measures FX positions, VaR

and P/L.

Structural equity risk

Grupo Santander measures equity positions, VaR and P/

L.

4. Liquidity risk

Structural liquidity management aims to fund the Group

and the Bank’s recurring activity optimising maturities

and costs, while avoiding taking on undesired liquidity

risks.

Grupo and Banco Santander’s liquidity management is

based on the following principles:

• Define liquidity risk and provide detailed

assessments of current and emerging material

liquidity risks.

• Define liquidity risk metrics, review and challenge

liquidity risk appetite and limits on first line of

defence proposals.

• Evaluates and challenges commercial/business

proposals; It provides senior management and

business units with the necessary elements to

understand the liquidity risk of Santander's

businesses and operations.

• Supervise the liquidity risk management of the first

line of defence and assess the permanence of

businesses within the limits of liquidity risk.

• Reports on compliance with risk appetite limits and

exceptions, if any, to governing bodies.

• Provides a consolidated view of liquidity risk

exposures and liquidity risk profile.

• Confirms the existence of adequate liquidity

procedures to manage the business within the limits

of risk appetite.

214

The effective application of these principles by all

institutions comprising the Group required the

development of a unique management framework built

upon three fundamental pillars:

• A solid organisational and governance model that

ensures the involvement of the subsidiaries’ senior

management in decision-taking and its integration

into the Group’s global strategy. The decision-making

process for all structural risks, including liquidity and

funding risk, is carried out by local Asset and Liability

Committees (ALCOs) in coordination with the global

ALCO, which is the body empowered by the Bank's

board in accordance with the corporate Asset and

Liability Management (ALM) framework.

This governance model has been reinforced as it has

been included within Santander's Risk Appetite

Framework. This framework meets demands from

regulators and market players emanating from the

financial crisis to strengthen banks’ risk management

and control systems.

  In-depth balance sheet analysis and measurement of

liquidity risk, supporting decision-taking and its

control. Group and Bank’s objective is to maintain

adequate liquidity levels necessary to cover its short-

and long-term needs with stable funding sources,

optimising the impact of their costs on the income

statement. Grupo and Banco Santander’s liquidity risk

management processes are contained within a

conservative risk appetite framework established in

each geographic area in accordance with its

commercial strategy. This risk appetite establishes the

limits within which the subsidiaries and, therefore, the

Bank can operate in order to achieve their strategic

objectives.

• Management adapted in practice to the liquidity needs

of each business. Every year, based on business needs,

a liquidity plan is developed which seeks to achieve:

– a solid balance sheet structure, with a diversified

presence in the wholesale markets;

– the use of liquidity buffers and limited

encumbrance of assets;

– compliance with both regulatory metrics and

other metrics included in each entity’s risk

appetite statement.

Over the course of the year, all dimensions of the plan

are monitored.

Grupo Santander continues to develop the ILAAP

(Internal Liquidity Adequacy Assessment Process), an

internal self-assessment of liquidity adequacy which

must be integrated into the Group’s other risk

management and strategic processes. It focuses on both

quantitative and qualitative matters and is used as an

input to the SREP (Supervisory Review and Evaluation

Process). The ILAAP evaluates the liquidity position both

in ordinary and stressed scenarios.

i. Liquidity risk measurement

Grupo Santander uses the Basel regulatory definition

and calculates a set of metrics and stress scenarios in

relation to intraday liquidity risk to maintain a high level

of management and control. On the one hand, the

regulatory liquidity metrics (LCR, NSFR) are prepared

following the regulatory criteria established in the CRR-II

and CRD IV. Regarding internal metrics, liquidity

scenarios are determined using a combination of

behavioral observation in actual liquidity crises occurred

at other banks, regulatory assumptions and expert

judgment.

a) Liquidity Coverage Ratio (LCR)

The liquidity coverage ratio (LCR) is a regulatory metric.

Its purpose is to promote the short-term resilience of a

bank’s liquidity profile and make sure it has enough

high-quality liquid assets to withstand a considerable

idiosyncratic or market stress scenario over 30 calendar

days.

b) Net Stable Funding Ratio (NSFR)

The net stable funding ratio (NSFR) is a regulatory metric

we use to measure long-term liquidity risk. It is the ratio

of available stable funding to required stable funding. It

requires banks to keep a robust balance sheet, with off-

balance-sheet assets and operations financed by stable

liabilities.

c) Liquidity buffer

The liquidity buffer is the total liquid assets a bank has to

cope with cash outflows during periods of stress. The

assets are free of encumbrances and can be used

immediately to generate liquidity without losses or

excessive discounts. The liquidity buffer is a tool for

calculating most liquidity metrics. It is also a metric with

defined limits for each subsidiary.

d) Wholesale liquidity metric

The wholesale liquidity metric measures the number of

days Grupo and Banco Santander would survive if it used

liquid assets to cover lost liquidity from a wholesale

deposit run-off (without possible renewal) over a set

time horizon. Grupo and Banco Santander also uses it as

an internal short-term liquidity metric to reduce risk

from dependence on wholesale funding.

e) Asset Encumbrance metrics

Grupo and Banco Santander calculate two metrics to

measure asset encumbrance risk. On the one hand, the

asset encumbrance ratio gives the proportion of

encumbered assets to total assets; on the other, the

structural asset encumbrance ratio gives the proportion

of encumbered assets by structural funding transaction

(namely long-term collateralized issues and credit

transactions with central banks).

215

f) Other additional liquidity indicators

In addition to traditional tools to measure short and

long-term liquidity and funding risk, Grupo and Banco

Santander have a set of additional liquidity indicators to

complement those and to measure other non-covered

liquidity risk factors. These include concentration

metrics, such as the main and the five largest funding

counterparties, or the distribution of funding by

maturity.

In this sense, deposits do not show a tendency towards

concentration, maintaining a stable structure at 31

December 2024, where approximately 75% are

transactional and more than 80% of retail deposits are

insured by deposit guarantee systems of the different

countries.

g) Liquidity scenario analysis

As liquidity stress tests, Grupo and Banco Santander

have five standard scenarios have been defined:

i. An idiosyncratic scenario of events detrimental only

to the Group and the Bank;

ii. a local market scenario of events highly detrimental

to a base country’s financial system or real economy;

iii. a global market scenario of events highly detrimental

to the global financial system; and

iv. combined scenario consisting of a combination of

more severe idiosyncratic and market events (local

and global) occurring simultaneously and

interactively.

v. climate scenarios where different stress cases derived

from the effects that climate change could have on

the economy are collected.

Grupo and Banco Santander use these stress test

outcomes as tools to determine risk appetite and

support business decision-making.

h) Liquidity early warning indicators

Early warning indicator system consists of quantitative

and qualitative liquidity indicators that help predict

stress situations and weaknesses in the funding and

liquidity structure of Grupo, and therefore, Banco

Santander entities. External indicators relate to market-

based financial variables; internal indicators relate to our

own performance.

i) Intraday liquidity metrics

Grupo and Banco Santander follow Basel regulation and

calculates several metrics and stress scenarios for

intraday liquidity risk to maintain a high level of control.

ii. Liquidity coverage ratio and net stable financing ratio

The regulatory requirement for the LCR ratio has been

set at 100% since 2018.

Below is a breakdown of the Group's liquid assets

composition according to the criteria established in the

supervisory prudential information (Commission

Implementing Regulation (EU) 2017/2114 of 9

November 2017) for the determination of high-quality

liquid assets for the calculation of the LCR ratio (HQLA):

EUR million
	2024	2023
	Amount weighted applicable	Amount weighted applicable
High-quality liquid assets-HQLAs
Cash and reserves available at central banks	188,745	217,935
Marketable assets Level 1	150,912	119,043
Marketable assets Level 2A	4,696	4,236
Marketable assets Level 2B	6,951	6,814
Total high-quality liquid assets	351,304	348,028

EUR million
	2024	2023
High-quality liquid assets-HQLAs (numerator)	315,524	348,028
Total net cash outflows (denominator)	206,889	209,892
Cash outflows	278,760	282,982
Cash inflows	71,871	73,090
Consolidated LCR ratio (%)	153%	166%
NSFR ratio  (%)	126%	123%

Since 2024, the calculation of the consolidated LCR ratio

has been updated to comply with a series of

requirements regarding asset transferability restrictions

in third countries. This new consolidated ratio includes

an adjustment whereby any excess liquidity above 100%

of LCR outflows, which is subject to transferability

restrictions (legal or operational) in third countries, is not

taken into account. This applies even if the surplus

liquidity can be used to cover additional outflows within

the country itself, which is not subject to any restrictions.

The total high-quality liquid assets differ from the high-

quality liquid assets (HQLAs) considered as the

numerator within the consolidated LCR ratio, due to the

aforementioned adjustment.

In addition, since 2024, we have been calculating a

Group LCR ratio using an internal methodology that

determines the minimum common coverage percentage

simultaneously across all the Group's markets and

considers all existing restrictions on liquidity transfers in

third countries. This methodology reflects the Group's

resilience to liquidity risk more accurately and the

internal ratio presents a level that is consistent with

what would be achieved by applying the criteria

followed until mid-2024, which did not include

restrictions on liquidity transfers between subsidiaries.

216

Regarding the net stable funding ratio (NSFR), its

definition was approved by the Basel Committee in

October 2014. The transposition of this requirement into

European regulation took place in June 2019 with the

publication in the Official Journal of the European Union

of Regulation (EU) 2019/876 of the European Parliament

and of the Council of 20 May 2019. The Regulation

establishes that entities must have a net stable funding

ratio, as defined in the Regulation, above 100% from

June 2021.

As for the funding structure, given the inherently

commercial nature of the Group's balance sheet, the

loan portfolio is mainly financed by customer deposits.

In note 22, 'Debt securities,' the composition of these

liabilities is presented based on their nature and

classification, the movements and maturity profile of the

debt securities issued by the Group, reflecting the

strategy of diversification by products, markets, issuers,

and terms followed by the Group in its approach to

wholesale markets.

iii.Asset encumbrance

Finally, the moderate use of assets by Grupo Santander

as collateral in the sources of structural financing of the

balance sheet should be highlighted.

In accordance with the guidelines established by the

European Banking Authority (EBA) in 2014 on committed

and uncommitted assets, the concept of assets

committed in financing transactions (asset

encumbrance) includes both on-balance sheet assets

provided as collateral in transactions to obtain liquidity

and off-balance sheet assets that have been received

and reused for similar purposes, as well as other assets

associated with liabilities for reasons other than

financing.

The residual maturities of the liabilities associated with

the assets and guarantees received and committed are

presented below, as of 31 of December of 2024 (EUR

thousand million):

Residual maturities of the liabilities	Unmatured	<=1month	>1 month <=3 months	>3 months <=12 months	>1 year <=2 years	>2 years <=3 years	3 years <=5 years	5 years <=10 years	>10 years	Total
Committed assets	45.6	55.9	13.9	39.9	33.0	37.6	39.6	20.6	13.7	299.8
Guarantees received committed	40.0	60.3	16.4	38.8	3.1	0.8	0.9	0.6	0.1	161.0

217

The reported Group information as required by the EBA

at 2024 year-end is as follows:

On-balance-sheet encumbered assets
EUR billion
	Carrying amount of encumbered assets	Fair value of encumbered assets	Carrying amount of unencumbered assets	Fair value of unencumbered assets
Loans and advances	168.8		1,181.0
Equity instruments	9.6	9.6	13.9
Debt securities	93.8	94.3	189.7	190.6
Other assets	27.6		152.8
Total assets	299.8		1,537.2

Encumbrance of collateral received
EUR billion
	Fair value of encumbered collateral received or own debt securities issued	Fair value of collateral received or own debt securities issued available for encumbrance
Collateral received	161.0	49.6
Loans and advances	1.2	—
Equity instruments	7.0	7.5
Debt securities	152.8	41.9
Other collateral received	—	0.2
Own debt securities issued other than own covered bonds or ABSs	0.1	2.3

Encumbered assets and collateral received and matching liabilities
EUR billion
	Matching liabilities, contingent liabilities or securities lent	Assets, collateral received and own debt securities issued other than covered bonds and ABSs encumbered
Total sources of encumbrance (carrying amount)	363.0	460.9

On-balance-sheet encumbered assets amounted to EUR

299,831 million , of which 56% are loans (mortgage

loans, corporate loans, etc.). Guarantees received

committed amounted to EUR 160,995 million, relating

mostly to debt securities received as security in asset

purchase transactions and re-used.

Taken together, these two categories represent a total of

EUR 460,888 million of encumbered assets, which give

rise to EUR 363,038 million matching liabilities.

As of December 2024, total asset encumbrance in

funding operations represented 22.50% of the Group’s

extended balance sheet under EBA criteria (total assets

plus guarantees received: EUR 2,047,690 million),

similar to December 2023.

218

d) Capital risk

The second line of defence can independently challenge

business and first-line activities by:

• Supervising capital planning and adequacy exercises

through a review of the main components affecting

the capital ratios.

• Identifying key metrics to calculate the Group’s

regulatory capital, setting tolerance levels and

analysing significant variations, as well as single

transactions with impact on capital.

• Reviewing and challenging the execution of capital

actions proposed in line with capital planning and

risk appetite.

Grupo Santander commands a sound solvency position,

above the levels required by regulators and by the

European Central bank.

Regulatory capital

At 1 January 2025, at a consolidated level, the Group

must maintain a minimum capital ratio of 9.65% of CET1

(4.50% being the requirement for Pillar I, 0.98% being

the requirement for Pillar 2R (requirement), 2.50% being

the requirement for capital conservation buffer, 1.25%

being the requirement for global systemically entity (D-

SIB), 0.39% being the requirement for anti-cyclical

capital buffer) and a systemic risk requirement of 0.03%.

Grupo Santander must also maintain a minimum capital

ratio of 11.47% of tier 1 and a minimum total ratio of

13.91%.

In 2024, the solvency target set was achieved.

Santander’s CET1 ratio stood at 12.78% at the close of

the year, demonstrating its organic capacity to generate

capital. The key regulatory capital figures are indicated

below:

Reconciliation of accounting capital with regulatory capital
EUR million
	2024	2023
Subscribed capital	7,576	8,092
Share premium account	40,079	44,373
Reserves	76,568	69,278
Treasury shares	(68)	(1,078)
Attributable profit	12,574	11,076
Approved dividend	(1,532)	(1,298)
Shareholders’ equity on public balance sheet	135,197	130,443
Valuation adjustments	(36,596)	(35,020)
Non-controlling interests	8,726	8,818
Total Equity on public balance sheet	107,327	104,241
Goodwill and intangible assets	(16,098)	(17,313)
Eligible preference shares and participating securities	10,371	9,002
Accrued dividendC	(1,611)	(1,471)
Other adjustmentsA	(9,817)	(8,717)
Tier 1B	90,170	85,742

A. Fundamentally for non-computable non-controlling interests and

deductions and reasonable filters in compliance with CRR .

B. Figures calculated by applying the transitional provisions of IFRS 9.

C. Assumes 25% of ordinary profit, see note 4.a for proposed

distribution of results.

Note: Certain figures presented in this capital note have been rounded for

ease of presentation. Consequently, the amounts corresponding to the

rows or columns of totals in the tables presented in this note may not

coincide with the arithmetic sum of the concepts or items that make up

the total.

The following table shows the capital coefficients and a

detail of the eligible internal resources of the Group:

Capital coefficients
	2024	2023
Level 1 ordinary eligible capital (EUR million)	79,800	76,741
Level 1 additional eligible capital (EUR million)	10,371	9,002
Level 2 eligible capital (EUR million)	18,418	16,497
Risk-weighted assets (EUR million)	624,503	623,731
Level 1 ordinary capital coefficient (CET 1)	12.78%	12.30%
Level 1 additional capital coefficient (AT1)	1.66%	1.45%
Level 1 capital coefficient (TIER1)	14.44%	13.75%
Level 2 capital coefficient (TIER 2)	2.95%	2.64%
Total capital coefficient	17.39%	16.39%

219

Eligible capital
EUR million
	2023	2022
Eligible capital
Common Equity Tier I	79,800	76,741
Capital	7,576	8,092
(-) Treasure shares and own shares financed	(1,694)	(2,847)
Share Premium	40,079	44,373
Reserves	76,608	68,721
Other retained earnings	(38,617)	(35,038)
Minority interests	8,479	6,899
Profit net of dividends	9,431	8,307
Deductions	(22,061)	(21,766)
Goodwill and intangible assets	(15,957)	(17,220)
Others	(6,104)	(4,546)
Additional Tier I	10,371	9,002
Eligible instruments AT1	9,725	8,461
AT1-excesses-subsidiaries	645	541
Tier II	18,418	16,497
Eligible instruments T2	18,869	17,101
Excess IRB provision on PE	0	76
T2-excesses -  subsidiaries	(450)	(680)
Total eligible capital	108,589	102,240

Note: Banco Santander, S.A. and its affiliates had not taken part in any

State aid programmes.

Leverage ratio

Basel III established the leverage ratio as a non-risk

sensitive measure aimed at limiting excessive balance

sheet growth relative to available capital.

The Group performs the calculation in accordance with

Regulation (EU) 2019/876 of 20 May 2019 amending

Regulation (EU) No 575/2013 as regards the leverage

ratio.

This ratio is calculated as tier 1 capital divided by

leverage exposure. Exposure is calculated as the sum of

the following items:

• Accounting assets, excluding derivatives and items

treated as deductions from tier 1 capital (for

example, the balance of loans is included, but not

that of goodwill) further excluding the exposures

referred to in Article 429.a (1) of the regulation.

• Off-balance-sheet items (mainly guarantees, unused

credit limits granted and documentary credits)

weighted using credit conversion factors.

• Inclusion of net value of derivatives (gains and losses

are netted with the same counterparty, minus

collaterals if they comply with certain criteria) plus a

charge for the future potential exposure.

• A charge for the potential risk of security funding

transactions.

• Lastly, it includes a charge for the risk of credit

derivative swaps (CDS).

With the publication of Regulation (EU) 2019/876 of 20

May, 2019, amending Regulation (EU) n.º 575/2013 as

regards the leverage ratio, the final calibration of the

ratio is set at 3% for all entities and, for systemic entities

G-SIB, is established an additional surcharge which

would be 50% of the cushion ratio applicable to the

EISM, applicable from January 2023. In addition,

modifications are included in its calculation, including

the exclusion of certain exposures from the total

exposure measure: public loans when exceptional

circumstances arise, public loans, transfer loans and

officially guaranteed export credits, transfer loans and

officially guaranteed export credits.

EUR million
	2024	2023
Leverage
Level 1 Capital	90,170	85,742
Exposure	1,885,572	1,826,922
Leverage Ratio	4.78%	4.69%

Global systemically important banks

Grupo Santander is one of 29 banks designated as global

systemically important banks (G-SIBs).

The designation as a globally systemic entity comes

from a measurement established by the regulators (FSB

and BCBS) that they have implemented based on five

indicators (size, interjurisdictional activity,

interconnection with other financial entities,

substitutability and complexity). The application

methodology has been modified in December 2021,

incorporating, among other things, an additional score

considering the Member States of the SRM as a single

jurisdiction.

This definition means it has to fulfil certain additional

requirements, which consist mainly of a capital buffer

(1% ), in TLAC requirements (total loss absorbing

capacity), that Grupo Santander has to publish relevant

information more frequently than other banks, greater

regulatory requirements for internal control bodies,

special supervision and drawing up of special reports to

be submitted to supervisors.

Additionally, Grupo Santander appears both on the list of

global systemic entities and on the list of domestic

systemic entities. Bank of Spain, based on rule 23 of

Circular 2/2016, requires the application of the highest

of the two corresponding buffers, in the case of Grupo

Santander being the domestic one, 1.25%, a surcharge

payable by 2025.

The fact that Grupo Santander has to comply with these

requirements makes it a more solid bank than its

domestic rivals.

220

Appendix I

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
2 & 3 Triton Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Real estate	21	1	12
A & L CF (Guernsey) Limited (n)	Guernsey	0.00%	100.00%		100.00%	100.00%	Leasing	1	0	0
A & L CF June (2) Limited (e) (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
A & L CF June (3) Limited (e) (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Leasing	0	0	0
A & L CF March (5) Limited (d) (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
A & L CF September (4) Limited (f) (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey Covered Bonds (Holdings) Limited	United Kingdom	—	(b)		—	—	Securitizat ion	0	0	0
Abbey Covered Bonds (LM) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	0	0	0
Abbey Covered Bonds LLP	United Kingdom	—	(b)		—	—	Securitizat ion	907	907	0
Abbey National Beta Investments Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey National Business Office Equipment Leasing Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey National Nominees Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey National PLP (UK) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey National Property Investments	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	240	12	167
Abbey National Treasury Services Investments Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey National Treasury Services Overseas Holdings (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey National UK Investments (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey Stockbrokers (Nominees) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abbey Stockbrokers Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Abent 3T, S.A.P.I de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Electricity productio n	(90)	(35)	0
Ablasa Participaciones, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	410	400	894
Aduro S.A.	Uruguay	0.00%	100.00%		100.00%	100.00%	Payments and collection services	2	(1)	1
Aevis Europa, S.L.	Spain	96.34%	0.00%		96.34%	96.34%	Cards	2	0	1
AFB SAM Holdings, S.L.	Spain	1.00%	99.00%		100.00%	100.00%	Holding company	1	0	0
Afisa S.A.	Chile	0.00%	100.00%		100.00%	100.00%	Fund managem ent company	4	0	4
Agro Flex Fundo de Investimento em Direitos Creditórios	Brazil	0.00%	90.00%		100.00%	100.00%	Investmen t fund	374	39	372
Allane Leasing GmbH	Austria	0.00%	46.95%		100.00%	100.00%	Renting	(2)	0	0
Allane Location Longue Durée S.a.r.l.	France	0.00%	46.95%		100.00%	100.00%	Renting	20	5	0

221

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Allane Mobility Consulting AG	Switzerland	0.00%	46.95%		100.00%	100.00%	Consultin g services	0	(1)	0
Allane Mobility Consulting B.V.	Netherlands	0.00%	46.95%		100.00%	100.00%	Consultin g services	(3)	0	0
Allane Mobility Consulting GmbH	Germany	0.00%	46.95%		100.00%	100.00%	Consultin g services	10	6	5
Allane Mobility Consulting Österreich GmbH	Austria	0.00%	46.95%		100.00%	100.00%	Consultin g services	(1)	0	0
Allane Mobility Consulting S.a.r.l	France	0.00%	46.95%		100.00%	100.00%	Consultin g services	(2)	0	0
Allane Schweiz AG	Switzerland	0.00%	46.95%		100.00%	100.00%	Renting	14	(5)	0
Allane SE	Germany	0.00%	46.95%		92.07%	92.07%	Renting	202	10	150
Allane Services GmbH & co. KG	Germany	0.00%	46.95%		100.00%	100.00%	Services	2	0	0
Allane Services Verwaltungs GmbH	Germany	0.00%	46.95%		100.00%	100.00%	Managem ent of portfolios	0	0	0
Alliance & Leicester Cash Solutions Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Alliance & Leicester Commercial Bank Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Alliance & Leicester Investments (Derivatives) Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Alliance & Leicester Investments (No.2) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Alliance & Leicester Investments Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Alliance & Leicester Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Alliance & Leicester Personal Finance Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	13	(12)	2
Altamira Santander Real Estate, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Real estate	130	8	125
Alternative Leasing, FIL (Compartimento B)	Spain	100.00%	0.00%		100.00%	100.00%	Investmen t fund	115	8	102
Amazonia Trade Limited	United Kingdom	100.00%	0.00%		100.00%	100.00%	Inactive	0	0	0
América Gestão Serviços em Energía S.A.	Brazil	0.00%	63.00%		70.00%	—	Electricity productio n	3	(1)	1
Amherst Pierpont Commercial Mortgage Securities LLC	United States	0.00%	100.00%		100.00%	100.00%	Securitizat ion	0	0	0
Amherst Pierpont International Ltd.	Hong-Kong	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
AMS Auto Markt Am Schieferstein GmbH (d)	Germany	0.00%	90.01%		100.00%	100.00%	Vehicle sales	0	0	0
AN (123) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Andaluza de Inversiones, S.A. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Holding company	37	0	27
ANITCO Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
AP Acquisition Trust I	United States	0.00%	100.00%		100.00%	100.00%	Trust company	0	0	0
AP Acquisition Trust II	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
AP Asset Acquisition LLC	United States	0.00%	100.00%		100.00%	100.00%	Financial services	2	1	2
APSG GP LLC	United States	0.00%	100.00%		100.00%	100.00%	Holding company	0	0	0

222

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Aquanima Brasil Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	E- commerce	2	0	3
Aquanima Chile S.A.	Chile	0.00%	100.00%		100.00%	100.00%	Services	3	1	3
Aquanima México S. de R.L. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	E- commerce	2	1	4
Aquanima S.A.	Argentine	0.00%	100.00%		100.00%	100.00%	Services	2	0	1
Ararinha Fundo de Investimento em Renda Fixa Longo Prazo Crédito Privado	Brazil	0.00%	90.00%		100.00%	—	Investmen t fund	7	0	7
Artarien S.A.	Uruguay	100.00%	0.00%		100.00%	100.00%	Insurance mediation	3	17	2
Atempo Growth I - Sub-Fund 4	Luxembourg	100.00%	0.00%		100.00%	—	Investmen t fund	29	0	35
Athena Corporation Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Financial services	2	0	0
Atlantes Mortgage No. 2	Portugal	—	(b)		—	—	Securitizat ion	0	0	0
Atlantes Mortgage No. 3	Portugal	—	(b)		—	—	Securitizat ion	0	0	0
Atlantes Mortgage No. 4	Portugal	—	(b)		—	—	Securitizat ion	0	0	0
Atual - Fundo de Invest Multimercado Crédito Privado Investimento no Exterior	Brazil	0.00%	90.00%		100.00%	100.00%	Investmen t fund	443	80	471
Auto ABS Belgium Loans 2019 SA/NV	Belgium	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS DFP Master Compartment France 2013	France	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS French Leases 2021	France	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS French Leases 2023	France	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS French Leases Master Compartment 2016	France	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS French Loans 2024	France	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS French Loans Master	France	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS French LT Leases Master	France	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Italian Balloon 2019-1 S.r.l.	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Italian Rainbow Loans S.r.l.	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Italian Stella Loans 2023-1 S.r.l.	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Italian Stella Loans S.r.l. (series 2024-1)	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Italian Stella Loans S.r.l. (series 2024-2)	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Spanish Loans 2020-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Spanish Loans 2022-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitizat ion	0	0	0
Auto ABS Spanish Loans 2024-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitizat ion	0	0	0

223

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Autodescuento, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	93.89%	Vehicles purchased by internet	3	(2)	19
Autohaus24 GmbH	Germany	0.00%	46.95%		100.00%	100.00%	Internet	(2)	0	0
Auto-Interleasing AG	Switzerland	0.00%	100.00%		100.00%	—	Renting	27	0	22
Auttar HUT Processamento de Dados Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	IT services	6	0	7
Aviación Antares, A.I.E.	Spain	99.99%	0.01%		100.00%	100.00%	Renting	65	7	28
Aviación Británica, A.I.E.	Spain	99.99%	0.01%		100.00%	100.00%	Renting	25	3	6
Aviación Comillas, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Renting	8	0	7
Aviación Laredo, S.L.	Spain	99.00%	1.00%		100.00%	100.00%	Air transport	3	0	3
Aviación Oyambre, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Renting	3	(1)	0
Aviación Santillana, S.L.	Spain	99.00%	1.00%		100.00%	100.00%	Renting	7	1	2
Aviación Suances, S.L.	Spain	99.00%	1.00%		100.00%	100.00%	Air transport	9	1	3
Aymoré Crédito, Financiamento e Investimento S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Finance company	1,072	375	1,302
Banco Bandepe S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Banking	829	76	815
Banco de Albacete, S.A. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Banking	14	0	9
Banco Hyundai Capital Brasil S.A.	Brazil	0.00%	45.00%		50.00%	50.00%	Banking	82	18	45
Banco Santander - Chile	Chile	0.00%	67.13%		67.18%	67.18%	Banking	3,908	831	3,777
Banco Santander (Brasil) S.A.	Brazil	0.04%	89.96%		90.60%	90.80%	Banking	11,982	2,028	10,795
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México como Fiduciaria del Fideicomiso 100740	Mexico	0.00%	99.98%		100.00%	100.00%	Finance company	183	25	176
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México como Fiduciaria del Fideicomiso 2002114	Mexico	0.00%	99.98%		100.00%	100.00%	Finance company	5	0	5
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México como Fiduciaria del Fideicomiso GFSSLPT	Mexico	0.00%	99.98%		100.00%	100.00%	Finance company	10	1	11
Banco Santander Argentina S.A.	Argentine	0.00%	99.82%		99.77%	99.78%	Banking	2,023	743	606
Banco Santander de Negocios Colombia S.A.	Colombia	92.95%	7.05%		100.00%	100.00%	Banking	199	4	202
Banco Santander International	United States	0.00%	100.00%		100.00%	100.00%	Banking	1,021	185	1,206
Banco Santander International SA	Switzerland	34.70%	65.30%		100.00%	100.00%	Banking	1,325	82	782
Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México	Mexico	24.93%	75.05%		99.98%	99.97%	Banking	5,785	1,326	7,920
Banco Santander Perú S.A.	Peru	99.90%	0.10%		100.00%	100.00%	Banking	300	61	135
Banco Santander S.A.	Uruguay	97.75%	2.25%		100.00%	100.00%	Banking	578	159	185
Banco Santander Totta, S.A.	Portugal	0.00%	99.87%		99.96%	99.96%	Banking	3,122	993	3,815
Banque Stellantis France	France	0.00%	50.00%		50.00%	50.00%	Banking	1,083	61	881

224

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Bansa Santander S.A.	Chile	0.00%	100.00%		100.00%	100.00%	Real estate	27	2	29
Bilkreditt 7 Designated Activity Company (j)	Ireland	—	(b)		—	—	Securitizat ion	0	0	0
Blecno Investments, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Real estate	176	9	166
BRS Investments S.A.	Argentine	5.10%	94.90%		100.00%	100.00%	Finance company	109	19	75
Cántabro Catalana de Inversiones, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	403	10	419
Capital Street Delaware LP	United States	0.00%	100.00%		100.00%	100.00%	Holding company	0	0	0
Capital Street Holdings, LLC	United States	0.00%	100.00%		100.00%	100.00%	Holding company	12	0	12
Capital Street REIT Holdings, LLC	United States	0.00%	100.00%		100.00%	100.00%	Holding company	1,063	38	1,101
Capital Street S.A.	Luxembourg	0.00%	100.00%		100.00%	100.00%	Finance company	0	0	0
Carmine D - Services, Unipessoal Lda.	Portugal	0.00%	100.00%		100.00%	100.00%	Software	0	0	2
Cartasur Cards S.A. (e)	Argentine	0.00%	99.82%		100.00%	100.00%	Finance company	9	2	15
Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander México	Mexico	0.00%	99.97%		99.97%	99.97%	Securities company	79	13	92
Cater Allen Holdings Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Cater Allen International Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Cater Allen Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Banking	333	146	268
Cater Allen Lloyd's Holdings Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Cater Allen Syndicate Management Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
CCAP Auto Lease Ltd.	United States	0.00%	100.00%		100.00%	100.00%	Leasing	396	82	477
Centro de Capacitación Santander, A.C.	Mexico	0.00%	99.98%		100.00%	100.00%	Non-profit institute	1	0	1
Certidesa, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Aircraft rental	(69)	(6)	0
Charlotte 2023 Funding Plc	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	0	0	0
Charlotte 2023 Holdings Limited	United Kingdom	—	(b)		—	—	Securitizat ion	0	0	0
Chrysler Capital Master Auto Receivables Funding 2 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(289)	9	0
Cianite New Energy, S.r.l.	Italy	0.00%	49.00%		70.00%	70.00%	Renewabl e energies	1	0	1
CIMA Finance DAC Series 2022-1	Ireland	—	(b)		—	—	Securitizat ion	0	0	0
CIMA Finance DAC Series 2023-1	Ireland	—	(b)		—	—	Securitizat ion	0	0	0
CLM Fleet Management Limited	United Kingdom	0.00%	100.00%		100.00%	—	Vehicle rental	2	1	7
Cobranza Amigable, S.A.P.I. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Collection services	4	0	3
Community Development and Affordable Housing Fund LLC (c)	United States	0.00%	96.00%		96.00%	96.00%	Asset managem ent	33	(2)	24
Compagnie Generale de Credit Aux Particuliers - Credipar S.A.	France	0.00%	50.00%		100.00%	100.00%	Banking	363	147	428

225

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Compagnie Pour la Location de Vehicules - CLV	France	0.00%	50.00%		100.00%	100.00%	Banking	24	4	26
Comparanet, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	—	Insurance mediation	7	0	7
Consumer Totta 1	Portugal	—	(b)		—	—	Securitizat ion	0	0	0
Consumer Totta 2	Portugal	—	(b)		—	—	Securitizat ion	0	0	0
Contrato de Fideicomiso Irrevocable de Administración CIB/4473	Mexico	—	(b)		—	—	Trust company	0	1	0
Credileads S.A.	Uruguay	0.00%	100.00%		100.00%	100.00%	Advertisin g	1	0	4
D365 Fundo de Investimento em Direitos Creditórios	Brazil	0.00%	90.00%		100.00%	—	Investmen t fund	242	4	222
Darep Designated Activity Company	Ireland	100.00%	0.00%		100.00%	100.00%	Reinsuran ces	13	(1)	12
Decarome, S.A.P.I. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Finance company	26	5	26
Decarope S.A.C.	Peru	0.00%	100.00%		100.00%	100.00%	Investmen t Company	12	4	12
Deva Capital Advisory Company, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Advisory services	3	1	2
Deva Capital Holding Company, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	505	(7)	556
Deva Capital Investment Company, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Holding company	448	24	420
Deva Capital Management Company, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Advisory services	24	(13)	11
Deva Capital Servicer Company, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Holding company	60	5	65
Diglo Servicer Company 2021, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Real estate managem ent	23	2	19
Diners Club Spain, S.A. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Cards	9	1	10
Dirección Estratega, S.C.	Mexico	0.00%	100.00%		100.00%	100.00%	Services	0	0	0
Drive Auto Receivables Trust 2021-1	United States	—	(b)		—	—	Securitizat ion	157	58	0
Drive Auto Receivables Trust 2021-2	United States	—	(b)		—	—	Securitizat ion	51	70	0
Drive Auto Receivables Trust 2021-3	United States	—	(b)		—	—	Securitizat ion	(35)	52	0
Drive Auto Receivables Trust 2024-1	United States	—	(b)		—	—	Securitizat ion	0	(144)	0
Drive Auto Receivables Trust 2024-2	United States	—	(b)		—	—	Securitizati on	0	(324)	0
Drive S.r.l.	Italy	0.00%	75.00%		75.00%	75.00%	Renting	6	(4)	6
Ductor Real Estate, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Real estate	26	1	22
Ebury Banco de Cambio S.A.	Brazil	0.00%	66.43%		100.00%	100.00%	Payment services	13	1	9
Ebury Banco Holding Participações Ltda.	Brazil	0.00%	66.43%		100.00%	100.00%	Holding company	3	0	0
Ebury Brasil Consultoria S.A.	Brazil	0.00%	66.43%		100.00%	100.00%	Consultin g services	86	0	88
Ebury Brasil Holding Ltda.	Brazil	0.00%	66.43%		100.00%	100.00%	Holding company	4	0	86
Ebury Brasil Participações S.A.	Brazil	0.00%	66.43%		100.00%	100.00%	Holding company	88	0	88

226

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Ebury Facilitadora De Pagamentos Ltda.	Brazil	0.00%	66.43%		100.00%	100.00%	Software	0	0	0
Ebury Mass Payments Holdco Limited (g)	United Kingdom	0.00%	66.43%		100.00%	100.00%	Holding company	0	9	19
Ebury Mass Payments Limited (g)	United Kingdom	0.00%	66.43%		100.00%	100.00%	Payment services	10	5	0
Ebury Partners (DIFC) Limited (g)	Arab United Emirates	0.00%	66.43%		100.00%	100.00%	Finance company	2	0	4
Ebury Partners Australia Pty Ltd. (g)	Australia	0.00%	66.43%		100.00%	100.00%	Finance company	2	0	3
Ebury Partners Belgium NV / SA (g)	Belgium	0.00%	66.43%		100.00%	100.00%	Payment services	21	6	20
Ebury Partners Canada Limited (g)	Canada	0.00%	66.43%		100.00%	100.00%	Finance company	3	0	7
Ebury Partners Chile SpA	Chile	0.00%	66.43%		100.00%	100.00%	Finance company	0	0	0
Ebury Partners China Limited	China	0.00%	66.43%		100.00%	100.00%	Marketing	0	0	0
Ebury Partners Finance Limited (g)	United Kingdom	0.00%	66.43%		100.00%	100.00%	Finance company	(11)	0	0
Ebury Partners Hong Kong Limited (g)	Hong-Kong	0.00%	66.43%		100.00%	100.00%	Finance company	3	0	4
Ebury Partners Limited (g)	United Kingdom	0.00%	66.43%		66.43%	66.54%	Holding company	252	(19)	459
Ebury Partners Markets Cyprus Limited (g)	Cyprus	0.00%	66.43%		100.00%	100.00%	Finance company	0	0	0
Ebury Partners Markets Limited (g)	United Kingdom	0.00%	66.43%		100.00%	100.00%	Finance company	24	0	18
Ebury Partners México, S.A. de C.V.	Mexico	0.00%	66.43%		100.00%	100.00%	Payment services	0	0	0
Ebury Partners South Africa (Pty) Ltd (g)	Republic of South Africa	0.00%	66.43%		100.00%	100.00%	Finance company	0	0	0
Ebury Partners Switzerland AG (g)	Switzerland	0.00%	66.43%		100.00%	100.00%	Finance company	6	0	5
Ebury Partners UK Limited (g)	United Kingdom	0.00%	66.43%		100.00%	100.00%	Electronic money	25	(5)	166
Ebury Payments PTE Ltd. (g)	Singapur	0.00%	66.43%		100.00%	100.00%	Payment services	1	0	0
Ebury Soluções de Pagamentos Ltda.	Brazil	0.00%	66.43%		100.00%	100.00%	Financial services	2	0	4
Ebury Tech Participações Ltda.	Brazil	0.00%	66.43%		100.00%	100.00%	Holding company	4	0	0
Ebury Technology Limited (g)	United Kingdom	0.00%	66.43%		100.00%	100.00%	Software	(55)	(4)	0
EDT FTPYME Pastor 3, Fondo de Titulización de Activos	Spain	—	(b)		—	—	Securitizat ion	0	0	0
Elcano Renovables, S.L.	Spain	0.00%	70.00%		70.00%	0.70	Holding company	0	0	0
Electrolyser, S.A. de C.V.	Mexico	0.00%	99.98%		100.00%	100.00%	Services	0	0	0
Elevate Tech Platforms, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	(1)	2	1
Emdia Serviços Especializados em Cobranças Ltda.	Brazil	0.00%	90.00%		100.00%	100.00%	Collection services	33	0	30
Empresa de Créditos Santander Consumo Perú S.A.	Peru	100.00%	0.00%		100.00%	100.00%	Finance company	52	7	50
Energias Renovables de Ormonde 30, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	55.00%	Renewabl e energies	3	0	10
Energias Renovables de Titania, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	55.00%	Renewabl e energies	2	0	6

227

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Energias Renovables Gladiateur 45, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	55.00%	Renewabl e energies	19	0	25
Energias Renovables Prometeo, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	55.00%	Renewabl e energies	2	0	6
Esfera Fidelidade S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Services	(14)	134	108
Evidence Previdência S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Insurance	121	(4)	106
Eyemobile Tecnologia S.A.	Brazil	0.00%	100.00%		100.00%	100.00%	IT services	0	0	0
F1rst Tecnologia e Inovação Ltda.	Brazil	0.00%	90.00%		100.00%	100.00%	IT services	69	9	68
Fideicomiso Empresarial Irrevocable de Administración y Garantía F/3443	Mexico	—	(b)		—	—	Trust company	(2)	2	0
Financeira El Corte Inglés, Portugal, S.F.C., S.A.	Portugal	0.00%	51.00%		100.00%	100.00%	Finance company	8	0	4
Financiera El Corte Inglés, E.F.C., S.A.	Spain	0.00%	51.00%		51.00%	51.00%	Finance company	248	50	140
Finsantusa, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Holding company	1,285	36	1,020
First National Motor plc	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
First National Tricity Finance Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	6	0	6
FIT Economia de Energia S.A.	Brazil	0.00%	58.50%		65.00%	—	Electricity productio n	1	(3)	0
Flexliving Valdemarín, S.L.	España	—	90.00%		90.00	—	Inmobiliari a	12	0	12
Fondation Holding Auto ABS Belgium Loans	Belgium	—	(b)		—	—	Securitizat ion	0	0	0
Fondo de Titulización PYMES Santander 15	Spain	—	(b)		—	—	Securitizat ion	0	0	0
Fondo de Titulización Santander Financiación 1	Spain	—	(b)		—	—	Securitizat ion	0	0	0
Fondo de Titulización, RMBS Santander 7	Spain	—	(b)		—	—	Securitizat ion	0	0	0
Fondos Santander, S.A. Administradora de Fondos de Inversión (en liquidación) (j)	Uruguay	0.00%	100.00%		100.00%	100.00%	Fund managem ent company	0	0	0
Foreign Exchange Solutions S.L. (g)	Spain	0.00%	66.43%		100.00%	100.00%	IT services	1	(1)	0
Fortensky Trading, Ltd.	Ireland	0.00%	100.00%		100.00%	100.00%	Finance company	0	0	0
Fosse (Master Issuer) Holdings Limited	United Kingdom	—	(b)		—	—	Securitizat ion	0	0	0
Fosse Funding (No.1) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	26	81	0
Fosse Master Issuer PLC	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	0	0	0
Fosse Trustee (UK) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	0	0	0
Freedom Depository Holdings, LLC	United States	0.00%	100.00%		100.00%	100.00%	Holding company	0	0	0
Freedom Depository, LLC	United States	0.00%	100.00%		100.00%	100.00%	Securitizat ion	0	0	0
Fundo de Investimento em Direitos Creditórios Atacado - Não Padronizado	Brazil	0.00%	90.00%		100.00%	100.00%	Investmen t fund	126	28	139

228

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema VI – Não padronizado	Brazil	0.00%	90.00%		100.00%	100.00%	Investmen t fund	317	52	332
Fundo de Investimento em Direitos Creditórios Tellus	Brazil	0.00%	90.00%		100.00%	100.00%	Investmen t fund	0	0	0
Gamma, Sociedade Financeira de Titularização de Créditos, S.A.	Portugal	0.00%	99.87%		100.00%	100.00%	Securitizat ion	8	0	8
GC FTPYME Pastor 4, Fondo de Titulización de Activos	Spain	—	(b)		—	—	Securitizat ion	0	0	0
Generación de Energía Villahermosa, S.A.P.I. de C.V.	Mexico	0.00%	100.00%		100.00%	—	Electricity productio n	2	0	2
Gesban México Servicios Administrativos Globales, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Services	2	0	0
Gesban Santander Servicios Profesionales Contables Limitada	Chile	0.00%	100.00%		100.00%	100.00%	Accountin g services	1	0	0
Gesban Servicios Administrativos Globales, S.L.	Spain	99.99%	0.01%		100.00%	100.00%	Services	5	(1)	1
Gesban UK Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Payments and collection services	2	0	0
Gestión de Inversiones JILT, S.A. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Services	15	0	11
Gestora de Procesos S.A. en liquidación (j)	Peru	100.00%	0.00%		100.00%	100.00%	Financial services	(1)	0	0
Getnet Adquirência e Serviços para Meios de Pagamento S.A. - Instituição de Pagamento	Brazil	0.00%	100.00%		100.00%	100.00%	Payment services	398	92	317
Getnet Argentina S.A.U.	Argentine	0.00%	100.00%		100.00%	100.00%	Payment methods	30	(3)	30
Getnet Europe, Entidad de Pago, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Payment services	158	13	137
Getnet Fundo de Investimento em Direitos Creditórios	Brazil	0.00%	90.00%		100.00%	100.00%	Investmen t fund	4	0	4
Getnet Merchant Solutions UK Ltd	United Kingdom	0.00%	100.00%		100.00%	100.00%	Financial services	5	(2)	3
Getnet México Servicios de Adquirencia, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Payments and collection services	151	50	175
Getnet Payments, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	Holding company	1,149	(223)	1,094
Getnet Sociedade de Credito Direto S.A.	Brazil	0.00%	100.00%		100.00%	100.00%	Finance company	(2)	18	17
Getnet Technology and Operations Brasil Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	IT services	177	4	181
Getnet Uruguay S.A.	Uruguay	0.00%	100.00%		100.00%	100.00%	Payment methods	10	(2)	7
GNXT Serviços de Atendimento Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	Telemarke ting	4	0	4
Golden Bar (Securitisation) S.r.l.	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Golden Bar Stand Alone 2020-1	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Golden Bar Stand Alone 2020-2	Italy	—	(b)		—	—	Securitizat ion	0	0	0

229

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Golden Bar Stand Alone 2021-1	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Golden Bar Stand Alone 2022-1	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Golden Bar Stand Alone 2023-1	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Golden Bar Stand Alone 2023-2	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Golden Bar Stand Alone 2024-1	Italy	—	(b)		—	—	Securitizat ion	0	0	0
Grafite New Energy, S.r.l.	Italy	0.00%	49.00%		70.00%	70.00%	Renewabl e energies	1	0	1
Gravity Cloud Technology, S.L.	Spain	100.00%	0.00%		100.00%	100.00%	IT services	34	0	33
Grupo Empresarial Santander, S.L.	Spain	99.62%	0.38%		100.00%	100.00%	Holding company	4,920	339	2,894
Grupo Financiero Santander México, S.A. de C.V.	Mexico	100.00%	0.00%		100.00%	100.00%	Holding company	4,649	986	5,779
Guaranty Car, S.A. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Automotiv e	3	0	2
Hipototta No. 13	Portugal	—	(b)		—	—	Securitizat ion	0	0	0
Hipototta No. 4 plc	Ireland	—	(b)		—	—	Securitizat ion	(6)	6	0
Hipototta No. 5 plc	Ireland	—	(b)		—	—	Securitizat ion	(16)	16	0
Holbah Santander, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Holding company	570	227	861
Holmes Funding Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	(34)	261	0
Holmes Holdings Limited	United Kingdom	—	(b)		—	—	Securitizat ion	0	0	0
Holmes Master Issuer plc	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	1	(1)	0
Holmes Trustees Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Securitizat ion	0	0	0
Hyundai Capital Bank Europe GmbH	Germany	0.00%	51.00%		51.00%	51.00%	Banking	1,183	(58)	608
Hyundai Fundo de Investimento em Direitos Creditórios	Brazil	0.00%	45.00%		100.00%	—	Investmen t fund	328	10	151
Ibérica de Compras Corporativas, S.L.	Spain	97.17%	2.83%		100.00%	100.00%	E- commerce	24	5	6
Independence Community Bank Corp.	United States	0.00%	100.00%		100.00%	100.00%	Holding company	3,903	116	4,019
Innohub, S.A.P.I. de C.V. (j)	Mexico	0.00%	62.01%		69.54%	62.01%	IT services	0	0	0
Insurance Funding Solutions Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Inversiones Capital Global, S.A. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	97	5	103
Inversiones Marítimas del Mediterráneo, S.A., en liquidación (c) (j)	Spain	0.00%	100.00%		100.00%	100.00%	Inactive	2	(1)	0
Isar Valley S.A.	Luxembourg	—	(b)		—	—	Securitizat ion	6	0	0
Isla de los Buques, S.A.	Spain	99.98%	0.02%		100.00%	100.00%	Finance company	1	0	1
Klare Corredora de Seguros S.A.	Chile	0.00%	100.00%		100.00%	50.10%	Insurance mediation	(2)	(2)	0

230

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Landcompany 2020, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Real estate managem ent	1,579	(1)	1,590
Laparanza, S.A.	Spain	61.59%	0.00%		61.59%	61.59%	Agricultur al holding	29	0	16
Lerma Investments 2018, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Real estate	10	0	11
Liquetine, S.L. Unipersonal	Spain	0.00%	70.00%		100.00%	100.00%	Renewabl e energies	4	0	4
Liquidity Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Factoring	0	0	0
Lynx Financial Crime Tech, S.A.	Spain	0.00%	79.99%		79.99%	100.00%	IT services	58	(4)	48
MAC No. 1 Limited	United Kingdom	—	(b)		—	—	Mortgage credit company	(1)	0	0
Master Red Europa, S.L.	Spain	96.34%	0.00%		96.34%	96.34%	Cards	1	0	1
Mata Alta, S.L. Unipersonal	Spain	0.00%	61.59%		100.00%	100.00%	Agricultur al holding	0	0	0

231

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
MCE Bank GmbH (d)	Germany	0.00%	90.01%		90.01%	90.01%	Banking	133	(3)	86
MCE Verwaltung GmbH (d)	Germany	0.00%	90.01%		100.00%	100.00%	Real estate rental	10	0	9
Mercadotecnia, Ideas y Tecnología, S.A. de C.V.	Mexico	0.00%	70.00%		70.00%	70.00%	Payment methods	0	13	14
Merciver, S.L.	Spain	99.90%	0.10%		100.00%	100.00%	Financial advisory	0	0	0
Midata Service GmbH (d)	Germany	0.00%	90.01%		100.00%	100.00%	IT services	0	0	0
Moon GC&P Investments, S.L. Unipersonal	Spain	100.00%	0.00		1.00	—	Holding company	90	0	91
Motor Securities 2018-1 Designated Activity Company (j)	Ireland	—	(b)		—	—	Securitization	0	0	0
Mouro Capital I LP	United Kingdom	0.00%	100.00%		100.00%	100.00%	Investment fund	773	(6)	324
Multiplica SpA	Chile	0.00%	100.00%		100.00%	100.00%	Payment services	2	0	2
Munduspar Participações S.A.	Brazil	0.80	0.00		0.80	0.80	Holding company	24	0	55
Navegante Américo Vespucio SpA	Chile	0.00%	100.00%		100.00%	100.00%	Real estate	62	(1)	92
Naviera Mirambel, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Finance company	0	0	0
Naviera Trans Gas, A.I.E.	Spain	99.99%	0.01%		100.00%	100.00%	Renting	53	6	62
Naviera Transcantábrica, S.L.	Spain	100.00%	0.00%		100.00%	100.00%	Leasing	5	0	4
Naviera Transchem, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Leasing	1	0	1
NeoAuto S.A.C.	Peru	0.00%	100.00%		100.00%	100.00%	Vehicles purchased by internet	1	(1)	2
Newcomar, S.L., en liquidación (j)	Spain	40.00%	40.00%		80.00%	80.00%	Real estate	0	0	0

232

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Novimovest – Fundo de Investimento Imobiliário	Portugal	0.00%	78.64%		78.74%	78.74%	Investment fund	155	4	125
NW Services CO.	United States	0.00%	100.00%		100.00%	100.00%	E-commerce	8	2	8
One Mobility Management GmbH	Germany	0.00%	46.95%		100.00%	100.00%	Services	0	0	0
Open Bank, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Banking	623	91	630
Open Digital Market, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	Commerce	0	0	0
Open Digital Services, S.L.	Spain	99.97%	0.03%		100.00%	100.00%	Services	56	(36)	5
Openbank México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México	Mexico	0.00%	100.00%		100.00%	100.00%	Banking	171	(21)	150
Operadora de Carteras Gamma, S.A.P.I. de C.V.	Mexico	100.00%	0.00%		100.00%	100.00%	Holding company	11	1	11
Optimal Investment Services SA	Switzerla nd	100.00%	0.00%		100.00%	100.00%	Fund management company	42	2	30
Optimal Multiadvisors Ireland Plc / Optimal Strategic US Equity Ireland Euro Fund (i) (m)	Ireland	0.00%	0.00%		0.00%	—	Fund management company	0	0	0
Optimal Multiadvisors Ireland Plc / Optimal Strategic US Equity Ireland US Dollar Fund (i) (m)	Ireland	0.00%	0.00%		0.00%	—	Fund management company	0	0	0
Paga Después, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Financial services	3	0	3
PagoNxt Emoney, E.D.E., S.L.	Spain	0.00%	100.00%		100.00%	100.00%	Financial services	2	(1)	2
PagoNxt Ltd	United Kingdom	100.00%	0.00%		100.00%	100.00%	Holding company	6	2	8
PagoNxt Merchant Solutions FZ- LLC	Arab United Emirates	0.00%	100.00%		100.00%	100.00%	Financial services	1	0	1
PagoNxt Merchant Solutions India Private Limited	India	0.00%	100.00%		100.00%	100.00%	Financial services	2	0	1
PagoNxt Payments Brasil Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	Financial services	3	0	3

233

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
PagoNxt Payments Chile SpA	Chile	0.00%	100.00%		100.00%	100.00%	Services	1	0	1
PagoNxt Payments México, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	IT services	1	1	1
PagoNxt Payments UK Ltd	United Kingdom	0.00%	100.00%		100.00%	100.00%	Payment services	7	(3)	5
PagoNxt Payments, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	IT services	383	(82)	301
PagoNxt Trade Services, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	Services	315	(84)	232
PagoNxt US, LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
PagoNxt, S.L.	Spain	1.00	0.00%		100.00%	100.00%	Holding company	2,430	(564)	2,699
Paytec Logística e Armazém Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	Logistics services	(1)	(1)	0
Paytec Tecnologia em Pagamentos Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	Commerce	4	0	5
PBE Companies, LLC	United States	0.00%	100.00%		100.00%	100.00%	Real estate	120	(2)	118
Pereda Gestión, S.A.	Spain	99.99%	0.01%		100.00%	100.00%	Securities brokerage	52	9	4
Phoenix S.A.	Uruguay	0.00%	100.00%		100.00%	100.00%	Payment methods	0	0	3
Pony S.A.	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
Pony S.A., Compartment German Auto Loans 2023-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
Pony S.A., Compartment German Auto Loans 2024-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
Portal Universia Argentina S.A.	Argentine	0.00%	75.75%		75.75%	75.75%	Internet	0	0	0
Portal Universia Portugal, Prestação de Serviços de Informática, S.A.	Portugal	0.00%	100.00%		100.00%	100.00%	Internet	0	0	0

234

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Precato IV Fundo de Investimento em Direitos Creditórios - Não Padronizados	Brazil	0.00%	90.00%		100.00%	100.00%	Investment fund	23	3	24
Prime 16 – Fundo de Investimentos Imobiliário	Brazil	0.00%	90.00%		100.00%	100.00%	Investment fund	10	(3)	6
Punta Lima Wind Farm, LLC	United States	0.00%	100.00%		100.00%	100.00%	Renewable energies	36	(14)	22
Punta Lima, LLC	United States	0.00%	100.00%		100.00%	100.00%	Leasing	36	(14)	22
Repton 2023-1 Limited	United Kingdom	—	(b)		—	—	Securitization	(3)	3	0
Retailcompany 2021, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Real estate	297	(9)	289
Retop S.A. (f)	Uruguay	100.00%	0.00%		100.00%	100.00%	Finance company	25	13	63
Return Capital Gestão de Ativos e Participações S.A.	Brazil	0.00%	90.00%		100.00%	80.00%	Collection services	1,396	99	1,346
Rojo Entretenimento S.A.	Brazil	0.00%	85.14%		94.60%	94.60%	Real estate	24	2	22
SAFO Alternative Lending, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Finance company	13	0	13
SAI Alternative Investments México, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	—	Consulting services	2	(1)	1
SAI Lux Carry SCSp	Luxembo urg	0.00%	100.00%		100.00%	—	Fund management company	0	0	0
SALCO, Servicios de Seguridad Santander, S.A.	Spain	99.99%	0.01%		100.00%	100.00%	Security	2	1	1
SAM Argentina Sociedad Gerente de Fondos Comunes de Inversión S.A.	Argentine	0.00%	100.00%		100.00%	100.00%	Investment fund management	2	(1)	1
SAM Asset Management, S.A. de C.V., Sociedad Operadora de Fondos de Inversión	Mexico	0.00%	100.00%		100.00%	100.00%	Fund management company	34	34	193
SAM Inversiones Argentina S.A.	Argentine	0.00%	100.00%		100.00%	100.00%	Pension fund management company	0	0	0
SAM Investment Holdings, S.L.	Spain	92.37%	7.63%		100.00%	100.00%	Holding company	1,466	88	1,597

235

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
San Créditos Estruturados i Fundo de Investimento em Direitos Creditórios Não Padronizados	Brazil	0.00%	90.00%		100.00%	100.00%	Investment fund	204	24	205
San Pietro Solar PV, S.r.l.	Italy	0.00%	56.00%		80.00%	80.00%	Renewable energies	6	(1)	12
SANB Promotora de Vendas e Cobrança S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Finance company	0	2	1
Sancap Investimentos e Participações S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Holding company	105	97	164
Santander (CF Trustee Property Nominee) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander (CF Trustee) Limited (d)	United Kingdom	—	(b)		—	—	Inactive	0	0	0
Santander (UK) Group Pension Schemes Trustees Limited (d)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Ahorro Inmobiliario 1, S.A. (j)	Spain	98.53%	0.00%		98.53%	98.53%	Real estate rental	0	0	0
Santander Alternative Investments, S.G.I.I.C., S.A. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Fund management company	23	(10)	32
Santander AM Global Working Capital Fund I	Luxembo urg	100.00%	0.00%		100.00%	100.00%	Investment fund	76	3	75
Santander Asesorías Financieras Limitada	Chile	0.00%	67.45%		100.00%	100.00%	Financial advisory	3	8	8
Santander Asset Finance (December) Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Leasing	83	0	0
Santander Asset Finance Opportunities	Luxembo urg	100.00%	0.00%		100.00%	100.00%	Investment fund	85	4	87
Santander Asset Finance plc	United Kingdom	0.00%	100.00%		100.00%	100.00%	Leasing	71	30	175
Santander Asset Management - SGOIC, S.A.	Portugal	0.00%	100.00%		100.00%	100.00%	Fund management company	6	3	12
Santander Asset Management Chile S.A.	Chile	0.00%	100.00%		100.00%	100.00%	Securities Investment	0	0	0
Santander Asset Management Gerente de Fondos Comunes de Inversión S.A.	Argentine	0.00%	100.00%		100.00%	100.00%	Fund management company	8	17	3

236

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Asset Management Luxembourg, S.A.	Luxembo urg	0.00%	100.00%		100.00%	100.00%	Fund management company	4	1	0
Santander Asset Management S.A. Administradora General de Fondos	Chile	0.00%	100.00%		100.00%	100.00%	Fund management company	2	14	132
Santander Asset Management UK Holdings Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Holding company	219	54	186
Santander Asset Management UK Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Management of funds and portfolios	31	8	129
Santander Asset Management, S.A., SGIIC	Spain	0.00%	100.00%		100.00%	100.00%	Fund management company	253	69	393
Santander Auto Lease Titling Ltd.	United States	0.00%	100.00%		100.00%	100.00%	Leasing	0	8	9
Santander Back-Offices Globales Mayoristas, S.A.	Spain	100%	0.00%		100%	100%	Services	4	2	1
Santander Banca de Inversión Colombia, S.A.S.	Colombia	100.00%	0.00%		100.00%	100.00%	Advisory services	2	0	1
Santander Bank & Trust Ltd.	Bahamas	100.00%	0.00%		100.00%	100.00%	Banking	391	12	389
Santander Bank Polska S.A.	Poland	62.20%	0.00%		62.20%	67.41%	Banking	5,855	1,216	4,268
Santander Bank, National Association	United States	0.00%	100.00%		100.00%	100.00%	Banking	11,564	607	12,161
Santander Brasil Administradora de Consórcio Ltda.	Brazil	0.00%	90.00%		100.00%	100.00%	Services	46	85	118
Santander Brasil Gestão de Recursos Ltda.	Brazil	0.08%	99.92%		100.00%	100.00%	Securities Investment	390	34	423
Santander Capital Holdings LLC	United States	0.00%	100.00%		100.00%	100.00%	Holding company	1,025	(29)	996
Santander Capital Structuring, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Investment Company	5	0	0
Santander Capitalização S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Insurance	(34)	95	55
Santander Cards Ireland Limited (n)	Ireland	0.00%	100.00%		100.00%	100.00%	Cards	(8)	0	0

237

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Cards Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	101	0	101
Santander Cards UK Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	166	3	116
Santander Chile Holding S.A.	Chile	22.11%	77.75%		99.86%	99.86%	Holding company	1,847	295	1,777
Santander Compara Holding, S.L.	Spain	99.97%	0.03%		100.00%	—	Holding company	12	0	12
Santander Consulting (Beijing) Co., Ltd.	China	0.00%	100.00%		100.00%	100.00%	Advisory services	10	1	4
Santander Consumer (UK) plc	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	1,192	(205)	314
Santander Consumer Auto Receivables Funding 2018-L3 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	143	(10)	0
Santander Consumer Auto Receivables Funding 2022-B1 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(88)	26	0
Santander Consumer Auto Receivables Funding 2022-B2 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(103)	30	0
Santander Consumer Auto Receivables Funding 2022-B3 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(166)	50	0
Santander Consumer Auto Receivables Funding 2022-B4 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(108)	42	0
Santander Consumer Auto Receivables Funding 2023-B1 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(133)	79	0
Santander Consumer Auto Receivables Funding 2023-B2 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(84)	34	0
Santander Consumer Auto Receivables Funding 2023-B3 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(75)	29	0
Santander Consumer Auto Receivables Funding 2023-B4 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(87)	35	0
Santander Consumer Auto Receivables Funding 2023-B5 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Auto Receivables Funding 2023-B6 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0

238

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Consumer Auto Receivables Funding 2024-B1 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Auto Receivables Funding 2024-B2 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Auto Receivables Funding 2024-B3 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Auto Receivables Funding 2024-L1 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Auto Receivables Funding 2024-L2 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Bank AG	Germany	0.00%	100.00%		100.00%	100.00%	Banking	3,588	207	5,345
Santander Consumer Bank AS	Norway	0.00%	100.00%		100.00%	100.00%	Banking	2,064	156	2,111
Santander Consumer Bank GmbH	Austria	0.00%	100.00%		100.00%	100.00%	Banking	543	54	363
Santander Consumer Bank S.A.	Poland	0.00%	77.32%		100.00%	100.00%	Banking	941	11	505
Santander Consumer Bank S.p.A.	Italy	0.00%	100.00%		100.00%	100.00%	Banking	968	29	603
Santander Consumer Credit Services Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	(41)	(2)	0
Santander Consumer Finance Global Services, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	IT	6	2	5
Santander Consumer Finance Inc.	Canada	0.00%	100.00%		100.00%	100.00%	Holding company	112	0	171
Santander Consumer Finance Limitada	Chile	49.00%	34.24%		100.00%	100.00%	Finance company	113	10	57
Santander Consumer Finance México, S.A. de C.V., S.O.F.O.M., E.R., Grupo Financiero Santander México	Mexico	0.00%	99.98%		100.00%	100.00%	Inactive	2	0	2
Santander Consumer Finance Oy	Finland	0.00%	100.00%		100.00%	100.00%	Finance company	458	30	159
Santander Consumer Finance Schweiz AG	Switzerla nd	0.00%	100.00%		100.00%	100.00%	Leasing	75	(15)	60

239

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Consumer Finance, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Banking	9,139	558	10,037
Santander Consumer Financial Solutions Sp. z o.o.	Poland	0.00%	77.32%		100.00%	100.00%	Leasing	4	(7)	5
Santander Consumer Holding Austria GmbH	Austria	0.00%	100.00%		100.00%	100.00%	Holding company	364	0	518
Santander Consumer Holding GmbH	Germany	0.00%	100.00%		100.00%	100.00%	Holding company	5,564	136	6,077
Santander Consumer Inc.	Canada	0.00%	100.00%		100.00%	100.00%	Finance company	92	(8)	46
Santander Consumer Lease Receivables 1 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	0	(23)	0
Santander Consumer Lease Receivables 2 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	0	(1)	0
Santander Consumer Leasing B.V.	Netherla nds	0.00%	100.00%		100.00%	100.00%	Renting	12	1	21
Santander Consumer Leasing GmbH	Germany	0.00%	100.00%		100.00%	100.00%	Leasing	70	9	151
Santander Consumer Leasing S.A.	France	0.00%	100.00%		100.00%	100.00%	Renting	3	0	3
Santander Consumer Mobility Services, S.A.	Spain	0.00%	100.00%		100.00%	100.00%	Renting	12	(4)	20
Santander Consumer Multirent Sp. z o.o.	Poland	0.00%	77.32%		100.00%	100.00%	Leasing	38	5	27
Santander Consumer Operations Services GmbH	Germany	0.00%	100.00%		100.00%	100.00%	Services	15	1	18
Santander Consumer Receivables 10 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	959	97	0
Santander Consumer Receivables 11 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	673	26	0
Santander Consumer Receivables 15 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	14	(23)	0
Santander Consumer Receivables 16 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	(46)	39	0
Santander Consumer Receivables 20 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Receivables 21 LLC	United States	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Consumer Receivables 7 LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	748	73	0

240

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Consumer Receivables Funding LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	7	3	0
Santander Consumer Renting S.r.l.	Italy	0.00%	100.00%		100.00%	100.00%	Renting	6	(3)	9
Santander Consumer Renting, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	Renting	43	2	38
Santander Consumer S.A.	Argentine	0.00%	99.82%		100.00%	100.00%	Finance company	15	2	16
Santander Consumer Services GmbH	Austria	0.00%	100.00%		100.00%	100.00%	Services	0	0	0
Santander Consumer Services, S.A.	Portugal	0.00%	100.00%		100.00%	100.00%	Finance company	14	(1)	6
Santander Consumer Spain Auto 2019-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumer Spain Auto 2020-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumer Spain Auto 2021-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumer Spain Auto 2022-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumer Spain Auto 2023-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumer Spain Auto 2024-1, Fondo de Titulización	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumer Technology Services GmbH	Germany	0.00%	100.00%		100.00%	100.00%	IT services	29	2	22
Santander Consumer USA Holdings Inc.	United States	0.00%	100.00%		100.00%	100.00%	Holding company	3,304	684	5,072
Santander Consumer USA Inc.	United States	0.00%	100.00%		100.00%	100.00%	Finance company	6,036	684	6,719
Santander Consumo 4, F.T.	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumo 5, F.T.	Spain	—	(b)		—	—	Securitization	0	0	0

241

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Consumo 6, F.T.	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Consumo 7, F.T.	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Corredora de Seguros Limitada	Chile	0.00%	67.21%		100.00%	100.00%	Insurance mediation	17	2	13
Santander Corredores de Bolsa Limitada	Chile	0.00%	83.24%		100.00%	100.00%	Securities company	54	4	49
Santander Corretora de Câmbio e Valores Mobiliários S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Securities company	151	6	141
Santander Corretora de Seguros, Investimentos e Serviços S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Insurance mediation	1,006	244	1,122
Santander Customer Voice, S.A.	Spain	99.50%	0.50%		100.00%	100.00%	Services	2	(1)	3
Santander de Titulización, S.G.F.T., S.A.	Spain	81.00%	19.00%		100.00%	100.00%	Fund management company	5	4	2
Santander Distribuidora de Títulos e Valores Mobiliários S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Securities company	72	3	68
Santander Drive Auto Receivables LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	0	0	0
Santander Drive Auto Receivables Trust 2021-2	United States	—	(b)		—	—	Securitization	118	60	0
Santander Drive Auto Receivables Trust 2022-1	United States	—	(b)		—	—	Securitization	(61)	51	0
Santander Drive Auto Receivables Trust 2022-2	United States	—	(b)		—	—	Securitization	(93)	65	0
Santander Drive Auto Receivables Trust 2022-3	United States	—	(b)		—	—	Securitization	(102)	55	0
Santander Drive Auto Receivables Trust 2022-4	United States	—	(b)		—	—	Securitization	(151)	69	0
Santander Drive Auto Receivables Trust 2022-5	United States	—	(b)		—	—	Securitization	(186)	71	0
Santander Drive Auto Receivables Trust 2022-6	United States	—	(b)		—	—	Securitization	(181)	71	0
Santander Drive Auto Receivables Trust 2022-7	United States	—	(b)		—	—	Securitization	(91)	40	0

242

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Drive Auto Receivables Trust 2023-1	United States	—	(b)		—	—	Securitization	(96)	69	0
Santander Drive Auto Receivables Trust 2023-2	United States	—	(b)		—	—	Securitization	(162)	109	0
Santander Drive Auto Receivables Trust 2023-3	United States	—	(b)		—	—	Securitization	(207)	124	0
Santander Drive Auto Receivables Trust 2023-4	United States	—	(b)		—	—	Securitization	(186)	97	0
Santander Drive Auto Receivables Trust 2023-5	United States	—	(b)		—	—	Securitization	(187)	104	0
Santander Drive Auto Receivables Trust 2023-6	United States	—	(b)		—	—	Securitization	(153)	83	0
Santander Drive Auto Receivables Trust 2024-1	United States	—	(b)		—	—	Securitization	0	(112)	0
Santander Drive Auto Receivables Trust 2024-2	United States	—	(b)		—	—	Securitization	0	(169)	0
Santander Drive Auto Receivables Trust 2024-3	United States	—	(b)		—	—	Securitization	0	(206)	0
Santander Drive Auto Receivables Trust 2024-4	United States	—	(b)		—	—	Securitization	0	(234)	0
Santander Drive Auto Receivables Trust 2024-5	United States	—	(b)		—	—	Securitization	0	(206)	0
Santander Drive Auto Receivables Trust 2024-7	United States	—	(b)		—	—	Inactive	0	0	0
Santander Drive Auto Receivables Trust 2024-S4	United States	—	(b)		—	—	Inactive	0	0	0
Santander Drive Auto Receivables Trust 2025-1	United States	—	(b)		—	—	Inactive	0	0	0
Santander Empresa Administradora de Fondos Colectivos S.A.	Peru	99.00%	1.00%		100.00%	—	Investment Company	2	(1)	1
Santander Equity Investments Limited	United Kingdom	0%	100.00%		100%	100%	Finance company	70	10	36
Santander España Servicios Legales, S.L.	Spain	99.97%	0.03%		100.00%	100.00%	Services	9	0	8

243

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Estates Limited	United Kingdom	0%	100.00%		100%	100%	Real estate	(8)	(1)	0
Santander European Hospitality Opportunities	Luxembo urg	100%	0.00%		100%	100%	Investment fund	30	0	26
Santander F24 S.A.	Poland	0%	62.20%		100%	100%	Finance company	2	0	2
Santander Facility Management España, S.L. Unipersonal	Spain	0%	100.00%		100%	100%	Real estate	799	(13)	785
Santander Factoring S.A.	Chile	0%	99.86%		100%	100%	Factoring	9	0	10
Santander Factoring Sp. z o.o.	Poland	0.00%	62.20%		100.00%	100.00%	Financial services	67	10	1
Santander Factoring y Confirming, S.A. Unipersonal, E.F.C.	Spain	100.00%	0.00%		100.00%	100.00%	Factoring	208	18	126
Santander FI Hedge Strategies	Ireland	0.00%	90.00%		100.00%	—	Investment fund	937	(267)	592
Santander Finance 2012-1 LLC	United States	0.00%	100.00%		100.00%	100.00%	Financial services	3	0	3
Santander Financial Exchanges Limited	United Kingdom	100.00%	0.00%		100.00%	100.00%	Inactive	0	0	0
Santander Financial Services plc	United Kingdom	0.00%	100.00%		100.00%	100.00%	Banking	418	(32)	466
Santander Financiamientos S.A.	Peru	100.00%	0.00%		100.00%	100.00%	Finance company	33	(3)	29
Santander Financing S.A.S.	Colombia	100.00%	0.00%		100.00%	100.00%	Financial advisory	1	2	2
Santander Finanse Sp. z o.o.	Poland	0.00%	62.20%		100.00%	100.00%	Financial services	61	11	19
Santander Fintech Holdings, S.L.	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	329	35	366
Santander Fundo de Investimento Amazonas Multimercado Crédito Privado Investimento no Exterior (o)	Brazil	0.00%	90.00%		100.00%	—	Investment fund	371	72	398
Santander Fundo de Investimento Diamantina Multimercado Crédito Privado Investimento no Exterior (p)	Brazil	0.00%	90.00%		100.00%	—	Investment fund	1,282	278	1,404

244

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Fundo de Investimento Guarujá Multimercado Crédito Privado Investimento no Exterior (d)	Brazil	0.00%	90.00%		100.00%	—	Investment fund	103	11	103
Santander Fundo de Investimento SBAC Renda Fixa Referenciado DI (h)	Brazil	0.00%	90.00%		100.00%	100.00%	Investment fund	1,539	13	1,376
Santander Gestión de Recaudación y Cobranzas Ltda.	Chile	0.00%	99.86%		100.00%	100.00%	Financial services	8	0	9
Santander Global Cards & Digital Solutions Brasil S.A.	Brazil	0.00%	100.00%		100.00%	100.00%	IT consulting	111	(6)	104
Santander Global Cards & Digital Solutions, S.L.	Spain	100.00%	0.00%		100.00%	100.00%	IT services	262	(41)	222
Santander Global Consumer Finance Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	8	0	8
Santander Global Facilities, S.A. de C.V.	Mexico	100.00%	0.00%		100.00%	100.00%	Services	153	10	165
Santander Global Services S.A. (j)	Uruguay	0.00%	100.00%		100.00%	100.00%	Services	0	0	0
Santander Global Services, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Real estate	3	4	3
Santander Global Technology and Operations Brasil Ltda.	Brazil	0.00%	100.00%		100.00%	100.00%	IT services	4	0	1
Santander Global Technology and Operations Chile Limitada	Chile	0.00%	100.00%		100.00%	100.00%	IT services	5	0	6
Santander Global Technology and Operations, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	IT services	464	6	438
Santander Green Investment, S.L.	Spain	99.97%	0.03%		100.00%	100.00%	Holding company	91	4	91
Santander Group Properties, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	—	Holding company	1,062	(13)	1,043
Santander Guarantee Company	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	5	0	3
Santander Hera Renda Fixa Fundo Incentivado de Investimento em Infraestrutura Responsabilidade Limitada	Brazil	0.00%	90.00%		100.00%	—	Investment fund	859	58	825
Santander Hermes Multimercado Crédito Privado Infraestructura Fundo de Investimento (q)	Brazil	0.00%	90.00%		100.00%	—	Investment fund	335	21	321
Santander Hipotecario 2 Fondo de Titulización de Activos	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Hipotecario 3 Fondo de Titulización de Activos	Spain	—	(b)		—	—	Securitization	0	0	0
Santander Holding Imobiliária S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Real estate	76	0	68

245

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Holding Internacional, S.A.	Spain	99.95%	0.05%		100.00%	100.00%	Holding company	4,208	64	2,558
Santander Holdings USA, Inc.	United States	100.00%	0.00%		100.00%	100.00%	Holding company	15,976	1,037	14,855
Santander Inclusión Financiera, S.A. de C.V., S.O.F.O.M., E.R., Grupo Financiero Santander México	Mexico	0.00%	99.98%		100.00%	100.00%	Finance company	11	(3)	8
Santander Insurance Agency, U.S., LLC	United States	0.00%	100.00%		100.00%	100.00%	Insurance mediation	1	0	1
Santander Insurance Services UK Limited	United Kingdom	100.00%	0.00%		100.00%	100.00%	Wealth management	48	2	48
Santander Insurance, S.L.	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	2,541	410	2,686
Santander Intermediación Correduría de Seguros, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Insurance mediation	28	5	18
Santander International Products, Plc. (l)	Ireland	99.99%	0.01%		100.00%	100.00%	Finance company	1	0	0
Santander International Wealth Management México, S. de R.L. de C.V.	México	0.00%	100.00%		100.00%	—	Advisory services	0	0	0
Santander International Wealth Solutions LLC	United States	0.00%	100.00%		100.00%	—	Holding company	0	0	0
Santander Inversiones S.A.	Chile	5.12%	94.88%		100.00%	100.00%	Holding company	1,502	227	1,052
Santander Investment Chile Limitada	Chile	16.12%	83.88%		100.00%	100.00%	Finance company	282	32	321
Santander Investment, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Banking	1,318	108	245
Santander Investments GP 1 S.à.r.l.	Luxembo urg	0.00%	100.00%		100.00%	100.00%	Fund management company	0	1	1
Santander Inwestycje Sp. z o.o.	Poland	0.00%	62.20%		100.00%	100.00%	Securities company	4	0	0
Santander ISA Managers Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Management of funds and portfolios	40	7	6
Santander Lease, S.A., E.F.C.	Spain	100.00%	0.00%		100.00%	100.00%	Leasing	60	(1)	51

246

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Leasing AB	Sweden	0.00%	100.00%		100.00%	—	Leasing and renting	9	3	22
Santander Leasing S.A.	Poland	0.00%	62.20%		100.00%	100.00%	Leasing	199	8	36
Santander Leasing S.A. Arrendamento Mercantil	Brazil	0.00%	90.00%		100.00%	100.00%	Leasing	1,431	114	1,390
Santander Leasing, LLC	United States	0.00%	100.00%		100.00%	100.00%	Leasing	(1)	(1)	0
Santander Lending Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Mortgage credit company	278	15	293
Santander Mediación Operador de Banca-Seguros Vinculado, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Insurance mediation	52	0	3
Santander Merchant S.A.	Argentin e	5.10%	94.90%		100.00%	100.00%	Finance company	1	1	2
Santander Mortgage Asset Depositor LLC	United States	0.00%	100.00%		100.00%	—	Inactive	0	0	0
Santander Mortgage Holdings Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Holding company	(12)	0	0
Santander New Business, S.A.	Spain	99.00%	1.00%		100.00%	100.00%	Trade intermediary	3	0	3
Santander Paraty Qif PLC	Ireland	0.00%	90.00%		100.00%	100.00%	Investment Company	937	(267)	592
Santander Pensiones, S.A., E.G.F.P.	Spain	0.00%	100.00%		100.00%	100.00%	Pension fund management company	87	14	184
Santander Pensões - Sociedade Gestora de Fundos de Pensões, S.A.	Portugal	100.00%	0.00%		100.00%	100.00%	Pension fund management company	3	0	3
Santander Prime Auto Issuance Notes 2018-A Designated Activity Company (j)	Ireland	—	(b)		—	—	Inactive	0	0	0
Santander Prime Auto Issuance Notes 2018-B Designated Activity Company (j)	Ireland	—	(b)		—	—	Inactive	0	0	0
Santander Prime Auto Issuance Notes 2018-C Designated Activity Company (j)	Ireland	—	(b)		—	—	Inactive	0	0	0
Santander Prime Auto Issuance Notes 2018-D Designated Activity Company (j)	Ireland	—	(b)		—	—	Inactive	0	0	0

247

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Prime Auto Issuance Notes 2018-E Designated Activity Company (j)	Ireland	—	(b)		—	—	Inactive	0	0	0
Santander Private Banking Gestión, S.A., S.G.I.I.C.	Spain	100.00%	0.00%		100.00%	100.00%	Fund management company	73	13	35
Santander Private Banking s.p.a. in Liquidazione (j)	Italy	100.00%	0.00%		100.00%	100.00%	Finance company	14	0	8
Santander Private Banking UK Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Holding company	310	123	420
Santander Private Real Estate Advisory & Management, S.A.	Spain	99.99%	0.01%		100.00%	100.00%	Real estate	4	0	4
Santander Private Real Estate Advisory, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Real estate	17	4	20
Santander Real Estate Debt 1 sub-fund	Luxembo urg	100.00%	0.00%		100.00%	100.00%	Investment fund	42	2	42
Santander Real Estate Equity I, F.C.R.	Spain	100.00%	0.00%		100.00%	—	Venture capital fund	25	(1)	24
Santander Real Estate, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Inactive	1	0	1
Santander Retail Auto Lease Funding LLC	United States	0.00%	100.00%		100.00%	100.00%	Finance company	0	0	0
Santander Retail Auto Lease Trust 2022-A	United States	—	(b)		—	—	Securitization	20	19	0
Santander Retail Auto Lease Trust 2022-B	United States	—	(b)		—	—	Securitization	14	17	0
Santander RMBS 6, Fondo de Titulización	Spain	—	(b)		—	—	Securitization	0	0	0
Santander S.A. Sociedad Securitizadora	Chile	0.00%	67.24%		100.00%	100.00%	Fund management company	1	0	0
Santander Secretariat Services Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Santander Securities LLC	United States	0.00%	100.00%		100.00%	100.00%	Securities company	39	2	41
Santander Seguros y Reaseguros, Compañía Aseguradora, S.A.	Spain	0.00%	100.00%		100.00%	100.00%	Insurance	857	157	1,152

248

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santander Services Solutions, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	Payment services	16	(2)	14
Santander Servicios Corporativos, S.A. de C.V.	Mexico	0.00%	99.98%		100.00%	100.00%	Services	14	1	14
Santander Technology USA, LLC	United States	0.00%	100.00%		100.00%	100.00%	IT services	53	0	53
Santander Tecnología Argentina S.A.	Argentine	0.00%	99.83%		100.00%	100.00%	IT services	6	19	19
Santander Tecnología México, S.A. de C.V.	Mexico	0.00	1.00		1.00	1.00	IT services	51	0	51
Santander Totta Seguros, Companhia de Seguros de Vida, S.A.	Portugal	0.00	1.00		1.00	1.00	Insurance	106	25	255
Santander Totta, SGPS, S.A.	Portugal	1.00	0.00		1.00	1.00	Holding company	3,749	885	5,652
Santander Towarzystwo Funduszy Inwestycyjnych S.A.	Poland	0.50	0.31		1.00	1.00	Fund management company	4	26	16
Santander Trade Services Limited	Hong- Kong	0.00%	100.00%		100.00%	100.00%	Inactive	27	1	16
Santander Trust S.A.	Argentin e	0.00%	99.99%		100.00%	100.00%	Services	0	0	0
Santander UK Group Holdings plc	United Kingdom	77.67%	22.33%		100.00%	100.00%	Holding company	14,516	1,736	17,655
Santander UK Investments	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	118	1	114
Santander UK Operations Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Finance company	7	0	0
Santander UK plc	United Kingdom	0.00	100.00%		100.00%	1.00	Banking	12,732	490	15,829
Santander UK Technology Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	IT services	26	0	7
Santander US Capital Markets LLC	United States	0.00%	100.00%		100.00%	100.00%	Securities Investment	1,053	(34)	1,019
Santander Valores S.A.	Argentine	0.05	94.73%		100.00%	1.00	Securities company	11	22	32

249

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Santusa Holding, S.L.	Spain	0.70	30.24%		100.00%	1.00	Holding company	9,931	508	6,559
SBNA Auto Lease Funding LLC	United States	0.00	100.00%		100.00%	1.00	Finance company	(2)	(596)	0
SBNA Auto Lease Trust 2023-A	United States	—	(b)		—	—	Securitization	(2)	(520)	0
SBNA Auto Lease Trust 2024-A	United States	—	(b)		—	—	Securitization	0	(24)	0
SBNA Auto Lease Trust 2024-B	United States	—	(b)		—	—	Securitization	0	(35)	0
SBNA Auto Lease Trust 2024-C	United States	—	(b)		—	—	Securitization	0	(17)	0
SBNA Auto Lease Trust 2025-A	United States	—	(b)		—	—	Inactive	0	0	0
SBNA Auto Receivables Funding LLC	United States	0.00%	100.00%		100.00%	—	Finance company	0	2	2
SBNA Auto Receivables Grantor Trust 2025-A	United States	—	(b)		—	—	Inactive	0	0	0
SBNA Auto Receivables Trust 2025-A	United States	—	(b)		—	—	Inactive	0	0	0
SBNA Investor LLC	United States	0.00%	100.00%		100.00%	100.00%	Holding company	1,030	89	1,119
SC Austria Auto Finance 2020-1 Designated Activity Company	Ireland	—	(b)		—	—	Securitization	0	0	0
SC Austria Consumer Loan 2021 Designated Activity Company	Ireland	—	(b)		—	—	Securitization	0	0	0
SC Canada Asset Securitization Trust	Canada	—	(b)		—	—	Securitization	0	0	0
SC Germany Auto 2019-1 UG (haftungsbeschränkt) (j)	Germany	—	(b)		—	—	Securitization	0	0	0
SC Germany Consumer 2018-1 UG (haftungsbeschränkt) (j)	Germany	—	(b)		—	—	Securitization	0	0	0
SC Germany Mobility 2019-1 UG (haftungsbeschränkt) (j)	Germany	—	(b)		—	—	Securitization	0	0	0

250

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
SC Germany S.A.	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Consumer 2020-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Consumer 2021-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Consumer 2022-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Consumer 2023-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Consumer 2024-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Consumer 2024-2	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Consumer Private 2023-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Leasing 2023-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Germany S.A., Compartment Mobility 2020-1	Luxembo urg	—	(b)		—	—	Securitization	0	0	0
SC Mobility AB	Sweden	0.00%	100.00%		100.00%	100.00%	Renting	0	0	0
SC Mobility AS	Norway	0.00%	100.00%		100.00%	100.00%	Renting	32	(1)	33
SC Poland Consumer 23-1 Designated Activity Company	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Ajoneuvohallinto IX Limited	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Ajoneuvohallinto VIII Limited (j)	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Ajoneuvohallinto X Limited	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Ajoneuvohallinto XI Limited	Ireland	—	(b)		—	—	Securitization	0	0	0

251

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
SCF Ajoneuvohallinto XII Limited	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Ajoneuvohallinto XIII Limited	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Eastside Locks GP Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Real estate management	0	0	0
SCF Rahoituspalvelut IX DAC	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Rahoituspalvelut VIII Designated Activity Company (j)	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Rahoituspalvelut X DAC	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Rahoituspalvelut XI Designated Activity Company	Ireland	—	(b)		—	—	Securitization	(13)	0	0
SCF Rahoituspalvelut XII DAC	Ireland	—	(b)		—	—	Securitization	0	0	0
SCF Rahoituspalvelut XIII DAC	Ireland	—	(b)		—	—	Securitization	1	0	0
SCM Poland Auto 2019-1 DAC	Ireland	—	(b)		—	—	Securitization	0	0	0
SDMX Superdigital, S.A. de C.V., Institución de Fondos de Pago Electrónico	Mexico	0.00%	100.00%		100.00%	100.00%	Payment platform	2	(1)	1
Secucor Finance 2021-1, DAC	Ireland	—	(b)		—	—	Securitization	0	0	0
Services and Promotions Delaware Corporation	United States	0.00%	100.00%		100.00%	100.00%	Holding company	94,000,000.00	(10,000,000.00)	146,000,000
Services and Promotions Miami LLC	United States	0.00%	100.00%		100.00%	100.00%	Real estate	88	(3)	85
Servicios de Cobranza, Recuperación y Seguimiento, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	85.00%	Finance company	36	1	40
Servicios Inmobiliarios Residencial en Venta JV2, S.L.	España	0.00%	90.00%		90.00%	0.00%	Inmobiliaria	8	0	8
Sheppards Moneybrokers Limited	United Kingdom	0.00%	100.00%		100.00%	100.00%	Inactive	0	0	0
Shiloh III Wind Project, LLC	United States	0.00%	100.00%		100.00%	100.00%	Renewable energies	363	8	370

252

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Silk Finance No. 5	Portugal	—	(b)		—	—	Securitization	37	(11)	0
Sociedad Integral de Valoraciones Automatizadas, S.A. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Appraisals	1	0	1
Sociedad Operadora de Tarjetas de Pago Santander Getnet Chile S.A.	Chile	0.00%	67.13%		100.00%	100.00%	Payments and collection services	21	28	33
Socur S.A. (f)	Uruguay	100.00%	0.00%		100.00%	100.00%	Finance company	62	15	59
Solution 4Fleet Consultoria Empresarial S.A.	Brazil	0.00%	90.00%		100.00%	80.00%	Vehicle rental	1	0	1
Sovereign Community Development Company	United States	0.00%	100.00%		100.00%	100.00%	Holding company	45	2	47
Sovereign Delaware Investment Corporation	United States	0.00%	100.00%		100.00%	100.00%	Holding company	158	7	165
Sovereign Lease Holdings, LLC	United States	0.00%	100.00%		100.00%	100.00%	Financial services	250	8	258
Sovereign REIT Holdings, Inc.	United States	0.00%	100.00%		100.00%	100.00%	Holding company	8,762	358	9,120
Sovereign Spirit Limited (n)	Bermuda s	0.00%	100.00%		100.00%	100.00%	Leasing	0	0	0
SSA Swiss Advisors AG	Switzerla nd	0.00%	100.00%		100.00%	100.00%	Wealth management	1	1	4
Stellantis Consumer Financial Services Polska Sp. z o.o.	Poland	0.00%	38.66%		100.00%	100.00%	Finance company	4	1	0
Stellantis Financial Services Belux SA	Belgium	0.00%	50.00%		100.00%	100.00%	Finance company	98	8	57
Stellantis Financial Services España, E.F.C., S.A.	Spain	0.00%	50.00%		50.00%	50.00%	Finance company	379	45	190
Stellantis Financial Services Italia S.p.A.	Italy	0.00%	50.00%		50.00%	50.00%	Banking	802	90	293
Stellantis Financial Services Nederland B.V.	Netherla nds	0.00%	50.00%		100.00%	100.00%	Finance company	69	11	39
Stellantis Financial Services Polska Sp. z o.o.	Poland	0.00%	38.66%		50.00%	50.00%	Finance company	63	10	13

253

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Stellantis Renting Italia S.p.A.	Italy	0.00%	50.00%		100.00%	100.00%	Renting	13	3	3
Sterrebeeck B.V.	Netherla nds	100.00%	0.00%		100.00%	100.00%	Holding company	5,895	478	10,877
Suleyado 2003, S.L. Unipersonal	Spain	0.00%	100.00%		100.00%	100.00%	Securities Investment	45	0	31
Summer Empreendimentos Ltda.	Brazil	0.00%	90.00%		100.00%	100.00%	Real estate management	5	1	5
Superdigital Argentina S.A.U.	Argentine	0.00%	100.00%		100.00%	100.00%	IT services	1	(1)	0
Superdigital Holding Company, S.L.	Spain	0.00%	100.00%		100.00%	100.00%	Holding company	199	(193)	6
Superdigital Instituição de Pagamento S.A.	Brazil	0.00%	100.00%		100.00%	100.00%	Payment services	70	(67)	3
Superdigital Perú S.A.C. en liquidación (j)	Peru	0.00%	100.00%		100.00%	100.00%	Financial services	0	0	0
Suzuki Servicios Financieros, S.L.	Spain	0.00%	51.00%		51.00%	51.00%	Intermediation	15	2	0
Svensk Autofinans WH 1 Designated Activity Company (j)	Ireland	—	(b)		—	—	Securitization	0	0	0
Swesant SA	Switzerla nd	0.00%	100.00%		100.00%	100.00%	Holding company	336	(16)	0
SX Negócios Ltda.	Brazil	0.00%	90.00%		100.00%	100.00%	Telemarketing	17	1	16
Tabasco Energía España, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	3	0	1
Taxagest Sociedade Gestora de Participações Sociais, S.A.	Portugal	0.00%	99.87%		100.00%	100.00%	Holding company	56	0	0
Taxos Luz, S.L. Unipersonal	Spain	0.00%	70.00%		100.00%	100.00%	Renewable energies	3	0	11
Teatinos Siglo XXI Inversiones S.A.	Chile	50.00%	50.00%		100.00%	100.00%	Holding company	1,498	266	2,135
The Alliance & Leicester Corporation Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Real estate	0	0	0

254

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
The Best Specialty Coffee, S.L. Unipersonal	Spain	100.00%	0.00%		100.00%	100.00%	Restaurant services	2	1	3
Time Retail Finance Limited (j)	United Kingdom	0.00%	100.00%		100.00%	100.00%	Services	0	0	0
TIMFin S.p.A.	Italy	0.00%	51.00%		51.00%	51.00%	Finance company	62	1	38
Titularizadora Colombiana S.A. - Universalidad TIV V9	Colombia	—	(b)		—	—	Securitization	0	0	0
Tonopah Solar I, LLC	United States	0.00%	100.00%		100.00%	100.00%	Holding company	6	0	5
Tools Soluções e Serviços Compartilhados Ltda.	Brazil	0.00%	90.00%		100.00%	100.00%	Services	36	4	36
Tornquist Asesores de Seguros S.A. (j)	Argentine	0.00%	99.99%		99.99%	99.99%	Inactive	0	0	0
Toro Asset Management S.A.	Brazil	0.00%	90.00%		100.00%	100.00%	Securities Investment	1	0	1
Toro Corretora de Títulos e Valores Mobiliários S.A.	Brazil	0.00%	90.00%		100.00%	62.51%	Securities company	50	0	45
Toro Investimentos S.A.	Brazil	0.00%	90.00%		100.00%	91.32%	Securities company	39	4	39
Totta (Ireland), PLC (h)	Ireland	0.00%	99.87%		100.00%	100.00%	Finance company	451	15	450
Totta Urbe - Empresa de Administração e Construções, S.A.	Portugal	0.00%	99.87%		100.00%	100.00%	Real estate	86	3	89
Trainera Venture Finance I, F.C.R.-PYME	Spain	99.00%	0.00%		99.00%	99.00%	Venture capital fund	20	0	20
Trans Skills Employment Services - Sole Proprietorship LLC	Arab United Emirates	0.00%	66.43%		100.00%	100.00%	Human resources services	1	(1)	0
Trans Skills Information Technology LLC	Saudi Arabia	0.00%	66.43%		100.00%	100.00%	Inactive	0	0	0
Trans Skills Investment in Commercial Enterprises & Management Co. LLC	Arab United Emirates	0.00%	66.43%		100.00%	100.00%	Holding company	1	0	8
Trans Skills South Africa (Pty) Limited	Republic of South Africa	0.00%	66.43%		100.00%	100.00%	Inactive	0	0	0

255

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
Trans Skills Technology Services LLC	Arab United Emirates	0.00%	66.43%		100.00%	100.00%	IT services	2	(1)	0
Transolver Finance EFC, S.A.	Spain	0.00%	51.00%		51.00%	51.00%	Leasing	75	7	17
Transskills Employer Services Private Limited	India	0.00%	66.43%		100.00%	—	Consulting services	0	0	0
Tresmares Santander Direct Lending, SICC, S.A.	Spain	99.67%	0.00%		99.67%	99.67%	Fund management company	1,210	80	1,201
TVG-Trappgroup Versicherungsvermittlungs- GmbH (d)	Germany	0.00%	90.01%		100.00%	100.00%	Insurance brokerage	0	0	2
Universia Brasil S.A.	Brazil	0.00%	100.00%		100.00%	100.00%	Internet	0	0	0
Universia Chile S.A.	Chile	0.00%	86.84%		86.84%	86.84%	Internet	1	0	0
Universia Colombia S.A.S.	Colombia	0.00%	100.00%		100.00%	100.00%	Internet	0	0	0
Universia España Red de Universidades, S.A.	Spain	0.00%	89.43%		89.43%	89.45%	Internet	3	0	2
Universia Holding, S.L.	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	16	0	14
Universia México, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Internet	1	0	1
Universia Perú, S.A.	Peru	0.00%	99.64%		99.64%	99.40%	Internet	0	0	0
Universia Uruguay, S.A.	Uruguay	0.00%	100.00%		100.00%	100.00%	Internet	0	0	0
Uro Property Holdings, S.A.	Spain	99.99%	0.00%		99.99%	99.99%	Real estate investment	176	(100)	109
Virtua Advanced Solutions FZE	Arab United Emirates	0.00%	66.43%		100.00%	100.00%	Payment services	1	0	0
Wallcesa, S.A.	Spain	100.00%	0.00%		100.00%	100.00%	Financial services	(921)	1	0
Waycarbon Soluções Ambientais e Projetos de Carbono S.A.	Brazil	0.00%	80.00%		100.00%	100.00%	Consulting services	24	0	19

256

Subsidiaries of Banco Santander, S.A. 1
		% of ownership held by Banco Santander			Percentage of voting power (k)			EUR million (a)
Company	Locatio n	Direct	Indirec t		Year 2024	Year 2023	Activity	Capital + reserves	Net results	Carrying amount
WIM Servicios Corporativos, S.A. de C.V.	Mexico	0.00%	100.00%		100.00%	100.00%	Advisory services	0	0	0
WTW Shipping Designated Activity Company	Ireland	100.00%	0.00%		100.00%	100.00%	Leasing	17	3	9

a. Amount according to the provisional books of each company as of the date of publication of these annexes, generally referring to 31 December 2024

without considering, where appropriate, interim dividends that have been made during the year. In the book value (net provision cost), the percentage

of ownership of the Group has been applied to the figure of each of the holding companies, without considering the impairment of goodwill made in

the consolidation process. The data for foreign companies are converted into euros at the exchange rate at the end of the year.

b. Companies over which effective control is maintained.

c. Data as at 31 December 2023, latest available accounts.

d. Data as at 31 March 2024, latest accounts available.

e. Data as at 30 June 2024, last accounts available.

f. Data as at 30 September 2024, last accounts available.

g. Data as at 30 April 2024, last accounts available.

h. Data as at 30 November 2024, last accounts available.

i. Companies in liquidation. Pending registration.

j. Company in liquidation as at 31 December 2024.

k. Pursuant to Article 3 of Royal Decree 1159/ 2010, of 17 September, approving the rules for the preparation of consolidated annual accounts, in order to

determine the voting rights, voting rights held directly by the parent company have been added to those held by companies controlled by the parent

company or by other persons acting in their own name but on behalf of a Group company. For these purposes, the number of votes corresponding to

the parent company, in relation to the companies indirectly dependent on it, is that corresponding to the dependent company that directly participates

in the share capital of the latter.

l. Company resident for tax purposes in Spain.

m. Data as at 30 June 2021, latest available accounts.

n. Company resident for tax purposes in the United Kingdom.

o. Data as at 29 February 2024, latest available accounts.

p. Data as at 31 July 2024, latest available accounts.

q. Data as at 31 May 2024, latest available accounts.

(1) Companies issuing preference shares are listed in Annex III, together with other relevant information.

257

Appendix II

Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
		% of ownership held by Banco Santander			Percentage of voting power (f)				EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Type of company	Asset	Capital + reserves	Net results
Administrador Financiero de Transantiago S.A.	Chile	0.00%	13.43%		20.00%	20.00%	Payments and collection services	Associated	56,000,000	8,000,000	3,000,000
Adprotel Strand, S.L. (consolidado)	Spain	0.00%	38.20%		38.20%	—	Real estate promotion	Associated	730	642	23
Aegon Santander Portugal Não Vida - Companhia de Seguros, S.A.	Portugal	0.00%	49.00%		49.00%	49.00%	Insurance	Joint ventures	73	8	19
Aegon Santander Portugal Vida - Companhia de Seguros Vida, S.A.	Portugal	0.00%	49.00%		49.00%	49.00%	Insurance	Joint ventures	144	24	18
Aeroplan - Sociedade Construtora de Aeroportos, Lda. (e)	Portugal	0.00%	19.97%		20.00%	20.00%	Inactive	—	0	0	0
Aguas de Fuensanta, S.A. (e) (k)	Spain	36.78%	0.00%		36.78%	36.78%	Food	—	0	0	0
Alma UK Holdings Ltd (consolidado) (b)	United Kingdom	30.00%	0.00%		30.00%	30.00%	Holding company	Joint ventures	3	0	3
Apolo Fundo de Investimento em Direitos Creditórios	Brazil	0.00%	30.00%		33.33%	33.33%	Investment fund	Joint ventures	64	3	16
Apolo Vault 1, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 10, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 11, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 12, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 13, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 14, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 15, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 16, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 17, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 18, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 19, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 2, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 20, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 21, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 22, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 23, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 24, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 25, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 26, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 27, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 28, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0
Apolo Vault 29, S.L.	Spain	0.00%	25.00%		25.00%	—	Renewable energies	—	0	0	0

258

Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
		% of ownership held by Banco Santander			Percentage of voting power (f)				EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Type of company	Asset	Capital + reserves	Net results
Apolo Vault 3, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 30, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 31, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 32, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 33, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 34, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 35, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 36, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 37, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 38, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 39, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 4, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 40, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 41, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 42, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 43, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 44, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 45, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 5, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 6, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 7, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 8, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Apolo Vault 9, S.L.	Spain	0.00%	25.00%		25.00%	0.00%	Renewable energies	—	0	0	0
Atitlan Agro I, S.C.R., S.A. (n) (o)	Spain	80.00%	0.00%		0.00%	0.00%	Holding company	—	0	0	0
Attijariwafa Bank Société Anonyme (consolidado) (b)	Morocco	0.00%	5.10%		5.10%	5.10%	Banking	—	62,750	4,792	715
AutoFi Inc. (b)	United States	9.50%	9.40%		4.99%	4.99%	E-commerce	—	24	31	(11)
Autopistas del Sol S.A. (b)	Argentine	0.00%	14.17%		14.17%	14.17%	Highway concession	—	199	72	49
Avanath Affordable Housing IV LLC (b)	United States	0.00%	7.27%		7.27%	7.27%	Investment Company	—	503	498	(81)
Axle 2023-1 Ltd	United Kingdom	—	(h)		—	—	Securitization	Joint ventures	726	0	2
Banco RCI Brasil S.A.	Brazil	0.00%	35.90%		39.89%	39.89%	Banking	Joint ventures	1,997	200	37
Banco S3 Caceis México, S.A., Institución de Banca Múltiple	Mexico	0.00%	50.00%		50.00%	50.00%	Banking	Joint ventures	219	96	14

259

Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
		% of ownership held by Banco Santander			Percentage of voting power (f)				EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Type of company	Asset	Capital + reserves	Net results
Bank of Beijing Consumer Finance Company	China	0.00%	20.00%		20.00%	20.00%	Finance company	Associated	1,868	149	20
Bank of Shanghai Co., Ltd. (consolidado) (b)	China	6.54%	0.00%		6.54%	6.54%	Banking	—	406,864	28,487	2,973
Biomas – Serviços Ambientais, Restauração e Carbono S.A.	Brazil	0.00%	15.00%		16.67%	16.67%	Consulting services	Associated	5	7	(5)
Bizum, S.L.	Spain	20.92%	0.00%		20.92%	20.92%	Payment services	Associated	24	9	3
CACEIS (consolidado)	France	0.00%	30.50%		30.50%	30.50%	Custody services	Associated	118,026	4,268	455
Campo Grande Empreendimentos Ltda. (k) (e)	Brazil	0.00%	22.79%		25.32%	25.32%	Inactive	—	0	0	0
CCPT - ComprarCasa, Rede Serviços Imobiliários, S.A.	Portugal	0.00%	49.98%		49.98%	49.98%	Real estate services	Joint ventures	0	0	0
Centro de Compensación Automatizado S.A.	Chile	0.00%	22.38%		33.33%	33.33%	Payments and collection services	Associated	23	14	5
Centro para el Desarrollo, Investigación y Aplicación de Nuevas Tecnologías, S.A. (l)	Spain	0.00%	49.00%		49.00%	49.00%	Technology	Associated	3	3	0
CIP S.A.	Brazil	0.00%	15.77%		17.52%	17.52%	Financial services	Associated	433	183	88
CNP Santander Insurance Europe Designated Activity Company	Ireland	0.00%	49.00%		49.00%	49.00%	Insurance	Associated	1,466	301	44
CNP Santander Insurance Life Designated Activity Company	Ireland	0.00%	49.00%		49.00%	49.00%	Insurance	Associated	1,007	97	60
CNP Santander Insurance Services Ireland Limited	Ireland	0.00%	49.00%		49.00%	49.00%	Services	Associated	15	7	1
Comder Contraparte Central S.A	Chile	0.00%	8.37%		12.47%	12.47%	Financial services	Associated	19	10	1
Companhia Promotora UCI	Brazil	0.00%	25.00%		25.00%	25.00%	Financial services	Joint ventures	0	(1)	0
Compañia Española de Financiación de Desarrollo, Cofides, S.A., SME (b)	Spain	20.17%	0.00%		20.17%	20.18%	Finance company	—	222	188	27
Compañía Española de Seguros de Crédito a la Exportación, S.A., Compañía de Seguros y Reaseguros (consolidado) (b)	Spain	23.33%	0.55%		23.88%	23.88%	Credit insurance	—	1,357	529	63
Compañía Española de Viviendas en Alquiler, S.A. (consolidado)	Spain	24.07%	0.00%		24.07%	24.07%	Real estate	Associated	606	383	24
Compañía para los Desarrollos Inmobiliarios de la Ciudad de Hispalis, S.L., en liquidación (d) (e)	Spain	21.98%	0.00%		21.98%	21.98%	Real estate promotion	—	38	(325)	0
Connecting Visions Ecosystems, S.L.	Spain	37.56%	0.00%		37.56%	19.90%	Consulting services	Joint ventures	1	1	0
Corkfoc Cortiças, S.A. (c)	Portugal	0.00%	27.55%		27.58%	27.58%	Cork industry	—	3	20	0
CSD Central de Serviços de Registro e Depósito Aos Mercados Financeiro e de Capitais S.A.	Brazil	0.00%	18.00%		20.00%	20.00%	Financial services	Associated	33	32	0
Decus Real Estate, S.L.	Spain	0.00%	30.00%		30.00%	0.00%	Real estate	Joint ventures	47	38	0
DoRes Securitisation S.r.l	Italy	—	(h)		—	—	Securitization	Joint ventures	0	0	0
Elaia Agro, S.L.	Spain	49.99%	0.00%		49.99%	0.00%	Consulting services	Associated	5	4	0
Emerald Tradeco UK Limited (o)	United Kingdom	25.00%	0.00%		4.99%	0.00%	Holding company	Associated	0	0	0
Ethias Lease N.V.	Belgium	0.00%	50.00%		50.00%	50.00%	Leasing	Associated	18	4	(1)
Euro Automatic Cash Entidad de Pago, S.L.	Spain	50.00%	0.00%		50.00%	50.00%	Payment services	Associated	43	23	(2)
European Hospitality Opportunities S.à r.l. (b)	Luxembourg	0.00%	49.00%		49.00%	49.00%	Holding company	Joint ventures	53	16	0
Evacuación Liquesun, S.L.	Spain	0.00%	35.00%		50.00%	50.00%	Electricity production	Joint ventures	0	0	0

260

Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
		% of ownership held by Banco Santander			Percentage of voting power (f)				EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Type of company	Asset	Capital + reserves	Net results
Evolve SPV S.r.l.	Italy	—	(h)		—	—	Securitization	Joint ventures	65	0	0
Federal Home Loan Bank of Pittsburgh (b)	United States	0.00%	5.37%		5.37%	7.48%	Banking	—	107,943	4,907	560
Federal Reserve Bank of Boston (b)	United States	0.00%	21.09%		21.09%	19.14%	Banking	—	183,407	1,662	59
Fondo de Titulización de Activos UCI 14	Spain	—	(h)		—	—	Securitization	Joint ventures	194	0	0
Fondo de Titulización de Activos UCI 15	Spain	—	(h)		—	—	Securitization	Joint ventures	244	0	0
Fondo de Titulización de Activos UCI 16	Spain	—	(h)		—	—	Securitization	Joint ventures	337	0	0
Fondo de Titulización de Activos UCI 17	Spain	—	(h)		—	—	Securitization	Joint ventures	292	0	0
Fondo de Titulización Hipotecaria UCI 12	Spain	—	(h)		—	—	Securitization	Joint ventures	110	0	0
Fondo de Titulización, RMBS Green Prado XI	Spain	—	(h)		—	—	Securitization	Joint ventures	422	0	0
Fondo de Titulización, RMBS Prado IX	Spain	—	(h)		—	—	Securitization	Joint ventures	381	0	0
Fondo de Titulización, RMBS Prado VII	Spain	—	(h)		—	—	Securitization	Joint ventures	321	0	0
Fondo de Titulización, RMBS Prado VIII	Spain	—	(h)		—	—	Securitization	Joint ventures	330	0	0
Fondo de Titulización, RMBS Prado X	Spain	—	(h)		—	—	Securitization	Joint ventures	437	0	0
Forest Power, S.L.	Spain	0.00%	55.00%		55.00%	0.00%	Renewable energies	Joint ventures	0	0	0
Forgepoint Capital International Management Limited	United Kingdom	50.00%	0.00%		50.00%	0.00%	Consulting services	Joint ventures	1	2	(1)
Fortune Auto Finance Co., Ltd	China	0.00%	50.00%		50.00%	50.00%	Finance company	Joint ventures	2,369	500	22
FrauDfense, S.L.	Spain	0.00%	33.33%		33.33%	33.33%	IT services	Joint ventures	3	5	(2)
Fremman limited (b)	United Kingdom	32.99%	0.00%		4.99%	4.99%	Consulting services	Associated	15	1	4
Gestora de Inteligência de Crédito S.A.	Brazil	0.00%	14.00%		16.00%	16.00%	Collection services	Associated	195	56	(4)
Gire S.A.	Argentine	0.00%	58.23%		58.33%	58.33%	Payments and collection services	Associated	134	85	(13)
Glenrowan Solar Holdings Pty Ltd	Australia	49.00%	0.00%		49.00%	49.00%	Holding company	Joint ventures	136	52	1
HCUK Auto Funding 2017-2 Ltd	United Kingdom	—	(h)		—	—	Securitization	Joint ventures	422	0	0
HCUK Auto Funding 2022-1 Limited (m)	United Kingdom	—	(h)		—	—	Securitization	Joint ventures	1,026	(2)	0
Healthy Neighborhoods Equity Fund I LP (b)	United States	0.00%	22.37%		22.37%	22.37%	Real estate	—	9	9	0
Hillcrest Private Equity Real Estate LLP (consolidado)	United Kingdom	0.00%	88.00%		88.00%	88.00%	Real estate	Joint ventures	194	115	3
Hyundai Capital UK Limited	United Kingdom	0.00%	50.01%		50.01%	50.01%	Finance company	Joint ventures	5,601	432	65
Hyundai Corretora de Seguros Ltda.	Brazil	0.00%	45.00%		50.00%	50.00%	Insurance mediation	Joint ventures	1	1	0
Imperial Holding S.C.A. (e) (i)	Luxembourg	0.00%	36.36%		36.36%	36.36%	Securities Investment	—	0	(113)	0
Imperial Management S.à r.l. (b) (e)	Luxembourg	0.00%	40.20%		40.20%	40.20%	Holding company	—	0	0	0
Inverlur Aguilas I, S.L.	Spain	0.00%	50.00%		50.00%	50.00%	Real estate	Joint ventures	0	0	0
Inverlur Aguilas II, S.L.	Spain	0.00%	50.00%		50.00%	50.00%	Real estate	Joint ventures	1	1	0

261

Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
		% of ownership held by Banco Santander			Percentage of voting power (f)				EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Type of company	Asset	Capital + reserves	Net results
Inversiones ZS América Dos Ltda.	Chile	0.00%	49.00%		49.00%	49.00%	Securities and real estate investment	Associated	251	213	38
Inversiones ZS América SpA	Chile	0.00%	49.00%		49.00%	49.00%	Securities and real estate investment	Associated	396	356	39
LB Oprent, S.A. (b)	Spain	40.00%	0.00%		40.00%	40.00%	Rental of industrial machinery	Associated	6	2	0
Mapfre Santander Portugal - Companhia de Seguros, S.A.	Portugal	0.00%	49.99%		49.99%	49.99%	Insurance	Associated	21	7	1
Massachusetts Business Development Corp. (consolidado) (b)	United States	0.00%	21.61%		21.61%	21.61%	Finance company	—	77	16	1
MB Capital Fund IV, LLC (b)	United States	0.00%	21.51%		21.51%	21.51%	Finance company	—	6	6	1
Merlin Properties, SOCIMI, S.A. (consolidado) (b)	Spain	20.04%	4.68%		24.90%	24.66%	Real estate investment	Associated	12,065	6,716	(83)
Merlion Aviation One Designated Activity Company	Ireland	—	(p)		—	—	Renting	—	303	23	0
Metrovacesa, S.A. (consolidado) (b)	Spain	31.94%	17.48%		49.47%	49.49%	Real estate promotion	Associated	2,533	1,706	(21)
Ocyener 2008, S.L.	Spain	0.00%	45.00%		45.00%	45.00%	Holding company	Associated	6	5	1
Operadora de Activos Beta, S.A. de C.V.	Mexico	49.99%	0.00%		49.99%	49.99%	Finance company	Associated	0	0	0
Payever GmbH	Germany	0.00%	10.00%		10.00%	10.00%	Software	Associated	5	3	1
Phoenix C1 Aviation Designated Activity Company	Ireland	—	(p)		—	—	Renting	—	210	19	0
Play Digital S.A.	Argentine	0.00%	14.18%		14.21%	14.71%	Payment platform	Associated	24	20	(16)
Pluxee Beneficios Brasil S.A.	Brazil	0.00%	18.00%		20.00%	0.00%	Services	Associated	1,282	469	71
POLFUND - Fundusz Poręczeń Kredytowych S.A.	Poland	0.00%	31.10%		50.00%	50.00%	Investment management	Associated	34	23	1
Portland SPV S.r.l.	Italy	—	(h)		—	—	Securitization	Joint ventures	141	0	0
Power Forest Aranda, S.L. Unipersonal	Spain	0.00%	55.00%		55.00%	0.00%	Renewable energies	Joint ventures	0	0	0
Promontoria Manzana, S.A. (consolidado) (b)	Spain	20.00%	0.00%		20.00%	20.00%	Holding company	Associated	714	176	(59)
Redbanc S.A.	Chile	0.00%	22.44%		33.43%	33.43%	Services	Associated	28	12	2
Redsys Servicios de Procesamiento, S.L. (consolidado)	Spain	24.90%	0.06%		24.96%	24.96%	Cards	Associated	157	74	5
Retama Real Estate, S.A. Unipersonal	Spain	0.00%	50.00%		50.00%	50.00%	Real estate	Joint ventures	16	(51)	(3)
Rías Redbanc S.A.	Uruguay	0.00%	25.00%		25.00%	25.00%	Services	—	4	1	0
RMBS Belém No.2	Portugal	—	(h)		—	—	Securitization	Joint ventures	200	0	0
RMBS Green Belém No.1	Portugal	—	(h)		—	—	Securitization	Joint ventures	139	0	0
Roc Aviation One Designated Activity Company	Ireland	—	(p)		—	—	Renting	—	291	(7)	(2)
Roc Shipping One Designated Activity Company	Ireland	—	(p)		—	—	Renting	—	103	(5)	1
S3 Caceis Brasil Distribuidora de Títulos e Valores Mobiliários S.A.	Brazil	0.00%	50.00%		50.00%	50.00%	Securities company	Joint ventures	254	174	30
S3 Caceis Brasil Participações S.A.	Brazil	0.00%	50.00%		50.00%	50.00%	Holding company	Joint ventures	210	177	29
S3 CACEIS Colombia S.A. Sociedad Fiduciaria	Colombia	0.00%	50.00%		50.00%	50.00%	Finance company	Joint ventures	10	9	0
San Preca Federal I Fundo de Investimento em Direitos Creditórios Não-Padronizados	Brazil	0.00%	45.00%		50.00%	50.00%	Investment fund	Negocios conjuntos	9	8	0

262

Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
		% of ownership held by Banco Santander			Percentage of voting power (f)				EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Type of company	Asset	Capital + reserves	Net results
Sancus Green Investments II, S.C.R., S.A. (b)	Spain	0.00%	33.02%		33.02%	32.95	Venture capital company	—	26	27	0
Santander Allianz Towarzystwo Ubezpieczeń na Życie S.A.	Poland	0.00%	30.48%		49.00%	49.00%	Insurance	Associated	240	29	40
Santander Allianz Towarzystwo Ubezpieczeń S.A.	Poland	0.00%	30.48%		49.00%	49.00%	Insurance	Associated	72	35	8
Santander Assurance Solutions, S.A.	Spain	0.00%	66.67%		66.67%	66.67%	Insurance mediation	Joint ventures	20	7	1
Santander Auto S.A.	Brazil	0.00%	45.00%		50.00%	50.00%	Insurance	Associated	66	10	8
Santander Caceis Latam Holding 1, S.L.	Spain	0.00%	50.00%		50.00%	50.00%	Holding company	Joint ventures	753	742	11
Santander Caceis Latam Holding 2, S.L.	Spain	0.00%	50.00%		50.00%	50.00%	Holding company	Joint ventures	3	3	0
Santander Generales Seguros y Reaseguros, S.A.	Spain	0.00%	49.00%		49.00%	49.00%	Insurance	Joint ventures	813	166	53
Santander Mapfre Hipoteca Inversa, E.F.C., S.A.	Spain	0.00%	50.00%		50.00%	50.00%	Finance company	Joint ventures	16	17	(4)
Santander Mapfre Seguros y Reaseguros, S.A.	Spain	0.00%	49.99%		49.99%	49.99%	Insurance	Associated	189	75	(5)
Santander Renovables, S.C.R., S.A. en liquidación (b) (e)	Spain	0.00%	100.00%		100.00%	—	Venture capital company	—	0	0	0
Santander Vida Seguros y Reaseguros, S.A.	Spain	0.00%	49.00%		49.00%	49.00%	Insurance	Joint ventures	986	308	68
Seaya Holdco, S.L. (consolidado)	Spain	24.99%	0.00%		24.99%	—	Holding company	Associated	29	26	6
Servicios de Infraestructura de Mercado OTC S.A	Chile	0.00%	8.38%		12.48%	12.48%	Services	Associated	15	14	1
SIBS-SGPS, S.A. (consolidado) (b)	Portugal	0.00%	15.54%		15.56%	15.56%	Management of portfolios	—	498	242	48
SIG RCRS A/B MF 2023 Venture LLC	United States	0.00%	20.00%		20.00%	20.00%	Finance company	—	5,151	4,776	368
Siguler Guff SBIC Fund LP (b)	United States	0.00%	20.00%		20.00%	20.00%	Investment Company	—	55	55	4
Sistema de Tarjetas y Medios de Pago, S.A. (b)	Spain	20.61%	0.00%		20.61%	20.61%	Payment methods	Associated	1,084	5	1
Sociedad Conjunta para la Emisión y Gestión de Medios de Pago, E.F.C., S.A.	Spain	45.70%	0.00%		45.70%	45.70%	Payment services	Joint ventures	116	36	1
Sociedad de Garantía Recíproca de Santander, S.G.R. (b)	Spain	24.95%	0.22%		25.17%	25.16%	Financial services	—	18	10	0
Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria, S.A. (b)	Spain	22.21%	0.00%		22.21%	22.21%	Financial services	—	15,764	(2,546)	(2,198)
Sociedad Interbancaria de Depósitos de Valores S.A.	Chile	0.00%	19.66%		29.29%	29.29%	Securities depository	Associated	10	8	2
Solar Maritime Designated Activity Company (b)	Ireland	0.00%	(h)		0.00%	—	Leasing	Joint ventures	145	9	0
STELLANTIS Insurance Europe Limited	Malta	0.00%	50.00%		50.00%	50.00%	Insurance	Joint ventures	249	63	33
STELLANTIS Life Insurance Europe Limited	Malta	0.00%	50.00%		50.00%	50.00%	Insurance	Joint ventures	104	(3)	17
Stephens Ranch Wind Energy Holdco LLC (consolidado) (b)	United States	0.00%	15.80%		15.80%	17.00%	Renewable energies	—	210	179	(11)
Tecnologia Bancária S.A.	Brazil	0.00%	17.08%		18.98%	19.81%	ATMs	Associated	429	153	0
Tonopah Solar Energy Holdings I, LLC (k)	United States	0.00%	26.80%		26.80%	26.80%	Holding company	Joint ventures	0	0	0
Transbank S.A.	Chile	0.00%	16.78%		25.00%	25.00%	Cards	Associated	1,913	133	10
Tresmares Growth Fund II, S.C.R., S.A.	Spain	40.00%	0.00%		40.00%	40.00%	Holding company	—	81	82	(1)
Tresmares Growth Fund III, S.C.R., S.A.	Spain	40.00%	0.00%		40.00%	40.00%	Holding company	—	62	63	(1)

263

Societies of which Grupo Santander owns more than 5% (g) , entities associated with Grupo Santander and jointly controlled entities
		% of ownership held by Banco Santander			Percentage of voting power (f)				EUR million (a)
Company	Location	Direct	Indirect		Year 2024	Year 2023	Activity	Type of company	Asset	Capital + reserves	Net results
Tresmares Growth Fund Santander, S.C.R., S.A. (n)	Spain	100.00%	0.00%		100.00%	100.00%	Holding company	—	108	109	(1)
U.C.I., S.A.	Spain	50.00%	0.00%		50.00%	50.00%	Holding company	Joint ventures	746	407	(6)
UCI Greece Credit and Loan Receivables Servicing Company Single Member Societe Anonyme	Greece	0.00%	50.00%		50.00%	50.00%	Financial services	Joint ventures	2	1	0
UCI Holding Brasil Ltda.	Brazil	0.00%	50.00%		50.00%	50.00%	Holding company	Joint ventures	1	(1)	0
UCI Mediação de Seguros, Unipessoal Lda.	Portugal	0.00%	50.00%		50.00%	50.00%	Insurance mediation	Joint ventures	0	0	0
UCI Servicios para Profesionales Inmobiliarios, S.A. Unipersonal	Spain	0.00%	50.00%		50.00%	50.00%	Real estate services	Joint ventures	1	0	0
Unicre-Instituição Financeira de Crédito, S.A.	Portugal	0.00%	21.83%		21.86%	21.86%	Finance company	—	543	113	23
Unión de Créditos Inmobiliarios, S.A. Unipersonal, EFC	Spain	0.00%	50.00%		50.00%	50.00%	Mortgage company	Joint ventures	9,871	805	(65)
VCFS Germany GmbH	Germany	0.00%	50.00%		50.00%	50.00%	Marketing	Joint ventures	1	1	0
Venda de Veículos Fundo de Investimento em Direitos Creditórios	Brazil	0.00%	35.90%		39.89%	39.77%	Securitization	Joint ventures	375	342	33
Volvo Car Financial Services UK Limited	United Kingdom	0.00%	50.01%		50.01%	50.01%	Leasing	Joint ventures	3,302	160	37
Webmotors S.A.	Brazil	0.00%	27.00%		30.00%	30.00%	Services	Associated	99	57	25
Zurich Santander Brasil Seguros e Previdência S.A.	Brazil	0.00%	48.79%		48.79%	48.79%	Insurance	Associated	17,687	313	188
Zurich Santander Holding (Spain), S.L. Unipersonal	Spain	0.00%	49.00%		49.00%	49.00%	Holding company	Associated	937	936	200
Zurich Santander Holding Dos (Spain), S.L. Unipersonal	Spain	0.00%	49.00%		49.00%	49.00%	Holding company	Associated	385	382	156
Zurich Santander Insurance América, S.L.	Spain	0.00%	49.00%		49.00%	49.00%	Holding company	Associated	1,497	1,450	412
Zurich Santander Seguros Argentina S.A. (j)	Argentine	0.00%	49.00%		49.00%	49.00%	Insurance	Associated	87	61	3
Zurich Santander Seguros de Vida Chile S.A.	Chile	0.00%	49.00%		49.00%	49.00%	Insurance	Associated	234	40	38
Zurich Santander Seguros Generales Chile S.A.	Chile	0.00%	49.00%		49.00%	49.00%	Insurance	Associated	265	58	18
Zurich Santander Seguros México, S.A.	Mexico	0.00%	49.00%		49.00%	49.00%	Insurance	Associated	1,906	44	180
Zurich Santander Seguros Uruguay S.A.	Uruguay	0.00%	49.00%		49.00%	49.00%	Insurance	Associated	54	20	12

a. Amount according to the provisional books at the date of publication of these annexes of each company, generally referring to 31 December 2024, except

where otherwise indicated due to the fact that the annual accounts are pending formulation. The data for foreign companies are converted into euros at

the exchange rate at the end of the year.

b. Data as at 31 December 2023, latest available accounts.

c. Data as at 31 December 2019, latest available accounts.

d. Data as at 30 November 2021, latest available accounts.

e. Company in liquidation as at 31 December 2024.

f. Pursuant to Article 3 of Royal Decree 1159/ 2010, of 17 September, approving the rules for the preparation of consolidated annual accounts, in order to

determine the voting rights, voting rights held directly by the parent company have been added to those held by companies controlled by the parent

company or by other persons acting in their own name but on behalf of a group company. For these purposes, the number of votes corresponding to the

parent company, in relation to the companies indirectly dependent on it, is that corresponding to the dependent company that directly participates in the

share capital of the latter.

g. Excluding the Group companies listed in Appendix I, as well as those which are of negligible interest with respect to the true and fair view that the

consolidated financial statements must give (in accordance with articles 48 of the Commercial Code and 260 of the Spanish Companies Act).

h. Companies over which joint control is maintained.

i. Data as at 31 October 2023, latest available accounts.

j. Data as at 30 June 2024, latest available accounts.

k. Company with no financial information available.

l. Data as 31 December 2022, latest available account.

m. Data as at 30 September 2024, latest available accounts.

n. Investment managed discretionally by a manager outside the Santander Group, the voting rights not being, in this case, decisive in determining control of

the entity.

o. Recently created company, without financial information available.

264

p. Company over which effective control has been lost.

265

Appendix III

Issuing subsidiaries of shares and preference shares
		% of ownership held by Banco Santander			EUR million (a)
Company	Location	Direct	Indirect	Activity	Capital	Reserves	Cost of preferred	Net results
Emisora Santander España, S.A. Unipersonal	Spain	100.00%	0.00%	Finance company	2	0	0	0
Santander Global Issuances B.V. (b)	Netherlands	100.00%	0.00%	Finance company	0	0	0	0
Santander UK (Structured Solutions) Limited	United Kingdom	0.00%	100.00%	Finance company	0	0	0	0
Sovereign Real Estate Investment Trust	United States	0.00%	100.00%	Finance company	5,067	(3,440)	103	13

a. Amount according to the books of each interim company as at 31 December 2023, converted into euro (in the case of foreign companies) at the year-

end exchange rate.

b. Sociedad con Residencia Fiscal en España.

 

266

Appendix IV

Notifications of acquisitions and disposals of

investments in 2024

Details of the notifications of acquisitions and

disposals of participations for 2024 in accordance with

Article 105 of the Securities Market Law may be found

below:

On September 24, 2024,  Banco Santander, S.A.

disclosed to the CNMV the increase of its stake in

SACYR, S.A. exceeding the 3% threshold, keeping a

stake of 3.078% as of September 18, 2024.

On October 18, 2024, Banco Santander, S.A. disclosed

to the CNMV the decrease of its stake in SACYR, S.A.

below the 3% threshold, keeping a stake of 2.548%,

as of October 14, 2024.

In relation to the information required by 155 of the

Corporate Enterprises Act, on the shareholdings in

which Grupo Santander owns more than 10% of the

capital of another company, and the successive

acquisitions of more than 5% of the share capital, see

appendices I, II and III.

267

Appendix V

List of Transactions subject to the Special Regime

for Mergers, Divisions, Assets Contributions,

Exchange of Securities and corporate domicile

change of a European Company or a European

Cooperative Society from one Member State to

another Member State of the European Union in

which the company has acted as an Acquiring

Entity or Partner

In compliance with the reporting obligations

established in Article 86 of Law 27/2014, of 27

November, on Corporate Tax (LIS), the following

information is provided on the transactions subject to

the tax regime of mergers, divisions, contributions of

assets, exchange of securities and corporate domicile

change of a European Company or a European

Cooperative Society from one Member State to

another Member State of the European Union,

provided for in Chapter VII of Title VII of the LIS, in

which BANCO SANTANDER, S.A. has intervened during

2024:

I.  In accordance with the provisions of section 2 of

article 86 of the LIS, it is reported that the company

BANCO SANTANDER, S.A. has intervened as a acquirer

partner in the following transaction:

– Merger by cross-border extra-European absorption

of PARASANT SA (swiss entity) and SIB BESAYA,

S.L. UNIPERSONAL (Spanish entity), by the

company BANCO SANTANDER, S.A. which owned

all the shares of the entities acquired. This

transaction constitutes a merger of those

regulated in Article 76.1.c) of the LIS. The

information required in article 86.1 of the LIS is

incorporated into this report.

II.  In accordance with the provisions of section 2 of

article 86 of the LIS, it is reported that the company

BANCO SANTANDER, S.A. has intervened as a partner

in the following transactions:

– Merger by absorption of CÁNTABRA DE

INVERSIONES, S.A. UNIPERSONAL by CÁNTABRO

CATALANA DE INVERSIONES, S.A. This transaction

constitutes a merger of those regulated in Article

76.1.a) of the LIS. BANCO SANTANDER, S.A. was a

wholly participant in the capital of both the

acquiring company and the acquiring company.

The book value of the securities delivered by

CÁNTABRA DE INVERSIONES, S.A. UNIPERSONAL

was 134,538,949.34 euros, while its tax value

amounted to 262,532,958.12 euros. The value for

which BANCO SANTANDER, S.A. has accounted for

the new investment in the CÁNTABRO CATALANA

DE INVERSIONES, S.A. is 134,538,949.34 euros.

– Merger by absorption of SANTANDER CONSUMER,

S.A., COMPAÑÍA DE FINANCIAMIENTO by BANCO

SANTANDER DE NEGOCIOS COLOMBIA S.A. This

transaction constitutes a merger of those

regulated in Article 76.1.a) of the LIS. BANCO

SANTANDER, S.A. held 79.022833% and

94.897432% of the share capital, respectively. The

book value of the securities delivered by

SANTANDER CONSUMER, S.A. COMPAÑÍA DE

FINANCIAMIENTO was 20,011,763.22 euros, while

its tax value amounted to 22,524,188.34 euros.

The value for which BANCO SANTANDER, S.A. has

accounted for the new investment in BANCO

SANTANDER DE NEGOCIOS COLOMBIA, S.A. is

20,011,763.22 euros.

– Exchange of securities regulated in Articles 76.5

and 80 of the LIS whereby SANTANDER GROUP

PROPERTIES, S.L. UNIPERSONAL acquires shares of

99,99999% and 100% of the share capital and

voting rights in the Spanish companies

SANTANDER GLOBAL SERVICES, S.L. S.L.

UNIPERSONAL and SANTANDER FACILITY

MANAGEMENT ESPAÑA, S.L. UNIPERSONAL,

respectively, through the attribution to its partner

BANCO SANTANDER, S.A., of securities

representative of the acquiring entity SANTANDER

GROUP PROPERTIES, S.L. UNIPERSONAL.

• The book value at which BANCO

SANTANDER, S.A. had accounted for the

securities delivered from SANTANDER

GLOBAL SERVICES, S.L. UNIPERSONAL was

372,533,000 euros, coinciding with its tax

value.

• The book value at which BANCO

SANTANDER, S.A. had accounted for the

securities delivered from SANTANDER

FACILITY MANAGEMENT ESPAÑA, SL

UNIPERSONAL was 393,292,733.84 euros,

coinciding with its tax value.

The value for which BANCO SANTANDER, S.A. has

accounted for the securities received from

SANTANDER GROUP PROPERTIES, S.L.

UNIPERSONAL is 785,254,000.00 euros.

– Exchange of securities regulated in Articles 76.5

and 80 of the LIS by which SANTANDER GROUP

PROPERTIES, S.L. UNIPERSONAL acquires a 100%

stake in the United Kingdom entity SANTANDER UK

INVESTMENTS through the attribution to its

partner BANCO SANTANDER, S.A., of securities

representative of the acquiring entity SANTANDER

GROUP PROPERTIES, S.L. UNIPERSONAL. The book

value for which BANCO SANTANDER, S.A. had

recorded the securities delivered from SANTANDER

UK INVESTMENTS was 118,970,416.71 euros,

coinciding with its tax value. The value for which

BANCO SANTANDER, S.A. has accounted for the

securities received from SANTANDER GROUP

PROPERTIES, S.L. UNIPERSONAL is 114,210,000.00

euros.

– Exchange of securities regulated in Articles 76.5

and 80 of the LIS whereby SANTANDER GROUP

PROPERTIES, S.L. UNIPERSONAL acquires a 100%

stake of the share capital and voting rights in the

Spanish entity SANTANDER GLOBAL SPORT, S.A.

UNIPERSONAL. This operation is executed as a

268

“contribution of partners or owners” (account 118

included in heading 11 “Reserves and other equity

instruments” of the table of accounts of the

General Accounting Plan approved by Royal Decree

1514/2007, of 16 November), consisting of a non-

monetary contribution by BANCO SANTANDER, S.A.

of the shares of the entity SANTANDER GLOBAL

SPORT, S.A. UNIPERSONAL. The book value for

which BANCO SANTANDER, S.A. had recorded the

securities delivered from SANTANDER GLOBAL

SPORT, S.A. UNIPERSONAL was 15,963,124.58

euros, while its tax value amounted to

42,466,705.44 euros. The value for which BANCO

SANTANDER, S.A. has accounted for the securities

received from SANTANDER GROUP PROPERTIES,

S.L. UNIPERSONAL is 15,963,124.58 euros.

III. In compliance with the provisions of article 86.3 of

the LIS, it is hereby stated for the record that the

disclosures required by sections 1 and 2 of article 86,

relating to transactions subject to the tax regime for

mergers, spin-offs, contributions of assets, exchange

of securities and change of registered office of a

European Company or a European Cooperative Society

from one Member State to another Member State of

the European Union, provided for in Chapter VII of Title

VII of the LIS, in which BANCO SANTANDER, S. A. has

been involved as acquirer or partner during previous

years, are included in the first annual report approved

by the acquirers following each of the aforementioned

transactions.

269

Appendix VI

Information regarding the cross-border extra-

European merger by absorption between Banco

Santander, S.A. (absorbing company) and Parasant

SA and SIB Besaya, S.L. Unipersonal (absorbed

companies), according to Article 86.1 of Law

27/2014 of the Corporate Tax Act.

a) Fiscal year in which the transferring entity

acquired the transferred assets that are subject to

depreciation.

There are no assets in Parasant SA and SIB Besaya, S.L.

Unipersonal that are subject to depreciation.

b) Latest balance sheet closed by the transferring

entities.

The latest balance sheets of the transferring entities

can be found in Note 1.i.

c) List of acquired assets that have been recorded in

the accounting books at a value different from that

at which they were recorded in the transferring

entity prior to the transaction, stating both values, as

well as the valuation adjustments made in the

accounting books of the two entities.

Below is the detail of those asset items on the balance

sheet of the transferring entity that have been

recorded at a different book value in the acquiring

entity:

Amounts in millions of euros:

Financial Statement Line	Book value Parasant SA	Merged adjustment value	Book value Banco Santander
Investments in subsidiaries, joint ventures and associates	1,008	42	1,050

Financial Statement Line	Book value SIB Besaya, S.L. Unipersonal	Merged adjustment value	Book value Banco Santander
Investments in subsidiaries, joint ventures and associates	430	117	547

d) List of tax benefits enjoyed by the transferring

entity, for which the acquiring entity must assume

compliance with certain requirements.

There are no tax benefits in the transferring entity for

which Banco Santander, S.A. must assume compliance

with certain requirements.

270

Appendix VII

Agent network - Collaborating agents, Agents empowered at 31 of December 2023.

SERVICIOS FINANCIEROS SANLO SL

ALBERO PAYA FINANCIEROS SL

GESFINPRO S.L.

SUSANA DONAT CRUZ

JUAN PEDRO BENITEZ GARCIA

JEC INVERSIONES EN CAPITAL SOCIEDAD LIMITADA

CARMELO PACHECO MARIN

CRISTINA PODEROSO TENA

SERGIO VIVANCOS ALFARO

JESUS ALVARADO CAMARA

ALBERTO VAZQUEZ OLMEDA

IVAN GUIU FARRE

LETICIA MARIA MARTINEZ ABAD

VEGUILLAS Y VEGUILLAS SL

JOSE MARIA MANZANO CIDONCHA

MERCEDES SABATER JIMENEZ

MARIA DEL CARMEN LEDESMA COUTO

MARIA JOSE CHARNECO HERRERO

BEATRIZ PEREZ GARCIA

GESTION FINANCIERA MALACITANA 2007 SL

JON DIEZ DIEGO DE

DAVID GARCIA-ARCICOLLAR RODRIGUEZ

MARIA CRISTINA SANCHEZ UZAL

ALEJANDRO SANCHEZ BERMUDEZ

LAURA ERES FUENTES

MARIA ISABEL RAMIREZ RODRIGUEZ

CASTEL GANDOLFO S.L

ALBALATE SERVICIOS FINANCIEROS Y DE GESTION SL

MANUEL SALGADO KAITTANI

JAVIER COMA PALOU

CRISTINA PURROY CASTELLO

HOPE FINANCE SL

FRANCISCA MARQUEZ CONTRERAS

MARIA LUZ SANZ DELGADO

MAYKA GONZALEZ HEREDIA

LUBESAGA SL

ASESORAMIENTOS FINANCIEROS TEM 2012 SLL

JUAN BAUTISTA HIDALGO IÑIGO

GORKA PEREZ DIAGO

QUIRINO MASCITTI

MARIA CARMEN CIUDAD MORENO

MARIA TERESA SALGADO RODRIGUEZ

GLORIA MOLINA RIVALLO

PEDRO DAVID DELGADO YANES

LORENA HERNANDEZ ATIENZA

ERNESTO DOMINGUEZ SLU

PAULA EIRIZ OTERO

EDUARDO HERNANDEZ HERNANDEZ

MARIA TERESA BROCH RUBERT

SERVICIOS BANCARIOS OLULA DEL RIO SL

ENRIQUE CHACON FERNANDEZ

RUBEN MARTI CALATAYUD

CECILIA MARIA ROSSELLO FLORIT

SOLUCIONES DE PATRIMONIO E INVERSION S.L.

SARA MORALES ECHEVERRIA

BBR BATEA GROUP SL

MARIA EUGENIA DE LA CRUZ DE LA ROSA

ANTONIO FORNOS ISERN

JAIME RIVERO CALVO

CARLOS ALBERTO PALACIOS MARTIN

LAP ASTURIAS S.L.

ANTONIO CEREZUELA RUIZ

271

GESTION SANTANDER CARBAJOSA S.L.U

JOARMAS ASESORAMIENTO S.L.U.

MARIA EVA NUÑEZ GONZALEZ

MARIA LOPEZ MARTINEZ

NATALIA FERNANDEZ SANCHEZ

JOSE MANUEL PERERA QUINTANA

AINOA LORAS COLL

MARCOS GARCIA-DIES PASTRANA

RAFAEL BELLMUNT BELLMUNT

ECONHOMBRIA SL

BEATRIZ GARRIDO SANTANDER S.L.

INVERSIONS RIBAGORÇA SL

GUADALUPE FORNE TENA

DIEGO CARCAS SANCHEZ

MARIA CRUZ GARCIA ESTELLER TORRES

ALVARO FABREGAS SANTAMARIA

ANDRES RIVERO JIMENEZ

ANTONIO BERNAL MERINO

AC CIGÜEÑA SL

MANUEL ARTURO DOVALE VAZQUEZ

DANIEL MARTI RODRIGUEZ

JUAN JOSE ARAGONESES MARTINEZ

LUIS ALBERTO MASEDO DEL CASTILLO

MARIA JOSE CABALLERO GRAU

FINANCERES ARO S.L.

PAULA GRACIA CABRERA COLONQUES

LARA & RAUL ASOCIADOS SL.

SARA CRIADO ESTEBAN

GEMMA GUTIERREZ BAJO

VINUESA & MOCHON 2014 SLL

BASKY INVERSIONES FINANCIERAS SL

MKS GESTION FINANCIERA SL

GUERRERO FINANCIAL STRATEGIES S.L.

ABRAHAN MARTINEZ IGLESIAS

VILLASEQUILLA AP SL

RODRIGUEZ CALS FINANCIERA SL

EVA LEON BELINCHON

MARTA GARRIDO FERNANDEZ

SERGIO SANCHEZ RODRIGUEZ

AGURTZANE ITZIAR AGUIRRE COLECHA

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MARIA TERESA PACHECO SANCHEZ

MANUEL MARIA GARCIA FERNANDEZ

ALEXANDRA FRANCH CANALDA

RAFAEL ROMERO RODRIGUEZ

YEBEGEST S.L.

FINANTOR 2017 SL

MARIA DOLORES ROCA BLANCH

PILAR VILA AYERBE

ALEJANDRO FERNANDEZ GARCIA

ELENA PARDO MARMOL

JESUS BERZAL MIGUEL

FERRERAS DE INVERSIONES S L

A C CARRIZO DE LA RIBERA SL

ASIS DE FEREZ S.L

VICTOR GONZALEZ CABO

OCTAVIO VADILLO GARCIA

PEDRO JAVIER SANCHEZ RODRIGUEZ

JOSE LUIS COUCEIRO DORELLE

JORGE ESCAPA ESPINEL

NOELIA MARTIN BOLIVAR

JAUME FORNOS NAVARRO

VICTOR MANUEL DIAZ MARRON

JOSE CARLOS GARCIA SANCHEZ

FELIPE PARRA CARRERA

JOSE MANUEL VAZQUEZ BERTOA

281

BEATRIZ SALA GARCIA

JAVIER TERAN CAMUS

CRISTOBAL NAVARRO VEGA

CARLOS MIGUEL GIJON MELENDEZ

ROBERTO CABALLERO MARTIN

ENRIQUE FOMPEROSA RUIZ

DIEGO GALLEGO VALVERDE

MARLOP 1822 SL

OLGA LLORENTE COSTA

ANTONI MONSO BONET

ALEJANDRO LLERA FERNANDEZ

VICENTE MANUEL MARTI SEGARRA

INMACULADA TORRES BERMUDEZ

MARIA ELISA SAEZ JIMENEZ

TABULA AGO S.L.

FRANCISCO FERNANDEZ PASCUAL

PATRICIA GUIJO LOZANO

MARIA DE LOS ANGELES RODRIGO GUTIERREZ

RC 2007 FINANCIEROS S.L.

FINANZAS SAN ANDRES S.L.

MARIA JESUS MONROY CARNERO

MUNICH FINANZ S.L

ANGEL LOPEZ RODRIGUEZ

ROSA MARIA RIVERO ACEDO

JOAN FELIU PUIGVERT

LONUBRUAD SL

PEDRO MIGUEL DEUTOR GARRIDO

AGUADO & ORTEGA ASESORES SL

FRANCISCO JOSE VIEJO GONZALEZ

FERNANDEZ DEL VALLE NOE 046869184C S L N E

ALBERTO RIAÑO MOROCHO

ANA MARIA RODRIGUEZ MORENO

GESTIONES FINANCIERAS FERRER Y GARCIA 2015 SL

ANDREA PRATS SEGURA

LUCIA PEREZ CUELLAR

MONICA CANO CANO

SANMAFRAILES S.L.

SANTOS BOL GARCIA

MARIA BELEN GARCIA BLANCO

NIEVES NUÑEZ PUGA

JESUS MARTINEZ CAÑAVATE GOMEZ MILLAN

TANIA LUCIA TEIXEIRA RODRIGUEZ

PAULA MARTINEZ GARCIA

ENRIQUE JONATAN EXPOSITO CAÑA

ANA MARIA GARCIA DOMINGUEZ

MARMA MALLORCA SL

JOSE BERZAL MIGUEL

SANDRA ORTEGA QUILON

JUAN FRANCISCO GARCIA JUNCOS

AREVALO Y MONGE SL

SILVIA GARCIA SENDRA

VIVANCOS ROS SL

MARIA TERESA MARTIN MUNIESA

CARLOS GARCIA RODRIGUEZ

JORDI ROSA ARIZA

PEDRO CARO CANO

GONZALO PEREZ JOSE

ANTONIO MARIN VALIENTE

ANA MARIA RUBIO PALACIOS

FERNANDO GARCIA BARATAS

NATALIA MOLINA SOLER

FRANCISCO RICARDO BELLO GOMEZ

JAVIER COBO GARCIA

DIEGO MARTINEZ OTON

ANGELA ZURITA MARTINEZ

LUCIA DIAZ PRUDENCIO

JULUM FINANZAS SLU

JOSE JUAN SANCHEZ SORIANO

ALEJANDRO ESCAPA ESPINEL

282

IGNACIO MARIA ANTOLIN FERNANDEZ

A.C. SANTOVENIA DE PISUERGA SL.

CARLOS ALBERTO GARCIA FERNANDEZ

JOSE IGNACIO CANTO PEREZ

VANESA VEGA BLANCO

FELIX ALFONSO TORRADO DIAZ

BORRELL MICOLA SL

JUANA MARTINEZ MARTINEZ

SERVICIOS FINANCIEROS DEL CONDADO S.L.U.

PRISCILA CRISTOBAL MALO

MARIA FATIMA SANCHEZ MILLAN

TATIANA RODRIGUEZ FERNANDEZ

NURIA BRAOJOS SANCHEZ

ALEXANDRE COLL QUINTANA

CRISTINA DIAZ PIZARRO

JAVIER MONGE LOPEZ

CELAVEDRA S.L

ANA MARIA LOPEZ OVEJERO

TERESA ROLDAN QUINQUER

DAVID JIMENEZ MARTINEZ

24198 SANTANDER LA VIRGEN DEL CAMINO SL

OSCAR MUSTE ROIG

JOSE ANTONIO REAL MUÑOZ

POL MORAGUES OLIVA

CARLOS GAVIN LORIENTE

MARIA DOLORES FOLLA-CISNEROS GARCIA

JASON ANDRES HERRERA GUASCA

ALBERTO BARTOLOME BLAS DE GUASP

HECTOR CANO SAZ

FORUM 20 SLU

MARIA VICTORIA IGLESIAS MATEOS

MANUEL BARRIGA DORADO

GRANDERSAN SLU

ALFREDO ROLDAN FERNANDEZ

LUCIA CARO ESPARCIA

ANSELMO HERNANDEZ RANZ

JUAN MANUEL ALARCON GARCIA

MARIA DE ARANZAZU DOMEZAIN GRANADOS

JOSE RAMON DOMONTE RODRIGUEZ

ARANCHA LOPEZ SANTOS

GUILLEM GENOVARD CALDENTEY

MANUEL GARCIA MONTOLIO

ANA CRISTINA MUÑOZ ALVAREZ

MARIA TRINIDAD BRIEVA DOMINGUEZ

JUAN CARLOS MORENO GARCIA

HUGO FLORES GALVAN

MARIA MERCEDES GARCIA SANTANA

6395 POYALES DEL HOYO AGENTE COLABORADOR SL

ANNA LOURDES MATEOS SANCHEZ

ROBERTO MARTIN RIVERO

CARLOS MESA DIEZ

INES PINDADO SAEZ

NUÑEZ MONTES FINANCIEROS S.L

GESTION INVERGARA S.L.

A.C. LAGUNA DE NEGRILLOS S.L.

MARIA MERCEDES GUZON LIEBANA

PEDRO FERRAGUT DIAGO

JUAN JOSE GISBERT FERRERES

ASEMAR FINANCIERA SL

DANIEL NAVAS ALONSO

A.C. VILLARCAYO S.L.

YOLANDA ALVAREZ RODRIGUEZ

OSMON SERVICIOS FINANCIEROS SL

MARIA LUISA VALIENTE LORENZO

FELIPE CHILLARON CASTILLO

ALICIA MARIA LOPEZ SERICO

MARIA ELISA ROSON FERRERO

JOSE ANGEL TIERNO ARANDA

MARIA EUGENIA GONZALEZ SANCHEZ

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MARIA VISITACION BECARES MARTINEZ

MARIA THAIS ROMERO NAVARRETE

JESSICA MARIA SEGADOR RISCO

MIGUEL ANGEL VIDAL JOVER

JORGE BARRERA PEREZ

SERVICIOS FINANCIEROS MAZA Y VILAR SL

SERGIO GONZALEZ PALACIO

ASESORIA GESTION GLOBAL S.L.

ESTHER PEIRO ORTEGA

UNAI LEKUBE ARANBERRI

HECTOR PIÑEIRO MARTIN

NURIA AMO LETON

SISMOINT SL.

JORDI ALUJA OSSO

AGENTES FINANCIEROS AOIZ SL

INTERMEDIACION FINANCIERA DEL NOROESTE SL

RUBEN LOPEZ CARMONA

CARLES ROYO DELPOZO

BENEDICTO GUTIERREZ BERNAL

JUAN RAMON BENITEZ GOMEZ

CORDOBESA DE INVERSIONES PUNTAS LEON S.L.

CECILIO PARRO CORTES

SERVICIOS FINANCIEROS PEDRO ABAD SOCIEDAD LIMITADA

MARIA CARMEN SANCHEZ PEÑA

AS NEVES ARBO

MARC MASERAS I SABATER

MARIA ANTONIA BARCELO AMENGUAL

1321 SANTANDER LA ALBERCA S.L.

MARTA CASTRO HIDALGO

BANFORTUNIA S.L

MARIA DEL PILAR MUÑOZ GONZALEZ

VERONICA PUEY MUÑOZ

AMALIA AGUILAR CASAS

JUAN MONTERO RODENAS

DAVID MOYA LUCAS

JAVIER DOMINGO PASCUAL JIMENEZ

MATEU & SANTANDER S.L.

BERTA RIERA FERRAN

ELENA PUERTO GALVEZ

BANSACLE SOCIEDAD LIMITADA.

G S G GRUPO CORPORATIVO DE SERVICIOS S.L.

MATARO ASESORES LEGALES Y TRIBUTARIOS S.L.

MELODI MARIA DOMINGUEZ ZAHINO

MIRIAM CARRO HERNANDO

CARLOS ARCAS CHECA

SONIA BELLMUNT SAURA

ROLARG SERVICIOS FINANCIEROS S.L.

MARIA ANGELICA RODRIGUEZ OLIVEROS

DANIEL TORRES MUIXI

RUBEN BERNALDO DE QUIROS DOMPABLO

OSCAR PARDAL ANIDO

JOSEFA SIMON YEBENES

MARTA HERNANDEZ PEREZ

MARIA PAZ CULEBRAS RAMOS

AOMAR NUÑEZ APARICIO

FRANCISCO JAVIER FORNER GARRIDO

JOSE ANTONIO LOPEZ LOPEZ

RAQUEL GAVELA SANCHEZ

MIGUEL JOSE MALAVE FERNANDEZ

FERNANDO ENRIQUE RODRIGUEZ PEREZ

SERVICIOS BANCARIOS BERJA SL

JUAN CARLOS GOMEZ GARCIA

SEBASTIAN PAVON CAMPOY

BEATRIZ SERRANO SAN PEDRO

HELLEN JANETH MENDEZ MURCIA

DAVID RUIZ MARCHESE

JOTOBE GESTIONS S.L.

SEFIAL 2021 SL

RUIDEMYR SL.

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MARIA SALOME ROSA DIEZ

JORGE VICENTE FRANCO

JOSE MANUEL AMEAL MAS

JESUS ANGEL GUTIERREZ QUINTANILLA

JALCAIDEN SOCIEDAD LIMITADA.

RAQUEL BARRERO GORDILLO

GUILLERMO FOS ALZAMORA

IPEVA INVERSIONES FINANCIERAS SLU

MARCOTE ASESORES SL

MARTI FORTUNY PLANAS

GLINKGO BILOBA PROPERTIES SL

MARIA PILAR PEREZ NAVARRO

CONCEPCION ISOLINA SOMOZA CALVIÑO

JUAN ANGEL ALCAZAR VERGARA

SERVICIOS FINANCIEROS FUENTE ALAMO 2024 SL.

EDUARDO GOMES HORCAJUELO

6155 SANTANDER LEDESMA S.L.

MANUEL GUERRERO VERDEJA

R&B SOLUCIONES FINANCIERAS S.L.U.

IVAN GONZALEZ MARTINEZ

JUAN CARBONELL SOCIAS S.L.

MARIA ANTONIA ROVIROSA PIÑOL

SOLEDAD GALAN FREJO

MARIA ALMUDENA MORENO NAVARRO

ANABEL SANCHEZ MARTIN

ANGEL MOLLEDA VELEZ

FRANCISCO JAVIER ARTEAGA LOPEZ

FRANCISCO FLORES ROMERO

MIGUEL ANGEL GARCIA RODRIGUEZ

MARIA TERESA JIMENEZ PACIOS

INTERMEDIACION NASARRE SL

MARIA JESUS MARTIN RODRIGUEZ

CELIA MONICA MARTINEZ OTERO

JOSE MANUEL TORRES MIGUEL

FINANZAS E INVERSIONES ALBAL SL

LUIS MANUEL MAYO RUBIO

GEMMA ARRUFAT RAFALES

SILVA&RUA ASOCIADOS SLU

ANA VANESA VILLASECA GARCIA

ALBERTO MORAN PEREZ

JOSE ANDRES HERNANDEZ FALCON

BUSINESS AND PERSONAL SERVICE S.A.

MARC MAYORAL SERRET

JESUS GABALDON MARTINEZ

ALVARO DIAZ ASTARLOA

VICENTE CANO CAMARA

MARIA JIMENEZ GONZALEZ

CECILIO ALVARADO GARCIA

CARLOS GROS NAVARRO

ALEJANDRO GARCIA GUERRERO

GESTION FINANCIERA CODI S.L.

JOSE ALFONSO TARI ESCLAPEZ

SUSANA FARIÑA FERNANDEZ

ANGELICA MONTEJO ASENSIO

ALMUDENA GONZALEZ GALLEGO

MIKEL ANDRES SANCHEZ CASTILLO

OSCAR JUSTO ALVAREZ

JOSE GAMERO MUÑIZ

MARIA VICTORIA DURAN ALVEZ

POSADA GESTION FINANCIERA SLU

RAUL LANGA GOMEZ

ALMUDENA GARCIA SANCHEZ

JOSE JAVIER SALAVERRI MARTINEZ

NEREA SOBRADILLO TRUEBA

ENRIQUE Y SINDE ASOCIADOS S.L.

JOSE MARIA FERNANDEZ RAMIREZ

285

Directors’ report

Banco Santander, S.A.

1. Introduction

Banco Santander, S.A. ('the Bank' or 'Banco Santander')

is a Spanish bank, incorporated as a sociedad anónima in

Spain and is the parent company of Grupo Santander or

Santander. Banco Santander, S.A. operates under the

commercial name Santander.

Banco Santander operates through a branch network

distributed in Spain and abroad.

On 7 June 2017, Banco Santander acquired the entire

share capital of Banco Popular Español, S.A.U. (‘Banco

Popular’) in an auction in connection with a resolution

plan adopted by the European Single Resolution Board

(the European banking resolution authority) and

executed by the FROB (the Spanish banking resolution

authority) following a determination by the European

Central Bank that Banco Popular was failing or likely to

fail, in accordance with Regulation (EU) 806/2014

establishing a framework for the recovery and resolution

of credit institutions and investment firms. On 24 April

2018, Banco Santander announced that the boards of

directors of Banco Santander, S.A. and Banco Popular

Español, S.A.U. had agreed to an absorption of Banco

Popular by Banco Santander. The legal absorption was

effective on 28 September 2018.

The directors’ report has been prepared based on the

accounting and Management records of Banco

Santander, S.A.

The financial information included in this directors’

report has been prepared in conformity with the Bank of

Spain Circular 4/2017 of 27 November on Public and

Reserved Financial Information Regulations and

Financial Statements Forms, and subsequent

modifications.

2. Situation of Banco Santander

Santander is a Retail and Consumer global powerhouse

and one of the largest banks in the eurozone. At 2024

year-end, we had EUR 1,837,081 million in assets and

EUR 1,348,422 million in total customer funds.

Santander was the second largest bank by market

capitalization in the eurozone (EUR 67,648 million as of

31 December 2024).

The Santander Way.

Our Purpose is to help people and businesses prosper.

Our Aim is to be the best open financial services

platform, by acting responsibly and earning the lasting

loyalty of our stakeholders by being Simple, Personal

and Fair in all we do.

Our business model and transformation in recent years

has provided sustained earnings and a stronger balance

sheet, despite the challenging environment and macro

volatility.

We engage in a wide range of typical banking activities,

operations and services. We do not merely meet our

legal and regulatory obligations but we also aim to

exceed the expectations of our  stakeholders:

employees, customers, communities and shareholders.

In detail:

We are committed to continuously improving the

experience of the 206,753 employees who are part of

Santander. Our goal is to attract and retain the best

talent by offering an attractive value proposition that

prioritizes personal growth, an inspiring culture, and

working conditions that ensure the health and well-

being of our people. Furthermore, we promote an

environment that prioritizes diversity, equity and

inclusion, where all voices are valued and individuals

feel safe and free to express their identity, ideas and

opinions.

Our health, safety and well-being policy applies in all

countries where we operate, with a proactive and

comprehensive approach to the health of the people

working at Santander.

YourVoice, our listening channel to periodically assess

the engagement and experience of our professionals,

showed an increase in engagement levels, achieving an

average score of 8.7 and an employee Net Promoter

Score (eNPS) of 63, obtaining results above the financial

industry in all evaluated dimensions, positioning us at

the top of the sector.

We plan to continue working in this direction, with the

firm purpose of improving year after year.

Customer focus is an essential part our strategy. We are

a Retail and Consumer global powerhouse with 173

million customers. We continue building a digital bank

with branches to be the number one bank for our

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customers. By listening to our customers' needs, we are

boosting Santander's position as their trusted financial

partner.

We keep moving and adapting to the evolving needs of

our customers, to offer the best products, an agile and

frictionless customer experience for daily needs and

competitive prices.

Throughout the year, we undertook significant initiatives

to transform the customer experience and strengthen

the value proposition. This was reflected in our customer

growth rates and Net Promoter Score (NPS)

improvement where we are one of the top three banks in

seven markets.

In the digital space, we enhanced self-service

capabilities and user experiences, leveraging behavioural

economics methodologies for deeper customer insights

and implementing training programmes to ensure

excellence in branch interactions.

At year end, we had 8,011 branches, including traditional

ones and other specialized centres for businesses,

private banking, universities and other customer

segments.

These physical spaces have evolved to integrate

traditional services with digital facilities. In some

branches, such  as the Work Cafés, we have collaborative

spaces, which enable native digital customers to have a

better experience and integrate their financial

transactions into their daily lives.

At the same time, customer interactions continued their

structural shift towards digital and remote services with

high user experience standards. We now have more than

59 million digital customers (10% more than in 2023)

and we increased our digitally available products and

services to 62% (56% in 2023).

At Santander, we appreciate the value of the human

connection that our branch network provides and are

mindful of our most vulnerable customers' needs,

responding with tailored offers, thereby increasing

customer loyalty and improving customer experience.

We are committed to creating products and services

catered to our customers' needs, such as through our

financial inclusion initiatives. For example, we provide

customers in rural Spain access to basic financial services

through our branches, ATMs, network of financial agents

in communities with under 10,000 inhabitants and

Correos Cash in areas that might otherwise have been

left unattended. In 2024, we extended the Correos Cash

agreement to offer cash access with a non-digital

solution through rural letter carriers.

Santander is also committed to ensuring and promoting

financial inclusion in vulnerable customers through

different initiatives such as our microfinance

programmes in Latin America (Prospera in Brazil and

Colombia, Tuiio in Mexico and Surgir in Peru). We also

signed several agreements with Multilateral

Development Banks in countries such as Chile, Brazil and

Poland where these agreements include allocating part

of new portfolios to social finance. In Spain, we helped

customers with financial difficulties to access credit (e.g.,

loans for a first home for young people) or those

impacted by the rising cost of living or natural disasters

(e.g., the floods that affected Valencia in October 2024),

among others.

Additionally, we have a cross-functional team that has

been working on enhancing services for our elderly

customers, including measures such as extending the

hours of counter/teller services and creating senior

ambassadors to make sure senior citizens receive the

best possible service. We also continued to promote

financial education with specific content for seniors

through our financial education programme, Finanzas

para Mortales. Our commitment in Spain to financial

education through this programme directly impacted

senior citizens, people with disabilities, people in

vulnerable situations and school children, among others.

We also support our communities through programmes

to help them address their social needs. We focus our

efforts on education, employability and

entrepreneurship, in addition to financial education and

support for vulnerable people. Moreover, we have a

strong track record of backing cultural and other social

initiatives.

For our shareholders, we delivered solid financial results

in 2024 and met all our 2024 targets which we upgraded

in July 2024.

Grupo Santander is diversified in three geographies well

balanced between mature and emerging markets, and

operates mainly in 10 core units, where it has significant

market shares.

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3. Financial performance

3.1 Economic outlook:

In 2024, Santander operated in an environment

characterized by gradual reductions in interest rates by

central banks, as a result of the decline in inflation and in

a context with continuing geopolitical tensions. In

general, the world's major economies are successfully

completing the soft landing promoted by central banks'

monetary policies and, while activity levels cooled down,

they did so slowly. Labour markets were robust, with

unemployment rates at or near full employment in two

out of three economies in which Santander operates.

Our core regions' economies performed as follows:

Eurozone (GDP: +0.7% in 2024). GDP growth improved

slightly during the year. The reactivation of household

consumption, still affected by inflation, was less than

the increase in wages would have allowed. Moreover,

the decline in gross fixed capital formation continued.

External demand was the main driver of economic

activity. The labour market continued to resist, with the

unemployment rate at record lows (6.3%). Inflation fell

to around 2%, allowing the ECB to start the cycle of

interest rate cuts, ending the year at 3%.

Spain (GDP: +3.2% in 2024). Spain's economy was one of

the most dynamic among the advanced economies. GDP

was driven by services exports and consumption (both

public and private). However, investment is not yet

reflecting the expansionary cycle. Immigration

supported this economic growth, with this population

increase leading to some tensions in the housing market.

Inflation continued to decline and remains around the

euro area average. 

To complete the information with the performance

indicators of the rest of geographies where the Group is

present, see the Consolidated Directors’ Report.

3.2 Balance sheet and results:

Banco Santander, S.A. is the Parent Bank of a financial

group that operates in different countries through

different businesses therefore its financial statements

not only reflect its commercial activity in Spain, but also

the activity derived from being the head of the Group.

This last aspect makes it difficult to analyse its evolution

without distinguishing the results obtained from the

commercial activity from those more directly related to

its holding nature.

During the year, we continued to drive our

transformation programme and we maintained the solid

trend in customer growth, reaching 40 consecutive

months of positive net growth (+285,000 customers in

2024).

There were good commercial dynamics, with the focus

on profitability. In Retail, new business volumes

increased double digits, mainly due to corporate,

personal loans and mortgages. We increased our market

share in payrolls, pensions and cards and we recorded

positive trends in mutual funds and insurance business.

In CIB, we consolidated our leadership in the major

league tables.

Regarding the balance sheet, as of 31 December 2024,

the total assets of Banco Santander stood at EUR

794,840 million, with an increase of 4.95% over the

previous year.

Loans and advances to customers at the end of the year

stood at EUR 325,693 million, with an increase of 5.38%

over the previous year motivated by the growth in

consumer loans and business loans.

Customer deposits, at the end of the year, stood at EUR

390,722 million with an increase of 1.47% over the

previous year. Demand deposits increased by 2.59% and

time deposits increased by 25.57%, showing growth in

both physical and legal persons.

Net interest income in 2024 stood at EUR 6,915 million,

8.45% higher than the previous year, which was

positively impacted by the positive performance of the

balance sheet and the evolution of interest rates.

Income from equity instruments amounted to EUR

8,447 million in 2024. This line includes dividends

received from the Group subsidiaries.

Net fee income increased by 11.30% compared to 2023

to 2,925 million euros, highlighting the growth in

commissions of investment funds.

Gains/losses on financial transactions (including

exchange differences) reflected gains of EUR 918 million

as compared to 509 million in the previous year, due to

the higher profits in the wholesale business.

General administrative expenses (personnel and other

administrative expenses) were EUR 5,293 million,

increasing 3.56% as compared to the previous year,

where increases due to inflation and the Collective

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Agreement have been mitigated by efficiency measures

in the retail banking business.

Impairment losses on financial assets (net) in 2024

accounted for EUR 1,334 million, 0.33% of financial

assets at fair value with changes in other comprehensive

income plus financial assets at amortized cost.

On the other hand, the impairment of investments in

subsidiaries, joint ventures or associates and non-

financial assets in 2024 amounted to EUR 240 million

and losses of non-current assets held for sale

amounted to EUR 58 million.

Distribution proposal of the Bank’s profit

For the 2024 results, the board continued to apply the

same policy as in 2023, with total shareholder

remuneration of approximately 50% of the Group

reported profit (excluding non-cash, non-capital ratios

impact items), distributed in approximately equal parts

in cash dividend and share buybacks.

Interim remuneration.

On 26 August 2024, the board resolved to execute the

First 2024 Buyback Programme worth up to EUR 1,525

million (equivalent to approximately 25% of said Group

reported profit in H1’24).

On 24 September 2024, the board resolved to pay an

interim cash dividend against the 2024 results of 10 euro

cents per share entitled to the dividend (equivalent to

approximately 25% of said Group reported profit in

H1’24); it was paid from 1 November 2024.

Final remuneration.

Under the 2024 shareholder remuneration policy:

On 4 February 2025 the board of directors resolved to

implement the Second 2024 Buyback Programme worth

a maximum amount of 1,587 million euros, for which

the appropriate regulatory authorization has been

obtained, and the execution of which began on 6

February 2025.

On 25 February 2025 the board of directors resolved to

submit a resolution at the 2025 AGM to approve a final

cash dividend in the gross amount of 11 euro cents per

share entitled to dividends. If approved at the AGM, the

dividend would be payable from 2 May 2025.

Once the above-mentioned actions are completed, total

shareholder remuneration for 2024 will total EUR 6,293

million (approximately 50% of the Group reported profit

-excluding non-cash, non-capital ratios impact items- in

2024), distributed as approximately 50% in cash

dividends (EUR 3,181 million) and 50% in share

buybacks (EUR 3,112 million). These amounts have been

estimated assuming that, as a consequence of the partial

execution of the Second 2024 Buyback Programme, the

number of outstanding shares entitled to a final cash

dividend will be 14,988,884,075. Therefore, that amount

may be higher if fewer shares than planned are acquired

in the Second 2024 Buyback Programme; otherwise, it

will be lower.

See more information in section 9.2 Dividend policy.

289

4. Trend information

This directors' report contains prospective information

on the directors’ plans, forecasts and estimates, based

on what they consider to be reasonable assumptions.

Readers of this report should take into account that such

prospective information must not be considered a

guarantee of our future performance as the plans,

forecasts and estimates are subject to numerous risks

and uncertainties, our future performance may not

match initial expectations. These risks and uncertainties

are described in the Risk management chapter of this

report and in note 49 of the financial statements.

The prospects for 2025 are for a moderate economic

slowdown, in an environment that will continue to be

relatively uncertain due to global geopolitical tensions.

Inflation is expected to continue to slow down gradually,

converging toward the central banks' targets, although it

is likely to do so at different rates between regions.

Central banks such as the Fed or the ECB are expected to

complete their rate-cutting cycle in 2025, with terminal

rates depending on the strength of the economies.

Economic slowdown is not expected to have a strong

impact on the unemployment rate due to the strength of

most labour markets.

Our macroeconomic forecast for 2025 by country/

region is as follows:

Eurozone

The eurozone is expected to face many challenges in

2025. Economic growth could show some improvement,

particularly in household consumption, supported by

increased real income, high savings rates and lower

interest rates. However, the year will be marked by

uncertainty arising from a complex geopolitical situation,

the potential protectionist shift in US trade policy,

elections in Germany and France’s difficulties in reducing

its public deficit. Inflation is expected to reach the ECB’s

2% target, which is expected to allow the ECB to reduce

interest rates to levels which have a neutral effect on the

economy.

Spain

We expect notable dynamism in economic growth,

although growing at a slightly lower rate than in 2024.

Household consumption is expected to be the main

growth driver and we expect corporate investment to

play a growing role (due to the reconstruction of the

damage caused by the floods in Valencia and the

implementation of the EU Recovery and Resilience Plan).

The unemployment rate is expected to continue to

improve. Inflation is expected to around 2%, as wage

increases are moderating.

Our strategy in Spain will focus on:

• Continue to grow and develop our customer base,

providing them with the best personalized

experience, to become their main bank.

• Evolve our operating model toward a digital bank

with branches, advancing in the simplification of

products and services, such as operational

processes, to focus on the value creation.

See more information in the Consolidated Directors’

Report.

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5. Sustainability information

This Statement of Non-Financial Disclosures of Banco

Santander, S.A., which is part of the Individual Directors'

Report, contains the non-financial disclosures set out in

the Consolidated Directors' Report of Grupo Santander

together with other material, pertinent, useful and

comparative information on Banco Santander, S.A. that is

appropriate to aid the an understanding of the trends,

results, status and impact of the activities of Banco

Santander, S.A., including information on matters of the

environment, society, human rights, the fight against

corruption and bribery, and personnel.

When drawing up the non-financial information

contained in this Statement of Non-Financial

Disclosures, we considered the double materiality

assessment that the Group conducts, based on the

Corporate Sustainability Reporting Directive (CSRD).

General information

Banco Santander, S.A.’s purpose is to help people and

businesses prosper. Our five sustainability pillars are:

1. Help our customers in meeting their goals in their

transition to a low-carbon economy while also

managing climate-related risks and impacts.

2. Help our employees develop by promoting an

inclusive culture and learning and providing fair

working conditions.

3. Contribute to the economic, financial and social

development of our communities, with a special

focus on education, employability and

entrepreneurship.

4. Be a trusted partner to our customers, with products

and services that adapt to their needs, while applying

responsible practices, supporting their financial

inclusion, and protecting their information.

5. Act responsibly through a strong culture, governance

and conduct.

The board of directors approves and oversees the

implementation of policies and strategies related to our

corporate culture and values, responsible practices and

sustainability.

The responsible banking, sustainability and culture

committee (RBSCC) assists the board of directors in

monitoring Banco Santander´s and its Group´s

responsible banking agenda and strategy.

Other committees analyse specific issues. The Audit

Committee supervises and assesses the financial and

non-financial reporting process, as well as the internal

control systems. The Group has implemented an internal

information control system that follows the most

demanding international standards and complies with

the guidelines established by the Committee of

Sponsoring Organizations of the Treadway Commission

(COSO).

The Group ‘s corporate Sustainability unit and

sustainability teams in our network of subsidiaries and

global businesses work jointly to deliver on our strategy

consistently across the Group.

The internal rules that embed sustainability standards in

our business model include:

Responsible banking framework

Establishes responsible banking as a strategic issue for

Santander and is directly applicable in all local units.

Corporate financial, management and sustainability

accounting and reporting framework

Sets out the principles, guidelines and actions to prepare

accounting, financial and management information, as

well as sustainability information, that must be applied

to all the Group's entities as a fundamental element for

their good governance.

Responsible banking policy and sustainability

Describes our sustainability principles, objectives and

strategy to generate long-term value for our

stakeholders, including the protection of human rights.

Responsible banking model

Establishes the roles and responsibilities of the first,

second and third line of defence for all sustainability

activities to progress the sustainability agenda, embed

ESG standards and achieve our objectives.

In addition to these rules, which apply to all the Group’s

units and businesses, we have policies on responsible

employee practice, responsible customer practice,

donations, and business conduct.

Identifying the non-financial risks of our operations is a

priority for Banco Santander.

We have procedures to identify, analyse and assess

these risks in transactions that are subject to the bank’s

policies and to external commitments like the Equator

Principles, which we have been applying since 2009.

Banco Santander is also a member of and participates in,

leading international sustainability (United Nations

Global Compact, Banking Environment Initiative, World

Business Council for Sustainable Development, Net Zero

Banking Alliance, Institute of International Finance and

European Banking Federation, and others). We are also a

founding member of the United Nations Principles for

Responsible Banking.

In Spain, we’re a member of Forética, the Spanish

Association of Sustainable Growth, and Fundación

SERES. 

In terms of external ratings, in 2024, we maintained our

position in MSCI (AA) and in CDP  improved to A. Our

position also improved in Sustainalytics, where we

3 In those countries where it is possible to certify electricity from renewable sources. The target considers the 10 main countries in which we operate.

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reached 17.1 points (improvement of 2.6 points),

remaining in the 'low risk' category, and in ISS we

reached the C+ category (vs. C in the previous period).

Information on environmental matters

Strategy

Santander's climate strategy is based on three

fundamental pillars:

1) Supporting our clients in their transition. We achieved

our target of mobilizing EUR 120 billion in green

financing between 2019 and 2025, 18 months ahead of

schedule, and are moving forward with the next target of

EUR 220 billion by 2030. We offer our clients guidance,

advice and specific solutions; and a wide range of

products to invest in according to their sustainability

preferences, with the aim of reaching EUR 100 billion of

assets under management in socially responsible

investment by 2025.

2) Embedding climate and environmental aspects into

risk management by adopting a risk-based approach to

these factors, with a special focus on the most material

sectors. We consider the risks derived from climate and

environmental factors in the risk management cycle,

including a materiality assessment that informs the

double materiality assessment and our sustainability

strategy.

3) Moving forward to align our portfolio with the

objectives of the Paris Agreement to help limit global

warming. We set alignment targets in high emissions

portfolios and with a 2030 horizon. We expect progress

on these targets to reflect the progress of the economies

we serve. We currently have seven targets in five sectors

and have alignment targets for our asset management

business.

Meanwhile, we continue to reduce our impact on the

environment by implementing efficiency measures in

our own operations, including sourcing all our electricity

from renewable energy by 2025.

Our 2024 highlights are:

– Publication of new alignment targets for the

automotive sector (both manufacturing and auto

lending) as well as of funded issues for residential

mortgages in Spain and the commercial real estate

sector (UK and Spain).

– We met our target of raising and facilitating EUR 120

billion in green finance since 2019.

– Grupo Santander has been a leader in renewable

energy financing for more than 10 years. In 2024, we

were among the top banks in number of transactions

and value of business globally, with 82 transactions

closed and a market share of 4.54% according to

Infralogic.

– Santander España launched the “Eficiencia

energética” loan for owners associations looking to

fund building renovations or boost energy efficiency.

– In 2024,  84% of the cards we purchased (39 million)

were manufactured with sustainable materials

(recycled PVC/PLA) and we continued to make

progress in offering solutions to our customers to

calculate their carbon footprint based on the

payments they make with their cards, as well as

initiatives to offset it.

Climate risk management

Managing climate and environmental risk factors is

fundamental to strengthening the resilience of our

strategy and business model to climate change.

To improve resilience, we embed climate and

environmental risk factors in the phases of the risk

management cycle where we analyse our own facilities

and customer financing. We also include the risks

associated with these factors in our policies, procedures,

tools, metrics, governance and culture.

We embed climate and environmental factors in risk

management based on defined climate scenarios and

time horizons and though a process that covers

identification, planning, assessment, monitoring,

mitigation and reporting.

Paris Agreement alignment

We are working towards our ambition of net zero carbon

emissions by 2050 by progressively setting actions

aimed at aligning our portfolios, focusing on those we

consider most material from a climate point of view, and

on our lending portfolio, as this is our most material

financial activity.

As part of our climate ambition, we prioritize the

alignment of high-emission sectors (which also carry a

high or very high transition risk according to the climate

materiality assessment) to which we have material

exposure. This includes setting alignment targets (in

coal, mining, oil and gas, power generation, steel,

automobiles and aviation), as well as monitoring

additional portfolios (mortgages, commercial real estate

and agriculture).

Regarding our own operations, we publicly report data

on our direct and indirect emissions (scopes 1, 2 and 3),

as well as other climate-relevant metrics such as energy

consumption. In this regard, we aim to use 100%

renewable electricity in our own operations 3 by 2025,

having already reached 96% in 2024.

Collaboration and global engagement

Alliances with other companies and governments can

help us share best practices and accelerate progress in

addressing climate change and protecting nature. Grupo

Santander participates in numerous organizations,

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alliances and working groups. Thus, we collaborate with

international and local actors to advance global and

company goals, in line with Sustainable Development

Goal (SDG) 17 on Partnerships to achieve the goals.

Information on social and employee-related

matters

We want working at Santander to be an experience that

attracts and retains the most talented people in all the

markets where we operate and promotes respect for

their rights. Our approach is based on three pillars:

I Having an attractive employee value proposition

that offers real opportunities to grow and harness

potential; innovative ways of working; projects that

inspire; and a shared, uplifting culture.

II Offering optimal conditions that safeguard

employee health and well-being, with fair and

competitive remuneration and initiatives that

afford a better work-life balance.

III Promoting a meritocratic and inclusive culture

where everybody feels valued.

Talent and skills development

As at 31 December 2024, Banco Santander had 34,940

employees in Spain, of which 47% are women and

53%are men. 99.57% of contracts are permanent, the

gender pay gap at the end of 2024 was 26%, and pay

equity was c. 0%, achieving our 2025 target two years

early. In Spain, the percentage of employees with some

type of disability stands at 1.7%.

Attracting talent

Our talent attraction strategy focuses on positioning

ourselves as an employer of choice. In 2024, we

welcomed 33,175 new employees to the Group.

In 2024 we focused on:

• digital transformation

• graduate internship programmes.; and

• bolstering our employee value proposition (EVP)

We offer programmes and experiences for our

employees’ personal and career development:

• Development programmes adapted to different

levels and businesses within the organization.

• Temporary and permanent domestic and

international mobility and functional experiences.

• Training, promoting continuous learning.

Talent management

We reaffirmed our commitment to developing talent in

2024. We kept close watch on our units’ and businesses’

needs to anticipate and cover their requirements, with a

proactive approach through initiatives that foster

individual growth and boost the wealth of talent in our

teams.

Developing potential

Thanks to our potential assessment model implemented

in 2022, we have deepened our understanding of the

skills, experiences and aspirations of 124,112

employees. It has driven us to draw up personalized

development plans based on each person’s needs.

We came up with a leadership profile and a common

leadership assessment methodology to foster

transformational and collaborative leadership aligned

with our strategy and gain deep, objective and

comparable knowledge of our leaders. This also enables

us to support their development and make key decisions

for the Group.

Mobility matters

We have a global international mobility policy approved

by the human resources committee at the decision of the

Group's board of directors, which is an essential tool for

employee development. The objectives of this policy are

to contribute to the development of talent in the Group,

to strengthen succession plans, to attract external talent,

to foster a global mindset, to facilitate international

movements to meet business needs and to share

mobility criteria transparently with the workforce.

Learning and development

The learning and development policy provides a

framework for the design, supervision and deployment

of activities aimed at promoting innovation and

developing the skills of our employees.

In 2024, we intensified our efforts to provide our

employees with the tools and resources necessary to

improve their skills and employability, aligning ourselves

with the critical demands of the business and the

market, and allocated EUR 64 million to training our

professionals.

173,309 users accessed Dojo, our digital learning

platform. We continue to roll it out to reach all

employees. In addition to providing access to an

extensive catalogue of learning resources with 174,223 

references, with high-quality courses in critical skills that

ensure that our employees are up to date with the latest

trends and technologies, Dojo offers personalized

recommendations based on current and future roles,

fostering a culture of self-development and continuous

learning.

Global learning community for leaders

The aim of Elevate is to equip our senior directors with

the means to lead their teams and achieve their strategic

objectives.

It’s fully digital format enables directors to sign up to

development programmes that are organized into

Learning Paths (People, Tech, Strategy and Change) that

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address the critical skills needed to lead the Group’s

transformation.

Talent development programmes and promotion of

lifelong learning

Our learning and development strategy, places special

focus on developing young talent and digital business

profiles, with programmes such as Young Leaders and

BeTech & Business.

These programmes are designed to identify and foster

internal talent, offering opportunities for growth in our

employees' careers to prepare them for future

challenges.

By 2024, 103,154 employees will have been trained in

critical skills related to technology, banking and people

skills, improving their individual performance.

Mandatory training and promotion of sustainability and

responsible banking

To reinforce the Group's culture and knowledge in

material matters, we have mandatory courses aimed at

training all employees on strategic and/or regulatory

topics approved by the global compliance committee. In

2024, our mandatory global training covered 13 topics,

including sustainability, code of conduct, harassment

prevention, cybersecurity, financial crime and data

protection. This helps protect the organization and

empower our employees to act responsibly and ethically

every day. In addition, each subsidiary has mandatory

courses on the laws of its jurisdiction.

We will continue to invest in the development of our

employees, so that they are equipped to face the

challenges of the future and contribute to the continued

success of the Group.

Working conditions

Employee health and well-being

Our employees’ health is embedded in our culture and

corporate strategy, under which our people and senior

managers work together to protect and promote each

other’s health, safety and well-being.

Based on our strategy, we implemented:

• safety and prevention systems;

• proactive initiatives to boost the overall well-being

of employees;

• a safe and supportive working environment when

it comes to health; and

• flexible work alternatives to enhance work-life

balance.

Our General health, safety and well-being policy aims to

promote healthy lifestyles and create long-term value

for employees and society. It applies to all our

subsidiaries and follows local laws in the markets where

we operate to the letter.

a) Occupational health

The sector-level collective agreements that we sign up

to consider employee health and occupational risk

prevention.

We offer regular check-ups and tests after extended

absences in every market where we operate. We also

cooperate with local public health authorities,

employees’ legal representatives and occupational risk

insurers. In every subsidiary with over 500 employees

(accounting for 99% of the Group), our people are

covered under occupational health and safety systems

and policies in compliance with local risk prevention

standards and best practices.

We revised our occupational risk prevention plans with

employees' councils through:

• regular assessments of risk factors and

preventative measures to handle or mitigate them;

• prevention through design in new work spaces and

tools;

• procedures regarding safe and quality working

conditions and certifications;

• emergency and evacuation plans to protect

employees, customers, suppliers and visitors to our

premises; emergency response; first aid training;

• measures to detect and minimize risk due to

postural hygiene;

• accident investigation to avoid reoccurrence; and

active participation of employee accident

prevention delegates on health and safety

committees.

b) Well-being

We aim to raise awareness about health and well-being

through our global BeHealthy programme, which

celebrated its eighth year in 2024.

In 2024, we ran several initiatives, activities and events

in all our subsidiaries following the programme’s four

pillars: know your numbers (self-awareness), eat well

(healthy nutrition), move (physical health) and be

balanced (mental & emotional wellbeing). In 2024, over

64,000 employees took part in local BeHealthy

initiatives.

c) Work-life balance

Santander promotes employee work-life balance.

Employees are entitled to leave for paternity, adoption,

care of newborns or family members. In 2024, 8,195

employees (5.3% of the total) took maternity, paternity

4   10,874 employees (5.3% of Santander's total workforce) exercised their right to parental or family care leave in 2024. The rate by gender was 6.7% for women

and  3.7% for men.

5   Other remuneration that complements our employees' salaries: benefits, pensions, other fixed remuneration, incentives and short- or long-term variable

remuneration.

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or adoption leave, and 2,824  took other leave to care for

family members 4.

We have enhanced our flexi-working policies and

options for employees in recent years to keep up with

digital transformation and social change. Almost all our

employees in central services roles can now adapt their

working hours and location to fit with their personal

circumstances We review these measures constantly

with our employees and in view of customer needs —

considering productivity, commitment and our

experience as an employer.

d) Social protection

At Santander we offer our employees protection against

a loss of income due to sickness, accidents at work,

acquired disability and paternal leave.

Our employees have public or private protection for loss

of income due to sickness or acquired disability

according to local regulation. On top of public health

services, we offer additional private cover in our core

markets, under which employees usually receive full pay

during periods of sickness.

Because employee care and respect for their rights are

important to Santander, 98% of our workforce have a

permanent contract. In all countries, employees have

coverage against loss of income due to unemployment

per local laws.

Our employees have appropriate pay protection in the

event of an occupational accident. In Spain and other

countries, we supplement the financial benefit that can

reach the entire salary of employees in situations of

temporary disability.

The Group has a minimum standard in each unit of fully

paid parental leave. All Group employees are entitled to

a minimum 14  and up to 30 weeks’ fully paid primary

parental or adoption leave, while all parents (or

secondary caregivers) have 4 weeks of fully paid

parental or adoption leave. Because of our inclusion and

flexible return measures, 76% of new mothers continue

working for Santander 12 months after returning from

their birth, adoption, or pregnancy leaves.

Our employees have retirement coverage through public

or private pension schemes in every market where we

operate. Santander supplements this with defined

contribution pension plans for our employees in our core

markets.

e) Collective bargaining and social dialogue

Santander promotes respect for the rights of its

employees, including their freedom of association and

the right to collective bargaining. Our responsible

banking and sustainability policy considers that forming

or joining trade unions and other representative bodies is

a basic right of employees, and in accordance with

Article 10 of our General Code of Conduct.

We also promote respect for freedom of association,

union activity, collective bargaining and the protection of

workers' representatives in accordance with the

legislation of each country where we operate.

At 2024 year end, 110,692 employees worked in

establishments or companies with union representation.

We continue to promote and comply with the

fundamental conventions of the International Labor

Organization and we have a European Works Council

that meets regularly meetings with representation from

the Group's management and employees' legal

representatives from Spain, Portugal, Germany, Poland,

the United Kingdom and other European countries.

We also maintained a constant dialogue with

employees’ legal representatives in bilateral and special

committee meetings in our markets where all parties

could discuss reporting, queries and negotiations about

working conditions, and employee benefits. In core

countries, important agreements have been reached

during 2024, including committees on occupational

health and safety, monitoring of gender balance plans,

control of pension plans, training, updates to

corresponding collective bargaining agreements, and

also other bilateral meetings with union representatives.

Remuneration and corporate benefits

a) Appropriate remuneration

Our comprehensive remuneration framework combines

fixed and variable pay schemes based on targets for

employees and the Group.

Our remuneration and performance policies, together

with the Code of Conduct, forbid differential treatment

that is not based on a review of performance and

corporate behaviours. It also promotes equal pay

between men and women.

Fixed remuneration schemes reflect local market

conditions. To set pay, we strictly abide by the practices,

regulations and collective agreements in force in each

jurisdiction where we operate.

All Santander employees receive a salary equal to or

higher than the legally established minimum in each of

our markets and we comply with all local legislations

and relevant collective agreements. Almost all

employees (99%) receive other forms of remuneration

that supplement their salary 5. This demonstrates our

pledge to provide fair, competitive remuneration and the

appropriate combination of fixed and variable pay.

6   Measured using the EPG - equal pay gap ratio, which compares the average pay between men and women performing similar tasks. 2024 results, across the

Group.

7   The gender pay gap measures the differences in pay between all women and men, regardless of the type of work. For our management we use the gender pay

gap understood as the difference between the median pay of men and women, expressed as a percentage of men's pay.

295

All businesses and subsidiaries have short-term variable

remuneration schemes that reflect what we have

achieved (the Group's quantitative and qualitative

objectives, as well as individual and team objectives) and

how we have achieved it (e.g., behaviour, leadership,

sustainability, commitment, growth, and risk

management). These schemes promote meritocracy,

which recognizes individual and team contributions.

In 2024 we allocated EUR 14,328 million to employee

compensation and other corporate benefits.

In accordance with European regulations on

remuneration and proper risk management, we have

identified 1,246 professionals who, due to their

functions, make decisions that can have a material

impact, and are therefore subject to a policy of deferring

a significant amount of their variable remuneration

(from 40% to 60%, depending on their responsibilities)

for a period of four to seven years, and all their variable

remuneration is subject to a possible reduction (malus)

or recovery (clawback).

b) Equal pay

Our remuneration practices promote gender-neutral pay

management, equal opportunity and the elimination of

inequality, especially in cases where men and women

perform the same or similar work (“equally remunerated

for equal work or work of equal value”). 

The salary comparison between women and men

performing similar functions remains at  c. 0%, which

confirms our positive performance in recent years and

meets the target we set for 2025 6.

We often consult our employees to gauge how

appropriate and acceptable our remuneration policies

are and they recently deemed our remuneration policies

competitive.

c) MyContribution

MyContribution is our common performance

management model. We update it regularly, and it is

aligned with our culture.

177,081 (86% of the total) Santander employees had

their performance reviewed under this model in 2024, in

line with what was agreed with management.

Inclusive culture

Inclusive culture is a component of our corporate culture

policy, through which we focus on building a merit-

based culture of equal opportunity and inclusion in

compliance with laws.

We discuss these matters at the highest level — the

Group board cannot delegate these discussions and our

executive committee reviews them.

Gender

40% of our board members are woman, which meets

our target of 40% and 60%.

Over the last five years, we have promoted equal access

to senior management positions.  As a result of our

efforts, we have made significant progress in female

representation, which has increased from 22.7% in 2019

to  31.2% in 2024, reaching 34.4% in our main Retail &

Commercial business.

Since this indicator took only the highest level of

management as reference (which accounts for just 1% of

the total workforce), we agreed to broaden the reference

base. Thus, the new indicator will enable us to:

• reach a greater proportion of our workforce and thus

develop a larger pool of internal female talent that

will organically advance towards senior roles; and

• to progress gradually and sustainably towards

gender balance, with the aim to approach c.40% by

2030.

Women account for 52.4% of the total workforce, a

stable trend.

We carry out initiatives to promote equal access with

programmes such as:

• 'Women in Tech' to attract talented women with a

background in technology and the digital realm (29%

of our STEM roles are held by women).

• InvestHer, is a global programme from Wealth

Management & Insurance with participants from

different Group´s geographies, that promotes the

presence of women in global business roles.

• Our Santander Women Network, founded in 2018 to

promote development, empowerment and

connection of women within and out of the

organization, continues to grow, with more than

8,000 professionals in 16 countries. 

In 2024 we maintained the salary gap in equivalent

positions in the Group (EPG) at c. 0%, having achieved

our objective in 2023 two years ahead of schedule. We

also analyse the overall gender pay gap (GPG), which

compares the median pay of all men and women. In

2024 it was 26% (an improvement of 2.1 p.p. and 4.5

p.p. compared to 2023 and 2022) 7.

Persons with disabilities

We strive for the successful inclusion of our 4,828

employees with disabilities (over 2.3% of our global

workforce).

We have employee networks dedicated to the inclusion

of people with disabilities.  Our global Enable network,

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formed in 2022, has over 2,700 members in 10

countries.

In 2024, to promote this network, we boosted

awareness and inclusion in the Group through events on

visibility, technology, accessibility, and women with

disabilities.

LGBTIQ+

Our global network of LGBTIQ+ employees, Embrace,

promoted events in 2024 to share challenges or topics of

common interest.  In June, we marked LGBTIQ+ pride

days with an event where employees from across our

footprint shared the challenges this group continues to

face in being seen and heard. Embrace employees also

featured on our “Santander te cuenta” podcast, which

we release internally and externally.

Currently, 2.8% of our workforce identify as trans, non-

binary or other diverse among the employees who

voluntarily offered to share this information.

Ethnicity and culture

We monitor ethnic minority representation in three of

our core markets: Brazil, the UK and the US. Employees

who identify themselves as part of these groups account

for over 31.6% of the total workforce, which matches

the proportion of those minorities among the local

population.

We have these employee inclusion networks on race and

culture: Reach, Bold and Talento não tem cor, which

boast over 1,300 members.

Anti-harassment protocol and training

To reaffirm the Group’s commitment to combat

discrimination, 108,213 Group employees received

training in 2024 on how to avoid unconscious bias, while

101,651 employees undertook a course on sexual

harassment and how to avoid discrimination.  These

courses form part of our global anti-harassment protocol

and General code of conduct as a common framework to

establish guaranteed standards and to fight against

discrimination and behaviour that contravenes fair

treatment and moral integrity.

Information on upholding human rights

Santander strives to respect and protect the human

rights of stakeholders in our operations and in the

markets where we operate.

The CSRD requires the findings of human rights due

diligence exercises to inform the double materiality

assessment.

Human rights form part of our management and

governance by:

• looking after our employees’ health and promoting

decent employment and the preservation of freedom

of association and collective bargaining, and the

prohibition of slavery and child labour;

• protecting the human rights of our customers

through responsible business practices and the

protection of their data;

• assessing the human rights impact of transactions

with customers, where we analyse environmental,

social and climate change (ESCC) issues; and

• embedding environmental and social aspects

(including human rights) in our supply chain

management

Our board-approved Responsible banking and

sustainability policy includes our pledge to uphold

human rights.

Canal Abierto is a key tool to identify, manage and

resolve potential human rights-related incidents or

violations to protect our customers, employees,

suppliers and the communities we serve.

In 2024, we conducted a comprehensive human rights

due diligence exercise to: (i) assess the effectiveness of

current due diligence policies; (ii) identify and assess

actual and potential adverse impacts based on their

severity and probability; and (iii) assess the suitability of

our communications channels and control measures to

prevent, mitigate and remedy adverse impacts.

This exercise followed international frameworks and

directives and best market practice and covered all of our

global businesses’ units and activities (Santander's own

operations and upstream and downstream activities).

The findings, which we embed in our strategy and

governance through the human rights due diligence

exercise, fed into the double materiality exercise and we

engaged stakeholders as part of our analysis of those

findings.

Information on anti-corruption

Grupo Santander is firmly committed to the fight against

financial crime and to compliance with financial crime

prevention regulation in every market where we

operate.

Our Group board-approved and subsidiary-ratified

Corporate financial crime compliance (FCC) framework

sets out the key principles for preventing financial crime,

which underpin these programmes: the anti-money

laundering and terrorism financing prevention

programme (AML/CTF); the sanctions programme; and,

since 2023, the anti-bribery and anti-corruption

programme (ABC).

This framework is available to all employees and

interested third parties. Moreover, we use information

channels to raise awareness of the importance of

financial crime compliance.

We design the policies that build on this framework

(including customer due diligence — CDD — procedures)

according to domestic and international financial crime

regulation to manage and mitigate the impacts and risks

297

of FCC and protect the Group’s integrity in all our

businesses and operations. We constantly review and

update our policies to remain consistent with regulatory

amendments and new and ever-changing external

threats.

Canal Abierto

Canal Abierto is an anonymous and confidential Grupo

Santander channel to report unethical conduct. It

protects whistleblowers by expressly prohibiting

reprisals or any negative consequence against them.

Every unit in the Group administers its own ethical

channel in different languages (including the local

tongue) according to the common standards set out in

the Canal Abierto policy since 2020.

In 2024, we received 54 reports in Spain, 8 of which

were from third parties (all of whom from customers).

In accordance with the established criteria, the Group

has no record of any judicial proceedings in relation to

incidents of discrimination or violation of fundamental

rights at Banco Santander nor is there any record of

cases involving employees that refer to serious human

rights incidents.

All reports submitted on Canal Abierto are handled

appropriately, whether they are found to be

substantiated or not.

Supporting communities

Support for education, employability and

entrepreneurship

Banco Santander has been supporting education,

employability and entrepreneurship for more than 28

years. In that time, we have invested over EUR 2.4 billion

in partnership with more than 1,170 universities in 26

countries, helping over 3.7 million people and

businesses. In 2024 alone, we allocated EUR 103.8

million to promote education, employability and

entrepreneurship, and helped 2.2 million people and

businesses. Thus, we increased our ambition to support

the community with EUR 400 million between 2023 and

2026.

Other community support actions

On top of direct community action, we cooperate with,

and channel our support through, local NGOs and social

charities.

We target our support on different groups depending on

their needs. Our support for vulnerable people focuses

on sensitive groups (due to gender, disability, age, lack

of digital skills, financial difficulty and other reasons).

We usually target cultural activities at the general

public, although we also include vulnerable groups to

facilitate their access to events and programmes.

In 2024, Banco Santander invested EUR  62.5 million  in

these initiatives, of which EUR 17.3 million accounted for

social programmes in Spain, helping over 161 thousand

people.

Fundación Banco Santander, which is based in Spain,

works to build a fair, inclusive and sustainable society by

financing and running several cultural, educational,

social and environmental projects.

Subcontracting and suppliers

Our outsourcing and third-party management model and

third-party certification policy (which apply in all our

markets) provide a methodology to make sure that our

suppliers meet the Group’s minimum requirements to

avoid risks that stem from substandard operational

resilience, solvency, reputational control and regulatory

compliance.

In 2024, we began embedding the new ESG approval

methodology in the Group, which enables us to pre-

classify all our suppliers according to their sector's

environmental and social exposure, and to classify them

under an ESG rating (low, medium, high) to prioritize the

most critical cases.

By the end of 2024, we had assessed 487 suppliers

identified with ESG risk.

Consumers

At 2024 year end, the Group had 15 million customers in

Spain and 173 million globally. Our aim is to make each

customer's experience Simple, Personal and Fair. The

customer is at the centre of everything we do. We

always listen to our customers promote the use of best

practices.

Regarding consumer protection, our compliance and

conduct committee-approved customer conduct risk

model sets out the principles that underpin how we align

customer engagement with our Simple, Personal and

Fair culture and how we make sure that the products and

services we offer adapt to our customers’ needs. Our

Product governance and consumer protection area (part

of the Compliance and conduct unit) oversees how we

follow our customer conduct risk model.

Santander’s product and service approval policy,

supported by local and corporate product governance

forums, helps ensure that products and services are

designed to meet the needs of the target market at a fair

price and in a transparent manner, and that processes

and controls set across the life cycle consider our

customers' interests.

Regarding conduct in sales, we assess customers' needs

and characteristics to offer the products that are most

suitable to each of them.. Commercial teams' training

and remuneration schemes play a vital role in

embedding conduct standards in our culture and daily

operations, with mechanisms to monitor products and

services throughout their life cycle.

In 2024, we embedded the guidelines for conduct in

fraud management in the Grupo Santander Fraud policy

8   Spain increases due to claims for mortgage origination fees. It includes Open bank S.A.

298

Moreover, following an internal review on conduct in

fraud management in 2023, local units worked on

aligning their improvement plans with Group standards

in 2024.

These plans combined digital channels to register cases

of fraud, bringing together customer voice, enhancing

customer communications related to fraud cases, and

bolstering controls in the first and second lines of

defence in terms of conduct towards fraud victims (with

special attention to vulnerable customers).

In addition, the management of vulnerable families and

businesses is a key pillar of Grupo Santander's strategy,

as it can make a difference to performance, perception

and long-term sustainability. We strive to identify and

consider the difficulties or vulnerabilities of our

customers and try to mitigate their potential impact. In

2024, we continued to make headway with embedding

Group regulations on vulnerable customers and the

prevention of overindebtedness in every market where

we operate. The aim is to provide a common approach

and standards to avoid disparate management between

markets.

The Group is using indicators that our units continue to

work on to identify and monitor customers in special

circumstances. We’re also developing methodologies

that will enable us to pinpoint signs of vulnerability in

order to adapt services to the specific needs of certain

customers. We also launched a global training course on

vulnerable customers so that all employees consider

potential vulnerabilities and are aware of the lines of

action in each case.

Financial health and inclusion

Financial health and inclusion are a priority for Santander

in contributing to social progress and promoting

prosperity and entrepreneurship.

To assess the significance of our proposition, we used

the World Bank's Global Findex Database to calculate

the number of unbanked, underbanked and financially

distressed people due to access and financing issues in

the markets where we operate as a retail bank.

Moreover, we have processes in place to pinpoint the

needs of customers facing financial difficulty; develop

products and services; and train our teams.

We want to help unbanked and underbanked people

enter the financial system and gain access to basic

financial services; encourage them to use financial

services that are tailored to their needs; overcome

barriers; have greater control over their finances; and

enjoy faster and more secure transactions, adapting to

the needs of both developing and mature markets.

In 2024, we financially included close to 1 million people

through access initiatives; and 1.6 million people

through finance initiatives.

In 2024, we continued to make headway with a common

approach to financial health. We define financial health

as people’s ability to manage daily finances to meet

short-term needs and support long-term goals and bring

stability to avoid financial distress.

Financial health must go hand in hand with financial

inclusion so that people who access the financial system

can manage their money responsibly and effectively. We

complement this with financial education to narrow the

knowledge gap on increasingly complex financial

products and digital skills.

In addition, in 2024 we set metrics to monitor financial

health, especially for over-indebted customers.

We also measure individual and SME customer

satisfaction (Net promoter score — NPS) and experience

through surveys on service, reputation and products in

each of our core markets. We draw up and execute

actions plans on the back of the survey findings. In 2024,

we conducted more than 9.9 million customer surveys

across all segments to understand how we can improve

our customers' experience, products and services, and

we ranked in the top 3 for NPS in seven of our core

markets, including Spain.

In 2024, we conducted a review of the channels on

which customers can raise queries or complaints.  The

Group's Customer service and dissatisfaction

management policy outlines the principle of making

channels available to avoid the potential impact of not

having adequate means for customers to convey their

issues or dissatisfaction and to ensure that we have

channels that adapt to our customers’ needs and

preferences 

In addition, customers have channels outside the

organization, such as financial consumer advocates,

regulatory bodies, consumer agencies, etc., where they

can complain if they deem organization's resolution of

their dissatisfaction inadequate.

We manage customer issues and complaints proactively

by carrying out root-cause analysis and learning from

our mistakes. In 2024, Banco Santander received

156,460 complaints in Spain, 77% more than in 2023 8.

Tax information

Santander’s tax strategy sets out the tax principles that

the entire Group must follow. The board of directors

approves our tax strategy and revises it regularly.

The Group’s tax risk management and control, which

draws on our internal control model, sets out the actions

that ensure we follow our tax strategy and the principles

that underpin it.

Since 2010, we've adhered to the Spanish Code of Good

Tax Practices and the UK Code of Practice on Taxation for

Banks, and more recently to the Portuguese Code of

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Good Tax Practices. Since 2015, we've voluntarily

submitted an annual Tax Transparency Report to Spain's

Tax Authority.

The principles of Grupo Santander’s tax strategy must

enable us to make appropriate contributions according

to the value creation in each of the countries where we

operate, as well as to comply strictly with local laws. The

Group’s tax contribution and the excellent work of our

subsidiaries in navigating their respective jurisdiction's

tax systems are a key component of the sustainable and

responsible banking framework we pledge to follow and

our contribution to sustainable and inclusive growth.

In 2024, Banco Santander, S.A. and its Group in Spain

collected and paid EUR 4,409 million in taxes, of which

EUR 2,396 million were own taxes and EUR 2,013

million third party taxes.

6. Research, development and

innovation

Research, development and innovation activities

Innovation and technological development are crucial to

Santander's strategy. We focus on operational

excellence and customer experience to meet the

challenges that stem from digital transformation.

The information we gather through new technology

platforms helps us to better understand the customer

journey and design a more accurate digital profile which

boosts confidence and increases customer loyalty.

In addition to competition from other banks, we must be

mindful of new entrants to the financial system that use

new technology to stand out from the crowd and gain a

competitive advantage.

Developing a sound strategic technology plan must

provide:

• greater capacity to adapt to customers’ needs

(customized products and services, full availability and

excellent, secure service on all channels);

• enhanced processes for Santander’s professionals to

ensure greater reliability and productivity; and

• proper risk management that provides teams with the

means to spot and assess all business, operational,

reputational, regulatory and compliance risks.

As a global systemically important bank, Santander and

its  subsidiaries face increasing regulatory demands that

impact  system models and underlying technology,

which require considerable investments to guarantee

compliance and legal certainty.

As in previous years, the European Commission's 2024

EU Industrial R&D Investment Scoreboard (based on

2023 data) recognized our technological effort. We were

the top bank in R&D investment, both in Europe and

globally, with EUR 2,197 million invested. In 2024, the

equivalent investment in R&D&I to that considered in the

ranking was EUR 2,104 million.

Technological strategy

To aid the Group's strategy to become the best open

digital platform for financial services, our technology

must boost efficiency and minimize risk through

optimization, simplification, supporting business growth

and value creation.

Our IT strategy is based on a global platform model with

reusable components, known as the One Santander

Platform. This strategy aligns with the Group's strategic

initiatives, global business, and operating model.

Our in-house ONE Santander platform is supported by

common technical components (such as a cloud-based

300

platform, common data platform and artificial

intelligence platform) as well as components of our five

global businesses and global control and support

functions. For example, Gravity is one of the components

of the global platform and its implementation laid the

foundations for digitalization with its own core banking

software.

To  ensure the commitment of all Group units to the IT

strategy and to manage the One Santander Platform,

there is an appropriate global governance of our

Platform, with all the active players in the key decisions

related with this.

To implement our technology strategy, we use internal

regulation, the Group's commitment and experience in

working with our entities and a governance model that

defines platforms, projects and initiatives to shape the

strategy across our footprint.

Innovation is at the core of Santander's activity, with a

commitment to the latest technologies that enable more

robust, efficient and secure systems and processes.

Artificial Intelligence is transforming our business across

multiple dimensions, from data-driven strategies, to

process automation and customer interaction. Our AI and

Agents Platform, which provides us with advanced

generative AI capabilities and supervised autonomous

agents, is a key enabler and accelerator of the Group’s

transformation. During 2024, we made significant

progress, with ongoing initiatives which demonstrate the

impact of these technologies.

We have an inventory of over 550 data-driven models

using machine learning to accelerate revenue growth

and operational efficiency across multiple countries and

businesses. Our models focus on areas including

simplification, business growth (customer acquisition

and retention, card lifecycle optimization), risk

management and pricing optimization (advanced credit

and smart pricing models).

Generative AI is having significant impacts on customer

support, operations and software development. In 2024,

we implemented conversational assistants in Spain,

Brazil and the UK.

In process automation, we are using operational agents

to manage over 6 million documents. Additionally, 5,800

developers are using AI tools supporting software

development, achieving a 25% improvement in the time-

to-deliver.

At Santander, we are confident that data and AI will

continue to play a pivotal role in our strategy, as they

represent a significant opportunity in the coming years

to drive cost savings, revenue generation, business

growth and operational simplification.

Santander Digital Services (SDS), a Group service

company, is contributing to the implementation of our

global business strategy across our footprint using all

these new technologies. It is furnishing our ONE

Santander platform with components linked to the

cloud, process automation, Gen AI or Data projects

among other areas. With over 9,000 employees in Spain,

Poland, Portugal, UK, Mexico, US, Brazil and Chile, SDS is

a key element in Santander's technology and operations

strategy, offering its services and know-how to the

different Group entities and banks.

Technological infrastructure

Santander  has a network of high-quality data processing

centres (CPDs) interconnected by a redundant

communications system. They are spread across

strategic markets to support and develop our operations.

They combine traditional IT systems with the capabilities

of a private, on-premise cloud, which, thanks to its swift

adoption, enables us to integrate management of the

business areas’ technology, accelerate digitalization and

achieve significant cost savings.

Santander has migrated more than 96% of its

technology infrastructure to the cloud and has

accelerated in the deployment of next generation

infrastructure in the on-premise private cloud with a

technology architecture that provides greater resilience

and efficiency while reducing energy consumption.

Our local Cloud Centres of Excellence (CCoEs),

coordinated by Global CCoE, guarantee consistent and

rigorous cloud adoption across our entities. This

minimizes risk in accordance with our public cloud

policy. Migration will also contribute towards

Santander's responsible banking goals as we have

reduced the carbon footprint by 32 tons.

Cybersecurity

Cybersecurity is crucial in supporting our purpose to help

people and businesses prosper and become the best

open financial services platform. Both the digital

evolution, driven by the boom in connectivity and

emerging technologies, as well as the complex cyber

threat landscape, continue to make cyber security a

business risk and a priority for the Group.

In 2024, the Group continued to strengthen its cyber

defences in an effort to mitigate the risks associated

with the current environment, which is marked by

increased geopolitical tensions and the accelerating

adoption of emerging technologies such as artificial

intelligence. As a result, new controls have been

implemented to address current risk areas and new

attack methods. Among these, security controls were

strengthened, focusing on ransomware and distributed

denial of service (DDoS) preparedness and response,

access management in virtual environments, supply

chain protection, and the incorporation of measures to

prevent digital fraud and identity theft, ensuring a more

secure customer experience. To ensure alignment with

the cybersecurity requirements set out in the Digital

Operational Resilience Act (DORA), regulation that aims

to strengthen IT security of financial entities, we also

reviewed and adapted internal regulations with a focus

301

on incident management and reporting and advanced

penetration testing.

To manage the environment with increasingly complex

threats and the rapidly transforming digital landscape

that means a continually expanding attack surface,

Santander has updated its cybersecurity strategy, which

focuses on three pillars:

Shift-left. Embedding security by default is key to help

identify and mitigate cyber security risks from the

earliest stages of initiatives. To this end, it is essential to

have a culture where security is our priority as an

organisation. In particular, we have defined measures in

this area aimed at reinforcing the risk culture, reducing

the attack surface or combating phishing scams, among

others.

Automated and assisted cyber defence. Taking

advantage of the capabilities provided by advanced

technologies to reduce response times, such as the use

of AI to speed up analysis by cybersecurity teams,

providing more dynamic and efficient defence

capabilities.

Resilience. Strengthening resilience globally is essential

to sustainably defend the bank against evolving threats.

The Santander Fusion Center, which integrates the

cybersecurity and IT monitoring teams, carries out the

functions of detection, monitoring and response to

operational failures and cybersecurity events for the

Group's entities, 24 hours a day, seven days a week.

Information systems are regularly reviewed through

internal and external audits. Santander identifies IT

assets, systems and information (including those of third

parties) and periodically reviews the risks and level of

protection to proactively detect and remedy potential

weaknesses. The activities performed comprise periodic

security tests including vulnerability scans, penetration

tests, and network team exercises that simulate real

cyber-attack scenarios.

In addition to periodic testing and review, independent

certification authorities review and certify our critical

cyber security processes. Certifications, including

International Organisation for Standardisation (ISO)

27001:2022 and 27017, Statement on Standards for

Attestation Engagements (SSAE) 18 and Payment Card

Industry Data Security Standard - PCI DSS4.0, are

regularly reviewed and updated, including new

processes and controls on an annual basis.

Fintech ecosystem

Santander actively participates in the fintech ecosystem

in all the regions in which we operate. We work with

fintech companies as partners as part of our efforts to

foster and channel innovation while improving customer

experience and efficiency. Through our Fintech Station

programme, we work with startups and scale-ups in

pilot programmes and implement or co-create new

products and services with them. In 2024, Santander

Fintech Station worked on eight Proofs of Concept (PoC)

and also launched six production initiatives. The Group

also provides banking services to these fintech

companies, such as advice on financing rounds, buying

and selling processes and IPOs. 

Santander is an active investor in the fintech sector,

sometimes directly through its Corporate Venture

Capital (CVC) programme, or through funds promoted by

the Group, such as Mouro Capital, a global fintech

venture capital fund. To date, the Group has invested in

several strategic fintech startups directly and through

Mouro, which has a portfolio comprising 46 companies

throughout Europe, North America and South America

and continues to be a key tool to drive innovation within

the Group. Santander collaborates with many of the

companies in Mouro’s portfolio, for example, with

ThetaRay for money laundering and sanctions

prevention worldwide. Atempo Growth, a pan-European

venture debt fund also backed by the Group,

consolidated its market position by financing 31

companies, many of them in the fintech sector (e.g.,

Form3, Acin or Clarity.ai). In February 2024, Trainera

Venture Finance began its activity, a venture debt fund

launched with Inveready, which has since financed 15

high-growth startups in Spain, several of them in the

fintech sector such as REVENI or TECFYS.

See more information in the Consolidated Directors’

Report.

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7. Customer service and

customer defence

Customer Service Annual Report

In accordance with article 17 of order ECO / 734/2004 of

March 11 of the Ministry of Economy on the

departments and services of Customer Service and the

Customer Ombudsman of Financial Institutions, the

directors’ report summarizes the Annual Report to be

presented by the holder of the Service on the Board of

Directors in March 2025.

Customer service and customer defence service

In compliance with Law 44/2002 on Measures for the

Reform of the Financial System of the 734/2004 Order of

the Ministry of Economy on Departments and Services of

Customer Service and the Customer Ombudsman of

Financial Institutions and in accordance with Article 37

Of the Regulations of the Customer Claims and Attention

and Defence Service in Grupo Santander, below is a

summary of the activity developed by the said Service

during 2024, in relation to the management of

complaints and claims.

This complaint and customer service department has

managed during 2024 the claims of 19 companies of

Grupo Santander in Spain.

Global evolution of complaints and claims received by

Banco Santander in 2024

In 2024, 166,376 claims were accepted in the complaint

and customer service department. Of these, 2,766 came

through the Customer Ombudsman, 1,143 through the

Bank of Spain, 94 through the National Securities Market

Commission (CNMV) and 122 through the General

Directorate of Insurance and Pension Funds (DGSFP).

Analysis of claims by affected products

The following is the classification of complaints received

in 2023 according to the type of product:

Number of complaints	2024	2023
Assets	120,627	46,500
Liabilities	10,968	12,310
Services	13,871	14,944
Insurances	1,237	1,359
Funds and Plans	702	855
Payment methods	15,676	17,047
Securities / Capital Markets / Treasury	1,031	1,118
Others	2,264	2,305
	166,376	96,438

Resolution of claims and complaints

As of 31 December 2024, 149,157 claims had been

resolved, of which 7,145 came from files received in

2023. This figure represents 85% of the claims and

complaints received in the year.

The average resolution time in 2024 was 32 calendar

days. 73% of the complaints and claims resolved have

required a processing time of more than 15 calendar

days.

In 15% of cases, the resolutions have been favourable to

customers.

Entities

The following are the companies adhering to the

Regulation of the Customer Service of Complaints, Care

and Defence of Grupo Santander and their corresponding

number of complaints and claims received.

303

Entities	Admitted to processing	Non-admitted to processing
BANCO SANTANDER, S.A.	149,381	23,906
SANTANDER CONSUMER FINANCE, S.A.	9,924	3,866
OPEN BANK, S.A.	4,941	331
SANTANDER SEGUROS Y REASEGUROS, COMPAÑÍA  ASEGURADORA, S.A.	1,131	467
SANTANDER PENSIONES, S.A., E.G.F.P.	291	93
GETNET EUROPE, ENTIDAD DE PAGO, S.L. UNIPERSONAL	285	40
SANTANDER ASSET MANAGEMENT, S.A., S.G.I.I.C.	222	57
ALTAMIRA SANTANDER REAL ESTATE, S.A.	104	61
SANTANDER FACTORING Y CONFIRMING, S.A. UNIPERSONAL , E.F.C.	56	5
SANTANDER LEASE, S.A., E.F.C.	21	1
EURO AUTOMATIC CASH ENTIDAD DE PAGO, S.L.	15	1
TRANSOLVER FINANCE, E.F.C., S.A.	5	1
SANTANDER PRIVATE BANKING GESTIÓN, S.A., S.G.I.I.C	—	—
PAGONXT EMONEY, EDE, SL	—	—
SANTANDER REAL ESTATE, S.A., S.G.I.I.C.	—	—
SANTANDER INTERMEDIACIÓN CORREIDURÍA DE SEGUROS, S.A.	—	—
SANTANDER INVESTMENT, S.A.	—	—
SANTANDER ALTERNATIVE INVESTMENTS, S.G.I.I.C.	—	—
BANCO DE ALBACETE, S.A. UNIPERSONAL	—	—
Total	166,376	28,829

The network of branches and the different channels of

relationship solve, in the first instance, the requests,

disconformities or incidents that the clients

communicate to Banco Santander, trying to avoid that

they become complaints to other instances.

8. Risk management, solvency

and capital

See notes 50 and 1.e) on risk and capital to the Bank

Annual Accounts. See more information in the

Consolidated Directors’ Report.

9. Other relevant information

9.1 Treasury shares:

See note 30 to the Bank Annual Accounts.

The acquisition of treasury shares was last authorized at

our 2023 AGM, for five years and subject to these

provisions:

• Treasury shares held cannot exceed 10% of Banco

Santander's share capital at any time, which is the

legal limit set under the Spanish Companies Act. 

• The acquisition price may not be lower than the par

value of the shares, nor exceed by more than 3%

the highest of the last independent purchase or the

highest independent offer at that time at the

trading venue where the purchase is made.

• The purpose of the acquisition of treasury shares

will be discretionary treasury share management,

the execution of share buyback programmes, the

delivery of these shares under the framework of

the employee and director remuneration policy or

any other purpose that the board deems pertinent

at any given time.

On 26 February 2024, the board updated the current

treasury shares policy which dictates that Banco

Santander may carry out treasury share transactions for

these purposes:

• Provide liquidity or supply of securities in the market

for Banco Santander shares, which gives this market

depth and minimizes any potential temporary

imbalances in supply and demand.

• Take advantage, for the benefit of all shareholders, of

weakness in the share price due to its medium-term

outlook.

• Meet Grupo Santander's obligations to deliver shares

to our employees and directors.

• Serve any other purpose authorized by the board

within the legal limits and those set at the general

meeting. In this regard, Banco Santander made during

the year the donations to Fundación Banco Santander

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indicated below in the context of its Responsible

Banking and Sustainability Policy.

Among other things, the policy also provides for:

• The principles to uphold in treasury share trades,

which include protecting financial markets' integrity

and prohibiting market manipulation and insider

trading.

• The operational criteria for carrying out treasury share

trades, unless in exceptional circumstances as per the

policy or carried out through mechanisms, such as

buyback programmes, with a regulation of their own.

These criteria include rules on: 

• Responsibility for execution of these trades, which

falls on the Investments and Holdings department,

which is kept separate from the rest of Banco

Santander.

• Venues. Trades must generally be carried out in

regulated markets and in the multilateral trading

facilities stipulated in the policy, which has been

amended by adding three multilateral trading facilities

where Banco Santander’s shares circulate.

• Volume limits. Trades must generally not exceed

15% of the average daily trading volume for Banco

Santander shares in the previous 30 sessions on the

relevant trading venue.

• Price limits. In general, (a) buy orders should not

exceed by more than 3% the higher of (i) the price of

the last independent transaction prior to the relevant

acquisition or (ii) the highest independent bid at that

time on the trading venue where the purchase is

made; and (b) sell orders should not be lower than

the lesser of the price of the last trade in the market

by independent parties and the lowest sell order

price in the order book.

• Time limits, including a black-out period that applies

(a) during the 15 calendar days prior to the

publication of each quarterly financial information

and (b) if Banco Santander has decided to delay the

disclosure of inside information according to market

abuse regulations, until such information is

disseminated. In the case of buyback programmes,

the specific regulations establish a black-out period

of 30 calendar days prior to the publication of annual

and semi-annual results, which, however, will not

apply when the buyback programme is managed by

a third party or when the issuer has a temporary

buyback programme in place.

• Disclosure to the markets of treasury shares trading.

The policy applies to the discretionary trading of treasury

shares irrespective of whether they are carried out in

regulated markets, in multilateral trading facilities,

outside the orders market, either through blocks or

through special transactions, or under buyback

programmes. Furthermore, buyback programmes shall

comply with all the applicable specific regulations, such

as regulation on market abuse and their relevant

implementing rules. The policy does not apply to

transactions on Banco Santander's shares carried out to

hedge market risks or provide brokerage or hedging for

customers.

The full treasury shares policy is available on Banco

Santander's corporate website.

Execution of the buyback programmes charged against

2023 results

According to the 2023 shareholder remuneration policy,

two buyback programmes were executed:

In the first buyback programme, executed from 28

September 2023 to 25 January 2024, we acquired

358,567,487 treasury shares (2.22% of share capital). 

Under the authorization of the 2023 AGM, on 30

January 2024 the board resolved to reduce Banco

Santander’s share capital through the cancellation of

the repurchased shares.

In the second buyback programme, executed from 20

February to 17 June 2024, we acquired 331,305,000

treasury shares (2.09% of share capital). In the terms

agreed at the 2024 AGM, on 25 June 2024 the board

resolved to reduce Banco Santander’s share capital

through the cancellation of the repurchased shares.

First 2024 Buyback Programme

Under the authorization of the 2023 AGM, and according

to the 2024 shareholder remuneration policy, on 26

August 2024 the board resolved to execute a new share

buyback programme for a maximum amount of EUR

1,525 million, equivalent to approximately 25% of the

Group reported profit (excluding non-cash, non-capital

ratios impact items) for the first half of 2024 and for

which we have already obtained the required regulatory

authorization of the European Central Bank (ECB).

In the First 2024 Buyback Programme (executed from 27

August to 3 December 2024), we acquired 341,781,250

treasury shares (accounting for approximately 2,21% of

Banco Santander’s share capital), at a weighted average

price per share of EUR 4.46.

On 17 December 2024, the board resolved to reduce the

share capital in the amount of EUR 170,890,625, by

cancelling the 341,781,250 repurchased shares.

Second 2024 Buyback Programme

Under the same AGM approval and also according to the

2024 shareholder remuneration policy, on 4 February

2025 the board resolved to execute a new share buyback

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programme for a maximum amount of EUR 1,587

million. The appropriate regulatory authorization has

already been obtained and the programme began on 6

February 2025.

The board had submitted the resolution to vote at the

2025 AGM for the share capital reduction by cancelling

the repurchased shares.

As at 31 December 2024, Banco Santander and its

subsidiaries held 15,529,459 shares, which accounted

for 0.10% of Banco Santander´s share capital (compared

to 297,815,673 shares, accounting for 1.84% of the

share capital as at 31 December 2023).

9.2 Dividend policy:

As required in Banco Santander’s by-laws, each year the

shareholder remuneration policy is submitted for

approval by the AGM.

Distribution charged against 2024 results

For the 2024 results, the board continued to apply the

same policy as in 2023, with total shareholder

remuneration of approximately 50% of the Group

reported profit (excluding non-cash, non-capital ratios

impact items), distributed in approximately equal parts

in cash dividend and share buybacks.

Interim remuneration.

On 26 August 2024, the board resolved to execute the

First 2024 Buyback Programme worth up to EUR 1,525

million (equivalent to approximately 25% of said Group

reported profit in H1’24).

On 24 September 2024, the board resolved to pay an

interim cash dividend against the 2024 results of 10 euro

cents per share entitled to the dividend (equivalent to

approximately 25% of said Group reported profit in

H1’24); it was paid from 1 November 2024.

Final remuneration.

Under the 2024 shareholder remuneration policy:

On 4 February 2025 the board of directors resolved to

implement the Second 2024 Buyback Programme worth

a maximum amount of 1,587 million euros, for which

the appropriate regulatory authorization has been

obtained, and the execution of which began on 6

February 2025.

On 25 February 2025 the board of directors resolved to

submit a resolution at the 2025 AGM to approve a final

cash dividend in the gross amount of 11 euro cents per

share entitled to dividends. If approved at the AGM, the

dividend would be payable from 2 May 2025.

Once the above-mentioned actions are completed, total

shareholder remuneration for 2024 will total EUR 6,293

million (approximately 50% of the Group reported profit

-excluding non-cash, non-capital ratios impact items- in

2024), distributed as approximately 50% in cash

dividends (EUR 3,181 million) and 50% in share

buybacks (EUR 3,112 million). These amounts have been

estimated assuming that, as a consequence of the partial

execution of the Second 2024 Buyback Programme, the

number of outstanding shares entitled to a final cash

dividend will be 14,988,884,075. Therefore, that amount

may be higher if fewer shares than planned are acquired

in the Second 2024 Buyback Programme; otherwise, it

will be lower.

Remuneration against 2025 results

As announced on 5 February 2025, the board intends to

allocate up to EUR 10 billion to shareholder remuneration

in the form of share buybacks, corresponding to the 2025

and 2026 results, as well as to the expected excess capital.

This share buyback target includes: (i) buybacks that are

part of the existing shareholder remuneration policy

outlined below, and (ii) additional buybacks following the

publication of annual results to distribute year-end

excesses of CET1 capital.

The ordinary remuneration policy for the 2025 results,

which the Board intends to apply, will remain the same

as for the 2024 results, consisting of a total shareholder

remuneration of approximately 50% of the Group's

reported profit (excluding non-cash and non-capital

ratios impact items), distributed in approximately equal

parts between cash dividends and share buybacks.

The execution of the shareholder remuneration policy

and share buybacks to distribute the excess CET1 capital

is subject to corporate and regulatory approvals.

9.3 Stock market information:

Banco Santander shares are listed on Spanish stock

exchanges (Madrid, Barcelona, Bilbao and Valencia), the

New York Stock Exchange as American Depositary

Shares (ADS), the London Stock Exchange as Crest

Depositary Interests (CDI), the Warsaw Stock Exchange

and in the International Quotation System (SIC) of the

Mexican Stock Exchange (BMV).

As at 31 December 2024, Banco Santander occupies the

second position in the eurozone and in the thirty-second

world by market value among financial institutions, with

a market capitalization of EUR 67,648 million.

7,713 million Banco Santander shares traded in the year

for an effective value of EUR 33,410 million and a

liquidity ratio of 49%.

The Santander share closed 2024 at 4.465 euros.

9.4 Average period of payment to suppliers:

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The average period of payment to suppliers during 2024

is 11 days, term which is below the maximum

established in applicable regulations.

10. Events after the reporting

period

No significant events occurred from 1 January 2025 to

the date on which these financial statements were

authorized for issue, other than those described in these

annual accounts.

11. Annual corporate

governance report and Annual

report on directors’

remuneration

According to articles 540 and 541 of the Spanish

Companies Act, Banco Santander, S.A. has prepared the

annual corporate governance report and the annual

report on directors’ remuneration for the year ended 31

December 2024 (that are part of the directors’ report of

that financial year) with the contents determined by

Order ECC/461/2013, of 20 March, and by Circular

3/2021, of 28 September, of the National Securities

Market Commission (CNMV), that modifies Circular

5/2013, of 12 June, that defines the annual corporate

governance report model for listed companies, and

Circular 4/2013, of 12 June, that defines the annual

report on directors’ remuneration model for listed

companies.

The annual corporate governance report includes a

section that refers to the compliance of the corporate

governance recommendations in Spain.

The annual corporate governance report and the annual

report on directors’ remuneration are included, as a

separate section, in the individual directors’ report in

accordance with the provisions of article 538 of the

Spanish Companies Act. The aforementioned reports are

sent individually, as other relevant information, to the

CNMV, and are included in the consolidated directors’

report as a separate section. They are available on the

Bank's corporate website (www.santander.com) and on

the CNMV website (www.cnmv.es).

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Pursuant to Article 253, section 1 of the revised Spanish Companies Act (Ley de Sociedades de Capital), the

board of directors of Banco Santander, S.A. draws up the individual financial statements (comprising the

balance sheet, the income statement, the statement of recognized income and expense, the statement of

changes in total equity, the statement of cash flows and the notes to the individual financial statements) and

the individual directors’ report for the 2024 fiscal year in eXtensible HyperText Markup Language (XHTML)

format, which conforms to the single electronic reporting format required under Directive 2004/109/EC and

Delegated Regulation (EU) 2019/815.

The directors of Banco Santander, S.A., listed below with an indication of their respective positions, declare

that, to the best of their knowledge, the company's individual financial statements for the 2024 financial year

were drawn up in accordance with the applicable accounting principles and give a true and fair view of the

assets, liabilities, financial position and profit or loss of the company, and that the directors’ report includes a

fair review of the development, performance and position of the company, together with a description of the

principal risks and uncertainties that it faces.

Boadilla del Monte (Madrid), 25 February 2025

ANA PATRICIA BOTÍN-SANZ DE SAUTUOLA Y O’SHEA		HÉCTOR BLAS GRISI CHECA
Chair		Chief Executive Officer

GLENN HOGAN HUTCHINS		JOSÉ ANTONIO ÁLVAREZ ÁLVAREZ
Vice Chair		Vice Chair

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MEMBERS:

HOMAIRA AKBARI		JUAN CARLOS BARRABÉS CÓNSUL
FRANCISCO JAVIER BOTÍN-SANZ DE SAUTUOLA Y O’SHEA		SOL DAURELLA COMADRÁN
HENRIQUE MANUEL DRUMMOND BORGES CIRNE DE CASTRO		GERMÁN DE LA FUENTE ESCAMILLA
GINA LORENZA DÍEZ BARROSO AZCÁRRAGA		LUIS ISASI FERNÁNDEZ DE BOBADILLA
BELÉN ROMANA GARCÍA		PAMELA ANN WALKDEN
ANTONIO FRANCESCO WEISS